By Ally Kennedy, Founder of Amiga
Nothing stresses out lawyers more than finances. In my work one-on-one with attorneys, I have found that the main reason that we don't earn enough is because we avoid the finances all together.
This is week 3 of our 6-week series, "Be the CEO of Your Law Firm," and this week we are talking money.
I believe that we don't handle our finances for two main reasons: 1- We are overwhelmed by numbers (I like to say I went to law school to never do math again) and 2- we "feel bad" to charge for our services. Both of these reasons have to do with mindset.
Being overwhelmed by numbers and finances and all of that leads to one main financial problem: avoidance. We avoid doing what we have to do and knowing what we need to know in order to plan strategically for our law firms and successfully run a business. I struggled with this for a long time. I didn't know how much I owed each month, didn't know to whom, and didn't know when my bills were due. I also had no clue how much money was coming into my firm each month.
The good news is that the financial aspect of running a law firm is a lot less scary once you turn on the light and look at everything that's there. It will take some time to get things organized, so carve out some time in your schedule to dedicate to the financial health of your firm and your life. Sometimes it helps to do this with a friend and/or a partner (business or intimate). (Sometimes a glass of wine helps too.)
Are you ready? Let's get down to it!
There are three main areas you need to know about:
What you need to know:
- How much money are you earning each month?
- How much money comes from consults?
- How much money comes from new contracts?
- How much money comes from existing cases?
With this information you will be able to tell how to increase your earnings.
This is the most stressful part for most of us. Here is a list of the main expenses you need to know. Feel free to add to this list as well.
- Rent (or mortgage)
- Professional memberships
- Email provider
- Case management software
- Billing software
- Office supplies (paper, pens, printers, ink, etc)
- Electronics upgrades (phones, scanners, etc)
It feels good to know what's there! It will help in the long run!
3. CONSULTATION/ MARKETING
Everything starts with the consultation. If you don't have a consultation then you don't get a new case. The following information is crucial to know. Because it was so hard for me to put the information together and track it in an easy, meaningful way, I created an app. We will be launching soon! Check out all of the info at: lawsuitetech.com.
You need to know:
- How many consultations you have a month. (I've yet to meet an attorney who knows this.)
- The source of the consultation, meaning how they found out about you.
- The amount of consultations that converted into new contracts each month.
You can use this information to bring in new business, evaluate whether your marketing money is being allocated to the right sources, and brainstorm on how to increase your conversions.
Once you have these three areas organized, you will be able to plan better for your business. You will know where to put your marketing efforts and marketing dollars. You will be able to make concrete, trackable goals for sustaining and growing your firm and your income.
Let's start a conversation about finances in the comments below!
About your Ally in Life, Business and Law:
Alexandra "Ally" Kennedy is a national award-winning attorney and the founder of AMIGA Lawyers and Alexandra Kennedy Immigration Law.. After becoming a mother, and in a matter of 3 months, Ally transformed her practice from earning in pesos to earning 6-figures and she is passionate about teaching attorneys how they can do the same. Ally empowers lawyers to be the CEOs of their law firms with her weekly blog, webinars, and conferences where she teaches step-by-step how to do the work they love while running a profitable legal business. Ally lives outside of Seattle with her partner and their 5 children.