For firm buyers + acquirers
Buying a law firm is structurally different from buying most businesses. WIP is its own asset class. Client matters need novation with client consent. SRA notification and (in some cases) consent matter. PII continuity must hold. We've seen these come up wrong and we know what 'good' looks like.
The questions and concerns that come up most often in a first conversation.
Highly dependent on practice area and region. High-street general practice in soft regional markets: 0.8-1.2x normalised profit. Mid-market LLP: 1.2-2x. Specialist firms (PI, niche commercial litigation, prestige private client): 2-3x+. Conveyancing-heavy firms have been depressed by post-2022 market conditions. We model against comparables.
WIP is recognised on an earnings basis (FRS 102 / FRS 105) at the recoverable amount. Aged WIP (over 6 months) is typically written down or excluded from the deal. Litigation WIP is discounted more aggressively than conveyancing WIP because conversion is slower. We work the WIP schedule with the seller's accountant and the deal lawyer.
Three years of statutory accounts plus management accounts year-to-date. WIP schedule with aging analysis. Client matter ledger sample for high-value accounts. Office and client account reconciliation evidence (last 12 months). PII renewal documents and any claims history. Partner drawings vs allocated profit reconciliation. Property lease and any other commitments.
Notification is required for material changes in ownership / management; consent depends on whether the entity itself changes (ABS application) or just shareholders/members. Asset purchases of an LLP's trade typically require client matter consent and PII continuity rather than SRA consent. Share purchases of an incorporated firm may require an ABS licence application. We co-ordinate with the regulatory law firm on the transaction.
Each client matter needs client consent for transfer to the new firm. Bulk novation letters are typical for residential conveyancing and other high-volume practices; bespoke client communications for complex matters. The SRA Accounts Rules require client money for transferred matters to be held in the new firm's client account from completion. Practical execution takes 3-8 weeks post-completion.
For goodwill acquired post-1 April 2019, tax relief at 6.5% per year over a notional 15-year amortisation period. On £500k of goodwill that's £32,500/year of corporation tax-deductible amortisation. Pre-2019 acquisitions had different rules; goodwill bought 8 July 2015 to 31 March 2019 generally has no tax relief. We confirm the acquisition date carries through correctly.
3-year normalised profit and WIP analysis. Identifying add-backs (one-off costs, owner-manager salary normalisation, related-party transactions). Output is a recommended bid range and the key questions to put to the seller's accountant.
Asset purchase vs share purchase modelling. Goodwill amortisation timing. Section 162 incorporation if buying via a new vehicle. SDLT analysis on any property transfer. Deal-finance structuring.
Co-ordination with the regulatory solicitor on the SRA-side filings. ABS licence application if the deal structure requires it. New COFA / COLP appointments managed alongside the financial integration.
First 90 days: client matter migration, PII continuity confirmation, client account transition, payroll merger, accounting system consolidation. The list grows but the framework is the same — get the basics right and the rest follows.
We work with the legal-sector lending team at most UK clearing banks. Vendor financing structures (deferred consideration, earn-outs) modelled and documented.
Free 10-minute practice health check
30-minute scoping call. We confirm scope (DD, structuring, integration) and quote a fixed engagement fee.
Want to read first?
Pillar guide
Pre-acquisition valuation modelling and post-acquisition tax planning.
Pillar guide
Full playbook for the first 90 days after completion.
Pillar guide
Indicative valuation on the firm you're considering buying.