My partners are near retirement age, and we’re discussing what to do about the fact that we now have more clients than I can handle alone.
I work out of my home so hiring an employee or finding another partner aren’t options (for home insurance reasons).
They are of the mind that we can just choose a couple hundred clients and sell the list to another firm (notifying the clients first of course). Is this a thing? It sounds crazy to me. Have any of you sold off clients or bought clients in this way? It’s not like we’re in a traditional office where someone takes over the whole space like selling a franchise.
Its a thing. I went through the same situation when I was in a practice with both of my parents. When they retired there was no way I could handle it all.
We sold the majority of the client list on a % basis of clients who stayed over a three year period. We receive a % of total billings of the clients who stays with the new guys over a three year period. We got a higher % on those who stayed on in year 3.
There are a variety of ways to work out a payment structure depending on retention period and other factors.
Ok, thank you both for responding. Working a retention period into this makes way more sense to me. Part of my thought process was why would anyone do this when I can’t guarantee the clients will go to them just because I gave them a list.
Obviously, there would be more retention if I can find a firm close to our own location.