Solicitors are trained to think several moves ahead in a case, yet many leave succession planning for solicitors until their own retirement is looming. That delay risks lower goodwill, hurried tax decisions and unsettled staff. It can also leave clients exposed if the handover lacks clear authority to act. As a firm of chartered accountants advising law practices of every size, we see the same pinch points time and again: insufficient working-capital data, a partner structure that no longer reflects how the firm operates and a lack of accurate valuation evidence when buyers come calling.
Good succession planning for solicitors goes far beyond choosing a date to step back. It embraces business advice on structure, profitability, cashflow management, compliance with the SRA Accounts Rules and the tax consequences of each exit route. That may sound like a long list, yet the rewards are tangible. The Office for National Statistics reports 2.72 million VAT- or PAYE-registered businesses in the UK, a reminder that buyers have plenty of choice when acquiring professional practices (ONS, 2024). Securing the best multiple for your equity, therefore, relies on proven financial performance, transparent processes and early action – all areas where accountants add value.
Structuring the firm for resilience
A firm’s legal structure shapes both its tax profile and its appeal to successors. Limited liability partnerships continue to dominate, comprising 57% of the 9,125 regulated solicitor firms in April 2025 (SRA, 2025). LLP status protects personal assets and simplifies profit-sharing, but it also requires members’ agreements that cover admission, retirement and dispute resolution. Our business advisory team can model different structures – LLP, incorporated company or hybrid arrangements – to see which best supports long-term ambitions while keeping administration manageable.
Financial management that supports succession
Robust numbers drive confident decisions. We recommend:
- Monthly key metrics: Lock-up days, WIP valuation and partner drawings compared with net profit.
- Quarterly reviews: Working-capital needs against projected case profiles.
- Annual dry-run valuations: A realistic market price, not just book value.
Using our cloud-based dashboards, partners see issues early and can adjust fee targets or cost bases well before retirement talks begin.
Regulatory obligations and risk
The Solicitors Regulation Authority expects orderly transfer of client matters. A closing-down project plan should include:
- Client communication: Engagement letters, consent for file transfer.
- Residual balances: Identification and clearance.
- PI run-off cover: Budgeted provision for six years’ premium.
Accountants help by testing trust-account reconciliations and ensuring the annual accountant’s report will satisfy the SRA even after the practice ceases.
Valuing a legal practice
Law firms rarely own hard assets, so value centres on sustainable profits. Buyers usually apply a multiple of super-profits over partner-equivalent salaries. We benchmark against recent transactions and OBR data showing capital gains tax (CGT) receipts of £19.7 billion forecast for 2025-26 – evidence that transactional activity remains strong despite rate rises (OBR, 2025). A higher multiple follows when:
- Fee income is diversified across practice areas.
- Dependence on any one partner or client is low.
- Lock-up is under 90 days and debtor control is tight.
Our valuation reports stand up to due diligence, giving buyers confidence and helping sellers defend price.
Tax efficiency when you scale or sell
HMRC collected £858 billion in taxes in 2024/25, 3.5% more than the previous year (HMRC, 2025). With rates and allowances under pressure, timing gains matters. Current CGT rates are 18% within the basic band and 24% above it, with Business Asset Disposal Relief at 14% up to £1 million. Aligning completion dates with year-end drawings, maximising pension contributions and using spouses’ allowances can shave thousands from the final bill.
Preparing for retirement, sale or wind-down
Succession planning for solicitors should begin at least five years before the intended exit. A typical timeline looks like this:
- Five years out: Vision setting: Will you pass the firm on internally, merge or sell outright?
- Three years out: Governance review: Update members’ agreements and partner appraisal frameworks.
- Two years out: Vendor due diligence: Commission an independent financial and compliance audit.
- One year out: Heads of terms: Agree price mechanics, earn-out clauses and post-completion consultancy roles.
Early planning also supports staff retention. Shared ownership schemes or loyalty bonuses reassure key fee-earners and maintain billing momentum through the transition.
How we make succession seamless
We combine big-firm experience with small-firm values:
- Strategic modelling: Scenario plans for different exit dates and structures.
- Tax optimisation: Personal and corporate, UK and cross-border.
- Valuation and deal support: Negotiating heads, liaising with legal advisers and verifying completion accounts.
- International reach: As part of an international network we source buyers across Europe, widening your pool of successors.
Find out more about these services on our tax planning pages.
Your next step
Succession planning for solicitors is not a one-off event – it is a structured process that protects client relationships, preserves firm value and secures the retiring partner’s future. Start early, measure performance rigorously and surround yourself with advisers who understand both the legal sector and the latest tax rules. Our team acts as a sounding board, modeller and deal-closer, giving you the confidence that every financial and regulatory detail has been covered.
If you are ready to talk about succession planning for solicitors, email us or call our London, Reigate or East Grinstead offices. We will map out the first actions and show how our global relationships and local commitment can make your exit smooth – and rewarding.