Greendale Funding of Gallatin, Tennessee explains how a lawyer can approach buying or buying into a law practice in Sumner County, TN: pricing the revenue that stays, structuring a term loan and seller terms, and planning repayment. Sumner County, TN counted 57 legal services employers in 2023. Ethics and transfer rules are for counsel.
How to buy a law firm?
Start with revenue by client and by matter type for three years, then estimate what stays after the sale. Hourly and flat-fee clients with ongoing matters can be priced with more confidence than contingency cases whose outcomes are open.
Law firm lending for Sumner County, TN businesses
Sumner County, TN counted 57 legal services employers in 2023, and 71.9% had fewer than five employees (County Business Patterns 2023). A term loan funds the purchase; a line of credit covers payroll while transferred matters bill. More on the trade is on the law firm funding page.
How to buy into a law firm? Notes for Sumner County, TN businesses
A buy-in purchases a share of an existing firm. The incoming lawyer may borrow personally or through the firm, and payments can be funded from the new share of profits. Read the partnership or operating agreement first.
Small business loans for law firms, explained for Gallatin, TN owners
Partners read the selling firm's collections, receivables aging, client concentration and the buyer's own practice record. Trust accounts are not part of the purchase funds.
Law firm loan repayment: a Gallatin, TN primer
Illustration only, invented figures: a buyer pays $240,000 for a practice collecting $400,000 a year. If 80% stays, $320,000 is expected. A loan payment of $4,000 a month is $48,000 a year, 15% of the expected collections (our arithmetic: $48,000 / $320,000).
Retention math by matter type for a Sumner County, TN practice purchase
Illustration only, invented figures: a seller's practice collected $400,000 last year from three sources: $220,000 in hourly estate and business work, $130,000 in flat-fee matters and $50,000 in contingency fees. A buyer who expects 85% of the hourly clients, 60% of the flat-fee pipeline and none of the contingency fees to carry over projects $265,000 (our arithmetic: $187,000 + $78,000 + $0).
In this invented example, the $48,000 a year of loan payments from the earlier illustration would take 18.1% of the projected $265,000 (our arithmetic), not 15%. Splitting retention by matter type, instead of using one blended percentage, shows how much the payment depends on which clients stay.
Document requests a buyer sends a Gallatin, TN law practice seller
- Collections by month for three years, split into hourly, flat-fee and contingency matters
- Receivables aging, with the amounts the seller expects to collect personally after closing
- Open matters by responsible attorney, with client details withheld until counsel says what can be shared
- The lease, its remaining term and whether the landlord allows assignment
- Roles and pay for every employee, and who intends to stay
- Practice software, phone numbers and the web domain that move with the sale
A partner reviewing the purchase request may ask for much of the same list, plus the buyer's own tax returns and credit.
How a seller's handover period shapes a Gallatin, TN practice loan
A seller who stays on for several months introduces clients and hands over matters, which supports the retention figure the loan is sized to. Write the handover into the purchase agreement: how long the seller stays, what the seller is paid, and whether part of the price depends on collections during that time. A price partly tied to retention lowers the amount the buyer borrows at closing.
Law firm loans: a Gallatin, TN primer
Weigh a seller note alongside a loan: payments tied to retained revenue move some risk to the seller. County figures are on the Gallatin, TN data page; more articles are on the Greendale blog.
By Greendale Funding · Updated
