The legal market has become more and more competitive in recent years, with law firms coming under intense pressure to serve their clients more efficiently, while simultaneously increasing the amount of revenue that partners bring in. As a result, companies are now less willing to take a chance on a potential partner and instead will insist that they prove their worth. This is even more acute now that the economy has turned downwards and is likely to remain so for the foreseeable future.
Simply having the right skills and being a cultural fit is no longer enough to secure a partner position. Instead, you will need to demonstrate to the firm that you are able to earn your keep and make a profit. Because of this, it is essential that you develop a practice which is personal to you and clients and work that will move with you, should you choose to move law firms. You will then need to be able to write a detailed business plan that demonstrates your potential value to both your existing firm and any firm you may want to join.
You will need to go through a similar exercise for any internal promotion to Partner. In most cases, a firm is only going to promote you if they feel they have to in order to protect their business. This means they need to feel that if you were to leave, a significant amount of clients and work would go with you.
Now that you understand why a business plan is necessary, the question is, what information should you include? Here are our thoughts on building a business plan for law firm partner.
What Do Law Firms Want to See?
For the most part, a company will want to see a breakdown of your financial performance. You will need to demonstrate not only how much money you have brought in in the past, but also project what you will post in your first few months with the firm.
In the context of a business plan, financial performance means three different things – all of which are important, although different firms will place different weighting on them. They are:
- Client Partner Billings: The total revenue which the firm gets from the clients you manage or “own”. If you are moving, then it is the total value to the new firm of having the clients you can bring
- Matter Partner Billings: The total revenue from all the files which you are in charge of, including the billings of your subordinates or fee earners in other teams. This demonstrates the overall value of your caseload.
- Personal Billing: The revenue generated directly from your time, whether on your own files or other people’s.
Anticipating your revenue is a precise art and needs to be done with the utmost care. A law firm will hold you accountable for your figures, so it is essential that you do not inflate or under-value your estimations. Instead, you should thoroughly analyse the strength of your contacts and how much work you believe you will get from them. Another point is to pick out those who may have followed you from previous practices, as they will also add to your value.
How to Begin
When building a business plan for law firm partner, it is essential that you are able to quickly pull out the information that will prove most valuable. This is why you should begin with an executive summary.
Your summary should ideally be a one page cover sheet that summarises all the main points in your plan. It needs to be concise and capture the essence of your business plan, especially your financial projections. Once this has been done, you are ready to move on to the rest of your proposal. Here are the elements we think you should include:
Set Your Objectives
The first main section you should include when building a business plan for law firm partner is an analysis of the key objectives you want to set yourself. You should then outline how you intend to meet these targets and what your strategies will be.
There are many different ways you can demonstrate how you will hit your goals. Here are just a few:
- Expanding existing relationships: list contacts you already work with and how you intend to increase the revenue they bring in.
- Identifying important sectors: identify which areas of the market you will expand your operations in and why.
- Using your reputation: discuss how your prominence in the industry can be harnessed to bring in business.
- Providing extra services: explain how you will use your experience to provide additional services to the firm’s existing clients.
- Enhancing pitches: outline how you can help the company improve the way it bids for a specific type of work.
You should also set out a few paragraphs underneath this to provide more information about your practice and how it will add value to the firm. Alongside this, it is a good idea to discuss your reasons for wanting to move – both social and economic.
Analyse the Markets
The next step is to take a detailed look at the specific market you will be working in. Are there any issues or trends that could impact the demand for legal services? What opportunities would be available to you?
You should also outline the specific geographical areas that you will service in your first few years at the practice. Ideally, this needs to be a mix of new and existing markets. Once you have done this, go into further detail about the precise industry sectors you will focus on and list the major participants in this area, plus the reasons why they are important.
Outline Your Clients and Financials
Now we have arrived at arguably the most important part of building a business plan for law firm partner. This is where you identify the clients you think will be able to bring in quality work for the business, plus your financial information.
When listing your clients, you should identify the significant clients and discuss in detail the type of work you have carried out for them and what your measurable outcomes were – such as fees. If this is a plan for a new firm, then be specific about the clients but do not name them. That would be a flagrant breach of your duty of confidentiality and at this stage it would not be appropriate to expose yourself to that risk. Simply call them “Client A”, “Client B” etc.
You should also consider identifying opportunities to further develop your clientele. If the plan is for a move, then you should think about how you could get extra work from existing clients of the firm that those clients don’t send in at the moment. If it is an internal plan, then target existing clients of your current firm that you do not presently work for. Also, set out which new clients you want to target and why.
In terms of financials, you should outline your billing hours over the last three years. These include the hours you billed to your own clients, your current firm’s or other partner’s clients, plus any productive non-billable hours. If there are any figures you feel need explaining, such as an unusually low or high billing, consider adding a footnote underneath.
The next things you should list are your personal charge out rate for the last three years and your billings, collections and referrals. For the latter section, you should differentiate between your own billings and referrals you made to other teams, with the total amount underneath. You also need to include fees you earned from clients of another partner, where you were the main ‘matter partner’.
Finally, you need to outline the compensation you have received in the last three years. This includes your basic salary, monthly draw, plus any bonuses you may have received.
Look at Business Development
The next major area you should include when building a business plan for law firm partner is business development. There are four main sections that are important to mention, which are:
Provide a breakdown of your current team, including their position, how much of their time is dedicated to your case work and whether they are in part or full time employment. If there is anybody within your team that you wish to bring with you to your new firm, explain why this would be a good idea and list their current and expected remuneration, plus the hours they billed in the last year.
You may also need to request extra support from your new firm, in addition to your current team. If this is the case, be sure to outline who they are (for example, a junior associate) and why you believe they are necessary. A potential reason is that you envisage you will grow the business dramatically and want to focus on the more high-end clients – meaning you would need an assistant to carry out the day-to-day lawyering work.
If you are intending to bring in a lot more business for the firm, or focus on new markets, you will need to outline how much time you wish to spend on this. Remember that you will also be expected to harness and grow existing clients, so it is essential that you demonstrate you are able to divide your time effectively.
The next thing you should outline is what marketing initiatives you intend to pursue during the next financial year. These include any sponsorships you will undertake, the conferences or seminars you plan on attending, speaking engagements and any articles you intend to write for external publication.
If there are any specific initiatives you think the firm should pursue, such as training in key areas, be sure to include this as well. It would be a good idea to also outline why this is important and, if possible, identify potential providers to work with.
Like any business, the law firm will want you to outline how much you expect your ventures will cost. Each time you identify something that you will need the company to provide, whether it is additional team members, a sponsorship opportunity, or extra training, you need to ensure you fully work out how much this will cost.
How You Fit Their Culture
It is important to outline why you believe you will be a good fit for the firm. After all, the company will want to know if they can work with you professionally – regardless of the amount of money you will bring in or what your plans will be. If two candidates sound the same on paper, then the business will likely go with the one they feel will integrate better into their culture. To determine whether you will be a good fit, you should carry out detailed research into the company and utilise any contacts within your network who may be able to help.
Now that you understand the basics of building a business plan for law firm partner, you should be confident in your ability to achieve your dream job. Once you have completed your plan, you may feel that you need an extra pair of eyes to advise you on any areas that may need to be tweaked. While this could come from another lawyer, you might find it more beneficial to contact a specialist legal recruiter.
Having somebody that lives and breathes the legal market in your corner could enhance your prospects in a number of areas. They will first of all be able to offer independent, and sometimes critical, input into both your client list and proposed billings.
An experienced recruiter will also be able to give your prospects of success a health-check and advise on how to fine-tune your sales pitch. In addition, they are likely to have an in-depth knowledge of the firm you are applying with, meaning they can give you essential information about the company and its culture that you may not otherwise have access to – thereby giving you a potential advantage over your competition. What is more, they could even provide details on other opportunities you may want to consider based on your experience.
If you believe that your business plan could benefit from the expertise of a specialist legal recruiter, contact Jepson Holt today. We will review your document and provide expert assistance to give you the best possible chance of success. For further information, you can also read our free eBook entitled: “Taking Control of Your Legal Career”. This handy guide details everything you need to know about progressing in your career and the actions you should take. At Jepson Holt, we aim to help you get the most out of your working life as possible.