A financial forecast is a fundamental road map necessary for your personal injury practice. It helps you save a lot of money and impractical decisions. It gives you the needed focus and control on the finances you risk as you start and progress in your career. Although risk is always at hand in the practice of personal injury, you can at least minimize risk by using the appropriate investment strategy.
There are three questions you need to answer before opening door for clients. First, is how much cash will be required to start the law practice? Second, is how much additional cash will be needed later in financing cases? Third, is how much salary the lawyer will need to meet living expenses during the start up stage of building the practice? K. William Gibson says you will need to consider the following expenses as you start your practice:
1. Office space
2. Furniture and office decorations
3. Communication equipment
4. Advertising logistical requirements
5. Web site development costs
6. Malpractice insurance
7. Equipment like computer, printer, photocopier, camera and others
8. Law books and periodicals
9. Internet connection expenses
10. Stationery, business cards, announcements and postage
11. Other office supplies
12. Secretarial services
Consider to reduce your expenses as your career gets going. Your ongoing expenses will be office rent, employee salaries, advertising and marketing. Make a list of these expenses to make sure you have a projected office expenses. You have an absolute control when it comes to advertising and marketing of your law office. However, you still need to do a marketing plan and measure return of investments (ROI) s. Many lawyers find it effective to market their services thru Yellow Pages Directory. While it is important that your service can be viewed in Yellow Pages, you should not present an image more than you can afford.
How much a client does should cost? In personal injury cases, an average case will only require a large sum of money if it has taken to trial. When the case goes on trial, you need to pay for the services of a doctor, engineer, and other professionals. The most expensive is the testimony of your client’s doctor.
As your career in personal injury practice progress, you may eventually want to add more personnel, open another office, and expand your experience in handling cases. If you decide on this, draft your long-term goals and fine-tune your financial forecast depending in your new set of needs. Your long-term goals must ensure you to serve more clients. Your financial planning should keep up with unexpected changes such as legislative changes. Some states implement tort reforms that could wreak havoc on your financial planning. When this happens, clients will have a hard time to have claims for personal injury damages.
There are times of drought in a personal injury lawyer’s career. Sometimes it can be very difficult to smooth out the cash flow curve especially when a lawyer has so little control over the case to settle. Armor yourself with financial plan that recognize the annual income of a full-time personal injury lawyer even through wild swings of career. Plan ahead your expenses. You can also pay for income taxes to reduce your taxable income in the current year.