Increase Your Business by Hiring Associates with Creative Business Plans

It is no secret that law firms have been hard hit by the recession.  Billable hours have decreased substantially during the past year, as the credit crisis has caused clients to slow their demands for many legal services provided by outside counsel, while insisting on discounts and fixed fees for remaining projects that require law firm expertise.   The result has been a dramatic drop in revenue:  in 2008, the average revenue per attorney in an AMLAW 100 firm decreased by 1.2%; the largest decline since 1991.  Some analysts predict that this trend will continue for the next year or more.

This scenario has caused many law firms to engage in their own cost-cutting measures, including reducing salaries and laying off lawyers and staff.  Consequently, firms have generally been very reluctant to hire new lawyers, particularly mid-level and senior attorneys, unless they have a substantial book of business.  While this reluctance is certainly understandable given the current economic environment, firms searching for additional revenue sources might do well to consider hiring candidates who, though currently lacking portables, have a viable plan for business development.

It is not uncommon for mid-level and senior associate/of counsel candidates to have high-level professional contacts as a result of past legal representation or various types of networking.  Candidates who have developed sound, creative business plans for tapping those contacts for business development can be a significant source of future revenue for law firms.

Of course, hiring a new attorney requires a significant commitment of financial and other resources.  Accordingly, it is critical to distinguish a solid business plan from a tenuous one.

A sound business development plan contains information providing credible assurance that the candidate can and will produce substantial legal work for your firm in a reasonable period of time.  Critical components include:

1.  Knowledge of your firm – A good candidate will exhibit familiarity with your practice areas, particularly the one(s) in which he or she has expressed interest.  The candidate should explain, with specifics, why he/she is interested in contributing to your firm.  

2.  Marketplace and trends - An understanding of the current state of, and future trends in, a given practice area is crucial for business development.  The candidate should state why the practice area will expand, and delineate how more legal assistance will be required to meet the needs of current and future clients. 

3.  How the will candidate fit in - The candidate should display an understanding of  businesses and legal needs of clients in the target practice area, and explain how he/she can work with the firm’s attorneys to provide quality legal services to them. 

 4.  Legal expertise and experience – The candidate should provide a general overview of his/her experience, and describe his/her specific expertise in areas that would be helpful to the targeted practice group. Any unique legal skills the candidate possesses should be highlighted, along with an explanation as to how they could benefit existing and potential clients. 

5.   Business development goals and strategies – Concise short-term and long-term business development stratagems should be presented.  Estimates of first and second year revenue goals are helpful, as a sign of the candidate’s commitment to business development.  A discussion of how the candidate could develop business for other practice groups would be useful in gauging the breadth of the candidate’s potential practice.

6.  Professional Contacts and Potential Clients -- The candidate should list businesses and other organizations with which he/she has a professional relationship.  Additional information such as the nature of prior legal representation (if applicable), selected legal areas for potential representation, and other client development opportunities that may be available through those entities ought to be provided.   

7.   Summary - The business plan should conclude with a brief paragraph, summarizing how the candidate’s experience, expertise, and contacts will benefit your firm and result in business development.

Increasing law firm revenue can be challenging, even in good economic times.  The task is significantly more daunting when, as now, existing clients are hunkering down and cutting back on their use of outside legal counsel.  Times such as these require a creative position toward revenue generation.   Market-savvy attorneys are an oft-overlooked source of business development.  When a seasoned attorney with a viable business plan shows up at your door, it could a lucrative opportunity knocking.