Arrangements[ edit ] Law firms are organized in a variety of ways, depending on the jurisdiction in which the firm practices. Sole proprietorshipin which the attorney is the law firm and is responsible for all profit, loss and liability; General partnershipin which all the attorneys who are members of the firm share ownership, profits and liabilities; Professional corporationswhich issue stock to the attorneys in a fashion similar to that of a business corporation; Limited liability companyin which the attorney-owners are called "members" but are not directly liable to third party creditors of the law firm prohibited as against public policy in many jurisdictions but allowed in others in the form of a "Professional Limited Liability Company" or "PLLC" ; Professional associationwhich operates similarly to a professional corporation or a limited liability company; Limited liability partnership LLPin which the attorney-owners are partners with one another, but no partner is liable to any creditor of the law firm nor is any partner liable for any negligence on the part of any other partner. The LLP is taxed as a partnership while enjoying the liability protection of a corporation.
That is, they recognize that they cannot sufficiently grow or compete any further on their own. The ability to break through that ceiling, gain scale and even solve for succession typically means considering a merger or acquisition opportunity.
So before you start taking those meetings, it makes perfect sense to educate yourself on the different profiles of typical acquirers and the types of firms they are seeking to fill a need in their business plans. Meet the Acquirers We find that most acquirers fall into 1 of 4 categories: They tend to do a small number of deals, so they are typically more strategic in nature than financial.
The benefits of these firms are that the seller can likely maintain an active voice in steering the direction of the ship, become a relatively significant equity holder if so desiredand have the opportunity to still run your office the way you want.
Another important distinction comes for those who become an equity owner. There is still a very significant liquidity event down the road if they take on an investor or sell the firm.
Principals who have a longer runway to retirement and are still looking to retain some managerial duties, and those who are most focused on a good cultural fit. Not a good fit for: Sellers who value maximum upfront money or those wanting more of a national footprint or brand.
Anyone looking to remain fully in charge of operations, since to an extent, investment management and financial planning are standardized across the firm.
Also, those looking to get a deal done quickly might steer clear of this category as these standalone firms tend to be less experienced deal makers. They excel at operations, streamlining businesses, standardizing processes, and maintaining strong communities of like-minded advisors.
They will take over the entire investment management program, financial planning process, and essentially everything aside from client service and business development.
Also a fit for smaller firms looking for an exit strategy or to gain considerable scale, and those wanting to step away from the day-to-day operations and just focus on clients.
Any principal who has not made peace with giving up full control.
Platform Acquirers These are organizations with many different types of businesses under one roof, but with common middle- and back-office infrastructure. While they want you to leverage their platform and scale, they are all about letting businesses continue to operate in silos.
Advisors who are close to retirement yet do not have a succession plan; those who truly want to retain a hands-on client management role; or, those who want to focus only on business development.
The firm would take all the operations, compliance, HR, and administrative activities off your plate, yet still allow you to retain local operating control. Those who value maximum upfront cash, are looking for a more boutique organization, and in the case of opening a new office, maintain some local operating control.
Advisors looking to remain fully in charge of operations since, to an extent, investment management and financial planning are standardized across the firm. Playing the Match Game Options are a great thing, but if a prospective seller is not strategic about who they engage, the exploration process can become a full-time endeavor.
Put another way, without having real clarity on your own business goals, jumping into meeting with a multitude of acquirers will likely be a thankless task. So what must a principal gain clarity on? Consider these 6 questions to start with: How much control am I willing to give up?
Am I comfortable with handing off just the middle- and back-office activities or can I make peace with absolving myself of investment management and financial planning? What do I value most in a deal structure: What exactly am I looking to solve for and how essential is it to solve for these items?
How do I want to live the rest of my business life:In his role as General Counsel to the firm, Mr. King leads a legal team that advises executive management on matters related to strategic business initiatives, corporate policies and procedures, business development, regulatory compliance programs and strategic management of the firm.
The Company This Independent Financial Advisory company was setup over a decade ago by a SME corporate clients who choose to use them for financial advice. In addition, they are opportunities They require an experienced Financial Adviser based in Birmingham to provide role, you will look to service their existing financial planning needs and identify / .
Line managers are directly involved in the sales-generation activities of the firm. True Staff sales management positions are part of the direct management hierarchy within the sales organization.
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Though assessments would reveal gaps in leadership skills in this bunch of top managers, these managers have been with the firm long enough to expect a succession to the top role and would not accept an external entity.