Buying a law practice in Florida

A small law practice handles a few areas of law, often for individuals and small businesses: estate planning and probate, real estate closings, family law, personal injury, criminal defense, immigration, business formation and contracts. How it gets paid shapes what it's worth.

• Flat fees (wills, closings, simple business work) bring steady, predictable income.
• Hourly work is billed monthly, often against up-front retainers held in the trust account.
• Contingency fees (personal injury) are a percentage of what clients recover, so income comes unevenly, as cases resolve.

Much of what you'd buy is goodwill: the practice's name, reputation, referral sources and client files. Estate planning practices also hold clients' original wills, and those clients come back for updates and probate. A small practice usually has one to a few lawyers, paralegals and a receptionist. Clients often hire a specific lawyer, so a careful handover matters more here than in most businesses.

• A steady flow of new work from referral sources and marketing, not only the selling lawyer's own network.
• Practice areas with repeat work, such as estate planning that leads to probate, or business clients with ongoing needs.
• Trust accounts reconciled every month, with no unexplained balances.
• Organized digital files and reliable practice management software.
• Experienced paralegals who know the clients and procedures and plan to stay.
• Fees that actually get collected, not just billed, with little owed by former clients.
• A website, reviews and listings that bring in new clients under the practice's name.
• A seller willing to stay on, introduce you to clients and referral sources, and answer questions.

Only lawyers may own a law practice in Florida. Under Rule 4-5.4 of the Rules Regulating The Florida Bar, a lawyer may not practice in a for-profit firm where a nonlawyer owns any interest, serves as an officer or director, or can direct a lawyer's professional judgment. The same rule bars lawyers from sharing legal fees with nonlawyers. If you aren't a lawyer authorized to practice in Florida, you can't buy one.

A lawyer may buy a practice, goodwill included, under Rule 4-1.17 when:

• The entire practice, or an entire area of practice, is sold to lawyers or firms authorized to practice in Florida.
• Each client gets written notice of the sale by certified mail, including their right to choose another lawyer. A client who doesn't object within 30 days is presumed to consent, and the sale can't close until that period ends or every client consents.
• A court approves substitution of counsel in pending cases.
• The buyer honors existing fee agreements and doesn't raise fees because of the sale.

Read the current rules on the Bar's website. As a Bar member, you can call the Bar's Ethics Hotline about something you plan to do.

• Trust account records: the monthly reconciliations the Bar's trust accounting rules require (Rule 5-1.2), each client's ledger and any shortfalls. Money in trust belongs to clients, not the practice, and problems there are serious.
• Open cases, court deadlines and statute of limitations dates, so nothing slips in the handover.
• Conflicts of interest between the seller's clients and your own, checked before closing.
• Past malpractice claims, and coverage for the seller's past work after closing.
• Contingency cases: put in writing how each fee will be split between seller and buyer.
• Where new clients come from, and whether the practice's advertising follows Bar rules.
• Who will hold the original wills and closed files, and how long files must be kept.
• Unpaid bills, and how much of what's billed clients actually pay.

• Where did your last 50 new clients come from?
• Which clients will expect to keep working with you personally?
• How long will you stay to introduce me to clients and referral sources?
• Who reconciles the trust accounts, and how often?
• Have you had any Bar grievances or malpractice claims?
• What happens to cases still open when we close?
• How many original wills and closed files do you hold?