Due diligence should confirm the assumptions behind your offer and reveal what ownership will require in practice. It is a focused investigation, not a substitute for commercial judgement or specialist legal and financial advice.
Start with strategic fit
Before requesting documents, ask whether the opportunity fits your growth plan. Consider location, client type, services, staff, systems, premises and the seller’s preferred handover. A practice can be financially attractive yet operationally difficult for your team to absorb.
Financial and fee information
- recent accounts and current management information;
- gross recurring fees reconciled to billing records;
- one-off work, discounts, write-offs and unrecovered time;
- maintainable profit and normalising adjustments;
- aged debt, work in progress and payment methods;
- tax, liabilities, finance and working-capital requirements.
Client risk and retention
Review concentration, sectors, geography, client age, profitability, service mix and the strength of each relationship. Understand which clients depend heavily on the seller and how communications will be handled.
Staff and culture
Examine roles, salaries, benefits, contracts, length of service, qualifications, performance, holiday, working patterns and key-person risk. Plan how responsibilities and culture will fit your existing practice. Take appropriate employment advice.
Operations, systems and premises
Understand software, licences, data quality, workflow, cyber security, hardware, filing standards, subcontractors and premises obligations. Estimate the time, cost and risk of any migration rather than assuming it will be straightforward.
Professional, regulatory and legal matters
With your advisers, review ownership, engagement terms, data protection, regulatory history, insurance, complaints, claims, leases, material contracts, restrictive covenants and any other liabilities that could affect the transaction.
Offer structure and protections
Make the assumptions behind your price clear. Define what is included, payment timing, adjustments, due-diligence conditions, exclusivity, handover, client retention and the responsibilities of each party. Ambiguity at offer stage tends to reappear later as delay.
Build the 100-day integration plan
- name the people responsible for each workstream;
- sequence staff and client communications;
- decide what will change immediately and what will not;
- plan systems and data migration with fallbacks;
- track key client conversations and retention;
- agree how the seller will support the transition.