Question of the Week: Why should my law firm have a business plan?
No matter what stage your law firm is in, from brand new practice to an established firm, a business plan can provide guidance and direction to help your firm meet its goals and achieve success.
Without a laid-out strategy and expectations, a firm is often working toward goals but less effectively than if there was a tangible objective and plan to get there. The business plan provides the necessary framework, giving you control over your firm’s direction and a blueprint for how to get there.
What it does
A business plan assesses a number of areas, designed to figure out what the competition and industry look like while defining offerings, project financials, and a firm overview. This process forces a firm to do a deep dive to see where they fit into the current market, rather than an on-the-fly approach. You probably have an understanding of these pieces in your mind already, but writing them down provides clarity on how you’re going to position your firm and what you want to achieve.
For new firms
If your firm is just getting off the ground or is still in the formation stage, it can be difficult to even imagine just how much goes into having your own practice and what’s needed to make it a success. As you’re starting out and dealing with all the moving parts that come along with your own practice, a business plan will provide a guide for decision-making, help you monitor progress, and offer accountability. This plan will also help you spell out what makes your firm different from so many others, outlining a specific unique selling proposition you can refer back to for all of your marketing, branding, and general firm operations.
Without this plan, firms can often feel like they’re stuck in a cycle of constantly trying to catch up, rather than taking steps toward specific, measurable goals.
Updating your business plan for long-term success
No law firm stays the same over the years. Your competition, client expectations, financial standings, and goals are going to change and you’ll want to revise your business plan as needed to reflect those changes. While the plan is initially meant to provide forecasting and an initial foundation to kick off the start of the firm, an established practice can use their business plan to stay relevant and determine how to approach the next phase of growth.
Typical components of a law firm business plan
Not every business plan is created the same, but there are common sections typically included. These are meant to address all of the critical items that go into a successful venture. A typical business plan looks something like this:
- Executive summary
- Mission statement
- Core values
- Differentiator/unique selling proposition
- Firm description
- Market analysis
- Target audience
- Competitor analysis
- Industry analysis and description
- Organization and management
This is a very brief overview of what’s included. You’ll want to create a detailed, in-depth plan to maximize its ability to help your firm.
Putting the plan together
If you’ve never created a business plan or updated your existing one, this is the perfect time to do so. Running a law firm is hard work, so make it easier on yourself by having a business plan in place to give you clear direction. Marketing, sales, customer service, and the financials will all benefit from a substantial, well laid out business plan.
Ready to get to work drafting a roadmap to success for your firm? Check out How do I draft a business plan for a law firm?