2022 may be winding down, but your law firm planning should be ramping up. With the new year rapidly approaching, it’s time to devise your strategy for 2023. Being prepared with a plan for the upcoming year will have your law firm poised for success—whether that translates into increased profitability, financial stability or accelerated growth.
Focus your efforts with these 3 questions:
- How is my firm performing currently?
To solidly map out where you want to take your firm in 2023, you must first identify your starting point—the firm’s current state of affairs.
This means not only combing through your firm financials and case portfolio, but also assessing your firm’s operations. Was the business profitable this year? Is your caseload at capacity or do you have room for growth? Is your office location and space adequate for the upcoming year? Do you have a content and loyal workforce?
Whatever the answer may be to these questions and others, clearly defining the present status of the firm will assist in the formation of a plan for the future.
- What goals will we work toward in 2023?
Lay out exactly what you want to achieve over the next year (and beyond). Identify goals that serve an important purpose in propelling the success of your firm, not just those that are “easy wins.”
For example, if you find in step 1 that you have additional capacity to take on more clients, consider setting a goal to increase your case intake by some defined amount. Or, perhaps seek to enter a new practice or geographic area in order to grow and diversify your firm.
Or, you may find your focus lands on stabilizing your firm’s cash flow. In many cases, law firms have fragmented financial resources, such as a mix of credit card use, “friends and family” investments and bank financing. Implementing one stable source of working capital can allow you to more efficiently operate your firm while taking on new opportunities as they present themselves.
- Do I need to increase my resources?
After evaluating where the firm is today and what the outlay is required to keep things running smoothly, you’ll need to determine whether you have sufficient capital that can be allocated toward your 2023 goals.
Budgeting is a key component. Having too much capital for your firm can be just as damaging as having too little—depending on the cost and type. By having a budget in place, you can protect your firm from overspending or taking on more debt than is reasonable to accomplish your goals.
Common use of funds that a plaintiffs’ firm might budget for may include:
- Growth or practice expansion
- Case expenses
- Navigating cash flow gaps
- Marketing and advertising
If your current resources can’t keep pace with your new ventures, explore other solutions to see if making a change would be beneficial. A line of credit specifically tailored to contingent fee practice can be a good way close the cashflow gap when necessary, allowing you to quickly adapt to your firm’s needs as they change.
Alternatively, there may be other financing products better suited to your firm’s business model and goals, such as a non-recourse advance or a post-settlement loan. Having working capital secured and ready for you to draw upon when new opportunities arise is paramount to your firm’s success and future growth.
Start 2023 with an adaptable plan in place and capital to support your objectives and any unforeseeable changes as they occur. This will put your firm in the best position to achieve its goals, maintain seamless operations and importantly, provide the best service to its clients.