Changing an “Exit Strategy” to an “Options Strategy”
Stephen P. Gallagher
I would like to thank my friend, Jim Calloway for his Law Practice Tips Blog posting of March 14, 2018 where he expanded the dialogue about The Legal Profession in Transition- Solo Practitioners and Their Future. Jim also linked to a couple articles my colleague, Leonard E. Sienko, Jr. and I wrote for the New York State Bar Association. All three articles appeared in The NYSBA Journal. The first Yesterday’s Strategies Rarely Answer Tomorrow’s Problems appeared in September 2015. the next follow-up article For Sole Practitioners, the Future is Not What it Used to Be and the most recent article, The Legal Profession in Transition was published in September, 2017 .
Jim reported that, “He often counsels and teaches new lawyers about building a practice from the ground up.” Jim suggested that it may be a much better situation for many of them to work with an experienced solo practitioner for a few years with the goal of taking over the practice. Young people can gain experience and receive advice while building a rapport with clients that they hope to retain after their lawyer has retired or transitioned to an “of counsel, but on call” status.
The whole idea of forming these relationships with younger lawyers is to help you create a firm that can thrive without the you. It is natural to want your firm to grow and prosper without sacrificing the freedom to live the lifestyle you want, so you want to build a firm that you can cash out and sell one day so you can retire comfortably or go after your next big idea.
You want to put yourself in a position to sell your firm for the maximum amount of money, so you will need to re-design the firm to thrive without you – so the next owner can continue to grow and profit from your hard work when you’re gone.
John Warrillow, the author of Built to Sell refers to having an “options strategy,” as opposed to an “exit strategy.” The idea is to have as many choices in the future as possible. When you follow an option strategy, Warrillow says, you build systems and a management team around you so that if a buyer comes along, or you decide it’s the right time to get out, you have a sellable business.
I do appreciate the uncertainty these young, frequently debt-ridden lawyers must face in trying to gain the skills needed to gain acceptance by the senior lawyer who may only be “exploring” moving away from full-time practice. I also accept the fear and frustration of senior lawyers who are trying to negotiate their own transition. I believe the survival of the profession may depend on how well these relationships are formed.