When you’re a busy attorney, especially a solo-practitioner, billing as many hours as possible is the most important thing on your mind. However, billing more hours isn’t enough to ensure the long-term success of your law firm. If you want to see your law firm succeed in the long-term, you must develop a five-year business plan. But there are certain essential elements you’ll need in place first before you can develop a business plan that will work.
Record Your Current Status
Before you know where you’re going, you must understand where you stand currently. What does your financial standing and client base look like? What does your cash flow look like? How many lawyers and additional administrative staff have you hired? You need a clear and in-depth view of your law firm.
- Do you have accurate up-to-date financial records for your law firm? You need to monitor your financials for at least three months before you can get an idea of where you are right now. It will also be a good idea to take a look at your previous tax records to uncover how much revenue you earned overall and how much your expenses were. Looking at your tax records also help you plan for the upcoming tax year so that you can take all possible deductions and plan expenditures and investments that will help you the reduce your tax obligations.
- How many employees have you hired already? And how much does it cost to maintain your staff? Take a look at the cost of employees and also the benefits. And don’t just look at the numbers, look at how having employees impacts your law firm. Keep an open mind about possibly increasing the number of employees you have, outsourcing some positions or duties, and/or consolidating some of your existing positions to reduce the number people you have on staff.
- When you first started your law firm you probably had a clear vision of what you wanted. Take a look back at that vision. Are still in line with that vision? Has your vision has remained the same? Whether your vision has remained the same or changed, you should write down that vision in as much detail as possible. It is your vision that will drive all of your goals and strategies. It’s a lot easier to remain motivated and avoid disappointment when you know that you are working for a greater vision.
Your Vision vs. Your Dream
Now that you know where your law firm currently stands, you need to take a closer look at your law firm vision and mission. It’s important to understand that there is a difference between a vision and a dream. A vision is something that is measurable and that can be attained with a little hard work while a dream is something fantastical and that seems impossible to achieve. Most dreams can’t be measured and are difficult to attain because they are so far away from reality. It is important that any dreams you have be transformed into a realistic vision. Here are a few tips on how you can improve your vision for your law firm:
- Choose something specific.
- Choose something attainable.
- Choose something measurable.
- Put your vision in writing.
- Reference your vision often.
Once you have a clear vision and an understanding of your current standing, you can craft an effective five-year business plan for your law firm.