Corporate lawyer Ruth Hargreaves — part of our specialist professional services team and an expert in business sales and exits — explores the options available to law firm partners, from partner buy‑outs to private equity sales, acquisitions and employee ownership trusts (EOTs).

For individual partner exits

Existing partner buy-out
If only one or some of the partners in a firm are looking to make an exit, a common solution is for the remaining partners to buy out the departing partner(s).

Since those remaining are already involved in the business, they’ll have a solid understanding of its financials, operations and risks. This familiarity reduces the need for extensive due diligence and makes the transaction more efficient and cost-effective.

Another benefit of a partner buy-out is retaining the firm’s independence. Unlike with introducing a new partner or investor — which may bring conflicting visions for strategy and operations — this route offers a seamless transition that promotes stability for both the business and its culture.

That said, a partner buy-out isn’t always viable. The remaining partners may lack access to the funds needed to complete the purchase and financing the deal could risk overleveraging. Additionally — if firm funds are used to facilitate the buy-out — it may reduce cash flow available for other business needs.