Business Portfolio 2026
The Budget is document six of six, pages 42 to 48 of the Business Portfolio.
Word and PDF · 49 pages · 66 KB Word, 1.1 MB PDF
The whole portfolio,expressed in dollars.
Document six of six in the Chapter 3 Business Portfolio. The budget is the financial representation of everything above it: six components, most of them derived from the documents before it, a twelve month revenue plan, growth investments, and one page of guardrails that shows whether the plan is inside the model. It ships inside the Business Portfolio document.
Word and PDF · 49 pages · Free to download. Part of The Law Firm Operating System Implementation Workbook.
What is inside.
The Budget section holds the planning summary and the guardrail tests. The month by month arithmetic, the itemised expense detail and the variance tracking live in the budget model, which is where the formulas belong.
The six components
| Component | Derived From |
|---|---|
| Revenue forecast | Company Goals |
| Payroll cost | Hiring Plan, Part Five |
| Marketing budget | Marketing Plan, Part Three |
| Operations budget | This document |
| Employee engagement budget | This document |
| Total owner's benefit | Calculated residual |
The twelve month revenue plan
Revenue Plan: first half
January through June, month by month. Cases projected multiplied by average case value gives monthly revenue, with quarter totals and a cumulative column, which is what a quarterly review reads.
Revenue Plan: second half
July through December. The year total must reconcile to the revenue goal in the Company Goals document.
Revenue by practice area
Last year, this year, growth and strategy per practice area. If the total here does not equal the year total, the practice area plan and the revenue plan disagree.
Growth investments
One time spending that is not payroll, marketing or operations: technology, marketing scale up, additional hires, training and development, office or space. Each line needs a funding source.
Financial guardrails
| Measure | Standard | Workbook |
|---|---|---|
| Employment Ratio | Under 40% of revenue | p. 44 |
| Operations | Not to exceed 15% of revenue | p. 47 |
| Real estate | 5 to 7% of revenue | p. 47 |
| Revenue per Employee | $200,000 and up | p. 48 |
Total owner's benefit is not net profit. It is the whole of what the ownership takes out of the firm: salary or draw, distributions, benefits the firm pays on the owner's behalf, and what is deliberately retained for reinvestment. Case costs are not operations either. Recorded as overhead they make the fifteen percent ceiling untestable and hide the true cost of a case.
How to use it.
Finish documents one to five first
Every amount on the budget summary comes from a document earlier in the portfolio: revenue from Company Goals, payroll from the Hiring Plan, marketing from the Marketing Plan.
Record the model version
Write down the budget model version and the date this summary was taken from it.
Run the guardrail test
Every percentage is measured against the revenue on the first line: payroll under 40%, operations up to 15%, real estate 5 to 7%. Revenue per employee is $200,000 and up.
Reconcile, then launch
Revenue goal and budget year total. Hiring plan employment cost and budget payroll. Practice area total and revenue plan total. Once the six documents agree, take the portfolio to the whole organization.
Download the Business Portfolio.
The Budget is not a separate file. It is the last of the six documents in the Business Portfolio.