Do you want your law practice to be more profitable in 2019? No, that’s not a trick question. You may desire a profitable practice, but if you don’t take action and get help, it’s not likely to
Part of the puzzle is leveraging your time using delegation. Another part that is just as important is leveraging your money through having the right financial team (bookkeeper, accountant, wealth advisor) and the right process.
Something as simple as billing on time and collecting on late receivables can have an immediate and dramatic impact on your bottom-line. Best part? Yo can hire someone to do it for you.
I’m a big Profit First fan who just discovered another resource that I’m eager to share. Greg Crabtree is a guest on the Lawyerist podcast who lays out the principle for growing a million dollar practice. Listen up then check out his book, Simple Numbers, Straight Talk, Big Profits.
Most of us take the position that, in business, that there is a set process that goes something like this:
- work with clients
- get paid
- pay bills
- make profit
The book Profit First turns that notion on its head. The author, Mike M, suggests that profit should come first. He thinks that business owners needn’t wait and just accept what’s left over. That with careful planning and accounting, you can take your profits off the top.
Interesting idea, huh? What I like about it is that it forces you to get clear on your spending and financial habits. Not pleasant, but so necessary if you want to create a profitable, sustainable law practice.
Thankfully, there are bookkeepers and accountants who follow the Profit First method so you don’t have to figure it all out on your own. I recommend Wendy
Simple Talk, Straight Numbers, Big Profits
I’m new to the work of Greg Crabtree. I’m looking forward to reading his book. I did catch him talking about his principles on the Lawyerist podcast, though.
Hitting a million dollars as a small firm or solo seems so mysterious and unattainable, doesn’t it? Yet, Greg lays out some numbers that present a different story. Read his book (aff link)
One of the things he discusses indirectly is realization rate, which I have been raving about for a while. It is the low-hanging fruit for improving your revenues.
Your realization rate is how much of your billable hours you actually invoice. Your revenue goes up when you stop knocking off hours and actually collect your money. Imagine that!
How do you eat an elephant?
How do you eat an elephant? One step at
Take the smaller step and raise your realization and collection rates before adding in more clients. You’ll make more money!