How do you determine the value of a law firm? This particular one has a $1.4 million dollar contract with the county and also gets private referrals.
My wife wants a divorce and says her law firm is worth nothing because it has no assets. Her cash flow is huge and she has a guaranteed contract to do third-level public defender work for the county where she works.Law firms can be difficult to value. You have to take into account the hard assets and the practice sources for immediate revenue.
However, the valuation for divorce purposes may be different from a valuation for business-sale purposes because. as a non-attorney (I'm assuming), you cannot be an owner of her practice.
In addition, if she is a sole practitioner, there's no business without her active involvement. Speak to a divorce attorney and a professional services valuation specialist to get the guidance you need on how to handle the financial issues between you and your wife.
Nina L. Kaufman, Esq. is an award-winning New York City attorney, edutainer and author. Under her Ask The Business Lawyer brand, she reaches thousands of entrepreneurs and small business owners with her legal services, professional speaking, information products, and LexAppeal weekly ezine. She also writes the Making It Legal blog.