Cost of Setting up in Private Practice

frfdm6e

Hi All.

I'm a solicitor who has just recently qualified and Im just wondering does anyone know approx. how much the cost of setting up in private practice on your own would be? Granted I won't be doing it for a few years yet but the idea of having my own practice has always appealed to me. I'm in a rural leinster area and have heard of a few "older" sole practitioners that are likely to retire in the next few years and am curious as to how much these practices normally cost to buy out?

Thanks in advance

Mr. Incognito

There are cost accountants that value this.

Dont be daft

I'd take a stab at €250k to tide you over for the first 18mths.

Depends on what area you'd be predominantly engaged in. If you were mainly conveyance then you'd be able to whip up turnover quite quickly, litigation however and you're on the back foot from the start.

That's the main a reason why buying a practice makes sense, instant turnover. Also, its much easier to borrow the money to buy an existing practice than to set up a new one.

Pat Mustard

Dont be daft wrote: »

I'd take a stab at €250k to tide you over for the first 18mths.

In general, the biggest expenses for anybody setting up a business as a self employed person are rent of premises, drawing a salary for oneself and staff wages.

Depending on budget, many start-up businesses don't open with support staff or expensive premises.

Many businesses, including solicitors' offices have been opened with small money.

WRT solicitors' offices as opposed to other offices, additional costs that arise are professional indemnity insurance and the cost of practising certificates. Professional indemnity insurance is significantly less expensive than it had been in previous years.

nuac

Dont be daft wrote: »

I'd take a stab at €250k to tide you over for the first 18mths.

Depends on what area you'd be predominantly engaged in. If you were mainly conveyance then you'd be able to whip up turnover quite quickly, litigation however and you're on the back foot from the start.

That's the main a reason why buying a practice makes sense, instant turnover. Also, its much easier to borrow the money to buy an existing practice than to set up a new one.

How, pls?

Dont be daft

The Mustard wrote: »

In general, the biggest expenses for anybody setting up a business as a self employed person are rent of premises, drawing a salary for oneself and staff wages.

Depending on budget, many start-up businesses don't open with support staff or expensive premises.

Many businesses, including solicitors' offices have been opened with small money.

WRT solicitors' offices as opposed to other offices, additional costs that arise are professional indemnity insurance and the cost of practising certificates. Professional indemnity insurance is significantly less expensive than it had been in previous years.

I agree.

Just "packet of fags" calculations here but I was thinking along the lines of

16k in rent and rates
5k in PI Insurance
7k in stationary, office furniture, computers etc.
60k in Staff wages, PRSI etc
60k in your own wages
75k in outlay (1k per file, 75 files)

Figures based on first 18 months of practicing, which, if your litigation based will be a pretty "dry" 18 months!
Maybe I'm way off. Would love to hear from someone who's actually done it.

Pat Mustard

Dont be daft wrote: »

Just "packet of fags" calculations here but I was thinking along the lines of

16k in rent and rates
5k in PI Insurance
7k in stationary, office furniture, computers etc.
60k in Staff wages, PRSI etc
60k in your own wages
75k in outlay (1k per file, 75 files)

Staff wages could be reduced to €30,000 straight away by hiring one person.

Maybe own drawings could be reduced to €50,000?

Outlays of €1,000 wouldn't arise in most conveyancing files. I'd say that outlays on files could be reduced to maybe €200 per file overall. Clients can be asked to pay for outlays wherever possible. €200 x 75 files = €15,000. I also think that if you are talking about conveyancing files, most of those outlays can be got back in a matter of weeks.

So maybe the calculation could read as follows:

16k in rent and rates
4.5K in bills and utilities.
5k in PI Insurance
2.5K Practising Cert.
7k in stationery, office furniture, computers etc.
30k in Staff wages, PRSI etc
50k in own drawings
15k in outlay (€200 per file, 75 files)
10K Servicing bank loans

€140,000.

At that, each of the 75 files would have to bring in €2K ex VAT, not counting the fact that outlays would be recovered reasonably quickly.

The cost of stationery would have to be paid every year but new furniture, computers, etc. would not.