For years, selling a law practice was prohibited because ethics regulators believed clients, files, and a firm’s good will were not something that could be sold. This prohibition did not really affect larger law firms, which would just buy out partners, i.e. the partnership would return the percentage of the equity owned by the retiring partner. Smaller law firms were able to “sell” themselves by merging with other firms.
Solos had to be more creative. Selling the firm’s physical fixtures and furnishings for more than their reasonable market value was a common way to get around the prohibition. Another way was to create a sham partnership, in which the departing lawyer received retirement benefits from the new partner. Solos who were unwilling or unable to take advantage of one of those options, would simply give away their clients — or just close up shop.
lennyesq 