A Four-Partner Firm with Dissimilar Retirement and Career Goals
The seller was a four partner firm generating $3,500,000 in annual fees. The firm had quality staff members but none were on a partner track and, therefore, the firm did not have a viable internal succession solution. The most senior partner, who was seeking to work part time as soon as possible on his way to full retirement, handled much of the administration and performed the least amount of billable hours. The other three partners averaged 1,500+ billable hours annually. All the partners handled similar sized books of business and were equal in equity ownership. Two were young partners not seeking succession. They were interested in becoming part of a firm that would allow them to grow professionally and financially. The other senior partner was seeking to work several more years and then be bought out. READ MORE »

The results are in!
The results for the survey question for Succession Advisory members are in! Question: Is the buyout for retiring partners of your firm based on equity percentage applied to overall firm value or, a multiple of historical compensation?

The results, of the 120 firms that responded, are:

• 58% paid completely or heavily based on equity ownership
• 24% paid heavily or exclusively on compensation
• 5% have no formal plan
• 5% tie the buyout exclusively or heavily to the book of business a partner manages/owns
• 8% were spread over many areas although most of them had elements of the top two

READ MORE »

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