This article was first published in the Lex Witness November 2017 issue.
The legal services sector in India has reached a stage when there is a sea of firms mushrooming at a pace that could have never be seen earlier. However, a few become success stories and the rest an eyewash. The essence lies in how does one manage to stick to a well thought plan and setup strategy. Besides the emotional leap that one has to take, confidence and passion wise, there is also the business acumen that one has to account for. Through this article, we will discuss some of the factors to take into consideration, prospective pitfalls to look for, and some proactive measures that can help you grow leaps and bounds in the future.
Are You Sure, You’re Not A Wantrepreneur?
Before even you get started with developing a business plan, or determining your branding strategy; self-analyze your risk appetite. Having the right temperament to run a business is extremely important when starting off on your own. Of course, it goes without saying that you should be well equipped in legal knowledge, to be able to successfully represent clients. Even if you lack in years of experience, having the confidence to set up a business, develop the right services, brand and market your offerings and being responsible for your employees is crucial deciding whether to start your own law firm. Once you have decided in favor of setting up your own practice, following are the elements you need to action upon next:
To help your chances of success, your law firm business should be planned out on paper well before you begin doing anything else in starting up your practice. But don’t think that development of a Business Plan is limited only to new law firms. Every firm can benefit from such an exercise. The plan should be your guide to directing the first three to five years of growth of your firm. Likely, any bank you approach for a start-up loan and some suppliers and vendors will want to see the plan to feel confident in working with you.
The business plan is a neatly organized summary of how your firm is going to get started, establish itself and then continue to grow. Generally, business plans consist of four main areas:
1. The Set Up – this is where you decide what kind of set up you want your firm to be – full service, boutique, Chamber practice and so on. Also, you should figure out where to be located, fee structure, team hiring, along with other logistics that will help you serve the clients in the best possible matter. Do not forget to address the legalities of the firm set-up, like whether it is going to a sole proprietorship, LLC, LLP, partnership etc.
2. The Business Plan – before you even get started, you should have a solid business plan in place to ensure that you can manage your expenses for the first 6 months at least, while it takes time to establish your practice even so slightly. You should also account for losses and have reserve cash in place. In the case that you start making profit the very first year onwards, you should have a solid financial plan in place to facilitate firm’s growth and expansion.
3. The Operations Plan – before hiring a team, have your agreements in place for compensation, NDAs, non-compete etc. You should also have a solid operation flow and structure in place from Accounts, IT & HR perspective, irrespective of how big or small your set-up is. Data security, payroll management, billing, and appraisal process are the bare minimum operational requirement for any new law firm.
4. The Brand Management Plan – albeit all start-up firms are strapped for cash, it is extremely important that you plan to make your services distinctive, and plan for appropriately brand yourself in the market. The legal industry is a highly competitive market. So setting yourself apart in the crowd.
It is easy to get carried away when setting up a practice. But it is very important to remain grounded, and set realistic and attainable goals, especially from the financial perspective. Set timelines and milestones to achieve them. Hold yourself accountable for failures, and have multiple back-up plans for any foreseeable pitfalls.
Consult advisers and have sounding board(s). Refer to the above 4 plans on a regular basis, especially the financial and the brand management plans. Activate a robust business development pipeline, and be sure to invest a substantial time in engaging in client development and retention activities.
If you have specific questions on either of the above mentioned checklist, we have written various articles that have been published in the past issues that further on each of the elements. Feel free to connect with us to know more.
I am the Principal Consultant at the Lex Witness Strategic Counsel Desk, an invitation based initiative, which caters to various entities who seek to create and improve their brand and undertake market activation strategies in the Indian legal market space. Much beyond the space of the magazine, the Strategic Counsel Desk aspires to provide a holistic framework for the firm’s positioning and business growth, primarily focusing on the strength in the Indian legal industry.