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LawBiz® TIPS – Week of October 9, 2012

LawBiz(r) newsletter

Ed PollI spent the weekend in Sleepy Hollow, NY with my son, daughter-in-law and two grandchildren. The weather was great, with the hint of Fall in the air. The purpose of the trip was to continue a recently begun tradition of taking my grandkids to a pumpkin farm to pick out their personal pumpkins for the holiday. This holiday is serious in the home area of Washington Irving. This is a great tradition I hope to maintain as long as I can.

If you will be in the following areas when I will be, I'd welcome having breakfast with you. Please contact me directly.

Monterey, CA - October 12-13, 2012
Lake Tahoe, CA - October 17-18, 2012
Washington, D.C. - October 25-27, 2012
San Francisco, CA - November 12-13, 2012

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Defining a Legacy of Goodwill

"I am really tired, and want to retire." I increasingly hear this from lawyers who call me seeking advice on how to sell their practices. For some, the wish to retire is nothing but a wish - retirement is out of reach for them after the value of their homes, investments and retirement plans took heavy hits over the last few years. "Business purgatory" is how one lawyer phrased it.

Is Your Firm a Pot of Gold?
For those lawyers who can retire, their firm typically represents a "pot of gold" in their minds, the asset on which they can depend. But we need to be very clear about what that asset really is. Every firm represents an investment of years of hard work and financial resources in growing the practice and building goodwill. Goodwill is certainly an accounting term, but I have reached the point of giving it a more practical definition, one that is more meaningful to the average lawyer, whether buying or selling:

Goodwill can be defined as legacy ... it's your legacy that you're passing along to others. It's your reputation, your phone number, your system and way of doing business, all the intangible elements that made you successful and provides you, the selling lawyer, with what is most valuable to sell. The better is your reputation, the more value your law practice will have. By contrast, firms with bad publicity, a declining client base, or malpractice and disciplinary matters hanging over them have little goodwill.

What is Your Largest Asset?
There is another sense in which goodwill constitutes a legacy - one in the traditional estate planning sense. The value of goodwill is the store of value from your practice that you can pass on to your heirs. If you do not recognize goodwill through a practice sale, you are throwing away the value of your practice, cheating your heirs and making an unintended gift to strangers (the lawyers who pick up your clients if you suddenly die or become disabled and cannot continue to work). Why would lawyers ignore perhaps the largest asset in their estate, the goodwill of their practice? Why throw away so much value that would otherwise go to family and heirs? The value is there. After investing years of hard work and financial resources in growing the practice, a well-planned practice sale allows any lawyer to reap the benefits of that value and realize the legacy that a years-long investment of time and effort created.

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In this issue:

Defining a Legacy of Goodwill

$50 OFF! Running Your Practice

Video: Preference is Perishable

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Ed Poll on YouTube video

YouTube LawBiz Forum
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What Clients Are Saying:

"Through Ed's invaluable coaching and no-nonsense approach, I was able to not only stay employed at the firm, but to make partner and have a future with the firm."

Los Angeles, CA

"Ed knew the right questions to make me answer. He has taught me virtually everything I know about formation, planning, and now management of a successful law firm."

Los Angeles, CA

"Ed is fair, kind and forthright, is very professional and was a very enjoyable person with whom to work. I would highly recommend the services of Ed Poll to anyone in need of assistance with understanding their business, improving its operations or valuing it for sale or transition to some other operational format."

DMG, R.N. J.D.
Austin, TX

Ed Poll, LawBiz® Management   |   |   |
©2011 LawBiz® Management. All rights reserved.

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