Legal Associates Temp Agency

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Attorney Employment Agency Business Plan

Market Analysis Summary

LATA will be focusing on two groups of attorneys that have a need for temp attorneys. The first group is mid-size firms. They are characterized by having seven to 15 attorneys on staff. The mid-size firms will often need help on a project of limited duration and will bring on board a temp attorney to help out on an ongoing case that they have.

The second target group is a small law firm, characterized by having one to six attorneys. For a small firm, they will typically get a client who has needs that, because of current work loads, cannot be fulfilled. The small law firm will then bring the temp attorney on board and hand them the case to work on from start to finish.

Currently, there are several legal-only temp firms. While they are quite similar to LATA, there is plenty of room in the Portland as evidenced by the growth of these companies. Additionally, there are temp agencies that have attorneys as clients but do not specialize in the temping for the practice of law. Firms use these general temp agencies, but there is the trend toward specialization of temp services. Law firms are realizing that there is more value for them to get a temp attorney from a legal temp firm who better understands the firm's needs.

4.1 Market Segmentation

LATA's customers can be divided into two different groups:

  1. The first group consists of mid-size law firms. These firms have between seven and 15 attorneys. These firms will at times need help on a project. The project is typically of a limited duration. The firm would contact a temp agency such as LATA and bring on the temp attorney to help out with the project. The temp attorney would typically assist with case instead of actually taking it over.
  2. The second group is small law firms. These are solo practitioners or firms up to six attorneys. They might have a client who brings them a case which they did not have the time for but do not want to turn away. So they get the client's consent to use an attorney that is not formally a part of the firm, hire a temp attorney, and allow the temp to take care of the case while they have a limited supervisory role.

In addition to these two groups there might be other miscellaneous customers that do not fit neatly into a segment.

Market Analysis
Year 1 Year 2 Year 3 Year 4 Year 5
Potential Customers Growth CAGR
Small-size Law Firms 9% 345 376 410 447 487 9.00%
Mid-size Law Firms 8% 154 166 179 193 208 7.80%
Total 8.64% 499 542 589 640 695 8.64%

4.2 Target Market Segment Strategy

LATA is specifically targeting the small- and mid-size law firms because they are the most likely to use a temp service consistently. LATA's  strategy for marketing its service will be based on a couple different forms of communication:

  1. Advertisements in the bar journal. All attorneys that are licensed to practice in the state get the bar journal and frequently refer to the bar journals classified section for job related information. The bar journal is the #1 source for reaching the legal community.
  2. Advertisements in the yellow pages. The yellow pages is a typical resource that people use when searching for specific things.
  3. Website. LATA is developing a website that highlights the different services that we offer. The website will be easily found using common terms in a search engine.
  4. General networking. Because LATA's president is an attorney, he will be networking with fellow attorneys at functions such as continuing legal education seminars (CLE).

4.3 Service Business Analysis

The temp agency in Portland is similar in size to comparable cities in other states. Most agencies have some degree of specialization. Some firms serve IT companies, some serve clerical needs. Most firms do not specialize in such a narrow area as the practice of law. If they served law firms, it is generally a part of a larger professional group practice.

Companies that are in need for temp workers will contact a temp agency and tell them what type of workers they need. The temp agency will have a list of potential workers that they have previously interviewed and screened out highly-qualified applicants for specific skills. The company will then pay the temp agency an hourly wage and the temp agency pays their temp worker. The margins in the temp industry are typically 14%-20%. The value that the temp agencies develop for the companies is that they do all the job posting, interviewing, screening, hiring, and payroll, etc. If the client is unhappy with the temp worker most temp agencies will take back the worker and replace them with someone else. This is quite attractive for many companies who do not have the time or resources to invest into finding temp help.

4.3.1 Competition and Buying Patterns

There are many different temp firms in Portland. On a nationwide scale, the largest franchise temp agencies make up 40% of the market. Portland has a similar makeup with several large franchise agencies. There are also many independent temp companies. Typically, both the franchise or independently owned companies are either generalists or concentrate on a broad group of skills like professionals or IT. It is quite rare for a company to be specific enough to only serve a single profession. While concentrating on a single profession limits the market size of the firm, it allows the temp firm to offer a higher level of service for that specific market niche.

There is a recent trend of companies hiring temp workers and converting them to full-time employees. This allows them to spend less money up front on the worker and also allows them a trial period with the employee. While any employer can set up a trial or probationary period for a worker, the temp set up allows them to do this without investing much money into hiring or training of the worker. In essence it allows the firm to pay the temp agency to be their HR department, converting the temp worker into an employee of the firm after they have been impressed with the temp's work product and personality. This makes hiring significantly less risky as you are able to "try before you buy."