Thank you. Thanks for having me. It's so fun to talk to you.
I am so excited now that we were talking a little bit before. And we'll probably talk afterwards, because we like to talk to each other. But it's better for everybody else to hear some of what we're talking about, because it relates to solo small, firm lawyers, their practices, and how they can make them more profitable, more enjoyable, and more efficient. Yeah, and so I've had a couple of episodes about KPIs a while back. And I definitely want to keep touching on this in upcoming episodes, because I do believe that there are a couple of key performance indicators. The one I talked about was client satisfaction and the Net Promoter Score. But the the biggest one, for most people, I think, even more so than net promoter score, but you know, we can discuss it is profitability, right? Like, how profitable Are you in your practice, and then to be profitable, you have to have, you know, a good balance between costs and revenue. But then there's another component, which is how enjoyable is any particular practice area? And I know you work with lawyers. And so this is a topic that you've dealt with, I'm sure many times, so why don't you kind of lay the groundwork for us with how that's important to lawyers in solo small, firm practices?
Yeah, sure. Well, this, I like talking about this stuff. Because it really is facts, not feelings, and I do really well with facts, not feelings. So typically, if I meet someone who, usually when I meet someone, even if there's some sense of organization, there's a lot, a lot feels like a hot mess in their head. And it's even if it's not, that's just feels like a lot, and there's a lot happening. And there's a bit of chaos, the revenues coming in, they're making payroll, everything, like everything's working out, maybe they know, some really high level KPIs. But the fact that they don't have any visibility into some of the more granular things in the business in terms of profitability, is it prevents them from being able to make decisions. So that's why I really liked the work because then, you know, it's part of my job is to help people dig in to figure this stuff out for themselves. Um, I don't know if we want to talk about how to do that, or if
Yeah, we do. Yeah, we do want to talk about it. Because as I was saying, before we started, you know, there's lawyers, I know, and frankly, you know, I'm kinda in this boat too. Like, I don't find it interesting to deal with the facts, the data, the numbers, because that wasn't, that's never been a thing I love doing. And as a stupid way of putting it, but for me, it's like if a computer or somebody else or anybody could calculate something that doesn't allow me to speculate and think about how that connects to other things, but it is connecting to the thing. So I'm not saying it's not important, but I know exactly what you're saying, when you say feels like a hot mess. But you don't really know what you're supposed to do about. That's how I feel a lot of times. And I know that you do this. So yeah, I'd love to know how to do it both for educating other people as well as myself.
Okay, let me ask you a question. I do understand, and you actually just summarize that in a way that really helps me understand why you don't love digging into the numbers in that way, specifically, but what would you be interested in being handed?
The numbers? Oh, of course.
Then you dig in and speculate? And you you play with the ideas? And I don't know,
right? Because when you said you don't have visibility, I know what you're talking about. You can look at something and you see, wait a minute, I am making more money here, or I'm spending too much money on this. I mean, I have a friend who got out of the practice of law. But what it took him to make that decision had the confidence to do it was when he realized that the other thing he was doing besides practicing law was what was making way more money than his practicing of law, and that he was spending way more time doing the law practicing thing. And he thought, well, this is crazy. I mean, like, I enjoy this other thing. I spend less time doing it now. But I'm making more money. What if I wasn't, quote, wasting the time doing the law practicing thing? Well, that's only because he kept track of the data and had all that visible. Was he able to feel confident making that decision? So yes, visibility is good.
Yeah, yeah, I Okay. I figured that was your answer. But I just thought, yeah, I would check. I mean, some people might even say no to that. I don't know. But yeah, so it is important to be able to answer questions that you might imagine someone who like you're meant as someone you would love to have, as a mentor and business walked in the room. They might ask you certain questions that you probably don't have the answers to, but you could get them But and so, and that's oftentimes when I, when I'm talking to people, I'll ask certain things just to get a read on where they are. And they'll say, I mean, I track that, but, but just because track somewhere doesn't mean it's looked at or evaluated. And so they, they're not really in tune with what it means for the business. So if we're talking about profitability, I think certainly as a firm profitability is something that most business owners look at, they have an idea of what it is at least yesterday at the end of the year. And then, but doing that by product, or practice area, or like whatever the revenue streams are that come in for, for you in the business. And so for some people I work with, they don't have multiple practice areas, but they have a lot of matter types that they need to look at. Thinking of a criminal lawyer, for example, they have felonies and misdemeanors, and DUIs and traffic tickets, things, there's all these things that they know that they deal with. And for some, there is certainly more revenue for some than others that come from those. But they don't know the profitability. They don't know, like when and they may have hunches. But you really it's, it can be a valuable exercise to dig in to figure out what are the expenses to be able to run that matter type or practice area. So that is where it kind of gets fun. And and it's not. I think people get frustrated when they first dig in, because they don't know exactly what the expenses are. They don't know. You know, it depends. It depends on how much time I spend or need to spend on this case versus that case. But if you can start tracking, even for three month period, or whatever makes sense. But if you start tracking case by case, the time and get averages, which maybe you can go back, depending on what you already track in your software, you can do that. But you You can pretty quickly get a read on the profitability per matter type of practice area that would help you know if you need to dig in further. Or if this is good, like you don't need to dig in further. This is really healthy, then you can go look at the next one.
Right? Yeah, and I think so to go back to the feelings thing, because I do think that what holds people up a lot of times are certain kinds of feelings. And so here's another one that I know you've dealt with. There's the perfectionism feeling right? Like so for me. So I totally understand what you just said, because that's kind of how I approach things is I realize, like, wait a second, if what's holding me back is I feel like this is this daunting task and have to measure everything to the decimal point. I'm not interested. But what if I could do back of the envelope kind of analysis? That's good enough, you know, this is, you know, part of the 8020 thing, like, you know, that gives me 80% of an inside with 20% of the effort and whatever. Okay, cool. Great. Let me try that. So then I try that. And then I realized what was holding me back from doing it ever. And the beginning was this perfectionism, this feeling like there was a specific, right way to do it, that I'm supposed to do. And I think that that's supposed to thing that gets stuck in our heads. That's actually a, it generates a feeling a feeling of inadequacy, a feeling of, you know, whatever, a bunch of different anxiety feelings. And then you don't do anything because nobody likes that anxiety feeling. So you're like, right, can I make that go away? Quickly? Well, yeah, somebody handed it to me, that would be really quick. But that didn't happen. The hand, I just make the feeling go away by not doing it. I think that's what happens to a lot of people.
Yeah, I mean, I guess. So I definitely have the perfectionistic bone in my body that I, I work to manage. And one thing that I have to remind myself and people I work with all the time is progress, not perfection, progress, not perfection, because if you you know, you're much better off being able to say, you know, my profitability for on a felony case, is anywhere from you know, 15 to 20%. I don't like that even is a range that you're pretty certain it's in that range. That's knowledge. You know, like, maybe it's not perfection to the decimal, but it gives you a read on where your attention really needs to go in the practice. And if there's some that are just razor thin, when you start to dig in, or it's like, I don't know what it is, but it's somewhere between zero and 5%. All right, we should we should chat about that. Like, what do you want to do you even want to continue doing these things? If you do, how are you going to create more margin of there. And there's options you can think about whether you delegate more or you do less as the actual attorney or you raise your fees, or like there's things you can do to push it that but you can't even have those conversations without knowing at least roughly where you are and not on hunches. That's not what I mean by roughly. The other thing I'll say if this is helpful is one thing I have everybody do during strategic planning. And it's the first time often they've ever done this is calculate what percentage of their revenue for their whole firm comes from a specific practice area or matter type. So, you know, if the firm is making $300,000, and $100,000 is coming from felonies, then it's a third of their revenue is coming from felonies. And so you start to when you when you start to think through how, what percentage like the revenue stream, what, how does it contribute, and being able to say the number that it contributes, in terms of percentages, it can be very illuminating, because a lot of times, you will know, as an owner, when you look at that, I want more of those, I want that to not be 35% of my revenue, I want it to be 45 or 50% of my revenue. So that can inform where you need to put your marketing efforts and where you need to put intentionality behind. And maybe there's another one that it's big, and it's a beast, but and you don't want to kill it. But it just doesn't need to be that big, you'd rather grow something else in the firm. So knowing that percentage of revenue, and what each practice area or matter type contributes, is a good number to know. And I would say 50% of people when they first learned that number, like, that's interesting. And then over time, they realize like, oh, wow, like they start to see a picture where they start to see a world in which they can pull levers to adjust those things the way they want to be adjusted, not just getting what the world gives them. Right? And then the other 50% See that up at the front, I guess.
Right? And I think that's the reason I start even thinking about KPIs and the relationships at 20 is I feel like the 8020 principle, it's real, it's a phenomenon. And it's not always at 20 ratio, but it's there. But how do you know that something like that can be used? Right? Like, you know, if it's like knowing that gravity exists, or something exists in a vague way, but you need to measure it. And when you start to measure it, even if the measurement is an approximation to what will come later? Or what is even possible, it's better to have the best approximation come up with using data than to have the hunches, yes, we know that we have established that. So now we know like, Okay, we should have numbers, and we should collect them. And then some people do. And then I know you've seen this, like they're using clear weather using rocket Mater. They're using whatever. And there's data in there. Right. But that data isn't necessarily easy to parse by practice area or whatever. All else. So now you need to take people to Okay, well, we you got the data, let's take it put it somewhere. And I know the answer to this question, but I'm gonna ask it anyway.
So private clients, we do air table because we build it for them. And anyone can use their table and build it. There's a learning curve. And if you are someone like RD, you could dig it.
No, I use it a table. But I learned quickly I hired somebody nice fellow in the in the Philippines was amazing. And yes, I would recommend you hires. Yes, if you're going to do our table.
Yeah, and you can set up a pretty basic air table. Especially that's a great idea that to have something like a VA that can really be helpful there. And that's their specialty. And it's great, I think it's it's much more powerful than a spreadsheet. However, this is the progress not or this is the perfectionistic people will hold out until the day that they have time to figure out air table, and they won't even get a spreadsheet together. So spreadsheets are fine. I ran my company and working with clients on spreadsheets for the first two years, a year and a half, something like that until I was just bumping up on limits where I wanted to see more. And it became too hard. And I've found at your table. But you the insight I could provide to people through spreadsheets, and you is basic and simple is the sound. So it may sound silly, just by asking yourself, what do I want to know what numbers do I want to be handed? And maybe you come up with five or less? I don't know. But you start with those. And then if you just start seeing those numbers, month over month, you start to get curious about other things because you start to get curious about what's contributing to the outputs to that you're looking at. So then you'll say okay, well, you know, number of new cases maybe that's a really common And when people start to track early on, okay, number of new cases or new matters to the door, and you start to look at that month over month, but you know, in your head, there's some reasons for why the number is what it is. But there's no documentation on it, there's no numbers to show. So then you'll probably start to say, I'd like to see how many leads came in versus the number of new cases. So then you'll have a new column. And that's really how you build the best portals or dashboards for yourself is starting small and staying curious. Because if you can do that, then you build out something that's really meaningful to you. And this is progress, not perfection. And people want to come out of the gates with this beautiful, perfect Dashboard right out right out of the gates. And you can get that you can pay someone like me or somebody else to really put that together for you. But it's not a requirement, you know, and you can, you can get their overtime. So
long. Glad you said that. Because once again, this illustrates the principle, like, let's just use the simplest tool that gets us most of the way there. And a spreadsheet is going to get us most of the way there faster, and you already understand it. And that's going to let you think through these numbers that you want to look at. And as you get better at that at some point, you're going to go well wait, this is getting kind of complicated, I needed to be better. And then at that point, you can think about putting something in air table. But right, if you went to air, if you said I don't really know which numbers to measure, but let me go find somebody on air table, and then I'll build, you know, the Taj Mahal of database spreadsheets, you're not going to even know what to do with that, because you're going to try to be learning something too complicated to begin with. So I'm glad you answered it that way. So spreadsheets are good place to start. And I like the idea of, you know, looking at new cases each month to start with and then look at leads. But this idea of looking at numbers month over month. So this is another thing is that, you know, most people looking at the yearly numbers, but what how you know, you're going to make decisions only once a year. No, you need to make them like, more regularly than that month over month is where you're starting to see trends, right? Hmm.
Yeah, I think initially, this all feels awkward at first. But initially, you just decide to start tracking a few certain things. And I believe you should have goals around whatever it is that you're tracking, that's another reason to start small, you don't need 10 goals. That's crazy. You just need one major goal. And what are the sub goals from that. So I truly believe every business owner, if they want to grow, and that is not everyone. But if they want to grow, then they should have a revenue goal. But that's the only main goal. That's like the mother goal. And then underneath that, there's some other things that that yes, there are other numbers that you want to hit or you're shooting for. But it's because if you do, it means you hit the revenue goal. So revenue is if that's the mother goal, then another goal that people set is one that we just talked about as number of new cases through the door, you know, that you need a certain number of new cases to door in order to hit your revenue goal. So you can start to have these sub goals that that you know, you should track because it's an indicator if you are on track or not for what you would like the business to do. So I do think starting small and and looking at those month over month, because if you have a goal that's longer term, then you break that down and figure out what is shorter term. And it is important when you're thinking about numbers to lift your head, every so often I'm a big fan of quarterly, lift your head, take stock, what's like how did this, you know, quarter? This is why like quarterly? How did this quarter go? What went well? what didn't go well? What are my lessons learned so that you can you really just take stock so that you can carry those that wisdom forward and not just keep running. And then then while you're in that period of lifting your head, then you decide like, Okay, this is what I'm shooting for. And that's what this you know, over the course of the year, that means that every quarter, I need to do X. And that means this these months to be on track for that I need to do this, this next quarter, I need to have, you know, 10 new cases a month to be on track for my quarterly goal. And it I do know as I'm saying this when you reverse engineer, you can get hooked on certain things that feel like well, what about that or what about that and just don't overthink it. It is more important to have a goal, measure progress on the way there and then be able to periodically and you get to decide how often but I think quarterly is a fantastic way to go. Lift your head and evaluate. It doesn't mean you ignore the numbers on the way there you look at a month over month but that's because you know what you're supposed to be on track for month over month. and it allows you to make some decisions. If you're not hitting it, figure out what am I doing? What's the what is the? What's the thing that strangling progress here? And you could think through things as you go in the quarter. But the quarter is when you maybe change your goals. You maybe you make some adjustments, you don't do that. And middle, the quarter, the middle, the quarter, your head is down, right? Yes, you you track things and you look at a month over month, but so now I feel like I'm gonna change it. But that that is, it feels important to. Like, that's why you measure, you're not shooting for anything. Why would you track anything?
Right? Well, so those are the big, those are big numbers. But then there's one, I'm guessing that we should definitely talk about, which is expenses, because profitability is revenue minus expenses. Yeah. Is that tricky to capture expenses for most law firm owners?
Um, it's tricky with specificity to initially, but you know, again, progress, not perfection, you take what you can get. So whatever your accountant, if you have an accountant that produces a p&l, and you know, you can go on that, but you do you, you want to start getting in tune with your expenses month over month. Some people this is gonna sound amazing other people, this will make them want to vomit. But I have some of the best advice I got from a mentor was she looked, or she asked me a question about the business. And the way that I answered, I don't remember what the question was, she said, You don't know enough about your business. And she said, you should have a sheet, it can be a spreadsheet, with every expense that is made. And when like that should, you should know where the money is going. And you may not be the one to fill it out. But you should know where the money is going. And then the argument to that, that I've heard from many people since then, when I talked about this is, well, that's just your, you could just set some things up properly in QuickBooks, or whatever you're using, and you can get that information. Yes, but I'll tell you, I took her advice. Even though it felt crazy, I made a spreadsheet with the month across the top, and then the pays down the left. And every month I put in what I pay, and sometimes it's one off, they're still in my spreadsheet. And that's just like one payment July or whatever. But they're all in there. And what is crazy, I have mine set up into like a category for tech or technology that I use, and then a category for meetings that I hold or, you know, so I have things broken down contractors, there's a section on my spreadsheet, but it's all there. And I can see every month, what I'm paying to who I see the total for the business, it always matches up what my accountant has. And but they do not break it down in a way that gives me the visibility to see what's going out. And I'll tell you, again, it sounds it might sound crazy, but that doesn't take that long to set up. I mean, you could have a VA go back and get a list of all the people you've paid. Or, or I guess actually you could probably do that with through QuickBooks or whatever you're using, but and then just export that run into a spreadsheet and then categorize it, you know, so it doesn't take that long to set up the but it gives you visibility that is unlike any other now. So that's like an end that since I've been doing that I am a better business owner. But no, I don't think you have to do that to be a good business owner. I think you just need to really understand the money going out and we all get caught up in these periods where we don't really know we're paying for anymore. There's a lot of expenses like we're kind of bloated, you know. And so yeah, you want to pay attention to that because you want to be in tune with it and so I think having a sense of a schedule for yourself that you're going to give some attention again not perfection you're not an accountant, you don't need to be perfect with this but what is your next step to be more dialed with your expenses wherever you are just what's the next thing that you could do that would maybe bump you up or engagement scale of how you are with your expenses I
so I think this is something you can do with air table because I think that this is going to be a conflict with a lot of people who think like me, which is Oh that's true. I didn't need any to keep track of that. And I could assign that to somebody else to go grab some of these and put them somewhere but what I don't really want most people unless you know it's my wife Donna or people I really super trust like my account. I don't really want them to see how much all the money is in one place right? But I need them to pump it in there some kind of way and I know an air table and other things you can create a form. Yeah, where people can pump things in and all they see is what they're pumping in and they're not looking at the master thing the master actually
exactly right? That's exactly right. And, you know, I should say, just so that we're clear, I use a VA to help. So basically, I download a CSV of the expenses every month, I just I spend on one card mostly. So I download the CSV. And then they put that into a spreadsheet, I want it sort of the columns set up a certain way. And so she knows what I want. And then, so the VA does that. And you know, it's someone that I do a fair amount of work with. But, you know, I there is a reason I chose her instead of a key team member that works really closely with me here. I mean, there's just some things not everybody on the team needs to know. So So that's a way to do that is to have somebody that you trust that you're not giving them access to your accounts, right? You're just having them mess with things in a way that helps tee you up nicely. But the other thing you said was? Well, I feel like you asked something specific that. Well, your table gives you the ability for forums. That's what you're saying? Yes. So if you wanted to use air table for that, it's a it's a great way to do it. Yeah.
So I was thinking about a couple of things from what you just said, which are one, the idea of having a virtual assistant, because you know, or part of the reason being that you don't want them to be within your true inner circle. For this kind of thing. That's something I remember hearing a couple of different virtual assistants and the both of them were folks that I work with in chatter boss, and maybe the owners had her boss talk about this, like a lot of their clients, like having a virtual assistant who's not part of the organization for precise reason. And that was the first time Oh, yeah, I can see why that would be the case. So you want compartmentalization. Right. So that's just something to bear in mind. But then the other thing I want to ask you about was like, the the manual, what is the virtual assistant you have doing? Are they copying and pasting manually from each cell of the CSV over to your spreadsheet? Or is there some, you know, easier way that they're able to do it, because I would imagine a lot of it's one on one copying and pasting.
Um, some of it is. But yes, so basically, they organize the spreadsheet in a way, when they get the CSV into a Google Sheet, they organize it in a way where at the tabs at the bottom, there's some checks and balances, basically, for me, so the tabs at the bottom, like the first tab will be the the first dump and maybe some hidden columns, because I don't care about them. The second tab will be organized by client spend. So like all the stuff that was in, she can tell by my calendar, what I was doing, and maybe the client I was servicing that day for meals, I was paying for whatever. So she can put the client's name next to certain expenses. So I get a total per client spend. And then also, the, the other way, there's another tab, I have her do broken up by the spreadsheet, which is tech contractors. So so it kind of lets me and I have to go. And usually there's some questions I have to answer. Some of its straightforward, but Amazon is the thing that I always have to answer. She's like, I don't know what this is for. So things like that. So I'll have to go in and fill in the blanks. But that's easy and fast for me. And then once I know like, this stuff is all right, like you have it categorized correctly, she knows where to put it in the spreadsheet, because there's a line for for either the client or for the the vendor that I'm paying so well in or both. So. So that is kind of how we set it up. So there's spreadsheet work first, which is pretty quick for her at this point. And that I dragged my feet on that because it took a while for me to get to the point where I was going to do a loom and say, Okay, I want you to upload this to Google Sheets, I want you to make these columns to sweat. And the reason it took me a while is because I needed to sort out in my head, the directions. That's the only reason. I just figure every time I had to do it, I would just do it. I don't know, you know, this is the thing with delegation. But
Well, that's good that you said that because and this is what this because I think and this is why it's good. When we talk we don't feel ashamed about saying like this is what I stumbled on because for one thing, I don't like people thinking I'm perfect. Not that anybody does, but you know, it's not I'm not and I learned when other people tell me what their mistakes were. And it also helps me feel better. Like I'm not the only one making mistakes, but I like understanding Oh, that was a mistake. You thought about it this way but then you learn this okay, then maybe I shouldn't do that. And I think one of the things that has Hold me back when I tried to do this is my zeal for automating right. And I've noticed, like with air table guy that was working with, I would say, hey, let's get the CSV, we'll upload it. And then there'll be this automation. He's like, whoa, slow down. Let's do this manually, first, observe how it works manually. And then we'll know when it's time to automated. And I thought, ah, that's true. You know, this is a person who's been doing this longer than me. And I think a lot of times, that's, that's another version of perfectionism. Really, it's like, I'm gonna make this perfect through automation. But, you know, the problem with automation is you don't observe it happening. And if it goes awry, you know, you're probably not going to observe it going awry either. Whereas with slow, manual things, you start to see, well, this is very regular, this could be automated, as opposed to this other thing like Amazon, you know, question? Okay, that's not going to work, because I'm gonna need to think about that. Right. So you have to learn this through, don't say trial and error, because it's not error. It's just through doing it. And then realizing like, this is the next logical step to that. Yes. Can be automated, that can't be okay. Great. Let's move slowly, steadily, incrementally.
Yeah. I mean, you know, are you talking about not being perfect, I am happy to, to air my flaws. Because with this, the fact that I'm doing it this way, still is kind of ridiculous, but I haven't, we talked about this before, like, the cobblers son has no shoes, I build some what I think is amazing stuff for clients, my company doesn't have that for itself, I am still in spreadsheets, like, we have an air table setup, but it's a hot mess. And, and so that I'm trying to get us out of spreadsheets and have an air table built, what I want done, I don't know how to build. So I'm hiring someone to help as well. And it's life changing. And and we have to move slow, just like you were saying. I mean, he has you know, Miro is mural boards. Yeah. So he that was the first calls was mapping out the different tables that needed to exist, the functionalities within the table. And you know, that was painful for you just want to get you can I can see the end result. But doesn't matter. There's a lot of things behind that go into it. So we did move slow. And if anybody that's listening, this is in the air table, one thing I learned was, we it's basically we're creating the ability to have all like our client list in there a member list, and then be able to, and also have all the expenses pumped in for financial like to financial stuff, but also to be able to pair it with a client if that expense is actually paired with the client, right. And that's the ability to, yes, I'll have financial capabilities for just like the normal stuff you'd want to see in a business, and I can tie it to the inner workings of the business is going to be great. The thing I wanted to share was, there's an app I learned about called finta, that will connect Chase or any bank, I guess, any bank because I have more than just chase or my bank accounts in there too. But Chase credit card, which is where I do the spend. It pumps in the transactions. There's like a template that we used and finta for Fanta and then template airtable. And then we apply the finta app and it so now all of my transactions don't need to be exported and then sent over. This hasn't been rolled out to the my team yet because it's still new. But it's like, Whoa, this is what I'm talking about. And this automation couldn't have happened just to your point, if I hadn't been doing it this way for this long. Even though it's ridiculous that it has been this long before I actually do it. If I had tried to jump the gun on this earlier, I would have I would have built something that wasn't as useful. And so, you know, there's truth to what you're saying that moving slow is a is a good way to build the ultimate. Because otherwise, you'll end up with something that's just not quite what you need.
Right? Yeah, it's true. It's like and this is where I love this Japanese principle called Kaizen, which is about slow, steady, constant improvement. And I think that's part of this, you know, because it's, it's better because it's sustainable. It's not as overwhelming pressure cooking, you know, all those reasons, which have to do with like the feelings but it's also better in terms of the effectiveness and efficiency. Because you're right, like as soon as you find there's a hitch here you go, Oh, wait, that didn't work. Let me fix that. The problem with automation, or trying to do too much too fast, which you know, is what automation basically is, is that by the time you discover how you've outrun your capability or does something ridiculous? You've created a bigger mess, because, you know, that's what automation does. Right? You know, picture, Lucille Ball and Ethel and the Chocolate Factory making the stuff, you know, like the thing goes too fast. And there's just chaos, right? That's a visual representation of the problem of automation. So it's not a best practice. It's the it's a worst practice, to try to automate things too fast. And the people who do automation and to do it, well, they know this. Like, there's, there's, you know, like you listen to people talk about they go, Yeah, we test in batches of 10 and 100, then we scale up to 1000. You know, like, they don't jump to like the fastest thing, because they know that new problems will arise at another level that weren't going to happen at the other level, or that could be, you know, weren't as big of a deal. So, you know, our desire to get it over with, I think a lot of times the guys want to have it, build it, get it over with and I'll be great. That's actually not good for a lot of reasons.
Hmm, yeah, no, I think you're right. But that's, it is my personality. I think there's probably a lot of people's Oh, yeah. Personality is all or nothing. Yeah, yeah. Just yeah, let's just go whole hog or forget it. And so that's not the the intensity that I can bring some of that stuff is not the healthiest, you know, and I recognize that.
Alright, so we've talked about the importance of collecting the data that the data can be then put into a spreadsheet or air table, and then we review it. And when we review it, I guess we could talk a little bit about that. But I think we kind of touched on that, that, you know, people have aha moments, and realize that they're spending too much in the wrong practice area, or, you know, they're not getting enough leads for whatever reason, like what other what are the common things that people tend to discover quickly, when they start reviewing on a month to month basis, or court? Well,
something that you mentioned something before we started the call, give me an example of the cost of an attorney that you're hiring, or an associate in the firm, and there are major aha was around some of that, you know, month over month data. And it does depend, like, the things that you might want to track on that attorney are, depend on how your what your fee structure is, and all that. But, you know, if you're hourly tracking their hours, of course, the fees attributed to them, the that for that month that came in, but sort of on the same vein, looking at the investment that you make every month in that employee, and or contractor, even if it's a contractor, and so, you know, with the not just their salary, what benefits do you offer, like any cost that goes towards, or is is happening for the firm, because the person is there, that should all be in that that cost number. And so then you can, you can subtract to see what your margin is every month from having this person in the in the firm. And so the fees attributed to them that come through the door that month, minus the expenses for them that month. And the other thing you can do is do to do a multiplier. So you would take the fees per month, divided by the cost per month. Oh my gosh, I hope I'm getting this right, then that'll give you like a multiple. And, you know, some people are just when you do that. It's like 1.2, or one sometimes certainly I've seen in the negatives, and they're like, I mean, I knew it wasn't making much, but I know I was losing money. And so it just wakes you up to start to maybe kick you into gear to have the conversation you kind of know you need to have now you can see it in black and white. Or it's just it's just arms you with information? And it's it's good grounds for determining does this person need some more mentorship? Or do they not fit core values? Or like what's going on here? And how as a leader, do I want to affect change here? And so that can be really, really valuable?
Yeah, I think that's kind of a unifying concept across all this is that there are for sure, difficult conversations or difficult realizations to have in your practice or any kind of business. And it's easy to stave those off or ignore them, you know, live in denial. And you can't do that when you start seeing numbers and you're like well wait, you know, it's I mean, it's like there's a there's a joke, you know, the old story of like, we lose money on every sale, but we make it up on volume, you know, like, that's like the classic expression of the you're not going to make So it's like, if you can't find those places where things aren't working out the way you expect them to, or think they are, you know, it's easy to, you know, put them off or ignore them. But that's not what a good business owner should be doing. And you know, you'll be happier if you have the difficult conversation you need to have. And sometimes that means letting the person go. And, you know, I remember when I was a young attorney, it's a big firm, and I had a friend who came to work there. And we were talking about this problem. I wasn't yet in the position of having to do that, because I was not yet a partner. But he and his, his wife had a business. And he talked about how Yeah, he could never do that. So he thought that that his wife was good at doing it. I said, Well, how did she do that? And he said, Well, you know, she's, you know, she told me something that I've always thought about and makes a lot of sense. And the more you think about it, the more sense it makes. He said, she told me that she would tell people, Look, you're not happy here. And obviously, your performance is demonstrating it. So it's probably best that you find something that makes you happier, and you'll be happier. And then, you know, we'll find somebody who is happier here. And he said, so does that work? Like do they leave? They're happy? Well, no, not at first, you know, they kind of shrugged it off, but then they go away. And when they do find something if they are able to because some people are toxic and can't work anywhere, but some people, you know, many people go off, and then they find some of the things they're doing. And they think, you know, that was really great. When you told me I didn't make sense to me at the time, but I value it now. And they left. So there's a good feeling that will get generated when that person processes. And I've thought about that a lot since then. Because I know that that is a true statement. That is absolutely true. Like I was happier. When I left the firm to go out on my own, I'd been unhappy a long time. They weren't going to tell me to leave. But they could tell I was unhappy. And one day I just said, you know, I'm unhappy, and I left. And I was happier as a solo practitioner. And so sometimes you just need to nudge people towards the thing they really need. So if you look at it as I'm firing them, or I'm telling them they should leave. That's not the complete, correct picture. Yeah. So you just have to think about how to frame it for yourself. Right for them.
Yeah, I Okay. Yes. I also, I feel like there's another barrier that people may have, which is looking at numbers in this way, when it comes to people can feel cold. Yeah. And people don't like there's, there's been a few of my favorite people I've gotten to work with on something like this, where we examine this, and they're defensive from the get go, because they're like, I don't know what you're getting ready to ask me to do. But I don't I'm not in this to exploit my employees. I'm like, Oh, my gosh, you don't you don't have to do anything with the data. But can you just look at it. Then when we start to look at it, and they start to see the facts, then it becomes Oh, okay, that that doesn't work for me. So yeah, now what? Right? Like I get to make some decisions, and maybe I've never put boundaries in place, or I've never put expectations. Maybe I just need to start there. Maybe they are a good employee. But I've just been a pretty like lackadaisical leader. So what is what do I need to change here? I think really just being willing to look at the, at the facts and knowing what your margins are. Because you have a margin for the firm, but you should know your margins for things that are happening within the firm on people, certainly. Because it is a job, it's good. You have them there, too, for a reason to serve the health of the firm. And if there's no margin there, then that's not healthy for the firm. So and then, you know, by practices another one, but just looking at margins in certain places, just getting curious about it not being attached to having this perfect to the decimal number. You will, you will become more curious, the more you dig in. And it's it's a it's a really great thing. I thought I'd bring that up though. Because there's, you know, if you're if you consider yourself like a good person, and you want your team to be happy, sometimes it can feel cold to look at things like this. But if you don't look at this, that means you aren't clear as the owner, and you have to be clear. And when you are clear, then to your point, you have the difficult conversations, maybe you let the person go. And it can feel pretty crappy, like no one likes to do some of that stuff. But you'll you can tell if you feel clear if you're if you are on the right path or not. If you feel messy when you are thinking about a certain area of the business or a certain person in the business or there's just you don't have clarity, and numbers give you the ability to have clarity.
Yeah, well, it's the old saying you can manage You know, measure, right? And when you measure it, then that gives you the insight to be able to manage it better. And that leads to all kinds of things. Well, I think that the the title of this, or the subtitle is going to be, start small and stay curious. Because I think that kind of is the simplest way to think about it. Like, you know, don't get overwhelmed, just start small, stay curious, that seems to be kind of the Kaizen organizing, unifying principle for making all this happen. But of course, if some people don't want to make it all happen on their own, they can work with you. And so why don't you tell us a little bit about what that how does somebody begin to work with you like, you know, what happens first and then.
So, I've worked with people mostly in a group setting called Master group, and but whether I work with people, private clients, or master group is all the same thing, which is quarterly strategic planning, with accountability and coaching in between. And it's pretty an in depth strategic planning, and it's all facilitated. So I can't tell you what your best plans are, but I can facilitate you making great plans for your business. And so that's what we do. So in the group setting, it's a really great community of people who are all in this together, and they like the group, they really feed off of each other, it's a pretty rich community. And then private clients are for people who, they're just kind of at a stage where they'd rather invest more and have a lot more hand holding. And so that's where we get in a room for a couple days, one or two days, every quarter. And yeah, so it's a lot more more intimate relationship. But both of the same thing, I just get to do it on a deeper level one on one with certain people. Yeah.
Well, I know several other people that are in your community or in my community, and vice versa. And I've sat in on some of your, you know, those those Sprint's that you used to do? Yeah, and, you know, you attract the right kind of people, right. I mean, the kind of people I think are the most enjoyable to be around, which are people who are serious about their business, and therefore willing to invest in making it better, but are not just in it to make money like this. I have, have trouble with anyone who, who only cares about money, but I especially have trouble with lawyers who look at it, just like you know, I'm just trying to scale my business and have yachts and fly around the country and look important and be important like that. That's fine. Those people don't need my help anyway, so we don't really cross paths. But but you know, your ethos, I admire and respect. And I like to people, you know, come into your, your, your circle. And so it's been good, I guess, for both of us, because we kind of cross pollinate, in an easy way. But So for folks who want to know more about you, I will put a link in the show notes to your website, which is an excellent website. And of course, you're in the inner circle community, and you're in there and people ask questions. Yeah, yeah.
Yeah. Ah, thanks for thanks for having me. It's always fun to dig into whatever we dig in on.
Yeah, agreed. All right. Well, thank you so much for this. I really appreciate it.
