Established Denver Law Firm, 20-Year Litigation Practice in Colorado

$855K

Revenue

$504K

SDE

0.5x

Multiple

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Full Editorial Writeup

This is a Denver law firm established in 2006 that has built a 20-year track record across real estate, construction defect, business law, and divorce matters. The firm has earned a reputation for aggressive litigation paired with affordable pricing, a positioning that generates a loyal base of roughly 1,500 clients and, importantly, more qualified inquiries than the current team can service. It runs out of a leased 2,911 square foot downtown office with four full-time employees.

The economics are the headline. On $854,578 of gross revenue the practice throws off $504,272 in cash flow to the owner, a 59 percent margin that reflects the high-labor, low-capital nature of a small litigation shop. The listed asking price of $245,000 against that SDE implies a 0.49x multiple, which is either a mispriced field or a signal that the reported cash flow is heavily tied to the departing owner-attorney's personal book and billable hours.

What is being sold here is a brand, a client list, a referral engine, marketing systems, and a library of forms and case knowledge, not a passive cash machine. Because this is a law firm, the buyer almost certainly needs to be a Colorado-licensed attorney or partner with one, which structurally narrows the buyer pool and helps explain the low sticker price relative to earnings.

Why we like it

Legal services are durable demand. Real estate disputes, construction defect claims, business litigation, and divorce do not disappear in a downturn, and construction defect work often increases when developers cut corners in boom years and litigation follows. This is countercyclical revenue diversification across four practice areas rather than dependence on one.
The reported earnings quality is unusually strong on paper: $504,272 of SDE on $854,578 of revenue is a 59 percent owner margin with only four employees and $5,000 monthly rent. If even a meaningful portion of that cash flow is transferable to a new attorney, the 0.49x asking multiple is well below typical small law firm pricing.
The firm has an existing lead-generation surplus, meaning it turns away or cannot service qualified inquiries beyond current capacity. That is the best kind of growth problem: demand already exists, so a new operator adding attorney or paralegal capacity can convert pipeline that is being left on the table today rather than spending to create demand.
Twenty years of operating history, a 1,500-client base, established referral relationships, a downtown Denver office, and a documented forms and research library give a licensed buyer real infrastructure to step into. This is a going concern with brand equity, not a startup dressed up as an acquisition.

How to improve it

Convert the existing inquiry overflow into revenue by hiring an associate attorney or additional paralegal capacity within the first 90 days. The listing states the firm already generates more qualified leads than it can serve, so incremental billable capacity should pay for itself quickly without new marketing spend.
Segment the client base and practice areas by profitability. Real estate and construction defect litigation typically carry higher realization than affordable divorce work, so reprice or de-emphasize the lowest-margin matters and steer capacity toward the highest-value case types.
Move from an affordable-hourly positioning toward flat-fee and contingency structures where appropriate, especially in construction defect and business disputes. This can materially lift effective rates and smooth cash flow versus billing purely on time.
Install a formal intake and CRM system to capture and nurture the inbound leads currently being turned away. Track conversion by source and referral partner so marketing dollars follow what actually produces retained matters.
Deepen referral relationships with real estate brokers, general contractors, and financial advisors who feed construction and business disputes. Systematizing these referral channels reduces reliance on the departing owner's personal relationships, which is the core transferability risk.
Document the departing attorney's playbooks, templates, and case strategies during the transition to preserve the two decades of institutional knowledge. Convert what lives in the owner's head into standardized firm processes so the value survives the handover.
Explore a modest fee increase across the affordable segment. A firm known for low pricing with excess demand almost certainly has room to raise rates without losing meaningful volume, and every dollar of rate increase flows nearly straight to the bottom line.

Diligence notes

The single biggest question is how much of the $504,272 SDE is the owner's personal billable production versus transferable firm earnings. A litigation practice built on one senior attorney's reputation and hours can lose a large share of revenue the day that attorney leaves, which is likely why the price is only 0.49x cash flow.
Confirm the buyer licensing requirement and structure. In most cases only a Colorado-licensed attorney can own a law firm, so verify who can legally acquire this practice and how a non-attorney investor could participate through a partnership or management arrangement without violating bar rules.
Scrutinize client and matter concentration. With roughly 1,500 clients spread across four practice areas the base sounds diversified, but pull the revenue split to confirm no single client, referral source, or practice area drives an outsized share of collections.
Review the pipeline of active contingency and construction defect matters, including expected timing and realization. These cases can be lumpy and long-dated, so understand how much of trailing cash flow came from one-time large settlements versus recurring recurring matter flow.
Verify the lease terms and continuity risk. The downtown lease expires August 1, 2027 with only a one-year extension available, so map out relocation or renewal options given the practice is marketed as relocatable but currently trades on its established downtown presence.
Assess trust accounting, malpractice insurance, and any pending bar complaints or open liabilities. A litigation firm carries professional liability exposure, so review IOLTA compliance, claims history, and tail coverage before closing.

Source

Originally listed on BizBuySell. View original listing →