Law Firm Valuation
Law Firm Business Valuation Calculator & Exit Planning Built for Attorneys
We built one platform that tracks your law firm business's value monthly, identifies exit gaps early, and ensures your personal finances align with your exit timeline.
1,000+ Businesses have joined YourExitValue.com
Most Law Firm Owners Have No Idea What Their Business is Actually Worth
Current Law Firm Valuation Multiples (2026)
Law Firm values are strong due to increased buyer demand from larger firms, practice-area buyers, PE-backed platforms. Here's what companies sell for:
Every business is different. That's why you need to track your value.
Included in Your Exit Value is a complete Exit Planning Assessment where you track your progress quarterly against your results from the previous quarter.
Know your number and watch it grow
Most business owners guess at their value. You'll know it with precision.
Our platform uses six proven valuation methodologies to give you a complete picture of what your business is worth today—and tracks how that number changes month over month. No more waiting for annual appraisals or paying $15K+ for outdated reports.
See your trends. Spot opportunities. Make informed decisions
What Actually Drives Law Firm Business Value
Revenue and earnings are the two most influential factors in your law firm business's valuation. But not all companies are valued equally. Here are the factors that move your number up—or down:
Practice Area
Recurring Areas
Estate planning and business law are worth more than contingency. Recurring practice areas with predictable revenue streams command higher multiples than contingency-based litigation that's unpredictable and doesn't transfer well.
Contingency = unpredictable cash
Origination Credit
Distributed Credit
All relationships with one partner = high risk. If one attorney controls 80% of client relationships, the firm's value walks out when they do. Distributed origination credit indicates transferable client relationships.
Single rainmaker = key-person risk
Associate Leverage
2:1 Leverage
2:1+ shows scalability. Solo practitioners have limited value. Associate leverage demonstrates a real business versus a practice—buyers want firms that can grow without adding partners.
No associates = no leverage
Realization Rate
90%+ Realization
High realization shows proper pricing. Realization rate (collected vs. billed) indicates pricing power and client quality. Firms with 90%+ realization have clients who value the work and pay accordingly.
Low realization = pricing issues
Technology Systems
Modern Practice Mgmt
Cloud-based systems show operational sophistication. Modern practice management, document management, and billing systems indicate a professionally-run operation that's ready for transition or integration.
Paper files = difficult transition
Client Concentration
Diversified Base
No client should exceed 10% of revenue. Client concentration creates transition risk—if your biggest client represents 25% of revenue, buyers will discount heavily for the risk of losing that relationship.
Concentrated = acquisition risk
How to Value a Law Firm
The U.S. legal services market includes over 450,000 law firms generating approximately $350 billion in annual revenue. Law firm valuations are among the most complex professional practice transactions due to ethical rules around non-lawyer ownership and the deeply personal nature of attorney-client relationships.
Seller's Discretionary Earnings (SDE) is the primary method for solo and small firm valuations. Law firms typically sell for 0.5x to 2.0x SDE — generally lower than other professional practices due to the high owner-dependence and ethical restrictions on fee-sharing with non-lawyers that limit the buyer pool to licensed attorneys in most states.
Revenue multiples for law firms typically range from 0.25x to 0.75x annual gross revenue. Practices with structured fee arrangements (flat fees, retainer agreements, subscription legal services) command higher multiples than those dependent on hourly billing, which is inherently unpredictable.
The defining challenge in law firm valuation is the ethical and regulatory framework around attorney-client relationships. In most states, law firms can only be sold to licensed attorneys, which significantly limits the buyer pool compared to other professional practices. Client matters are confidential, fee-sharing rules vary by state, and clients always have the right to choose their attorney — meaning client retention is never guaranteed. Firms with institutional client relationships, multiple attorneys, and practice areas that don't depend entirely on the named partner's personal reputation transfer value most effectively.
Despite these challenges, law firm M&A activity has increased, particularly for practices in estate planning, immigration, personal injury, and insurance defense where recurring or portfolio-based client relationships exist. Use our free calculator above to get your instant estimate, then track your value monthly with YourExitValue.
Frequently Asked Questions
What multiple do law firm businesses sell for?
Most law firm businesses sell for 1.5x – 2.5x SDE or 0.5x – 1.0x annual revenue. However, the range is wide. Companies with strong practice area can command significantly higher multiples. YourExitValue tracks exactly where you fall on each value driver.
How does practice area affect my company's value?
Practice Area is one of the biggest value drivers for law firm businesses. Larger firms, practice-area buyers, pe-backed platforms specifically look for companies with strong performance here. Improving this metric can significantly increase your multiple.
How long before selling should I start tracking my law firm business value?
Ideally 1 to 5 years before your target exit. This gives you time to improve your practice area, reduce owner dependence, strengthen your team, and document growth trends buyers pay premium prices for.
Who buys law firm businesses?
Common buyers include larger firms, practice-area buyers, PE-backed platforms, as well as individual buyers looking to own a business and strategic acquirers. Each buyer type values different aspects. YourExitValue helps you understand what each looks for.
What valuation method is used for law firm businesses?
Most law firm businesses are valued using SDE (Seller's Discretionary Earnings) multiples for smaller companies under $1M in earnings, and EBITDA multiples for larger companies. Revenue multiples (0.5x – 1.0x) are sometimes used as quick reference.
What's the fastest way to increase my law firm business value?
The fastest improvements typically come from: 1) Improving your practice area to hit the target, 2) Reducing owner dependence, 3) Documenting your systems and processes, and 4) Cleaning up financials. Most owners add 20-40% in 12-24 months.