August 14, 2012 Practice Points

Developing a Business Plan for Your Practice

By Cindy Albracht-Crogan

Whether you realize it or not, all law practices have a business plan. Even the lack of a plan can be a plan itself. But if you are always "running short" at the end of the month or are not aware if your firm is profitable, it is probably time for a formal business plan.

A good first step is to talk to colleagues who have business plans and are happy with them. Other practitioners suggest reviewing templates that can be found online at the U.S. Small Business Administration site or other local resources within your state, including the local chamber of commerce. In addition, resources can be located in books discussing sole proprietorships and/or small businesses.

What should your business plan contain? Daniel Van Loh, an attorney with the Minnesota law firm of Deckert & Van Loh, suggests that a business plan should contain six items: an executive summary briefly outlining your practice's profile and goals, a market analysis, a company description, an outline of organization and management, a sales and marketing strategy, and financial projections for your firm. For solo firms, Van Loh and Minnesota solo attorney Joe Flanders also suggest that a business plan should address your practices' sustainability, its affordability, its accessibility to clients, a mission statement, an overhead estimate, and annual projections for the first five years.

A business plan should include detailed information about the "what, where, when, why, and how" for generating revenue. However, while it is important to consider the advantages of a business plan, solo and small-firm practitioners should keep in mind that the top priority is growing the practice and having a strong focus on marketing.

Keywords: litigation, solo practitioners, small firms, business plans, marketing, management

Cindy Albracht-Crogan is with Cohen, Kennedy, Dowd & Quigley in Phoenix, Arizona.

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