Syndicate Law Firm - Industry Overview - Research Paper Example

? Syndicate Law Firm al Affiliation) Executive Summary The Syndicate Law Firm will be a general law firm located in LewisCounty, Hohenwald, Tennessee. The Syndicate Law Firm will specialize in the law of real estate. The company will counsel clients on local and state laws, and federal regulations that will govern the development of real estate in Lewis. The company will represent various businesses in the industry, including builders, mortgage lenders, owners and tenants, commercial real estate developers, institutional investors and financiers, and real estate investment trusts. The manager of the company is James Mark. James Mark has a passion for the law and is comfortable with the real estate aspects of it. Specifically title searches, which forms the genealogy of land ownership. As a starting company, Syndicate Law firm will forecast its revenue. Revenue forecast is the amount of money calculated that Syndicate firm expects to receive from its sales. It is almost impossible to predict the yearly revenues of Syndicate Company precisely. It is critically crucial for Syndicate to develop a revenue budget of high quality. Managers of Syndicate will spend their time to assess the condition of the market, conduct analysis and negotiate with superiors to set the revenue expectations. This is possible for the company by setting aggressive but achievable targets. Therefore, revenue forecast plays a crucial in the present economies. It helps Syndicate understand how programs of the company affect the levels of domestic income. It also offers insight into the company’s economic health in the long-term and short-term (“Idaho real estate: practice & law”, 2002). Consequently, revenue forecast is crucial because it enables the managers of Syndicate to re-adjust the company’s annual budget. Adjustments are based on the company’s cash inflow’s estimate and keep off a large deficit of the budget. Syndicate budget team typically performs the procedures of revenue forecast at the end of a financial year. Consequently, the activities of revenue forecast affect the social expenditure and investment of infrastructure that Syndicate Company can develop over a financial year. For instance, when the estimates of revenue decrease, it causes the managers of Syndicate to reduce some of the social programs or even raise sales. Success The Syndicate Law firm will achieve its success by setting goals. Setting goals is part of the Syndicate’s planning process. The managers establish financial and non-financial goals for longer and shorter term. When Syndicate Law firm has goals in place, it will help the management team to focus on the operational steps it needs to take and the resources needed to meet the target. When Syndicate Company meets non-financial goals, the possibility of meeting the financial target such as profitability and revenues becomes possible. Some of the non-financial goals include customer satisfaction, planning and reporting systems, employee and training development, policies and procedures, long-range vision, and community involvement. On the other hand, some of the financial goals that Syndicate Company needs to achieve include revenue and profitability. The major success of Syndicate Company is to keep their clients satisfied. This offers the chance for repeat business. When a customer is satisfied, they are likely to tell their associates about their experience. Therefore, if Syndicate Company sells to other companies, the endorsement from clients is crucial to close a sale with a new client. Also, the managers will create business plans for the company to table to perspective investors, which serve the company as a guide. When Syndicate grows, their planning process also grows. The growth includes the regular gathering of information on competitive activities and comparing the actual outcomes to forecast figures on a quarterly basis. Another success of the Syndicate Law Firm is its revenue growth and its expansion. Revenue growth and expansion creates additional complexities and responsibilities for the managers. When Syndicate gives the existing staff members the opportunity to improve their capabilities and skills, it enables them to create plans for their career development. Consequently, one of the successes of Syndicate Company is to contribute financial support and time to improve the life of the stakeholders. These supports include sponsoring charity events and encourage staff members to take part worthy cause. The community development will enhance the reputation and will give the Syndicate Law Firm its brand name added exposure. Industry Overview The revenue growth of real estate industry has slowed over the last five years. Therefore, it has become important for the real estate law firm to retain its partners. Real estate law firms are knowledge, skills, and labor intensive, making their functions to be done in the house. As such, training of the employees is crucial for growth of revenue. The downward pressure on the revenue is as a result of battling for skilled workers. Companies in the real estate law industry put appropriate techniques and strategies to retain employees in the long term when the industry begins to record low profit margins. Growth area in this industry includes employment law, corporate law, workplace relations, and service and product liability law. Therefore, the key areas of growth and success in this industry include setting appropriate goals and strategies, having an access to niche markets, programs of staff development, management of staff, risk management skills, and developing financial processes. When companies specialize in the growth area of the firm, they become more cost-efficient. This is because they will offer better quality of performance than when they offer services that cover all sectors of the law. The industry has a professional management practice system which includes job costing systems, cash flow management, and time management. They make sure the financial basics and fundamentals are in place with the help of financial-health check. Mission/Purpose of the Syndicate Law Firm Syndicate Real Estate Law Firm will be trusted by more realtors, lenders, mortgage brokers, developers, and clients each year than any law firm. The Syndicate Law Firm will commit them to customer service and will strive to make its customer’s dealing with the firm as informative, convenient, and pleasant as possible. The company will also commit to deliver peace of mind to its clients. Some of the company’s features include recruiting knowledgeable and dedicated staff and lawyers who can communicate their knowledge to customers in a concise and clear manner. The company will also use clear language to defend their client’s case (“Final economic forecast summary tables”, 2009). The Syndicate Law Firm will create multi- offices throughout Lewis. This enables clients to choose which of their offices is convenient for them and the company will arrange for the lawyer. Additionally, the company will develop relevant and updated website where the company will answer fundamental questions asked by the customers (Coase, 2008). The company will toll free communication numbers to enable clients outside the domestic area to contact the company. Syndicate Company recognizes the corporate social responsibility it bears to the public. The company will come up with a rehabilitation program that mirrors the Davidson County Drug court. This would offer rehabilitation to nonviolent drug/alcohol related offenders in lieu of jail. Additionally, the company will support various charities like the Children’s Miracle Network and Looking Glass Foundation. Consequently, the syndicate Law Firm will come up with Quality Assurance Programs that will perform a survey of customers to obtain their opinion based on the company’s service delivery. The above anticipated characteristics of the company will a direct outcome of the customer feedback on what they would like Syndicate to offer them. The company will be committed to complete and total service to the clients (Coase, 2008). Revenue Model Description One of the goals of the Syndicate Law Firm is to generate income, produce profits and earn higher than average investment returns. The Company will use the short and long-term projections to find the operation and the potential of the company. The company will generate income from marketing the legal services and also through profitability. Some of the services that Syndicate Company will market include; the specialized services, client tailored services, and standardized services. The standardized services will focus on price, efficiency, and speed. Specialized services include the major IP litigations, catastrophic services, and major bankruptcies (“Final economic forecast summary tables”, 2009). Client-tailored services include the intellectual Property, complex litigation, commercial Real estate, commercial/products litigations, general Corp counseling, banking law, and small M&A. In addition, the company will market standardized services such as residential real estate collections, loan documents for banks, workers compensation, foreclosures, small employment, and patent prosecution. The company will also generate income from levying fees to clients. The fee type that the Syndicate Law Firm will levy includes time-based, fixed fee, contingency, asset-based, value based, and the hybrids of the named fee types (“Financial management”, 2009). The lawyer-based rates will include: $405 for employment litigation, $500 for antitrust litigation, $450 for patent litigation, and $270 for employment litigation associate. The law firm’s profitability will include rates charged, utilization, leverage, expenses, speed, and realization. Other sources of revenues for the company will be consultation services. The company will provide consulting services for real estate related issues such as buying and selling of real estates, real estate agency, banks, and legal counsel for Lewis County (“Revenue forecast”, 2008). Scenario-Based Assumptions The Syndicate Law Firm develops assumption that focuses the forecast budget outcome for the 3 year period. The assumptions are based on the best-case scenario, worst-case scenario, and a more likely scenario. The three scenarios allow the company’s board and administration to identify and anticipate the issues that need to be discussed. Section reviews the main components that will drive the budget and outlines the estimated effect of the assumptions on the operation of the company for the three years. The table below shows the summary of assumptions for the three years.       Best Case Scenario   Most Likely Scenario   Worst Case Scenario   Revenue Y0 % Y1 % Y2 % Y3 % Y0 % Y1 % Y2 % Y3 % Y0 % Y1 % Y2 % Y3 % Active 450000 13.51 210000 6.71 980000 33.59 1480000 45.28 189966 28.32 132780 21.23 235687 31.06 149950 23.23 40000 38.13 45733 23.02 14900 9.87 35000 23.12 Closed 379900 11.41 899733 28.76 349900 11.99 224900 6.88 96653 14.41 98347 15.72 88338 11.64 85884 13.31 18000 17.16 12500 6.29 12000 7.95 19500 12.88 Pending 0 0.00 109000 3.48 149000 5.11 195000 5.97 0 0.00 103250 16.51 109750 14.46 86044 13.33 0 0.00 97500 49.09 70500 46.69 49500 32.69 Expired 1200000 36.04 910000 29.09 450000 15.42 379000 11.59 226337 33.74 166100 26.56 162250 21.38 175850 27.24 32000 30.51 27900 14.05 33700 22.32 34900 23.05 Withdrawn 1300000 39.04 1000000 31.96 989000 33.89 990000 30.29 157879 23.53 125005 19.99 162904 21.46 147745 22.89 14900 14.20 15000 7.55 19900 13.18 12500 8.26 Total 3329900   3128733   2917900   3268900   670835   625482   758929   645473   104900   198633   151000   151400                                                     Expenditure                                                 Salary for emp (%)     4   4   4       3   3   3       2   2   2   Benefits (%)     2   2   2       2   2   2       3   3   3   During infla($)     2.4m   2.5m   2.6m       1.4m   1.5m   1.6m       1.4m   1.5m   1.6m   Other (%)     3   2   2       3   2   2       3   2   2   Strategic reallocation (%)     41276   41308   41338       41276   41308   41338       41276   41308   41338   Operating margin target (%)     4.5-5.9   4.5-5.9   4.5-5.9       4.5-5.9   4.5-5.9   4.5-5.9       4.5-5.9   4.5-5.9   4.5-5.9   Average Return on Net Asset Target (%)     8-12.1   8-12.1   8-12.1       8-12.1   8-12.1   8-12.1       8-12.1   8-12.1   8-12.1   Revenue Assumptions Most likely Case The appropriations of Syndicate Company are forecast to rise by three percent yearly from the 35% of the budget that is operating to fifty percent of the budget. The model dwells on the assumption that the funding will be performance based and this scenario assumes a three percent annual increment (“Financial management”, 2009). Best Case Scenario. Because of other externalities on the company from revenues, the revenues for the company will be flat for the first year, increase by two percent in the second year, and by three percent in the third year. Most likely Scenario Given the undue externalities on the company from revenues in other sections and sluggish recovery of the industry, the company’s revenue is modeled with a single percent reduction every year. 2. Consulting service is one of the core sources of funding for the company. Therefore, charges for the services increase during the most-likely and the best scenarios. In the worst scenario the fee for the services are designed to rise at 1.5 per cent for the second year and the third year. Other services of the company are designed to increase in the first year by 3.3 percent. The best and worst scenarios increased the rate by two percent for Y1 and Y2. The best scenarios increased by 2.2 percent for the second and the third year. 3. The enrollment and increment of clients for the company is anticipated to be seven hundred. The best scenario is expected to grow slightly, but decreases on the second and the third year. The most likely scenario will assume the general increase of 8m dollars leading from a 2.1 percent rise in the client enrollment in the first year. The major growth of the client is anticipated to occur during the best scenario. The worst case scenario assumes that there will be no growth in the enrollment of new clients. 4. The growth in other subsidiary revue is anticipated to rise in the best and most likely scenarios. The company’s revenue is expected to decline or remain flat. Other revenues from services the company offers will slightly increase. Therefore, every scenario will dwell on the minor adjustment to other cash flows. The most likely scenario assumes 3 percent growth in other sources of revenue in the three years. The best case scenario assumes an increase of two percent in other sources of revenue in the three years. Additionally, the worst case scenario assumes a 1.5 percent growth in other sources of revenue in the three years. Expenditure Assumptions Maintaining competitive employees for the company will continue to be Syndicates’ top priority. The following three scenarios show a range of possibilities: In most likely scenario salary and wages will rise annually by 3.5 percent. The best case scenario salary and wages will rise by three percent annually. The worst case scenario the overall wages and salaries will raise by 2 percent annually. Additionally, the benefits paid on the most likely scenario will rise by one per cent. The best case scenarios benefits paid on wages and salaries will rise by 1.5%. The worst case scenario benefit paid on wages and salaries will rise by 2 percent of the benefits that are eligible on annual payroll. The adjustment on the inflations on the equipment and expense related to compliance, utilities, and insurance is anticipated to rise over the years. In total, other costs are designed to increase in all the cases (Coase, 2008). The financial objective of the company is to achieve budget equilibrium. Therefore, the company will need action combination to increase the revenue, reduce expenses, and reallocate resources. To achieve this budget equilibrium, the company will be required to reduce expenses and generate revenues. Appendices: Reference Coase, R. H. (2008). The firm, the market, and the law. Chicago: University of Chicago Press. Final economic forecast summary tables. (2009). Olympia, Wash.: Washington State Economic and Revenue Forecast Council. Financial management. (2009). Tampa, Fla: Financial Management Association. Idaho real estate: practice & law. (10th Ed.). (2002). Chicago, Ill.: Dearborn Real Estate Education. Revenue forecast. (2008). Juneau, Alaska: Alaska Dept. of Revenue. Read More