Being invested in the fate of your practice after you have left your role is important. You can bet that the buyer will consider it so - one of the greatest concerns to a buyer is whether the practice they are purchasing will maintain its turnover after the key practitioner exits.
The key to making this work lies in the fine details of the client transition program and in the vendor being willing to provision the necessary time to carry this out. It’s for this reason we say to our vendors that retirement only truly commences after the clients have been transitioned to the new owner.
A vendor who takes the initiative and actively commits to working with a buyer on the content and execution of the client transition program will instil confidence in the buyer that leads to better retention terms.
The exact form of this commitment will vary according to buyer and client needs. The vendor might segment the client base. They might offer an in-person introduction of the business clients to the purchaser as part of the transition. They might provide an ‘on call’ transition service as required. It might be all this and more - the important part is that the vendor’s involvement be useful to the buyer and reassuring to the client.
We also find that many of our vendors are keen to stay involved with the firm following the sale – often as a part of an extended transition program, but also possibly as a partner (where they retain some equity) or an employee (perhaps on reduced hours to enable a shift in their work/life balance). When the buyer is willing, this kind of arrangement can be highly and mutually beneficial.
It’s important to emphasize that one size definitely does not fit all. What appeals to one buyer may cause another to walk away. It’s yet one more reason why it’s vitally important to reach the widest possible audience of qualified buyers, and to be clear where your preferences lie in terms of the timing of your eventual exit.
How can you determine the appropriate amount of time to allow for transitioning the clients? Again no one size fits all. However, the guiding principle here is that the larger the size of the fee base you are managing the longer the transition period will last – and, importantly, the greater the resources the purchaser will need to have available to devote to the task.
You need to know what’s important to you. Visualise your pathway out of practice life, keep your goal uppermost in your mind and the transition can be rewarding in more than just the financial sense.