Lawyers, do you have a game plan for your business?
Sunday, October 26, 2014
We have a daughter that for the last 16 years has been in the equestrian world of show jumping. My husband and I have great respect for her ability to enter the show ring always having a plan for how she will ride the course. In show jumping, your goal is to complete the designed course, which consists of a number of jumps or obstacles, in the fastest time, staying on course and without knocking down any rails. It requires a clear vision, a plan, and a strategy with the ability to execute and adjust when things go awry and still complete the course. Before she goes into the ring to compete, she has evaluated the competition, the course and the best path to ride. Simply put: she and her horse have a game plan.
So how well are you doing with your plan to grow and manage your law practice?
Whether a solo, an associate or a partner within a firm, you have to always have that mindset of being a business owner. A partner today may be a solo tomorrow. To grow your business, you have to focus on how to get business, deliver services, get paid and make money. This focus leads to developing clarity around what you do and how you ride the course.
While most lawyers want to have more business and grow, it is amazing how many I talk to that have not taken the time to develop even a simple business plan. As a result, the business is without a focused direction or clear strategy. And businesses without clarity about what they do, will not be as successful as a business with a game plan. Just like a rider going into the show ring without a vision and strategy will most likely fail at completing the course.
So, much like our daughter preparing for the show ring, the answer to questions like “How can I get more clients?” or “How can I find better clients?” or “Am I profitable?” begin with having a game plan. In the business world, these components are cleverly disguised as a business plan. Do you have one? A great business plan is not some pie-in-the-sky document full of impressive prose. A business plan can be as simple as a one-page document outlining the actions you will take to be successful. The key is does it provide clarity and serve as a guide for future actions and decisions.
You see, the trouble with most business plans and the reason people don’t want to create one is they are often written for someone else – a banker, an investor, or a potential partner. Instead, I say write it for yourself. It’s your chance to think through the challenges you are facing and commit to a plan of action. Form doesn’t matter.
This short article is not here to tell you how to write a business plan, but instead, to get you thinking about how clear or unclear your own business strategy may be. Maybe the end result will be that you decide to develop a game plan to help guide your business on a course for growth.
Whether just starting out or if you have been practicing for a few years, why write down your game plan?
First, it becomes a tool forcing you to think through important issues that you may have not otherwise considered.
Second, it guides your decision making in two areas: 1) on those issues you identified, you see the obstacles and have a plan; 2) you will be better prepared to respond to the unexpected twists and turns.
Third, it changes your mindset. As you write it, ideas come, strategies unfold, beliefs you may have had change and it becomes more real – you are starting or running a business. It builds your confidence and clients and referral resources will notice this.
Lastly, when treated as a living, breathing document it becomes your own set of checks and balances.
Keeping it simple, so a business plan does not feel like homework, here is a short outline with a few questions to ask yourself in evaluating your need to write your business plan.
1. Business Summary
• Summarizes the firm, the services (product) and the market for your services and it is written last, not first
• Answers the questions what does your firm do, where is it going and how will you get there
• Questions to ask:
Have you identified your niche practice areas? What do you enjoy doing?
Do you have a mission and vision statement identifying where you want to go and what you want your firm to become?
What are your strengths, skills and experiences you bring to your practice? Think beyond legal skills.
2. Description of your firm – high level overview
• Client niche to be serviced, where the office will be located, legal entity form to be used, reasons why people will seek your services, business goals to be obtained.
• Analysis your own firm
Why did you start your firm? What is your passion?
Describe the areas you want to focus on.
Have you created your unique selling proposition (USP)? If not, then you are just another lawyer in town.
Who are your clients and prospects? Do you know their needs?
What are the weaknesses of the lawyers in your area? Who is your competition?
• Firm operations – the answers to these questions affect your budgetWill you have an office or work from home?
• Do you need support staff? Who will answer your phone?
• What technology do you need to invest in so you can deliver services efficiently and with a focus on client service? This will be in your budget.
• What are insurance needs?
3. The finances of your firm. This section consists of creating the following:
• Economics of a Law Firm: The expenses and revenue of the firm and how you get paid
• Calculating billing rates and understanding the affect of realization rates on revenue
• Setting up profit and loss (P&L) statements
• Creating a cash flow worksheet keeping an eye on the bank accounts and your monthly “nut.”
• Identifying key metrics to track and measure
It should provide answers to these questions:
• Have you reviewed your current finances regarding assets, current cash flow, expenses and past due accounts? Is this information readily available, updated and reviewed monthly?
• Have you developed a budget to track expenses and revenue?
• Do you know how will you compensate yourself?
• Do you know how much you need to bill and collect every month in order to keep the doors open and pay yourself? Is this number written somewhere where you see it everyday? This is referred to as your monthly “nut”
• Do you have a budget for the technology?
• Do you have a budget for accomplishing your marketing plan?
4. The marketing piece. Keep this simple. It can become a distraction and pushed aside if it is too complicated and expensive. This section will provide answers to the questions:
First, are going to market your firm? Or just hope clients find you? You are running a business and a business needs clients in order to make money. Also realize, you will need to spend a little money in order to make some money. Second, where and how will you get clients?
You will develop a written plan that consists of a timeline with activities, events and associated costs. This timeline will become your action plan and a vehicle for tracking your return on investment (ROI). Here is a link to a sample individual marketing plan:
When developing this section, you should ask yourself these questions:
• Do you have a clear image of what your perfect client looks like and where you will find them? Can you draw a picture of your perfect client? Great, hang it on the wall of your office.
In summary, regardless of whether you just are starting out, or have been in practice for several years, take the time to create a simple business plan for your practice. It will really help you better understand the finances of your practice, how you can grow your practice and build for a more profitable future.
• Do you have a list of business, family and social contacts?
• How will potential clients find you? Internet searches, bar associations, business referral, friend/family referral
• Do you have a website that will engage visitors, capture leads, and track activity?
• Do you understand the elements of online marketing with social media, directory profiles and local listings?
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