Set Reasonable Goals, Stick to the Budget and Keep the Napkin

By Scott J. Corwin

Eighteen years ago I passed the bar.

Before I was even admitted, I made a decision that I wanted to work for myself.

I had no clients, no money and a mountain of debt from law school. I decided to hang out my own shingle seven days after I was admitted. I would never have predicted that my practice would have grown into what it is today. Nor would I have predicted that I would have as fulfilling a professional life as I do today.

The path to getting from there to here has been both challenging and rewarding. And the single most important factor in my practice and personal success has been planning ahead and thinking about the future. Setting goals and sticking to a budget are essential keys to my success and the success of anyone who wants to be in a profitable business.

Establishing a budget I knew I wanted to open my own practice, but I didn’t know how to go about and do it from a financial perspective. I sat down with a friend of mine, Mitch Feinstein, at Junior’s Deli on Pico Boulevard in West Los Angeles for breakfast. I told him what I wanted to do. Mitch had been a practicing attorney for about 20 years at the time. He also launched his own real estate and consumer lending company and was a whiz at financing and banking.

Mitch started talking with me about preparing a strategic plan and a budget for my proposed law firm though I was not being sworn in as an attorney for several more weeks. Mitch handed me a pen and instructed me to take notes on the back of a napkin.

He asked me to put down how much I would like to earn my first year in practice. I said I would be happy with $60,000—my previous income earned, working 240 plus hours per month as a law clerk. “OK,” he said, that means you need $5,000 per month in profit.”

Then we wrote down the estimated costs for a small office lease, telephone, fax, supplies, publications, professional fees, MCLE, malpractice insurance, parking, photocopy, as well as an allotted amount for costs of investigation and litigation of my (at the time non-existent) cases. Mitch then had me project an amount for a part-time and then full-time secretary. Of course, at the time I had no need for a secretary since I had no clients.

I had clerked for personal-injury attorneys for all three years of law school so I knew I wanted to be a consumer lawyer fighting for the little guy. We estimated how many small personal-injury cases I would need to meet my budgets. Once we had broken down the budget for both expenses and income, and the volume of cases I would need, the task of opening my own law firm from a financial perspective no longer seemed daunting.

Mitch told me to put away “the napkin” and open it up at the end of the year.

He assured me that if I stuck to the plan I would make more than what I had projected by the end of the year. Mitch was right—I far exceeded my goal in that first 12 months.

I typed up the notes from the napkin and saved it in my computer.

Today, nearly 20 years later, I still make budgets and review my firm’s financial data. Every so often, I open up the computer file and review “The Plan on a Napkin” and remember where I started, how far I have come, and most importantly how I got here.

Scott J. Corwin is a sole practitioner in West Los Angeles where he practices exclusively plaintiff’s personal injury litigation, with an emphasis on motor vehicle and premises liability cases. He is a member of the Board of Governors of CAALA on which he has served from 2005 to the present. He also serves as a member of the Board of Governors of CAOC since 2006. He received the CAALA Presidential Award of Merit for outstanding service to the organization in 2005, 2006 and 2007. He has also been named a Southern California SuperLawyer from 2007 to the present. He is an active supporter of many charities most notably the Vista Inspire Program of Vista Del Mar, working with children with developmental disabilities. He has also performed pro bono work as an advocate for children with special needs.

Note: This post is excerpted from a longer article by Scott Corwin: “Budgeting, Financial and Banking Issues in the Solo or Small Practice: Get control of your finances! Practical suggestions on how to create a financial budget and set reasonable goals,” published in the May 2011 issue of the Consumer Attorneys Association of Los Angeles’ (CAALA) members-only publication, Advocate.

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