Four Ways to Profit from Legal Business Plans
Increasingly, private companies large and small are creating Legal Business Plans (LBP) to govern the use of outside legal services.
A key aspect of any good plan, business management experts say, is risk management.
So what does a Legal Business Plan do?
- It defines the specific issues facing the company that might require legal help.
- It sets a monthly or annual budget for legal services.
- It establishes criteria for selecting the right law firms to do the work.
- It specifies how the law work is to be delivered and how its quality will be evaluated.
Not so long ago, the use of formal, written LBPs was mostly confined to insurance companies and financial firms that routinely employ outside lawyers. But now even mom-and-pop operations are encouraged to come up with them.
“If you don’t have one, get one quick,” writes Craig Bleifer of Corporate Counsel. “The legal business plan should be an integral subset of any company’s business plan, since it is vital to the management of risk and reputation, can play an important role in adding value and driving innovation, and at a minimum can affect an expensive piece of overhead that must be managed efficiently and effectively.”
Assessing and minimizing risk lies at the heart of the LBP. The plan should take into account any anticipated changes in laws and regulations that might affect business, as well as expected shifts within the industry. Is competition likely to increase in coming years? Will government enforcement pick up?
Other key concerns:
- Current litigation
- Anticipated litigation
- Product rollouts or recalls
- Opening of new markets
- Closing down units
- Mergers and acquisitions
In essence, an effective LBP is a roadmap for growth and stability. It looks to the past for lessons learned and the future for looming risks.
“Sometimes the best defense is a good offense,” says Bleifer. “For example, design, implementation, and ongoing training on a legal document hold system can go a long way in avoiding negative consequences in future litigation when documents have not been properly preserved.”
Here are four ways for your law firm to capitalize on the LBP trend:
* Get on the same page. If you are hired to do legal work for a business, ask if it has an LBP. If so, request a copy. That way, you will have a clear idea of your client’s expectations.
* Review sample LBPs. Become familiar with common clauses and provisions. Shape your responses to Requests for Proposal to mirror this language.
* Draft an LBP for your client. If you represent a business that does not have an LBP, offer to draft one.
* Educate businesses. Write an article or blog post for a business website on the importance of LBPs. Give a free workshop on the topic. Talk them up to members of your local Chamber of Commerce. You will become the LBP go-to law firm.
Jay Reeves is an attorney licensed in North Carolina and South Carolina. He has practiced in both states and was Legal Editor at Lawyers Weekly and Risk Manager at Lawyers Mutual. He writes the Risk Man column of practice pointers and risk management tips. Contact email@example.com or phone 919-619-2441.