Pdf_icon_LPM
The purpose of business planning is to establish a common focus for action. This is done by:

  1. Clarifying goals
  2. Establishing measures of results
  3. Assessing resource distribution needs
  4. Unifying the firm to commit to a course of action

Following are the most important steps to take in preparing to write your business plan:

Get the Process Organized

  • Why do it?
  • What is it?
  • Who will do what?
  • Evaluation of the planning process

Evaluate Your Competitiveness

  • Who are our existing clients?
  • What is our fee history?
  • Are we using outside services?
  • Are we recognizing opportunities for cross-selling?
  • How much do we really collect?
  • What are we capable of?
  • What are our internal resources?
  • Who are our competitors?
  • What is our market?
  • Why are they our competitors (experience,price, speed, etc.)?
  • How do they affect our clients?
  • What do we do for their clients?
  • What is our technology situation?
  1. What type of systems do we use?
  2. What can we use our systems for?
  3. Do we need to upgrade?
  • Are there any trends developing which may affect our clients – changing laws, economy, etc.
  • Are there any developments affecting current structure of our firm

Internal Strengths and Weaknesses

Consider the following:

  • What is our professional reputation?
  • How do we deliver legal services?
  • What kind of staff do we want in our firm and how do we train them?
  • What type of office environment (physical location, appearance, etc.) do we want?
  • What is our culture?
  • How do we manage our practice?
  • Who are the firm leaders and why?
  • What kind of support services do we have?
  • What are the firm’s finances?

Reassess Your Strategy

  • Define primary mission
  • Set goals
  • Review your strategy

Evaluate Your Resources Objectively

  • Office organization and structure
  • What kind of leadership and management skills do we have?
  • What kind of tools are we using – i.e. technology, support systems, standardized forms, etc.?
  • How do we identify the skills we need to recruit, how do we allocate the work among attorneys, paralegals, etc.?
  • How are we doing financially, do we collect everything we bill, do we need additional capital?

Business Projection

  • What kind of revenue and volume of business do we project – to work at capacity?
  • What is our payroll expense now and what will it be in the future?
  • How much space do we need?
  • What type of technology do we need?
  • What kind of transactional expenses are we expecting?
  • What are our projected expenses relating to office relocation, computer conversion, etc.?
  • What is our capital projection (capital sources less capital needs = net income)?

Prepare Your Financial Plan

  • Balance Sheet
  • Income Statement
  • Cash Flow Statement
  • Policies for financial management
  • Financing plan

Prepare Your Business Plan Document

  • Executive Summary
  • Business and Revenue Forecast
  • Professional Staffing Plan
  • Support Staff Requirements
  • Technology Forecast
  • Space Requirements
  • Organization and Management Plan
  • Financial Plan – Operations and Capital

How to Successfully Implement “The Plan”

  • Establish a common will and consensus to the plan
  • Keep focused on the goals
  • Recognize established leadership of the organization
  • Make the commitment to proper resource allocation
  • Expect to give and receive accountability for results
  • Reward motivation
  • Overcome inertia and avoid complacency
  • Measure and evaluate results and – if necessary, readjust the plan to coincide with new developments

 

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The information provided and the opinions expressed in this monograph are solely those of the author. Neither the State Bar of Texas nor the author are rendering legal, accounting or professional advice and assume no liability in connection with the suggestions, opinions, or products mentioned.