Starting a new law firm can demand upon several factors that must be considered in detail when creating a business plan. For instance, a more convenient downtown location can cause higher overhead that reduce profits more than a slightly less convenient location. The marketing methods of a law firm are also very sophisticated, as legal restrictions exist for some law firms, but there are still many marketing channels that attorneys may use to promote their firms. Pro Business Plans has worked with many new and existing law firms to develop data driven marketing strategies that have been successful for comparable firms in non-competing locations. The following article provides a high level overview of what Pro Business Plans includes in its law firm business plan.
Law Firm Business Plan
A law firm may use a basic structure, but there are fundamental differences such as the practice type, amount of partners, and location that all determine the outcome of the plan. A two partner, urban law firm in Miami specializing in estate planning is completely different from a fifteen partner law firm in California specializing in litigation. The marketing, financial structure, operations, and market research applied for the plan must all necessarily be completely custom. The following section provides a breakdown of the different dimensions of a custom law firm business plan:
The location of a law firm is not as easy as one may assume it to be. It is not always simply a question of finding adequate office space at a reasonable price. If your company is thinking about what is convenient for you based on your needs, it is already going about the location analysis in an incorrect manner. Instead, the location should be based upon the demographics of your target market. A law firm that specializing in immigration advisory would be wise to be located nearby a district of the town with a high population of immigrants, as it is likely these potential customers will first visit firms within the lowest possible distance to their place of residence. However, if other law firms have followed this premise, the market may be saturated in that area and other attractive locations may exist that leave other areas of the market untapped. The location analysis is designed to determine the best location to place a law firm.
When thinking about where to place a law firm, the service structure, and pricing, it is critical to perform a comprehensive competitive analysis. This entails understanding the price structure of competing firms, the location, and credentials of their partners. When citizens being to analyze their legal options in the market, they will often gather quotes and meetings with multiple attorneys before determining which one to retain. By collecting and organizing such competitive intelligence, on an ongoing basis, your firm can adapt to the market and consistently be the most attractive option. The competitive analysis section should be comprehensive and also briefly include smaller general practice law firms that may enter your niche space.
Many law firms must be careful about the manner which they promote their services. Not only can they encounter potential legal restrictions, but also target the wrong potential client that will result in lost advertising investment. The marketing strategy should be highly calibrated toward not only your law firms practice area, but also its target demographics. Some firms, for instance, focus on high net worth individuals for immigration. Others may focus on targeting the lower end of the market and make up for it with volume. Pro Business Plans has worked with several new and existing law firms to develop an offline and online marketing strategy tailored to their target market, location, practice area, and budget.
Any business plan law firm, regardless of its size, can benefit from a financial model. An accurate financial model can help the firm determine the optimal pricing structure and allocate its budget in a manageable way. Thinking holistically about the budget of a law firm or worse, arbitrarily determining its expense structure, is almost certain to result in disaster. A financial model always makes sense to understand how the expense structure will impact the revenue and inevitable profitability of your law firm. Pro Business Plans benchmarks new law firms against the budgets of those with similar sizes and practice areas in order to determine the structure that is most stable and profitable for its clients.