Four Myths about Individual Lawyer Business Plans Marci Taylor
Creating an effective personal business plan is critical to building your book of business. Lawyers and firms have had so many failed attempts or stops and starts in individual business planning that my coaching clients vent a great deal of frustration with the process. Ridiculously long forms to fill out and submit, no real follow up from supervisors, and nothing related to plans in firm rewards systems deter lawyers from engaging in what can be one of the most useful tools in their personal marketing and business development arsenal.
There are four major myths about individual lawyer business plans that I would like to dispel to help you to create a business plan you will actually use to drive results:
1. Business plans should be marketing/business development focused only and not include financial goals.
Yes, marketing and business development strategies and tactics will be the key elements in your business plan, but to have a plan without financial goals defeats the purpose of the exercise. You are not marketing because it is what you “should” be doing or because it is what your firm expects. You are marketing to build your client base and book of business so that you can generate more revenue for yourself and others in your firm. So, having a business plan without financial goals misses the mark. Financial goals should include your goals for revenues that you will originate for yourself and for other lawyers and professionals in the firm. They should also include the revenues you will generate via your own personal production. Setting these goals can be challenging and requires an understanding of the profitability of your practice and, to an extent, the other practices you plan to sell, including rate structures and realization. Many lawyers either overestimate revenue goals because they fail to take into consideration write-downs, write-offs and other profitability factors. They are also reluctant to set goals too high, or in some instances to put any goals in writing at all, for fear of the consequences if unforeseen circumstances prevent them from achieving their stated goals. In my experience, lawyers who include realistic financial goals in their plans do a much better job of achieving the desired results in their business plans than those who don’t. Even if your firm does not require financial targets (in dollars, not just hours) in whatever form business plan they require, it is important that you give thoughtful consideration and record these goals in writing for yourself.
2. Business plans should not include deadlines and estimated time allocation.
Lawyer clients often tell me they have trouble doing marketing and business development because it “takes away” from their billable hours. To be clear from the outset – marketing and business development time is in addition to, not in lieu of client billable time. Successful rainmakers recognize this and plan their time accordingly. They plan specifically and realistically for the time required to do marketing and business development well. Frequently, lawyers do not accomplish the strategies in their plan because, they don’t set deadlines, and they do not include marketing and business development time in their calendar as they would an important meeting, appointment or billable task. Your business plan should include realistic estimates for your total time contribution for the year, including: billable hours, marketing and business development hours, firm management/administration time and professional development time as well as time budgets for some of the major activities contemplated in the plan.
3. The longer the business plan, the more you will accomplish.
Many firms use cumbersome business plan forms that can be overwhelming to complete. Other firms require lawyers to submit business plans, but provide little or no guidance as to the form. When this happens, lawyers generally either (1) ignore the requirement and do nothing at all or (2) do what they know and begin to dictate or type a lengthy, narrative document detailing what they propose to do to generate business. The truth is, there is no magic number of pages or items that make for a successful business plan. For your business plan to be effective, it should be clear and concise, with specific action items and firm timetables and deadlines. Lengthy narrative plans are not likely to be read more than once by you or anyone else, and they will not provide you the quick reference and reminder that succinct plan will.
4. Business planning is an annual exercise required by my firm and not tied at all to my compensation.
The final myth is that business plans are one-and-done. In larger firms, every year, the email comes around reminding lawyers that the time to submit their business plans draws near. Lawyers go through the exercise of drafting and submitting the plan, and then…crickets chirp in the distance. Lawyers in small and mid-sized firm think about and talk about doing individual business plans at year end or at the annual retreat, but never quite get around to doing it. The truth is, having an effective business plan that you refer to and rely on regularly is one of the best things you can do to ensure your professional growth, and you should invest in yourself and prepare and implement one regardless of whether it is one of your firm’s administrative endeavors or retreat promises. Second, your business plan should be an ever-evolving document that you use as you do your calendar or planner or whatever tools you use to organize and plan your time and tasks. Third, whether or not handing in your plan as part of the administrative process is part of your firm’s compensation criteria, using a business plan to grow your client base and book of business is the single factor most directly linked to your overall financial success, professional satisfaction and personal freedom.