Privately owned architecture firms face the generational challenge of either embarking on an internal ownership transition/leadership succession program or the external sale or merger of the firm. There are financial, cultural and professional career satisfaction parameters which are to be considered and weighed in deciding upon a course of action. An external sale/merger yields the highest financial return to owners with continued employment for staff and the closure of the firm yields the lowest financial return to the owners with no continued employment. An internal transition/succession more likely perpetuates the firm culture when compared to an external exit and while the proceeds to owners are less than an external sale and more than a closure, there is continued employment for owners and for staff who wish to continue. The most important trade-off facing a design firm is ceding control of the firm and design decisions in exchange for the payment of the purchase price. In the circumstance where neither an external sale nor an internal transition is a viable course of action, the closure of the firm serves as the default choice where the owners are unable to continue the firm in existence.
There is no right answer as to which course of action is best and the decision as to how to proceed is up to each firm and its owners in the context of its circumstances and the variables that matter most to them. It is critical for the leaders of a firm to constantly revisit the firm's strategic plan and the owners' plan for transition and leadership succession (internally or externally). Waiting too long to plan or act will likely result in neither an internal transition nor an external exit and therefore the default alternative of closure will ensue. For all reasons set forth above, a closure has few advantages and numerous disadvantages and should be avoided if at all possible.