Business plans are an essential part of the legal recruitment process for all senior Associates and Partners looking to move their practice to another law firm. A lawyer's business plan is exactly what it says it is and need not be complicated or verbose. It is usually based on a unique and concise analysis of clients, types of work and fees generated.
At its most basic a lawyer's business plan may consist of a list of clients and likely fee generation. This may be sufficient for some law firms but most will require a more detailed document which will map out the migration of your current law practice, its integration in to the new law firm and its expansion and development thereafter. The new law firm is likely to be investing considerable time and initial funding in you and requires as much reassurance as early as possible.
Where you pitch yourself and your business plan will have a huge impact on the direction of your legal career. Underselling yourself and your current clients and contacts can be as damaging as overselling. Be realistic, positive and aware that almost as much is read into how you answer a question as to the content of your answer.
You may be thinking that you don't want to commit to a transportable client base and perhaps you can't, for instance if you are working for large institutional clients who only instruct law firms on selected panels e.g. large banks or insurance companies. In this situation the list of potential suitors is likely to be less but there are opportunities where succession is an issue or a particular skill set is in demand and is currently not being serviced
Be aware of the interviewers' expectations from the outset. He or she will expect to talk about your clients, contacts and legal experience. Remember that clients will instruct the lawyers they want to and based on a good working relationship there is no reason (all things being equal) why they will not follow if you ask them. You need to be confident and if possible sound out some of your better clients on a confidential basis before the interview.
The Structure of the Business Plan
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Introduction/summary - set out the proposition and headline the main points
- Market overview - your personal view of your marketplace relating to your legal field. There may be some market information you can quote. For example: Grant Thornton recently (2006) published a paper which predicts a 74% growth in the need for lawyers with regulatory experience.
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Business analysis
- What is the law discipline and market?
- How much work do you cross refer to other parts of the law firm? What fees have they generated for other departments in recent years?
- What is your charge out rate? Are you moving to a law firm who can charge the same rates? Can you increase the rate or would lowering encourage clients to move more quickly?
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Client analysis - go through your clients one by one, giving a description of the client, your contact and some detail on your relationship with them. Include:
- Where do your clients come from? How diverse are the clients? Who at your law firm is involved with this client? Who is the Client Partner/Matter Partner? Which area of the legal practice do they instruct most? What percentage of my annual fee income do these key clients represent? Tag each client 'hot', 'warm' or 'cold' and give an estimated figure for a first full year's revenue from that client
- At what level are your contacts within these clients? (eg. chief executive, finance director, head of legal, line manager)
- What new clients have I brought on in the last year/two years/three years? How much of your time do you spend in external marketing and client development?
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Business development.
- What does your business require in order to grow? What kind of support from the law firm's existing resource can you use? What kind of marketing support?
- Set targets which are realistic and achievable. Do not underplay them but give yourself a window of time where you can get used to the new systems and also market yourself internally. This could be anything from 2 to 6 months.
- You need to be realistic yet positive. Try to think of new ways of gaining business rather than the well versed mail shot or corporate lunch. You will need to define your following in a figure or fee bracket. A projected earnings figure based on historic billing from your 'best' clients who you think will move with you.
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Future business.
- Make any developments in the business plan realistic and achievable. In order to grow revenue significantly you are probably going to have to recruit a legal assistant or use existing resources in the new law firm. Think about what level of Assistant would be ideal to support your business. You may want to rely on a SWOT analysis (Strengths, Weaknesses, Opportunities and Threats), which you may choose to use. It is quite a crude but effective and well-understood methodology. Think about how your clients are likely to develop. What happens if your key clients are taken over? How might you replace the work if it went elsewhere?
- Develop this to a three year plan. Concentrate on turnover (fees generated) and which clients this is going to come from. The recruiting law firm is interested in the growth of your law practice and building a sustainable business unit.
Restrictive Covenants
Always remember they must be reasonable in 'time' and 'space'. Just because it is a contract from a law firm doesn't always mean it has been well drafted! If you have a very good relationship with your current employer and as part of your exit you can negotiate to take some clients then this is sometimes the best policy. If not, and the relationship turns sour on your resignation, it may be that you will have to lie low for a short period of time. However, in our experience, if a client wants to work with you, they will.
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