Small firms should consider the benefits of alternative business structure (ABS) status as a way to handle succession planning, the senior partner of one of the latest licensees has said. “ABS means we can end our practising certificates and still own the firm,” he explained.
A growing number of small and mid-sized law firms are looking at raising external capital, but many need to address failings in basic business planning first, new research has found. It also identified £20m as the turnover point when a law firm turns into a real business.
Dealing successfully with succession is proving a difficult challenge for many traditional legal practices. The average age of (predominantly male) equity partners is now 59, yet most have failed to plan for their exit and succession. As a result, many firms now face an uncertain future with little or no value being placed on the sale prices of their practices and no younger partners prepared to invest in equity to enable partners’ retirement.