Lawyers: How and Why to Implement a Business Plan to Guide Your Firm

Successful businesses of all shapes and sizes often take time once a year or so to review and update their mission statement, strategic plan, and operational plan. While a few solo and small law firms do something similar most years, many attorneys in this space refuse to do so because they continue to insist on viewing their firm as a professional practice and not a business. As a result, they see no value in using these particular business-planning tools. While I go back and forth on how far one should go with this process, I have never believed that taking such tools completely off the table is a good idea.

Businesses that have a mission statement, a well-developed strategic plan, and an operational plan that everyone can buy into and take ownership of usually have a clearer direction about where they are heading. I refer to this direction as the vision of the business. These businesses have a vision of who they are, where they are going, why they are doing what they’re doing, who they are doing it for, and what they hope to accomplish. Most importantly, for those businesses that do this well, all employees from the top down know, understand, and believe in the vision.

Regardless of your firm’s size and whether you develop a formal mission statement, strategic plan, and/or operational plan or not, there is value in knowing who you are as a business and where you are going over the long haul. Simply put, if there is no clear direction as to where your firm is going or how you’re going to get there, isn’t your long-term success being left to the whims of fate? Sure it is.

Get practical advice in the 5 most important areas of running a successful business right now with the free ALPS Guide to Managing Your Law Firm:

For example, over the years I have visited a number of firms where workloads had become unduly burdensome, offices were in a severe state of disarray, retirement planning was a pipe dream, staff turnover was high, and/or problem clients had become the norm. Sadly, the attorneys practicing in such settings would sometimes share how their professional careers took them to a place far different than where they thought they’d be. Truly, at times I could see it on their faces. Life just didn’t turn out the way they hoped it would.

It was rather apparent that the attorneys in these situations were not actively managing the business side of their law practices. Instead, they had been reacting to whatever occurred day after day thereby passively allowing their firms to morph into the unfulfilling situations I happened to stumble upon. In my experience, few individuals find success by chance. Success comes with the hard work of developing and then implementing a plan, learning from the missteps that will occur, and adjusting course as necessary. In a law firm setting, if there is no agreed-upon direction, no shared vision, and no plan, the business side of your practice is simply in a fog adrift at sea.

To be clear, I am not about to try to convince you to drop everything so you can take the necessary time to develop a formal mission statement or conduct a comprehensive strategic planning session. Rather, my desire is to encourage you to work to create a business vision that will allow everyone in your firm to see and understand where the goal line is and how the firm intends to get there.

One way to do so would be to set aside time for a firm meeting. In advance of this meeting, ask all firm attorneys to define what and where they want their practice to be in five, ten, and perhaps even twenty years. Have everyone identify the type of clients they each want and specify how many hours a month they each see themselves working. Ask what practice areas they wish to focus on. Have them share where they hope to be financially over time and when they might want to retire. Determine if anyone is interested in firm leadership. If so, have them identify what role. There are no set items that must be considered in this process. This is more about enabling everyone to start the process of developing their own personal vision. With that information in hand, the firm meeting would be where everyone’s personal vision should be reviewed in order to see if a unified firm-wide vision can be crafted from the individual parts. If so, you will have a starting place for the process of mapping out the journey that will help make this vision a reality. If not, everyone will at least have information that will enable them to make decisions about their future.

In terms of mapping out the journey, let’s say your firm’s vision includes a recognized need to reduce workloads in order to regain a balance between professional and personal lives. One idea might be to stop taking on new matters until the number of matters per responsible attorney drops to the desired number, or perhaps you commit to dropping as many problem clients as possible. After all, problem clients tend to demand excessive time and are often fee collection problems. I have had attorneys tell me that problem clients create 80% of their stress, take 80% of their time, and generate less than 20% of their income. Viewed in this light, problem clients aren’t worth the effort they require, which makes this an easy decision if you ask me. But it gets better because one benefit of this strategy is that any newfound time can be used for personal time or for seeking better clients who can pay and are not a problem. Couple this with training all who need to be trained in how to identify potential problem clients so no more are picked up and now you’re starting to move in the right direction.

A few more examples of the kinds of topics that might be addressed as you define your firm’s vision include the following. Be intentional with well-planned growth because growth for growth’s sake alone doesn’t always end well. Develop a well-thought-out move into the social media advertising space versus tossing up a Facebook page and calling it good. Establish a budget that accounts for ongoing investment in a retirement plan versus letting everyone fend for themselves. Consider educating every attorney about the need to have tech spending (hardware and software) be an ongoing operational expense versus a once-every-ten-year capital expense in order to maximize productivity and remain competitive. Of course, such spending should be done in accordance with a purposeful implementation of new tech tools and systems.

Believe it or not, creating and implementing a firm vision can also help reduce your firm’s risk of a malpractice claim. If you are successful in avoiding problem clients on a going-forward basis, that alone would reduce your exposure. But you can go much further with this. For example, are new associates being trained in how to conduct an intake interview with an eye toward client selection to include accurately determining if the prospective client can actually afford your services? Have you implemented firm-wide practices and procedures such as a firm-wide computer calendaring system as opposed to allowing each attorney to calendar according to personal preference? A vision that incorporates standardized practices and procedures into the process allows a firm to begin to truly operate as a firm as opposed to being a firm in name only.

In the end, the choice is yours. I get not seeing the value in spending hour after hour developing a mission statement, strategic plan, and operating plan just to check that task off the to-do list, particularly in the small firm setting. Trust me, I’ve done my fair share of that and never found it to be all that useful. I’ve also been in a situation where there was no plan, no vision, no nothing. Trust me, that didn’t end well. All I can say is that the older I get, the more I appreciate the importance and value of planning for the future. But, of course, that can’t happen until you take the time to figure out what you want the future to be.