Law firm valuation

Armstrong Watson provide valuations of law firms for a variety of reasons:

  • Incorporations - determining the goodwill and agreeing that with HMRC
  • Acquisitions/mergers/disposals
  • Retirements
  • Admitting new partners
  • Disputes with exiting partners - we act for firms and individuals/groups in the unfortunate position of partnership disputes

Our valuation report will discuss all of the potential valuation methodologies; changes in the legal market; the firm's location, work types, people and prospects; and how changes in the legal market may affect the firm given its specific characteristics.

The report will conclude with the most appropriate valuation methodology and the most appropriate valuation multiples if relevant. An analysis will be prepared of the financial position and results of your firm and the valuation methodology and multiple applied to the financial analysis to generate the appropriate valuation.

Contact our Legal Sector Partner, Andy Poole, on 07828 857830 or andy.poole@armstrongwatson.co.uk to discuss how we can help you.

  Read more about the benefits of appointing Armstrong Watson

What is it?

A formal report concluding the most appropriate open market value of a law firm.

Who is it for?

Law firms of all sizes and locations.

What are the benefits for your firm?

  1. You will know the value of your firm or another firm
  2. You will be able to make appropriate decisions on retirement/succession planning
  3. You will be able to make appropriate decisions on internal ownership changes
  4. You will be able to make appropriate decisions on acquisitions or disposals

What do I have to do?

Head of finance to supply information. Pre-agreed partners and staff to be available for the interviews.

What are the deliverables?

Interviews with key people either by telephone or in person. Presentation of a draft report. Issue of final report.

What is the cost?

£3,500 plus VAT for law firms of up to 100 people. Desktop valuations are also available at a cost of £1,950 for firms of up to 100 people. Bespoke costs agreed for larger firms. Note: if the valuation is part of a legal dispute other costs may be involved.

How long will it take?

Two weeks.

CASE STUDY

Armstrong Watson were approached by an individual that had left a law firm that he had established some years previously. The terms of the shareholders’ agreement provided for an independent valuation to be carried out following appointment of an arbitrator by the President of the ICAEW. Our remit was to work on behalf of the individual with his dealings with the arbitrator and the other parties to the dispute.

The other parties were to remain as owners of the practice and had offered a valuation of our client’s shares of almost £nil. Our client expected considerably more and had fallen out with his former colleagues as a result. Legal action had also been taken and each party was being advised by other lawyers. We therefore needed to liaise with the individual’s legal advisers; take care not to interfere with the legal process; or to adversely impact upon it.

We were instructed to carry out a valuation of the law firm for submission to the independent arbitrator. We prepared a fully substantiated valuation report taking into account all of the issues of the firm and the changes in the wider legal market. This was prepared on the same basis as if we were the independent arbitrator. We always take this approach and will only put forward a valuation that we could defend in court if required. We do not artificially inflate valuations as part of a negotiation process.

Our calculations showed a value of the individual’s shares in excess of £100,000. We submitted our report on that basis and responded to the other party’s submission on behalf of our client.

The independent arbitrator’s valuation was in line with our calculations and report and in our view provided a fair valuation for all concerned. More importantly for our client, it was a result that he was delighted with.

What our clients say

Your Key Contacts

Andy Poole

Legal Sector Partner

07828 857830

Email Andy

Rosy Rourke

Legal Sector Director

07557 951148

Email Rosy

Tom Blandford

Legal Sector Director

07793 621951

Email Tom

Get in touch

To find out more about how we can help you or your business, contact one of our Legal Sector Specialists above.

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