If considering starting a law firm an attorney will either practised law as an associate or partner, or recently graduated from law school and passed a bar exam. Law school graduates, with prior business management skills and experience, may decide to take the risk of opening a new law firm as opposed to working for someone else. Experienced lawyers with law practice experience, may seek more control over their practice areas, or a greater share of proceeds from securing and managing law cases and transactions. In drafting a law firm business plan, the U.S. Small Business Administration (SBA) provides resources on both drafting business plans and securing bank loans that can be used for sole practitioners and larger start-up law firms.
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Things you need
- Law license
Draft a law firm business plan. Choose drafting tools based on personal preferences. Ultimately, a start-up company plan should be typed out as a formal plan for the business that includes current goals, financial figures, existing office resources and anticipated needs. A start-up business plan is unique in that it is the first company plan that lays out the core tasks and activities required to achieve the start-up results.
Discuss the substantive practice areas of the law firm. This can be general trial practice or a specific area such as criminal law, family law, probate law, immigration law or tax law. Outline the required continuing legal training, and research and organizational law practice tools needed for the practicing attorney. This may include securing legal research software and subscriptions such as Loislaw, Westlaw, and LexisNexis. A bank of law document templates in both electronic and hard-copy format helps with drafting pleadings and briefs. Compare features and prices and write firm choices in the business plan.
Draft a projection of law firm expenses. The first major outlay of financial resources will include the lease or purchase of the law office facility. Law firm costs may also include office furniture, computer equipment, office supplies and equipment, legal research resources, employee salaries, professional liability insurance, continuing legal education (CLE), professional subscriptions, associational fees, and other professional services such as accounting and tax assistance. Check out the online information about guaranteed loan programs offered by the SBA for bank loan options.
Estimate law office space that will be needed. A small law office generally has an area for the receptionist and/or legal secretary, individual offices for attorneys, and a law library that can also work as a conference room and work area for tackling large projects. Write out the amount of office square footage needed for the anticipated start-up staff. Include a cost assessment in the business plan based on the local market price for commercial leases or purchases.
Anticipate staffing requirements. This wholly depends on the size of the firm. This may include administrative staff, such as legal secretaries and paralegals, as well as associates or partners. Estimate the staff size in the business plan and a course of action for securing the human resources needed for the start-up.
Address accounting needs. Law office administrative accounting duties can be performed by a staff attorney, business manager, or contracted out to a professional accountant. Costs for these services should be factored into the business plan. This includes either the estimated cost of professional services, or the cost of accounting software that will be needed by the in-house accounting manager for the firm.
Discuss law firm marketing. Applicable rules of ethics, as determined by the state bar, will determine the type of advertising and marketing a law firm can engage. While legal marketing is often more subdued than other professions, advertisements in community phone directories and television and radio advertisements are popular forms of law firm promotional activities. Layout some specific ideas in the business plan with cost estimates.
Tips and warnings
- This article is for informational purposes only and should not be used as a substitute for professional legal or tax advice.
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