Looking for a nonprofit law firm business plan? You're in the right place.
A legal-aid practice answers to funders, a board and the state bar, and each one asks a different question. How many cases can an attorney close in a year? Which grants pay for the work, and when does the cash arrive? What does the budget look like if a major funder cuts its award? A blank template won't show what a workable answer looks like.
In this article we'll walk through a complete sample plan for a tenant-defense law firm in Portland, Oregon, section by section. We'll cover the executive summary, the SWOT analysis and, in particular, all of the financials.
Here's what the plan will show you:
- The funding mix: see how a county contract, foundation grants, IOLTA money and donations fit together, and how much one funder can safely supply
- Caseload and capacity: learn how to tie cases closed to attorney, paralegal and volunteer hours, so the numbers hold up when a funder checks them
- The net assets note: understand how a model built for owners maps onto restricted and unrestricted funds
- The first year, month by month: spot the months when grant money lands and the months when the reserve pays the bills
- Insurance and bar rules: find out where the Oregon State Bar's malpractice and trust-account rules shape the budget
- The five-year budget, cash flow and balance sheet: follow each hire back to the funding that pays for it
- The downside case: have an answer ready for the "what if grants come in 20% short?" question, with the steps the director takes
If you're planning a legal-aid practice, read this before you write your own. The firm is fictional, so keep what fits your clients and funders and change the rest.
In this plan
If you need a nonprofit law firm business plan template for your own plan, start it in the Toolkit.
Executive Summary
Cedar Bridge is a 501(c)(3) tenant-defense law firm that opens in Portland, Oregon on January 1, 2027. It represents renters on low incomes who face eviction in Multnomah County, with full representation in court, limited-scope help and same-day advice at the courthouse. Founder Al Rand, an attorney, serves as executive director and supervising attorney. The firm has a board and no owners.
It opens with $550,000 in gifts and no debt: a $104,000 start-up grant restricted to launch costs and $446,000 from founding donors with no restrictions on use. The grant pays for equipment, fit-out, legal work, registrations and launch outreach. The $446,000 is held as an operating reserve.
| Year 1 | Year 2 | Year 3 | |
|---|---|---|---|
| Revenue | $654,000 | $1,069,000 | $1,303,000 |
| Surplus (deficit) after start-up costs | ($177,653) | $4,071 | $24,304 |
| Closing cash | $216,325 | $165,265 | $163,892 |
The firm closes 710 matters in its first year and 1,350 in its third, 250 of them with full representation. A county eviction-defense contract, paid as cost reimbursement, supplies about half of revenue. The contract is applied for and not yet awarded; the plan sets out its expected terms and what happens if it starts late or shrinks. Foundation grants, an Oregon Law Foundation IOLTA grant, court-awarded fees under ORS 90.255 and donations make up the rest. Year 1 is a deficit because the contract starts in March and the team is on payroll from January. The firm makes a small surplus from Year 2.
The plan tests itself three ways. With every revenue line 20% short, the director freezes hiring, drops the last post and takes a pay cut, and cash stays positive in every year, at its lowest about a month of spending. A late contract start and the loss of half the contract are tested separately, and the second of those exhausts the reserve. Cedar Bridge makes no promise about the outcome of any client's case, and says so in every engagement letter.
Who Cedar Bridge Is
Legal name: Cedar Bridge, an Oregon nonprofit corporation, seeking recognition under section 501(c)(3). Leader: Al Rand, executive director and supervising attorney. No one owns the firm. Premises: 1,800 square feet of leased office space in Portland, with two interview rooms and a secure file room. Start date: January 1, 2027. Stage: pre-launch. The board is seated, the lease is in draft, the county has the contract application and the IRS determination is pending.
Mission and scope
Cedar Bridge defends renters in Multnomah County against eviction and the housing problems that sit behind it, such as unlawful lockouts, retaliation and deposit disputes. It does not take immigration, family or criminal matters. A single focus lets each attorney build familiarity with the courtroom, the local judges and the usual landlord positions.
Targets by year
- Close 710 matters in 2027, 110 of them with full representation.
- Reach a full year of the county contract in 2028 and report a first surplus.
- Build a bench of 40 volunteer lawyers by 2031, each giving 80 hours a year.
- Raise unrestricted giving to $255,000 a year by 2031.
Rules that shape the budget
- Trust accounts. Oregon RPC 1.15-1 requires client funds to sit in a separate, interest-bearing lawyer trust account. The bar's published rules show the IOLTA provisions of RPC 1.15-2 repealed on January 1, 2025 and replaced by Rule of Licensure Title 6. Pooled interest funds the Oregon Law Foundation, a source of grants for legal aid.
- Malpractice cover. Oregon lawyers in private practice carry coverage through the Professional Liability Fund. Under PLF Policy 3.150, a lawyer who works for a legal aid office can claim an exemption when the office supplies coverage through an acceptable alternative insurer. For legal aid offices the policy sets a floor of $300,000 per claim and $300,000 in the aggregate, on a claims-made basis. Cedar Bridge buys its own policy and has the PLF confirm that it qualifies.
- Limited-scope clinics. RPC 6.5 relaxes conflict checks for lawyers who give short-term advice through a nonprofit program with no expectation of continuing representation. The courthouse desk runs on that rule.
- Fee awards. ORS 90.255 lets a court award reasonable fees to the prevailing party, which helps when a tenant wins and exposes a tenant who loses. Engagement letters say so.
- Funders and independence. Every grant and contract is reviewed by counsel against the Oregon Rules of Professional Conduct, so that no funder directs a lawyer's judgment on a client's case.
- Charity filings. Cedar Bridge registers with the Oregon Department of Justice's Charitable Activities Section and files its annual report. Financial-review requirements depend on size, and the firm confirms the current threshold with the Section.
Eviction Defense in Portland
Who pays for this work
Clients pay nothing. Five kinds of money pay for the firm: a government contract, foundation grants, IOLTA grants, donors and, occasionally, the other side. They behave differently, so the budget counts each separately. A county contract that reimburses costs pays late and carries compliance work. A foundation grant arrives in a lump and expires. Donations can be spent on anything and are the least predictable.
The county contract is the plan's biggest exposure. Cedar Bridge has applied in a competitive solicitation and has not been awarded it. Incumbent providers include statewide legal aid programs and tenant-rights organizations, and the county decides how many it funds. The plan expects a two-year term, termination for convenience on 30 days' notice and payment 60 days after invoice, and takes the real terms from the solicitation. Without the contract the firm would open smaller, on foundation grants and gifts alone.
What the people who do the work cost
The Bureau of Labor Statistics reported a median of $159,670 for lawyers across all employers in May 2025 and $62,890 for paralegals and legal assistants. Cedar Bridge pays staff attorneys $82,000 to $98,000 and paralegals $58,000 to $60,000. The gap to the lawyer median is normal for legal aid, and it is the main hiring risk. The executive director’s $115,000 is modest for an organization with a $1.3 million budget in Year 3, and the board reviews it every year. The plan answers turnover with 3% annual pay raises and a retirement match.
The courthouse with several doors
Renters facing eviction in Multnomah County can already reach statewide legal aid programs, tenant-rights nonprofits, volunteer court-day clinics and private landlord-tenant lawyers. Eviction filing counts come from court records and change from year to year. The plan sizes its caseload to staff hours instead of to a count of filings, and it counts on those other organizations to take the cases it turns away.
Where Cedar Bridge is strong and exposed
| Helpful | Harmful | |
|---|---|---|
| Inside | Strengths: one practice area; a director who has run a court-day clinic; fee recovery under ORS 90.255; a volunteer bench | Weaknesses: no track record with the county or the IOLTA funder; half of revenue from one unawarded contract; thin reserve after Year 1 |
| Outside | Opportunities: more attorney positions under the contract; foundations that fund housing stability; law firms looking for pro bono matters | Threats: a county budget cut; late reimbursement; a larger organization bidding for the same contract; attorney turnover |
Who Walks Into Housing Court Alone
The client is a renter with a notice in hand, a court date within weeks and, usually, no lawyer. Many are working households that fell behind after a loss of hours or a medical bill. Others face a termination notice or a dispute over repairs or retaliation. Cedar Bridge's board sets income limits each year, and intake staff screen on income, household size and the type of case.
Funders are the second customer. The county wants cases handled at an agreed volume with clean reporting. Foundations want outcomes they can describe to their own boards. Law firms want pro bono work that suits their lawyers. Reports to funders use aggregate figures unless a client consents to more, because client information stays confidential.
How Cases and Gifts Arrive
Referral channels
Most clients arrive through tenant-rights groups, other legal aid programs, 211 referral lines and word of mouth among renters. The website explains the process in plain English and carries a call-back form. Intake staff return every inquiry within one business day.
The courthouse desk
On first-appearance days, a volunteer lawyer and a paralegal staff a desk. They give same-day advice under RPC 6.5, and the staff attorneys take the cases that need full representation. The desk accounts for 400 advice matters in Year 1 and 850 by Year 5.
Raising the money
The development manager starts in month 4 and manages three tracks: renewals and new foundation proposals, a law-firm sponsorship program, and monthly donors plus a year-end appeal. The outreach and fundraising budget is $24,000 in Year 1. The Oregon Law Foundation grant is applied for in Year 1 and expected from Year 2. The January foundation grant and the founding gifts are held through a fiscal sponsor until the IRS recognizes the firm, and donors are told that deductibility depends on that recognition.
How a Case Moves Through the Office
Intake to closed file
- A tenant calls or submits the web form, and intake screens for income and conflicts.
- A staff attorney reviews the notice or complaint and decides the level of help: advice, limited scope or full representation.
- The client signs an engagement letter that states the scope, what the firm will not do and that no outcome is promised.
- The attorney and paralegal prepare the answer, gather evidence and negotiate, or take the case to trial.
- The file closes with a recorded result and a client survey, and the paralegal reports aggregate figures to funders.
Caseload and capacity
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Full representation | 110 | 200 | 250 | 290 | 310 |
| Limited-scope help | 200 | 340 | 400 | 440 | 460 |
| Courthouse advice | 400 | 580 | 700 | 800 | 850 |
| Matters closed | 710 | 1,120 | 1,350 | 1,530 | 1,620 |
| Attorney full-time equivalents | 2.2 | 3.4 | 4.2 | 5.2 | 5.4 |
| Hours available (attorneys, paralegals, volunteers) | 5,148 | 8,218 | 10,046 | 11,640 | 12,090 |
| Hours needed | 3,920 | 6,856 | 8,440 | 9,680 | 10,300 |
| Use of available hours | 76% | 83% | 84% | 83% | 85% |
| Cost per full-representation case | $4,760 | $3,680 | $3,600 | $3,520 | $3,490 |
Full representation is planned at 24 hours, limited-scope help at 4 hours and courthouse advice at 1.2 hours. A staff attorney has 1,450 productive hours, the executive director gives 40% of his time to cases, each paralegal has 1,250 hours and each volunteer lawyer is counted at 44. Use of hours is lowest in Year 1 because the office starts empty and cases build through the first quarters. Cost per full-representation case divides all cash costs by case hours and multiplies by 24, so it carries a share of rent, insurance and fundraising. Revenue per matter closed is about $920 in Year 1 and $950 to $965 afterward. The model does not count volunteer hours as revenue.
Pro bono volunteers
The volunteer bench grows from 15 lawyers in Year 1 to 40 in Year 5. The Oregon State Bar's aspirational standard is 80 hours a year, and the plan counts 55% of that, 44 hours, so volunteers supply 13% to 15% of available hours. Volunteers handle courthouse advice and take limited-scope matters under a staff attorney's supervision. Cedar Bridge trains them, assigns a mentor and provides malpractice cover for their work with the firm. The insurer confirms the wording before launch.
Insurance and client funds
Insurance costs $28,000 in Year 1 and covers malpractice, directors and officers, general liability, cyber, workers' compensation and crime cover for client funds. The firm keeps a trust account for client money, and the bookkeeper reconciles it monthly. The board's finance committee reviews the reconciliation each quarter.
Premises and systems
Cedar Bridge rents 1,800 square feet in Portland and moves to about 2,100 square feet in Year 3, with $24,000 budgeted for fit-out, deposit and moving, covered by a one-time capital grant. A cloud case-management system tracks deadlines, hours and outcomes, and generates the county's reports. Software costs $20,000 in Year 1.
Who Runs It
Al Rand, executive director and supervising attorney
Al has twelve years in practice. He spent eight as a staff attorney at a legal aid program in Oregon and four directing a volunteer court-day clinic. He holds an active Oregon bar license, gives 40% of his time to cases and is paid $115,000.
The board
A board of seven sets the budget, approves every grant and contract, reviews the audit and sets the executive director's pay. Two seats are held by practicing lawyers, one by an accountant and one by a former tenant client.
Gaps and key-person risk
Al has not run a payroll of this size or written a government contract budget. The plan answers that with a part-time bookkeeper from month 3, an outside accountant who reviews the books each quarter and a lawyer on call for contract terms. If Al is out, the senior staff attorney, hired in month 27, becomes the deputy. A salary that sits low for the role raises the chance he leaves, and the board reviews it yearly. Until then a board member who is a lawyer supervises the staff attorneys.
Funding, Budget and Net Assets
The model covers five years: month by month for 2027, then one line per year. The sections run from funding to the figures behind the budget, then revenue, staffing, income and expenses, cash and net assets. Surplus comes last on purpose. A legal-aid firm is judged on what it delivers, and the surplus here is small by design.
Where the first $550,000 comes from
| Use of funds | Amount |
|---|---|
| Laptops, phones, scanners, court-day kit | $24,000 |
| Office fit-out: interview rooms, furniture, secure file room | $38,000 |
| Legal: incorporation, IRS exemption application, Oregon charity registration, policies | $16,000 |
| Trust-account set-up, registrations and case-management implementation | $14,000 |
| Launch: website, referral partners, first donor appeal | $12,000 |
| Operating reserve (reimbursement lag and the Year 1 deficit) | $446,000 |
| Total uses | $550,000 |
| Source of funds | Amount |
|---|---|
| Start-up grant (restricted to launch costs) | $104,000 |
| Founding donors: operating reserve (without donor restrictions) | $446,000 |
| Total sources | $550,000 |
Cedar Bridge opens with $550,000 of gifts and no debt. A $104,000 start-up grant is restricted to launch costs, and $446,000 comes from founding donors without restrictions on use. The launch costs are $104,000: equipment and fit-out of $62,000 are capitalized and $42,000 of legal work, registrations and launch outreach is expensed at opening. The $446,000 is the operating reserve. The model has no owners, so its rows map to nonprofit net assets as follows. The "Paid-in capital" row is opening net assets, the $550,000 of founding gifts. "Retained earnings" is the running total of surpluses and deficits, which a nonprofit reports as the change in net assets. The "Owner distributions" row is always zero, because a charity has no owners to pay. US nonprofit reporting splits net assets into those with and without donor restrictions (FASB ASU 2016-14), and this model does not split them. The $104,000 grant is the restricted part at opening and is released as launch costs are spent. The reserve and the giving line are without restrictions. Grants are counted when cash arrives, and the firm's accountant decides the accounting timing for each award. The model charges no income tax. The IRS decides recognition under section 501(c)(3), and that determination is still pending, which is why the first grant and the founding gifts are held through a fiscal sponsor until the letter arrives. Whether donors may deduct a gift depends on that recognition, and counsel confirms what donors are told. No line of credit is drawn in the model. The board is arranging a $100,000 revolving line as a back-stop for the county's payment cycle, and its cost is not modeled.
What the budget rests on
- The firm closes 710 matters in Year 1 and 1,620 in Year 5. A matter is one of three kinds: full representation (110 in Year 1, 310 in Year 5; planned at 24 attorney, paralegal and volunteer hours each), limited-scope help such as drafting an answer or coaching a tenant through a hearing (200 to 460; 4 hours each) and same-day advice at the courthouse desk (400 to 850; 1.2 hours each). The operating plan sets these out year by year against staff hours.
- Each staff attorney has 1,450 productive hours a year, the supervising attorney gives 40% of his time to cases, and each paralegal has 1,250. Volunteer lawyers are counted at 44 hours a year each, 55% of the Oregon State Bar's aspirational 80 hours, with 15 volunteers in Year 1 and 40 in Year 5. Hours needed are 76% of hours available in Year 1, which starts with an empty office, and 83% to 85% in later years. Full-representation load works out at 49 to 59 cases per attorney full-time equivalent.
- The county eviction-defense contract pays by reimbursing eligible costs, up to a ceiling, on a monthly invoice. The award is not yet made. Cedar Bridge has applied in a competitive solicitation, and the plan counts the contract from March 2027 on the terms it expects: a two-year term, renewable; termination for convenience on 30 days' notice; and payment 60 days after invoice. The actual terms come from the solicitation. The Year 1 reimbursement is $20,000 in March, rising to $36,000 a month by July, for $330,000. The ceiling is $584,000 in Year 2 and $815,000 by Year 5 as the contract funds more attorney positions. The contract is restricted to the program and supplies 50% to 55% of revenue every year. Direct case costs run at 6% of the contract.
- Foundation grants in Year 1 are $100,000 in January, $80,000 in July and $30,000 in October, counted in the month the cash arrives and restricted to the program. They rise from $270,000 in Year 2 to $340,000 in Year 5 as funders renew and one or two are added. Year 3 includes a one-time $24,000 capital grant for the office move. Foundations often pay in advance, so the 60-day receivables rule below is cautious for this line.
- Oregon Law Foundation IOLTA funding is zero in Year 1, because a new grantee has no track record. It is $40,000 in Year 2 and $60,000 by Year 5. Eligibility, amounts and timing are the Foundation's to set, and the plan treats the line as likely rather than promised.
- Court-awarded fees come from ORS 90.255, under which an Oregon court may award reasonable fees to the prevailing party in a residential tenancy case. The award is discretionary, and it runs both ways: a tenant who loses can face the landlord's fees. The plan counts an award in 20% of full-representation matters, which is the plan's own figure with no source behind it: 14 awards of about $1,000 in Year 1 (from June), 40 in Year 2 and 62 by Year 5, averaging $1,000 to $1,100. Engagement letters warn every client in writing of the fee exposure, and the director weighs it before a case goes to trial.
- Giving without restrictions is $100,000 in Year 1 and $255,000 in Year 5, from monthly donors, law-firm sponsorships and a year-end appeal that brings in 42% of the Year 1 total in November and December. The development manager joins in month 4. In Year 2 that salary and the outreach budget come to about $114,000. Set against $135,000 of giving alone that is 85 cents per dollar, but the role also writes the foundation and IOLTA proposals behind $310,000 more, so across the $445,000 of giving and grants it costs about 26 cents on the dollar.
- Payroll adds 27% to wages for payroll taxes, health cover, workers' compensation and a retirement match, and 15% for the part-time bookkeeper. The wages in the personnel table are launch rates, and annual pay raises of 3% are charged as a separate line from Year 2. Staff attorneys at $82,000 to $98,000 sit well below the $159,670 median the Bureau of Labor Statistics reports for all lawyers (May 2025), as is usual in legal aid, and paralegals at $58,000 to $60,000 sit just under the $62,890 median. The executive director's $115,000 is below what a firm of this size pays in the private sector, which is a retention risk the board reviews each year.
- Professional fees are $22,000 in Year 1 and $34,000 in Year 5. Year 1 includes $10,000 for an outside accountant's review of the books. Later years carry a financial review or audit if funders or the Oregon Department of Justice's Charitable Activities Section require one, a threshold the firm confirms with the Section. Insurance is $28,000 in Year 1 and $41,000 in Year 5, covering claims-made legal malpractice for staff and volunteer lawyers, directors and officers, general liability, cyber, workers' compensation and crime cover for client funds. The limits are the plan's own and are confirmed with a broker before the policy is bound.
- Rent is 1,800 square feet in Portland at about $31 a square foot a year, covering rent, service charges and property taxes ($55,800 in Year 1), then about 2,100 square feet from Year 3, with $24,000 in Year 3 for the move: fit-out, deposit and moving. Receivables average 60 days across all revenue, which matches the county's expected payment term and is slow for foundation grants. The model holds payables at 20 days.
- Costs per full-representation case, with every cash cost spread over case hours, are about $4,760 in Year 1, $3,680 in Year 2 and $3,490 by Year 5. Revenue per matter closed is about $920 in Year 1 and $950 to $965 later.
Who pays, and when
| Revenue stream | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| County eviction-defense contract (cost reimbursement, restricted) | $330,000 | $584,000 | $674,000 | $774,000 | $815,000 |
| Foundation program grants (restricted) | $210,000 | $270,000 | $324,000 | $325,000 | $340,000 |
| Oregon Law Foundation IOLTA grant (restricted) | $0 | $40,000 | $55,000 | $58,000 | $60,000 |
| Individual, law-firm and corporate giving (without restrictions) | $100,000 | $135,000 | $195,000 | $235,000 | $255,000 |
| Court-awarded attorney fees | $14,000 | $40,000 | $55,000 | $62,000 | $66,000 |
| Total revenue | $654,000 | $1,069,000 | $1,303,000 | $1,454,000 | $1,536,000 |
| Growth on prior year | – | 63% | 22% | 12% | 6% |
The county contract is the base and the largest exposure: it supplies 50% of revenue in Year 1 and 53% in Year 5. Foundation grants carry the launch year at 32% of revenue and fall to 22% by Year 5 as the contract and giving grow. Giving without restrictions pays for what no contract covers. Fees and the IOLTA grant are small and slow to build, so the plan does not lean on them early.
Month by month in Year 1
| Month | County eviction-defense contract (cost reimbursement, restricted) | Foundation program grants (restricted) | Oregon Law Foundation IOLTA grant (restricted) | Individual, law-firm and corporate giving (without restrictions) | Court-awarded attorney fees | Total revenue | EBITDA |
|---|---|---|---|---|---|---|---|
| Jan 2027 | $0 | $100,000 | $0 | $5,000 | $0 | $105,000 | $38,700 |
| Feb 2027 | $0 | $0 | $0 | $5,000 | $0 | $5,000 | ($58,272) |
| Mar 2027 | $20,000 | $0 | $0 | $6,000 | $0 | $26,000 | ($37,908) |
| Apr 2027 | $28,000 | $0 | $0 | $6,000 | $0 | $34,000 | ($30,150) |
| May 2027 | $32,000 | $0 | $0 | $6,000 | $0 | $38,000 | ($26,272) |
| Jun 2027 | $34,000 | $0 | $0 | $6,000 | $1,500 | $41,500 | ($22,878) |
| Jul 2027 | $36,000 | $80,000 | $0 | $5,000 | $1,500 | $122,500 | $55,670 |
| Aug 2027 | $36,000 | $0 | $0 | $5,000 | $2,000 | $43,000 | ($21,423) |
| Sep 2027 | $36,000 | $0 | $0 | $6,000 | $2,000 | $44,000 | ($20,453) |
| Oct 2027 | $36,000 | $30,000 | $0 | $8,000 | $2,500 | $76,500 | $11,063 |
| Nov 2027 | $36,000 | $0 | $0 | $16,000 | $2,500 | $54,500 | ($10,271) |
| Dec 2027 | $36,000 | $0 | $0 | $26,000 | $2,000 | $64,000 | ($1,059) |
The monthly view spreads costs evenly across Year 1, so payroll does not step up when the second staff attorney and the bookkeeper start in month 3 and the development manager in month 4, about $19,000 a month of extra payroll by month 4. It also applies no receivables timing. Read the monthly EBITDA as the timing of income only: it is positive in January, July and October, when the three foundation grants land, and negative in the other nine months. The model draws no conclusion about the lowest month. The reserve is sized from the full-year result instead: a $177,653 deficit after start-up costs, plus $107,507 held in receivables at year end.
Staffing and payroll
| Role | Annual wage | Starts | Year 1 end | Year 2 end | Year 3 end | Year 4 end | Year 5 end |
|---|---|---|---|---|---|---|---|
| Executive director and supervising attorney | $115,000 | Month 1 | 1 | 1 | 1 | 1 | 1 |
| Staff attorney A | $82,000 | Month 1 | 1 | 1 | 1 | 1 | 1 |
| Staff attorney B | $82,000 | Month 3 | 1 | 1 | 1 | 1 | 1 |
| Paralegal | $58,000 | Month 1 | 1 | 1 | 1 | 1 | 1 |
| Intake and office coordinator | $50,000 | Month 1 | 1 | 1 | 1 | 1 | 1 |
| Bookkeeper | $30,000 | Month 3 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 |
| Development manager | $68,000 | Month 4 | 1 | 1 | 1 | 1 | 1 |
| Staff attorney C | $84,000 | Month 13 | – | 1 | 1 | 1 | 1 |
| Second paralegal | $60,000 | Month 16 | – | 1 | 1 | 1 | 1 |
| Senior staff attorney | $96,000 | Month 27 | – | – | 1 | 1 | 1 |
| Second senior attorney | $98,000 | Month 40 | – | – | – | 1 | 1 |
| Total payroll incl. on-costs | $567,653 | $776,180 | $896,830 | $1,010,495 | $1,041,610 |
Six and a half full-time equivalents are on payroll at the end of Year 1: the executive director, two staff attorneys, a paralegal, the intake and office coordinator, the development manager and a half-time bookkeeper. The second staff attorney and the bookkeeper start in month 3, with the county contract, and the development manager in month 4. A third staff attorney follows in month 13 and a second paralegal in month 16, as the contract ceiling rises. A senior staff attorney joins in month 27 and a second senior attorney in month 40. Each hire follows the funding that pays for it. The executive director's $115,000 starts in month one and is already in the costs, so every surplus line is after that salary.
Income and expenses over five years
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Revenue | $654,000 | $1,069,000 | $1,303,000 | $1,454,000 | $1,536,000 |
| Direct case costs (interpreters, records, service of process, court reporters) | ($19,800) | ($32,364) | ($39,449) | ($44,020) | ($46,503) |
| Gross profit | $634,200 | $1,036,636 | $1,263,551 | $1,409,980 | $1,489,497 |
| Payroll incl. on-costs | ($567,653) | ($776,180) | ($896,830) | ($1,010,495) | ($1,041,610) |
| Rent | ($55,800) | ($57,500) | ($67,000) | ($69,000) | ($71,000) |
| Utilities | ($6,000) | ($6,200) | ($6,400) | ($6,600) | ($6,800) |
| Marketing | ($24,000) | ($28,000) | ($32,000) | ($34,000) | ($36,000) |
| Insurance | ($28,000) | ($32,000) | ($36,000) | ($39,000) | ($41,000) |
| Professional fees | ($22,000) | ($26,000) | ($30,000) | ($32,000) | ($34,000) |
| Software subscriptions | ($20,000) | ($24,000) | ($28,000) | ($30,000) | ($32,000) |
| Bar dues, CLE and license fees | ($9,000) | ($11,000) | ($14,000) | ($16,000) | ($17,500) |
| Volunteer training and pro bono coordination | ($8,000) | ($10,000) | ($11,000) | ($12,000) | ($12,500) |
| Phones, supplies, printing and postage | ($7,000) | ($8,000) | ($9,000) | ($9,500) | ($10,000) |
| Equipment replacement and new-hire kit | $0 | ($6,000) | ($5,000) | ($8,000) | ($5,000) |
| Office move: fit-out, deposit and moving (Year 3) | $0 | $0 | ($24,000) | $0 | $0 |
| Allowance for disallowed or unreimbursed costs | ($10,000) | ($12,000) | ($13,000) | ($14,000) | ($15,000) |
| Annual pay raises (3% a year) | $0 | ($23,285) | ($54,617) | ($93,700) | ($130,731) |
| EBITDA | ($123,253) | $16,471 | $36,704 | $35,685 | $36,356 |
| Depreciation | ($12,400) | ($12,400) | ($12,400) | ($12,400) | ($12,400) |
| Interest | $0 | $0 | $0 | $0 | $0 |
| Income tax | $0 | $0 | $0 | $0 | $0 |
| Net income before start-up costs | ($135,653) | $4,071 | $24,304 | $23,285 | $23,956 |
| Start-up costs expensed at opening (legal, registrations, launch outreach) | ($42,000) | $0 | $0 | $0 | $0 |
| Net income after start-up costs | ($177,653) | $4,071 | $24,304 | $23,285 | $23,956 |
Year 1 loses $135,653 before start-up costs and $177,653 after them, because the county contract starts in March while the full team is on payroll by month 4. Year 2 is the first surplus, $4,071, once the contract runs for a full year. Surpluses stay between 1.6% and 1.9% of revenue from Year 3, after the 3% pay raises and payroll at 73% to 76% of revenue. Those are thin margins, and a single missed grant erases them. The model charges no income tax.
Cash and the 60-day wait
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Cash from operations | ($271,675) | ($51,060) | ($1,373) | $11,113 | $23,013 |
| Equipment and fit-out | ($62,000) | $0 | $0 | $0 | $0 |
| Funding received | $550,000 | $0 | $0 | $0 | $0 |
| Loan principal repaid | $0 | $0 | $0 | $0 | $0 |
| Owner distributions | $0 | $0 | $0 | $0 | $0 |
| Net change in cash | $216,325 | ($51,060) | ($1,373) | $11,113 | $23,013 |
| Closing cash | $216,325 | $165,265 | $163,892 | $175,005 | $198,018 |
Cash is above zero at every year end. Year 1 closes at $216,325, about 3.3 months of cash spending, because the reserve has not yet been drawn down. After that the balance falls to $165,265 in Year 2, when receivables from the larger contract absorb cash, and then rises each year. From Year 2 it equals 1.5 to 1.9 months of spending. The board's own goal is three months, and the plan does not reach it by Year 5. Faster growth in giving without restrictions is the way to close that gap, and the line of credit covers the county's payment cycle in the meantime. If the firm closed, the Year 1 balance would fund about three months of wind-down: stop intake, transfer open matters with client consent, return client trust funds and pass remaining assets to another legal-aid nonprofit, as the articles require.
Balance sheet and net assets
| At year end | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| Cash | $216,325 | $165,265 | $163,892 | $175,005 | $198,018 |
| Accounts receivable | $107,507 | $175,726 | $214,192 | $239,014 | $252,493 |
| Equipment and fit-out (net) | $49,600 | $37,200 | $24,800 | $12,400 | $0 |
| Total assets | $373,432 | $378,191 | $402,883 | $426,419 | $450,511 |
| Accounts payable | $1,085 | $1,773 | $2,162 | $2,412 | $2,548 |
| Debt (none in this plan) | $0 | $0 | $0 | $0 | $0 |
| Paid-in capital | $550,000 | $550,000 | $550,000 | $550,000 | $550,000 |
| Retained earnings | ($177,653) | ($173,583) | ($149,278) | ($125,993) | ($102,037) |
| Total liabilities and equity | $373,432 | $378,191 | $402,883 | $426,419 | $450,511 |
Break-even and coverage
| Measure | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| EBITDA margin | -18.9% | 1.5% | 2.8% | 2.5% | 2.4% |
| Net margin (before start-up costs) | -20.7% | 0.4% | 1.9% | 1.6% | 1.6% |
| Payroll incl. pay raises as share of revenue | 87% | 75% | 73% | 76% | 76% |
| Revenue per full-time equivalent at year end | $100,615 | $125,765 | $137,158 | $138,476 | $146,286 |
| Average monthly revenue | $54,500 | $89,083 | $108,583 | $121,167 | $128,000 |
| Monthly revenue needed to cover operating costs | $65,092 | $87,668 | $105,429 | $118,100 | $124,876 |
| Debt service cover (EBITDA / interest + principal) | – | – | – | – | – |
The last two rows of the ratios table compare average monthly revenue with the revenue needed to cover operating costs. Year 1 averages $54,500 a month against $65,092 needed, which is a deficit. Year 2 averages $89,083 against $87,668, and the margin stays under $3,200 a month in every later year. There is no debt, so debt service cover does not apply. Revenue per full-time equivalent rises from $100,615 to $146,286 as the contract and grants spread across a larger team.
A 20% drop across every revenue line, and two harder tests
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Revenue | $523,200 | $855,200 | $1,042,400 | $1,163,200 | $1,228,800 |
| Net income before start-up costs | ($242,138) | ($19,468) | $45,778 | $59,087 | $88,409 |
| Net income after start-up costs | ($284,138) | ($19,468) | $45,778 | $59,087 | $88,409 |
| Closing cash | $131,124 | $70,031 | $97,747 | $149,577 | $239,711 |
The first test cuts every revenue line by 20% in every year: the contract, foundation grants, the IOLTA grant, giving and fee awards. The response: the bookkeeper starts two months later, the third staff attorney and the second paralegal are not hired, the senior staff attorney starts six months later, the second senior attorney is dropped, and the executive director takes a 10% pay cut. Fundraising spend is protected, since cutting it would deepen the shortfall. On those terms the firm ends every year with cash, at no less than $70,031 at the end of Year 2, which is about a month of spending, and returns a surplus from Year 3. Equity ends Year 1 at $265,862. Year 3 to 5 surpluses are above the base case because the hiring freeze saves more than the lost revenue costs, and the firm would be smaller and would close fewer matters. Without the response, Year 2 ends with negative cash. This case shows a smaller firm; it does not stress the concentration risk. The second test does. If the county contract starts in September instead of March, Year 1 revenue falls by $216,000 and the firm closes the year with $48,081 in cash. Delaying the second staff attorney and the bookkeeper to month 9 lifts that to $117,401. The third test is the worst case: losing half of the contract from Year 2 with no response leaves cash at negative $70,379 by the end of Year 2. The reserve cannot absorb a loss that size, and the board would cut positions, which the plan does not model.
Sources
Each link is the place to read the current version, since rules and rates change.
- Oregon State Bar Professional Liability Fund, Policy 3.150, Exemptions from PLF participation.
- Oregon State Bar, Oregon Rules of Professional Conduct (version effective September 3, 2026): RPC 1.15-1, and the repeal note on RPC 1.15-2.
- Oregon Law Foundation, Opening an IOLTA.
- Oregon State Bar, Pro bono program (80-hour aspirational standard; RPC 6.5 short-term limited services).
- ORS 90.255, attorney fees, on a legal-research site, a secondary source. The Oregon Legislature's own page could not be loaded when this plan was prepared.
- Bureau of Labor Statistics, Lawyers and Paralegals and legal assistants, Occupational Outlook Handbook, May 2025 wage data.
- Oregon Department of Justice, Charitable Activities Section.
- FASB ASU 2016-14, net asset classes for not-for-profit entities: Marcum LLP summary, a secondary source.
Create a plan as complete as this one
Pick the amount of help you want.
Do it yourself
$197 Toolkit, 12 months
Build your plan with the AI Wizard and every tool you need, at your own pace.
Start my plan →Done with you
$497 Toolkit Plus, 12 months
Our AI builds the plan with you, section by section, from your answers.
Want a person too? Upgrade to a consultation with an MBA graduate.
See Toolkit Plus →Done for you
From $1,997 written for you
We research and write the whole plan, and you review the finished draft.
See the writing service →That is the example. For your own business, the nonprofit law firm business plan template walks you through each section.