How and Why You Should Create a Law Firm Business Plan
Whether you’re setting out on your own to start a new law firm, or you’re looking to improve the organization you’re already part of, treating your firm like an actual business is absolutely essential to its success.
Compared to business owners, attorneys are at a serious advantage when it comes to building a suitable business plan. While you may not be a financial or a business expert, by virtue of your education you are an expert in two of the more necessary areas in building a business plan: research and writing.
If done correctly, a business plan typically involves copious amounts of each before it’s fully developed, and this is definitely one area of building up the business-side of your firm you won’t want to shortcut.
In order to develop a well-conceived business plan for your law firm, you should include the following:
- Executive Summary: A basic breakdown of the important matters being covered in your business plan, where key points and goals are highlighted for you, as well as for current or future partners.
- Company Description: You can liken this to the “About Us” section on most websites, where you offer a brief summary of your law firm’s mission, values, structure, location and history.
- Market Analysis: Dive into greater detail on the finer points of where your area of practice is currently heading in your service region, what the needs of your potential clients are and how you can reach your target audience more effectively. This section should also include a thorough competitor analysis where you look at what law firms like yours are doing right and wrong.
- Services: When you’re building out this area, ask yourself these key questions: Are the services you’re providing addressing all the needs of your clients? If not, where do you see improvements needing to be made? What are your competitors offering that you could also bring to the table? Where are you staying ahead of other firms in your area?
- Strategy: Now that you’ve discovered your law firm’s points of strength and weakness, the next step is to examine ways to better promote the services you already offer, and how to offer those you will be newly introducing. Therefore, you’ll not only want to figure out how to position your firm and its array of services, but also how much these will cost your clients, and where you will be focusing your marketing efforts.
- Economics: If you need funding to get your law firm going initially, then this is a section you will definitely want to have laid out perfectly. However, even if you’re not seeking funding, a financial plan can help you gauge what your firm’s operational costs will be, and how much you will need to make to be a profitable law practice. For help in this area, visit this walkthrough from Investopedia.
Now that you have enough background on how to create a business plan for your law firm, here are the reasons why you should get started right away.
See your professional and law firm’s goals in writing.
Your law firm’s business plan is unique. No matter how closely it might resemble other business plans written up by other attorneys, yours will have distinct elements that ultimately set it apart. To that end, your business goals and strategies (steps one and five above) should be written down to not only offer you some clarity on why you’re setting out on this entrepreneurial adventure, but to hone down exactly what the realization of these goals appear like.
Business plans are business predictors.
Without a business plan, you can easily get lost in the day-to-day shuffle of working with clients and keeping your law firm running. When this happens, there’s a tendency to fall short in key areas. So remember, the projections and forecasts you create in your business plan now become the benchmarks you meet in your law firm’s future.
Truly Understand Your Market
Even veteran attorneys don’t always fully understand their target market, making it imperative to not only do a complete market analysis on your areas of expertise, but also the specific needs of your potential clients. By going beyond experiential perceptions and instead looking at hard data, you really begin to comprehend how your firm can provide even better client solutions.
Every intelligent business plan for a law firm should include using the latest technology to keep things running smoothly and efficiently. From case automation software to managed services that include billing and bookkeeping, Abacus is your single source for streamlining your legal practice and allowing you to work on your firm instead of just in your firm. Request your demo today.