June 18 2012
The Legal Entrepreneur: What to Put in a Business Plan
Every business should have a business plan. Even if it is just one page. We are reviewing the different sections that a typical business plan should have, including the following:
1. Executive Summary: A short concise statement about your business.
2. General Company Narrative: Discuss your business in greater detail.
Review your goals for your law business. Then list the objectives for achieving those goals. Remember, Peter Drucker said it best: there is only one valid purpose for a business and that is to create a customer.
Then you must discuss your industry in your business plan.
In this post we continue discussing the narrative section of your business plan. As best you can, your next section should be about your strengths and core competencies. This is not meant to speak esoterically about why you are a better attorney than the next one, but rather, what is your advantage by hanging out your shingle and why you decided to go into business.
The old adage, “I wanted to help people,” may be a good place to start, but you should go ahead and delve deeper to explain why you think you should be helping people. Because you wanted them to have fair representation, or receive a service that they wouldn't normally have gotten, or by solving their problems that they aren't able to.
Maybe your strength is that you have a great court room presence, or can break down some very complex issues into their base elements and deal with them, maybe you are very adept at dealing with clients or you are simply a brilliant writer. Put down at least 3 strengths or core competencies to get your business plan narrative started.
By listing some strengths, you will be able to answer the next question that should be posed in your business plan, that being what service or services will you be offering. A true general practice for a solo practitioner is very doable, but you must be willing to learn a lot of new areas of the law.
Therefore, I suggest that you should become a “quasi” expert in three separate areas of the law. These particular areas will be your main economic engine to make sure you get paid every month and that you will have sufficient financial resources to keep the lights on and to pay your legal staff. Also, the “legal office rule of 3” works great if you can find a partner or associate that has an opposite or complimentary set of 3. This adds that much more strength to your legal office and making sure that you make money in this venture.
The rule of 3 allows you to concentrate your practice, but will also give you the opportunity to have a general practice as well. Most states do not allow for specialization in the legal field, despite all areas of the law having become pretty specialized with so many nuances. But the rule of 3 allows you to develop a niche practice. It also allows you to more narrowly tailor your advertising message.
Quick recap: you need a business plan. In that plan, you must talk about your strengths, so you can then begin to narrow your practice area into 3 general areas. Do not be afraid to open your office and run a general practice, but you want to focus some attention for your business into 3 areas of law. This will become your economic engine that allows you to accept other clients and branch out into other areas of the law.
We will continue this post in the next article and go over in greater detail the sections of your business plan.
As always: Got a comment, different point of view, or question, just let me know.
Law school teaches you how to think like a lawyer, but not run a business. This column fills in that gap. You CAN open your own law firm and you CAN be successful.
© 2012 Douglas C. Howard
The Legal Entrepreneur
Twitter: legalpreneur – helping attorneys learn the fundamentals of running a law business