Posted May 01, 2007 11:21 am CDT
Solos are by nature entrepreneurial risk-takers. But, like any other startup, a law practice is a business, and lawyers still need to fit their goals into a traditional business plan.
“There’s a certain anxiety about writing things down,” says Diana Laskaris, a solo attorney and business consultant in Chicago. “Once you write it down it becomes real, and for some people it feels set in stone.”
Laskaris offers two reasons to develop a plan: first, to focus the business owner and provide a road map; and second, to prove the firm’s viability to lenders, landlords or other potential creditors.
“Your operating plan, or road map, may be a subset of a more detailed plan for outside audiences,” she says.
Stay On Track
Joe Kopietz, who runs an eponymous small firm in Pontiac, Mich., agrees. “If you don’t have plans written down, especially when there’s more than one person involved in the firm, it’s very easy to go off the track because everybody has a different sense of how to move forward,” says Kopietz.
He recommends starting with business-planning software, available in many places on the Internet. The software will walk the user through questions designed to help plan the business’s focus, direction, market and finances. He also suggests checking with the local bar association or university business department for examples and help.
Most unseasoned business owners err in predicting the startup’s first few years’ expenses and revenues. Kopietz recommends seeking advice from an accountant who has worked with other new businesses and can provide comparisons.
“Everybody underestimates expenses and overestimates revenues,” he notes. Business plans should provide focus yet still be flexible enough to fit changing circumstances. For example, says Kopietz, a plan should state that the firm will focus on a certain area of law. Writing it down can help avoid the temptation to take unrelated matters out of a need for revenue, especially in the early months. Taking cases outside the plan may prevent a lawyer from marketing to get the business desired and the practice he or she envisioned.
But, Kopietz says, you also need to take a larger view. If the demand for legal services in your area differs from the original plan, you may need to switch practice areas or add the higher-demand area to your plan.
“The business plan is not about being rigid; it’s about having a strategy. But plans have to adapt to conditions,” he says.
Like a road map, a business plan can have detours, Laskaris says, so long as the attorney sticks to the overall plan.
Laskaris tells of a friend who came to her early in her solo practice, asking for help with an adoption. Laskaris, who practices business and entertainment law, had no desire to add adoption to her list. But she agreed to handle the matter as a one-time venture. “If I’d decided I really liked adoption law, my business plan could have been revised to make that part of my practice,” she says. “As it was, I just got to learn about an area, decided it wasn’t going to hold my long-term interest, and so I helped my friend and now I’m finished with my adventures in adoption law.”
Think of yourself as a business owner, Laskaris says. Decide what your strengths and weaknesses are. Focus your energies on the parts of the business you like and are good at, and plan to hire help for the other aspects.
“Don’t try to save a nickel by doing the office cleaning yourself if you hate it. Hire someone and spend that same hour earning twice as much doing legal work as what you’re paying someone to clean for you. That’s smart business.”