Good business plans keep law firms on track.
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The founders of a new law firm should view the business plan as a road map for the firm’s first three to five years of operation. As they write the plan together, the founders have the opportunity to decide on the practice areas they will enter, how they will acquire clients, how they will attract professional talent and how they will finance the firm’s startup. The business plan is an important management tool and it should remain a part of the firm’s ongoing planning process.
Executive Summary
When outsiders, bankers for example, view a law firm’s business plan, they often do not read beyond the executive summary. For that reason, the summary should be an engaging snapshot of the business plan, containing its essential elements. Writers of the business plan should remember that the job of the executive summary is to impress the reader and encourage him to read the entire plan or pass it on to staff analysts for close study.
The Firm
The section following the executive summary should be an overview of the law firm. It should describe the firm’s premises and provide photographs of the firm’s building, offices and common work areas. It should include information about the size and makeup of the staff, the various skills covered and the number of lawyers in the firm who are engaged in services for clients in the firm’s practice areas, such as corporate law, wills and estates, criminal law and banking and finance.
Marketing
The marketing section should contain in-depth discussions of the firm’s practice areas. Each area being described should contain market information that justifies the way the firm is organized. For example, if the firm is planning a large corporate law area, the business plan should contain a serious discussion of the potential revenue from corporate work. It should state how many potential corporate clients are in the area and note whether they are large corporations or small businesses. It should estimate what market share the firm can reasonably expect and evaluate whether the firm has the right number of lawyers in each practice area.
Biographies
The biographies section should contain biographical summaries of all lawyers in the firm. The logical order is alphabetically, by rank. For example, begin with the managing partner, then the partners and associates. Each summary should present the lawyer’s educational background, legal experience, special qualifications and notable civic activities.
Financial
The financial section should contain the firm’s current balance sheet — a statement of assets, liabilities and net worth. There should be a projection of income over the next three years. The firm’s independent accountants should participate in creating the income projection. The firm can add historical balance sheets to this section in future years. If the firm intends to apply to a bank for some form of startup financing, a summary of the financing needs can appear in this section.
Photo Credits
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