Most of what we write here about succession — the founder dependency, the earn-out mechanics, the value of a second tier that stays after completion — applies just as well to a law firm as it does to an accountancy practice. But solicitors' firms carry a genuinely different regulatory layer on top, and it's one that changes both who can buy the firm and how the deal has to be structured. Ignore it and a deal that looks straightforward on the numbers can stall for months on approvals nobody budgeted time for.
Accountancy has no equivalent restriction on who can own a firm. Legal services do. For most of the profession's history, only solicitors could own a solicitors' practice — which meant a founder looking to bring in outside capital, or sell to anyone other than another firm of solicitors, simply had no market to sell into.
The Legal Services Act 2007 changed that by creating Alternative Business Structures (ABS): SRA-licensed firms that can have non-lawyer owners and external investment, including private equity. It's the single biggest reason the legal consolidation wave — and the entry of external capital into legal services — has been possible at all. A firm structured as an ABS has a genuinely different, wider pool of potential buyers than one that isn't, and founders thinking about an eventual sale are well served by understanding early whether their structure allows for it.
Buying an accountancy practice is, at its core, a commercial transaction with commercial approvals. Buying into a solicitors' firm additionally requires regulatory sign-off — new owners, and often new managers, need SRA approval, and the firm's Compliance Officer for Legal Practice (COLP) and Compliance Officer for Finance and Administration (COFA) arrangements need to hold up under the new ownership. None of this is usually a barrier to a well-run firm. It is, reliably, a timeline item — and deals that don't build regulatory approval into the completion schedule from day one tend to be the ones that drag.
This is the detail that catches founders out most often. When a solicitors' practice closes or ceases to practise in its existing form, English and Welsh solicitors are required to maintain run-off professional indemnity cover for a minimum of six years after the firm stops trading, to cover claims arising from historic work. That cost — often a significant one — needs to be explicitly addressed in the deal structure: who is buying the cover, whether it's factored into price, and whether the transaction is even structured in a way that avoids triggering run-off at all (a share sale of the practice vehicle, rather than an asset sale into a new entity, commonly does). Get this wrong and a founder can be left personally exposed to an insurance bill years after they thought the sale was finished.
Three things are worth doing well before a firm goes anywhere near a buyer. First, get a straight answer from your own compliance team, or an external adviser, on whether your firm's structure supports an ABS conversion if it hasn't already happened — it materially widens who can buy you. Second, build SRA approval timelines into any expectation of when completion can actually happen; treat it as a real item on the plan, not paperwork that happens automatically alongside the commercial close. Third, get the run-off insurance question answered and priced before you're mid-negotiation, not after — it belongs in the same conversation as the multiple and the earn-out, not as a footnote discovered by lawyers on both sides three weeks before completion.
None of this makes law firm succession harder than accountancy succession in the ways that matter most — the fundamentals of a saleable firm are strikingly similar: recurring client relationships, a team that isn't entirely the founder, clean financials, a sensible fee base. What it does mean is that the regulatory layer needs to be part of the conversation from the first meeting, not a surprise raised by lawyers once heads of terms are signed. A buyer who understands the ABS and SRA landscape properly, and structures around the run-off question upfront, is a materially easier buyer to actually complete a deal with.
