Your executive summary is the first part of your business plan, but you usually write it last because it is a summary of all the important parts.
The point of your Executive Summary is to get the reader’s attention quickly. Tell them what kind of law firm you run and what your status is. For instance, are you a new business, do you have a law firm that you want to grow, or do you run law firms in more than one city?
Next, give an overview of each part of your plan that follows. For example, give a short summary of the law firm business. Talk about the kind of law firm you are running. Detail your direct competitors. Tell us about your ideal customers. Give a brief overview of your marketing plan. Find the important people on your team. And explain what your financial plan is.
In your business analysis, you will explain what kind of law firm you run.
For example, you might own one of the following types of law firms:
- Commercial law: This kind of law firm focuses on financial issues like mergers and acquisitions, raising money, initial public offerings (IPOs), etc.
- Criminal, Civil Negligence, and Personal Injury Law: This type of business focuses on criminal defense, accidents, and malpractice.
- Real estate law deals with the buying and selling of property and how it is used.
- Labor law: This type of firm takes care of everything to do with work, from pensions and benefits to negotiating contracts.
In the section of your business plan called “Company Analysis,” you need to explain what kind of law firm you will run and give background information about the business.
Answers should be given to questions like:
- When did you start your business, and why?
- What important steps have you taken so far? Milestones could include how many clients were helped, how many cases were won, etc.
- Your legal structure. Are you set up as an S-Corporation? An LLC? A single-person business? Tell us about your legal structure.
In your industry analysis, you need to give an overview of the law firm industry.
Even though this may seem pointless, it has more than one use.
First, learning about the law firm business gives you information. It gives you a better idea of the market you are in.
Second, market research can help you make your strategy better, especially if it shows you market trends.
The third reason to do market research is to show your readers that you know a lot about your field. You do just that by doing the research and putting it in your plan.
In the industry analysis section of your law firm plan, you should answer the following questions:
- How big is the business of law firms in terms of dollars?
- Is the market going down or up?
- Who are your main rivals in the market?
- Who are the main market suppliers?
- What changes are happening in the field?
- How fast is the industry expected to grow in the next 5–10 years?
- How big is the market that matters? That is, how big could your law firm’s market be? You can figure out such a number by figuring out how big the market is in the whole country and then applying that number to the population in your area.
In the section of your law firm plan called “Customer Analysis,” you must describe the customers you serve or hope to serve.
Businesses, households, and government organizations are all examples of customer segments.
As you might guess, the type of law firm you run will depend a lot on the customer segment(s) you choose. Households and nonprofit organizations, for example, would respond differently to marketing campaigns.
Try to figure out who your ideal customers are based on how they look and how they think. In terms of demographics, talk about the ages, genders, locations, and income levels of the people you want to serve. Because most law firms mostly work with people in their own city or town, it is easy to find demographic information on government websites.
Psychographic profiles explain what your target customers want and need. The better you can understand and define these needs, the easier it will be to get customers and keep them coming back.
In your competitive analysis, you should list your business’s direct and indirect competitors and then focus on the direct ones.
Other law firms are their main competition.
Indirect competitors are other places where customers can buy things that aren’t direct competitors. This includes companies that handle accounting or human resources. You should also talk about this competition.
When it comes to direct competition, you need to talk about the other law firms that you compete with. Most likely, the closest law firms to you will be your direct competitors.
Give an overview of each of these competitors’ businesses and list their strengths and weaknesses. Unless you’ve worked at one of your competitors’ companies, you won’t know everything about them. But you should be able to find out key facts about them, such as:
- What kind of clients do they work with?
- Which kinds of cases do they take?
- How much do they charge (high, low, etc.)?
- What can they do well?
- What do they do wrong?
For the last two questions, try to answer them from the customers’ point of view. And don’t be afraid to ask the customers of your competitors what they like and dislike about them.
The last part of your competitive analysis section is to list the ways you are better than your competitors. As an example:
- Will you give and get better legal advice?
- Will you offer things that your competitors don’t?
- Will your interactions with customers be more responsive?
- Will you have better prices or different ways to pay?
Think about how you will do better than your competitors and write them down in this part of your plan.
Usually, a marketing plan has four parts: the product, the price, the place, and the promotion. In your marketing plan for a law firm, you should include the following:
Product: In the product section, you should repeat the type of law firm company that you wrote about in your Company Analysis. Then, give specifics about the products you’ll be selling. For example, do you offer services other than in-person consultation, like virtual meetings?
Price: Write down the prices you’ll be charging and how they compare to those of your competitors. In the product and price sections of your marketing plan, you mainly talk about the things you sell and how much they cost.
Place: This is where your law firm company is located. Write down where you are and how that will affect your success. For instance, is your law firm in a busy business district, office building, etc.? Talk about why your location could be the best for your customers.
Promotions: The section on promotions is the last part of your law firm’s marketing plan. Here, you’ll write down how you’ll get people to your location (s). Here are some ways you could promote your business:
- Putting ads in newspapers and magazines in your area
- Contacting local websites
- Marketing with social media
- Local radio advertising
In the other parts of your business plan, you talked about your goals. In your operations plan, you talk about how you will reach those goals. Your plan for operations should have two separate parts.
Everyday short-term processes include all of the things you have to do to run your law firm, such as filling out and filing paperwork, researching past cases, going to court, meeting with clients, etc.
Long-term goals are the goals you want to reach in the future. These could be the dates you hope to file your 100th lawsuit, have 25 business clients on retainer, or earn $X. It could also be when you plan to open a new office in a different city.
For your law firm to show that it can be successful, it needs a strong management team. Showcase the backgrounds of your key players, focusing on the skills and experiences that prove they can help a company grow.
You and/or your team members should have managed law firms before. If so, talk about your experience and skills. But also highlight any experience you think will help your business succeed.
If your team is missing something, you might want to put together an advisory board. A two-to-eight-person advisory board would help your business in the same way that a mentor would. They would help answer questions and give advice on how to plan. If you need to, look for advisory board members who have worked as lawyers or who have run small businesses successfully in the past.
Your 5-year financial plan should include a monthly or quarterly breakdown for the first year, then an annual breakdown after that. Your income statement, balance sheet, and cash flow statement are all part of your financial statements.
A more common name for an income statement is a Profit and Loss statement, or P&L. It shows your income and then takes away your expenses to show if you made a profit.
You need to make assumptions in order to make your income statement. For example, will you file 25 lawsuits per month or sign five retainer contracts per month? And will sales grow by 2% or 10% every year? As you might expect, the financial forecasts for your business will be greatly affected by the assumptions you choose. Do as much research as you can to try to make sure your assumptions are true.
Balance sheets show both your assets and your debts. Balance sheets can have a lot of information, but try to boil them down to the most important parts. For example, if you put $50,000 into building up your law firm, you won’t make money right away. Instead, it is an asset that you can use to make money for years to come. Likewise, if a bank gives you a check for $50,000, you don’t have to pay it back right away. Instead, you will have to pay that back over time.
Cash Flow Statement: Your cash flow statement will help you figure out how much money you need to start or grow your business and make sure you never run out of cash. Most business owners and entrepreneurs don’t realize that you can make money but still go bankrupt if you run out of money.
When making your Income Statement and Balance Sheets, make sure to include some of the most important costs of starting or growing a law firm:
- Location build-out, which includes construction, design fees, etc.
- Costs of licensing, software, and office supplies
- Payroll or wages given to employees Business insurance
- Taxes and licenses:
- Legal expenses