Latest / Wealthy Woman Lawyer Podcast, Helping you create a profitable, sustainable law firm you love / Episode 342: Wealth Anxiety: Why $500K in Revenue Hasn’t Made You Feel Safer

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Episode 342: Wealth Anxiety: Why $500K in Revenue Hasn’t Made You Feel Safer · Wealthy Woman Lawyer Podcast, Helping you create a profitable, sustainable law firm you love

• 0:01
  Intro: Welcome to the Wealthy Woman Lawyer Podcast. What if you could hang out with successful women lawyers, ask them about growing their firms, managing resources like time, team, and systems, mastering money issues, and more. Then take an insight or two to help you build a wealth generating law firm. Each week, your host, Devina Frederick, takes an in-depth look at how to think like a CEO, attract clients who you love to serve and will pay you on time, and create a profitable, sustainable firm you love. Devina is founder and CEO of Wealthy Woman Lawyer, and her goal is to give you the information you need to scale your law firm business from 6 to 7 figures in gross annual revenue so you can fully fund and still have time to enjoy the lifestyle of your dreams.
• 0:47
  Now here's Davina.
• 0:50
  Davina: Picture a Sunday night. The kids are finally asleep. The house is quiet. You created half $1,000,000 in revenue last year, the most your firm has ever produced. And by every external measure, you have arrived.
• 1:03
  And yet here you are at 11:00 lying awake doing the same anxious arithmetic you were doing when the firm was a third this size? What if next month is slow? What if that big client leaves? What if it all goes away? You hit the number.
• 1:17
  The number was supposed to make you feel safe, and it did not. If you have ever wondered why the money came but the safety did not, keep listening. This episode is for you. Welcome back to the Wealthy Woman Lawyer Podcast. I am your host, attorney Devina Frederick, two time author of books on law firm marketing and management and founder of Wealthy Woman Lawyer, a company that guides women law firm owners in cultivating the mindset, the strategies, and the systems to scale their firms to multiple millions of dollars in gross annual revenue without burning out in the process.
• 1:54
  Our goal is to help you create a profitable, sustainable, wealth generating law firm that lets you relax more and stress less. I am so glad you are here with me today. I think you are going to enjoy this topic. Today, we are going to talk about something I almost never hear named out loud in the legal business world, wealth anxiety. The strange persistent feeling that no matter how much your revenue grows, you are still one bad month away from collapse.
• 2:26
  We are going to talk about why high earning women lawyers feel this so acutely, what that fear is quietly costing your firm, and four structural moves you can make to build the kind of safety that reduces the Sunday night scaries. By the end of this episode, you will understand that feeling of safety is not something you earn by hitting a bigger number. It is something you cultivate within yourself and for your law firm. Let's get into it. Here's a pattern I have watched dozens of times.
• 2:56
  A woman law firm owner sets a revenue goal. Let us say it is half $1,000,000. She decides somewhere deep down that when she hits that number, she will finally feel secure. She will finally relax. She will finally exhale.
• 3:11
  So she works. She markets. She hires. She grinds, and she finally hits the number. And then a remarkable thing happens.
• 3:18
  Nothing changes on the inside. The exhale never comes. The goalpost simply slides forward. Now the magic number is $750,000. Then it is $1,000,000 and then $2,000,000 The anxiety does not shrink as the revenue grows.
• 3:34
  In many cases, it grows right alongside it. If you are wondering who she is, she was me. There were many years of growing my business when no matter how successful I was, no matter how much money I made, no matter how it looked from the outside, I still constantly worried about money on the inside. One day, I had to ask myself, how much money would ever be enough to make the worry stop? That's when it dawned on me that I did not have a money problem.
• 4:03
  I had a money anxiety problem. You'd think that would go away at a certain point, but for me, it didn't. Why? Because the anxiety was never actually about the revenue. Many of us, especially those who did not grow up with financial security, tell ourselves a story that money equals safety.
• 4:21
  So we chase money, expecting safety to be waiting at the finish line. But safety is not a revenue number or even an income level. Truth be told, safety is an inside job. It requires emotional work and a basis for safety that is not something external like money. Thank goodness I found a wonderful therapist to guide me through the process of finding safety within myself.
• 4:46
  If you feel like you are constantly worried about money, no matter how much you make, then I highly recommend seeking professional help. It's well worth the investment. That said, only people who were born not worrying about money and who still have plenty will tell you that money doesn't buy happiness. It doesn't, but it sure does provide a lot of options and resources that likely would not be available without it. In our society, money is a necessity, and wealth feels like security for many.
• 5:17
  We could get into the topic of wealth inequality in this country and, indeed, throughout the world because it's very real. But today, I want to keep our conversation focused very tightly on what I am confident you can control, and that is creating a wealth generating law firm that you can count on throughout the life of your firm. We'll focus specifically on your law firm business, where the worry comes from and what needs to be in place to make you, as the owner, feel safer and more secure with regard to your law firm business and its longevity. What most of us may not realize as we climb the ladder to the high 6 or 7 figures in revenue is that security in a business comes not just from that top line number, but from your firm's foundation and infrastructure. Without the right business model, owning and operating a law firm business can be a wild roller coaster ride.
• 6:13
  The reason you do not feel safe may not be that you have not made enough money. It may be that you have not yet built the infrastructure in your firm that transforms money into financial security. Let's dig into the specific reasons you may be feeling uneasy even though you had a good year financially. Reason number one, your income is almost entirely dependent on you. For most women firm owners, the revenue stops the moment they stop.
• 6:42
  You are the rainmaker, the closer, the senior attorney, and often the operations manager too. Some part of you knows that the whole machine runs on your two hands and your one nervous system. Of course, you feel exposed. The exposure is real. This issue will never be resolved if you remain the bottleneck in your business.
• 7:03
  The most I have ever seen a true solo practitioner make without any help at all is $800,000 a year in gross revenue. To do that, she was literally working herself to death. There was no time for relationships, rest, relaxation, or even hiring someone to help. Every night, after a long day at work, she went home, drank wine, worked some more, and then collapsed into bed, only to get up and do it all over again the next day. Her family had become so accustomed to the lifestyle she provided that she felt she had no choice but to keep sacrificing herself to maintain it.
• 7:40
  The sad irony was that if she had cut her workload just a little, she would have created more time to hire the help she needed, and that action would likely have skyrocketed her revenue into the millions and, more importantly, given her back her life outside of work. Reason number two, you have no cushion, so every month requires the same level of performance or better. When there is no cash reserve, no retained earnings, it can feel like you are walking a tightrope. Every single month must perform or the whole thing wobbles. That means you never get to zoom out.
• 8:16
  You are always managing the next thirty days, not envisioning the next six months, next year, or the next three years. A firm with no buffer is a firm where you can never feel safe because there is no margin between you and the edge. You might experience this as the feast or famine cycle where you market, market, market, and then you must stop marketing and do all the work. And then you realize you need some more new cases, so you rush back to rainmaking and start the cycle all over again. How exhausting.
• 8:47
  Reason number three, you measure the wrong number or only one number. I know we talk a lot about revenue, and I am a huge believer that achieving at least 7 figures is critical because it provides the capital your business needs to grow. Unless you have stacks of cash sitting elsewhere to invest in your firm, you'll never hear me call revenue a vanity number. Some people would tell you that financial security lies in profitability, but even that doesn't feel right to me because profits can fluctuate wildly based on your tax strategy, your goals, and your firm's other needs. Quite frankly, if you use your business as a bank for your lifestyle, you'll take home a lot of money, but your profits may not look that great on paper.
• 9:32
  Also, it's your accountant's job to make sure they don't legally, that is. We need to consider many indicators to assess the health of your law firm, such as your marketing and sales systems, conversion systems, cash flow, retained earnings, tax structures, owner's compensation, and more. Unless you have a business model that addresses all of these and other critical key performance indicators, there will always be a worry that something feels off. Just looking at any one number will not tell you everything you need to know. Reason four: You carry the financial weight.
• 10:05
  Many women I work with are the financial anchor of their household, or they feel responsible for their team's mortgages, their employees' families, and the people who depend on the firm. That weight is rarely spoken about. It sits on your chest at 11:00 at night, and it makes the prospect of one slow quarter feel not like an inconvenience, but like a threat to everyone you love. It's perfectly normal to feel this way, but there is a way to lessen that burden, and I'm going to get into that momentarily. But first, I want to discuss what the fear is costing you.
• 10:40
  Fear of not having enough makes you undercharge. For example, when you are scared of losing a client, you discount your fees or write off hours to keep her. Recently, I was speaking with an owner who told me she was so concerned about not getting enough clients to cover the two new associates she had just hired that she reduced her firm's initial retainers to attract more clients during the beginning of year slump. Were they the firm's ideal clients? No.
• 11:06
  They were clients who hired based on price, but it did accomplish her short term goal. The real issue is that she got so accustomed to quoting those new lower fees that she failed to raise them again once she felt the firm was back on stable ground. Also, the firm's capacity increased to handle more cases, but she left a lot of money on the table by undercharging. Fear makes you over accept. When every month feels like a struggle, you say yes to clients, you should decline.
• 11:37
  The wrong clients come in through the door that fear props open. If you've ever had that one client who wanted to haggle on your fees and you reluctantly accepted them anyway because you were worried about making your revenue goal for the month only to discover they were the most demanding and unreasonable client you've ever had? I know you can relate to this concept. It's a mistake most of us make at some point or another in our legal careers. Fear makes you hoard the work.
• 12:06
  When you believe the firm only stays alive because you personally are handling everything, then you may be a caseload hoarder. But, Devina, clients want to hire me, not my team. News flash, the clients feel that way because you do. If you worry about delegating because you are afraid your team will screw up your case, your firm's reputation, and your relationship with the client, then the issue is not that the client wants to only work with you. The issue is that you have not yet discovered how to speak in terms of the law firm and set your team up for success.
• 12:41
  Fear taxes your life. It steals your sleep, your presence at dinner, your patience with your kids, the version of you that your family signed up for. That cost does not appear on any profit and loss statement, but you and the people who love you pay it every single month. Resolving these fears is not optional if you want to scale your firm to 7 figures and beyond and free yourself up from overwork and overwhelm. So let's talk about how to do that in an actionable way.
• 13:15
  I think there are four basic law firm business structures that help reduce owners' anxiety around money, sustainability, and wealth building. In other words, if you implement these three structures in your business, you will begin to worry a little less about money and feel calmer and more confident as a law firm owner. These are not the be all and end all when it comes to creating a profitable, sustainable, wealth generating law firm. But all three are necessary to begin moving in that direction. Structure number one is the cash buffer.
• 13:48
  This is the foundation. So we start here. I want you to build over time a business savings account that holds three to six months of your firm's operating expenses. This is not about revenue, which is the total money you bring into the firm. It's about setting aside enough to cover expenses in case you have a slow month or two.
• 14:09
  Creating a cash buffer will help cover payroll, rent, software, and other essentials that keep the business running smoothly. When that account exists, something profound shifts in your body. A slow month is no longer an emergency. It is just July or December. When you have this buffer, you can make decisions from a place of choice rather than panic.
• 14:30
  If you do nothing else, at least do this. Start with one month, then two. The first time you watch a slow month roll by and feel calm instead of worried, you will understand why I started here. Structure number two is a marketing system that does not depend on the kindness of others. We all love referrals from our colleagues, friends, and former clients, and it's awesome when most of our business comes from referrals.
• 14:55
  However, when referrals all come through you when you begin to hire a bigger and better team, your personal referrals may no longer be enough to support the firm's growth. It's critical, then, that you establish a marketing system a way of attracting the firm's ideal clients outside of your own personal reputation. These may involve advertising, training more senior attorneys in rainmaking, and setting them up for success, developing and implementing an organic content marketing strategy, or something else. The key is to invest in a marketing system that consistently attracts your firm's ideal clients and helps maintain steady cash flow. Structure three is a team to help you expand your firm's wealth capacity.
• 15:40
  Financial security requires that the firm can run at least for a while without you personally touching every matter. That means hiring before you feel ready, documenting how the work gets done, delegating it to others, and deliberately building a firm that is not a monument to your own indispensability. I know the indispensability feels like job security. It is the opposite. A firm that collapses the moment you step away is fragile.
• 16:11
  A firm that hums along while you take two or three weeks off is stable and built for longevity. In addition to putting these three structures in place, we still need to address the emotional aspect of feeling financially safe in your law firm business. So alongside the four structures, I want you to consider the following. First, separate your worth from your numbers. Your revenue is a measure of your business model's success.
• 16:40
  It is not a measure of your personal worth. The day you internalize that, the monthly number stops being a verdict on your value and goes back to being what it always was, a piece of data. Second, define what you want specifically for yourself and your life, and then consider how your firm can support that. If you are like most women law firm owners, you might have written down some goals, but you likely have never attached dollar figures to them. It's critical that you do so because it lets you clearly see what you are working toward.
• 17:17
  When you have a clear plan and path, you can make decisions and take calculated risks from a place of confidence, not fear. Third, practice receiving that feeling of safety and financial security before it is perfect. Do not wait for the six month buffer to be in your bank account before taking a calming breath. Let the one or two month buffer feel like a win. Let the first client who found you through Google Ads or your Instagram content feel like a celebration.
• 17:46
  Feeling safe instead of worried all the time is a muscle you build by noticing it, not a finish line you only cross once. Before we wrap up, I wanna leave you with this thought. The chase for a bigger number is seductive because it feels like progress, and sometimes it is. But if you have been telling yourself that the next revenue milestone is what will finally let you breathe, I want to lovingly free you from that story. As cliche as it sounds, growing a wealth generating law firm that can operate without your daily involvement in all the details is about the journey, not the destination.
• 18:23
  If you are listening to this and thinking, Yes, Devina, this is exactly the work I need to do, but I cannot see how to build the structure on my own, I invite you to book a call with me. Go to wealthywomanlawyer.com and click the Apply Now button in the top right corner. You will complete a brief application to help us understand where you are and where you want to go, and then you can schedule a Zoom call to discuss your law firm's growth goals and next steps. And if you have not yet left a review for the Wealthy Woman Lawyer Podcast, I would be incredibly grateful if you would take a moment to do so. Your reviews help us reach more women attorneys who are quietly carrying this exact fear.
• 19:06
  And please share this with others. I am Davina Frederick, and this has been the Wealthy Woman Lawyer Podcast. I will see you back here next week.
• 19:14
  Intro: If you're ready to create more of what you truly desire in your business and your life, then you'll want to visit us at wealthywomanlawyer.com to learn more about how we help our clients create wealth generating law firms with ease.