Organizational plan of a business plan of a law firm
Brief Investment Memorandum
Lawyers have always been considered highly demanded and highly paid specialists. This also applies to the law firm, which is a profitable and promising business. First, this business does not require large capital investments to open. Secondly, the demand for the services of law firms is constantly increasing. This is reflected in the fast payback period of the project, which is 12 months, and the break-even point is 4 months after the start of work.
To open, you need a staff of 9 people. It is also necessary to rent an office space of 65 m2. It is better to look for premises in the central part of the city, on streets with high traffic. You can also consider premises near business centers, near the centers of business activity. It is desirable that the entrance is from the street.
The law firm will provide a wide range of consulting services. The firm will be able to serve 150 client inquiries every month with a staff of 5 lawyers. Most of the clients will use one-time consultations with specialists. As a result, the financial indicators of the project are as follows:
Initial investment amount - 892,000 rubles
Monthly profit - 121,000 rubles
Payback period - 12 months
Break-even point - 4 months
Return on sales - 24%
Description of business, product or service
The services of law firms are now more popular than ever. This is due to constantly changing legislation. Citizens simply cannot understand all the legal aspects and are forced to turn to specialists. Also, citizens turn to lawyers for help in litigation, the number of which is constantly growing. Thus, the demand for services only increases, including during the crisis.
The main task of the company is to provide professional legal consulting services to individuals and legal entities.
In this article, there will be no advertising gimmicks of marketers who offer to purchase a law firm franchise, here I will share my experience gained over 7 years. For greater clarity, I will operate with some numbers, but I do not advise you to make a special emphasis on my data when calculating your project, since there is a significant difference in figures by region.
Step-Step, choose a direction of activity
I believe that the choice of the organizational and legal form for a future law firm can be postponed until a later period, first you need to decide on the direction and, accordingly, on the types of services provided. In the early stages, I recommend choosing only 2 - 3 related areas, so you need to build on your own knowledge and skills, if you do not plan to immediately recruit a large staff of lawyers. And over time, to expand the list of services provided.
Arguments for this opinion:
Firstly, a narrow direction allows you to save your advertising budget, you do not need to promote 10-15 types of services at once, which significantly reduces the risk of failure at the initial stages.
Secondly, having considerable experience in the selection of lawyers, attending consultations and litigation, I can say with confidence that it is more pleasant to work with people who understand the issue thoroughly, and do not climb into the legal framework to find the answer to the question, while not being embarrassed by the presence of the client. Therefore, a lawyer by inheritance should deal with the problems of heirs, and not give advice on the bankruptcy of an individual.
Thirdly, a good lawyer is a practicing lawyer who can correctly interpret the norms taking into account personal experience, but also use the practice and explanations of various courts, as well as track numerous changes in laws.
Choice of areas of activity
The choice depends on the preferences of the lawyer, it is important to remember that the client wants to receive a high-quality turnkey service, i.e. in addition to consulting, you must be ready to prepare a claim, or a statement of claim, defend the interests of the customer in court and finish the case at the stage of enforcement proceedings.
If the choice fell on the provision of legal services to legal entities, then you should also think about such related services as accounting and tax accounting, reporting, and EDS production.
Step, choose the organizational and legal form Choice between LLC and individual entrepreneur
I will not dwell on this issue in detail, of course, there is a difference between these two forms. I settled on the status of an individual entrepreneur, since this choice allows me to use all incoming funds at my own discretion, I do not need to invent any expense items to cash out funds, or pay an additional tax on dividends.
Business plan - a comprehensive rationale for the project to create a company, including the definition of the target audience, marketing activities, financial planning, calculation of return on investment and net profit.
Here you will learn about the key points to consider when developing a business plan for your legal services business.
- Will a legal entity (individual entrepreneur, LLC, JSC) or a lawyer's education (collegium, bureau, lawyer's office or consultation) be created.
- Will lawyers provide a full range of possible services (practices) or choose a narrow specialization.
- Do lawyers have regular clients who are capable of providing the firm with orders at first, or should the costs of advertising be included in the expenses immediately.
- Do the founders have sufficient legal tools (office equipment, software and online services that allow them to provide services in the form of outsourcing, Internet access, etc.) or should the costs be included in the costs right away.
- If there are several founders of a firm or a lawyer education - how expenses and incomes, powers and responsibilities, votes in decision-making will be distributed.
After the answers to the above questions have been given, it is possible to determine in more detail the costs of setting up a company, renting premises, remuneration of employees (lawyers, accountants, managers and even cleaners), purchasing office equipment and software, advertising and so on. And then it remains to think over a step-by-step strategy of actions for opening a company, providing services and earning income from the implementation of professional legal activities.
Prices for the development of business plans for a law firm
Development of a business plan for a law firm
Choice of organizational legal form
The question of what to choose - sole proprietor, LLC or joint-stock company for specialists with legal education usually does not cause difficulties, in these nuances, thanks to their knowledge, they initially understand well. Although, more often than not, entrepreneurs, regardless of the field of activity, prefer to register an LLC.
More interesting is the question of choosing a lawyer education. Everything is not so simple here. The collegium and bureau are collective lawyers' formations, they consist of at least two lawyers. It also has its own leadership, accounting and all other attributes of the organization.
As a rule, a bar is created by a pair of lawyers who have gained experience, a client base and a certain reputation, and decided to unite in order to create a common firm with the possibility of attracting additional lawyers and increasing income. In the lawyer's office, on the contrary, there is only one lawyer working individually. In general, a collegium and a bureau can be compared with an LLC, and a lawyer's office with an individual entrepreneur.
Why include the legal part in the business plan
The legal plan in the business plan began to appear relatively recently. Many entrepreneurs still do not realize its importance. Often, when drawing up a business plan for a project or company, this section is completely ignored or filled with general phrases. This practice cannot be considered correct.
The value of the legal plan
A business plan is often used to interest potential partners, investors and lenders. The economic justification should convince of the profitability of the proposed idea, and the legal one - in the availability of legal guarantees for the realization of the interests of all involved persons.
For example, an investor who is offered a share in the authorized capital in exchange for financing will ask:
- the organizational form of the future commercial structure;
- the system of its governing bodies;
- the proposed method of participation in making significant decisions (on the conclusion of large transactions, appointment of a manager, distribution of profits).
The legal plan should provide the stakeholder with answers to these and similar questions. The information contained in it is intended to assure the transparency of the company's activities, the controllability of its finances, the provision of guarantees of return on investment.
Description of organizational and legal form
An important purpose of the legal plan is to justify the choice of the organizational and legal form on which they depend:
- composition and method of forming governing bodies;
- choice of types of entrepreneurial activities;
- access to existing taxation systems;
- the level of complexity of registration procedures and execution of current decisions;
- the possibility of obtaining benefits (in Russia, for example, peasant farms, small businesses have them).
Business plan of the legal organization
First of all, it is very important to understand what a law firm is. A legal company is an organization that provides legal services to the public.
This type of activity can be either highly specialized or aimed at broad activities. The clients of the company will be individuals or organizations.
If you want to determine the direction of work correctly and without mistakes, as well as a business development strategy, study the demand market and competitors.
The modern legal services market is very wide. It covers a lot of areas, therefore, before starting the registration of an entrepreneurial project, it is recommended to choose the type of activity.
The first thing you should understand is that a start-up company will not be able to cover the full range of types of legal aid. There is no specific advice regarding the choice of the number and focus of the services provided.
Some experts believe that when entering the market it is not worth splitting into several directions.
It is better to acquire a good business reputation in one or several types of activities, and only then expand the range of services. This is a good development strategy that will allow you to establish yourself in the market and occupy your own niche. However, it is important to understand that by opting for just such a strategy, you run the risk of facing a large number of competitors.
When choosing a highly specialized law firm, most clients will prefer experienced organizations. In this regard, it would be advisable for a young company to give preference to versatility. The company's specialists can provide services in traditional directions:
- legal assistance to large and small businesses;
- legal assistance to individuals;
- debt collection;
- resolving legal issues;
- tax assistance.
The above are the main popular areas of work of legal organizations. It should be noted right away that one of the most interesting areas is servicing legal entities.