February 15, 2024 • 44 mins
The conversation turns to the definition of a successful law firm, strategic hiring, employee growth, and RJon's book Profit First for Lawyers.
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Episode Transcript
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(00:00):
While RJon was away.
Team RJon came to play.
Well the cat's out of the bag now, folks.
But we're still here bringing youour favorite, and most importantly,
actionable insights to RJon's newestbook, Profit First for Lawyers.
We're gonna help you accelerate your lawfirm's growth so that you can experience
more profit in every aspect of your life.
(00:21):
We're also going to be providing somebehind the scenes footage at what it's
really like to work with RJon Robins.
So, put your B.S.
aside for the next few minutesand put yourself, your family,
your firm, and your profit first.
Well, hey guys!
Welcome back to another episode ofthe Profit First For Lawyers podcast.
(00:44):
I'm your host, Karli, and todayI'm bringing you part two in
our bonus two-part series.
Now, if you have no idea what I'm talkingabout, go back and watch part one.
Where I announce that seasontwo of the Profit First For
Lawyers podcast is coming soon.
And I bring you this bonus contentfrom an interview that RJon did
on The Managing Partners Podcast.
Now this interview was so packed fullof great information, delivered only
(01:07):
in the way that RJon can, but it wassplit up into two highly profitable,
actionable, insightful episodes that willhelp your law firm be more profitable.
With no further ado, here's part two.
We're going to hear RJon talk about ourdefinition of a successful law firm,
the difference between an expense andan investment, and why trying to spend
(01:28):
less may actually be costing you more.
Lastly, RJon's going to talk abouthis book, Profit First for Lawyers.
and his hopes for you, thelistener and/or the reader.
Okay, let's get into it.
Let's roll that clip.
It's just how the world works.
You can't have a big impacton the world at small scale.
You want to have a bigimpact, you got to scale up.
(01:52):
Now you want to make big donations?
Help nonprofits?
You can't write big checksif you don't got no money.
You can't give a lot of people greatjobs and terrific career opportunities.
If you can't employ anyonebecause you're running a little
operation out of your basement.
That's another thing too.
So that's a big thing we do here.
We're prescribed to,we're always growing.
(02:15):
If you go work for a firm andthey're like, 'Okay, what's
my career look like here?'
'Uh, well, we're going tostay small and nimble.'
And, 'Well, where'sthe opportunity for me?
I want to be able to grow leadershipopportunities, travel, you know,
whatever it may be more money,security for my family.' I can't offer
(02:36):
a young person any of that stuff.
If I'm like, 'Yeah, we're not growing.
We don't scale here.
This is a mom and pop.' And then, 'Andthat's all we're going to keep it.'
I don't want to go work at that company.
Our 'Definition of a Successful LawFirm', and you probably heard this from
our members who come to work with you.
Our 'Definition of a Successful Law Firm'is a law firm that serves the owner.
(02:56):
In at least three ways, "HasTo Serve You Financially."
Means it has to give you enough netoperating income or total owner benefit
to live the way you want to live, not.
To let you get by, not so you can, youknow, not all lists of all the things
you can do without not, Hey, you know,I don't, I can live with just this,
you know, why live with just this?
(03:17):
If you're capable of living withmore, "Has To Serve You Financially."
Second criteria for a successfullaw firm, according to me and How
To MANAGE professionally is it"Has To Serve You Professionally."
Which means, it has to giveyou a platform to have a
(03:39):
big positive impact on the world, or atleast a big enough positive impact on
the world to satisfy you professionally.
And do it in a way that allows you towork with people you like working with
doing work that is meaningful to you.
And third, 'Definition ofa Successful Law Firm' is it
"Has To Serve You Personally."
(03:59):
Which means it has to runefficiently and predictably.
And well enough so you can stepaway for 30 days, at least 30 days
with emergency access only withconfidence that the business will
work for you even while you're gone.
So it "Has To Serve You Financially."
"Has To Serve You Personally."
"Has To Serve You Professionally."
(04:21):
And
one of the, one of the reasonswhy, How To MANAGE keeps growing.
And we've grown 10,000 percentin the last nine years.
We've been in 5,000 every singleyear for nine years in a row.
You know, look financially,I, my mortgage is paid off.
(04:43):
I have no debt.
I have, let's just say, I don'thave a financial need to keep
growing this business, and yetI keep growing this business.
Why do I do it?
I do it because number one.
I want to have a bigger impact onthe world and help more lawyers
build better law firms that helpthousands and thousands and thousands
(05:06):
of more clients and create jobs.
And I just like helping people growand reach their full potential.
That's my professional motivation.
And, and also I have to keep growingit because how else am I going to
attract and retain amazing superstars?
You don't attract and retainamazing superstars by saying,
(05:29):
'We're not going to grow.' 100%.
It's exactly what you just said.
I mean, they want to know what'sthe opportunity, what's next.
And you know, you don't have tohave like the greatest, biggest, most
elaborate ambitions in the world, butyou gotta be able to show a person an
opportunity that you're going somewhereif you want them to come with you.
(05:50):
And this is part of the, this is theirony, the paradox, if you will, of
these small law firms that are strugglingand then they struggle and they make
the wrong hiring decisions, right?
So instead of hiring a lawyerto replace themselves, they
hire lawyers to assist them.
And then they wonder why theycan never get away from the firm.
(06:12):
The first strategic hire that everysmall law firm owner listening
to this ought to make are peopleto replace yourself, right?
So if you can hire someone to help youfor, let's say, I'm just making this up.
$75,000 for a baby lawyer fora baby lawyer and $150,000.
(06:36):
Let's just say for a grown up lawyer, the$150,000 lawyer is going to be much more
profitable for you than the baby lawyer.
And you tell yourself 'Well I can'tafford the $150,000 a year lawyer.' You
can't afford the $75,000 baby lawyer.
You can only afford the$150,000 grownup lawyer.
(06:57):
But of course, if you don't have abusiness plan and you don't have any
financial controls and you don't know yourcost of goods sold and you don't have a
budget and you don't track your data andyou don't know your numbers and you don't
pay attention to how your business runs.
Well, then you don't see what'sblatantly obvious to the rest of us,
which is the $150,000 grownup is waymore profitable in the short term and
(07:23):
in the long term than the $75,000 baby.
And I can get into explaining allthe reasons why, if you want me to.
I think that's a good point, andyou're going to spend a lot of
your time training, and they'regoing to be shadowing you all
the time, and you're going to beless time to bill for yourself.
I 100 percent agree, and
Let's say Let's put some math to it.
(07:44):
$75,000 lawyer, right?
$75,000, times 1.2, gross itup to $90,000, with payroll
taxes, benefits, $90,000.
Divided by, let's say 46productive weeks in a year.
That's all you're reallygoing to get out of a person.
$1,956 is what it costsyou per week, per week.
(08:14):
Okay.
I did the math wrong.
$90,000 divided by 52 weeks is goingto cost you $1,730 per week, right?
$150,000 a year lawyer wouldobviously be twice that much.
It'd be $3,400 a week.
Except the difference is thatthe $150,000 lawyer is going
(08:36):
to be breaking even in 30 days.
You put together a good onboarding plan.
The first 30 days of any new employee'stime on the job, I don't want them doing
one single productive thing for your firm.
All I want you doing for thefirst 30 days Is investing,
(08:56):
investing, investing, investing,and setting them up for success.
So you can have a long termprofitable person in that role, right?
So let's say, uh, the $90,000person, $90,000 divided by 52 is, I'm
writing this down so I don't forget,$90,000 is $1,700 a week, and the
(09:21):
$150,000 person is $3,500 a week.
You with me?
Mm hmm.
Yeah.
So let's say you invest 4 weekson the $3,500 an hour, $150,000
a year, I'm sorry, $3,500 a week,$150,000 a year, grown up, self
sufficient, experienced lawyer.
You spend, you invest a monthtraining, training, training,
(09:45):
training, training, really trainingthem to be successful with you.
So $3,500 times 4, you got$14,000 invested in this person.
You with me?
But then they're up and running.
At 14, at $14,000 invested, boom,they're at least breaking even for
a month or two, and then they startmaking a profit for you in a month.
(10:09):
The $1,700 a week, quote unquote,less expensive, $75,000 half price.
Scratch and dent baby wet behind the ears.
You have to train themhow to do everything.
And they come back to youand ask you a questions and
questions, a million questions.
It might take you three months to getthat person to break even if you're lucky.
(10:33):
Right?
So $1,700 a week times 12weeks, three months is $20,000.
So it costs you less and youget to break even sooner.
And probably $150,000 a year lawyer.
And then on top of that, the $150,000a year lawyer, you're probably
(10:58):
going to have a higher profitmargin on, and they're going to ask
you less questions in the future.
And if something were to happen toyou, they can take over and you can
give them a bunch of stuff directly offof your caseload and let them do it.
And then you can focus on workingon the business instead of doing
all the legal work yourself.
(11:21):
I'm sorry?
That's a really good tip right there.
I watch these people, stack associatesall day long and not have any
other senior attorney all the time.
And then it also, what, what ends uphappening is you know, one out of three,
one out of three baby lawyers who'snever practiced law before, or they
(11:42):
barely practiced law before they they'reworking for you for three months, six
months, nine months in your practice area.
And then they'd say, 'You know what?
I don't really like this practice area asmuch as I thought I was going to.' Right?
'It looked really interesting fromthe outside, but I've never done it
before.' 'And it turns out I don'treally like doing bankruptcy.' 'I
don't really like doing divorce.' 'Idon't really like doing immigration.'
(12:02):
'I don't really like doingintellectual.' Whatever it is.
Right?
And they need to follow their bliss.
They need to follow their career.
They need to do what's right for them.
And what's right for them is to leave.
And so you have to start all over again.
And you just invested, you wastedpotentially, uh, $40,000, $50,000.
(12:25):
The person who's been practicing for,you know, for a while, they know what
it's like to be a family law attorney.
They know what it's liketo be an M&A attorney.
They know what it'slike to be a litigator.
They know what that's like.
They're not going to wake upand say, 'I changed my mind.'
(12:47):
'I don't want to do this anymore.'
They've already gone through that.
They've been through that.
They've already, they've already leftthree other practice areas behind.
Anyway, this could bea whole other podcast.
And I'd be happy to get, listen, I cantalk about any of this stuff all day long.
I love talking about this stuff.
No, there's so many different topicsand, we can go down a ton of rabbit
(13:08):
holes and I've, I appreciate that,
but that's why everyone shouldgo to www.HowToMANAGE.com and
download the free app and.
Yes, if you're if you're on uswith video, LinkedIn, YouTube,
Facebook, right down below it'swww.HowToMANAGE.com . If you're in
your car, driving to work, whatever.
Pull over!
Pull over!
Go to www.HowToMANAGE.com
(13:29):
Don't get hurt!
I
know a lot of, uh, uh,personal injury attorneys.
So, no, RJon, I appreciate everythingyou've, you've come on here to share.
I love the passion and, and that's whatwe, that's what I'm looking for, right?
That's what we need on this show.
What these attorneys that Ispeak with often that just aren't
in a good spot, need to hear.
And so I appreciate it.
(13:50):
Are we winding down here?
What's that?
Are we winding down?
If you want to wind down, yougot, I wanted to make sure.
Share.
No, I'm happy all day long.
I just wanna make sure that I havea chance to talk about my book.
No, no.
That's exactly what I was about to do.
I was like, let's, I wanted toshare about your book, so not
winding down, but I wanna makesure that, um, we can flip over to
that.
RJon's got a new book, Profit First for
(14:14):
Lawyers.
And I'm going to put up the,the book here real quick too.
Just, I know he's holding it up.
It's on your screen, butProfit First for Lawyers.
And you can go to this QR code, too.
Right there.
I don't know how to do it.
So, just real quick.
So, I'll let RJon kind of talkabout his, book real quick.
(14:35):
It's the best bookthat's ever been written!
It is.
It's even better than my last book.
This is now the best book ever.
No, really, if you have already readProfit First, this book will go deeper
into a whole bunch of things that Mikewasn't able to get into because he
(14:57):
wasn't writing a book just for lawyers.
It'll give you a lot ofcontext for a lot of things.
It'll help you understand why.
I'll just read through the tableof contents to give you an idea.
Yeah.
And I'll add, so I ama Profit First company.
We, we read Mike's book, ProfitFirst, and implemented it
(15:20):
about four or five years ago.
And so we were very deep into it.
And then of course RJon and histeam was nice enough to send me.
A copy before his book published,that me and my business partner read.
And yes, it's, it's very much alignedwith how a law firm operates and
dives into those different things.
(15:41):
So,
Yeah, so, I mean, if you've alreadyread Profit First, I think this
book will be really fun for you.
It'll definitely be profitable for you.
You'll learn new ways toimplement Profit First to make
your law firm more profitable.
It'll also give you a lot of ammunitionthat you can use when your bookkeeper,
your accountant, your partners.
You know, fight you on Profit Firstbecause anyone, I mean, everyone who's
(16:02):
doing They fight us on it, right?
The table of contents is, "ThisBook Will Make Your Law Firm
More Profitable.", And it will.
Two, "You Are Not Alone."
Number three, "Our Definition OfSuccess of a Successful Law Firm
(And Why It Should Be Your DefinitionOf A Successful Law Firm Too!)",
(16:23):
and why you should hold everyonein your law firm to this standard.
Four.
But Profit-, "But Financial ProfitIsn't The Only Measure of Success."
And I kind of gave a little hintabout that financial profit,
personal profit, professional profit.
You got to make sure your lawfirm is doing all three for you.
Chapter 5, "The 7 Main Partsof Every Successful Law Firm."
(16:45):
Chapter Six.
"What Is Profit?"
What does profit actually mean?
Because if you ask two different lawyers,how profitable their law firm is, you're
liable to get at least three differentanswers and it'll drive you insane.
But once you understand what profitreally is and how to measure it and
what Total Owner Benefits means.
It'll give you a lot of clarity andgive you a lot of confidence and
(17:08):
you'll have more productive, healthierconversations with other lawyers.
Number seven, "Understanding WhyYour C.P.A Doesn't Absolutely
Love Putting Your Profits First."
"Understanding Why Your C.P.A DoesNot Love Putting Your Profits First."
Will make you a lot more profitableand make your life a lot better.
(17:32):
I promise you why number eight,"Why Generally Accepted Accounting
Principles, Why GAAP Isn't For You."
If you own your own law firm.
GAAP is not for us.
GAAP is, if you get nothing else fromthis podcast, GAAP is not for us.
Chapter 9 is defining an, very,very important accounting term.
(17:57):
99.
9 percent of C.P.As.
don't know.
They literally don't know"Total Owner Benefits."
You've got to live on.
You got to know what "Total OwnerBenefits" are, or you're going
to be wasting money on taxes.
You, your profits are going tobe much diminished and it'll
drive you a little bit crazy.
Chapter 10, is understandingthe difference between "Static
(18:22):
Overhead and Dynamic Overhead."
And when Mike was at my househaving dinner, when we first had the
idea of doing something like this.
We talked about static overheadversus dynamic overhead, and I don't
think he would mind me saying this.
He was like, basically like, 'Damn!
I should have put that in my book."
so, but you know, healready wrote the book.
(18:45):
Chapter 11, "What a Small Law FirmBookkeeper (Who Doesn't Suck) Should
Be Doing For You.", a law firmbookkeeper who doesn't suck should
be doing things for you and, andlay it all out for you in chapter
11 so you can measure and evaluate.
Whether your bookkeeper is doing agood job for you or not, because a bad
(19:06):
bookkeeper or a bookkeeper who you likethem, they're wonderful, they're nice,
they're terrific, they're friendly, theysend you a Christmas ham every year,
blah, blah, blah, blah, blah, but they'reflushing your life down the fucking
toilet, that's not a good bookkeeper.
Uh, you gotta make sure- a bad bookkeeper,and by good and bad, I don't mean
that they do the books accurately.
(19:28):
Doing books accurately is table stakes.
A bookkeeper.
Yeah.
Yeah.
That's like the
minimum requirement,
minimum, minimum, minimum requirement.
But you talk to lawyers like,'Oh, you like your bookkeeper?'
'Yeah.
They do my books accurately!' Yeah.
And I mean, that, that's the minimum.
(19:48):
It must be
honest.
Most bookkeepers started aslike an admin assistant that
just becomes the bookkeeper.
No, I'm talking about good bookkeepers.
I'm talking about, there are bookkeepersout there who are good bookkeepers.
They are, they do accurate bookkeeping.
They were trained as bookkeepers,they work for a C.P.A, they work
for a C.P.A by the way who thinksGAAP is gospel and it's not.
(20:09):
They're trained and they dogood bookkeeping, they're
professional bookkeepers, andthey do accurate bookkeeping.
But they still suck because they'resucking all the profits out of your
firm and you're thanking them for it.
Chapter 12 are, we, we walk youthrough, I walk you through "The
Key Financial Reports That EverySmall Law Firm Bookkeeper Who
(20:32):
Does Not Suck Ought to Insist OnWalking You Through Every Month."
If your bookkeeper isn'tinsisting, if your bookkeeper
isn't a big pain in your ass.
And insisting on walking you throughthese key financial reports every month.
They suck and they're doing you adisservice and you are leaving probably
(20:53):
tens of thousands of dollars of profit onthe table, possibly even every month or
every quarter, or at the very least everyyear, depending on the size of your firm.
And then we go into "A Much DeeperDive into the Drivers of Profit Than
Most Struggling Law Firm Owners AreEver Willing to Take" seriously.
(21:17):
That's the book.
And if you have already read ProfitFirst, or better yet, listened to
the audio, the audio is great.
Mike records it himself.
If you've already listened to ProfitFirst, or read Profit First, this
will add a lot of color and dimensionto your, to your experience.
(21:41):
If you've never read Profit First, Thisbook is meant to be a rallying cry.
This meant this book is meant toconvince you to read Profit First
and to implement Profit First.
And, anyway, I hope everyone reads it.
Yeah, I would say myself.
I didn't hire a ghost writer.
I actually sat down and wrotethe whole book in nine days.
(22:03):
Well, I, I think I got a copy of yoursbefore it was even like published, so I
got like some, like a rougher copy, which.
It's great.
So, I will say this, everyone listening.
Profit First.
Get RJon's book, version of it,if you're a law firm, of course.
But
you have to
Read the book with theintention to start applying it.
(22:25):
And it's not easy.
Our bank pushed back on us.
Our C.P.A pushed back on us.
Our bookkeeper has had to constantlyevolve and to get the reports
and things that we want to do,but don't let it overwhelm you.
You need to start.
And we started early and I'm glad we did.
And.
We get profits and we makeprofits and we, it's, it'll,
(22:50):
it'll change your life for sure.
So I would say,
Can I put a little math to this?
Yeah.
All right.
Do it up.
I'm taking out my calculator here.
Let's say your law firm runs at, let'sjust say 25 percent Total Owner Benefit.
I'm just using that as a number tomake them, to make the math example,
(23:10):
easy 25 percent Total Owner Benefit.
You with me?
Mm hmm.
And let's say that you're billing by thehour, which by the way, I really wish
you would do value based billing, butlet's say you're billing by the hour.
Um, and let's say youbill at, give me a number.
What's, what's thenumber that your average.
(23:31):
Array client is billing per hour.
$300.
We'll say $300 an hour, great.
And let's say your law firm's going togross, let's just say a half, $500,000.
Right.
Um, $500,000.
Divided by $300 an hour is 1,666hours that you have to bill.
(24:03):
Yeah.
If you do Profit First andyou can increase your profits
by let's just say 10%.
Right.
If you can increase your profits by 10%.
So a $500,000 firm at a 25 percent TotalOwner Benefit margin, $500,000 times
(24:28):
.25 means the owner is going to have$125, 000 in Total Owner Benefits.
You with me?
Mm hmm.
Yeah.
If you can increase your profits by just10%, you could reduce your billables.
(24:48):
By 166 hours a year, the 166hours you don't have to work.
Put another way, 1,666 1,666 hourstimes $300 an hour is $500,000 a year.
(25:12):
1,666 hours divided by 12 months.
Is 138 hours a month, right?
If you could get the same Total OwnerBenefit out of a $450,000 law firm, take
(25:34):
the same $125,000 Total Owner Benefit,except instead of having to gross
$500,000, you only have to gross $450,000.
$450,000 divided by $300 an hour meansyou only have to bill 1500 hours a year.
(25:56):
That's 166 hours a yearthat you don't have to bill.
166 hours you don't have to bill dividedby 46 productive weeks in a year.
That's three hours a weekyou don't have to bill.
(26:16):
That's three hours a weekyou don't have to bill.
What could you do withthose three hours a week?
Could you use those three hoursa week to do better marketing,
to bring in more revenue?
Could you use those three hoursa week to do more training?
So you have a better staff.
Do you want to take those threehours a week and put them together?
(26:37):
And have 14 hours once a month.
That means once a month,you could take two days off.
You could take two days offonce a month and have the same
Total Owner Benefit income.
If you could just increase yourprofits by 10 percent by using
something like Profit First.
(26:59):
Another thing to think about is youcould take off one whole week, a
quarter, one full week per quarter.
You could take off a whole weekper quarter to spend time with your
family, to work on your health, workon your business, do whatever you want.
This makes a difference tothe quality of your life.
(27:21):
This makes a difference to the qualityof your relationships with your family.
This makes a difference to your health.
This makes a difference to, it makesso many differences in so many ways.
It seems so simple.
It really makes a differenceto take Profits First.
Yeah, if you've never listened toit or read the book, Yeah, I think
(27:43):
most people see it and they'relike, 'Oh, that sounds unethical.
profits first?
Profits before employees.
Profits before family.' You got to readit because then you'll understand it,
You know, when you're going to- when yougo on a commercial airline, you know,
they, you know, they tell you what to do.
If there's an emergency, when theairbag drops, the oxygen mask,
(28:06):
Put it on yourself first.
Why?
So you can help others.
Because if you can't helpyourself, you can't help anyone.
Wouldn't it be great to take aweek off to rest and recharge
and be your best for your clientsand be your best for your family?
Profit First can help you do that.
Yeah.
Amazing.
I'm just trying to sell a book.
I'm just trying to, I'm just trying tosell a book and convince you to read
(28:28):
the book and take the book seriously.
What you do with your life.
That's up to you.
Well, you can also tune in,just put it on the screen.
It's kind of over top us, but, they'relike, Ooh, Profit First For Lawyers.
So RJon actually has a podcastof Profit First For Lawyers.
If you just Google "ProfitFirst For Lawyers".
You'll, you'll see his book,you'll see the podcast.
(28:49):
It all comes up on Google.
I want to say, Kevin, we havealready sold 26,000 books.
It just went, it launchedin August, I think, right?
July, August.
Uh, not very long ago,
July, it launched in July.
(29:11):
This is September.
We've sold 28,000 books.
I have waiting lists after waiting listsafter waiting lists for all different
products and services that we sell.
This isn't me like, 'Oh, I got toget another client.' I told you that
a big part of the motivation why Ihave grown How To MANAGE a Small Law
(29:34):
Firm as, as much as I've grown it,you know, this year, last year we
did 29 and a half million dollars.
This year we'll do 34, 35 million dollars.
Uh, we'll be probably close to 45,50 million next year in revenue.
I don't need to make moremoney from this thing.
I want to have a biggerimpact on the legal industry.
(29:58):
And I want to help more people.
And, um, part of the reason that I agreedto take nine days out of my life to
write this book, because Mike asked meto write this book for lawyers and I did.
Mike's awesome.
Ron's pretty cool too.
What's that?
And Ron's pretty cool too.
(30:20):
Mike's partner.
Who runs Profit First Professionals.
Yeah.
Mike's hilarious.
So I said his name, right?
And he was very excited aboutthat one time on a podcast.
Yes.
Michalowicz.
All right.
What else would you ask me?
What else would youraudience like to know?
I'm happy to sit here all day talking.
I love this stuff.
(30:41):
No, I mean, I, this is, this is what I do.
I talk about business and I getto have attorneys on here and
some are very successful, right.
And they've done it right.
And they've run a good business andI bring them on here to share what
they've done and what they've learned.
And a lot of times theyare a How To MANAGE member.
And they, they.
You've had some of our members as guests?
Oh, yeah.
Absolutely.
(31:02):
Can you think of anyoneoff the top of your head?
Well, I had Jimmy Grant on recently.
Not sure who else.
I don't know.
I've had 300 attorneys.
I've heard a few, but I'm drawing a blank.
The lights are shining on my face.
The microphone's in my mouth.
I've had a lot of good guests, soit's hard to put a finger on it.
(31:26):
It's
it's easy to forget a lot of stuff whenyou got the lights in your face and
they can microphone in your mouth, so...
I got my big light right here, too.
Yeah, exactly.
No, but I think Jimmy Grant'sthe last one that I know of that
was a How To MANAGE member Butto your point to your point.
Everyone on here should be looking to growtheir firms expand it even if the money
(31:48):
is not the driving factor But you stillhave those other two goals the personal
and professional and I was gonna add tothis too It's not only your as an owner
personal, or professional, personal,and financial goals, but you know, we
have that for each of our employees.
What are their professional,personal and financial goals?
And how are we helpingthem meet those goals?
(32:11):
So take that to your staff as well.
Like, hey, senior attorney orassociate attorney or admin.
It doesn't matter.
How about receptionist,paralegal, secretary?
How can we help you achieveyour financial, personal
and professional goals?
100%.
And, and whatever it may be.
And sometimes what I've foundwith some of my employees, they
(32:32):
don't even have that mindset andthey don't even know what to say.
Like, 'Oh, I don't really have any goals.'And you're like, 'Okay, let's sit down.
Let's talk.
Like you, we got to work on this.'Like, 'What do you want to do?
''There's gotta be something you're passionate about that you'd like to
do outside of this office.' Right.
And so we'll, we'll digit out of them slowly.
Like you gotta have some ambition.
(32:53):
We got to figure something out.
And they're like, 'Well,I've always wanted to run a
marathon in wherever.' Yeah.
We might be able to say, 'Allright, well, you're going, we
got you a ticket and you're off.'
And you can take your time.
You're referring to a few books thatI love, because we do the same thing.
I mean, this, this, every, every oneof our employees at How To MANAGE, we
(33:15):
have, we help them create what wecall a "Business Contribution Plan."
And, you know, we've got our businessplan that's got our plans for the future.
And so we help them create a"Business Contribution Plan", which is
basically a personal career life plan.
And we merge it together.
Like this is how it fitsinto our business plan.
(33:38):
And that is great because then we know,okay, you know what, we're going to
help you achieve your financial goals,your personal goals, your professional
goals, whatever, whatever, whatever.
And we map out that.
Okay.
36 months, you're gonna haveto leave working for us to go
off in this other direction.
But we can get you there and you're gonnaget the most amazing performance outta
(34:01):
that person, for that period of timeuntil it's time to go your separate ways.
Yeah.
And then they leave on, andthen they leave on great terms.
And then they help you find theirreplacement and then they help
you on board the replacement.
And then when you've got questionsafter they're gone, they're happy
to take your call and help you out.
And then what's really cool is theyoften will send you other employees
(34:26):
or other candidates that they run into.
And then your recruiting becomes easier.
And then when you're recruiting candidatesand you talk about the fact that this
is something that you do for them,that this is part of the culture of
your business, the wrong people don'tcare and the right people love it.
(34:46):
100%.
And they might call back andsay, 'Hey, can I come back?'
Yeah, they do.
The place they go mightnot have this in place.
Probably a good
chance.
It doesn't.
Well, yeah, but the thing is, ifyou're doing your job as an employer,
you're helping your employee make.
The career move, you'recounseling them, you're coaching
them, you're advising them.
You don't just let thempick a new job on their own.
(35:08):
You say, 'Look, let us help you figureout if this is the right job for you.'
I had a, I had a, one of our, one of ourpeople from our accounting department
recently who was, he needed to grow.
He needed to leave our...he needed toleave working for How To MANAGE a Small
Law Firm to continue to grow his career.
Because at that time, there justwasn't anywhere else for him to go.
(35:30):
If you want to stick around for twoor three years, there's some place for
you to go, but you really shouldn'tstick around for two or three years.
You're ready to go to the next level.
You just don't have an opportunityin our organization right now.
So you let us help you figure outwhat your next move is going to be.
And I mean, I coachedhim, I counseled him.
We, we sat down and helped him evaluatethree different options, three different
(35:53):
opportunities that he had and helpedhim pick the right opportunity.
And I actually sat down, I was actuallysitting with the owner of that law firm
that he ultimately went to go work for,and he's been promoted twice since then.
The point I'm making, you got to helppeople get to where they want to go.
(36:14):
That that's really how you buildand sustain a successful business.
And I personally think it's good life.
Yeah.
And you can't, you
can't just be stuck on the factthat they can't leave here.
They can't leave me, you know,they got to stay here forever.
And then God forbid, you'rerunning a firm that's not growing
and scaling and has no processes,and then you're just, you're doing
a huge disservice to that person.
(36:35):
You know, what kind of business,put things in place to prevent
people from being able to leave.
We talked about restaurants.
We talked about hotels...
Law firms?
Prisons.
Oh.
Prisons!
Prisons are designed to preventpeople from being able to leave.
(36:58):
And that's what you
possibly built.
Right?
Yeah, I mean, you know, anyway,that's not a good place to try
to recruit superstars into.
No.
You gotta, you gotta build something.
And this goes back to the processes andthe systems and the procedures, because
if you've got processes and systems andprocedures for recruiting, for onboarding,
(37:19):
for training, and if you can put areally good person into a system and get
amazing performance out of them, you'renot afraid of someone outgrowing you.
It's actually an amazing thing forrecruiting when you've got a culture
where everyone knows that people aregoing someplace and doing something.
I've lost a few, uh, goodemployees to entrepreneurship.
(37:39):
And when they came in the door asan intern, we knew if we don't keep
up with this person and give themenough opportunity fast enough,
they're, they're not going to be here.
We just, we could tell, we could feel it.
And now, now when we bring someoneon like that, we're like, we, they
cannot be like a low level person.
They have to have a path.
Uh, as if everyone has to.
(37:59):
But...
I challenge, I wanna challenge youto just think about the mindset
that you just demonstrated there.
Sorry to challenge you on a mindsetthing, live on your podcast . That's fine.
You said 'We've lost a few employees.'I say we've graduated a few employees.
(38:21):
All right.
I love it.
I appreciate that.
And I wasn't saying it in a bad
way.
I know you weren't, but the wordsmake a difference, not just for
you, but for your whole team.
We literally think of ourselves as like,we graduate people out of working with us.
Look, we graduate our members.
(38:44):
A law firm comes into How To MANAGEa Small Law Firm with zero dollars in
revenue or they come in with $250,000 inrevenue or they come in with $500,000 in
revenue or they come in with a milliondollars in revenue or sometimes they come
in with a few million dollars in revenue.
And our goal is to graduate themup and out of How To MANAGE a Small
Law Firm so that they can bring in afull time in-house professional legal
(39:09):
administrator so that they can bringin-house a full time, controller or CFO.
And so they can bring in afull time in-house CEO and, and
then they outgrow our services.
And that's like some of ourbest...I just got a text last night
from one of our former members.
And she literally just, I mean,I get texts like this all the
(39:29):
time from our former members.
And she was just saying, that they'reon a 10 million dollar run rate.
And she was like atthe, what did she say?
About to break $10 million on the year.
And here I'm covering the name.
(39:54):
Like, I can't make this stuff up.
Right?
Wow, that's awesome.
I love it when people outgrow us.
That means we're doing the right thing.
We're helping people grow.
Why else do people wantto do business with you?
That's a good testament right there.
Why would they be texting you?
They obviously felt How To MANAGEis a big part of why they got there.
(40:15):
I get texts like that all the time.
It's really very, very, I love itwhen people, I mean, I still send
texts and celebrations to my mentorsand that's the right kind of mentor,
that's the right kind of coach,
that's the right kind of advisor,that's the right kind of employer
you should be looking for.
Someone who wants to help yougrow and isn't afraid of you
(40:38):
outgrowing their business model.
We also have Scaling Up Your Law Firm.
Scaling Up Your Law Firm willtake you from $1 million to $10
million, $10 million to $25 million,$25 million to $100 million.
And just like Mike Michalowicz withProfit First came to us and asked us
to write Profit First For Lawyers.
(41:02):
Yeah.
Vern.
Yeah.
Vern, came and asked, you know, theScaling Up organization, asked us to
create a program called Scaling UpYour Law Firm, which we just launched.
There's a waiting list for it.
I'm not trying to sell it.
I'm just making the point.
You want people to grow.
(41:23):
You gotta have, yougotta help people grow.
100%.
And I think, you know, you comeinto the realization that, you're
gonna have good folks come in toyour team and they might be gone.
You might not want to see them go,but it's the right thing for them.
It's gotta be the right move for them.
And so we have a lot of teammembers that have left and I
think that's the thing too.
Like I try to call my team,team, not employees or staff.
(41:45):
But it's, there's so many thatI'm still in contact with.
That say, 'Hey, I saw youguys are hiring for this.
I know someone.' And thenthat's a good referral, right?
I know that if you're gonna, they'regonna send me someone that they think
would be a good fit for our organization.
So it's, it's a great way to go.
That's a good tool.
Speaking of
(42:06):
which I actually have tointerview a candidate who was
referred by one of our employees.
And I got to do that 10 minutes from now.
So I got to jump.
Yeah.
When you get ready for that, we've spentplenty of time on here and I appreciate
all the passion and, and bringing thefire and that's what we want on here.
You've got to get ProfitFirst For Lawyers..
(42:27):
Again, it changed our business.
And you got to check it outand they got the podcast too.
So, RJon's actually alwayslooking for questions too, and
he'll answer those on the podcast.
So go in and interact with that and he'llanswer his questions if you have them.
And then, if you're listening rightnow and you have other questions,
things that I can ask RJon or maybehave him back on, let me know.
(42:51):
Like, the hardest thingsyou can come up with.
We can answer them for you.
So, RJon, thank you so much.
I
appreciate it.
You're welcome.
Thank you for having me.
And, and again, I, I would not haveaccepted the invitation if I hadn't
been hearing good things from my teamabout their work with your team and
(43:11):
the results you get with our members.
And of course, I also listen toyour podcast and it's pretty cool.
Thank you.
Well, I appreciate that.
Well, I'm going to stop recording here.
You stay on with me for justa second if you have it.
Everyone have a great day go out therescale your law firm listen to RJon.
Check out How To MANAGE, checkout his book and his podcast.
(43:31):
He's gonna help you one way or another.
So, uh, just do that and have agreat day and we'll see you on
the next episode.
Bye.
And that's what we've got for you today.
Folks, if you have questionsfor RJon, send those my way at
Podcast@ProfitFirstForLawyers.com.
And be sure to check out our earlierepisodes if you want to get more great
(43:51):
content that will help you accelerateyour law firm's growth and give you
more insights that will help youlive the life that you want to live.
And make sure you hit those like andsubscribe buttons so that you know
the moment new episodes are released.
We will see you in season two.
Thank you for joining us on anotherepisode of Profit First For Lawyers.
(44:11):
If you're enjoying what you're hearing,tell a friend and buy your copy of
the book at ProfitFirstForLawyers.com.
Your future self will thank you forit and we will see you next time.
While RJon was away.
Team RJon came to play.
Well the cat's out of the bag now, folks.
But we're still here bringing youour favorite, and most importantly,
actionable insights to RJon's newestbook, Profit First for Lawyers.
We're gonna help you accelerate your lawfirm's growth so that you can experience
more profit in every aspect of your life.
(00:21):
We're also going to be providing somebehind the scenes footage at what it's
really like to work with RJon Robins.
So, put your B.S.
aside for the next few minutesand put yourself, your family,
your firm, and your profit first.
Well, hey guys!
Welcome back to another episode ofthe Profit First For Lawyers podcast.
(00:44):
I'm your host, Karli, and todayI'm bringing you part two in
our bonus two-part series.
Now, if you have no idea what I'm talkingabout, go back and watch part one.
Where I announce that seasontwo of the Profit First For
Lawyers podcast is coming soon.
And I bring you this bonus contentfrom an interview that RJon did
on The Managing Partners Podcast.
Now this interview was so packed fullof great information, delivered only
(01:07):
in the way that RJon can, but it wassplit up into two highly profitable,
actionable, insightful episodes that willhelp your law firm be more profitable.
With no further ado, here's part two.
We're going to hear RJon talk about ourdefinition of a successful law firm,
the difference between an expense andan investment, and why trying to spend
(01:28):
less may actually be costing you more.
Lastly, RJon's going to talk abouthis book, Profit First for Lawyers.
and his hopes for you, thelistener and/or the reader.
Okay, let's get into it.
Let's roll that clip.
It's just how the world works.
You can't have a big impacton the world at small scale.
You want to have a bigimpact, you got to scale up.
(01:52):
Now you want to make big donations?
Help nonprofits?
You can't write big checksif you don't got no money.
You can't give a lot of people greatjobs and terrific career opportunities.
If you can't employ anyonebecause you're running a little
operation out of your basement.
That's another thing too.
So that's a big thing we do here.
We're prescribed to,we're always growing.
(02:15):
If you go work for a firm andthey're like, 'Okay, what's
my career look like here?'
'Uh, well, we're going tostay small and nimble.'
And, 'Well, where'sthe opportunity for me?
I want to be able to grow leadershipopportunities, travel, you know,
whatever it may be more money,security for my family.' I can't offer
(02:36):
a young person any of that stuff.
If I'm like, 'Yeah, we're not growing.
We don't scale here.
This is a mom and pop.' And then, 'Andthat's all we're going to keep it.'
I don't want to go work at that company.
Our 'Definition of a Successful LawFirm', and you probably heard this from
our members who come to work with you.
Our 'Definition of a Successful Law Firm'is a law firm that serves the owner.
(02:56):
In at least three ways, "HasTo Serve You Financially."
Means it has to give you enough netoperating income or total owner benefit
to live the way you want to live, not.
To let you get by, not so you can, youknow, not all lists of all the things
you can do without not, Hey, you know,I don't, I can live with just this,
you know, why live with just this?
(03:17):
If you're capable of living withmore, "Has To Serve You Financially."
Second criteria for a successfullaw firm, according to me and How
To MANAGE professionally is it"Has To Serve You Professionally."
Which means, it has to giveyou a platform to have a
(03:39):
big positive impact on the world, or atleast a big enough positive impact on
the world to satisfy you professionally.
And do it in a way that allows you towork with people you like working with
doing work that is meaningful to you.
And third, 'Definition ofa Successful Law Firm' is it
"Has To Serve You Personally."
(03:59):
Which means it has to runefficiently and predictably.
And well enough so you can stepaway for 30 days, at least 30 days
with emergency access only withconfidence that the business will
work for you even while you're gone.
So it "Has To Serve You Financially."
"Has To Serve You Personally."
"Has To Serve You Professionally."
(04:21):
And
one of the, one of the reasonswhy, How To MANAGE keeps growing.
And we've grown 10,000 percentin the last nine years.
We've been in 5,000 every singleyear for nine years in a row.
You know, look financially,I, my mortgage is paid off.
(04:43):
I have no debt.
I have, let's just say, I don'thave a financial need to keep
growing this business, and yetI keep growing this business.
Why do I do it?
I do it because number one.
I want to have a bigger impact onthe world and help more lawyers
build better law firms that helpthousands and thousands and thousands
(05:06):
of more clients and create jobs.
And I just like helping people growand reach their full potential.
That's my professional motivation.
And, and also I have to keep growingit because how else am I going to
attract and retain amazing superstars?
You don't attract and retainamazing superstars by saying,
(05:29):
'We're not going to grow.' 100%.
It's exactly what you just said.
I mean, they want to know what'sthe opportunity, what's next.
And you know, you don't have tohave like the greatest, biggest, most
elaborate ambitions in the world, butyou gotta be able to show a person an
opportunity that you're going somewhereif you want them to come with you.
(05:50):
And this is part of the, this is theirony, the paradox, if you will, of
these small law firms that are strugglingand then they struggle and they make
the wrong hiring decisions, right?
So instead of hiring a lawyerto replace themselves, they
hire lawyers to assist them.
And then they wonder why theycan never get away from the firm.
(06:12):
The first strategic hire that everysmall law firm owner listening
to this ought to make are peopleto replace yourself, right?
So if you can hire someone to help youfor, let's say, I'm just making this up.
$75,000 for a baby lawyer fora baby lawyer and $150,000.
(06:36):
Let's just say for a grown up lawyer, the$150,000 lawyer is going to be much more
profitable for you than the baby lawyer.
And you tell yourself 'Well I can'tafford the $150,000 a year lawyer.' You
can't afford the $75,000 baby lawyer.
You can only afford the$150,000 grownup lawyer.
(06:57):
But of course, if you don't have abusiness plan and you don't have any
financial controls and you don't know yourcost of goods sold and you don't have a
budget and you don't track your data andyou don't know your numbers and you don't
pay attention to how your business runs.
Well, then you don't see what'sblatantly obvious to the rest of us,
which is the $150,000 grownup is waymore profitable in the short term and
(07:23):
in the long term than the $75,000 baby.
And I can get into explaining allthe reasons why, if you want me to.
I think that's a good point, andyou're going to spend a lot of
your time training, and they'regoing to be shadowing you all
the time, and you're going to beless time to bill for yourself.
I 100 percent agree, and
Let's say Let's put some math to it.
(07:44):
$75,000 lawyer, right?
$75,000, times 1.2, gross itup to $90,000, with payroll
taxes, benefits, $90,000.
Divided by, let's say 46productive weeks in a year.
That's all you're reallygoing to get out of a person.
$1,956 is what it costsyou per week, per week.
(08:14):
Okay.
I did the math wrong.
$90,000 divided by 52 weeks is goingto cost you $1,730 per week, right?
$150,000 a year lawyer wouldobviously be twice that much.
It'd be $3,400 a week.
Except the difference is thatthe $150,000 lawyer is going
(08:36):
to be breaking even in 30 days.
You put together a good onboarding plan.
The first 30 days of any new employee'stime on the job, I don't want them doing
one single productive thing for your firm.
All I want you doing for thefirst 30 days Is investing,
(08:56):
investing, investing, investing,and setting them up for success.
So you can have a long termprofitable person in that role, right?
So let's say, uh, the $90,000person, $90,000 divided by 52 is, I'm
writing this down so I don't forget,$90,000 is $1,700 a week, and the
(09:21):
$150,000 person is $3,500 a week.
You with me?
Mm hmm.
Yeah.
So let's say you invest 4 weekson the $3,500 an hour, $150,000
a year, I'm sorry, $3,500 a week,$150,000 a year, grown up, self
sufficient, experienced lawyer.
You spend, you invest a monthtraining, training, training,
(09:45):
training, training, really trainingthem to be successful with you.
So $3,500 times 4, you got$14,000 invested in this person.
You with me?
But then they're up and running.
At 14, at $14,000 invested, boom,they're at least breaking even for
a month or two, and then they startmaking a profit for you in a month.
(10:09):
The $1,700 a week, quote unquote,less expensive, $75,000 half price.
Scratch and dent baby wet behind the ears.
You have to train themhow to do everything.
And they come back to youand ask you a questions and
questions, a million questions.
It might take you three months to getthat person to break even if you're lucky.
(10:33):
Right?
So $1,700 a week times 12weeks, three months is $20,000.
So it costs you less and youget to break even sooner.
And probably $150,000 a year lawyer.
And then on top of that, the $150,000a year lawyer, you're probably
(10:58):
going to have a higher profitmargin on, and they're going to ask
you less questions in the future.
And if something were to happen toyou, they can take over and you can
give them a bunch of stuff directly offof your caseload and let them do it.
And then you can focus on workingon the business instead of doing
all the legal work yourself.
(11:21):
I'm sorry?
That's a really good tip right there.
I watch these people, stack associatesall day long and not have any
other senior attorney all the time.
And then it also, what, what ends uphappening is you know, one out of three,
one out of three baby lawyers who'snever practiced law before, or they
(11:42):
barely practiced law before they they'reworking for you for three months, six
months, nine months in your practice area.
And then they'd say, 'You know what?
I don't really like this practice area asmuch as I thought I was going to.' Right?
'It looked really interesting fromthe outside, but I've never done it
before.' 'And it turns out I don'treally like doing bankruptcy.' 'I
don't really like doing divorce.' 'Idon't really like doing immigration.'
(12:02):
'I don't really like doingintellectual.' Whatever it is.
Right?
And they need to follow their bliss.
They need to follow their career.
They need to do what's right for them.
And what's right for them is to leave.
And so you have to start all over again.
And you just invested, you wastedpotentially, uh, $40,000, $50,000.
(12:25):
The person who's been practicing for,you know, for a while, they know what
it's like to be a family law attorney.
They know what it's liketo be an M&A attorney.
They know what it'slike to be a litigator.
They know what that's like.
They're not going to wake upand say, 'I changed my mind.'
(12:47):
'I don't want to do this anymore.'
They've already gone through that.
They've been through that.
They've already, they've already leftthree other practice areas behind.
Anyway, this could bea whole other podcast.
And I'd be happy to get, listen, I cantalk about any of this stuff all day long.
I love talking about this stuff.
No, there's so many different topicsand, we can go down a ton of rabbit
(13:08):
holes and I've, I appreciate that,
but that's why everyone shouldgo to www.HowToMANAGE.com and
download the free app and.
Yes, if you're if you're on uswith video, LinkedIn, YouTube,
Facebook, right down below it'swww.HowToMANAGE.com . If you're in
your car, driving to work, whatever.
Pull over!
Pull over!
Go to www.HowToMANAGE.com
(13:29):
Don't get hurt!
I
know a lot of, uh, uh,personal injury attorneys.
So, no, RJon, I appreciate everythingyou've, you've come on here to share.
I love the passion and, and that's whatwe, that's what I'm looking for, right?
That's what we need on this show.
What these attorneys that Ispeak with often that just aren't
in a good spot, need to hear.
And so I appreciate it.
(13:50):
Are we winding down here?
What's that?
Are we winding down?
If you want to wind down, yougot, I wanted to make sure.
Share.
No, I'm happy all day long.
I just wanna make sure that I havea chance to talk about my book.
No, no.
That's exactly what I was about to do.
I was like, let's, I wanted toshare about your book, so not
winding down, but I wanna makesure that, um, we can flip over to
that.
RJon's got a new book, Profit First for
(14:14):
Lawyers.
And I'm going to put up the,the book here real quick too.
Just, I know he's holding it up.
It's on your screen, butProfit First for Lawyers.
And you can go to this QR code, too.
Right there.
I don't know how to do it.
So, just real quick.
So, I'll let RJon kind of talkabout his, book real quick.
(14:35):
It's the best bookthat's ever been written!
It is.
It's even better than my last book.
This is now the best book ever.
No, really, if you have already readProfit First, this book will go deeper
into a whole bunch of things that Mikewasn't able to get into because he
(14:57):
wasn't writing a book just for lawyers.
It'll give you a lot ofcontext for a lot of things.
It'll help you understand why.
I'll just read through the tableof contents to give you an idea.
Yeah.
And I'll add, so I ama Profit First company.
We, we read Mike's book, ProfitFirst, and implemented it
(15:20):
about four or five years ago.
And so we were very deep into it.
And then of course RJon and histeam was nice enough to send me.
A copy before his book published,that me and my business partner read.
And yes, it's, it's very much alignedwith how a law firm operates and
dives into those different things.
(15:41):
So,
Yeah, so, I mean, if you've alreadyread Profit First, I think this
book will be really fun for you.
It'll definitely be profitable for you.
You'll learn new ways toimplement Profit First to make
your law firm more profitable.
It'll also give you a lot of ammunitionthat you can use when your bookkeeper,
your accountant, your partners.
You know, fight you on Profit Firstbecause anyone, I mean, everyone who's
(16:02):
doing They fight us on it, right?
The table of contents is, "ThisBook Will Make Your Law Firm
More Profitable.", And it will.
Two, "You Are Not Alone."
Number three, "Our Definition OfSuccess of a Successful Law Firm
(And Why It Should Be Your DefinitionOf A Successful Law Firm Too!)",
(16:23):
and why you should hold everyonein your law firm to this standard.
Four.
But Profit-, "But Financial ProfitIsn't The Only Measure of Success."
And I kind of gave a little hintabout that financial profit,
personal profit, professional profit.
You got to make sure your lawfirm is doing all three for you.
Chapter 5, "The 7 Main Partsof Every Successful Law Firm."
(16:45):
Chapter Six.
"What Is Profit?"
What does profit actually mean?
Because if you ask two different lawyers,how profitable their law firm is, you're
liable to get at least three differentanswers and it'll drive you insane.
But once you understand what profitreally is and how to measure it and
what Total Owner Benefits means.
It'll give you a lot of clarity andgive you a lot of confidence and
(17:08):
you'll have more productive, healthierconversations with other lawyers.
Number seven, "Understanding WhyYour C.P.A Doesn't Absolutely
Love Putting Your Profits First."
"Understanding Why Your C.P.A DoesNot Love Putting Your Profits First."
Will make you a lot more profitableand make your life a lot better.
(17:32):
I promise you why number eight,"Why Generally Accepted Accounting
Principles, Why GAAP Isn't For You."
If you own your own law firm.
GAAP is not for us.
GAAP is, if you get nothing else fromthis podcast, GAAP is not for us.
Chapter 9 is defining an, very,very important accounting term.
(17:57):
99.
9 percent of C.P.As.
don't know.
They literally don't know"Total Owner Benefits."
You've got to live on.
You got to know what "Total OwnerBenefits" are, or you're going
to be wasting money on taxes.
You, your profits are going tobe much diminished and it'll
drive you a little bit crazy.
Chapter 10, is understandingthe difference between "Static
(18:22):
Overhead and Dynamic Overhead."
And when Mike was at my househaving dinner, when we first had the
idea of doing something like this.
We talked about static overheadversus dynamic overhead, and I don't
think he would mind me saying this.
He was like, basically like, 'Damn!
I should have put that in my book."
so, but you know, healready wrote the book.
(18:45):
Chapter 11, "What a Small Law FirmBookkeeper (Who Doesn't Suck) Should
Be Doing For You.", a law firmbookkeeper who doesn't suck should
be doing things for you and, andlay it all out for you in chapter
11 so you can measure and evaluate.
Whether your bookkeeper is doing agood job for you or not, because a bad
(19:06):
bookkeeper or a bookkeeper who you likethem, they're wonderful, they're nice,
they're terrific, they're friendly, theysend you a Christmas ham every year,
blah, blah, blah, blah, blah, but they'reflushing your life down the fucking
toilet, that's not a good bookkeeper.
Uh, you gotta make sure- a bad bookkeeper,and by good and bad, I don't mean
that they do the books accurately.
(19:28):
Doing books accurately is table stakes.
A bookkeeper.
Yeah.
Yeah.
That's like the
minimum requirement,
minimum, minimum, minimum requirement.
But you talk to lawyers like,'Oh, you like your bookkeeper?'
'Yeah.
They do my books accurately!' Yeah.
And I mean, that, that's the minimum.
(19:48):
It must be
honest.
Most bookkeepers started aslike an admin assistant that
just becomes the bookkeeper.
No, I'm talking about good bookkeepers.
I'm talking about, there are bookkeepersout there who are good bookkeepers.
They are, they do accurate bookkeeping.
They were trained as bookkeepers,they work for a C.P.A, they work
for a C.P.A by the way who thinksGAAP is gospel and it's not.
(20:09):
They're trained and they dogood bookkeeping, they're
professional bookkeepers, andthey do accurate bookkeeping.
But they still suck because they'resucking all the profits out of your
firm and you're thanking them for it.
Chapter 12 are, we, we walk youthrough, I walk you through "The
Key Financial Reports That EverySmall Law Firm Bookkeeper Who
(20:32):
Does Not Suck Ought to Insist OnWalking You Through Every Month."
If your bookkeeper isn'tinsisting, if your bookkeeper
isn't a big pain in your ass.
And insisting on walking you throughthese key financial reports every month.
They suck and they're doing you adisservice and you are leaving probably
(20:53):
tens of thousands of dollars of profit onthe table, possibly even every month or
every quarter, or at the very least everyyear, depending on the size of your firm.
And then we go into "A Much DeeperDive into the Drivers of Profit Than
Most Struggling Law Firm Owners AreEver Willing to Take" seriously.
(21:17):
That's the book.
And if you have already read ProfitFirst, or better yet, listened to
the audio, the audio is great.
Mike records it himself.
If you've already listened to ProfitFirst, or read Profit First, this
will add a lot of color and dimensionto your, to your experience.
(21:41):
If you've never read Profit First, Thisbook is meant to be a rallying cry.
This meant this book is meant toconvince you to read Profit First
and to implement Profit First.
And, anyway, I hope everyone reads it.
Yeah, I would say myself.
I didn't hire a ghost writer.
I actually sat down and wrotethe whole book in nine days.
(22:03):
Well, I, I think I got a copy of yoursbefore it was even like published, so I
got like some, like a rougher copy, which.
It's great.
So, I will say this, everyone listening.
Profit First.
Get RJon's book, version of it,if you're a law firm, of course.
But
you have to
Read the book with theintention to start applying it.
(22:25):
And it's not easy.
Our bank pushed back on us.
Our C.P.A pushed back on us.
Our bookkeeper has had to constantlyevolve and to get the reports
and things that we want to do,but don't let it overwhelm you.
You need to start.
And we started early and I'm glad we did.
And.
We get profits and we makeprofits and we, it's, it'll,
(22:50):
it'll change your life for sure.
So I would say,
Can I put a little math to this?
Yeah.
All right.
Do it up.
I'm taking out my calculator here.
Let's say your law firm runs at, let'sjust say 25 percent Total Owner Benefit.
I'm just using that as a number tomake them, to make the math example,
(23:10):
easy 25 percent Total Owner Benefit.
You with me?
Mm hmm.
And let's say that you're billing by thehour, which by the way, I really wish
you would do value based billing, butlet's say you're billing by the hour.
Um, and let's say youbill at, give me a number.
What's, what's thenumber that your average.
(23:31):
Array client is billing per hour.
$300.
We'll say $300 an hour, great.
And let's say your law firm's going togross, let's just say a half, $500,000.
Right.
Um, $500,000.
Divided by $300 an hour is 1,666hours that you have to bill.
(24:03):
Yeah.
If you do Profit First andyou can increase your profits
by let's just say 10%.
Right.
If you can increase your profits by 10%.
So a $500,000 firm at a 25 percent TotalOwner Benefit margin, $500,000 times
(24:28):
.25 means the owner is going to have$125, 000 in Total Owner Benefits.
You with me?
Mm hmm.
Yeah.
If you can increase your profits by just10%, you could reduce your billables.
(24:48):
By 166 hours a year, the 166hours you don't have to work.
Put another way, 1,666 1,666 hourstimes $300 an hour is $500,000 a year.
(25:12):
1,666 hours divided by 12 months.
Is 138 hours a month, right?
If you could get the same Total OwnerBenefit out of a $450,000 law firm, take
(25:34):
the same $125,000 Total Owner Benefit,except instead of having to gross
$500,000, you only have to gross $450,000.
$450,000 divided by $300 an hour meansyou only have to bill 1500 hours a year.
(25:56):
That's 166 hours a yearthat you don't have to bill.
166 hours you don't have to bill dividedby 46 productive weeks in a year.
That's three hours a weekyou don't have to bill.
(26:16):
That's three hours a weekyou don't have to bill.
What could you do withthose three hours a week?
Could you use those three hoursa week to do better marketing,
to bring in more revenue?
Could you use those three hoursa week to do more training?
So you have a better staff.
Do you want to take those threehours a week and put them together?
(26:37):
And have 14 hours once a month.
That means once a month,you could take two days off.
You could take two days offonce a month and have the same
Total Owner Benefit income.
If you could just increase yourprofits by 10 percent by using
something like Profit First.
(26:59):
Another thing to think about is youcould take off one whole week, a
quarter, one full week per quarter.
You could take off a whole weekper quarter to spend time with your
family, to work on your health, workon your business, do whatever you want.
This makes a difference tothe quality of your life.
(27:21):
This makes a difference to the qualityof your relationships with your family.
This makes a difference to your health.
This makes a difference to, it makesso many differences in so many ways.
It seems so simple.
It really makes a differenceto take Profits First.
Yeah, if you've never listened toit or read the book, Yeah, I think
(27:43):
most people see it and they'relike, 'Oh, that sounds unethical.
profits first?
Profits before employees.
Profits before family.' You got to readit because then you'll understand it,
You know, when you're going to- when yougo on a commercial airline, you know,
they, you know, they tell you what to do.
If there's an emergency, when theairbag drops, the oxygen mask,
(28:06):
Put it on yourself first.
Why?
So you can help others.
Because if you can't helpyourself, you can't help anyone.
Wouldn't it be great to take aweek off to rest and recharge
and be your best for your clientsand be your best for your family?
Profit First can help you do that.
Yeah.
Amazing.
I'm just trying to sell a book.
I'm just trying to, I'm just trying tosell a book and convince you to read
(28:28):
the book and take the book seriously.
What you do with your life.
That's up to you.
Well, you can also tune in,just put it on the screen.
It's kind of over top us, but, they'relike, Ooh, Profit First For Lawyers.
So RJon actually has a podcastof Profit First For Lawyers.
If you just Google "ProfitFirst For Lawyers".
You'll, you'll see his book,you'll see the podcast.
(28:49):
It all comes up on Google.
I want to say, Kevin, we havealready sold 26,000 books.
It just went, it launchedin August, I think, right?
July, August.
Uh, not very long ago,
July, it launched in July.
(29:11):
This is September.
We've sold 28,000 books.
I have waiting lists after waiting listsafter waiting lists for all different
products and services that we sell.
This isn't me like, 'Oh, I got toget another client.' I told you that
a big part of the motivation why Ihave grown How To MANAGE a Small Law
(29:34):
Firm as, as much as I've grown it,you know, this year, last year we
did 29 and a half million dollars.
This year we'll do 34, 35 million dollars.
Uh, we'll be probably close to 45,50 million next year in revenue.
I don't need to make moremoney from this thing.
I want to have a biggerimpact on the legal industry.
(29:58):
And I want to help more people.
And, um, part of the reason that I agreedto take nine days out of my life to
write this book, because Mike asked meto write this book for lawyers and I did.
Mike's awesome.
Ron's pretty cool too.
What's that?
And Ron's pretty cool too.
(30:20):
Mike's partner.
Who runs Profit First Professionals.
Yeah.
Mike's hilarious.
So I said his name, right?
And he was very excited aboutthat one time on a podcast.
Yes.
Michalowicz.
All right.
What else would you ask me?
What else would youraudience like to know?
I'm happy to sit here all day talking.
I love this stuff.
(30:41):
No, I mean, I, this is, this is what I do.
I talk about business and I getto have attorneys on here and
some are very successful, right.
And they've done it right.
And they've run a good business andI bring them on here to share what
they've done and what they've learned.
And a lot of times theyare a How To MANAGE member.
And they, they.
You've had some of our members as guests?
Oh, yeah.
Absolutely.
(31:02):
Can you think of anyoneoff the top of your head?
Well, I had Jimmy Grant on recently.
Not sure who else.
I don't know.
I've had 300 attorneys.
I've heard a few, but I'm drawing a blank.
The lights are shining on my face.
The microphone's in my mouth.
I've had a lot of good guests, soit's hard to put a finger on it.
(31:26):
It's
it's easy to forget a lot of stuff whenyou got the lights in your face and
they can microphone in your mouth, so...
I got my big light right here, too.
Yeah, exactly.
No, but I think Jimmy Grant'sthe last one that I know of that
was a How To MANAGE member Butto your point to your point.
Everyone on here should be looking to growtheir firms expand it even if the money
(31:48):
is not the driving factor But you stillhave those other two goals the personal
and professional and I was gonna add tothis too It's not only your as an owner
personal, or professional, personal,and financial goals, but you know, we
have that for each of our employees.
What are their professional,personal and financial goals?
And how are we helpingthem meet those goals?
(32:11):
So take that to your staff as well.
Like, hey, senior attorney orassociate attorney or admin.
It doesn't matter.
How about receptionist,paralegal, secretary?
How can we help you achieveyour financial, personal
and professional goals?
100%.
And, and whatever it may be.
And sometimes what I've foundwith some of my employees, they
(32:32):
don't even have that mindset andthey don't even know what to say.
Like, 'Oh, I don't really have any goals.'And you're like, 'Okay, let's sit down.
Let's talk.
Like you, we got to work on this.'Like, 'What do you want to do?
''There's gotta be something you're passionate about that you'd like to
do outside of this office.' Right.
And so we'll, we'll digit out of them slowly.
Like you gotta have some ambition.
(32:53):
We got to figure something out.
And they're like, 'Well,I've always wanted to run a
marathon in wherever.' Yeah.
We might be able to say, 'Allright, well, you're going, we
got you a ticket and you're off.'
And you can take your time.
You're referring to a few books thatI love, because we do the same thing.
I mean, this, this, every, every oneof our employees at How To MANAGE, we
(33:15):
have, we help them create what wecall a "Business Contribution Plan."
And, you know, we've got our businessplan that's got our plans for the future.
And so we help them create a"Business Contribution Plan", which is
basically a personal career life plan.
And we merge it together.
Like this is how it fitsinto our business plan.
(33:38):
And that is great because then we know,okay, you know what, we're going to
help you achieve your financial goals,your personal goals, your professional
goals, whatever, whatever, whatever.
And we map out that.
Okay.
36 months, you're gonna haveto leave working for us to go
off in this other direction.
But we can get you there and you're gonnaget the most amazing performance outta
(34:01):
that person, for that period of timeuntil it's time to go your separate ways.
Yeah.
And then they leave on, andthen they leave on great terms.
And then they help you find theirreplacement and then they help
you on board the replacement.
And then when you've got questionsafter they're gone, they're happy
to take your call and help you out.
And then what's really cool is theyoften will send you other employees
(34:26):
or other candidates that they run into.
And then your recruiting becomes easier.
And then when you're recruiting candidatesand you talk about the fact that this
is something that you do for them,that this is part of the culture of
your business, the wrong people don'tcare and the right people love it.
(34:46):
100%.
And they might call back andsay, 'Hey, can I come back?'
Yeah, they do.
The place they go mightnot have this in place.
Probably a good
chance.
It doesn't.
Well, yeah, but the thing is, ifyou're doing your job as an employer,
you're helping your employee make.
The career move, you'recounseling them, you're coaching
them, you're advising them.
You don't just let thempick a new job on their own.
(35:08):
You say, 'Look, let us help you figureout if this is the right job for you.'
I had a, I had a, one of our, one of ourpeople from our accounting department
recently who was, he needed to grow.
He needed to leave our...he needed toleave working for How To MANAGE a Small
Law Firm to continue to grow his career.
Because at that time, there justwasn't anywhere else for him to go.
(35:30):
If you want to stick around for twoor three years, there's some place for
you to go, but you really shouldn'tstick around for two or three years.
You're ready to go to the next level.
You just don't have an opportunityin our organization right now.
So you let us help you figure outwhat your next move is going to be.
And I mean, I coachedhim, I counseled him.
We, we sat down and helped him evaluatethree different options, three different
(35:53):
opportunities that he had and helpedhim pick the right opportunity.
And I actually sat down, I was actuallysitting with the owner of that law firm
that he ultimately went to go work for,and he's been promoted twice since then.
The point I'm making, you got to helppeople get to where they want to go.
(36:14):
That that's really how you buildand sustain a successful business.
And I personally think it's good life.
Yeah.
And you can't, you
can't just be stuck on the factthat they can't leave here.
They can't leave me, you know,they got to stay here forever.
And then God forbid, you'rerunning a firm that's not growing
and scaling and has no processes,and then you're just, you're doing
a huge disservice to that person.
(36:35):
You know, what kind of business,put things in place to prevent
people from being able to leave.
We talked about restaurants.
We talked about hotels...
Law firms?
Prisons.
Oh.
Prisons!
Prisons are designed to preventpeople from being able to leave.
(36:58):
And that's what you
possibly built.
Right?
Yeah, I mean, you know, anyway,that's not a good place to try
to recruit superstars into.
No.
You gotta, you gotta build something.
And this goes back to the processes andthe systems and the procedures, because
if you've got processes and systems andprocedures for recruiting, for onboarding,
(37:19):
for training, and if you can put areally good person into a system and get
amazing performance out of them, you'renot afraid of someone outgrowing you.
It's actually an amazing thing forrecruiting when you've got a culture
where everyone knows that people aregoing someplace and doing something.
I've lost a few, uh, goodemployees to entrepreneurship.
(37:39):
And when they came in the door asan intern, we knew if we don't keep
up with this person and give themenough opportunity fast enough,
they're, they're not going to be here.
We just, we could tell, we could feel it.
And now, now when we bring someoneon like that, we're like, we, they
cannot be like a low level person.
They have to have a path.
Uh, as if everyone has to.
(37:59):
But...
I challenge, I wanna challenge youto just think about the mindset
that you just demonstrated there.
Sorry to challenge you on a mindsetthing, live on your podcast . That's fine.
You said 'We've lost a few employees.'I say we've graduated a few employees.
(38:21):
All right.
I love it.
I appreciate that.
And I wasn't saying it in a bad
way.
I know you weren't, but the wordsmake a difference, not just for
you, but for your whole team.
We literally think of ourselves as like,we graduate people out of working with us.
Look, we graduate our members.
(38:44):
A law firm comes into How To MANAGEa Small Law Firm with zero dollars in
revenue or they come in with $250,000 inrevenue or they come in with $500,000 in
revenue or they come in with a milliondollars in revenue or sometimes they come
in with a few million dollars in revenue.
And our goal is to graduate themup and out of How To MANAGE a Small
Law Firm so that they can bring in afull time in-house professional legal
(39:09):
administrator so that they can bringin-house a full time, controller or CFO.
And so they can bring in afull time in-house CEO and, and
then they outgrow our services.
And that's like some of ourbest...I just got a text last night
from one of our former members.
And she literally just, I mean,I get texts like this all the
(39:29):
time from our former members.
And she was just saying, that they'reon a 10 million dollar run rate.
And she was like atthe, what did she say?
About to break $10 million on the year.
And here I'm covering the name.
(39:54):
Like, I can't make this stuff up.
Right?
Wow, that's awesome.
I love it when people outgrow us.
That means we're doing the right thing.
We're helping people grow.
Why else do people wantto do business with you?
That's a good testament right there.
Why would they be texting you?
They obviously felt How To MANAGEis a big part of why they got there.
(40:15):
I get texts like that all the time.
It's really very, very, I love itwhen people, I mean, I still send
texts and celebrations to my mentorsand that's the right kind of mentor,
that's the right kind of coach,
that's the right kind of advisor,that's the right kind of employer
you should be looking for.
Someone who wants to help yougrow and isn't afraid of you
(40:38):
outgrowing their business model.
We also have Scaling Up Your Law Firm.
Scaling Up Your Law Firm willtake you from $1 million to $10
million, $10 million to $25 million,$25 million to $100 million.
And just like Mike Michalowicz withProfit First came to us and asked us
to write Profit First For Lawyers.
(41:02):
Yeah.
Vern.
Yeah.
Vern, came and asked, you know, theScaling Up organization, asked us to
create a program called Scaling UpYour Law Firm, which we just launched.
There's a waiting list for it.
I'm not trying to sell it.
I'm just making the point.
You want people to grow.
(41:23):
You gotta have, yougotta help people grow.
100%.
And I think, you know, you comeinto the realization that, you're
gonna have good folks come in toyour team and they might be gone.
You might not want to see them go,but it's the right thing for them.
It's gotta be the right move for them.
And so we have a lot of teammembers that have left and I
think that's the thing too.
Like I try to call my team,team, not employees or staff.
(41:45):
But it's, there's so many thatI'm still in contact with.
That say, 'Hey, I saw youguys are hiring for this.
I know someone.' And thenthat's a good referral, right?
I know that if you're gonna, they'regonna send me someone that they think
would be a good fit for our organization.
So it's, it's a great way to go.
That's a good tool.
Speaking of
(42:06):
which I actually have tointerview a candidate who was
referred by one of our employees.
And I got to do that 10 minutes from now.
So I got to jump.
Yeah.
When you get ready for that, we've spentplenty of time on here and I appreciate
all the passion and, and bringing thefire and that's what we want on here.
You've got to get ProfitFirst For Lawyers..
(42:27):
Again, it changed our business.
And you got to check it outand they got the podcast too.
So, RJon's actually alwayslooking for questions too, and
he'll answer those on the podcast.
So go in and interact with that and he'llanswer his questions if you have them.
And then, if you're listening rightnow and you have other questions,
things that I can ask RJon or maybehave him back on, let me know.
(42:51):
Like, the hardest thingsyou can come up with.
We can answer them for you.
So, RJon, thank you so much.
I
appreciate it.
You're welcome.
Thank you for having me.
And, and again, I, I would not haveaccepted the invitation if I hadn't
been hearing good things from my teamabout their work with your team and
(43:11):
the results you get with our members.
And of course, I also listen toyour podcast and it's pretty cool.
Thank you.
Well, I appreciate that.
Well, I'm going to stop recording here.
You stay on with me for justa second if you have it.
Everyone have a great day go out therescale your law firm listen to RJon.
Check out How To MANAGE, checkout his book and his podcast.
(43:31):
He's gonna help you one way or another.
So, uh, just do that and have agreat day and we'll see you on
the next episode.
Bye.
And that's what we've got for you today.
Folks, if you have questionsfor RJon, send those my way at
Podcast@ProfitFirstForLawyers.com.
And be sure to check out our earlierepisodes if you want to get more great
(43:51):
content that will help you accelerateyour law firm's growth and give you
more insights that will help youlive the life that you want to live.
And make sure you hit those like andsubscribe buttons so that you know
the moment new episodes are released.
We will see you in season two.
Thank you for joining us on anotherepisode of Profit First For Lawyers.
(44:11):
If you're enjoying what you're hearing,tell a friend and buy your copy of
the book at ProfitFirstForLawyers.com.
Your future self will thank you forit and we will see you next time.
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