business plan legal department

How to Create a Law Firm Business Plan Aimed at Success

Want a successful law firm? Start with a solid business plan. Our guide covers everything that will help you create a roadmap for success.

A firm exists to serve people—so its business plan must take into account those it aims to help. A law firm's business plan lays out the key pillars that will support a practice, from operational details to marketing strategies to financial projections. Furthermore, it should provide a clear roadmap for where the firm hopes to be in the coming years.

In this blog,  we will guide you through the process  of creating a comprehensive law firm business plan that  will help you achieve your goals . Additionally, in our latest Grow Law Firm podcast, our host Sasha Berson conversed with Omar Ochoa, the founding attorney of Omar Ochoa Law Firm, to discuss the topic of creating a law firm business plan aimed at success. Be sure to listen to another insightful episode featuring Tom Lenfestey, where he discusses crafting a sellable and profitable law firm.

Why Is a Business Plan Important for Law Firms?

A business plan is a vital tool for any law firm to achieve success. It outlines goals, strategies, and the feasibility of business ideas, providing a clear direction and focus for the firm. The plan can be used to secure funding from investors or financial institutions by demonstrating the potential for growth and profitability.

Moreover, a business plan supports decision-making by evaluating the feasibility of new ventures and assessing potential risks and rewards. It helps to manage resources effectively by setting financial goals and tracking progress, ensuring the firm is making the most of its resources and achieving objectives.

Lastly, a law firm's business plan enables growth by identifying new opportunities and developing strategies to capitalize on them. By planning for the future and setting realistic growth targets, law firms can take their businesses to the next level. Overall, a well-developed business plan is critical for success in the legal industry, providing direction and focus, supporting decision-making, managing resources effectively, and enabling growth.

General Tips for Creating an Attorney Business Plan

Building a business plan for law firms is not an easy or intuitive process. By considering the following issues before opening your doors to clients, you have a much better chance of having a stable firm that matches your values and has a clear set of goals.

— Stay Focused

Forming a law firm can feel overwhelming. You have a lot of freedom and can easily get sidetracked into issues that either can wait or do not deserve your attention.

If having a strong law firm website design is important enough for you to include in your plan, you will spend time on that instead of less important matters.

A plan also includes a budget. The process of planning your firm's finances can ensure that you do not overspend (or underspend) as you start your own firm.

The attention to detail that comes from having a plan will help you avoid spreading yourself too thin by focusing on every issue or the wrong issues. Instead, you will maintain your focus on the important issues.

Whether you have law partners or develop a solo law firm business plan, the plan will help you stay focused on your end goals.

— Keep Track of Goals and Results

It is easy to set goals when you  start a law firm and then promptly forget about them.

Your plan will set out your goals and the metrics you will use to determine your progress toward meeting them. The plan should also explain how you will know when you have met them.

For example, you might have a growth goal of reaching five lawyers within two years. Or you might have a revenue goal of collecting $200,000 your first year.

Too many businesses, including law firms, meander on their developmental path. By setting goals and the path for meeting them, you will have guardrails to keep your firm on track.

"If you want to be the number one law firm in the country by revenue right in a 20 year time period, have that be your goal and everything that you do right is in service of that goal. You might not get there, but you're gonna find that you're gonna be very successful either way."

"If you want to be the number one law firm in the country by revenue right in a 20 year time period, have that be your goal and everything that you do right is in service of that goal. You might not get there, but you're gonna find that you're gonna be very successful either way." — Omar Ochoa

— Sort Out Your Own Law Firm Strategy

Developing a clear vision is important for establishing a strategic law firm plan aimed at long-term goals . As Omar Ochoa discusses in the podcast, having very specific milestone visions like where you want to be in five, ten, or fifteen years helps drive the strategy and actions needed to get there.

It's easy to say that you'll run your law firm better. But a plan actually helps you identify how to improve by articulating a concrete strategy. The process of creating the plan will help you pinpoint problems and solutions.

A plan forces consideration of operational details often overlooked. It equates to defining your firm's purpose and then pursuing that vision with purpose-driven strategies and actions. As Omar notes, marrying vision to action through knowledge of other successful law firm models is key to achieving goals.

One area that is frequently overlooked in plans is the inclusion of law firm marketing strategies . Developing this aspect is critical for attracting clients and sustaining growth.

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— Move Forward

You should view your plan as a law firm business development plan that will guide the formation and growth of your firm .

You can review the document periodically to remind you and your law partners of your growth and expansion projections. After this review, you can ensure your growth and expansion remain on track to carry you to your goals.

The review will also tell you whether you need to update your firm's goals. When you started your law firm, you might have been unduly pessimistic or optimistic in your projections. Once you have some time to operate according to your plan, you can update your goals to keep them realistic. You can also update your processes to focus on what works and discard what does not.

The review can provide your projections for what you hope to accomplish and the roadmap for accomplishing it.

Law Firm Business Plan Template

Each of the websites below includes at least one attorney business development plan template:

• Business Plan Workbook
• PracticePro
• Smith & Jones, P.A.
• Wy'East Law Firm

You can use a law firm strategic plan example from these sites to start your firm's plan, then turn the plan into a document unique to your circumstances, goals, and needs.

What to Consider before Starting Law Firm Business Plans

Before starting a law firm business plan, think through a few key issues, including:

— Setting the Goals

Reflect deeply on your firm's purpose. Think about who you represent and how you can best meet their needs. A law firm exists for its clients. As you think about your  law firm goals , think about goals for providing legal services to your clients.

"We continue to try to have the biggest impact that we can because ultimately, in my opinion at least, that's what lawyers are for, is to be able to help people and be able to move us forward." — Omar Ochoa

You need to set realistic and achievable goals. These goals should reflect your reasons for starting your law firm. Thus, if you started your law firm because you expected to make more money on your own than working for someone else, set some goals for collections.

While you are setting your goals, think about how you will reach them and the ways you will measure your success. For example, if you want to expand to include ten lawyers within three years, think about intermediate goals at the end of years one and two. This helps measure your progress.

— Choosing Partnership Structure

For lawyers considering a partnership structure, it's important to select partners that complement each other's strengths and weaknesses to help the firm function effectively.

There are 2 main partnership structure options:

• A single-tier model provides equal decision-making power and liability between partners.
• Meanwhile, a two-tier structure offers tiers like equity and non-equity partners, providing flexibility and career progression opportunities.

While similarly skilled individuals may clash, partners with differing abilities can succeed together. Some attorneys also choose to run their own firm for flexibility. This allows them to leverage different specialists through occasional joint ventures tailored for specific cases, without the constraints of a single long-term partnership. Furthermore, it highlights how the law firm partnership structures impacts freedom and sustainability.

— Thinking of the Revenue You Need

Calculate how much revenue you need to cover your overhead and pay your salary. Suppose your expenses include:

• $2,000 per month for office rent
• $36,000 per year for a legal assistant salary
• $600 per month for courier expenses
• $400 per month for a copier lease

Assume you want the  median annual salary for lawyers  of $127,990. You need $199,990 per year in revenue to cover your salary and expenses.

But revenue is not the end of the story. Your landlord, vendors, and employees expect to get paid monthly. So, you should also calculate how much cash flow you need each month to cover your hard expenses.

You also need a reserve. Clients expect you to front expenses like filing fees. Make sure you have a reserve to pay these costs and float them until clients reimburse you.

— Defining the Rate of Payment

You need to make some difficult decisions when it comes to setting your own fee structure. If you choose a higher billing rate, you will need to work less to meet your revenue goals. But you might not find many clients who are able to pay your fees.

Whether you charge a flat fee, contingent fee, or hourly fee, you should expect potential clients to compare your fees to those of your direct and indirect competitors. Remember, your firm competes against other lawyers, online services like  LegalZoom , and do-it-yourself legal forms books.

Finally, you need to comply with your state's rules of professional conduct when setting your fees. The  ABA's model rules  give eight factors to determine the reasonableness of a fee. These factors include the customary fee for your location and the skill required to provide the requested legal services.

— Making the Cases in Your Law Practice Meet the Revenue Needs

Figure out how much you need to work to meet your revenue target . If you charge a flat fee, you can simply divide your revenue target by your flat fee.

Hourly fee lawyers can calculate the number of hours they need to bill and collect. However, law firm owners rarely bill 100% of the hours they work due to the administrative tasks they perform to run a firm. Also, you will probably not collect 100% of your billings, and clients could take 90 days or longer to pay.

Contingency fee lawyers will find it nearly impossible to project the cases they need. You have no way of knowing the value of your cases in advance. You also have no idea when your cases will settle. You could work on a case for years before you finally get paid.

The Founder of Omar Ochoa Law Firm

Omar Ochoa is a founding attorney with extensive experience in complex litigation, including antitrust, class actions, and securities cases. He has recovered hundreds of millions of dollars for clients and has been nationally recognized as one of the best young trial lawyers in the country.

Omar graduated from the University of Texas at Austin with degrees in business administration, accounting, and economics. He later earned his law degree from the university, serving as editor-in-chief of the Texas Law Review. He has clerked for two federal judges and has worked at the prestigious law firm Susman Godfrey L.L.P. Omar is dedicated to seeking excellence. He has been recognized for his outstanding achievements in antitrust litigation.

Parts of a Business Plan for Law Firm Formation: Structure

A law firm business plan is a written document that lays out your law firm goals and strategies.

For many businesses, a business plan helps secure investors. But the ethical rules prohibit law firms from seeking funding from  outside investors or non-lawyer shareholders .

Your business plan is for you and your law partners. It will help you manage everyone's expectations and roles in the firm. Here is a law firm business plan example to help you see the parts and pieces in action.

— Executive Summary

An executive summary combines the important information in the business plan into a single-page overview. Your plan will include details like projections, budgets, and staffing needs. This section highlights the conclusions from those detailed analyses.

Your executive summary should include :

• A mission statement explaining the purpose of your firm in one or two sentences
• A list of the core values that your firm will use whenever it makes decisions about its future
• The firm's overarching goals for itself, its lawyers, and the clients it serves
• The unique selling proposition that sets your firm apart from other firms in the legal industry

You should think of this section as a quick way for people like lenders, potential law partners, and merger targets, to quickly understand the principles that drive your firm.

— Law Firm Description and Legal Structure

First, you will describe what your law firm does. You will describe your law practice and the clients you expect to serve.

Second, you will describe how your firm operates. The organization and management overview will explain your legal structure and the management responsibilities of you and your law partners.

This section should fill in the details about your firm's operation and structure by:

• Describing the scope of the legal services you offer and your ideal clients
• Restating your mission statement and core values and expanding upon how they will guide your firm
• Explaining your location and where your clients will come from
• Describing your business entity type and management structure
• Detailing your unique selling proposition , including the features that distinguish your firm from your competitors

When someone reads this section, they should have a clear picture of what you will create.

— Financial Calculations

Your attorney business plan explains where your firm's revenue comes from and where it goes. This is where your skills as a lawyer begin to diverge from your skills as a business owner. You may need to learn a few new accounting concepts so you can perform the analyses expected in a financial plan.

You will need a  financial plan  for at least the first year.

If you plan to seek a bank loan or line of credit, your bank may need a financial plan that covers three years or longer.

You will need more than a few rough numbers for a useful business plan. Instead, you will need to estimate your expenses and revenues as accurately as possible.

"Take some financial statements courses, take some managerial accounting courses that teach you how to track costs, how to frame costs in a way that you're looking at the important costs." — Omar Ochoa

You might need to contact vendors and service providers to get precise costs. You will probably need to track your billings with your prior firm to predict your revenues. If you are opening a law firm after law school or an in-house job, you may need a competitive analysis to show what similar law firms earn in your location and practice area.

Some reports you may need in your business plan include:

• Revenue analysis listing the fees you will collect each month
• Budget describing your monthly and annual expenses
• Financial projections combining the revenue analysis and budgeted expenses to predict your profit margins
• Cash flow statement showing how your revenues and expenses affect your cash on hand.

Your cash flow statement might be the most important financial report because it explains how your bank balance will fluctuate over time. If your clients take too long to pay their bills or you have too many accounts payable due at the same time, your cash flow statement will show you when money might get tight.

— Market Analysis

A market analysis will tell you where you fit into the legal market in your location and field. You need a competitive analysis to understand the other lawyers and law firms that will compete with you for potential clients. You can also analyze their marketing messages to figure out how to stand out from the competition.

A competitive analysis will tell you what services other firms offer, how much they charge, and what features help your competitors succeed.

Your analysis should include a discussion about your :

• Ideal clients and what you can do to help them
• Market size and whether you offer something clients need
• Competitors and what they offer to clients
• Competitive advantages and how you can market them to potential clients

You can also develop and hone your marketing strategy based on the benefits you offer to clients over your competitors. Finally, a market analysis can tell you the locations and practice areas in which your firm may expand in the future.

Your market analysis helps you focus your efforts on your legal niche.

— Marketing Plan

A marketing plan sets out the steps you will take to reach your target market. Your marketing strategy will take your market analysis and turn it into a plan of action.

You will start with the results of your market analysis identifying your clients, your competitors, and your competitive advantages. You will then discuss the message you can deliver to potential clients that captures the advantages you have over your competition.

Some advantages you might have over other lawyers and law firms might include tangible benefits like lower billing rates or local office locations. Other advantages might provide some intangible benefits like more years of experience or state-bar-certified specialists in those states that allow specialization.

You will then discuss your marketing plan. A marketing plan explains :

• Characteristics of the target market you want to reach
• What your competition offers
• The distinct benefits you offer
• A message you can use to explain what separates you from your competition
• Your action plan for delivering your message
• Your goals for your action plan, such as the number of client leads, new clients, or new cases per month

Your action plan will include the marketing channels you want to use to spread your message. Marketing specialists can help you identify the best channels for your marketing message and client base.

For example, if you practice intellectual property law, you need to reach business owners and in-house lawyers who want to protect their companies' brands, inventions, artistic works, and trade secrets. A marketing agency may help you create a marketing strategy geared toward trade publications and business magazines.

However, IP lawyers require an entirely different marketing strategy than firms that practice family law. Family lawyers need to market to individuals and will tailor their marketing efforts toward different marketing channels and messages.

Even if you expect most of your client leads to come from referrals, you still need brand recognition for those leads to find you. You should consider a website, basic SEO, legal directory, and bar association listings.

— Your Law Firm Services

You will outline the services your law firm offers to clients. Lawyers with established clients and an existing legal practice can simply describe what they already do.

Any new law firm or lawyer transitioning from other practice areas should consider:

• Practice areas you know and enjoy
• Overlapping practice fields that will not require extra staff, such as personal injury and workers' comp
• Related legal services your clients may need, such as wills and guardianship

By offering needed services you can competently provide, you can gain clients and avoid referring existing clients out to other lawyers.

— Your Law Firm Budget

You should approach your budget as a living document. You will spend more money as you add more lawyers and staff members to your firm. But you can also look for ways to reduce your operating costs through investments in technology services and other cost-saving measures .

Your budget should set out the amount you expect to initially spend on start-up expenses. As you create your start-up budget, remember many of these expenses are not recurring. Furniture, computers, and office space build-outs can last several years. In short, your budget should answer the question, "What do you need to open a law firm?"

It should also lay out the amount you plan to spend each month to operate your firm. Here, you will include your recurring expenses, such as rent, staff salaries, insurance premiums, and equipment leases.

Using your operating budget, you will determine the amount of money you need to start and run your firm. This, in turn, will tell you whether you need to take out a loan or tap into your savings to start your law firm. You will need a plan for paying your expenses and day-to-day costs while your firm gets onto its feet.

Let us help you create a digital marketing strategy and a growth plan

Some Useful Tips on Creating a Business Plan for Law Firm Creation and Development

As you draft your law firm business plan, you should focus on the process. By putting your thoughts down in writing, you will often identify issues you had not previously considered.

Some other tips for drafting your business plan include:

— Describe Both Strengths and Weaknesses

You want to project confidence as you prepare your business plan. Remember, you will use this plan to approach potential law partners, lenders, and merger targets. You need to show that you have a solid plan backed up by your financial projections.

At the same time, you need to remain realistic. Write a business plan that describes your business challenges as well as your competitive advantages.

For example, if you have a strong competitor that has a solid  law firm reputation management  and many of the clients you will target, acknowledge the difficulty of getting those clients to switch law firms. Describe your marketing strategies for approaching and pitching your law firm to those clients.

— Think Ahead

Remember that your business plan sets out the roadmap for both the establishment and operation of your law firm . Think about issues that could arise as your firm grows and matures.

For example, you may have a goal of reaching ten lawyers in three years. But as your staff grows, you may need a human resources manager. You may also seek to handle your payroll in-house instead of outsourcing it to a payroll provider. These changes will create ripple effects throughout your business plans. You will incur costs when you add staff members. You will also realize benefits like increased attorney efficiency.

At the same time, any projections more than five years into the future will likely be useless. Your firm and its clients will evolve, and technology will change how you practice law.

"A law firm that actually does something in the unique way that is an actual measurable advantage to their clients or to their firm." — Tom Lenfestey

— Be Clear about Your Intentions

As you develop your plan, you should keep its purpose in mind. First, you want to outline your core values and goals for your law firm. Set out the reasons why you started your law firm and what you intend to accomplish with it.

"You can't just be doing something because you want prestige. There's gotta be more to that, right? You have to have a purpose that you're following. And if you've got that, that purpose is like gravity, right? You will always be grounded." — Omar Ochoa

Second, you set out your path to achieving those goals. This will include boring technical information like how much you spend on legal research every month. But it will also explain your approach to solving problems consistent with your mission statement and philosophy for law firm management.

— Consult and Update If Necessary

Your plan should guide you as you build your firm. It contains your goals and the roadmap for reaching them. But your plan is not carved in stone.

As you face challenges, you will consult your plan to make sure you approach these challenges in a way consistent with achieving your goals. But under some circumstances, you might find that the plan no longer provides the right solution.

As you work with your firm and your law partners, your goals, processes, and solutions to problems may evolve. The technology your firm uses may change. Your law firm's costs may go up with inflation or down as you realize economies of scale. You should update your plan when this happens.

— Develop a Succession Plan for Your Law Firm

Creating a succession plan for a law firm is essential for ensuring a smooth transition and preserving the firm’s value. Drawing from the experiences of professionals in other fields, it is clear that lawyers often face unique challenges in succession planning. A well-structured exit strategy can help lawyers realize the value of their practice, whether they plan to retire or pursue other interests.

Firms generating over $2 million in revenue typically have invested in systems that make them more attractive and easier to transition. These systems are crucial in creating value and attracting buyers. A transition-based sale, where the selling attorney remains involved for a period, ensures a smooth handover of clients and referral sources, reducing the risk of value loss. Additionally, specialized, systematized, and profitable firms command higher valuations. By investing in robust systems and considering your exit strategy early, you can create lasting value, financial security, and peace of mind, making your law firm more sellable in the future.

Building High-Value Law Firms with Tom Lenfestey, the CEO of Law Practice Exchange

This podcast episode features a discussion between Sasha Berson and Tom Lenfestey about the Law Practice Exchange, a marketplace for buying and selling law firms. Tom, an attorney and CPA, explains how his experience with other professionals inspired the creation of this marketplace. They discuss the importance of building systems to enhance a firm's value, the challenges of succession planning, and strategies for creating a smooth transition and maximizing value during a sale.

"You make more money with hopefully more consistency and less stress. And so that's also part of it is enjoy it. Build to better, right, overall, but build that firm that you want." — Tom Lenfestey

Tom Lenfestey

The CEO of Law Practice Exchange

Tom Lenfestey is an attorney and CPA who founded the Law Practice Exchange, a marketplace for buying and selling law firms. With a background in assisting dentists and CPAs in selling their practices, Tom identified the need for a similar platform for lawyers. His work focuses on helping attorneys realize the value of their practices, providing structured exit strategies, and facilitating smooth transitions.

Final Steps

There is no recipe for creating a business plan for law firm development. What goes into your mission statement and plan will depend on several factors, including your law firm's business model. But this is a feature, not a bug of developing a business plan.

The process of business planning will help you develop solutions to issues you might have overlooked. If you have law partners, just going through the process of creating a law firm business plan can ensure that everyone is on the same page.

As you create your plan, the process itself should provoke thoughts and ideas so you can have a unique law firm tailored to your goals and values. This will help you get exactly what you wanted when you started in the legal industry.

To learn how to expand your client base as your firm grows, check out Grow Law Firm, a professional  law firm SEO agency .

• Easy steps you can take to bring in more clients and up this year’s revenue
• The top website and marketing mistakes holding your law firm back

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Consult with Sasha Berson, a legal marketing expert , to address your marketing needs.

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• How to Start a Law Firm

How to Create a Law Firm Business Plan

Instantly download this article as a PDF

Contents: Guide To How to Start a Law Firm

1. How to Create a Law Firm Business Plan

2. how to create a law firm budget, 3. getting support: networking and hiring, 4. setting up your workplace, 5. creating your online presence, 6. implementing systems and processes, 7. making it official, 8. how to get more clients for your law firm.

The wait is over…gain an edge with the latest report.

What is a business plan and why is it important.

A law firm business plan is a document that summarizes what you want to achieve and how you’ll run your business. This summary includes general information about your law firm, why you chose to start it, major goals, the services you offer, a budget, and a strategy for gaining and managing clients.

A business plan is essential to any law firm as it documents, and serves as, a roadmap for the future.

As you think through what it is you want to achieve, what type of clients you want to serve, how much to charge as a lawyer , and what type of matters you want to handle, your business plan may evolve. That’s okay! Your law firm business plan can change as your goals change, so don’t feel pressured to have all the answers upfront.

That being said, the more thought you put into your business plan now, the better you’ll set yourself up for success in the long run.

What to consider when creating your business plan

Before you start writing a law firm business plan, as an attorney and a potential entrepreneur, it’s important to take a step back and reflect on what you want from your practice first. For a more specific, meaningful, and ultimately rewarding business plan, consider these three points:

1. What are your business goals?

The first and most critical step in writing an effective plan is to ask yourself, “Why do I want to own a law firm ? What do I want to achieve? What’s my definition of success ?”

Starting your own law firm isn’t just about having a job—it gives you the potential to have more freedom and more fulfillment. In theory, owning your own firm gives you more control over your income.

Consider the following questions to get started:

• What do I want to achieve through starting my own law firm?
• What’s the impact I want to have?
• What am I good at?
• How do I want to service my clients?
• What problems do I want to help solve?
• What does success look like after starting this law firm?

Answering these questions might be more difficult than you think, but they’ll help you get clear on your goals for why you want to run a law firm. 

2. Consider how much revenue you’ll need

Now that you have an idea of what success looks like, calculate how much annual revenue you’ll need to achieve those goals—and more.

In 2024, the median pay for lawyers was $176,470   (up from $126,930 in 2023) .  While this isn’t a small amount of money, after factoring in living expenses like saving for retirement, rent or mortgage payments, student debt repayment, vehicles, emergencies, office lease etc., that number gets eaten away quickly.

More importantly, there’s no extra room for investment in hiring or marketing to grow your law firm. So, it may just be you and you alone until things pick up.

In that case, be generous when estimating how much revenue you’ll need, and write down a number that scares you. You’ll be much better off planning with that number in mind from the beginning.

3. Setting your fee structure

After setting your goals and estimating a few rough numbers to start, it’s time to create your fee structure. 

Your fee structure should include:

• What others charge on average
• What practice area you’ve chosen
• What your business expenses are 

As you might already know, each client is different which means each matter you handle will be different. It could make sense to charge a flat rate for one project but an hourly rate for another. 

Understanding what your competitors are charging and how they’re structuring their pricing is a good starting point to then build out your own fee structure.

Luckily, there are so many incredible tools out there such as Clio’s Legal Trends Report , which can help you understand average hourly rates; a benchmark calculator for hourly rates within your jurisdiction ; blog posts about billing; and more, that make it easy for you to do market research and understand what others are charging.

4. Determine how many cases you need to meet that revenue goal

If you are only handling two or three cases per month, the number you came up with above might look outrageous. It’s not. 

For example, let’s use the 2024 median pay of $176,470 a year in annual revenue as our goal, with a flat fee of $3,000 per client.

$176,470  per year in revenue = an average case value of $3,000 – $3200 = 55 cases per year = 4 – 5 per month.

$176,470  per year might seem crazy if you’re only working a couple of cases per month, but keep in mind that you’re going to gradually work up to it.

The number of cases you’ll need may differ depending on your location and practice area, so do your research to make sure you come up with a realistic case goal (even if it still feels like a stretch).

This brings us to the next part of developing your business plan—writing it.

How to write a law firm business plan

Once you’ve got the starting points of your business plan worked out, it’s time to put pen to paper. 

While your law firm business plan should be tailored to your unique situation, the following list will walk you step-by-step through all key sections you need to have a comprehensive business plan:

1. Executive summary

An executive summary is a one-page, high-level overview of all the key information in your business plan.

Law firm business plans can cover a lot, so it’s worth having a succinct high-level overview to keep things simple (hint: While this section should come first in your plan, it’s actually easier to write this section last, after you’ve laid out your plan).

Your executive summary should include:

• Mission statement : One or two sentences describing your firm’s purpose.
• Core values : What values are most important to the firm?
• Major goals : What are your firm’s overarching goals and objectives?
• Unique selling proposition : What sets your firm apart from other firms?

2. Firm description

Next, write a company summary for your firm, something  concise that provides a general overview of your firm, while providing important details describing your practice and clients, including:

• Service(s) : What type of law do you practice? What types of clients do you serve? Firm values : Restate your mission statement and core values.
• Legal structure : What sort of business entity are you? Are you in a sole proprietorship or a limited liability partnership?
• Location : Where is the office geographically located? What areas does the firm serve?
• Unique selling proposition : What makes your firm stand out? What technology or services give your firm an edge?

3. Market analysis

A little bit of preliminary market research goes a long way. 

Look at bar association listings to see how many other firms in your area offer similar services. Is there a high demand for what you’re offering? If not, how can you ensure you stand out to potential clients? This will greatly inform the message you choose to use in your marketing efforts.

Create a market analysis for your firm, including the following:

• Ideal client : What demographics (like location, age, occupation), needs, and motivations would signify the best client match for your firm, and why?
• Industry description : What is the current and projected size of the market your firm is in? What are the trends in your legal niche?
• Competitive analysis : Who are your direct and indirect competitors, and how are they serving your target market? Where do your competitors succeed? What opportunities are there for your firm?
• Projections : How much can your ideal clients spend on legal services ? How much can you charge?

4. Organization and management overview

You know that you’re the best person to lead the firm, but does everyone else know it too? This section is your opportunity to provide important details about yourself—and the key players in your firm.

• Highlight your experience and the educational background details that set you apart.
• Add the same for other members of your team, if applicable, including what makes them right for their specific roles.
• If your practice is on the larger size, this section is a great place to add quick visual aids like an organizational chart.

5. Services

Outline the types of legal services your firm provides.

For example, if you practice family law, what will you provide in your portfolio of legal services—cohabitation agreements? Wills/estates? Pre-nups? 

You also want to include who your services are for. For example, you might offer legal tech services to start-up companies and high-tech clients.

When writing about your services it’s important to consider:

• What problems do your potential clients need your help with?
• How can your services uniquely help your clients solve their problems?
• What is the benefit of your services to clients?
• Why would potential clients choose your firm over another firm?

How to Start a Law Firm Checklist

Everything you need to start a law firm—in one checklist

6. Marketing strategy

Marketing is a critical part of your law firm , and your business plan. It helps you understand how to make your firm stand out from others, how much you need to charge, and how you’ll get the word out and attract new clients. Learn more about how to get new clients for law firms .

Consider including the following in your law firm marketing strategy:

• Ideal client : Where would they find you ( online , through a local business directory, local Google ads , etc)?
• Marketing goals : Detail what specific outcomes you hope to accomplish through marketing. Goals should include tactical objectives (more clients? Higher billing rates?) and overall objectives (like increased name recognition).
• Unique selling proposition : Restate what sets you apart and makes you uniquely able to best serve your clients.
• Competition : Detail who your competition is—and what they’re doing to gain clients. Analyze their marketing strategies and assess where the cost of your services fits in with your competitors.
• Action plan : List the specific actions your firm will take to reach your target market and achieve your marketing goals (this could include a media/advertising strategy).

It’s also important to consider that your marketing needs will be different depending on the current stage of your law firm. 

When starting your own law firm, then marketing for you might mean a lot of hustle—working referral relationships , identifying groups that you can get in front of for speaking engagements, blogging, and using social media to get your name in front of potential clients.

As you grow (or if you have existing marketing in place) you should be able to estimate the number of cases you will bring in through each channel. Then, you can quantify your marketing cost per client by dividing the total cost of that marketing effort by the number of cases you got from each marketing channel. For example, if you’re the only corporate lawyer in a small town, you’ll need to spend less on advertising than a family lawyer in a larger city.

Once you have an idea of the cost and effectiveness of your marketing efforts, implement a marketing tax on yourself—a percentage that comes out of every single case fee you collect, and that gets invested straight back into marketing efforts. 

This is a simple way to think about how much you need to be charging to fuel your revenue goals. It’s also an easy way to scale and grow your marketing budget.

Once you start mapping out this information, you’ll notice that a system starts to form, which connects your goals, the number of cases you need to bring in, the profit you need to make on each case, the money you need to re-invest in marketing, and the number of people or contract resources you will need to employ to keep growing.

Learn more about how to market your law firm with Clio.

7. Financial plan

The heart of your law firm business plan is the financial plan. After all, when it comes to your business, there may not be a more important question than, “How much does it cost to run your law firm?”

The key is to include as much specific financial information as possible—particularly if you’re seeking funding like taking out a bank loan. As you start out, this financial plan should include numbers for your first year.

This could include:

• Revenue goal : How much money you want to make broken down by month.
• Financial projections : What you’ll realistically expect to earn, how many cases you think you’ll have capacity to take on, and what you’ll be charging each client each month.
• Budget : A breakdown of your expenses and what your money will be going towards each month.
• Cash flow statement: What you actually earned and spent each month. (Clio makes this easy with the financial reporting feature ). This is different from your projections and budget and should be updated as the year progresses. You’ll find that you may have budgeted for something that cost you much less than you originally thought or made more in a month than you projected, these discrepancies should be recorded in your cash flow statement.

As you start it’s reasonable to make assumptions based on your goals. You should also review and update this document for your second year, third year, and so on as time goes on.

8. Start-up budget

If you’re creating a business plan for a new law firm, you need a realistic start-up budget. To do this, you’ll need to consider a number of up-front and day-to-day costs, and account for these in your revenue goals.

Here are a few examples of costs to include in your budget:

• Hardware (laptops, printers, scanners, office furniture, etc.)
• Practice management software and other technology services
• Office space (Will you rent, or work from home?)
• Malpractice insurance
• Staff salaries (Are you planning to hire an administrative assistant or paralegal?)
• Utilities (Phone, internet, etc.)

Once you’ve laid out all of these costs, take a second look. Are there places where you could reduce your operating costs, and in turn, increase your profit margins? There are also plenty of tools you can look at to help streamline non-billable tasks and leave yourself more time to practice law. Be sure to look at these options and work them into your operating budget.

Law firm business plan templates

Here are some links where you can find examples of business plans and business plan templates for law firms:

• Wy’East Law Firm
• Smith & Jones, P.A.
• Business Plan Workbook

Final thoughts on how to create a law firm business plan

Having a goal and understanding how to get there is essential for any lawyer deciding to hang their own shingle. Having a written business plan does a few key things:

• It creates a concrete explanation and breakdown of why you need to work a certain number of hours this week.
• It keeps you accountable to your goals and commitments.
• It serves as a comprehensive tool you can share with your firm, investors, and potential partners.

To learn more about how to start a law firm, be sure to check out our complete guide .

And again, remember that technology is a key part of any business plan. Watch how law firms use Clio in this on-demand webinar to learn how to set up an efficient and organized back office.

Written by: Lisa Dimyadi Last updated: August 12, 2024

Client Management

Case management, billing & payments, accounting & report, e-signature.

• Help Center

Starting a law firm can be a rewarding and lucrative venture, but it requires careful planning and strategy. A well-crafted business plan is a crucial tool for any law firm looking to establish itself, secure funding, or grow its practice. The business plan will serve as a roadmap, outlining the law firm’s objectives, strategies, and unique selling proposition

Why Every Law Firm Needs a Business Plan

A well-structured business plan is imperative for every law firm, regardless of its size or specialization. While legal expertise is undoubtedly crucial, having a clear vision and strategic direction is equally essential. A business plan serves as a guiding light, defining the firm’s mission, values, and long-term goals. This clarity is vital for aligning the entire firm towards a common purpose, ensuring that everyone understands the objectives and the path to achieving them. Without a business plan, a law firm may find itself navigating uncertain waters, reacting to circumstances rather than proactively pursuing its ambitions.

The Key Components of a Law Firm Business Plan

A well-structured law firm business plan consists of several key components, each playing a crucial role in guiding the firm’s operations and ensuring its long-term success. Here are the essential elements of a comprehensive law firm business plan:

• Executive summary
• Law firm description
• Market analysis
• Organization and management
• Services 
• Marketing Strategy
• Financial plan
• Start-up budget

Section One: Executive Summary

The executive summary is arguably the most critical section of your law firm’s business plan. While it appears at the beginning, it is often written last, as it serves as a concise yet comprehensive overview of your entire plan. This section should capture the reader’s attention, providing them with a clear understanding of your law firm’s essence, mission, and what to expect from the rest of the document. In your executive summary:

• Introduce your law firm: Briefly describe your law firm’s name, location, and legal specialization.
• Mission and vision: State your firm’s mission and vision, highlighting your commitment to serving clients’ legal needs effectively.
• Your unique selling proposition: Clearly state your USP, and present what is unique about your firm that will ensure success.

The executive summary sets the stage for your entire business plan. It should be a concise yet compelling introduction to your firm’s mission, values, and potential. If crafted well, it can grab the reader’s attention and encourage them to explore other sections in detail. If you feel overwhelmed by this, you can write this section last. 

Section Two: Law Firm Description

This section of your business plan provides a deeper dive into your firm’s background, history, legal specializations, and legal structure and ownership. This section should provide a concise yet informative overview of your firm’s identity and history. Here’s what this section should cover:

• Mission Statement: Briefly reiterate your law firm’s mission statement. This statement should encapsulate your firm’s overarching purpose and guiding principles.
• Geographic Location: State out the physical location of your law firm’s office(s). This should include the city or region where your primary office is situated.
• Legal Structure and Ownership: State the legal structure of your law firm, whether it’s an LLC, S-Corp, or another legal entity. This choice is a fundamental aspect of your business model, influencing ownership, liability, and taxation. If your firm’s ownership is not that of a sole proprietorship, provide details on the ownership structure. Explain how the chosen structure aligns with your firm’s business model, decision-making processes, and long-term goals.
• Firm History: Provide the history of your law firm. Highlight key milestones, achievements, and notable moments in your firm’s journey. If your firm is well-established, briefly summarize its history, showcasing your accomplishments and contributions to the legal field.

Remember that brevity is key in this section. Don’t spend too much time, just touch on important points and achievements. 

Section Three: Market Analysis

A well-conducted market analysis will not only demonstrate your understanding of the legal industry but also inform your law firm’s strategies and decision-making. It goes beyond understanding your competition; it delves deep into your potential clients’ needs and expectations. 

Through market analysis, you can segment your target market based on demographics, industry, legal needs, and preferences. This segmentation allows you to tailor your services to meet the specific needs of different client groups. It also helps you identify the pain points and challenges that potential clients face. By understanding their concerns, you can offer solutions that directly address these pain points.

Your market analysis should also reveal the pricing strategies of your competitors. By benchmarking your pricing against theirs, you can position your services competitively. You can choose to price higher if you offer unique value or lower if you aim to attract price-sensitive clients. Your market analysis should reveal areas where your competitors may be falling short. Use this information to frame your services as the solution to these weaknesses. For example, if competitors have slow response times, emphasize your firm’s commitment to timely communication. 

Showcase your firm’s USPs that directly address client needs and preferences. If you excel in a particular practice area, have a reputation for excellent client service, or offer innovative fee structures, use these strengths to attract your preferred clientele. Ultimately, a well-documented market analysis not only informs your law firm’s business model but also guides your approach to client acquisition, pricing, and service delivery. It ensures that your legal services align with client expectations and positions your firm for success in a competitive legal industry

Section Four: Organization and Management

Image Source – Creately

This section provides a clear picture of your firm’s internal structure and leadership. Name the key stakeholders in your law firm and what they bring to the table. Highlight any unique experiences or expertise that each partner brings to the firm. This could include prior work at prestigious law firms, involvement in landmark cases, or specialized knowledge in a specific area of law. Explain how these experiences set your firm apart and enhance its capabilities. You can also include an organizational chart that visually represents your law firm’s structure. This chart should showcase the hierarchy, roles, and reporting lines within the firm. By including the names, educational backgrounds, unique experiences, and organizational chart, you paint a comprehensive picture of your law firm’s leadership and structure. This not only builds confidence in your team’s capabilities but also showcases the depth and expertise of your staff to potential clients, partners, or investors.

Section Five: Services

This section is the core of your law firm business plan. Here, you will go into detail about all aspects of your services. Present in simple words:

• The problem(s) your law firm is addressing and your approach to how to alleviate those pain points? Answer these questions, and provide in detail how your firm is in the best position to tackle this problem. 
• The solution(s) you are providing. This should describe how your law firm resolves your prospective market’s needs. This should include the work you do, and the benefits that each client will receive if they work with your firm. 
• Your law firm competition.  This should describe what advantages your law firm has over your competitors? What you do differently when providing your solutions and how your clients will gain additional benefits when they work with your law firm.

Section Six: Marketing Strategy

As you craft your business plan, keep these four essential questions in mind:

• What Is Your Firm’s Value Proposition? Clearly define what sets your law firm apart from others. This should guide your marketing and sales strategies, emphasizing the unique value you offer to clients.
• Who Is Your Target Audience? Identify your ideal client profile. Understanding your target audience helps tailor your marketing efforts to reach those most likely to benefit from your services.
• What Are Your Growth Goals? Set specific, measurable growth goals for your firm. These goals should inform your sales and marketing strategies, outlining how you plan to achieve them.
• How Will You Measure Success? Determine key performance indicators (KPIs) to measure the success of your marketing and sales efforts. Whether it’s tracking client acquisition rates, website traffic, or revenue growth, having measurable metrics will help you gauge your progress and make informed adjustments.

It is also valuable to perform a SWOT analysis (Strengths, Weaknesses, Opportunities, Threats) to assess your law firm’s internal and external factors. Describe your online marketing efforts, including your website, social media presence, and email marketing campaigns. Explain how you plan to leverage marketing  to reach and engage potential clients effectively. You should also define your pricing structure and fee arrangements. This may include hourly rates for specific legal services, retainer agreements for ongoing representation, or flat fees for standardized services. 

Section Seven: Financial Plan

If you want to expand your law firm and ensure a steady income, it’s essential to create a financial strategy for your practice. While you might not have all the answers regarding your firm’s finances, provide comprehensive details. Your goal should be to establish a financial plan, particularly for the initial year of your firm’s operation.

Provide comprehensive financial projections that cover the anticipated income, expenses, and cash flow for your law firm. These forecasts should offer a clear picture of how your firm expects to perform financially. You should also Incorporate income statements, which show your firm’s revenue and expenses, balance sheets that detail your assets and liabilities, and cash flow projections, which illustrate how money moves in and out of your business. These financial statements offer a holistic view of your firm’s financial health.

Explain the assumptions underlying your financial projections. This may include factors like growth rates, market trends, client acquisition strategies, and pricing models. Describe your strategies for achieving growth and how they translate into financial outcomes. This section is critical for demonstrating your law firm’s financial preparedness and sustainability. Investors, lenders, or partners will scrutinize these sections to assess the viability of your firm, making it essential to provide detailed and well-supported financial information.

Section Eight: Start-up Budget

When developing a business plan for your law firm, it is essential to create a realistic startup budget. This involves carefully considering various initial and ongoing expenses and factoring them into your revenue objectives. Here are some instances of expenses to incorporate into your budget:

• Hardware costs, such as laptops, printers, scanners, and office furniture.
• Office space expenses, whether you plan to rent space or work from home.
• Malpractice insurance fees.
• Staff salaries, including potential hires like administrative assistants or paralegals.
• Utility expenses, covering phone and internet services, among others.
• Expenses on practice management software or other tech tools

After itemizing these costs, review them thoroughly. Clearly state the total amount of funding you require to start and sustain your law firm. Explain how this funding will be allocated, including how much goes into covering startup costs and how much is reserved for ongoing operations. Be specific about the purpose of each funding component. 

Additionally, explore tools and solutions that can streamline non-billable tasks, freeing up more time for your legal practice. This not only enhances your overall productivity but also allows you to allocate more time to your legal practice. One exceptional solution that can significantly benefit your law firm operations is a legal practice management software. 

DigitsLaw: The Legal Practice Management Software for Law Firms

DigitsLaw is an all-in-one practice management software that streamlines and simplifies the day-to-day operations of a law firm. Whether you are a small firm or you have law firms in major cities, DigitsLaw can meet the unique needs of your legal practice. Our simple and intuitive tool offers a wealth of features that can make a substantial difference in the success and efficiency of your firm.

Here’s how DigitsLaw can help your new law firm scale:

• Effortless Case Management: DigitsLaw simplifies case management by centralizing all your client information, documents, and communications in one secure location. This ensures that you have easy access to everything you need, right at your fingertips.
• Time Tracking and Billing: With DigitsLaw, tracking billable hours and generating invoices is seamless. You can accurately record your time, expenses, and activities, allowing for transparent and error-free billing processes.
• Conflict Check: DigitsLaw provides a robust conflict check system that assists law firms in maintaining ethical standards and preventing conflicts of interest. By incorporating DigitsLaw conflict check capabilities into your law firm’s workflow, you can enhance your due diligence processes, reduce the risk of conflicts of interest, and uphold the highest ethical standards in your legal practice. 
• Client Collaboration: Foster better client relationships through DigitsLaw’s client portal . Clients can securely access case information, share documents, and communicate with your firm, enhancing transparency and trust.
• Legal Document Management: Say goodbye to the hassle of paper documents and disorganized files. DigitsLaw enables efficient document storage, organization, and collaboration, saving you time and reducing the risk of errors.
• Secure and Compliant: DigitsLaw prioritizes security and compliance, ensuring that your client data and sensitive information are protected at the highest standards.

By leveraging DigitsLaw’s capabilities, you can significantly reduce administrative overhead, minimize errors, and provide a more streamlined and responsive experience for your clients. It’s a strategic investment that will pay dividends as your firm grows and prospers.

Sample Business Plan and Fillable Template

If you’re in the early stages of creating your business plan, we’ve prepared an example that can serve as a reference. You can also download a blank version of our template here. Remember to tailor your plan to your specific requirements and objectives. 

Download your copy of our law firm business plan template HERE

Final thoughts.

In conclusion, crafting a law firm business plan is not just a formality; it’s a roadmap that guides your firm toward success. Whether you’re launching a new law firm or seeking to revitalize an existing one, a well-thought-out plan helps you.  From defining your firm’s mission and values to conducting a thorough market analysis every section of your plan plays a crucial role in shaping your law firm’s journey. It’s not just about impressing potential investors; it’s about setting clear goals, making informed decisions, and ensuring that your firm is well-prepared for the challenges and opportunities that lie ahead.

As you start planning, remember that your business plan is a living document. It should evolve and adapt as your firm grows and the legal industry changes. Regularly revisit and update your plan to stay aligned with your mission, serve your clients better, and achieve your long-term vision.

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How to Create a Legal Department Strategic Plan

December 18, 2023

Market Insights

As we all move into 2024, front and center are your aspirations to grow and change. While change can be unnerving, the curveballs 2024 will throw your way don’t have to catch you unprepared.

Creating a legal department strategic plan ensures you have a common direction to move toward in the coming year. It outlines specific, actionable steps, resource allocation, and KPIs to measure your results.

Learn how to create a legal department strategic plan that will fuel your growth and prepare you for any challenges that may appear along the way.

Key Takeaways:

• Legal department strategic plans unify your team under common goals.
• Use data to analyze past, current, and future performance.
• Use technology and cross-functional processes to improve your plan’s efficiency.

Why Should You Create a Legal Department Strategic Plan?

A strategic plan is your roadmap that provides the most efficient path from point A to point B. It outlines the steps and strategies to implement them.

Benefits of a legal department strategic plan include:

• Unifying departments
• Boosting productivity
• Staying on budget
• Ensuring legal compliance
• Eliminating bottlenecks
• Consistency in processes
• Supporting communication

10 Steps to Create a Legal Department Strategic Plan

Use these 10 steps to develop a consistent, efficient legal department strategic plan.

Step 1: Perform a Comprehensive Assessment

Before planning forward, step back and look where you came from.

A comprehensive assessment reviews your current legal department’s performance. You check how well you’re meeting budgets, how productive teams and processes are, and what tasks you can perform.

Assess your strengths, weaknesses, and growth opportunities, considering regulatory changes, industry trends, new legal technology , and emerging legal challenges.

Morae offers legal department assessments too, if you should need some expert assistance to help guide the process.

Step 2: Define Clear Goals and Objectives

Begin your legal strategic planning with a clear understanding of the legal industry and your position in it. The best place to start is at the end, so you know where you want to end up.

Define clear goals with specific outcomes you can measure and achieve within a set timeframe. For example, if enhancing ESG commitment is your goal, set quantifiable targets for reducing emissions and trash while investing a percentage more into social causes.

Link each goal to a motivating factor to inspire team engagement. Without a motivating factor, your team will have no reason to care about the goal, giving you a challenging time implementing the plan.

Your objectives are smaller steps that will help you achieve your overarching goal.

Image from https://marketbusinessnews.com/financial-glossary/goal/

Step 3: Align with Current Strategies

Ensure your new strategic plan complements existing plans.

Look for ways to overlap your plan with current functions or processes or create new strategies that don’t hurt what’s already working.

You should also consider company-wide goals and align your strategic plan with your business’s objectives, such as growth goals or ESG goals.

Step 4: Prioritize Objectives

As you list your objectives, prioritize them from most important to least. The most important objectives are time-sensitive, budget-sensitive, or have the most significant impact.

Prioritizing helps you allocate attention effectively and meet deadlines.

Step 5: Develop Actionable Steps

Transform each objective into actionable steps.

For example, to improve regulatory compliance, create a step-by-step process for incorporating a compliance management system.

Each step in your strategy should include the following:

• A detailed action plan
• Task outline
• Responsibilities
• Required resources

Step 6: Allocate Resources

Your resources will support your objectives by providing the money and items necessary to perform each task.

By allocating resources at the start, you ensure you have enough for every stage of the plan and don’t run out midway through.

Consider cross-functional collaboration to maximize resource efficiency. For example, before investing in new software, consider what other parts of your plan the software might also help with so you can use it in several ways.

Step 7: Establish Key Performance Indicators (KPIs)

Define legal key performance indicators (KPIs) that align with your strategic plan’s objectives. These measurable benchmarks track your progress and alert you when you have achieved your goals.

For example, if your goal is reducing litigation costs, your KPI could be a specific percentage reduction in legal expenses over a set period.

Step 8: Implement and Monitor the Strategy

After initiating your strategic plan, you’ll want to stay on top of tracking it.

Use tools to collect and analyze data at every stage of your strategy, such as data catalogs , so you can monitor your performance.

Regularly running reports and checking your KPIs helps you keep on track to meet your deadlines. It also alerts you to any issues early so you can fix them before they turn into significant problems.

Step 9: Keep Open Communication

Open communication improves the effectiveness of your new plan. After all, if your team doesn’t participate, then the entire program will fall through.

So, you want to keep your team in the loop and involve them throughout the strategy.

Asking for feedback and gaining their perspective throughout the planning and running of the plan keeps them engaged. Your team can offer their insights into what will or won’t work. They can also provide their opinion on how well the strategy works while they perform tasks.

Adjust the plan based on their input and experiences.

Step 10: Stay Agile

An agile business plan is flexible and changes as needs and trends shift. It considers a complex and uncertain future. It offers strategies to adjust and scale your legal department as times change quickly.

The heart of an agile strategy plan is the people and offering a collaborative place to meet and discuss how the plan works. It’s also a safe place where creative minds can provide new solutions.

Agile strategies tend to lead change rather than trying to keep up with change. It also has a structure that quickly responds to feedback.

Of all businesses that incorporate agile frameworks , 93% report higher customer satisfaction, 76% report higher employee engagement rates, and 93% report higher operational performance.

Image from https://www.agilebusiness.org/business-agility.html

Hit More Strategic Plan Objectives

Do you need help building or executing your strategic plan?

Our expert legal tech and outsourcing team can help you hit those objectives with cross-functional technology so you stay within budget. We can also help you create training, technology roadmaps, and automated processes to keep your new plans running smoothly.

Charting Your Course for Success in 2024 with Strategic Planning

As you continue to accellerate into 2024, it’s time to embrace change and prepare for the challenges ahead. A well-crafted legal department strategic plan is your roadmap to success, guiding your team with clear goals, actionable steps, and measurable KPIs.

Remember, a strategic plan is more than just a set of goals; it’s a commitment to unified growth and productivity. Whether it’s enhancing communication, leveraging technology, or fostering a collaborative environment, every aspect of your plan contributes to the overall success of your legal department.

Ready to take your legal team to new heights in 2024? Contact us for expert guidance on building and executing a strategic plan that aligns with your vision and propels your team forward.

• Sample Business Plans

Law Firm Business Plan

If you are a lawyer, chances are you have thought of owning a law firm at least once if not more.

After all, having your firm gives you the freedom of taking up projects that you like and working at flexible hours.

But with freedom comes responsibility, and most of us find the thought of doing everything from onboarding clients to taking care of every detail of their case at least in the initial days quite overwhelming.

But don’t worry! It isn’t as scary as it looks. All you need to run a successful law firm is your sharp wit to deal with cases and a well-written law firm business plan to deal with the business side of your profession.

Free Law Firm Business Plan Template

Download our free business plan template now and pave the way to success. Let’s turn your vision into an actionable strategy!

• Fill in the blanks – Outline
• Financial Tables

Industry Overview

The global legal services market was valued at a whopping sum of 849.28 billion dollars in 2020 and is expected to rise at a high rate going forward too.

The main changes in the legal industry have been brought about by the introduction of AI which does proofreading and data research jobs with higher efficiency. This lets the lawyers focus on what really matters.

Also, the security and access systems have become loads better due to cloud computing.

What is Law Firm Business Plan?

A law firm business plan is a document that outlines your business goals and strategies to achieve those goals. It includes your law firm overview, your reason to start your firm, the services you will offer, a budget or funding requirements, and strategies to get and manage your clients.

Why Law Firm Business Plan is Important?

A business plan would help you understand what sets you apart from your competitors, and how you can market your USP to your clients.

It also helps you design strategies to reach out to your clients and manage them. It comes in extremely handy for analyzing the loopholes in your business structure.

Moreover, it helps you identify your strengths and work on your weaknesses.

All in all, It can make managing your business a hassle-free and less chaotic process.

Things to Consider Before Writing a Law Firm Business Plan

Focus on your expertise.

Between juggling business and practice, it is natural that practice gets neglected more often than not. But always keep in mind that though focusing on your business is important it shouldn’t come at the cost of skills you need to develop and upgrade to do well as a lawyer.

Also, it is important to decide on a niche so you can dig deeper and become an expert at handling cases of that kind.

Create a proper website

In today’s world being present and active on the internet is as important for your business as being good at what you do.

A strong web presence helps you reach out to your customers as well as builds your reliability for them.

Build your network

Networking is an important aspect of being a lawyer. From getting new customers, getting updates on the legal world, and even collecting evidence if you are a criminal lawyer, a good network can work wonders for your legal business.

The kind of circle you belong to also has an impact on your reputation and image as a lawyer.

Develop soft skills

We all know that confidence and intellect are a lawyer’s best friends. And although it is an ongoing process to develop these skills, it is good to get a head start before you start your business.

Intellect helps you upgrade and pay attention to detail, and confidence helps you sound more convincing and reliable. Both of which are foundational to a legal business.

How to Write a Law Firm Business Plan?

A law firm business plan would be a combination of segments common to all business plans and segments specific to a law firm.

Before you start writing your business plan for your new law firm, spend as much time as you can reading through some examples of  consulting-related business plans .

Reading some sample business plans will give you a good idea of what you’re aiming for. It will also show you the different sections that different entrepreneurs include and the language they use to write about themselves and their business plans.

We have created this sample law firm business plan for you to get a good idea about how a perfect law firm business plan should look like and what details you will need to include in your stunning business plan.

Chalking out Your Business Plan

Starting your own law firm is an exciting prospect for any lawyer. Having your firm gives you more independence, lets you implement ideas you want to, and most importantly, you get to deal with clients firsthand.

And if you plan on starting your own, do so with a proper business plan.

But you might wonder, why do I need a business plan as a lawyer, isn’t my legal knowledge and years of work enough?

The answer is no.

To run a law firm you need a law degree, but to run a successful business you need a business plan alongside your degree.

Law Firm Business Plan Outline

This is the standard law firm business plan outline which will cover all important sections that you should include in your business plan.

• Mission Statement
• Vision Statement
• Financial Summary
• 3 Year profit forecast
• Business Structure
• Startup cost
• Market Analysis
• Market Trends
• Target Market
• Market Segmentation
• Sales Strategy
• Marketing Strategy
• Pricing Strategy
• Personnel Plan
• Financial Plan
• Important Assumptions
• Brake-even Analysis
• Profit Yearly
• Gross Margin Yearly
• Projected Cash Flow
• Projected Balance Sheet
• Business Ratios

Say goodbye to boring templates

Build your business plan faster and easier with AI

Plans starting from $7/month

Now, let’s understand how you can complete each section of your business plan.

1. Executive Summary

The executive summary forms the first page of your business plan. It acts as a pitch for your business to potential investors and should consist of the following sections.

• Objective: This gives an overview of what you wish to accomplish with your business. The objective should be clear and solve an existing problem in the market.
• Vision Statement: This should state what vision you have for your business. How do you want it to function and how far do you expect to reach with it. You can also include how your vision sits with the current market situation.
• Financial Summary: This section should ideally consist of the history of your finances and their current state. A proper financial summary helps you gain an investor’s confidence and makes it easier for your business to get funded.

2. Company Summary

Next up we have the company summary section, this segment provides an overview of your company’s structure and its functioning.

This section provides a brief description of the following:

• Legal Structure: This section would describe the legal terms and conditions your firm functions on, as well as the ownership structure of your firm.
• USP: This would consist of points that set your firm apart from your competitor’s firm.
• Services: This section will include the services you offer, the legal procedures you are well versed in, all in all, the client base you cater to.
• Location: This segment covers your area of service and the location of your firm. A clearly stated area of service, helps you reach the right audience.

3. Market analysis

This segment consists of a thorough analysis of the market situation. It can be split up into the following sub-segments.

• Market Trends: This would consist of all the prevailing trends in the market. It is important to know market trends because it helps your business keep up with the evolving market.
• Target Market:  This section would consist of a summary of the market you cater to. Clearly defining your niche helps you reach out to your desired customer base.
• Market Segmentation: In this section, note down the segments present in the market, as well as what segment of the market your business would fit in. This would help you narrow down the number of competitors you have, the strategies you must follow, and the major and additional services you should offer.

4. Strategy and implementations

In this section, you would include various business strategies like:

• Marketing strategy You can formulate a marketing strategy depending on your target audience and the easiest and most effective ways of reaching out to them. It is important to formulate your marketing strategy based on your USP and your vision statement.
• Pricing Strategy It is important to formulate a pricing strategy based on the market trends, the nature of the work, and your target audience.
• Milestones This segment would consist of the various milestones your business would have to reach to achieve your goal and the strategies to help you reach them.

5. Financial Plan

The financial section of your business plan would consist of the following information regarding your business.

• Financial history
• Current State of finances
• Profit and loss

Download a sample law firm business plan

Need help writing your business plan from scratch? Here you go;  download our free law firm business plan pdf  to start.

It’s a modern business plan template specifically designed for your law firm business. Use the example business plan as a guide for writing your own.

The Quickest Way to turn a Business Idea into a Business Plan

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Law Firm Business Plan Summary

All of the above segments would help you in creating a well-rounded business plan. Starting your law firm with a well-written business plan can make your growth process faster and smoother.

After getting started with Upmetrics , you can copy this law firm business plan example into your business plan and modify the required information and download your law firm business plan pdf or doc file.

It’s the fastest and easiest way to start writing your business plan.

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Upmetrics is the #1 business planning software that helps entrepreneurs and business owners create investment-ready business plans using AI. We regularly share business planning insights on our blog. Check out the Upmetrics blog for such interesting reads. Read more

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A Complete Strategy for Creating a Law Firm Business Plan

You’ve invested so much time into completing and graduating from law school and studying and passing the state bar exam. Maybe you spent years working at law firms, in government, or in corporate law. Now you’re ready to open your own firm, and you want to do it right so all those years of hard work pay off. You need a law firm business plan.

But do you know where to begin? What should your business plan include? What are the challenges you know and, most importantly, what don’t you know? 

Start with the basics. What are your values? What do you want to achieve with your law firm? What will make your firm stand out?

Understanding your “why” will prepare you to open your firm and establish its operations—from case and document management to checking your firm’s growth profile. Well-defined goals, plenty of preparation, and the right tools can help you get answers to your business questions and create the best business plan for your law firm.

What Is a Law Firm Business Plan?

A business plan is a roadmap that accounts for your milestones, potential setbacks, and the overall growth of your brand. You may want to include strategies for marketing, finance, sales, and partnerships.

Generally speaking, it’s a summary of what goals you want to achieve as a brand. If you’re not sure of where you’d like to start with your business plan, think about:

• The purpose of your firm and what you want to do
• How you see your firm in five, ten, or twenty years
• The type of working environment you want to provide
• Management and organization of the firm
• What do you want to see come out of your firm financially

While considering each of these factors, keep your target clientele in mind. Consider your demographic, their needs, and expectations. This way of thinking can help keep you focused on providing top-notch client care.

Why Is a Law Firm Business Plan Important?

Making a business plan is a guiding principle for your goals and success. This way, you’ll be less likely to lose sight of your goal. When managing a firm, you have to worry about yourself, your staff, the brand and business as a whole, your partners, competitors, and of course, your clients. With all this responsibility, losing track of your mission seems almost inevitable. However, it doesn’t have to be. Referring to your firm’s values, your long- and short-term objectives, and your financial projections can help prevent you from falling behind.

Your firm is a business, so you must manage it as such.

Even though you should follow your law firm’s business plan, that doesn’t mean your goals won’t or shouldn’t change. Sometimes, things don’t go as intended, and you must adapt. For example, some marketing strategies may not be as popular with your target audience as intended. In that case, it’s time to go back to the drawing board and see how you can appeal to them.

How Do I Start a Law Firm Business Plan?

Getting started is almost always the hardest part of anything. However, if you start small, it’s easy to build.

When creating your law firm business plan, follow these steps:

Define Your Goals

Having defined goals sets the tone for how you manage and market your business. It may seem obvious to you, but when prospects do a search and land on your website , that might not be the case for them. When you articulate what drives you, these potential clients may be more inclined to look into what you can offer them.

If you’re unsure how to explain your goals for the firm, maybe come back to that later. Figuring out your services, marketing strategies, financial projections, management, and operations may help you come to a more concise conclusion.

Revenue/Value Estimation

Whether you’re asking for funding or want to build the firm from the ground up, you must figure out how to keep the lights on.

You’ll want to have an answer for the following:

• What are the costs associated with starting a law firm?
• What is the number of cases you need to break even? Make a profit?
• What is your profit-loss estimation?

Be precise with these numbers. That way, you can better gauge your success or lack thereof.

Billing Structure

Creating a comprehensive legal billing policy at the beginning will save your law firm a vast amount of non-billable hours and money .

First, you’ll want to get clear on items like your fees. Some firms charge a flat fee. Others charge by the hour. The fee structure can vary depending on the area of practice . For example, if you’re working in personal injury law , especially, you may go the contingency fee route. 

Once you figure out which payment structure to use, you’ll want to create a process for how you’ll get paid. Automating your billing with legal workflows is a simple way to standardize the processes. This workflow should outline items like the invoice creation process, modes of sending the invoice, and how the client will pay. 

PracticePanther’s automated legal workflows can be customized to trigger events throughout the billing cycle so you never have to worry about missing a step. 

Identify the Risks

Just like the risk assessment you give your clients, the same should be done when starting a law firm. Identifying potentials risk during the planning process will help inform your business decision. While risks are not always avoidable, being proactive can limit the shock associated with surprise risks. 

A few potential risks for law firms: 

• Market share
• Pros and cons of your pricing structure
• Demand of services

What Is in a Law Firm Business Plan?

There’s no set formula for creating a picture-perfect business plan. However, these things may put you on the road to success:

Executive Summary

This section gives an overall view of your plan. It includes:

• Mission statement, noting your inspiration and drive for your law firm
• Core values, describing what you’ll use to serve your clients
• How you stand out, discussing what you’ll bring to the table that others may not
• A company description, articulating how you got started in law, your educational and professional background, etc.

Refrain from making general, overstated platitudes. Every other firm promises how they’ll strive to deliver the results their clients need. Be specific and tell them how you will act.

Market Analysis

Who will you represent, and how will you get paid? These questions can help you determine how you’ll carry out a market analysis:

• Target clientele: What demographic do you want to serve? Think of age, location, status, occupation, or gender.
• Financial projections: How much would this demographic reasonably spend on your services?
• Industry: What are the trends in this industry? What’s the market size? What’s its potential for growth or lack thereof?
• Competition: Who are your main competitors? What are their/your strengths and weaknesses?

Law Firm Billing and Finances

What are budgets and revenue going to look like? Think about how much money you’ll need to start up and keep the firm running every month. How many cases will allow you to break even or make a profit?

Assess how much you project to make this year and every year thereafter.

Management Structure

Now is the time to think about how you’ll operate. Yes, you want to create a healthy work environment, but how will you do that?

If you’re opening this firm, you probably have the educational background and experience to hit the ground running.

However, serving clients and running operations are two different things. Are you the right person to manage the firm as a whole? It’s okay if you’re not sure. Maybe you would benefit from hiring an office manager or other employees to keep things running.

Legal Technology

The more clients you take, the more paperwork, documents, and overall assistance you’ll need. You may not need to hire an employee to take care of such matters per se. As such, you may want to consider purchasing law practice management software to keep track of every detail of your business operations. These cloud-based solutions make it easy to work from anywhere while maintaining collaboration with staff or outsourced workers. 

Managing your law firm is made easy with an all-in-one solution . PracticePanther comes equipped with all of the resources your need to efficiently manage a profitable law firm. Native features like custom reporting to track expenses or cash flow, legal document management for accessibility and paperless filing, legal billing software to accurately manage your billing and invoicing, case management to streamline your cases, eSignature to quickly send documents for electronic signature , and online payment processing to get paid faster and enhance the client experience.

Other law practice management platforms may require costly monthly subscriptions for essential business features like online payment processing or eSignature. With PracticePanther — they’re free to activate and included with your account. 

Legal Services

Your services are the bread and butter of your firm. What problems are your potential clients experiencing, and how will you help them?

Here, you can also differentiate yourself from your competitors and discuss the advantages of hiring you.

Law Firm Marketing

When you market your firm, think about how you will present it and entice a prospect to hire you. What services will you provide, and at what cost? Show potential clients that your firm is worth every penny and that you will go above and beyond for them.

Creating a law firm marketing strategy with proven tactics and goals is key. Traditionally, firms have relied on word of mouth. However, to remain profitable — law firms should utilize modern channels such as social media, paid advertising, and search engine optimization or SEO. 

Use your executive summary and market analysis as an initial guide for your marketing strategy then continue to measure and adjust your strategy. 

Sample Law Firm Business Plan

Organizing your law firm’s business plan can seem like a big maze. However, if you have a document template that allows you to break everything down step by step, it won’t be as scary.

PracticePanther offers a white-label template for you to write out your goals for your firm. You can even customize it with your logo, ensuring your professionalism and brand recognition. This feature also stores your business plan in one place. 

What’s more, if you have several potential business plans, you can easily store them within PracticePanther as a template or file . This way, if you need to adjust your plan (which is highly recommended that you monitor your business plan) you can easily access it.

Outlook on the Business of a Law Firm

It’s great to have short-and long-term goals and objectives when you’re forming a law firm business plan. Still, these plans should be flexible and adapt to the market. 

Having an understanding of how to scale and market your law firm with modern processes will ensure the overall profitability of your business. With PracticePanther’s five-minute law firm growth quiz , you can find your growth profile along with a strategic growth roadmap for success. 

Modern legal technology makes it easier than ever to practice and manage a law firm today. Ready to get started? You can schedule a custom demo with PracticePanther to see how our features support your firm’s success.

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• Business plans for law departments

Five benefits of creating a business plan for your law department

This article is based upon the Practice Note “In-House Counsel Skills Needed to Support Emerging Law Department Responsibilities,” one of the more than 65,000 resources available in Practical Law. 

Corporate counsel are challenged to align the goals of the law department with the business’ goals and to manage their departments like a business. In addition, corporate counsel struggle to demonstrate the value of the law department to internal stakeholders, particularly those in the C-suite.

One way to meet those challenges is to create and implement a law department business plan. The benefits of doing include:

• Creating a shared vision, common goals, and greater accountability for law department employees, all of which leads to better client service and greater job satisfaction
• Setting out an explicit strategy for making the law department more efficient
• Improving resource allocation
• Strengthening relationships within the law department and between the law department and its internal clients
• Demonstrating to the board of directors, company management, and other employees how the law department contributes to the company’s well-being and adds to its bottom line

By creating a business plan for the law department, you are thinking like a business person and speaking the language of business. This simple tactic sends a powerful message to all your internal stakeholders.

Related content

Part 1: managing your department, part 2: up-skilling, how to be sure moving legal work in-house is the right move.

Check out Practical Law Connect from Thomson Reuters, the legal know-how solution built by and for in-house counsel.

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How to Draft a Law Firm Business Plan

Law firms are something more than a business. Law firms and the lawyers within them are engaged in a profession, with obligations that go beyond purely commercial concerns.

Listen to this article:   Click here to play this audio clip

This truth can obscure the need for lawyers to pay attention to the business management side of their practices: their finances, marketing plans, business development efforts, IT purchases, lease terms and capital needs. For the highly trained lawyer, such concerns may feel at best like an afterthought, or at worst a nuisance that steals time from their true occupation: the “practice of law.”

And yet, those annoying business details are responsible for keeping the lights on. While law firms may be more than a business, there is, in fact, a large and necessary business element to them. For solo practices and small firms in particular, investing time into the business management side of legal practice can make a major difference in the financial rewards they derive from it—or even their survival. Firms that have failed to do so in the past (and even those that haven’t) can get a handle on their law practice business management by taking the step of drafting a business plan.

THE POINT OF A BUSINESS PLAN

We’ll discuss the components of a business plan in a moment, but first, let’s talk about why this exercise is valuable. For another type of business, a business plan may be useful in attracting investors or securing financing. Law firms should not think of their business plans as utilitarian documents in that sense (although someday one could prove helpful in obtaining a line of credit, say, or attracting lateral partners). Instead, the primary value of the business plan, particularly for the solo practice or small firm drafting one for the first time, lies in the fact that it forces the firm to think about business issues that it otherwise would not have considered.

As the D.C. Bar says in its advice to startup law offices : “The act of planning helps you think things through thoroughly, study and research if you are not sure of the facts, and look at your ideas critically. It takes time now, but avoids costly, perhaps disastrous, mistakes later.”

Of course, a business plan does little for anyone if it is quickly forgotten. But the mere act of generating a business plan gives a firm a direction to head in and goals to point toward. If the firm makes it a practice to revisit the business plan on an annual basis (if not more regularly), its business considerations will stay top-of-mind and the firm will continually refine them in ways that improve its performance.

THE CONTENTS OF A BUSINESS PLAN

Creating a strong business plan will require an investment of time and energy. At the same time, no one wants to write, or read, a massive document. To improve the chances that the project gets done, and gets read, it is best to keep a business plan to a reasonable length. Anything over 20 pages may stretch attention spans to the breaking point, and there’s no harm in going shorter if you have covered all the territory you need to by that point.

So, what, exactly, is the territory that you should cover? Most authorities agree that a sound business plan for a law firm should address the following broad areas:

• Overview of the Firm

This section should include basic information about the firm: its name, legal structure, practice areas and leadership positions. It should also contain some deeper information about the firm's identity and aspirations.

This would include:

A mission statement about the firm’s purpose

A vision statement or recitation of medium- and long-term goals for the firm

Important aspects of the firm’s history

Any important philosophies that the firm brings to legal practice

• Market Analysis

This section should discuss the business trends affecting the firm’s important practice areas and clients. It should evaluate any technologies that are affecting your practice area and consider how the firm may leverage or keep up with them. This section should also devote substantial energy to identifying the firm’s major competitors in each of its important practice areas and comparing their services to the firm’s.

In this section, identify the firm’s major clients, breaking them down by important characteristics like size, location, industry and practice groups used. Go through a similar exercise for major client prospects and targets. It’s worth examining how the firm can improve its relationships with both of these groups.

Important financial information includes the firm’s fixed and variable costs, backward- and forward-looking revenue, realization rate, collection rate, monthly overhead, assets and liabilities. A 12-month profit and loss projection should be included and could be considered the heart of the business plan.

There is a great amount of detail that any firm could get into on this front. Don’t get overwhelmed by it; at the same time, this is some of the most important information in the business plan, so it’s not advisable to gloss over it.

This section will address key operational issues like the office lease, equipment purchases and technology plans. You may assign roles to various staff members for operational issues.

Think about what marketing the firm currently performs, how it obtains clients and what marketing goals it wants to set for the future.

After completing these and any other sections the firm might want to address, then go back and draft an executive summary to be included at the beginning of the business plan document. The summary should be professional, but don’t be afraid to give it some optimistic energy. After all, with your eyes on the business management fundamentals of your firm, things should be looking up for the future.

• Growing Your Business
• Law Practice Management

Strategic Planning for Your In-House Legal Department

Shake the dread off this task by following 8 steps to conquer Legal Department strategic planning, including practical tips and insights from two experts.

A BarkerGilmore survey informs us that more than 70% of CEOs define their ideal General Counsel as a “strategic business partner and valued member of the leadership team,” yet according to a Xakia flash poll, 59% of General Counsels said they do not have a Legal Department strategic plan .

Why is a Legal Department strategic plan so important?

The Association of Corporate Counsel’s Legal Operations Maturity Model Toolkit lists five primary reasons:

➡️ Align the Legal Department with business direction and goals.

🏃Ensure the entire Legal Department is moving in the same direction.

💰 Prioritize and justify investments in resources and technology.

📊 Demonstrate the Legal Department’s value contribution and business impact to the company.

📈 Measure the success of the Legal Department planning process.

The importance of having a strategic plan is likely well understood, but how to action one often stymies GCs who are crunched for time managing day-to-day business. So how do you get there?

It can be easier than you think. Xakia developed a framework, 8 Steps to an In-House Legal Strategic Plan , that will help you build an actionable plan for your team.

How do these steps work in the field?

We recently sat down with Shiv Patel, Manager Legal Projects and Operations at Coverys, and Brian Matthew Rhodes, Chief Legal Officer and Corporate Secretary at Opportunity@Work, to gain insights into how legal teams of varying size and maturity tackle the strategic planning process .

Step One: Gather Intel

Guidelines:.

• Look at last year and identify where your team struggled – workload, budget, personnel? – and which problems you would like to solve
• Talk to your clients and learn their plans and concerns for the upcoming year
• Talk to the boss and make sure your department objectives are aligned with the company’s strategic goals
• Talk to your team — engage the lawyers and staff to gain an understanding of the business issues that are piling up, what technology is or isn’t working, and identify recommended changes

Put Into Practice:

Ms. Patel highlighted an organized process used by the mid-size Coverys legal team. “We have ideation sessions with our team members and departments and organically come up with ideas and share thoughts. We take information gathered in these ideation sessions and find commonalities to define department goals for the year. It can be as simple as putting a Word doc up on a screen in a conference room and doing a data dump.”

Working from the hectic start-up environment facing rapid policy and regulatory changes, Mr. Rhodes added that his responsibilities include “constantly gleaning information from both internal and external sources” to inform his strategic planning.

Step Two: Think Long Term

• Do not skip this step
• Understand your company’s strategic goals and identify them front and center on your Legal Department strategic plan

This is a critical element underlying the Coverys ideation sessions. All “data dumps” are driven by a clear understanding of the company’s strategic goals and how Legal can help achieve them.

If you don’t know your company goals, make sure to find out. If your company doesn’t have an established strategic plan, consider being proactive on behalf of the Legal Department to set goals and tactics in line with your industry.

Step Three: Think Short Term

• Identify the short-term projects your Legal Department should address
• Consider your organization’s position relative to its industry, regulatory landscape, geography, and workforce, and other economic considerations

Both Ms. Patel and Mr. Rhodes operate in highly regulated industries. Mr. Rhodes revealed that his organization relies on an “integrated master plan” and works closely with state and federal public sectors to ensure they are on top of laws and regulations that will impact the organization’s mission.

Ms. Patel’s team keeps a watchful eye on state and federal regulatory changes to ensure that the legal team is always in a position to render proactive strategic guidance.

Step Four: Determine Your Major Missions

• Select a few, no more than three, major missions to provide a foundation for your strategic plan and spark ideas for tactics and execution
• Highlight areas where you want to build strength or address weakness in years to come

Both Ms. Patel and Mr. Rhodes offered creative options to develop legal department missions. As Ms. Patel explained, the Coverys team deploys an exercise where “each team member comes up with a newspaper headliner in ten words or less as to who we are as a team. From there we try to figure out our vision and mission for the year. This fun activity has been great in helping us figure out what we want to do and who we are.”

Mr. Rhodes communicated that his goal is to create internal efficiencies with the Legal Department. “I go by a five-finger approach - be knowledgeable, resourceful, legally sound, thorough, and punctual.”

Step Five: Draft Your Strategic Objectives

• Review your major missions
• Identify your building blocks to get you there
• Recommendation: Start with no more than three strategic objectives in total for a greater likelihood of success

For Mr. Rhodes, his building blocks involve “creating themes and metrics under each one. I articulate exactly what the legal team is going to do to hold myself accountable and for the company to hold Legal accountable.”

The Coverys team tweaks the verbiage from “strategic objectives” to “key focus areas” which has helped alleviate creative blockages. Ms. Patel explained, “we break up the discussion into categories and within those talk about people, projects, tasks and initiatives to build the objectives within the plan.”

Step Six: Define Success

• Brainstorm: For each strategic objective, what is the ideal result?
• Think of quantifiable measures: spend, response time, cycle time, number of matters completed, etc
• Use emotive language and to be clear about what success feels and looks like

Mr. Rhodes “ties the five-finger approach with metrics under each to the company’s master plan.” For instance, “under knowledgeable, we work closely with Finance and IT in the creation of relevant policies. Under resourceful, we said we would create a Legal Confluence page, a Xakia legal intake form, and a Slack page.”

For both teams, it comes down to data. Ms. Patel emphasized “we pull data from our Xakia legal analytics software and use that data to set our goals and objectives and define success. Having the data available to us has been a game changer.”

The key is to find something measurable whether that's a set of tasks under each objective or specific metrics the team seeks to achieve.

Step Seven: Commit to Tactics

• For each strategic objective, write the tactics you will complete to get there
• Tactics should be achievable, action-oriented, and accountable
• It’s OK to start with a few exploratory steps and build-out as you start tackling a problem

This should be approached as straightforward as possible. Keep it clear and concise. As Ms. Patel advised “for each strategic objective or goal, we have 3-4 bulleted lists on how we’re going to accomplish that goal and what is actually being accomplished from that goal.”  Don't overthink this step - just get started.

Step Eight: Share Your Strategic Plan

• Don’t reinvent the wheel. We created a Legal Department Strategic Plan Template to fit on one page so it can be easily shared
• Sharing the Legal Department strategic plan provides focus and will drive the team to row in the same direction toward achieving key goals and objectives

Ms. Patel's team benefits from a mature Coverys structure that operates as a well-oiled machine with a “strategy planning committee that receives all department strategic plans and provides feedback to finalize the department goals. All final department plans are available in one place and it’s nice to see where legal fits in.”

For Mr. Rhodes, the important part is transparency to allow all departments visibility into how their plans fit into the organization's integrated master plan to drive accountability.

Get started with your Legal Department strategic plan now

Watch the webinar on demand with Anne Post, Brian Matthew Rhodes and Shiv Patel as they guide you through the creation of a clear and focused legal strategic plan. You can also download Xakia's legal strategic plan template  so you don't have to start from scratch.

Download the strategic plan template now

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• How Legal Operations Can Get Ahead of the Budget Process

[author: Peter Eilhauer **]

Is it budgeting season already? Legal Operations are often asked to own the legal department’s budgeting efforts, and many find the process painful. Finance may provide a template to fill out, but it can be difficult to complete a budget with so many unknowns. The commonly used phrase – legal is different – holds some truth in this case, as there are consistent challenges with legal budgets:

• Not all spend is known. An unforeseen event like a new deal or litigation can spike the legal budget. Staying on top of something that hasn’t yet happened can be challenging.
• Changes in business strategy impact your costs – A change in strategy, such as an increase in patent filings or a new business line launch, will change costs. It can be challenging to know where these changes may occur.
• Outside Counsel spend is significant – 50% or more of the legal budget might be tied to Outside Counsel. It can be challenging to clarify what Outside Counsel is working on and what to expect in the coming year.

It may seem daunting, but legal operations teams have insights into their Outside Counse l billing data to help make more informed decisions. Here are some tips on using that data and some other strategies to help build more accurate budgets and speak the language of Finance.

Know the known, plan for the partially known

Last year’s spend data is a good starting point for planning next year’s budget, as it will give a clear line of sight into the matters in flight. With well-structured billing data, legal operations teams should know:

• Total matters
• The current phase of those matters
• The remaining phases of those matters

If the legal department requires its law firms to submit budgets through the eBilling system or as a matter-level bid – then they already have the known costs calculated for their in-flight matters.

What about matters that don’t exist yet? Certain matters, like Employment and Labor, can be reasonably forecasted based on last year’s events and expected growth in the company. Similarly, some IP can be forecasted based on business strategy. If next year’s number of filings can be anticipated, as well as the average cost per phase, then those costs can be estimated as well.

Don’t forget rate increases

Big law firm rates increased almost 10% this past year. Unless other control measures are in place, like Invoice Review or Matter-Level Bidding then similar increases should be expected. It’s important to bake those increases into budget estimates, and the known spend.

Don’t sweat the small stuff

Remember, Finance cares about the big picture. Itemizing everything is helpful but may not be necessary. Hunting down every $200 technology purchase is not the best spent time for a legal operations team.

Make the business case for right-sourcing

The in-house and Outside Counsel budgets should not exist in silos; they should be managed in tandem. If significant work is being sent to law firms that support the operations of the enterprise (versus litigation), moving that work in-house results in more legal support at a lower cost.

Get a handle on your legal spend today

Legal operations can act on all of these recommendations by leveraging their billing data, but if the data isn’t clean, it will be challenging to answer budgeting questions accurately. It’s important to take time to do a quick data scrub to answer the high-level budget questions and consider a more thorough spend analysis to highlight where the budget can be reduced.

The budgeting process can be overwhelming, but with these tips, legal operations teams can avoid underestimating their budget needs and reshape their approach to spend in 2025.

** Peter Eilhauer, Managing Director, has over 20 years' experience in the legal industry, working with corporate legal departments, law firms, and insurance companies to radically reduce costs and improve operations through spend analysis, process improvement, and workflow automation. Peter has worked both as a consultant, service provider, and in-house professional to manage legal operations and spend management programs. He has written and spoken extensively on data analysis, and has overseen the development of multiple spend analytics platforms. Peter holds a BA from Northwestern University and an MBA from the University of Chicago Booth School of Business.

[ View source .]

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The Basic Legal Aspects of an Effective Business Plan

As we enter the final month of the year and excitement grows for the holiday season many people may not realize December also holds a special designation for business owners and aspiring entrepreneurs. It is National Write a Business Plan Month . And while the holidays often serve as a time for reflection on the year that was, developing a business plan forces business owners to look forward and put constructive thought into the years ahead.

No matter what stage a business is at, it is always beneficial to develop and strengthen a strategic plan. A well-drafted business plan serves as a strong foundation for a successful business. The plan acts as a road map directing what the business will do, how it will grow, the markets its will serve, the manner in which it will operate, the struggles it may encounter and the goals it hopes to achieve. Similar to a road map, your business may encounter roadblocks and detours requiring you to rethink the plan’s path, but ultimately an effective business plan will force the owner to think critically and objectively about the future of the business and should continuously serve as a compass for the company going forward.

Along with addressing overarching business matters, the development of the business plan presents a great opportunity to address certain legal matters that may seem minor today but can prevent major stress down the road.

One of the biggest decisions a business faces at the outset is determining how it will be structured. The chosen structure will have lasting implications related to business operations, liability protections, and tax strategies. The most common business structures are limited liability companies, corporations, and partnerships. The entity you chose will likely require state filing and may necessitate obtaining a tax identification number from the IRS and State Department of Revenue.

In addition to determining business entity type, an effective business plan must consider all applicable federal, state and local laws that may be applicable to its operations for each location it intends to conduct business. These considerations keep the business ahead of the curve when it comes to obtaining necessary licenses or permits to operate. The business must also consider local zoning ordinances for each physical location from which it will operate in order to ensure the location is suitable for the operation. Effective planning in these areas helps avoid future hurdles that could delay expansion into a new market and hinder growth.

Finally, the business should consider contracts and legal agreements that may be necessary in its operations. While many of these documents will develop over time and need not be specifically addressed in the business plan, they should be given some forethought as the business considers its operations. Specific contracts that may require particular attention in the business plan are Confidentiality and Non-Disclosure Agreements. These documents are not absolutely necessary in every business venture, but in the right circumstances they can be crucial to the development or growth of the business. By entering into Confidentiality and Non-Disclosure Agreements the business owner will be able to talk freely about the innovative ideas and creative potential of the business without concern that the information will be stolen or publicly disclosed. The more sensitive the information the higher the likelihood the business will require strong Confidentiality and Non-Disclosure agreements.

Ultimately, these are just a few of the issues a business owner must address and there are many other matters that should be taken into consideration when developing a strategic plan. A business owner need not develop the plan alone. They may consult with experts in tax, law, and business as well as trusted individuals invested emotionally or financially in their success. While the business plan will not address every detail that may impact the company, it should plot the road the business will follow. Establishing an effective plan for the business will pave a way that leads to success down the road.

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