Law Practice Management Building a Solo/Small Firm Business Plan
Why Start Your Own Practice? • Be clear on why you want to open a practice. • Autonomy? Power and Influence? Financial Gain? Altruism? • Before starting the planning process: • One page on your personal reasons. • One page on what you value in life. • One page on how your loved ones will be affected. • One page on your understanding of your resilience.
Why plan? • Envision what the future holds • Establish what you have and what you need to be successful • Ensure that other stakeholders (family, partners, etc.) know what to expect • Identify real obstacles • Make your case for what you need
Plan Contents • Your mission, vision, and values • Your market and marketing plan • Your service plan: how your service responds to your market • Your operations plan • Your financial plan and budget
Mission statement • This is about the practice, not the reasons for wanting to be an entrepreneur. • It should reflect your best intentions about serving your clients, your profession, and your community. • It is written in the present tense, much like an affirmation. • Keep it short and concise.
Market and Marketing Plan • Your market is made up of individuals who may value and want your practice’s service. • They have one or more characteristics in common, such as but not limited to age, income level, residence or business location, marital status. • Your marketing plan should be based in part on what you know about, or can assume about your market.
Research http://www.census.gov/acs/www/ http://factfinder2.census.gov/faces/nav/jsf/pages/index.xhtml http://www.census.gov/econ/census12/ http://www.pced.org/ http://www.myflorida.com/
Other Research • Articles and blogs • Conversations with reliable individuals • Trial and error The point: Understand the client, so that you can attract, serve, and retain
Marketing Plan • Describes your market and how you will enter the market. • Describes the process of generating interest and bringing your practice to the attention of your market, including your estimate of how long it will take to build awareness. • Describes only the efforts you can control or direct, and how you will measure effectiveness in the short term. • Provides financial details on the impact of any investment you will make in marketing and the results you expect it to yield.
RULE 4-7.4 DIRECT CONTACT WITH PROSPECTIVE CLIENTS (a) Solicitation. Except as provided in subdivision (b) of this rule, a lawyer shall not solicit professional employment from a prospective client with whom the lawyer has no family or prior professional relationship, in person or otherwise, when a significant motive for the lawyer's doing so is the lawyer's pecuniary gain. A lawyer shall not permit employees or agents of the lawyer to solicit in the lawyer's behalf. A lawyer shall not enter into an agreement for, charge, or collect a fee for professional employment obtained in violation of this rule. The term "solicit" includes contact in person, by telephone, telegraph, or facsimile, or by other communication directed to a specific recipient and includes (i) any written form of communication directed to a specific recipient and not meeting the requirements of subdivision (b) of this rule, and (ii) any electronic mail communication directed to a specific recipient and not meeting the requirements of subdivision (c) of rule 4-7.6.
Key Advertising Rule Provisions • All advertisements must be filed at least 20 days in advance of their planned use, unless they are exempt - Rule 4-7.19(a) • All ad rules apply to websites and social networking and video sharing sites in addition to other media such as print, t.v. and radio - Rule 4-7.11(a) [Websites will remain exempt from the filing requirement – Rule 4-7.20(g)]
Unduly manipulative techniques are prohibited, including appeals to emotions rather than rational evaluation of lawyer qualifications – Rule 4-7.15(a) • Ads may not use authority figures, or actors portraying authority figures, to endorse, recommend, or act as a spokesperson for, the advertising lawyer – Rule 4-7.15(b) • Lawyers may not offer economic incentives to view an ad or hire a lawyer, except for a discounted fee – Rule 4-7.15(d)
Competition • Your marketing plan should explain your competition, what you know about the practices with whom you compete for attention. • How many competitors? Who are they? What share of the market do you think they have? Why you and not them? • Your differentiators: price, service quality or quantity, convenience, timeliness, or other factors.
Service Plan • How will you meet the value expectations of your clients and your client market? • How will you know if you are meeting their expectations? • The service plan is about the work: How will you do it and how will you communicate what you have done, why you have done it that way, and what that value represents. • The service plan justifies the client’s investment, and your investment in client retention.
Operations Plan Standard Operating Procedures • Staff activity and behavior • Technology plans and equipment • Docketing and Calendar system • Time Tracking and Billing • Confidentiality and related • Insurance and licensing • Financial accounts management and record-keeping • Skills needed by you and by any staff you add • Definitions
Skills Required for Operations • Resource Management (Time, Money, Relationships, Communications) • Financial Management • Technology: MS Office or Alternatives, Practice Management Software, Time/Billing/Accounting Software • Decision-making • Self-care and Life Management
Financial Management • Prospective (Budget) • What will we spend? • What will we earn and when will we receive it? • How do we apportion it? • Retrospective (Analysis) • How did the firm perform against budget? • Is there new information? • Do I understand the implications of the information?
Capital Needed for Start-Up The list of every necessary one-time only purchase or expense: Equipment (Notebook computer, scanner, printer, smart phone) Software (paid or free open source?) Deposit on utilities Rent deposit Loan or credit service fee
Breakeven Analysis • Timeline showing where your cash will come from until your practice is covering its expenses. • This may include payment to you by the practice, if you need living expenses from this source. • Repayment, if necessary, should be dealt with in this section. • This may be a cash flow analysis—looking at your checking account into the future.
Profit and Loss Statement • Project your income each month at the level you anticipate • Project your monthly expenses (lease payments, rent, phone, utilities, staff, auto, supplies, insurance) • Subtract • Adjust one or the other, or both
Budget • What will you spend, on what will you spend it? • This can be quarterly or monthly. • You will need help from an accountant and a mentor who is in the same kind of practice you intend to build. • A budget is a guideline, but an important tool.
Sample Profit and Loss Statement Find a Sample Here
Other • Pricing analysis • Balance sheet with assets and retained earnings • Copies of alternative leasing or purchase arrangements • Productivity analyses—staff or no staff, paper or technology solutions • Marketing and advertising investment options
Besides your JD and license, you need: • Quantitative skills and interests • Law office software • Aptitude for logistics • Business development skills • Patience and determination • Willingness to learn • Mentors
Bottom Line: • Plan first, then jump • But don’t plan for so long that you forget to jump
FAIL What to do when you fail?
Failure is overrated(as a teaching tool) • You’ve learned what doesn’t work, so you wont’ make that mistake again • However, you could make a different mistake next time Focus on improving what has worked in the past rather than avoiding what has failed
Admit Your Failures • Most people can empathize because everyone knows what it's like to make mistakes • People will respect you for owning up to everything. It shows that you have nothing to hide Embrace your failures
The World Won’t Change Unless You Change • The world's not going to change for any of us • We can't blame the shortfalls in our lives on the people around us • The outside world is just a reflection of who we are inside • How you react to the events in your life will be the biggest determinant of who you are If you want the world to change, change yourself first
Pursue What You Love • Don't become the rabbit chasing the carrot - you'll be chasing your whole life • Instead, find a passion you could pursue for the rest of your life • Craft your mastery and become better than anyone at it • Not only will money follow, success will “If you don't love it, you'll fail” – Steve Jobs
Presence Always Beats Presents If you're absent during my struggle, don't expect to be present during my success - Will Smith
No One Else Knows What They are Doing Either • The Hard Truth: None of us actually knows what we're doing • Even senior partners and successful entrepreneurs are just winging it • The difference is that experienced people have learned to mitigate mistakes better than others
Be Self-Aware • There will be times when those around us provide us with recognition for a topic we have limited knowledge about. • It's okay, as long as you're self-aware of the shit you don't know you don't know.
The people you want to be cautious of are the people that take pride in the shit they know. • The sooner you realize that everyone around you also has no idea what they're doing, the sooner you'll let go of your fear and take the leap.
Guard Your Time • Time is the most precious commodity we have • We need to protect it. • The most effective way to manage time is to treat it as if we're a senior partner in a major law firm • There's a significant difference in how you shift your priorities when your time is worth $750/hr vs$20/hr
Action Plan for Each Quadrant 1. Urgent and Important: Do it immediately 2. Non-Urgent and Important: Decide when you'll do it 3. Urgent and Non-Important: Delegate to someone else. 4. Non-Urgent and Non-Important: Do it later.
Push Yourself • Too often we underestimate our abilities • Become independent from external factors of motivation, and learn to push yourself internally • You can push yourself harder than you think • You have a bigger influence in people than you think Don't ever underestimate your abilities - you have a lot to share with the world
Speak Your Mind • Many business owners reserve their comments thinking it will hurt the person's feelings or assume you and the other person are on the same page. • This is a mistake. • It endangers the trust of others by not communicating our thoughts. • “Here's what I think.” will always beat “I should have said...” Speak your mind even if it's not what the other person wants to hear
Enjoy the Ride • Failure is part of the process, so don't be afraid to get lost once in a while • Sometimes you have to lose yourself to find yourself