Start a Law Firm
A business plan is not a box-ticking exercise for the bank. It is the document that forces you to turn an exciting idea into concrete decisions — what you will sell, to whom, at what price, and how you will stay solvent while you build a reputation. Done well, it becomes the operating manual for your first two years.
Why a plan is worth the effort
Writing things down exposes the gaps. It is easy to assume there is demand for your services, or that fees will cover your costs, until you put numbers on a page. A plan helps you pressure-test your assumptions before you have spent any money, and gives you something to measure reality against once you have launched.
It also has practical uses: lenders, landlords and some software providers will ask to see it, and the discipline of planning makes your SRA authorisation application far smoother because you will already have thought through structure, compliance and finances.
Define your services and proposition
Start with clarity about what your firm actually does. Which areas of law will you offer, and — just as importantly — which will you decline? A sharp, well-defined proposition is easier to market than a long list of services you can technically deliver.
Write a single sentence that explains who you help and how. If you cannot, your positioning is not yet clear enough to build a firm around.
Understand your market and clients
Describe your ideal client in real terms: who they are, what triggers them to need a solicitor, where they look for one, and what they value. Then look honestly at the competition — who else serves these clients, and what will make a prospective client choose you instead.
This section should connect directly to your marketing plan. There is little point identifying a target client you have no realistic way of reaching.
Build the financial projections
This is the part most new firm owners under-cook. At a minimum your plan should include a start-up budget, a 12-month cashflow forecast (not just a profit and loss), realistic fee assumptions and the personal income you need to draw. Model a cautious scenario as well as your hoped-for one.
Pay particular attention to timing. Legal work is often delivered long before it is paid for, so a firm can be profitable on paper and still run out of cash. Your projections should make that risk visible.
Plan for compliance and risk
Because you are regulated, your plan should address how you will meet your obligations from day one — your firm structure, your COLP and COFA, professional indemnity insurance, anti-money-laundering procedures and the SRA Accounts Rules. Treat these as core business decisions, not afterthoughts; they affect both your costs and your timeline.
Set goals and review milestones
Finish with a small number of specific, measurable goals — revenue, client numbers, matters opened — and the dates by which you expect to hit them. A plan you never look at again is wasted. Diarise a quarterly review to compare your forecasts with reality and adjust course while it is cheap to do so.
This article is general guidance, not legal or financial advice. Confirm current regulatory requirements with the SRA, and consider taking advice from an accountant who understands law firms before finalising your projections.
Sources & further reading
- GOV.UK — Write a business plan (free templates and guidance)
- SRA — Firm authorisation process
- The Law Society — Business management
Business plan checklist
- A one-sentence proposition I can say out loud
- A clearly defined ideal client and market
- A start-up budget and 12-month cashflow forecast
- A compliance and PII plan from day one
- Measurable goals with quarterly review dates