About Our Guest
This replay includes a BONUS extra interview segment – where Moshe talks about the amount law firms SHOULD be spending on marketing and the first steps you should take if your firm is not as profitable as you think it should be. Great actionable information for anyone with questions about their marketing spend.
– Thanks for joining us. This is our extended interview with Moshe Amsel. The first part of this video is from our “GNGF Live” that happens every other Wednesday. The second part here in this bonus extended interview, we dive into more detail around Moshe’s proven methods to help grow your law firm’s profits. If you already saw the live, I’ll put a timestamp to the exclusive extended interview below. Be sure to like and subscribe to follow along with our, great conversations on legal marketing and the business side of running a law firm. And to watch this video on your platform of choice you can find everywhere we stream at gngf.tv. Are you a small firm lawyer? Do you work hard on business development, accounts receivable and accounts payable, managing your team, all with just trying to help your clients, with their critical issues? One thing we hear from many of the law firms that reach out to us every day is that they do all this work and at the end of it there seems to be little room left for a good salary and some business profit. Well, today on “GNGF Live” we’re talking with Moshe Amsel, owner of the successful accounting firm, Dream Builder Financial and host of the podcast “Profit with Law”. Moshe has proven that there are better and different ways for a law firm to do business, help their clients and grow their profits. So welcome to “GNGF Live”. This is your by weekly, ask the experts about all things all for marketing and business growth. I’m Mark Homer, author of “Online Law Practice Strategies” and founder of Get Noticed Get Found. As always, please be sure to like and subscribe our page, and not just the video so you can get updated, when our next episode goes live. And of course, we have moderators on the chat. So please ask questions and interact while we’re live. And if you’re watching this in the future, after we’re live we do monitor the comments on Facebook, YouTube and LinkedIn. And we’ll work to reach out to our guests to answer any follow up questions you have. That’s because we love you all and we love getting to meet you in person. So come see us. Here’s where we’re gonna be next. On December 6, I’m gonna be speaking at the CLE at the Omaha Bar Association, and during the week of December 15th to 20th, we’ll talk about this in a second. But I’m gonna be speaking at the Law Firm Growth Virtual Summit which was actually started by our guest today Moshe Amsel. You can join thousands of small and solo law firms from across the country, on a web-based summit so no need to travel and you can jump in on the topics that matter to you. Joe, can we get a link to that in the chat. And finally, GNGF is proud to be joining four other their legal marketing agencies to put on the second Best Damn Legal Marketing Conference or BEDLAM 2020. This year, it’s gonna be in Las Vegas, April first to third. And depending on when you’re watching this, early bird pricing might still be available. So use the code, the early bird 2020 and you can save $200. If you aren’t following our page, you may not have noticed we started a new video series, we call GNGF Tips. Check it out on our YouTube page. Joe, do you have a link to the first video that we have? Awesome, so we drop a new video every other Friday. So now let’s get to our interview today. I’d like to welcome Moshe Amsel to “GNGF Live”. Moshe, thanks for joining us today.
– It’s a pleasure to be here. Thank you so much for having me.
– Awesome, it was great seeing you out in San Diego at the Clio Conference. That’s big conversations there. But tell me how did you get started working with law firms?
– So it’s an interesting story. But essentially, I started an accounting practice to help people with creating generational wealth. My grandfather came over from Nazi, Germany, with basically, he was 11 years old with his father and the rest of their family perished over there. And they started a business and through that business created some wealth, which impacted myself and my children, because he gave us money for a down payment, for a house, helped with private school tuition. And he did that, it’s a large family, 30 plus grandchildren and well over 100 great grandchildren. And everybody experienced the same distribution that I did and being the recipient of that I said, “You know what, I really wanna help people “with doing exactly that.” So I set out with a mission to empower all people with wealth creation, so that this and future generation can lead a better life and that I’m at the beginning of my journey where I’m helping people with growing their business which is the ultimate cash producer or at least the supposed to be. And then eventually, my brand will grow into, helping people take that cash and then produce repeatable and growing wealth so that they can have the impact they want on the world. Now how I ended up helping law firms, is simply just the way that my practice took hold. Because I started my practice more recently, I realized I needed to do advisory services, I aligned myself with Mike Michalowicz and the Profit First program, I became a Profit First professional and through their group was introduced to a law firm that was looking to implement Profit First and through that engagement was referred to another and another and another and I ended up. By the time I had five law firms as clients, I started to realize that these firms were getting, coaching on how to grow their practice. That was all on the sales side, the marketing side, the team development side and everybody was ignoring, the financial side of the business. So on the front end, they had a beautiful office, big staff and looked really successful. On the back end, the owner was struggling, from payroll to payroll wondering how they’re gonna come up with the money to pay all their staff and to pay the rent. And that really was an eye opener to me that there’s an opportunity here to educate the market and help law firm owners with this journey and stop ignoring the most important part of the business, the financial side. So I’m not an attorney but I bring a different perspective to running a law firm looking at it as a business endeavor and not as a practice. And that’s how I got involved and that’s what I bring to the table.
– It’s interesting, I think we talked about this before, but it’s very similar, Like we had a couple lawyer clients early on, like 10 plus years ago. So they were a couple of law firms and things went well and they referred us to others and others and within about a year. So we realized this is a group that we can really help and impact and I tell you, we’ve been loving, working within the legal industry and being involved in a lot of changes over the last 10 years. Being on the sidelines for someone that is a non-lawyer as well. So one of the conversations we had in San Diego that I really liked because it’s something that I talk about all the time. So the term that you used for, what is marketer math? Is the question ask you, but like use the term marketer math, and we went on about that for like 20-30 minutes about how it drives us crazy. But so I’ll let you kinda take it away ’cause you did a good job kinda like, wrapping it up there, what is marketer math and why should firms really be worried about this?
– Yeah, so first of all we’re not gonna talk to you for 20 or 30 minutes about marketing math. So don’t shut this off, right? We’re gonna do this real quick. Marketer math is when a marketer tells you, “Hey, if you put $1 in and can take $2 out, “let’s do that all day long.” And essentially, what marketers completely ignore, is the rest of the cost of running a business and the cost of growing with the growth that your marketing is producing. If you put $1 in and take $2 out, you have a broken business model because 50% markup is not gonna cover all the costs required to continue to grow with those new clients that you’re bringing on. Now, if you already have the capacity to handle those clients, yeah, the math works but the second you have to expand your office or hire another staff member, the math doesn’t work anymore. And what I like to do is to highlight that because when you’re approaching the marketing discussion, you need to have a much better handle, on your entire financial picture, so that you can understand, first of all, what can you spend on marketing? And second of all, what kind of returns you need to produce, from that marketing in order to stay in business? So we don’t wanna just spend money on marketing, for the sake of spending money on marketing but we wanna actually have a defined result that we’re trying to achieve, and make sure we’re hitting that metric. And if we’re not, there’s a problem. Now, obviously, it takes time sometimes. So you have to identify what that length of time is. But you need to know that math upfront so that if you’re not hitting those numbers you know that there’s an issue and you need to perhaps tweak, change or find a new method.
– Yeah, and we talked about this little too like it’s the, put $1 and get $2 out or ROI calculations that only look at revenue, right? these ROI calculators it’s like, well, you pay this much money and the case is worth this much, look, that’s 400% ROI on this lead funnel or whatever. And it drives me crazy ’cause there’s staff, there’s rent, there’s all these things that cost money, they go out the door and nobody considers in these ROI calculators. So we actually have initial consultations with law firms and we ask questions like, what’s your capacity? ‘Cause you mentioned the capacity issue, right? So what’s your capacity? What are your margins right now? What are your margin goals? How much is your average cases, right? So we get all this stuff so we can figure out, what ROI they need. And sometimes we have to say, hey, you’re gonna have a gap here for a while, ’cause that doesn’t happen overnight, right? And like, these are conversations, I think most people just come up with an ROI calculator, wave some magic ones, if they’re marketer math, and that’s where people I think get burned. So I’m glad to hear somebody on the financial side, is saying something similar that we’re saying on the marketing side. But you mentioned, go ahead.
– And that’s the crux of Profit First, which we can talk about if you’d like but the idea is that as a economical community, we identify by that top line revenue number. We talk about the market cap of companies, we talk about, I’m doing a law Firm Growth Summit. So I had to tell sponsors who my target audience is. I didn’t tell them firms that are producing a million dollars in profitability. I told them firms that are 10 million in revenue, up to firms that are 10 million in revenue, right? That’s what people understand and that’s why there’s this huge discrepancy in what you should do in practice versus what we’re used to using in the descriptive form.
– And I’ll be honest, I’m a little insider baseball here because I have my copy of “Profit First” here, which Moshe was talking about and great book, Michael Michalowicz. But you mentioned this, like business owners think about the top line and I’m in a group called Entrepreneur Organization, which is to get in you have to have like a million dollars in revenue minimum, right? But you could have somebody in there that’s 50% margin and somebody that’s 2% margin and they’re considered the same business, right? And that’s where people get into the these confusions but we just had Michael Michalowicz in actually to talk about “Profit First”. So why don’t you take a little bit for our audience and talk about “Profit First” ’cause you are much more of an expert than I am.
– Thank you. Yeah, and I understand from our conversation that you’ve implement the “Profit First”, in your business as well. So you’re also an expert, you just don’t have a certification but you’re just as much of an expert as I am. Profit First, the idea is that it’s built on human behavior and human psychology is driven primarily by something called Parkinson’s Law, and that’s not the disease. And Parkinson’s Law dictates that given a finite resource where our consumption of that resource is gonna expand to use the entire resource. It’s used a lot in time management. But a perfect example of Parkinson’s Law is brushing your teeth. When you go to brush your teeth, you take a tube toothpaste and you lather on a nice big piece of toothpaste onto the toothbrush, right? And you keep doing that throughout the entire tube, until you get to the end. And when you get to the end, you’re eking out the last bit of toothpaste. Somehow you managed to get away with half a brush, quarter of a brush but you’re brushing your teeth with the same effect that you had with a full lather of toothpaste, that is Parkinson’s Law in practice. And what happens is that we really could make do, with a lot less than we are making do because we have the resource available. So our tendency is to spend it. That happens with the cash in our bank account as well. And if you run your firm with all of your cash in one place, and you do what we call check balance accounting or bank balance accounting, where you login to your bank account in the morning, you look at the balance and that’s how you drive throughout the day with your business decisions, right? So I login in the morning, well, wow, we got paid this morning, I got $40,000 in the bank, what are we gonna do? Let’s buy some new computers. Let’s think about hiring a staff member. Needless to say you have $20,000 of checks you wrote that are gonna clear your account, you have payroll coming up, so you can’t run a business that way and expect to have something to show for it as the owner at the end. And it’s human nature to operate that way. So what Profit First does is it says, let’s not try to change human nature, let’s not try to change the behavior you’re already doing. Because, I mean, who has tried to diet and then keep the weight off? We all know that if you’re not changing the underlying way that you operate, it’s doomed to fail. So instead of saying, “Hey, don’t eat this unhealthy stuff, “just eat smaller portions of it.” You’re much more likely to succeed. And that’s what we do in Profit First, is we basically take the amount of money coming into the firm, create a few separate bank accounts and divvy that money up. So the money comes into a revenue account, you then put away some money for tax, you put away some money for the owners profit, you put away money for the owner to get paid, their salary and then you put away money for the operating expenses of the firm. And that operating expenses ends up being a much smaller, piece of the pie. So when a firm is less than a quarter million, in revenue that’s 30%. When they’re going from a quarter million to 500,000 it goes up to 40%. So as the top line, the revenue number grows, the amount that we can allocate to operating expenses can increase, and all of that is covered in the book. You don’t have to sit here and memorize it. But if you think about it, if you’re running a half million dollar practice and you’re spending more than 40% of your revenue that’s coming in which if you’re not using Profit First, you most likely are doing that already today. Then you have a broken business model. And what’s gonna end up happening.
– paying yourself enough ’cause that’s one of the things. You’re not .
– Paying your taxes.
– At the end of the year. Or you end up, you have to pull out money on your pocket to pay taxes, right?
– There’s those things that if you don’t think about it up front. Like it was fascinating when, like our Profit First consultant we worked with and to be fair we don’t work together, we just have talked about Profit First a lot. But our Profit First consultants set things up where after a few months, I’m like, “Wow, there’s an account here “and it has a word profit on it and there’s money in it.” I don’t remember the last time that happened, it was just like I got lucky at the end of the year, right? And service businesses and so it’s not that far other than I’m not as smart as all the lawyers out there but it’s still a service model. And so there’s a lot of similarities so I found that fascinating. But I wanna make sure we talk about ’cause you mentioned earlier, the Law Firm Growth Summit.
– Yeah, absolutely, so.
– [Mark] So tell, this is pretty cool.
– Yeah, so when, when I started to work in the legal industry, I recognized that there was, there’s a problem and that problem is that law firm owners know that they need education. They know that they need to learn more about how to run a successful business. They want to do that but the only place that they go for education is conferences. That’s the one , right? That’s the one place to go for education and the conferences. First of all the conferences are not geared strictly on, running a practice. There’s always other things peppered in there. There’s all these other agendas with the conference as far as promoting a specific brand, like the Clio Conference is specifically to promote Clio, even though they have informational sessions. And they’re also bringing headline speakers who are not very specific to the law firm business model, right? So that’s problem number one. Problem number two is there’s an access issue, right? You need to fly there, you need to take time off of work to get there. You need to pay to get there, you need to pay for the admission, you need to lose that you would have been serving clients and bringing in money for your firm in order to attend those. And all of those barriers to entry are preventing law firm owners, from getting the education that they need and that they want. So when I started to get to know some of the amazing leaders in the industry, the thought leaders, the people who are the front runners of new ideas and ways that we can increase the profitability of the firm and increase the productivity and improve the life of the law firm owner. I mean, that’s really what this is all about. It’s about getting your time back, having money in the bank account, being able to spend time on the things that are important to you, whether it’s family, whether it’s a hobby, whether it’s giving to others. There’s a lot of things that people wanna do other than running a law practice. Law practice is a means to an end, it’s not the end, right? So I wanted to create a facility to be able to do that. So what we did was, is we decided to create a virtual conference. The conference is completely online. The barrier to entry is zilch, it’s free so the idea is that you don’t have to pay, you don’t have to travel, you don’t have to earmark specifically work hours. Each session is being released and available for 24 hours so if the best time for you to consume that is in the evening, then you can consume it in the evening. If you want to consume three weeks later, that’s fine. There’s a small price to buy an all access pass but the content is there for you to consume for free on the spot and it’s really exciting because we’ve now, created it over five days and we’ve separated it into five tracks. So we have a marketing track, we have a sales track, we have a leadership and team development track. We have a technology and processes track and financials track. So six speakers for each of these tracks, 30 speakers in total and each of these speakers is coming to talk to you about a specific nuances, specific ideas, specific thing that you can use to run with in the summit. And Mark is gonna be one of our speakers there and GNGF is–
– [Mark] Very excited, yeah.
– And GNGF is also a sponsor of the event and the sponsors, so we’ve got some sponsors that are really excited about the event because they recognize the opportunity that this is for law firm owners who prior to this didn’t have a place to go for this information and to get this education that they so desperately need. So my mission is to empower people with wealth creation and this is my way of making that happen, of helping you do that.
– And we were very excited about being involved in the this because of that reason, right? There’s a lot of people that I wanna learn how to run my business better so I can be more profitable and have more at the end of day or spend more time, coach my son’s basketball team or whatever, right? But in order to do that, lemme spend $5,000 and four of my days of time and go travel across the country, right? So here’s a way where I’m like, “Oh, that makes so much sense. “Why isn’t this already happening?” So when you had the idea we were on board right away and very thankful that you asked us to help speak and contribute there too. So we’re very excited but how can people find out about this?
– It’s very simple. Just go to LawFirmGrowthSummit.com/GNGF. LawFirmGrowthSummit.com/GNGF and–
– Awesome, and Joe you can get that in the messages, right?
– Awesome, so we’ll put a link in here for everybody. So we’re about our time on our Facebook Live but I wanted to talk about, you talked about how much real revenue should be allocated to marketing spin. And I wanted to know if somebody is not feeling profitable, what are some of the good first steps people can take? Can you stay with us and we’ll release an extended interview on Friday?
– Yeah, absolutely.
– Awesome, thanks. Alright, so hang on one second, Moshe. So we’re out of time on our Facebook Live so thanks for joining and be sure to like and subscribe our page. Not just our video but like and subscribe the page so you can be notified when we have more of these great interviews. We’re gonna keep going here in the GNGF studios so be sure to check out the extended interview, on Friday we’ll drop that where Moshe is gonna dive into some of the more specifics of how much percentage should you be spending, on things like marketing and if you are kind of struggling with some of profit issues, what are some of the first steps you should be taking? So check that out on Friday, thanks for sticking with us, Moshe and we’ll catch everybody later. Okay, thanks, Moshe. So do you wanna dive into this process a little bit? So tell me, we talked about , I had this question from our in conversation San Diego. You talked about, first of all, there’s real revenue and how much of that should be allocated to marketing?
– So real revenue is a terminology that’s introduced in the book “Profit First” and essentially is to eliminate revenue that is simply reselling somebody else’s services. Most law firms don’t have to worry about the difference between revenue and real revenue. The difference is if you are simply reselling the time of another attorney. So if your if your practice is primarily, geared around not having your own in house staff but outsourcing everything to outsource attorneys and just making money on the difference between what you’re charging hourly and what you’re paying them, then that would, the real revenue would come into effect. So I don’t wanna focus too much on real revenue ’cause it’s not relevant to most law practices other than the fact that revenue and real revenue are the same thing. And so the real revenue is basically your revenue number and then off of that Profit First uses a percentage to figure out what should go into each of these bank accounts and that’s how the system is run. So for example, tax is 15% of revenue at every point in the business. Now, depending on where you are geographically that might change. Attorneys, unfortunately, the more money that they make they lose the QBI deduction so tax goes up. So you need to keep your finger on the pulse of that to make sure that you’re not withholding too little. The biggest places where you might go wrong is New York City because there’s a city tax on top of the state tax, on top of this federal tax. And at the end of the day it ends up being greater than 15% of real revenue when you’re really making money. So that would be something that you that you worry about but the idea here is that we use these, hard target allocation percentages to figure out where that money should be going. And I alluded to this percentage in, the operating expenses account with different levels. So there’s a matrix in the book where it says, if you’re from zero to 250K your OPEX should be 30%. From 250 to 500 it should be 40%. 500 to a million should be 50% and it gives those numbers. The question is how much of that operating expenses should be going to marketing specifically. Or how much of the total revenue should be going to marketing specifically? And the answer that I’m gonna give you might surprise you or it might surprise the people who are tuning into this. And that is that the target you’re going to be aiming for is 10% of real revenue. So I know that,
– 10% revenue?
– Yeah, 10% of revenue
– For marketing?
– For marketing, yeah.
– That’s a much higher number that I think a lot of people think.
– Right and actually, the operating expenses is a much lower number than a lot of people think. So there’s a lot of disparity here, right? So where is your money going right now? Rather than marketing and more than it’s supposed to be, right? Generally, firm owners are overspending on the rent and they’re overspending on their payroll. Those are the two big ones and then there’s also a ton of little things and there’s little beestings that they’re spending here, spend their and those things–
– Subscription for this, subscription for that, subscription for that.
– Exactly, we’re in a subscription age. I mean, just as we’re recording this, Disney+ just came out and HBO Max is coming out next year and Netflix and before you turn around, you’ve replaced your cable with just an internet connection but now you’re paying for five different streaming services. So in the business it’s the same way. You’ve got your Practice Management Software, you’ve got your faxing and digital signature and before you turn around there’s all these things. Some of them are unnecessary and you’re gonna have them but a lot of times we sign up for something and then we forget to cancel it and it just sits there. So if you’re not on top of it, that money is getting wasted but moving back to the marketing discussion. When you’re in the zero to 250K range, you’re probably not spending a lot of money on marketing. You’re just figuring it out, right? And there’s so many ways to market without spending money. Yes, you should have a good clean website but that’s a one time expenditure. You should be getting all the referrals you can, you should be, hitting the ground.
– Taking referrals. Do your stuff online to protect your referrals, right? Like there’s a lot of stuff you can do. Get a gear book, the first third of the book is that stuff, right? It’s like, hey, you can do this on your own, exactly and there’s a lot you can learn that way.
– Yeah, and I’m not sure what your feeling is on this but once you do get started on the marketing side, I’m a believer in starting with paid advertising. Going after the people who are coming in already looking for what you have to offer and trying to hit them first. The reason is, even though Google Ads which is the put me in place for that, even though Google Ads are expensive, it’s a place for you to test your system and test if your marketing funnel, so to speak. If the process you’re taking people, from when they find out about you until you close the sale and they become a client, you have to test that system and get it to the point where it’s working and you’re able to convert somebody from interested lead to a client. So when you go into that realm, still your spending is pretty low because you’re ramping up your spending as you’re seeing results. You’re not gonna spend $1,000 a month on day one, you can test the same funnel by spending $300 a month and then you can increase that once you start to see things are expanding. So that percentage of marketing expense is gonna grow with you as you grow through those four stages. But once you start to become a mature firm and you’ve proven your marketing funnel works, you’ve proven that you’ve already used up all of your free resources, you have systems in place to continue the referral process going. Now you’re looking for additional leads beyond that and now you need to start educating the market, on the need for your services. You need to start fishing in a barrel of people who don’t even know they have a problem to identify the problem to them, that’s where the expensive marketing starts to happen. And at that point.
– It’s a difference maker for a lot of people.
– Yeah, absolutely.
– It’s sort of, getting by and actually growing.
– Correct, because the first part as much as firm owners will argue that it wasn’t easy. The first part is the easy part. You’ve gone through all the easy steps and now it’s time to put your big boy pants, big girl pants on and rise to the occasion to figure out how to get people who don’t even know that they need you to need you. And that’s where it costs money but at this point you’ve already got the business coming, you’ve already got the staff in place, the processes in place that, so there’s a lot of growing that happen in this process where now you’re able to allocate more of that money to marketing. And now the marketing math is making sense because your 10% that you’re spending on that marketing should be bringing in significantly more, leads than it would have been bringing in if you had started with 10% on day one. So 10% is the target number and it’s not foolproof, it’s not perfect, every firm is different, every market is different. It’s just a barometer to say, okay, if you’re spending 2% on marketing you should be able to allocate more budget to it. If you’re spending 25% on marketing, you’re spending too much and you gotta throttle back and figure, probably you’re seeing results but you’re not seeing the results in a large enough way. In other words you’re probably making $2 in every $1, when you can make $4 in every $1. So you gotta figure out how to make that more efficient so you can throttle back the budget, without affecting the results.
– Right, yeah, I think you mentioned something in there that I’m just gonna mention for a second so people can hear what you said. So the funnel is not just the inbound marketing stuff that ends in a, a funnel doesn’t end in a lead, a funnel ends in a case signed up or a new client or new matter. You talked about testing that piece, that’s an area that we’re continuing to talk about with, I think we have an interview coming up with Matt Spiegel Lawmatics who you’ve met I think as well. So about the intake process and like thinking about CRM systems and who does what and how you follow up quickly and like keep people warm on a drip campaign, whatever it is for your practice area. How do you get somebody from a lead coming in into a client? And that’s part of the thing you need to be testing?
– Absolutely, and we already plugged, the Law Firm Growth Summit. We have an entire day dedicated to the sales part of this, right? Because it’s not getting the lead through the door did nothing for you. You’re not getting money for having more leads. You’re getting money by converting the leads into sales and the easiest way to make more money is to increase your conversion rate from lead to sale. One of the crazy things is the Clio trends report, right? They reached out to 2,000 law firms. Two thirds of those law firms never answered the phone and never returned the call.
– Never even returned the call. It’s one thing to say, “Okay, I’m busy, I didn’t answer the phone.” Didn’t even return a call. These were targeted calls where they said, they looked at attorneys website their, key practice area was and they came up with a significant issue that would treat that. Be like a hot case for somebody, right? And didn’t even return the call. So it’s just fascinating, it’s just a dice in the lead and people pay for leads and the problem is a lot of marketers sell leads. And if you haven’t figured the other stuff out, I almost say don’t spend money on AdWords until you know how you’re gonna handle the call when it comes in.
– Absolutely, having the sales process in places is so crucial and it’s starts with the human touch. It starts with answering the phone. Maddie Martin from Smith AI, they’re another sponsor of our event, they offer an amazing service, that first touch point. You know if you engage somebody like them you know that you’re going to get that first touch point taken care of. Now it’s what’s the next touch point? What is the experience I’m taking them through? And it’s not just, oh, lemme get them to a consultation or lemme like, there’s things that you can do to make their experience feel like, they’re being taken down the red carpet and you can you can control that. So put some thought into it and create that customer journey that you would wanna have, if you were the one engaging the firm.
– All right, so let’s leave people with this tip then. If somebody feels like hey, I’m not feeling profitable, or like, I know I’m not paying myself as much as I probably should or there’s really nothing there. I’m pulling in my back pocket to pay taxes and stuff. And I’m working like 60 hours a week and still not seeing this, right? What is like the first thing or first couple things somebody should be, wrapping their head around or be looking at or that they could get started going on?
– Yeah, so I’m gonna give you a long short answer, okay? So if I set out on a trip and I wanna go to a destination, I put that destination in the GPS. If the GPS doesn’t know where I am at the starting point it cannot give me directions to the final destination, right? So if you have your location services off on your phone, you’ll never get that route put on the phone. The journey of building your law practice, you have a target that you are going for. So you would think that the answer I’m gonna give you is pick a goal and now aim for it. But if you don’t know where you are today and you can’t measure where you are today, then you can’t know whether you’re making progress. You have no idea if you’re heading in the right direction. You could have been making efforts towards the goal and be moving backwards in the process. So you need to know your numbers and that’s, I think the first place. There’s so many firms that I come into contact with and they’re not even using something like QuickBooks. They’re not even using like, at the end of the year, I’m throwing a spreadsheet together for my accountant, for what happened in the business. You’re clueless, other than your bank balance, you’re clueless as to whether or not you’re making money and what the, and there’s so many nuances of the business hidden in those numbers that you can dig into and understand how it’s working. So the first step is just know your numbers. Make sure that you have your bookkeeping in place, make sure that you have a starting point that you can look at your profit and loss statement. If you don’t know what that is, that’s where you have your revenue at the top, then you have your expenses and you have your profit at the bottom. And you can look at that and you can say, “Wow, I didn’t realize I was spending, $10,000 a month on X, Y and Z. And now I see what kind of a big piece of my expenses it is, let’s see if we can cut that out. So knowing your numbers is the first step. So the first piece, the first homework is, if you’re doing your bookkeeping yourself, find yourself a bookkeeper, that’s not the job for a law firm owner. If you’re not doing it at all, find yourself a bookkeeper. That’s not the job of a law firm owner. I’m not here to sell bookkeeping services, I think it’s almost criminal that we call ourselves firm owners and we don’t treat it like a business. If you were a true business owner that’s the first thing is you would, have a handle on your numbers. So that would be my first step.
– Yeah, I thought it fascinating when we worked with our Profits First consultant. That’s one of the things they started with, right? Where’s your numbers? But then they put it into percentages of the categories and it’s like they got hazed. It’s like, oh, that seems odd, like we shouldn’t be spending that much on technology and less on marketing, right? You start looking at kinda where things fall out as you were mentioning, like, oh, we had like 18 subscriptions with different new sites or things like that we did not need them all. So it’s just some easy wins, when you just put them into categories and look at the metrics. When we look at a law firm from a marketing standpoint, we have something called the GNGF Way that I think that fourth step, yeah, fourth but before we get to where you’re going is know your metrics, right? So we wanna know who you are as a firm, right? And then kinda figure out like how you’re gonna communicate that. But then you gotta know your metrics before you figure out where you wanna go. So like you were saying, like, you can’t get somewhere, in a GPS if you don’t know where you’re starting and that’s I totally agree. That’s awesome advise.
– Yeah, and if you wanna know the step after that, pick the target.
– [Mark] Yeah, exactly.
– So know where you’re coming from and then know where you’re going and the rest will fill itself in .
– ‘Cause if you don’t know where you’re going, you’ll definitely get there.
– Yeah, exactly, very, very slowly.
– Awesome, well, thanks for connecting with us today and, again, Law Firm Growth Summit, we’ll make sure people get the link to that. This information, there’s Profit First off, I mean, I’m a big fan, being somebody that works in the Profit First consultant but man having worked with tons of law firms now from whether it’s consultation calls, speaking CLEs or actually having them as clients, the amount of people that, to get basic information out about what’s the average case value per practice area? It’s like, I’m not sure how much I made in all my cases, let alone the average case, right? So just getting your stuff out of QuickBooks which seems like it should be simple, I totally agree like, you probably shouldn’t be answering your own phones, you mentioned, hire somebody there. You shouldn’t be doing your own bookkeeping, there’s probably a whole bunch of things a solo to small law firm owner should be not thinking about and letting somebody else handle so totally agree. So thanks again and we will wrap it up here and make sure we’ll get all the links out to everybody. But I look forward to seeing you again at the Law Firm Growth Summit in few weeks.
– Yes, I’m absolutely looking forward to seeing everybody who is tuning into this at the Law Firm Growth Summit, LawFirmGrowthSummit.com/GNGF. And you can also check out my podcast “Profit with Law.”
– Yeah, we didn’t talk about that but I had mentioned that in the introduction earlier, the “Profit with Law” podcast and we’ll make sure there’s a link to that. Another great podcast I saw you had Maddie on there recently as well, you guys were talking about the, sales side of things. So I like that.
– Yes I did.
– That was a great episode.
– Thank you, appreciate that.
– Alright, everybody, well, thanks for joining us. Remember to like or subscribe to our page and make sure you get updated on, when we’re gonna be doing these great interviews later. If you have any questions or concerns you can communicate in the messages there and we will track this offline as well even when we’re not live. All right, everybody.
– Hey, what’s up I’m Josh, thanks so much for joining us. If you feel like you learned something today, think of how beneficial it would be to chat with myself or another one of our marketing consultants one on one. Go ahead and visit our website to schedule your free consultation, it only takes a minute.