On this week’s Wealthy Woman Lawyer® Podcast, we welcome Victoria Collier. Victoria is a certified elder law attorney who built a firm with a $1.5 million dollar value.
After taking her law firm to great heights, she realized it was no longer serving her passion and wasn’t getting her to where she wanted to be from a personal standpoint, so she sold it for six times her net revenue.
Today, she coaches attorneys on positioning their firms for sale so they can step into their true purpose or pursue another passion. Listen as she shares with us:
- The 7 most important steps to take when preparing your firm for sale
- What buyers want to see—the assets that make your firm highly marketable
- Ego, imposter syndrome, insecurities…how to step around the hurdles that keep you from getting to your next place of passion, once you sell your firm
- And much more…
Listen now…
Mentioned in this episode:
Transcript
Davina Frederick: Hello and welcome to the Wealthy Woman Lawyer podcast. We believe all women lawyers deserve to be wealthy women lawyers. Our mission is to provide thought provoking powerful and practical information to help you in creating your own sustainable wealth generating law firm without overwork or overwhelm so you can live your best life. I’m your host, Davina Frederick, and I’m so excited for you to meet our guest today. So let’s get started. Victoria Collier, certified elder law attorney and certified exit planning advisor successfully built her own law firm directly out of law school to over $1.5 million before she sold it in 2020 for six times her net revenue.
While practicing, she coached lawyers on how to add value to their estate and elder law firms by adding veterans planning budgets. Now, Victoria guides lawyers on how to build assets within their firms so they can sell it for real value when they’re ready to do so when they’re ready to do something else and live a different dream. her coaching company is Victory Walk Coaching. So we’re super happy to have Victoria here today. I’ve got lots of questions. I know you guys are gonna have them too. So let’s dive in. And thanks for being on the Wealthy Woman Lawyer podcast Victoria. Welcome.
Victoria Collier: Well, thank you Davina. It’s great to be here. This is a topic that not a lot of people talk about.
Davina: Exactly. It’s one we haven’t yet covered on our show, and or certainly not in any detail. So I was super excited. I actually connected with you on social media on Facebook, I think it was, and you mentioned something about selling your your practice. And I was like, oh, yes, we have to help get you on here to talk about that. Because it’s a question that comes up for a lot of my women, law firm owner clients. You know, the importance of how do we build a business that we can actually sell and not all businesses that are built are easily sold.
So I want to get into that. There’s a lot of questions I have. But before we do, I think it’s really important that we talk about your journey as an attorney. So how did you start out? Were you somebody when you were a little kid, you wanted, you knew immediately you want to be a lawyer? Like, you know, you were nine and watching Matlock, or whatever. And or was it something where, you know, along the way, it just seemed like the right thing to do at a certain point.
Victoria: I wish it were that clear when I was nine, but no. I moved out my parents house when I was 17. And still in high school. And so it took me a minute to get legs under me. And to do so I actually, at the age of 19, went in the Air Force, so I could afford to go to college. So I spent six years in the Air Force. And while I was in the Air Force, after I was a carpenter and a mason for three years, I crashed into became a paralegal. And so that was my first taste of what a law office, even though it was Air Force, but that was my first taste of what law and doing legal work was. And that inspired me.
Davina: Wow. So tell me about your time in the Air Force.
Victoria: So I joined when I was 19. So I was a little older than the many people who just start right out of high school. And I loved it, I just absolutely loved it. And I was stationed in Germany for two years, right out of basic training. And I was a, like I said, a carpenter, you know, five foot three, weighed 100 pounds, and you’re supposed to go to technical training, to learn your trade before you go to your first duty station. But they didn’t have any room in the technical training course, when I came through. So I went right to my first duty station with no training. 45 men and only one other woman.
And then there was me. It was interesting, especially, you know, when you go in the military, you have to take this exam called the asvab. And there truly are pictures on the exam. And there was a picture of a screwdriver, and it says, is this you know what type of screwdriver is this Phillips, Flathead, CD, whatever, and I got it wrong. And I’m like, if there’s anybody who needed the technical training, it was me. But I didn’t get it. I got on the job training, which is pretty much how I started my law firm as well.
Davina: Yeah, yeah, that’s Wow, I can’t imagine trying to become a carpenter like that, where you’re just like, you’re just trying to, you know, you know what the names of the tools are, that would be so tough. But it sounds like it was a good you know, it doesn’t sound like you’re afraid to just jump in and try to figure it out. It sounds like that’s you’ve had a lot of experience in that in your life.
Victoria: You know, it’s the only thing that has propelled me to where I am now is being able to, you know, basically step off the cliff and have faith that it’s either going to work or I’m going to learn from the experience.
Davina: I think that is a key characteristic of successful that differentiates successful entrepreneurs, business owners, from those who are less successful, and that’s their sort of ability to feel the fear and do it anyway. You know, and, and just learn, you know, learn, learned as you go, and then the confidence, that the trust in yourself to be able to figure it out. Do you find that did you find that to be the case?
Victoria: I do. But I will share that. After I had children, I shifted. And I did not understand why I felt like I lost my confidence. And I wasn’t as much of a risk taker. And I was actually, you know, limiting myself in many ways, until I realized what was happening and why it was happening. And it’s because I felt the weight of the responsibility of taking care of my family, because I have a wife, and she was also a lawyer. But when we had our kids, she stopped working. So all of the financial responsibility was on me. And instead of taking more risk to reach greater heights, I started withdrawing. And it had a hugely negative impact on my happiness and our financial success.
Davina: Right? Well, what did you do just sort of move yourself out of that?
Victoria: I had to hit bottom.
Davina: I also hit bottom on things I understand. So. So you hit bottom. And what was that like?
Victoria: Well, almost bottom. So I was I was doing things to sabotage my relationship, I was doing things to sabotage my law firm, and my financial success. And so what I ended up when I say I hit bottom, what happened was, we had specifically built a house, that was beautiful in the neighborhood we wanted to be in. Where we were going to raise our kids. And after living there seven years, when I went through this spiral, I had accumulated so much debt, we went on a vacation, I came back and I told my wife without any discussion, we’re going to lose it all if we don’t move. And she had no say in it, you know, and.
Davina: I bet that was a hard conversation.
Victoria: It was a hard two years thereafter. Yeah, until I could, you know, really get my head on straight and get the ship going back in the right direction.
Davina: Right. Right. And so you learn that sometimes you have to take a step back to move forward. And I feel that was a very humbling experience.
Victoria: Oh, absolutely. And while it’s, you know, not pleasant while you’re going through it, it has made all the difference in the breakthroughs I’ve been able to make after that. The breakthroughs that I can share with clients, so they can make breakthroughs. And so I cherish the experience, would not want to go through it again.
Davina: Yeah, you were not cherishing it in the moment. I certainly understand that as someone who’s been down that path. It’s not fun. When you look around, you’re like, oh, my gosh, what we’re doing is not working. And then we’re gonna make big changes. So tell me what changes you made to get yourself back on the path. Now, were you an attorney at that time, or were you in a different position at that time, and then you went to law school, or what point in your career did this occur?
Victoria: I actually was an attorney at this time, I still owned my own law firm. I was in that five year period where I was grossing quite nicely. But as I said, I was taking some behaviors to sabotage things. So when I realized that I just wasn’t being me anymore. So first of all, you know, I used coaching to help me get the right mindset. But secondarily, I realized that I wasn’t being me, and I am that risk taker, I am the person who, you know, takes on the responsibility. Willingly, not, it’s not imposed on me kind of thing. And so I stopped being, you know, victims of my circumstance. And I said, you know, let’s step into who you know, what our strengths are, what our gifts are, and why I’m here.
And so but it was also during that time that I realized, for me, I had taken my law firm to great heights. I had built it up. I had a great team, and I was you know building a business, not just a law firm. But it was also when I realized, this is no longer serving my, my passion. It’s no longer, even though I still love my clients and I still loved our purpose because it still fits in my personal mission as does what I’m currently doing. But it wasn’t going to get me where I wanted to go from a personal standpoint and to show my kids who all I am and can be. And I made that decision during that period of time that I need to sell this law firm so that I can step more into who I am and, and do the things that I’m put on this earth to do.
Davina: I love that. I so relate to what you’re saying, because for me, that was a, I made a decision to leave my law firm and pursue other things. And which led me to what I do now, and I’ve been doing for eight years. So I totally understand that being in that situation where you’re just realizing life is life is bigger, and we can take a lot of different choices. And I think sometimes with attorneys, we get so locked into our identity as attorneys, we feel like well, I’m a lawyer, I invested all this to become a lawyer. And I need to stay a lawyer, right? It’s like a life sentence. And then you’re like, what would it be like? I mean, it takes a while just to wrap your mind around the idea of what would it be like for me to do something different. Did you have that experience?
Victoria: No. The reason is, because there are so many things that I am interested in, and that my life mission and my life purpose feeds. But I do know that you know, so many people, because they were at the age of nine, when they knew what they wanted to do. They haven’t been able to explore or dream or be creative, or bring that childlike energy back into what would I do if I wasn’t a lawyer, because he wrapped their entire identity around it. And that’s part of the challenge of, you know, being miserable in your law firm. And you know, when the whole message out there is build, build, build, grow, grow, grow, and you’ll be happy, happy, happy. It doesn’t resonate. And then in some, for some people, it just makes them withdraw more. They don’t feel like they’re part of the community anymore. And they don’t feel like they can lose their you know, leave their law firm. And like you said they feel trapped.
Davina: Right.
Victoria: Like a life sentence.
Davina: There’s there’s definitely, there’s definitely life after a law. That that is absolute truth. You and I both are proven that. Well before we go down that journey, though, is where you are now I really want to talk about your law firm and growing a law firm. How long from the time you started your firm til you sold it? How much time are we talking about here?
Victoria: Yes. So it was 19 years, I started my own practice directly out of law school in 2002. And I sold it in 2020.
Davina: Great, so you had, you had that experience as a paralegal so that having that experience as a paralegal probably made it a an easier transition for you to start your own firm right out of law school. I would imagine because you had you had that experience, and then you’ve gone to law school. So you have a really good idea of kind of how, how being a lawyer actually worked right. But what was it like for you to be a business owner?
Victoria: Yeah. Well, certainly, you know, being a paralegal gives you a false sense of bravado that you think you know. You know, I, I felt that way when I went to law school, I’m like, oh, this is easy, I know the terms. So it was easy for about six weeks, and then they throw the reality at you.
Davina: And then you get the reality exactly. Reality check.
Victoria: So as far as being a business owner, you know, it came in phases. You know, they go as you know, they do not teach you that in law school. And I didn’t even know I was necessarily an entrepreneur, until I read Rich Dad, Poor Dad, in about 2004. So a couple years after owning my law firm. And then I was, you know, definitely on the entrepreneur path. And I started, you know, with coaches back then. So I’ve always had business coaches, and mentors.
And then later in my business, I had mindset coaches. And so I would say it was through having a business coach. My business coach for 19 years was Bill Hammond, and he passed away last year, but so that was instrumental with getting the mindset for this is a business. This is not a law firm. In fact, Bill Hammond said we’re in the marketing business, and we provide legal services. And I would go one step further and say, you know, we are CEOs of a business that provides services.
Davina: Well, tell me about your, so you started right out of law school. And how long did it take you before you started adding to your team, growing your team, and really hiring other staff and lawyers.
Victoria: So I think that’s the biggest mistake that people make is not hiring team soon enough. First of all, I started off with a partner, because in the state of Georgia, you get your you graduate in April, you take the bar in July, you don’t get the results until October 31. And so I knew there was going to be six months where I couldn’t practice. And I knew I was going to own my own firm. So I found this lawyer who was miserable, doing a different type of law. And I said, I will teach you this, if we can use your bar license.
And he said, okay. So that’s I started off with a partner. The very first person we hired was a receptionist. And that was from day one, to answer our phones, schedule our appointments and send out letters to clients. I’ve always believed that you have to look bigger than you are, and have a, you know, bigger persona than you are, and just having someone else answer your phones for you was was helpful for that. And so, I will say that over the years, I built my practice, and my profitability on paralegals.
And because I knew as a paralegal, I could do just about anything other than step into court, and assist clients, you know, obviously, you can’t give legal advice. But much of what we do in the law firm is administrative, especially my type of law, which was estate planning and elder care. So I built my practice on the backs of paralegals. I did try to hire lawyers throughout, I wasn’t great at that. And my first partner, after one year, he retired and, you know, sent me clients thereafter. And it was great. But I purposely chose someone who was also older, not just miserable, but older and miserable.
Davina: So the key is you’re going to bring in a partner early on older and miserable is what we’re looking for. So that they leave and we got it to ourselves.
Victoria: Right? Like, you know, I mean, I hired lawyers along the way. Like I said, I wasn’t hugely successful with that. And I did hire a lawyer that became a partner of mine at one point, but then after two years, he became not a partner anymore. And so it was not until I was hiring, specifically to sell my business, that I was successful at hiring a lawyer that I hired to be my COO that then helped with the policies and procedures and getting the financials in order. You know, like the reporting in a formalized way. We had them but had them formalized. And so she really was building the assets within our firm. And then when it came time for me to sell, I approached her and I’m going to sell either to a third party or to you if you’re interested. And so I did end up selling to her. But ultimately, I brought her in to get the business ready to sell. And in fact, it was ready to sell.
Davina: Wonderful, so let’s let’s talk about that. What differentiates a law firm business that you can sell to one that is not sellable.
Victoria: So many solo practitioners who truly have no team or anything like that, it’s more difficult to sell, because the only thing you’re relying on there is your income stream. And that’s a historical number. It’s hard to project what your future income stream will be, when the other only asset that you have is your reputation, and goodwill. And so that’s hard to transfer to another person. It is not impossible, but it certainly affects how much a person will get when they sell their law firm. So other types of assets that are helpful, that we can build.
And it doesn’t take that long to build when someone’s you know, ready and willing and not averse to action is creating policies and procedures. Creating a at least a basic level of team so that the production is not so required of the lawyer of the owner. And really it’s the most important thing, Davina, is having a mindset of CEO versus the mindset of lawyer. We’ve got to operate our law firm as a business and stop operating it as a law firm that, you know provides services.
Davina: Right, right. So when you brought this individual in to help you prepare the law firm, to be sold, what were some of the things that you tasked her with? What did she do to help make sure there’s clear evidence of value in your law firm?
Victoria: Right. So for starters, I just want to share that, you know, she did not know I was bringing her in for that purpose.
Davina: Did you know at the time? You knew, at the time that was the plan.
Victoria: Yes, yes, yes. In fact, when I did a personality test, the, the analysis, the the guy who is doing the analysis with me, he says, well, she’s gonna want to take over your firm. And he said it like it was a bad thing. I said, so how soon?
Davina: So can that be like next week? Because that would really be awesome.
Victoria: Right, exactly. So the first thing I had her do was put together an entire front end intake policies and procedures from when the when a person first calls, what are the scripts? What are the checklist? Where does it go, all of that. So to systematize, our front end office. And then from there, we, you know, just duplicated that with the other departments within the office, like marketing, sales, production.
Davina: Interesting to hear you say, you know, we know, you know, as business owners marketing, sales, we’re familiar with those terms, but you know, often the, so I have a product that I’m developing right now, that’s about systematizing, your law firm business, and seven foundational systems. And one of them, I call it fulfillment, and you called it production. And lawyers tend not to think about their business in terms of production or fulfillment, right?
Because that’s where the, that’s where the legal work occurs. And we’re kind of taught in law school, to bet it’s, it’s kind of a lofty thing, you know, it’s perfect, it’s perfection, right? It’s a learned profession, one of the only three learned professions, medical, law and theology, right? And to take it and put it in such business terms to say it’s its production. But that’s really what you have to do. If you’re creating a business that you want to sell. You have to think of it like any sort of other business where you’re creating a product. Right?
Victoria: Exactly. And in fact, that’s what I share with clients of mine is, you know, we need to look outside the law, to see how we need to operate our businesses, where we provide a service called law, you know, because, you know, our businesses and like you said, you know, that, like doctors are the only ones that you know, act like we don’t need skews.
Davina: Right, we just need to, we do this for fun. So in addition, so you had her come in and really deal with sort of making sure that all of your systems were set up. So that’s number one, right? The first thing, and then what are some other things that she did, to kind of help show evidence of marketable value in your business?
Victoria: So I was also teaching her to be the manager of the team. And so I, the year before I publicly stated I was going to sell the farm, I took two full months off to individual months. So I took April, and I took September off. And to see, number one, do I have a business or do I have a practice and the first 30 days I took off, it was horrible. It was a disaster in all the right ways. And then by September, I took 30 days off, and you wouldn’t even know that I was gone, or that I was ever there, you know, it had no impact on the firm whatsoever. So the second thing that I did was have her step into the management of the team and supervision of production, and start, you know, meeting with clients or, you know, we also had non attorney sales team as well.
So really just running the office, so that I as the owner could step out. Because a buyer in a perfect world is buying an asset that produces passive income and doesn’t have to step in and be the lawyer. Doesn’t have to step in and be the sales team. Doesn’t have to step in and draft the first document. That in the ultimate perfect world would be what a new owner is buying. An asset that provides passive income. Now, some buyers still want to be that lawyer. And so there’s still an opportunity for firms that aren’t set up like that, to still sell their firms. Because more lawyers want to be lawyers than they know how to be business owners and they’re willing to buy someone’s list. They’re willing to buy someone’s processes. Willing to buy someone’s team, you don’t I’m saying?
Davina: Right, right. So intake procedures, really replacing yourself is what we’re talking about you the first time you stepped out, you are not irreplaceable at that point, because you were so involved in the day to day still. And then the second time you stepped out by that time, you had made yourself replaceable. And that can be a hard thing, for a lot of people to wrap their mind around that, gosh, I don’t know if I want to make myself replaceable in my business. Now we know you were very motivated to sell by this time. And so you were very willing to do that. But I can imagine that a lot of attorneys that struggle with that concept. But it’s so critical.
Victoria: It is and ego gets in the way of a lot of a lot of things that create situations where we don’t succeed. So you’ve got ego going on. And you also have imposter syndrome going on, where if someone else comes in, and you know, can take over what I’m doing. Or they see that maybe I’m not as good as what it appears on the outside. Because when you are delegating, or you are allowing someone else to get close enough to do your job for you, then they might see that you’re not as good as you, you know, project out there. You know, I’m saying, right, a lot of insecurities come up. And then ego gets in the way.
Davina: So for you, that wasn’t an issue. You weren’t worried about somebody coming in and seeing kind of like the chaos and, and the mess behind the scenes that you know, because there when you brought somebody in, you didn’t have all these, you probably had some systems, right? But maybe they weren’t, like you said as as up to par as you’d like them to be for you to be able to sell. And how did that feel to how to, I imagine it’s a vulnerable sort of feeling to have somebody come in?
Victoria: Yeah, I’ll get your real vulnerable, I’ll show you some real vulnerability. So the in April when I was gone, she had just started. She was there for her first week. And I was gone, and we couldn’t make payroll. And she was, oh, didn’t know what to do. And so, yeah, real vulnerable. So I had to come back, you know, from that vacation and basically say, you know, this is never gonna happen again. This is what we’re going to do to change this. But now you’ve seen the mess, are you going to run away? Or are you going to stay? And so it was also a wonderful time to test character. And things like that. However, no, I wasn’t afraid because we all have messes. And the only way we can get out of messes is often asking for help, and my help was hiring someone to clear it up for me.
Davina: Right. I love that I love that you shared that story. Because I think it will really resonate with so many people and help so many people, kind of like you said, get over that ego part and realize that, you know, people when we’re inviting people in like that, it’s not for, they’re not there to judge us, they’re there to help us become better, right? And get and achieve our goals, you have a very clear goal in mind. So we talked about intake procedures and teaching others to manage. And you also mentioned a non attorney sales team.
And I think that’s so important. I certainly am working with a lot of women, law firm owner clients to get them to develop a non attorney sales team. Tell me what that was like for you when you first were introduced to that concept. And because you know, we first started out, we’re doing all the consultations. And we’re thinking how, how can somebody else? People are going to want to meet with a lawyer? How can they sign up for, you know, legal services, without being a lawyer. What was it like for you, that journey?
Victoria: I welcomed it from the beginning. And I think the challenge was finding where in the firm or what services in the firm, lend itself best to have a non attorney salesperson. You know, what requires legal advice and what does not require legal advice for someone to hire the firm. And so, like in an estate planning firm, I found it to be very easy to have a non attorney salesperson in the probate, you know, area or trust admin after someone’s die. Because, you know, ultimately the question is, you know, the issue is someone has died. And, you know, these are the assets. You have to go, you know, through probate to administer them.
So there’s no legal advice there. It’s do you want our firm or not, and so it’s teaching the sales conversation. And there’s also urgency because there’s actually you know, a death and action needs to be taken if someone’s going to access those funds. And so there’s not a whole lot of thinking or decision making on the behalf of a client. Versus do you want this firm or not, because this is the process, no matter who you go through. Versus estate planning, where there might be options, a will or a trust, or this or that. I found that more challenging to teach a non attorney salesperson, you know, as successful, however, where attorneys fall short, and where the ego gets in again, is that we feel like we have to actually describe all the stuff that’s in a will and in a trust and why one is better than the other.
And in fact, that just confuses clients. And that’s where a non attorney salesperson can be so beautifully helpful to a law firm, is that they are connecting with the client, they are talking about pain and solutions. They’re talking about future what it looks like if you have this solution, but they’re not getting into the weeds of what that is. And so I embraced that thought. My paralegals in my Medicaid and government benefits of veterans benefits, they had already been doing sales and doing them over the phone. Because again, it’s like the probate, you know, you have too much money, there are tools available through the state.
And we can employ them, this is what your life will look like afterwards. Do you want to hire us or not? Without getting into what is the strategy? So then, of course, the conversation is once you hire us, you’ll sit down with a lawyer, and they will outline what the strategy is for you. But with everything Davina, it’s setting up the expectations for the client beforehand, and I think that’s where the lawyers have a hard time is like, but the clients expect to see the lawyer. No, you expect the client to see the lawyer.
Davina: That’s a very powerful statement. Yeah.
Victoria: So there’s a lot of mind shift, you know, that has to happen with the lawyer, that, you know, we’re trained, that, you know, we’re the ones that are coming to see. We’re trained that you know, all of our education and training is, is what’s so important. And so we need to take a look at that and say that, no, we can set up the expectation differently for our team. We can set up the expectation differently for the client, and then that positions us differently. And that’s actually an asset to your firm, versus being just like every other firm.
Davina: I love that we can set the expectations. That’s such a powerful, life changing thing, when you realize that you get to choose. UYou get to choose, and you can set those clear expectations. And if you’re not setting clear expectations at the beginning around what you want, what you want for your clients and the experience you want them to have, they’re gonna fill in the gaps, right? And it’s not, it’s probably not gonna make you happy. It’s not gonna make you happy. We’re not going to like their approach, right? So it’s so important to make that shift, especially if you’re trying to build a saleable asset. So next up for what you needed to have a sellable asset. You mentioned earlier, your finances and getting that those proper documentation or can you talk about that a little bit more?
Victoria: Yeah, absolutely. Absolutely. So, you know, everyone focuses on income, we also need to look at expenses. You know, are there expenses that are necessary that that the new owner is going to have? And then there’s what’s coming through the firm that maybe owner specific and not firm specific? And are things out of whack or in whack? Like, am I spending, you know, 30% of my revenue on marketing? And am I getting my ROI? Most people don’t know anything about their numbers at all. And so having, you know, good P&Ls, good balance sheet understanding them, but more than that, it’s knowing the numbers of what are your leads?
What’s your, you know, consultations? What’s your conversion rate? What’s your average case value? And how, you know, how many of these do we need to get these numbers? And that is foundational, because when a buyer is looking, they’re gonna say, okay, how many clients do you have per year? And what’s your average? And, you know, are you charging enough? Are you charging too much? You know, so that’s where having formalized reporting on your numbers is a benefit when you’re selling because the owner can see that you know your business.
Davina: Right, and they can see whether there’s true value or not. Because, you know, there’s certain people have different goals, when they have a law firm business. Some people want a lifestyle business, they’re not really looking for, like, like we discussed a big, high revenue and a team and all that. They’re looking for something that is a lifestyle business. And so they’re probably taking a lot of that cash out of it, you know, for themselves, because there is right. And that’s one thing, and you take that cash and you can invest it do other things. And then there are other people who are growing an asset, the business, that’s going to be a wealth generating machine for them down the line in the future, once all these kinds of pieces and parts are in place, and then eventually, they’ll have something that they can sell.
So there’s different approaches, and there’s nothing wrong. I mean, people can choose whatever it is that they that they want to do. But for those who are looking to sell it, I think these are some great information that you’re giving us on how we show the value. Because one of the things I think I sold a business before it was not a law firm business. And one of the things that impacts the value is also marketability of the business. Like who is anybody out there looking to buy? I mean, who’s gonna? Do we have people that we’ve targeted to buy? And in your case, you actually did you have somebody you brought in somebody? And kind of with that intention in mind? Did you have another idea around that? Or was that?
Victoria: Well, absolutely. You know, in fact, I, one of my clients right now, who is also an estate planning attorney, and she contacted me early in the year. Early 2020 and said, you know, hey, I’m looking to retire, would you like to buy my business and I said, well, I’m under a non compete, so no. But I, you know, I have other people do this. And so she fortunately, had a business. And I, she hired me to help her sell it. And literally, in two months, I had hand picked, you know, several opportunities. One of them said, I’m interested.
And five months later, she contacted me in February, in April, I contacted potential buyers, in June, we were under contract, and in seven days, we’re going to sell. I mean, we’re going to close. So and that was to a third party outside the firm. So there’s definitely other options than just know hoping to sell it to an associate attorney or someone you bring in. And not only was she able to sell within, you know, five months of, you know, tapping a buyer on the shoulder, but she’s selling for over 200,000 more than what her prior agent told her that she should be able to expect. Because she wasn’t looking at the real assets.
Davina: Good. So let’s, let’s talk about assets, and, and so when you had this buyer for your client, your friend, who hired you to help sell her firm. What kinds of things was the buyer expecting to see?
Victoria: Well the buyer looked at, you know, the tax returns for the past five years, and you know, the P&Ls. And, you know, they’re looking for patterns to see if something, you know, just, you know, did you get a huge lump sum, or is this consistent. They’re looking for recurring revenue streams. So maintenance plans are something that’s very easy to set up and keep your clients right in front of you all the time, you know, paying you. So we look at that. So reoccurring income streams, looking at stable employees. You know, I think that’s one of the areas where, solo practitioners, you mentioned lifestyle business, or you’re setting it up for wealth, you know, legacy generation, you can do both.
But what you can’t do is you can’t keep all the profit for yourself and expect to number one, make a lot of money. And number two, then sell it for a lot of money. And so the way to really be profitable, short term, middle term and long term is actually hire a team that you make three to five times off of whatever you’re paying them salary wise. And you are at some point becoming the manager of not the team. I you know, there’s something that I like to say is, we don’t manage people, we manage processes. And I think that’s what holds sole practitioners back is they think that oh, I don’t want to manage people.
I don’t like managing people. You don’t have to manage people when you have processes, you know. But that’s what holds people back and so what this you know, buyer was looking for was you know, does the seller have a team, that’s rock solid. So that, you know, the buyer still liked being the lawyer. But he also wanted to know he was supported in all the additional business that the other firm had. Because, you know, he still has his own firm too. So he was adding to his firm. And he wanted to make sure that he didn’t have to come in and do a whole lot because the team was already there doing it.
Davina: Right. I think that is that is, that is huge, because a lot of your buyers will be people who, like you said earlier, may not be looking to come in and jump in, as an attorney, right, they may be at that point in their career, where they’re looking for to add to their business, and create additional income for them without having to jump in and do the work. So I love that.
Victoria: Can I just include this real quick is just that, you know, when we say team, I’m not talking 10, 20 people. You know, there’s a foundational set of people that, you know, someone can have this cost effective, and, and can generate profit without having this monster of a business, you know what I’m saying? So you know, it’s not like you have to have, you know, a 4000 square foot building with 20 people running around. You can get by with a basic, I would say, two people besides yourself. And that can be operated very effectively, very profitably and be a real business that’s desirable to purchase.
Davina: Right, right. So that, I know what question now I’ve had it stems from that, which is, you sold your practice for six times your net revenue. So how, are there for people who are interested in buying other people’s practices? What kinds of, do you make, what kinds of financial arrangements are you seeing people make? Because I want to dispel the notion that, you know, you have to have millions of dollars sitting someplace to buy somebody’s business outright with cash, right? Some people can do that. But there are other people, particularly if you have people who’ve grown up in the firm, who are now looking to buy the firm. So what kinds of arrangements have you seen?
Victoria: Alright. So the first thing I hear from people is, you know, I’d like to sell it to my associate, but they can’t afford it. Well, they can’t afford it, you’re not paying them enough. I’m kidding. But what people don’t understand is, first and foremost, there’s the SBA does give loans out to buy law firms. And their interest rates are incredibly low. And so number one, I would look at an SBA loan for anybody who’s looking to purchase a firm. But otherwise, what’s very common is that the seller will hold a note for a certain period of time, and that’s paid back through the revenues of the firm.
And if you’re that confident, and the ongoing revenues of the firm, based on the transition in your history, then that you know, is is a good solution so everyone can get in. In my situation, for example, I got a lump sum in the beginning, and I got a monthly stream for a year and a half. Also, a buyer is going to hope and expect that the seller is going to stay on for a little while, on some degree, as a consultant or even working in the firm, doing certain things for a period of time. Obviously, the seller is going to want that to be as short as possible in most cases. Now not all sellers are like that.
I just spoke with a non lawyer business that wants to sell this week and he’s like, look, I just don’t want to own the business. But I’d be, I want to do the marketing and the sales, I’m really good at that. I just I’m not good at the business owner and he wasn’t. So sometimes the seller actually doesn’t want to stay as of counsel, right? There’s, there’s lots of different arrangements. But one thing that is very critical to understand is that there’s two different types of sales and one is an asset sale and one is a stock sale. And getting that wrong is going to affect taxes, insurance and liability.
Davina: Explain that to us a little bit.
Victoria: So, generally speaking, a seller would like to sell their entire business the entity itself, okay. And so as a law firm, like, like me, I was an S Corp. So I have stock. And so my buyer bought the entire law firm to include my tax id, my you know, all of my, all the assets within the firm, all that kind of stuff. When the person, dwhen the buyer buys that, you know, she’s buying all the liability as well. Meaning if I’ve got clients out there that are going to sue me, she’s taking that on as the firm owner, right? Because she bought the firm, and I as a lawyer, am not sued. It’s the firm that gets sued.
And so you know, you have to know that. Now, she was comfortable buying the stock, because I mean, she’d worked in the firm for two years, she knew what any of the issues were, right. Yeah, so not so scary in that situation. But a third party’s, not going to come in and buy the entity. A third party is going to want to come in and just buy the assets, but not the actual entity. So I’m going to buy your list, I’m going to buy basically your team, I’m going to buy your clients, I’m going to buy your marketing system, I’m going to buy your sales, you know, scripts or whatever, and I’m going to buy your goodwill.
But what I’m not going to do is I’m not going to take your tax ID number and I’m not going to you know, take your entity, I’m going to have a different name, even probably. So that cuts me off as a buyer from your liability that you created. Because maybe you were, you know, stocking, you know, taking cash and not putting in your register. Maybe you’ve got unhappy clients that just haven’t surfaced yet. So a buyer, a third party buyer, is likely going to want an asset sale.
Davina: So that’d be something like kind of the example you gave earlier, where somebody maybe has their own firm already. And so they’re looking to expand into maybe a different practice area so they buy a firm, and they’re they’re probably buying the assets for that because they already have an entity and they’re sort of merging it into their business. Would that be a good example? Okay, okay, good. Good, good. Well, that it’s so interesting, is there anything, we’re running short on time, but I want to make sure that we’ve got everything that we need to know if we are trying to get our law firm business together for for sale.
So looking at your, your systems and procedures, teaching others to manage replacing yourself, having a non attorney sales team. Really getting those financials high and tight. And exploring the different options like, like you say, you know, you work with clients to help them, find those buyers, and they may not just be within their firm, that they can really think outside of their own firm, when they’re looking for a buyer. What else do we need to make sure we add to the list that we need to be paying attention to, if we’re preparing to sell.
Victoria: I would just say that, first and foremost, we need to prepare to sell from the beginning and not just when we’re burned out exhausted and ready to retire. We need to you know, you’ve probably heard that book Built to Sell, we need to build the business as if we’re selling it tomorrow, because we are not guaranteed today. And you know, people, like I’m working with a person right now, who has a spouse that has a medical condition that is requiring them to move to a different environment based on the medical condition. And so, you know, the business has to be closed down or sold.
And so that’s not predictable. And so, you know, that’s number one thing is, you know, I hear people say all the time, well, you know, I mean, I’m not ready for that, like five years from now. Does that mean that you’re not going to get you know, like, do anything until you’re ready to sell. You know, even when we have a baby, we start preparing the room, you know, when we know we’re pregnant. We you know, start planning our marriages when we’re like six years old if we’re women, right? So I would say you know, build it to sell as if you’re going to sell tomorrow, even if it’s not going to be for 20, 30, 40 years, because we actually don’t know what tomorrow looks like.
Davina: Right. Right. I think that’s that’s wisdom, you and I are a little bit older. And so we know that wisdom for being on the other side of things, and sort of seeing that. And while it may take a while for people to you know, get systems in place and stuff like that, when you are minding those financials and keeping those good books is just foundational for me, we would advise, as attorneys, we advise our clients I right? So as a lawyer who really need to be tracking and knowing and really separating those numbers out for our business right from the beginning.
Because I imagine when you go to sell your business, you know, people are going to be looking at the history of your business, not just the last couple of years, they’re going to be looking at it if you had kind of running it like a sloppy ship for years. And then oh, I’m fine. I want to sell so I better start, you know, running it high and tight. Then you know, people are gonna look at that and they’re gonna say, like, what’s really that’s really true here, right? Wouldn’t you imagine?
Victoria: Well, yes, that can happen but you know, what also happens is that, for example, let’s take a family law firm. A buyer is gonna say okay, well how many contested cases do you have? How many non contested cases do you have? How many child custody cases do you have? And if you’re not keeping good records of that, then the owner at some point is going to be like, they’re just nitpicking and I don’t have time for this, I’m still running a business. And they may give up on the process. Just because they were not business oriented enough for knowing what a buyer is going to look at.
Davina: You’re not wanting to be there at the end suddenly have to go you know, dig out into the archives. If you’ve already got everything set up, then it becomes a much easier process at a time when you’re feeling really burnt out and ready to go or, you know, maybe not even burnt out and just ready for next chapter. You know, usually when we’re ready for our next chapter, we’re ready to ready to go and so the sooner, the more prepared we are the better for sure.
Victoria: Right. Right. I had bought a farm and, man once I was ready to start farming and everything I couldn’t get out of my firm fast enough.
Davina: Wow, that’s so fun. So we did you buy a farm, in, so you’re in. Are you in Georgia?
Victoria: I’m in Atlanta. Yeah.
Davina: Yeah, okay. So did you buy a farm there then in Georgia?
Victoria: I did. Yeah, it’s about two hours from my house. And I it became legal last year to grow hemp for CBD products. And so sure, I bought a farm specifically for that purpose so that I can make products for senior citizens, which is still my client base, my still passion to help people with the highest quality of life possible. So that’s, that’s what I was running towards.
Davina: I love it. I love it. You, we definitely we may need to just get some time to chat just so that I can hear all of your stories for all the different careers that you have. I’m also multi career person and have so many interests and it sounds like you heard the saying you’ve had a lot of different careers. And very interesting. You’ve lived a very interesting life it sounds like. I thank you so much for being here. Tell me, tell me how we can connect, how people can connect with you on social media or any other ways or whatever they can reach out to you if they’re wanting to discuss the sale of their business.
Victoria: Sure. So my website is victorywalkcoaching.com. And the easiest way to learn about what we provide is on that website right now and always being you know, updated as life updates. And then also my email is Victoria@Colliercoaching.com. And I am on Facebook as you said that’s how we met. So I am I will always be a lawyer and so I’m on the will your Facebook groups Boss Lady and others. And so I’m Victoria L Collier on Facebook.
Davina: Wonderful. Thanks so much for letting us know. Thanks again for being here Victoria. I really enjoyed our conversation.
Victoria: Thank you. I did as well. Appreciate the opportunity.
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