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May 20, 2012


Law Firm Branch Office – Key Issues

Question:

Our firm represents general business clients in Cleveland, Ohio. We have 37 attorneys. Currently we have only one office at the present time. As part of our planning process we have been discussing whether we should open a branch office in another major city in Ohio. What issues should we be thinking about?

Response:

Branching is being incorporated into more firm strategic plans. However, often the results do not meet firm expectations considering the time, effort and investment made. Overhead increases, anticipated opportunities do not materialize, management becomes more complex, resources are spread too thin, and the firm loses sight of its common identity.

Branching can be risky due to the dollars and managerial time investment. However, there can be significant benefits as well.

The starting point is to avoid knee jerk reactions such as branching because other firms are doing it, assuming that clients want you to have a presence in another geographical area, etc. Do your homework and build a business case for the branch office. Here are ideas to get you started:

1. Ask your clients what they think about the move. Is the move important to them?
2. Determine your objectives for the branch office. For example:

a. It meets the firm's strategies outlined in the firm strategic plan
b. Geographic expansion
c. Client requirements
d. Defensive measures
e. Convenience office for client meetings

3. Obtain and analyze quantitative data.

a. Client information obtained from meetings and surveys
b. Information concerning referral sources
c. Competitor analysis
d. Business growth market research

Build your business case (a business plan for the branch office if you will) and make sure that a branch office makes business sense for your firm. Create a pro forma budget and review the financial impact. If a branch office makes sense begin thinking about implementation issues such as staffing, actual location, management, etc.

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John W. Olmstead, MBA, Ph.D, CMC


Posted at 09:28 PM in Offices and Facilities, Strategy
Tags: Law Firm Branch Offices

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