The recent Depression (2008, not 1932) has dashed the hopes and expectations of many lawyers. A recent survey reported by USA Today in its March 7, 2014 edition says that 58% of those between the ages of 54 and 64 years of age will retire later than the originally planned.
Postponement generally comes from a reduction in the value of the assets that were to be used to fund the retirement and the fear that the current value of the asset pool (stocks, bonds, 401K, real estate, etc.) no longer will be sufficient to sustain the lifestyle of the retiree, given the extended life expectancy of our population.
There is another reason. As noted in the recently published book, Life After Law: What Will You Do With the Next 6,000 Days?, most lawyers don’t know what to do with themselves after they leave their practice. While the law practice has value, the price for the practice is seldom the issue … it’s what will I do with myself? Until you can answer the question of "what will I do" and "where will I go," one is likely to stay put. Only coincidentally, this postpones the time when savings accounts must be used.
The pressure is increasingly being felt by our Baby Boomers … sell the practice or "die in your boots." The latter option is not attractive and deprives one’s family of the money that could have been paid for the value of the practice before it (the practice) dissipates and/or the lawyer dies.
I had never thought of digital assets being inherited! Wow, what an oversight. Clearly, digital property is an asset and can be passed on to the next generation. Have you thought about the goodwill represented by your Twitter account, your blog, you website and all the other digital assets you create? If not, you should because but for an affirmative act on your part, the rights to that property may be lost.
Most lawyers will pooh-pooh the idea that their electronic/digital property is worth anything … they said this about the value of their law practice also. Many lawyers are beginning to adjust their thinking, recognizing that law practice goodwill has value … and together, this property could be worth tens of thousands, if not hundreds of thousands, of dollars. Why should this value evaporate? Take care and plan not only your estate but also the estate of your law practice, including digital assets!
I have been getting more calls from lawyers wanting to retire, wanting to sell their law practices. As a result, I started writing a new book. I just finished Life After Law: What Will You Do With the Rest of Your Life? It is being edited now and will be available for sale in October.
As a result, I’ve been giving a lot of thought to the definition of Goodwill, the primary asset a lawyer has to sell. And though it is not consistent with the accounting profession’s definition, I have come upon a new definition that I believe is more meaningful to the average lawyer, whether buying or selling:
Goodwill can be defined as legacy … it’s your legacy that you’re passing along to others … It’s your reputation, your phone number, your system and way of doing business, all the intangible elements that made you successful and provides you, the selling lawyer, with what to sell … The better is your reputation, the more value your law practice will have.