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- [00:01]
A
Are you tired of the marketing guessing game? Does your website feel more like a digital billboard than a client magnet? If you're nodding along, you're not alone. And it's time to stop the uncertainty and start getting real results. Let's talk about your marketing spend. Are you just shelling out money every month and crossing your fingers? Do you ever wonder what impact your marketing is really having on your revenue? Well, it's time to take the guesswork out of the equation with Rise Up Media. We've been working with them for over a year and, and the feedback from our fellow members has been fantastic. Rise Up Media is here to take your marketing to the next level. They'll even perform a full audit of your online presence, giving you the good, the bad, and even let you in on what your competition is up to that you're missing out on. And the best part, there's no obligation, no catch, no pressure. If you decide to work with them, their contracts are month to month. That's right. No long term commitments tying you down.
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B
So what are you waiting for?
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A
To learn more about how Rise Up Media can transform your firms, visit riseup media.com max law and rise is spelled with a Z. Riseupmedia.com max law.
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B
This is Maximum Lawyer with your host Tyson Mutrix. Brook and Pam, welcome to the show. It's. This is going to be exciting. 1. I, I can tell just by our pre recording conversation it's just going to be, it's going to be a lot of fun. But let's, let's. I'm going to jump right in. How? Because I think it's funny because I was asking you, do you prefer Cathedral Capital or Cath Cap and you told me not to use Cathedral Capital and I already did. But Cath Cap, how would you explain what Cathcap does and the transformation you can help law firm owners achieve?
- [02:00]
C
So we're fractional CFOs and we plug into firms that are between 2 and 50 million who've reached a ceiling and know they need help. And what we do time and time again is we take them, we listen to what their goals are and we customize our services to meet those many, many, many of our clients. Double their revenue in two to three years and they triple their profits. And we do that by diving into the data and again listening to what does that owner want?
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B
Yeah. Brooke, did you have more to add to that?
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D
Well, I was going to say we believe that there are different kinds of profit. A lot of people think that profit is only about money. That Profit is also about time or your reputation. It's really about having the firm that you want, that gives you what you want and you need. And so that may be a firm that you only have to go into the office two days a week, or that may be a firm where you get to go to court and you don't have to do any marketing. But it really is, as Pam said, it's about listening to our clients and what their goals are in helping them hit that.
- [03:19]
B
I wonder why you chose the two million dollar market as like that line in the sand. Because, you know, 2 to 50 is a pretty massive. It's a lot of Money, right. But 2 million specifically, I do wonder how you came up with that number.
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C
Well, there seems to be certain gates, certain benchmarks that you have to kind of prove your concept of your firm. Right. And so 1 million is probably the time you start hiring others. Right. When you get to 2 million, you've hired enough others that it gets really complicated. And what we know is that attorneys didn't go to school to run business, and therefore numbers are hard for them. And being a female led and female founded organization, we're able to help those owners be comfortable talking about money. But right after that, there's people issues. And what we found is that everything shows up in the numbers. And so we dig in and quite frankly, at around 2 million you can afford us.
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B
I think that's fair.
- [04:27]
D
2 million is also where you really have a team that can help you. So it's not just you implementing what we're talking about and, and you as the firm owner doing all the work.
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B
Well, I think it's important you know what your niche is. And I think that that's really, really important. I think it's, I think it's cool that you knew right off the bat exactly, you know, what it was. And so I think that's great. All right, so you've both worked with a lot of different law firms, all sizes, different industries, really different niches. So what would you say makes law firm ownership uniquely challenging from, let's say like a financial and leadership standpoint?
- [05:06]
D
I think that really depends on the type of law you're practicing. If we're talking about financial, so if we're talking about personal injury. Personal injury, you basically have to buy your cases, you have to buy that inventory and you work it depending upon, you know, what percentage of your practice is pre lit, you know, you work that for nine to 16 months and how much of it is litigation, and that can go three years we had one client that was 20 some odd years into one particular case. I don't know if he's ever going to get that thing resolved. So that is all about balancing working cases now and not getting paid until a much later date. Hourly cases. When we're looking at the financials, are we balancing what we're paying our people, what we're expecting them to bill our collections and we're monitoring the flow of cases and you know, with flat fee again, what are we paying, what are we charging and how are we monitoring production? So I think they all have different things that we look at from a financial standpoint. They all have a different set of challenges, but they all have challenges.
- [06:28]
C
I think another challenge that I honestly enjoy of working with attorneys is they're really smart people. So they get concepts and you can move fast with them and they're kind of fun. Particularly the boutique practices that we work with. You know, it's a nice match of law and entrepreneurship. And both Brooke and I come from long histories of working in entrepreneurial entities. And yeah, it just speaks to the soul.
- [07:00]
B
So, yeah, I do remember whenever I went to law school, the thing I noticed the most was about just how many talented people there were in my law school class. And I do think that lawyers generally are very talented people. They got lots of different hobbies and are successful, different things. I think that that is, I think that's a really good point. I really do. You know, we were Talking about the 2 million to 50 million and all that. I think what that allows, it gives you all a very unique viewpoint into different law firms. And you all can see the successful firms, what they're doing right and what they're doing wrong. And I wonder if, if you all have identified any key traits of the ones that are, that are, are highly successful.
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C
Absolutely. They are leaders who invest in themselves and grow and delegate and elevate most many of them. And Brooks works, works with these run on eos. I think it's a great place for them to learn and grow as a leader, but also grow and invest in their teams. The ones who can let go of the vine and trust their teams and have the metrics and the tools in place to know if things are on or off track. Those are the ones who succeed.
- [08:12]
D
And the other thing that those attorneys do is they execute. They have worked very hard to get away from that paralysis by analysis. You know, in law school you're taught don't ask a question until you know the answer. Don't make a decision until you Know every possible outcome. And while that's great when you're working a case, not so fabulous when you're running a business. So as Pam said that letting go of the vine and that, you know, really just kind of taking the risk. Okay, we're gonna try this. If it doesn't work, we'll try something else. But taking action.
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C
Yeah. Risk with accountability. The ones that know when not to throw more good money after bad money, you know, particularly in marketing.
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D
Yeah. Not huge fans of lighting the hundred dollar bills on fire and throwing them out the window.
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B
I'm not either. It's. It reminds me of something that I talked about yesterday on the live show where it's Jeff Bezos, his two way door, where anytime they're very open to starting new things, but, and so they make decisions really quickly, but whenever they're heading down the path, it's not going to work, they, they head back out the door. Right. So it's a two way door. Could they cut their losses, they move on. It does remind me a lot of that.
- [09:26]
C
The other thing I'll say is that they have money to spend and there's a lot of people who, who want a piece of that. And so building that accountability, having tools what to say yes to and what to say no to, how to make decisions, that's really important. And that's what we try to do is shed some light on where money should be spent and why.
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D
And that's something that Pam and the rest of the team, but Pam especially is really great at. Okay, how are we going to make this decision? What is the lens that we are going to look through? What are the parameters we're going to use every single time? And there is an article that Pam wrote. Pam, how long ago was that? Like five or six years ago. I love this article. It was all about having a. Oh my gosh, now I forgot what we call circuit breakers. Circuit breakers, like when X happens, that throws the circuit breaker and we're out. Because so often as you say, you know, Jeff Bezos is in there, they try something new and they think, ooh, we just put a little more in it and a little more in it. And if we just give it another four or five months. No, and that's part of that calculated risk that Pam was talking about. How far do we go? How much risk can we take on what is the potential return? And where is that point where we say we're done, we're out?
- [10:56]
B
Yeah. Something that I don't think that law school teach. Well, I know they don't teach this and they should. Is, is this whole idea of sunk costs, where that cost is gone, you're never getting it back. Don't throw more money at it because you're not going to get that money back anyways. So just cut your losses. I just, that's something that you just never hear about. And you do hear people saying, well, you know, I've invested this much into the project. I don't. Doesn't matter how much you've invested into it. It doesn't matter. It's not working. You need to bail, pull the cord, you're done.
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D
It's new money starting now. It's new money that work.
- [11:30]
B
You know, I've heard you all talk about, and I don't know how related this is to it, but I've heard you'll talk about. Right seats, right. Profits, which I think it's.
- [11:38]
C
Right people, right Seats, right Profits.
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B
Yeah. So what. Explain what that, what that is and how to. How it directly affects the law firm's bottom line.
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C
Absolutely. So we do a two by two, right? So you have an axis of competency and then you have an access of core values and you rate your people. And obviously the people in the upright quadrant are your stars, right? And if, you know, if it comes to mind who your stars are, they're aligned with your core values and they're great at their jobs, you need to pick up the phone or text them and say, hey, thank you, I really appreciate you. Because they don't get enough love. The opposite of that are people who don't align with your core values and they aren't really good at. They are definitely not good at their jobs. They're called rats, stars spelled backwards. And they gotta go. You can't tell me one story that justifies them staying. Okay? So you begin to see the financial impact of this analysis. The other two quadrants are the ones where owners really struggle. Really, really struggle. So you have the people that are aligned with your core values, right? They carry the firm flag and they're just nice to have around the office, but they're not really great at their job. We call these people puppies, right? They're cute, right? But they need to be trained, they need to be developed. Now, we can have one or two, but we can't have a whole litter of puppies because then it creates chaos, right? So we need to put a plan in place for those people to get them from being puppies over to being stars. The problem and the piece that really has a drag on Most firms is. Is the last category. And so that's people who are really good at their jobs think litigators really good at their jobs, but they don't align with your core values. So you build walls up around them. Right? Oh, you don't have to use the practice management system. Oh, you don't have to track your time. Just, I'll hire you an assistant to track your time, right? You do all this accommodation because they're so good. There's a lot of revenue at stake. The problem is those terrorists, they hold you hostage, they drive off your stars. So toxicity amongst your people has a direct financial impact.
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D
So that's.
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C
That's one piece of the right people, right seat. So that's the right people thing. The next thing has to do with, you know, are they in the right seat? Right. Every seat in a firm has a different DNA, right. And. And one piece of that DNA is their financial thermostat. We can go in more into that if you want to. But the other is how they make decisions, right. There's all firm owners are. Tend to be entrepreneurial, and therefore, you know, they make decisions based upon their guts. Well, there's also analytical decision makers and collaborative decision makers. And I forget the book, it was lead your firm by your customer promise. Was that the name of the book, Brooke?
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D
Yeah, something like that.
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C
And everything of that era was about collaboration, right? That was the new business trend. And this litigation firm adopted collaboration and changed it from being the, the, the one intuitive decision maker. And they began to lose their edge. They began to lose clients. And, you know, not everything is for everybody. So, so right people, right seats is one. You have to know what you need in which roles and make sure you have that right person to fit into to what is needed.
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B
So I pulled up, is it lead, right, for your company's type or is that something else? That's it. Interesting. Okay, so I want to go back to it. So are you saying that they. That they started to live by that book and then things went the opposite direction? Is that what you said?
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C
No, what they did was they followed the invo trend of the day. Right. We've all done that, right? Now we need to have radical candor now. We need to, you know, be collaborative, right? We have these trends that kind of move through the culture, the book of. Of the year or whatever. And they did that because they thought, oh, this is great idea, but it didn't fit their customer promise. Their customer promise was leading edge results. And the collaboration that they brought in slowed everything down and they diluted the power of the intuition of that litigator. And so it wasn't the right culture for their customer promise.
- [16:36]
B
That's beautiful, Brooke. Do you have anything to add to that?
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D
It is interesting and it is subtle, but yes, you really can take your firm in a direction that is not to your benefit if you are just listening to whatever's hot. You know, like Pam said. Oh, it's collaboration. We must be collaborative and everyone has to agree. Well, you know, Gina Wickman, who wrote Traction is famous for saying consensus is for brunch.
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B
Well, like what people, they, they don't think about as like the leadership part of it. Like, people need. You have to lead your firm. And when you are, and you can tell me if I'm, if you think I'm wrong about this, but that's the aspect that we need to maybe talk about more is leadership. You have, if you're doing this whole thing where, you know, where it's a democracy and everyone gets to vote. No one's leading the firm. They. You have in one, you're going to get into risk in a second. But you're the one that's taking all the risk. You know, the employees are not taking all the risk. There, there is some risk working for you, I guess, in some way. But they could also leave tomorrow and find another job. You're the one that laid out all this cash. You're the one that's paying all this money. You split all the, you're putting in, you know, the 80 hour work weeks and all that. And so. But you also need one that's leading the firm. And having it more of like everyone gets to vote is not, it's just not the way of leading a firm. You have to be able to lead.
- [17:58]
D
These firms for there are kind of two things in there. One is, we're not saying collaboration is wrong for every law firm. We have seen very collaborative law firms that have done a phenomenal job because that is their culture and that is their customer promise. You are right in that the firm needs to have one vision. Everyone needs to see the same vision. They need to agree on that vision. It needs to permeate the entire farm to the point where they can touch it, taste it, smell it, feel it. Like they can close their eyes and absolutely envision that destination where they're going. That can come from a collaborative discussion or it can come from one person's mind. As long as everybody's on board, that doesn't matter. But you're right. You've Got to lead by giving them that position.
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B
Yeah, you, you rarely see, and I understand what you're talking about, the difference, but you rarely do see very highly successful companies that have led by committee. You usually have one, one vision led by one person.
- [19:10]
C
Yet would you say, Pam, benevolent dictator?
- [19:14]
B
Yes, sometimes. Sometimes.
- [19:17]
C
I mean it's not a bad model.
- [19:19]
D
As long as the, the dictator really is benevolent, it's all good. Yeah. And when we talk about collab, collaboration is really a lot of what we do. So we are very collaborative in that we believe that we work very much in a team based environment in the company. We believe that the client is absolutely a part of that team and should be part of decision making and understand what's going on. And we also believe in working with other providers to make sure that we're not saying one thing and somebody else is saying something. That's the direct opposite. So we are very collaborative. That does not mean that everybody on the team got to vote on our 10 year target.
- [20:10]
B
So it's interesting, I kind of think about like, so I've got two companies, I've got Maximum Lawyer and I've got the Firm. So Matrix Firm. I would say that I'm definitely more of the benevolent dictator at the Firm, but with Maxwell is more of a collaborative. You know, we do take the whole rising tides sort of even like when it comes to vendors, when it comes to other lawyers, other groups, we do take the whole thing. You were all kind of working together. So it is, there is a different dynamic I think when it comes.
- [20:35]
C
We have, we have a different customer promises. Right?
- [20:39]
B
Absolutely, absolutely we do. Yes. But we do have, we have solid visions on both of them. We have, we have very solid visions with the Firm and with Maxwell and. But it's kind of funny as, as you were talking about that I was thinking about the differences between, you know, different companies that I'm a part of. I want to go back though, because about the four quadrants, I find it really interesting. It's a really. Because we. There. There's a couple of things you said that really make me think about what I hear from lawyers all the time about you. You called them stars. Right. And I hear, I hear all the time people mislabeling. What'd you. What are the toxic employee ones? What's up? What quadrant would you.
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C
Terrorists.
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B
Terrorists.
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C
The rats and the terrorists. Yeah.
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B
So the terrorists, they, they label the terrorists rock stars and stars and they do put up these fences around them. Right. And. But they're really toxic employees because I remember I Did an episode months ago about toxic employees and the traits to look for. But you made it so simple. It's so much simpler. You okay, do they live the values, yes or no and are they good at their job? You made it so much easier to identify those than what I did. Because there are certain traits that you can identify easily to figure out if they are, if they are a terrorist.
- [21:51]
D
Yeah.
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B
And so I think it's beautiful the way you did that. I think it's, it's a, it's a really great. I also like the, the puppies because you hear about puppies all the time, you know, and I, well, they've been with me for so long and I think of all. And I am curious what you think. I think the ones that people have the hardest time firing are the puppies.
- [22:09]
D
So I was, I was at a conference and I was talking about the GRID and the terrorists and the puppies and the. And I had a guy come up to me and he said, so I think I have some puppies but I need to keep them. I'm like okay, why, why do we need to keep the puppies? Are they trainable? Because that's a big question you have to ask. There are some people that it doesn't matter how many resources you give them, they're never going to learn. And by the same token there are puppies that need you to give them resources and train them. And if you don't have the time to train them, you are doing them a disservice because you could be training them. But so anyway, he said, oh yeah, no, they will never have the ability to do the job, but they're emotional support puppies.
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B
It's funny because for the listeners, good.
- [23:06]
D
For you for trying.
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B
But no, I think it's funny for the listeners that can't see. Pam covered her mouth whenever Brooke said that. I think that was pretty good. And I also. Before you finish, it is interesting for those of you that can't see this. It's really interesting watching you all know each other really well. It's very clear because just the facial expressions you, you can you indicate who's going to talk, who's not going to talk, your non verbals, you all just, you all are talking to each other without talking. I think it's brilliant. So for anyone that is just listening, you should go and watch this on YouTube because it's, it is really is really interesting to watch you all how you communicate with each other. Anyways, I didn't want to derail that but Continue, Brooke.
- [23:42]
D
Well, no, I mean, it was just. I was like, yeah, we can't afford to keep emotional support puppies because they're not doing their job. They may make everybody feel really good, but, you know, they're still puppies, and they're still piddling all over the floor, and we still have to feed them. And so that costs time and money. And frankly, they're tearing up the office. So. Nicotica.
- [24:04]
C
Yes. And I'd like to call attention to what we were talking about before, which is the role of leadership. Leadership's job is to identify puppies and terrorists with the puppy. It's important that you have that conversation and say you're absolutely aligned with our core values, but there's some performance issues going on. And because you're so bought into what we're trying to do here, we want to invest in. In you and we want to develop you. Do you want to be developed? Okay, to Brooke's point, I don't think they want it to be developed. But if they respond and say, yes, please train me, then you set a time frame to which you want them to go from being puppies over to being stars. And so if it comes the point in time when they are not, they are just going to be an internal puppy. Everybody knows, and it's no surprise. The thing with terrorists is the moment you identify them and start to address it, you get so much loyalty from everyone else on the team. They're like, thank you. The thing with terrorists is it's not a quick decision, right? It's not like the rats that have to go. You need to have a strategy, right? You need to think, okay, this person brings in this revenue, and you have to put things in place. And the thing I love most when a terrorist is addressed is the whole rest of the team is so grateful that they rise up and they fill the gaps. I don't want to. I don't want any of your listeners to think you're not going to experience a drop in revenue. You're going to experience a drop in revenue, but you will make that up and more in a much shorter time than you probably think.
- [25:54]
D
And that is the biggest thing. You know, first, telling a firm that they have a terrorist, frankly, doesn't always go very well. So usually we just try to let them. We just nudge them in that direction until they see it. I got an email from one of my firms, I think, on Saturday. She's like, yep, well, we've been sidestepping it. We're gonna have to call this Person, a terrorist. I'm like telling you for eight months, but okay. But what I hear from owners is I can't afford to fire them. I just can't afford to fire them. And Pam's right. You've got to come up with that strategy because they are revenue generators or they are the person. You know, it could be a paralegal. That is really part, a pivotal part of the process. And they're the only one that knows how to do it. Yeah. Tough. Consistently. What we see is as soon as that person leaves, employees come into your office, they say two things. Thank you, and what took you so long? And we see everybody else really pitching in. We see them taking up a lot of the slack and we see their production, their own personal production going up. I think part of it is they're grateful and excited. I think part of it is there's no longer this distraction. They're no longer sitting around the water cooler talking about the person or being upset by the person. And so, you know, the distraction's gone.
- [27:30]
B
So I can speak from personal experience. We just wrapped up last week a settlement with one of our employees that we actually had to sue. That was a terrorist. That. Yeah, it was a, it was a big deal. And it was, it was everything you said. It was like a six month thing where we had to plan it out. We did see what was what we, we actually did not see a drop in revenue. We, the team rallied. They were so happy with the decision. They, you know, everyone kind of saw it coming. But it was one of those things where we had to plan for it and we did. And so we, luckily we have a great leadership team that implemented the plan. And everyone rallied. Everyone was so happy. Our revenues, our revenues increase. Even more important, our profits increased, which was, you know, was great, but it is, they can be so. The, the terrorists can be so detrimental to the rest of the firm because they, they, they don't like to follow rules. You know, like, they're the ones that want it. You're talking about like putting up the fences or the walls around them because they don't want to, they don't want to follow the rules. They want everybody else to follow the rules. But what I found was it was really interesting, and this has been a couple of times I've seen this with employees, is that they will hide the work that they're not doing so that they, you think that they're doing work, but they're not doing it.
- [28:42]
D
Yeah. And then they leave and you open their top drawer, you're like, holy shit. You're like, we're screwed. Because there's so much stuff that they had been kind of squirreling away that you didn't know about.
- [28:55]
B
Are, are there ways of identifying the rats and the stars and the terrace and the puppies at the very beginning?
- [29:01]
D
Absolutely.
- [29:02]
B
So tell me, walk us through that.
- [29:04]
D
That is super easy. It's about having core values. Do you have core values? Are they real core values? Do you live them and breathe them every day all through your firm? And when I say core values, I don't mean something like integrity.
- [29:20]
C
Right?
- [29:21]
D
It's. Well, I'll use one of ours. It's be a partner. I've already talked about this one a little bit. It's a short phrase that people can remember followed by a sentence that explains it and then a few bullet points below so that you can really look at it. It is hard to say based on one word, yes or no. But when you've got a phrase, a defining sentence and three to five bullet points, you're like, yes, yes. Not so much on that one, but yes, yes, yes. So overall on the whole, yes, this person lives this value. So it makes it really easy to grade people. They either get a plus, a plus, minus, or a minus. And you set the bar and you say if your score isn't this, you're out. And you talk to them about that. When you're hiring, you hire based on that. You do a 30 day check in where you talk to them about how they're doing on it. You do a situation 60s day check in where you talk to them about their core values. And if they're not a match, they're probably not going to make it to 90 days.
- [30:33]
B
Do you, do you all use job scorecards? All, or do you recommend them, I Wonder?
- [30:38]
D
We have KPIs.
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C
When you say a job scorecard would.
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D
It would.
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B
So we use something. I know that there's a lot like people like Brian Mittman, who's a guild member, like I don't know if you know Brian, but. So we like, we have job scorecards for each position and so what's the purpose of the role and like what we're looking for in that, that type of a person and what sort of outcomes we're wanting and then what the KPIs are. Some people just have KPIs and they kind of call that their job. Scorecards are a little bit more advanced. I just wondered if you all had anything for that. Like that for every position.
- [31:07]
C
Yeah, we have. I don't think we call it that, but we have all those components. What we have done is worked on not only the technical parts of the job, but the behavioral parts of the job. And so during our hiring process, which is fairly robust, and to Brooke's point, the way you avoid puppies and terrorists is by your hiring and onboarding process. You know, I talk to all our candidates. First thing is 15 minute conversation, 5 questions, and all the while I'm grading them. And it's an amazing, amazing filter. In terms of where we found in our hiring process that we were missing something is we had. What did you call it? Bias, confirmation bias. And we're like, you are just delightful. I want to hire you. And what we weren't picking up on is there were certain we're financial people, right? And financial people are a dime a dozen, easy to find. But the type of finance that we practice, that relational piece of it, the fact that we switch from client to client to client, it doesn't align with the behaviors of your typical accountants. Right. And so we had to build a behavioral profile for the ideal. And then we test the last batch of candidates against that, and nobody hits it. Right on. But it helps us know the gaps that we have to fill with them. And particularly then we lay their supervisors behaviors on top of theirs. And then we have a coach who works with them to understand how they can be successful together.
- [32:56]
D
And that made an enormous difference when we added that we used to hire in pairs, thinking that we were gonna lose one, thinking that one would be a bad hire. We now hire in pairs because it's easier to train in a pair. But we know we're gonna pretty high chance we're gonna keep both of those people because we're not hiring people. I mean, I swear, there were times when Pam and I would interview people. You would think we were just shopping for friends. We're like, oh, my God, she's so cute. We totally need to hire her. One of our questions is, is she or he margarita worthy? Would you want to sit down and have a drink with them? That goes back to one of our core values. And man, we could find all kinds of margarita worthy people, but they weren't necessarily right for the company and for our clients.
- [33:50]
C
And the thing we have going for us is that our core values are owned by everybody. And it's not just Brooke and I protecting the core values of the firm. And. And so during the interview process, everybody who talks to that candidate is grading them on core values. And it's very different to absorb core values when. When you're in leadership than when you might be a future peer of theirs. Right. People show up differently.
- [34:19]
B
Definitely. Yeah. This. This has been such a fascinating conversation. I didn't think we'd spend this much time talking about this part of it, but I do. I do. I do find it interesting. I'm gonna. I'm gonna shift gears a little bit bit because I want to talk about maybe a law firm owner that's taken on too much. And. And what are some warning signs that a law firm owner is doing too much and that they need to step back from some of the roles.
- [34:44]
D
Besides the frazzled. Working 60 hours, not remembering their children's names, you know, never being present on vacation. Okay, so now that we've dismissed all of those.
- [34:57]
B
So. So it's funny because, like, I think sometimes people need to hear that, though. You know what I mean? Like, some of those, they may seem obvious, but they. They may need to hear it.
- [35:04]
C
Yes. And it. It shows up in things like, my books haven't been closed in a year. I have a huge receivable balance. I can't hire good people. These are all symptoms of the issues with leadership.
- [35:21]
B
I. I wonder how much of that has to do with. Because I wanted. I wanted. I said I want to get into risk a little bit. I wonder how much that has to do, though, also with. They're not paying themselves enough money. And I think sometimes maybe it's oddly related, but, like. Because I know you will talk a lot about, you know, whether or not people are getting paid enough for the risk that they're taking in the business. So can you talk a little bit about that part of it?
- [35:43]
D
Yeah, I'll talk about that. But I also want to back up a little bit. There are a lot of people who refuse to give up jobs because they think that it's less expensive for them to do it. I'm not gonna hire a bookkeeper for $1,000 a month because I can actually get the books done. Okay, great. So it takes you. I don't know, Pam. What, eight, ten hours a month? Let's say it's ten hours a month, and your billing rate is $500 an hour. Is it a better idea for you to bill $5000 or pay someone 1500 so they don't. They just think about what they can't afford. It's really easy when someone has an hourly practice to do that. When we start talking about contingency practices, they're like, well, you know, I don't bill hourly. So I was In Buffalo, I was talking to one of my contingency clients and I went through and I figured out what his, like, effective hourly billing rate was.
- [36:52]
B
Oh, I don't know if I want to hear this, but.
- [36:57]
D
We hadn't gone over $2,000 an hour. We're pretty freaking close. And I'm like, and you don't want to pay someone? We were talking about bringing in like a financial person. Like, so you're costing yourself money. And, and they don't understand that. Yes, we want our, our owners to get paid because you are taking risk. You are, you're, you're taking financial risk. You have signed the lease, you have guaranteed the loans. If, you know, when payroll rolls around, if the money's not in the bank, it's coming out of your pocket. So we want you to get paid. However, I would rather you run a slightly smaller, more profitable firm where you are working a reasonable amount. Then you go chase that top line number because there's a great expression. Revenue is vanity and profit is sanity and cash is king. So you know those people who go off and they're just chasing the revenue and they're doing it all themselves and they're gonna burn out. And ultimately they're not, they're not doing themselves any good and they're not doing their families any good.
- [38:13]
C
And that's one of the things that we bring, is that we see inside the real numbers of so many firms is that we can help benchmark it and we can tell them how to prioritize the issues and tell them, you know, you're really doing well in these areas. I think what we need to focus on is this piece, because if we get this right, then it's going to help the four or five other things. And it's amazing how they relax when they see how they relate to their peers. So that kind of benchmarking is, is a really valuable piece of what we do.
- [38:55]
B
Yeah, it's, you'd mentioned the vanity number of the revenue. And I call, I call that an ego number. I call the number of employees you have as an ego number because people think that they've got to have these massive law firms for some reason. So anytime someone leads with like the revenue or if they lead with the number of employees, I'm thinking like, okay, doesn't mean anything. It's just your, it's just ego. That's all, that's all you're talking about when it comes to that.
- [39:18]
C
So you can also find it on.
- [39:20]
B
The P and l. Say that again, Pam.
- [39:23]
C
You can also find it on the profit and loss statement. I often add that line in as an expense item is the owner's ego.
- [39:33]
B
I love that.
- [39:35]
D
You know, I've got a former client who has. Her firm's doing five or six times what it was when we first started working. Working with her, however many years ago. And she doesn't work with us anymore. But I keep up with her. I know what's going on. She's got three employees, multi million dollar firm. And can I tell you what she's taken to the bottom line.
- [39:59]
B
I bet she is. I bet she is.
- [40:02]
D
You know, we finally got away from the. She had to have the biggest law firm in town. And now, frankly, she might have one attorney on payroll. Other than that, she has figured out a way to get her legal work done by contractors and hourly people, and she's crushing it. She's lowered her risk.
- [40:26]
B
That's. That's awesome. Well, kudos to you all for, for that. That's. That's incredible. That's. That's just testament to the work, the work that you all have done with her. But I want to. I want to start to wind things down. But before I do that, though, if people want to work with Cathcap, how do they get in touch with you? I do want to say this too. I want to thank both of you. You all are a sponsor of Max Lock on, and we wouldn't be able to put it on without sponsors like you also, like, from the bottom of my heart, thank you. Because it's one of those things where these conferences are extremely expensive. And we, we are. It's one of the things where we could have way more sponsors if we wanted, so we could have way more sponsored money, but we choose not to because we want to be very selective with who we're working with. And so we're working with you all because we think that you'll do amazing work. So thank you all. Really do appreciate that. But I do want to.
- [41:13]
D
We appreciate you bringing it back.
- [41:15]
B
Well, it's. It's one of the things where. Yeah, Beck and I were like, one of the first things, one of the first decisions we did. So whenever I took over Max, first things we said, let's bring it, let's bring it back. And I think people, people had been wanting, want it, wanting it. So we decided, okay, let's give the people what they want. And, and so that's why. So I'm glad you all are excited about it.
- [41:34]
C
No, we're very grateful. I think the people that you Attract the messages. The, the healthy, having healthy, happy firms.
- [41:44]
B
Absolutely.
- [41:44]
C
It speaks to us. We're those kind of people. We want people to, to get what they want out of their lives and their firm. If they want to get in touch with us, the, the probably the quickest way is to email me directly. And it's Pam P A M at Cathcap C A T H C A p dot com.
- [42:04]
B
Very good. So this is a good segue into my last question I want to ask you all. And it's about, it's about mindset because you've both worked with burned out, underpaid, overwhelmed attorneys. You know, you, which is funny because you all are so happy and bright and everything. And so it's good to see that that's not kind of like it rubbed off on you all. You are like very, very positive, which is great. But I wonder, I want to know if you could share maybe one mindset shift that the, the ones that you, they've gone from maybe overwhelmed and underpaid to happy and paying themselves a nice living. Maybe one mindset, mindset shift that they've made to make that difference.
- [42:45]
C
I think it is knowing that they're entitled, you know, they're taking the risks and they need to take care of themselves and their firms before they take care of, you know, it's put your oxygen mask on first. I think that that mindset shift that I, it's okay to make money, right. I am entitled. I, I earned it. And, and when they get there, I think that that helps them make tougher decisions to focus again on the bottom line.
- [43:25]
D
I agree with that. Realizing that there's nothing wrong with making money and that it is okay and it's okay to make more than your paralegal. You don't have to be the lowest paid person in your firm or the.
- [43:38]
C
No paid person in your firm.
- [43:41]
D
Right. I also think it's that shift where they really open up to possibility instead of seeing something, I can't do it, it won't work. Seeing, yeah, I can do that. It will work. It might work. And I think that comes from setting and achieving goals and proving that you can do it and winning. And the more you win, it just creates this culture of success and having that running through your firm is it just really, you said it earlier, rising tide lifts all boats and that really makes a difference.
- [44:26]
C
I think the other thing is getting comfortable with trust. And I don't know if that's a mindset trust, but Stephen Covey, the son, not the father, wrote a book the speed of trust. And people who learn how to trust themselves and others get a dividend. And people who, businesses, firms that have low trust environments, they get taxed. And that's, that's a skill, right? There are so many people that think that trust is earned, but once they realize that it's something that they, as a leader, have to call, cultivate and give freely, that's game changing, really. Game changing. And when you deal with, we come into the money side of it, right? And people are usually very, very tight. And, you know, I'm not going to share my numbers with anybody. It's like, okay, we'll start there. But when they can begin to trust that the people are all going with them on this, climbing this mountain, that's when it gets magical.
- [45:30]
D
Your employees really do want you to win.
- [45:33]
B
It's a beautiful message from both of you. I think it's a great way of ending it. I also want to take a screenshot of the, the, the, the facial expressions you all just made a few a few seconds ago. That was fantastic. At the same time, it was really good. Thank you so, so much, both of you. This has been great, great episode. If anybody wants to work with Cathcap, Cathcap.com you can follow them on LinkedIn, Instagram, Facebook. Thank you both very much for doing this, and I look forward to seeing you both in nashville. Go to maxwellcon.com for anybody that wants tickets. But I really appreciate both of you. Thank you so much.
- [46:02]
C
You're welcome. Thank you for having us.
- [46:04]
D
Thanks. Lyson.
- [46:20]
E
If your law firm is running fine, but you know you're capable of more, more growth, more freedom, more, more control. Maxlock on is where you find your next move. This is two days of strategy systems and straight talk from law firm owners who are actually in the game. No hype, no recycled advice, just the real stuff that's working to grow law firms right now, you're not showing up just for inspiration. You're showing up to make better decisions faster. You're showing up to cut out the guesswork and walk away with a clearer path forward. Because the truth is, trying to figure it out on your own takes longer, cost more, and burns you out. This room is where the people serious about building better law firms show up, get the details, and grab your ticket@maxlawcon.com.