Law schools may be great at giving lawyers a legal education, but many are very poor in preparing an attorney to run a business. The last 2 blogs discussed succession planning and the need for a backup attorney, all important issues for running an ongoing law firm. So once you have decided to start a new law firm and are ready to hang out your shingle you need a plan. Whether you’re an experienced attorney or new in practice don’t start a new practice without a business plan. Every new firm needs to address the business side of the law.
A law firm is a business. This business just happens to practice law. And as with any business it needs to have a written business plan. Why put the plan in writing? Generally people that put plans in writing tend to follow the plans more closely and are more successful. The plan should not be a static document; it needs to be reviewed, preferably monthly, against what actually happened. As needed you should make adjustments to the plan to keep you on track. So what should a business plan contain?
1. An executive summary of what your new law practice is and is not.
2. What the legal structure is for your firm.
3. What will you call your firm?
4. Where will your office be located?
5. What areas of law and types of clients do you want to accept?
6. How do you plan on marketing and selling your services; i.e. obtaining clients?
7. Are you planning on teaming up with other lawyers or law firms for certain work?
8. Create a list of measureable goals that you need to reach to be successful.
9. What insurance will you need; i.e. Business Owners Coverage, Attorney Malpractice Insurance, Workers Compensation, Cyber Insurance.
10. A fix asset budget for the equipment and supplies you will need.
11. A staffing budget or how do you plain on making payroll.
12. An annual budget that estimates revenue and expenses.
13. A decision as to how you will finance your cash flow; i.e. personal funds or a loan, until the revenue starts to flow.
14. How will you pay yourself? Don’t forget that you still have personal expenses that will need to be covered.
15. If you need funding, the above steps should help you determine how much you will need and when you will need cash.
Once you have answered the above questions with a written plan, it is now time to execute your plan and practice law. The more you plan your work and work you plan, the more likely you are to succeed in the business of law.