Financing Your Law Firm Acquisition

If you’re in the market to acquire a law firm, one of the very first questions you will carefully consider is, “How will this purchase be funded?”

There are many funding options available to law firm buyers including, of course, bank financing and there are lots of reasons why this may be the best strategic choice for you.?

One of the primary reasons to choose bank financing? Financing through a bank allows you to maintain financial flexibility. Cash reserves and other sources can be maintained to leverage growth opportunities, such as scaling the firm you will soon acquire.?

Most law firm acquisitions are funded by banks over a 10 year repayment period. This helps spread out the payments to minimize the expense burden and allow you to invest in growth in the early years post-acquisition.

Here are a few others.

Benefits of Financing with Banks

• Access to Large Amounts of Capital: Banks can offer significant loans that might not be feasible through private funding.
• Structured Repayment: Loans are paid back in installments, which helps in financial planning and budgeting.
• Acquisition Advisor: Banks will work with you to review the deal and make sure they think it is financially sound. In a way, they will act as another advisor reviewing on your behalf.
• Potential Tax Benefits: Interest payments on business loans can often be deducted, reducing the net cost of borrowing.

But law firm buyers should choose their lender carefully. There are distinct benefits to working with a lender with proven success and experience getting law firm acquisitions fully funded and closed.?

I’ve seen firsthand how working with a bank that has experience in financing law firm acquisitions provides many advantages:

• Industry-Specific Knowledge: These lenders understand the specific risks and opportunities associated with law firms and the deal terms they are bought and sold under.
• Customized Financing Solutions: They can offer loan products that are tailored to the needs of law firms.
• Guidance and Support: Experienced lenders can guide buyers through the acquisition process, helping them avoid common pitfalls, increased expense and significant delays when compared to those lenders who aren’t law firm specific.

As a member of the LPE community, you get access to a vetted and proven network of established relationships with our Trusted Partners. We help our clients assemble the best team for the task at hand, including accountants, attorneys, financial advisors - and banks and lenders.

If you haven’t already, join us! Create your account in The Marketplace and get support and guidance, no matter where you are on your journey as a law firm buyer.?