Why Law Firms Need Business Plans
Having a solid plan can mean the difference between success and failure.
This is what you always dreamed of. After years of school and working for others, you’re striking out on your own. You’re starting your firm. It’s a big accomplishment. Congratulations.
It’s also a big step. You’re now more than an attorney. You’re a small-business owner. And that means you’ll need a business plan.
You might be thinking: Why? My “business” is practicing law. I know how to do that.
True. But running a firm means managing what is in essence a service-oriented business. Having a thorough, written plan in place makes it more likely that your business will succeed. A good business plan provides:
- A list of goals you want to achieve in your law business, with ways to reach them
- A sales tool that helps you to obtain financing or add partners or employees
In other words, a business plan is a roadmap to your future.
For instance, you’ll need to market your firm. A business plan is a way to understand what your market is. What kind of clients will you be seeking? What are your strategies for attracting them?
There’s also the day-to-day operation of your business. What will you need to pay your rent and other bills? Will you need to hire a part- or full-time business manager to handle billings and keep track of hours spent on clients? This requires projecting what your monthly revenues and expenses might be, and how you expect to meet those goals. If you can’t meet your financial obligations, you’re out of business, no matter how skilled an attorney you are.
As your practice grows and changes, you can revise the plan. Indeed, that’s a good idea. A business plan provides a way to think through the challenges and opportunities your practice might face. Is there a chance, for instance, that key clients might go out of business or merge with others? How might you deal with that possibility?
So how do you get started? If you’re the only attorney in your firm and your practice follows a standard discipline (divorce, bankruptcy and the like), there are books and online templates that you can use. These can provide an inexpensive way to get a plan in place.
However, if you see opportunities to grow your practice—particularly if you have a distinctive specialty, such as tax law for creative professionals—consider consulting with a business plan professional. Needless to say, that professional should be familiar with the ins and outs of a smaller legal practice.
Whatever route you take, having a solid plan in place can help you make your dream a reality—and not a nightmare.