BUDGETING AND BUDGETING AND PLANNING FOR SUCCESSPLANNING FOR SUCCESS

ajp@johnsonparrislaw.com(336) 510-2150

www.johnsonparrislaw.com

Strategic Planning: Strategic Planning: What We’ll CoverWhat We’ll Cover

PurposeElements of the PlanThe BudgetAction Items

Purpose: SuccessPurpose: Success

You are a Business Owner◦Your Business is Law

Fail to plan and you plan to failImplementation should not await a

finished plan- Avoid Analysis Paralysis◦SWOT- Strengths, Weaknesses,

Opportunities,ThreatsA plan without accountability is

nothing

Elements of the PlanElements of the Plan

Vision & Mission◦What are you Building and Why

Objectives◦What will you measure

Strategy◦What will make you successful

Action Plan◦What needs to be done

The Business PlanThe Business Plan

Vision & Mission◦ Joe Schmoe PLLC will be the premier provider of traffic and misdemeanor criminal

representation in Greensboro and the first thought in a defendant’s mind when they encounter the police. We strive to provide zealous representation to bring fairness to the legal process for everyday citizens.

Objectives◦ We will generate fees to total $100,000 to achieve a $30,000 profit in the first

year. We will handle 40 misdemeanor cases at $2,000 each and 100 traffic ticket cases at $200 each to achieve our goal. My salary will be $50,000. The budget will be $100,000. Our profit will double in two years.

Strategy◦ Increase revenues and profit by building referral network and implementing

marketing plan. Increase revenues by growing misdemeanor clients. Hire staff to leverage low cost providers of services. Reduce appointed work to 1/3 of fees earned by increasing private clientele.

Action Plan◦ Identify referral sources- 1 mo. Personally contact referral sources and ask for

business- 3 mos. Start direct mail campaign- 1 mo. Hire staff- 6 mos. Take misdemeanor CLE classes- 4 mos. Draft marketing plan 2 mos.

The BudgetThe Budget

Income◦Setting Fees, Getting Fees

Expenses◦Fixed, Variable

Tracking◦What will make you successful

Budget TrackingBudget Tracking

Monthly Financialso Balance Sheet, P&L, Cash Flows

What you Earn◦By case, by referral source, by realization rate

What you Owe◦Your Expenses v. Budget

Who Owes You◦Accounts Receivable Billing effectively, client selection, time capture

2013 Budget Assumptions

Salaries 50,000 SoloOvertime 0

FICA & Medicare 3,825 7.65%Benefits 0 Health and DentalProfit Sharing 0Bonuses 0

Furn & Fixtures 0 Included in rentComputer 0 already have oneFirm Research Costs 0 NCBA CasemakerMembership Dues 500 NCBA & GBATravel and Lodging 0

Meals & Entertainment 250 2 meals per monthSeminars, Training, & CLE's 500

Firm Relations 200 Thank You notes, CardsClient Relations 200

Employee Relations 0

Telecommunications 660

Malpractice Insurance 600

Other Insurance 0

Recruiting Expense 0

Marketing Consultation 0

Newspaper Advertising 0

Notes Payable 1 0

TV Advertising 0

Yellow Pages Advertising 0

Other Advertising 2,400 ListingsOffice Supplies 500

Law Library 300 Practice area booksRent 500

Utilities 0 Included in rentOutside Services 1,000 Accounting and ITPostage 50

Building & Grounds 0

Printed materials 500

Signage 300

Licensing and Registration 300

Total Area Costs 62,585

Admin Allocation 0

Total Area Costs 62,585

Income

P/(L)

Income: How to Set FeesIncome: How to Set Fees

Rule of Professional Conduct 1.5ASK SOMEBODY!Research: the phone book, the

Internet, legal formsEstimate based on time and costsNegotiate with the potential client

Income: How to Get FeesIncome: How to Get Fees

Attorney-Client Engagement Agreement◦Ask other attorneys◦State Bar Lawyer’s Handbook◦NCBA Alternate Billing Commission Forms

Be prepared- set your price frameworkMake it easy to payGet enough money up front

Expenses: Fixed & VariableExpenses: Fixed & Variable

Fixed Costs◦What they are◦Negotiate◦Prioritize

Variable Costs◦Forecasting◦Strategies to Manage

Success Factors: Spend Time “On” Success Factors: Spend Time “On” the Businessthe Business

Set a Direction with a PlanSet Goals and Measure ResultsDedicate Time to Your BusinessDevelop Non-Legal Business Relationships

(BNI, Chamber of Commerce, Kiwanis)Say what you are going to do….do what

you said you would…..be honest with yourself

Success Factors: Remember to Success Factors: Remember to Market YourselfMarket Yourself

Every person you meet is a potential client or referral source

Marketing does not have to cost a lot of money but does require a huge investment

Make sure people know who you are and what you do

Take other lawyers to lunch and ask them for referrals

Be visible

Success Factors: Get InvolvedSuccess Factors: Get Involved

Professional OrganizationsFind the “fit” for your interests and practiceImprove your skillsDevelop important relationshipsReferral Networks are keyTake leadership rolesGreensboro Bar/ Law Practice Management

Section offer great resources

Success Factors: Use Your Fellow Success Factors: Use Your Fellow LawyersLawyers

Leverage their experienceGenerous and willing to help you

succeedWork on co-counsel opportunities22,000 of them in the state so you are

not alone

Success Factors: Listservs Are Success Factors: Listservs Are Essential Essential

Assists with preparing legal documentsAssists with finding experts and “go to” peopleEasily viewed formatUse “specialty” bar listservs (defense, litigation,

family law)Expands the network of referral opportunities

Action ItemsAction Items

Draft a Business PlanDraft a Marketing PlanRead Rule of Professional Conduct

1.5Read 2008 FEO 10Price Your ServicesGet a one call away mentor