Feasibility Analysis of a Law Firm

Feasibility Analysis of a Law Firm

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Executive Summary

Digital Law Practice and Title Company specialize in the real estate law, title and escrow. This venture is born out of my passion for law, and how I enjoy the real estate part of it most, especially searching title; genealogy of land ownership. The service of the firm is to provide outstanding legal service and solutions to clients mostly in the real estate sector at a reasonable service. I chose law after drawing my inspiration from the old saying about law, “When times are good, they are good, and when times are bad, they are better”. This firm will be there to provide for those in need. This document is going to define success, the purpose and mission of this particular venture, a description of my ventures revenue model, case assumptions of the venture performance, and sources that aided in making assumptions.

Digital Law Practice and Title Company will raise revenue through feed charge on the services provided to the clients. The service will be billed on hourly bases for all categories of clients. Through hourly changes, Digital Law Practice and Title Company forecast estimate indicates earnings of $301,225, in the first year. The earning in the second year will reach $602,450 and $1,204,900 in the third year. This revenue forecast is based on the best case scenario.

Definition of Success

Every person has a vision in life. God has also given us unique abilities and talents, as well as opportunities to exploit and bring the best out of us. Most people have dreams they would wish to achieve in life. However, most people die before they make these achievements since they do not focus and develop themselves to deliver on their dreams. From this, my definition of success is to have a dream, develop oneself to deliver on the dream, focus on purpose and eventually achieve well laid down goals.

From my definition of success, I consider Bill Gates to be a successful person in life. Since he had a passion about electronics and despite education in school, he focused on his passion and dream giving it the best to the extent that he quit academics after discovering that academics will not steer him towards his goal. Eventually, he discovered a computer. At the time computers began, several competitors came on the market like the Macintosh, but he manages to stay at the top throughout, because of management skills.

I peg my own success on the number of clients the company will be able to serve on quarterly basis and the amount of revenue the company will be able to generate during the same period. It is also vital to realize the forecasted financial performance in the first, second and third years of existence.

Financial and Non-Financial Goals

My financial goals include, but not limited to: be able to run my law firm marking significant profit after paying my staff well with initial income of about $100,000 and growing by about 40% subsequent years. The company aims to attain revenue of $301,225, in the first year, $602,450 in the second year and $1,204,900 in the third year. These particular achievements will improve the economic standing of employees and partners through good pay, with a sustainable annual increment. The success of the firm will also improve my economic and living standards. Through a sustained growth, I expect my company to expand and serve clients far beyond Lewis county.

The company’s non-financial goal is the focus on delivering solutions to the rising real estate legal issues as well as giving the best service to my clients. Statistics show that the real estate industry is an ever flourishing field. Consequently, with time legal issues will also increase prompting the need for resource and professionals to address arising issues. This law firm shall be strategically established to offer solutions to these issues.

Best service delivery will drive the company’s dream. I intent to establish policies that shall govern the way clients will be handled and served. Before hiring any staff, the company will ensure that these professionals have satisfactory public relations skills, in order to handle clients well. As my company gets established with time, it shall fully sponsor and run children’s home with the ultimate goal of raising, educating and motivating less fortunate in the society. This is out of passion for the unfortunate in the society. I desire that someone will one day attribute their success to me having lifted them from point of no hope for the future. I believe that success in life is not only leaving a good life, but changing lives of other people positively.

Mission and Purpose of the Venture

Digital Law Practice and Title Company shall specialize in the real estate law, title and escrow. The mission of the law firm is to provide outstanding legal service and solutions to clients at a fair fee. The firm is focused on the fast changing real estate business that has very complex legal issues. The specialization of the firm will be real estate law since its market is turning around. In fact, Nissan’s top supplier announced that the factory is to be set to bring in an average of 1000 jobs to the area; as a result, there will be increased demand for housing. In Hohenwald, there are only two title companies, and one of them is on the way to retirement by the end of this year. This is a sharp indicator that there will be a big market for a new firm.

The firm will target buyers and sellers of real estate, banks, agents and all people in need of areas of legal counsel in Lewis County, Tennessee and surrounding areas. When initially setting up the firm, I will only hire a legal assistant/receptionist who will assist in office work and hope to grow the company up to a staff within 3 years. As the company gets more and more established, I intend to partner with a treatment facility in the country and start a rehabilitation program that intends to mirror the Davidson County Drug court. This will offer rehabilitation and nonviolent drug/alcohol related offenders in lieu of jail (Marcum, 2013).

The firm’s core values include professionalism, customer service, integrity, accountability, honesty, fairness and equity. All the staff of the firm shall be expected to adhere to the values. The management structure of the company shall be professional to ensure high quality service delivery. Training will be highly valued not only in the professional line, but also in all areas that touch the business of the firm including public relations, technology and ethics. In order to absorb new staff, the company shall itself train young graduates who upon successful completion of the internship period will be absorbed.

Industry Overview

Economic analysis by The Wall Street Journal reports that home construction is spending at the highest level since 2008 year (Sparshot, 2013). This includes public projects, housing as well as commercial, which consistently increase at about 0.6% per annum. The report acknowledges that the housing market has played a big role in the growth of the economy; therefore, making home owners more confident and comfortable spending a lot on building materials, thus, creating more jobs.

Nashville Business Journal published an article about Nissan’s top supplier adding up to about 1200 jobs with $109.6 M investment (Snyder, 3013). This was announced by both the government and officials of the Calsonic Kansei North America Inc. This company manufactures thermal components, exhaust systems and so much more. The new projected jobs will be an addition to the company’s facilities in Shelbyville, Lewisburg and Smyrna. Calsonic is set to invest $2.1 million at the facility in Smyrna, located within Nissan’s plant. This will add about 183 employees to already existing 469 staff.

At Shelbyville plant, Calsonic is making the biggest investment ever- $57.6 million. This investment is estimated to add about 489 jobs over the next three years. The company is also investing $49.8 million at Lewisburg facility estimated to create about 256 jobs by the end of three years. “For an unprecedented fourth year in a row, Tennessee ranks as the No. 1 state in the nation for automotive manufacturing strength and CKNA’s major investment in our state reaffirms why we continue to earn this distinction,” said Hagerty. With this overview of the market predictions, this venture is timely.

Revenue Model Description

A revenue model is a clear description of how a business plans to earn its income, how it will make a profit and generate relatively higher return on investment. My law firm intends to bill for services offered on an hourly basis. Timesheets shall be used to track record and accurately serve and keep time clients. With the current technology advancement, the company intends to seek a software design and application development company to do a system that will be utilized to do the pricing. Payment will only be required after service has been successfully rendered to clients. My revenue model will be represented by four different category streams.

The first category is buyers and sellers of a real estate property. Every time when buying or selling of a real estate, there are legal procedures that are followed to the later, and my law firm will be strategic to offer this service. The second category is banks that offer loans for buyers of a real estate. The third category shall comprise real estate agents. Last but not least will be people that will be in need of legal counsel in Lewis County, Tennessee and the surrounding areas. In this venture, the law firm will depend on revenue from the maximum number of clients, which the firm will serve in a specified period.

The demand for services from the firm shall determine the number of clients the firm can serve in a specified period. With legal issues and different clients, some services will be more involving than others. For example, dealing with a group of real estate owners may be more involving that handling a single owner, this significantly determines the number of services the business will be able to offer in a given timeframe.

Scenario-Based Explanations of Assumption

My law firm offers legal counsel and law practices. During the research of identifying potential clients, I spoke to five prospective clients. First, I spoke to Marquette Tyner. She is the mother to Conor Scott who recently was a party to the lawsuit vs Williamson County with regard to his disability. I was able to assist and help her to navigate the courts during the lawsuit. They recently purchased a home.

The second contact was Tisha Rickard who owns a small business of a doggie daycare and boarding facility (Sit n Stay) located in Hendersonville. Ms. Rickard recently started her business that I was able to assist to establish. The third one was Bernie Leadon who recently negotiated a contract to rejoin a partnership and tour. The fourth one is Juanita Lane who owns Dulce Desserts, a small business that recently negotiated the commercial real estate lease for her store. The last person I spoke to is Gerlie Rickard, CPA – Certified Public Accountant and Expert witness for IRS. We discussed the potential demand for Tax attorneys and Tax Law.

I was able to encounter three competitors during my research. First was Billy W. Townsend, Esq who owns Townsend Law Office. He had a paralegal, Linda- a primary source of this paper. They opened books and provided me with valuable and authentic information I needed to validate my numbers and business plan. Moreover, he wants me to buy his law firm. The second competitor is William Landis Turner, Esq. He is a semiretired attorney who practices in Lewis County (42 years) and past president of The Tennessee Bar Association, presently Chairman of TN Lawyers fund for Client Protection and Lewis County Commissioner.

The last competitor is Janet Johnson, Executive Director Hohenwald/Lewis County Chamber of Commerce, facilitator for Leadership Lewis County. Janet, as an executive director of the Chamber of Commerce, is an invaluable networking person to know, and can provide referrals to my law firm as a member of the Chamber. Through her encouragement, I am a member of the 2014 Leadership Lewis County Class.

My interview with Lewis Turner gave me numerous lessons that will be valuable in the establishment and running of a Law firm in Hohenwald, Tennessee. First, Hohenwald does not have many lawyers. There are only five practicing lawyers in Lewis County and, therefore, there is room for more. However, being a rural county and small town, practicing law here would need a lot of travelling; especially if a person does not live within the county. Furthermore, one can only make very little money in such small towns. However, there are a few people who can pay good fees. From this Turner’ perspective on small towns, my business will seek to establish a name and compete effectively with the legal firms in the county. Second, my firm will strive to win as many as possible clients who can pay big fees.

Turner also notes that new graduates have minimal knowledge of the legal aspects of practicing law. In this regard, my firm will train its recruits to meet their expect job outcomes. Vigorous training will also be used to prepare interns for absorption into the firm.

Tuner also suggests that giving something back to the community is good. I appreciate helping the community and I plan to contribute to it through charity and help in the rehabilitation of drug addicts. Turner notes that the starting salaries for graduate lawyers are not impressive, and one has to find a very good firm to get paid well. In this, my firm will make good salary packages as a priority.

Best Case Scenario

The best case scenario is based on the expectation that the low firm will be able to render its service to a large number of clients and generate the highest possible revenues due to favorable economic development. The best case scenario is economic growth due to the industry development. Industrial development in the county will create more than 1,000 jobs leading to a boom secondary services industries or providers. All these will increase the county’s population and result in a boom for the real estate market. It means that there will be more real estate clients that will need legal services. If this best cases scenario holds, I anticipate making 100% sales in cash (I the first year of operation) with the total sales from the month of January to December amounting to $301,225, those of the second year projected to reach $602,450, and in the third year to reach $1,204,900. Accordingly, it means that the percentage increase in sales by the third year is anticipated to be 300%.

Worst-Case Scenario

A worst case scenario would mostly result for economic downturns cycles of inflation, and economic recessions are common. Another economic recession would result in economic devastation. Recession would give negative effect on the industry growth, resulting in massive layoffs. Losing a job would reduce people income and thus, reduce their ability to buy homes or rent apartments. The number of client served by my firm would also drop and encourage the firm’s revenues to drop. This would slow the growth of the firm. If the worst case scenario takes precedence, the firm will earn total sales of $160,770 in the first year, $128,616 in the second year and $109,566 in the third year. This leads to an expected 31.84% decrease in sales by the end of the third year in operation of the law firm.

Lewis County Economic Indicators

Below is economic data about Lewis County provided by Lewis Chamber of Commerce.

(Updated Comprehensive development strategy Committee, 2012).

( Updated Comprehensive development strategy Committee, 2012).

References

Primary Sources:

Customers:

Marquette Tyner. Email interview. 5 Feb. 2014. Email Address: HYPERLINK “mailto:Marquette.tyner@gmail.com”Marquette.tyner@gmail.com

Tisha Rickard. Phone interview. 10 Feb. 2014. Contact phone: 615-957-7104

Bernie Leadon. Phone interview. 18 Jan. 2014. Contact phone: 615-478-3660

Juanita Lane. Phone interview. 4 Feb. 2014. Contact phone: 615-321-8700

Gerlie Rickard. Phone interview. 1 Feb. 2014. Contact phone: 615-851-2525

Competitors:

Billy W. Townsend. “Townsend Law Office”.Phone interview. 2 Feb. 2014.

Contact phone: 931-796-5547 Title: Owner

William Landis Turner. “TN Lawyers fund for Client Protection and Lewis County Commissioner. Phone interview. 4 Feb. 2014.

Contact: 931-212-7370/931-796-5317 Title: Chairman

Janet Johnson. “Hohenwald/Lewis County Chamber of Commerce”.Phone interview. 2 Feb. 2014.

Contact: 931-796-4084.

Title: Executive Director.

Secondary Sources:

Marcum, M. (Performer). (2013). Prescription drug abuse and addiction [Web Video].Retrieved from HYPERLINK “http://www.attorneycredits.com/classes.php?stateID=6&displayPerPage=20&pageNum”http://www.attorneycredits.com/classes.php?stateID=6&displayPerPage=20&pageNum=1&keyword=Prescription Drug Abuse and Addiction&practice=&specialty=&doSearch.x=37&doSearch.y=8

Snyder, E. (2013, September 3). Nissan’s top supplier adding 1,200 jobs with $109.6M TN investment. Nashville Business Journal. Retrieved from HYPERLINK “http://www.bizjournals.com/nashville/blog/2013/09/nissans-top-supplier-adding-1200.html” http://www.bizjournals.com/nashville/blog/2013/09/nissans-top-supplier-adding-1200.html

Sparshot, J. (2013, September 03). Home construction spending at highest level since 2008. Wall Street Journal. Retrieved from HYPERLINK “http://blogs.wsj.com/economics/2013/09/03/home-%09construction-spending-at-highest-level-since-2008/”http://blogs.wsj.com/economics/2013/09/03/home-construction-spending-at-highest-level-since-2008/

Updated Comprehensive development strategy Committee. (2012). Updated Comprehensive Development Strategy. Retrieved from http://lewiscountyny.org/content/Generic/View/68:field=documents;/content/Documents/File/1949.pdf