Everything you need to know about law firm succession planning, practice valuation, sale preparation, and exit strategies for UK solicitors planning retirement or practice exit.
Practice Succession & Sale
Practice succession planning ensures continuity for clients, protects practice value, and provides financial security for retiring partners. Without proper planning, practices often sell for significantly less than their potential value, or fail to find buyers at all.
Successful succession typically requires 3-5 years of planning. This allows time to develop junior partners, improve practice systems, optimise profitability, and identify suitable buyers or successors. Early planning maximises value and reduces stress during transition.
Law firm valuation involves several approaches:
Practice area, client retention rates, fee earner stability, and systems quality all affect valuation. Specialist legal sector accountants understand these factors and can provide realistic valuations.
Maximising practice value requires preparation across several areas:
Practice sale proceeds may qualify for Business Asset Disposal Relief (formerly Entrepreneurs' Relief), reducing Capital Gains Tax to 18% (from 6 April 2026) on qualifying gains up to the £1 million lifetime limit. Structuring the sale correctly ensures maximum tax efficiency.
Consider phased retirement, earn-out arrangements, and pension contributions as part of your exit strategy. Each approach has different tax implications and risk profiles. Specialist advice ensures you choose the optimal structure for your circumstances.
Internal succession to junior partners or employees often provides better outcomes than external sale. It maintains client relationships, preserves practice culture, and can be structured flexibly over several years. However, it requires developing successors with both technical capability and commercial acumen, plus financing arrangements for the purchase.
The library
15 guides for UK solicitors and law firms.
UK law firm EBITDA multiples in 2026/27 range from 0.8x for conveyancing-heavy firms in soft markets to 3x+ for specialist firms with premium positioning. Most multi-partner firms sit at 1.2-2.0x normalised EBITDA. We cover the realistic ranges and what drives them.
6 min read
A practical comparison of asset sale and share sale structures for UK law firms. A partnership or LLP has no shares and can only do an asset sale, while an incorporated firm or ABS can do a share sale. Covers seller CGT, BADR date bands, the goodwill versus WIP split, TOGC, and when to incorporate first.
12 min read
Buying a law firm requires more than a handshake. This guide walks solicitors through the financial due diligence process, from reviewing seller accounts and WIP to checking SRA compliance and partner tax liabilities.
9 min read
A practical guide for UK solicitors on financing a law firm acquisition. Covers bank lending, asset finance, vendor financing, and the SRA compliance requirements that apply when borrowing to buy a practice.
9 min read
When a law firm is sold, goodwill is a capital disposal charged to Capital Gains Tax, not trading income. Business Asset Disposal Relief can cut the rate on qualifying gains, but the rate now varies by the date of disposal and the conditions are strict. Section 162 incorporation relief can defer the charge, and the buyer's own goodwill relief depends on when and from whom the goodwill was acquired.
10 min read
A clear, practical guide for UK solicitors on how law firm valuation works in 2025/26. Covers profit multiples, goodwill valuation, WIP treatment, and the factors that push a firm's value up or down. Written for partners, firm buyers, and succession planners.
9 min read
Merging two law firms is a tax decision and a regulatory decision at the same time. This guide covers the tax treatment of goodwill and WIP, the structure of the merged firm, SRA authorisation and notification, transferring the client account under the SRA Accounts Rules, and PII continuity.
10 min read
A practical guide for UK sole practitioner solicitors on planning succession, structuring client transfers, using locum agreements, and managing SRA compliance. Includes worked examples and tax considerations for a smooth exit.
8 min read
Retiring from a law firm LLP triggers several tax events: final profit share, goodwill disposal, and any deferred consideration. This guide explains how solicitors can structure their exit to minimise CGT and income tax, covering BADR, earn-outs, and the timing of retirement.
7 min read
On a law firm sale, work in progress (WIP) and debtors are an income item, not a capital one. Unbilled time and unpaid bills are brought into account as a trading receipt taxed at income tax rates plus Class 4 NIC, while goodwill is a capital asset taxed at CGT rates. This guide explains the split, the statute behind it (ITTOIA 2005 ss.182 to 185), how WIP is valued under FRS 102, and why the sale agreement must separate the two.
10 min read
Goodwill is usually the largest asset on a law firm sale. This guide explains how it is valued (normalised profit or EBITDA multiples and fee multiples expressed as ranges), what pushes the multiple up or down, and how big a share of the price goodwill typically represents. Tax treatment is covered at a high level, with a link to the dedicated goodwill tax page.
7 min read
Law firm succession planning requires careful consideration of partnership structures, goodwill valuation, tax implications, and SRA compliance. Getting it right protects both retiring partners and the continuing practice.
9 min read
Understanding law firm valuation is crucial for practice succession planning, partner buyouts, and practice sales. This guide covers the key valuation methods and factors that determine your firm's worth.
5 min read
Partner retirement planning requires careful coordination of tax strategy, pension arrangements, and practice succession. This guide covers the key considerations for law firm partners preparing for retirement.
7 min read
Selling a solicitor practice runs through preparation, choosing an asset or share sale, SRA consent and client novation, then the tax heads on goodwill, WIP and debtors. This guide walks the end-to-end process and the tax overview, with specialist links where you need to go deeper.
6 min read
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