I am sole owner of a 8 attorney firm in the Northwest. Two other attorneys are income partners - no equity - and the other five attorneys are associates. I am just turning 50 and am beginning to think about future retirement. What questions/issues should I be thinking about?
Fifty seems to be the point at which attorneys being thinking about their retirement and their future. Some even consider and in fact make complete career changes at this point in their lives. Here are a few questions to begin thinking about:
- Have you decided when you want to retire and leave your firm? Or do you want to work forever?
- What amount of cash or annual cash flow do you need when you exit?
- Do you presently have a retirement plan and how much income to you project that it will provide at different exit times?
- To whom do you want to transfer your interest? Family members in law school, other attorneys in the firm, another firm, etc?
- Based on future cash flow, do you know how much the firm is worth today?
- Do you know how to best maximize the income stream generated by the firm - in the years ahead while you are still with the firm and after you leave the firm?
- Have you been able to institutionalize the firm - or is it uniquely you?
- Is the firm even marketable?
- Do you have a succession/exit plan?
- Do you have a plan for your business if the unexpected happens to you?
- Have you taken steps to protect your family's wealth?
John W. Olmstead, MBA, Ph.D, CMC