Selling Personal Injury WIP
What does an ideal personal injury WIP book look like?
Good value personal injury WIP has acquirers competing for purchase, and this has the potential to drive prices upwards. Our experience shows that deals such as these are strategic sales. The decision to off-load a personal injury caseload will have been well thought through, and time will be spent “packaging” the caseload for sale, sometimes involving a bid process. Its all about getting full value out of the personal injury caseload.
If more law firms approach a sale in this way, there is the ability for ‘market making’ to drive prices further upwards. In these scenarios, this is not a fire sale.
To increase/maintain value in personal injury WIP, a firm needs a clear matter listing readily available and will accurately log key data. Case files will be tidy/chronologically recorded (paper or paperless) and truly reflect the recorded management information data.
Prior to any due diligence, it is advisable for firms to remove cases with little prospects of success from the listings along with dormant files. If a firm can offer triangulation, providing historic settlement patterns and win/loss ratios, this will add potential value.
The more prepared the vendor is for a sale, including an understanding of valuation and transactional processes, the better the likely outcome for them.
A survey this month carried out by Zebra of 15 acquisitive firms, revealed that 13 are actively looking for strategic off-loads. Serious injury and clinical negligence caseloads have the potential to attract some big players, particularly if the selling firm has a high profile, and is known for technical excellence.