7 Questions to Ask Before Buying a Solo Attorney Practice

2026-08-21

Before buying a solo law practice, ask these 7 critical questions about finances, clients, and liabilities to avoid costly mistakes.

Buying an existing solo law practice can be a smart way to skip the startup phase, but it carries unique risks. You are not just buying a book of business; you are inheriting liabilities, client expectations, and operational quirks. Before you sign anything, ask these seven questions to protect your investment and your license.

1. Why is the seller really selling?

The seller’s reason for selling affects everything from price to transition risk. Common reasons include retirement, health issues, burnout, or a move to a larger firm. Ask directly and verify. If the reason is burnout, expect a practice with neglected client relationships or administrative chaos. If it is retirement, check if the seller is willing to stay for a transition period, typically 3 to 6 months, to introduce you to key clients and referral sources. A seller who wants to leave immediately may be hiding problems.

2. What is the actual financial health of the practice?

Request at least three years of profit and loss statements, tax returns, and a current balance sheet. Look for trends in revenue and expenses. A practice that is shrinking may be priced low for a reason. Calculate the seller’s discretionary earnings (SDE), which is net profit plus owner’s salary, perks, and one-time expenses. For solo law practices, SDE often ranges from $80,000 to $250,000, depending on location and practice area. Compare the asking price to a multiple of SDE, typically 1.5 to 3.0 for small professional practices. Also, review accounts receivable aging. If a large portion is over 90 days, you may struggle to collect.

3. What is the client base really worth?

Clients are the core asset, but not all clients are equal. Ask for a client list with revenue contribution and practice area. Look for concentration risk: if one client generates more than 20% of revenue, that is a red flag. Also, check for client retention rates. In a solo practice, clients often stay because of the personal relationship with the attorney. If you are new, they may leave. Ask the seller to introduce you to top clients during the transition. Consider including a retention clause in the purchase agreement: if a certain percentage of clients do not re-engage within six months, the price adjusts.

4. What are the outstanding liabilities and ethical obligations?

You are not automatically responsible for the seller’s past malpractice, but you could be if you take over the files. Ask about any pending or potential malpractice claims, bar complaints, or unresolved trust accounting issues. Review the seller’s trust account records for the last three years. A single error in trust accounting can lead to disbarment. Also, check for outstanding debts, such as office lease obligations, equipment leases, or loans. You may need to assume these or negotiate the seller to pay them off before closing.

5. What is the condition of the office lease and equipment?

If the practice has an office, review the lease. Is it assignable? How much time is left? What is the monthly rent? In many cities, commercial leases for a small office range from $1,500 to $5,000 per month. If the lease is above market, you may be stuck with high overhead. Also, inspect the equipment: computers, printers, phones, and furniture. Are they functional or outdated? You may need to budget $5,000 to $15,000 for upgrades. If the seller owns the building, consider whether you want to buy it or lease it from them.

6. Are the employees and systems transferable?

If the practice has staff, such as a paralegal or receptionist, will they stay? Key employees can make or break the transition. Ask about their roles, salaries, and any employment agreements. You may need to offer retention bonuses, typically 5% to 10% of salary, to keep them through the transition. Also, review the practice management software and case management systems. Are they cloud-based or local? Can you easily transfer data? If the seller uses outdated software, you may need to migrate to a modern system like Clio or MyCase, which costs $40 to $100 per user per month.

7. What is the tax structure of the sale?

This is critical for your tax planning. The way the sale is structured affects your tax liability and the seller’s. You can buy assets (client files, equipment, goodwill) or buy the entity (e.g., a PC or LLC). Buying assets is usually safer for you because you avoid inheriting unknown liabilities. However, the allocation of the purchase price among assets matters. For example, goodwill is amortizable over 15 years, while equipment can be depreciated faster. Work with a CPA to determine the best allocation. Also, consider the tax implications of assuming the lease or any debts. You want to maximize your deductions, but you also need to avoid triggering the seller’s tax problems.

FAQ

Do I need a lawyer to review the purchase agreement?

Yes. Even if you are a lawyer, you need an independent attorney who specializes in practice sales. They will spot issues you might miss, such as non-compete clauses, indemnification provisions, and transition terms. Expect to pay $2,000 to $5,000 for legal review and negotiation.

How much should I budget for the transition period?

Plan for at least 3 to 6 months of overlap. You may need to pay the seller a consulting fee, typically $1,000 to $3,000 per month, plus cover your own salary and operating costs. Total transition costs can range from $10,000 to $30,000.

Can I finance the purchase?

Yes. Options include SBA loans, bank loans, or seller financing. SBA 7(a) loans are common for practice acquisitions, with down payments of 10% to 20% and terms up to 10 years. Seller financing often requires 10% to 30% down, with the seller carrying the rest at 5% to 8% interest.

What happens to the seller’s malpractice insurance tail?

You need to ensure the seller purchases a tail policy to cover claims arising from their past work. This can cost $5,000 to $15,000, depending on the policy. Negotiate who pays for it, but do not close until it is in place.

The bottom line

Buying a solo law practice can be a profitable move, but only if you do your due diligence. Ask these seven questions, get everything in writing, and work with a CPA and a lawyer who specialize in practice sales. The cost of professional advice is small compared to the risk of inheriting a hidden problem. Take your time, and do not let the seller’s urgency push you into a bad deal. A well-negotiated purchase can give you a head start, but a poorly vetted one can set you back years.