Valuing a Sydney professional firm means valuing clients, people and unbilled work.
A legal practice or an accounting firm owns little you can touch. A valuer looks at who the clients would follow, what the partners take out and what unbilled work will collect.
- $1,495 + GSTThe fixed fee where turnover is below $2 million, put in writing before we begin
- 2 business daysFrom payment and complete information to a signed small-business report
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- 10 yearsHow long the working file behind each report is kept
Delivery time starts once payment and all required information have been received.
What a professional firm in Sydney is worth depends on the profit left after each working owner is paid a market salary. A valuer tests whether clients deal with the firm or with one partner, and how much fee income rests on a few of them. Work in progress is counted separately, at what will be collected. Practising certificates, registrations and licences are checked too, because some belong to individual people and not to the firm.
A buyer pays for clients who stay once the selling partner has gone.
Nearly everything a professional firm owns goes home each evening. What changes hands is the expectation that clients keep sending work. A valuer asks who each client would follow: the firm's name, a team or one person. Fees shared across several people are worth more than fees resting on one partner's relationships.
What does a valuer change in the accounts of a practice?
Reported profit often leaves out a proper wage for the owners' own work, so a valuer charges a market salary for each working partner or director. What is left shows the firm's leverage: profit made through employed staff, which a buyer can keep, as against fees a partner earns personally.
- ·Fees from a one-off matter, such as a single large transaction
- ·Rent, where the owners hold the office in a related entity
- ·Private costs paid through the practice
Work in progress is valued at what will be collected.
Unbilled time and unpaid bills can be a large part of what a departing partner is owed, yet neither is worth its face amount. A valuer looks at the firm's record of write-offs and slow payers, and at fixed-fee jobs that have run over. The partnership or shareholders agreement usually says whether these sit inside the price.
New South Wales practising certificates and national registrations sit behind the fees.
Law practices in NSW are regulated under the Legal Profession Uniform Law (NSW). The Council of the Law Society of NSW issues solicitors' practising certificates, and all complaints about lawyers in NSW go to the NSW Legal Services Commissioner. A practice run through a company is known as an incorporated legal practice. One or more of its directors has to be an authorised principal: a solicitor whose practising certificate allows them to supervise others.
Tax agents and BAS agents need registration with the Tax Practitioners Board before they provide those services for a fee, and ASIC registers company auditors and liquidators. A business giving financial product advice generally needs an Australian financial services licence from ASIC, or can act as an authorised representative of a licensee. What happens to these when owners change is a question for the firm's lawyer.
A settled firm is valued on capitalised earnings, with net assets as the floor.
Capitalising maintainable earnings, which turns a typical year's adjusted profit into a value, suits a settled firm whose profit repeats. Where a known change is under way, such as a senior partner retiring in stages, a discounted cash flow can model it year by year. Net assets, mainly collectable debtors and work in progress, sets the floor where the goodwill is personal to one person.
Professional firms: questions we are asked.
How is goodwill in a Sydney legal or accounting practice worked out?
It is what remains of the firm's value once its tangible assets are taken out. A valuer capitalises the profit left after market salaries for the owners, then deducts collectable debtors, work in progress and equipment. Goodwill that would follow a departing partner is personal, and a buyer will not pay for it.
Our NSW accounting practice has one registered tax agent. Does that affect the value?
It can. A company or partnership that is a registered tax agent also needs a sufficient number of registered individual tax agents to provide the services and supervise. Where one person fills that role, a valuer asks what would happen to the fee income if they left, and whether a second registered person is in place.
Does it matter who holds the licence in a financial advice practice?
Yes. ASIC says its licence assessment is of the licensee at a point in time, not of the owners or employees. So a valuer asks whether the practice holds its own Australian financial services licence or is an authorised representative of another licensee, and what that agreement says about a change of owner.
What records does a valuer need from a professional firm in Sydney?
Three years of financial statements, fee income by client and by partner, aged lists of debtors and work in progress, what each owner is paid, the partnership or shareholders agreement and the office lease. They go through our secure client portal once you decide to go ahead. Meetings at our York Street office are by appointment.
Where the rules on this page come from
This page describes the rules in general terms. It is not legal, tax or duty advice: your lawyer or accountant advises on how a rule applies to you.
- ·About the Office of the NSW Legal Services Commissioner, Office of the NSW Legal Services Commissioner
- ·Your practising certificate, Law Society of NSW
- ·Practice structures, Law Society of NSW
- ·Incorporated Legal Practice Toolkit, October 2021, Law Society of NSW
- ·Tax agent registration, Tax Practitioners Board
- ·BAS agent registration, Tax Practitioners Board
- ·Company auditors, Australian Securities and Investments Commission
- ·Registered liquidators, Australian Securities and Investments Commission
- ·Check if you need an AFS licence, Australian Securities and Investments Commission
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Small Business Valuation
$1,495 + GST
The package for turnover below $2 million: a signed report in 2 business days. Delivery time starts once payment and all required information have been received.
Larger than that? The fee steps up with turnover. See every fee
Page last reviewed on 15 November 2026. Business Valuations Sydney, 32 York Street, Sydney NSW 2000.