Time To Start Planning 2022

Yes, we know it's mid-November. But now is the best time to start thinking about your 2022 plans for your law firm. Seemingly, your current work processes will continue into 2022. You may return to pre-pandemic norms, like meeting clients in the office regularly, handling paper more frequently, and going to the office daily. Or maybe it won't. But either way, now is the time to start thinking about 2022 financially, functionally, and strategically.

Financial Outlook

The first step is understanding where you stand. Review your financials for the past year. Identify where you want to focus in 2022.

• Revenue: Did you hit your goals? If you didn't have goals set, are you happy with the outcome? Anything you want to see change for 2022? 
• Expenses: This is a big area to review, particularly if you adopted new processes and therefore new expenses. Which expenses had a positive effect? Which didn't payout as well as you had hoped?
• Income: Especially if you are a solo attorney, did you reach the income goals for yourself? If you are a firm, how happy is your firm with its compensation?

Particularly with the Great Resignation, it's important to consider the financial effect on your law firm team members. Take into consideration the value of soft benefits, like working remotely, or perhaps you have instituted some flexible hours into each day as well. Be sure to look at the whole picture of compensation, not just the financial one. Although that is an important one for most.

When it comes to planning your 2022 expense budget, consider the 50/30/20 rule. With this approach,

• 50% of your expenses are spent on necessities,
• 30% of your expenses are spent on wants, and
• 20% of your expenses are spent on debt repayment or savings.

Of course, as in all things, the devil is in the details. What do you consider necessities? Chances are after the pandemic, the office space, or as much of it, isn't a necessity any longer. With many law firms moving to a hybrid approach, offices are setting up hotelling of desk space, or hot desking. With this scenario, desks are shared by people who alternate their days in the office and at home. As a result, the size of the office the firm needs is reduced. Likewise, new items may come to the necessity list, like technology. These two specific items work hand in hand. By using a cloud-based case management software platform, there is less need for physical space for paper documents, and therefore, for a desk. As to the wants, well, consider options that you want to try to see if it addresses any issues you are tackling. For example, if efficiency is a key area of focus for you, budget some funds to try out some tools to address that need. 

Functional Outlook

Consider how your law firm functions and if you are reaching your case goals. Although there was a definite dip in the number of cases clients added early in the pandemic, the last year has seen a fairly steady increase and is more typical. Did your firm see that return? If not, could it be due to the area of law you are practicing? Bankruptcy attorneys were fairly busy during the pandemic. Real estate matters were far less frequent. What is the outlook for your area of law?

Now is the time to consider adding other areas of law to your firm. Whether that includes some coursework for you or perhaps adding other lawyers to your firm, it's a good time to think about the 2022 outlook. Remember to consider your geographic area and attorney density. If there are already several law firms offering family law support, unless you are convinced your approach is truly differentiated, it may be better to consider a different area of law.

Strategic Outlook

There are 3 key areas to review strategically: financial, competitive, and setting objectives. The financial and competitive aspects are touched on above. Certainly, there is more to be said on each. There is plenty of content out there that can help you identify the specific steps your law firm needs to take to complete a full review. 

For objective setting, consider how you work and the client experience. As an example, if you are a solo attorney and do all of the work yourself, without a legal secretary or paralegal, consider hiring a legal professional as your workload continues. After all, just because you can work 60 or more hours a week doesn't mean you should.

When you consider objectives, include the following:

• Outsourcing support or services
• Invest in technology 
• Focus on marketing for your firm
• Determine if and when to hire a part-time or full-time team member
• Client feedback

The client feedback piece is another one of those 'bigger than the mere words suggest' item. How are you currently working with clients? Is it all email and tracking down who said what? If you aren't using case management software that gives clients access to their case, consider it. Informed clients are happier clients. And happier clients mean more referrals. 

As the Holiday season begins next week, it's a great time to take advantage of some potential downtime to consider your 2022. If all of these items feel overwhelming, well, pick just one. Think of the things that keep you up at night and address those first. It could be caseload, expenses, or client issues. Whatever it is, consider that first. And just because it's the turning of a calendar year doesn't mean it's the only time to consider these items. Set quarterly targets to review the various aspects of your firm. Perhaps it's expenses for Q4 2021. Objectives for Q1 2022. You get the idea. Whatever your approach, the key is to take a proactive approach.