Valuing Your Book of Business
Your book of business has real market value— it is time sensitive. Clearly detail your book’s value by client and how much revenue each client contributes. Identify what verticals have historically were most profitable.
“Do not wait: the time will never be ‘just right’. Start where you stand, and work it. Use whatever tools you may have at your command. Better tools will be found as you go along.” ― Napoleon Hill.
“When you begin negotiating your book, all that counts is how well you tell your story,” Shari Davidson President On Balance Search. “Knowing what your book of business is worth—particularly as it grows—gives you that edge. In order to objectively guide you, I will need to know what you want from the onset.”
Working with a legal recruiter who has the right connections can help get the deal done. From understanding all the legal issues helps in big ways.
Most lawyers spend little if any time understanding what their book is worth and how to increase value. An earn-out arrangement guarantees a minimum level of performance. If the client retention rate drops or the revenue drops, the payout also drops.
A book with lots of recurring revenue brings in more money than a book of transaction-heavy clients. Location is also very important, here in the Metro New York area a book commands much more value than most parts of the country. At big market adds longevity and makes your book stronger.
It’s all about the proper strategic fit between all parties involved. The objective is to increase the value of the business for all parties involved. There has to be strategic alignment and synergy that increases the likelihood for increased profitability. This also applies when parties are coming together in a partnership. There has be value recognition to share resources and capabilities to be on an equal footing. The better the strategic fit, the better the outcome for higher profit.
What to look for when joining a new firm:
- Strategic Fit: alignment and synergy.
- Philosophy: How does the new firm do business— conservative versus aggressive
- Presence: Is your practice well known? Will your clients do business with the new firm
- Services: Will your scope of your expertise work well in the new business model of the firm?
- Processes: What systems does the new firm have in place to capture more marketshare: technology, marketing, network, servicing?
Your book is only valuable to a firm that can leverage your contacts. It can either be a strength or a weakness, it’s really important to find the right fit. It’s all a matter of telling a story that makes sense.
About On Balance Search Consultants
On Balance offers great insight and industry intelligence. Shari Davidson, President of On Balance Search Consultants, advises law firms on how to take a firm to the next level and helps rising talent make the transition to the right law firm. We pride ourselves in understanding our clients and candidate’s needs, On Balance has an outstanding track record placing strong candidates with high retention rates.
Please note that the content of this blog does not constitute legal advice and is only intended for the educational purpose of the reader. Please consult your legal counsel for specifics regarding your specific circumstances and the laws in your states pertaining to social media, legal recruiting and any legal restrictions regarding the law.
To contact Shari Davidson: info@OnBalanceSearch.com or 516-731-3400.