Latest / Legal Late Night / Fixing Legal Time Tracking Mistakes and the Real Role of a Fractional CFO with Leah Miller
Transcript
- Jared Correia (00:00): Hello everybody. We've got to show the promises to be at least mildly interesting for your listening, watching, enjoyment. I'm your host, Jared Correia. I'm the CEO of Red Cave Law Firm Consulting. In the monologue, I'm just kind of trying to capture more time. I mean, aren't we all? For the interview, we've got Leah Miller, the founder and CEO of Firmly Profits. Ah, I love puns. In the counter program, it's time for horse feathers. Now it's time to get your scratch pads out because we're talking over how to get your time back and then to charge for it because right. (00:45): The abiding human obsession is with time, preserving it mostly. And for law firms, that obsession acquires a tangible result. Since most law firms still bill their clients on an hourly basis, time quite literally equals money. Yet there are many siphons through which law firms lose time at each level of the billing process. An associate doesn't record 15 minutes spent researching. A time entry is recorded improperly so that it does not show up on an invoice. An invoice is not sent in a timely fashion and becomes an uncollected receivable. Bills are sent that no one pays. For many law firms that time capture, billing and collections process is like putting a pin in a balloon. When you're done, all that's left is a tied off and withered piece of rubber representing your pocketbook. There are, of course, methods available to tighten up the payment workflow for law firms, but much of the focus is on billing and collection. (01:49): Even if the time capture event is the most significant in terms of increasing the size of the plot from which you can draw for generating revenue. Fortunately, there are ways that you can build law firm revenue at the time collection stage. Would you? Could you on a train? At this point in time, your law firm should be accessing internal data via cloud-based technology. It's safe. The ethics authorities say it's okay and you're probably already using AI. Practically speaking, more money is funneling into the legal technology sector than ever before, which means that more software is being custom built for lawyers and that that software getting better all the time, including that which features AI. One of the chief reasons that lawyers don't capture time is because it's often inconvenient to do so. Now, that's not always a legitimate beef, but sometimes this. For example, if an attorney is sitting at court and not going to whip out their laptop and log into a local program to record time, it'd be much easier to open a smartphone app and add a time duration and jot down a note and be done with it. (02:55): Because cloud-based software is agnostic, lawyers can work on whatever devices they want to, wherever they have a secure internet connection. And with automated time tracking apps, utilizing artificial intelligence, you may just need to check logs built while you work so you can remain in a flow state. What I'm saying is there may be more convenient time captured tools than you're already using. If you ain't first, you're last. Time lag is the mortal enemy of effective time capture. This is why everybody says that you should record your time or have it recorded contemporaneously with your activity. Like at least some of the things that everyone says, this one is true. In a staggering number of law firms, and especially in the case of the older partner, some attorneys still keep time on paper and record it later or have a staff person do it on their behalf. (03:47): Either way, recording time twice any way it happens is a big waste of ... Well, time. Using cloud software means that your attorneys and staff will have more flexibility about how they record their time, but the psychological shift required here is one in which the attorney becomes comfortable with a primary electronic interface, i.e. One software for time capture, whether assessed by browser or app or even carrier pigeon. The brave little tailor. But here's the thing, at least starting out, nobody's going to do anything unless you tell them to. That's why it's important to have explicit in- office policies for timekeeping. Your policy should be specific with respect to the technology requirements of how timekeeping is done in the law firm when. In other words, everyone should do it the same way. An effective time recording policy would also include screenshots from the software use, collectively representing a step-by-step guide to managing the entire process. (04:46): Take a look at how technology companies organize support documents and take a page out of their books. On the back end, nobody's going to continue to do anything unless you stay on them. To that point, an administrative person within the firm should perform a weekly review of time capture and individual attorneys should perform personal missing time assessment to see what they did for the non-billable hours in any given week. Analytics aren't just for baseball teams anymore. Smart law firm managers use data to address process improvements. And while there are a number of KPIs related to law firm management with most of those at least touching the effectiveness of time capture like utilization rate, you should absolutely identify a set of essential KPIs for your law firm. Even a simple push into data management can yield significant results. Lost time reviews can encourage improved time capture so can comparing time capture raised and processes for individual attorneys. (05:42): And in terms of motivation, running numbers indicating increased time capture and its effects on bonuses can be another carrot for your stick. Put on an addition. Not for nothing, but if you're taking the time to improve your time capture rates, extend that endeavor to the remainder of the process as well. Build better workflows to collect on your accounts receivable. Apply electronic payment options to better effect in order to speed payment processing, streamline your intake system, including through the use of electronic signatures to save administrative time, capture more retainers, and get to billing faster. Comedy is all about timing, but so is law firm management. Funny how that works out. (06:25): I'd say it's high time to get to our interview subject and that is Leah Miller of Firmly Profits. If you've got the time, she's got the financial tips you need. It's all coming up next. While I've effectively run out of things to say, which is awkward because this is a podcast, so I will simply continue working on my Alchemy project. Oh, it appears I'm all out of lead. Maybe we could focus on some more sound financial strategies with my next guest instead. That guest is Leah Miller, the principle of Firmly Profits and I love a good pun. Welcome to the show, Leah. How are you? Leah Miller (07:07): I'm good. Thanks for having me. I'm excited. Jared Correia (07:10): Yeah. Well, you're excited now. We haven't really started. We'll see. Okay. So one thing I learned about you when we recently spoke was that you like and ride horses. I do. I myself have been hauled kicking and screaming into the equestrian world. Can you tell me what is it about horses that's cool? Because I think they're just really smelly. Leah Miller (07:38): I love that smell. That's like ... I grew up- Jared Correia (07:43): The smell of shit? No, no, go ahead. Leah Miller (07:47): To be fair, I grew up riding horses and I did- Jared Correia (07:51): Your nose blind. Leah Miller (07:52): Yeah. I didn't do it for a long time. When I had kids and got married and lived in the city, I didn't ride for a long time. And I said something to somebody a year and a half ago. I was like, "There is literally nothing in the world being on the back of a horse that's running really fast." It is a feeling of just pure joy and happiness. And so a year ago, tomorrow actually, we bought a small farm in central Florida and so we now have, and I went all in, all in. Don't come to me for financial advice when it comes to buying farm animals. And so I'm riding again. My kids are riding. We go out trail riding together. My kids think I'm really cool because I can go really fast on a horse. So that's number one because I want my kids to think I'm cool for the longest, Jared Correia (08:44): As Leah Miller (08:44): Long as possible. Of course. So yeah, that's a little overview of how I got back into horseback riding and it is my favorite, most joyful thing to do. Jared Correia (08:54): You say horse is going fast. I know that there are different levels of horse speed, right? Cantering, galloping. What is the fast version of that? Cantering? Leah Miller (09:10): Cantering is not as fast as a gallop but a nice controlled. I don't like out of control horse. That's my biggest fear, especially with my kids riding horses now. Oh my God. You're just Jared Correia (09:21): Cruising. Leah Miller (09:22): And the old personal injury paralegal in me, I've got so much anxiety when it comes to anything like that. But yeah, nice controlled canter through the woods, like nothing better, not Jared Correia (09:36): Race horses. Can you give me some horse names? One thing I learned about horses that you're not supposed to change their names when you buy them. Leah Miller (09:44): So that's debatable. We've changed some and kept other ones. My daughter's Pony, it's a boy. He's got blue eyes. He's a prettiest little pony. His pain in my butt. His name was Sparkles. She renamed him Diamond Sparkles. And so Diamond Sparkle's the pony. Jared Correia (10:03): Sure, he loves that. Leah Miller (10:06): He overcompensates for that name in a lot of ways. But yeah, no, we renamed some. My horse is Freya. I kept her name. I liked it. My daughter's horse was named Colter and she renamed him Jacks. That's easier. Jared Correia (10:23): Okay. Leah Miller (10:24): Yeah. Jared Correia (10:25): I feel like if I'm reincarnated and punished for my sins, I will come back as a pony named Diamond Sparkles. Leah Miller (10:33): The six-year-old leading you around saying, "You're such a pretty boy." Jared Correia (10:38): Yeah, that sounds like my version of hell. How did you get into the legal space? You mentioned you were a paralegal. How'd you start doing that? Leah Miller (10:47): So I went away to college at 17 and I was like, "I'm going to be an emergency room doctor." And then Jared Correia (10:54): I Leah Miller (10:55): Took my first chemistry class at the University of Central Florida and I was like, "You know what? Don't think I'm going to be a doctor." Then I really didn't know what I wanted to do. I took some education classes. I'm like, "Maybe I'll be a teacher. I love educating, love teaching." And I moved back home and somebody I knew was an office manager of a personal injury firm or we did PIP defense, but some personal injury and she was looking for a legal assistant. And so I started there and the first day I walked in the door and I had to do something with something called an interrogatory and I was like, "Huh, what is this? " I did not put honorable in front of a judge's name when I wrote a letter one time and got worn a new one from a JA and I fell in love with it, loved it, loved the legal field. (11:45): So I changed my major and decided that that's what I wanted to do. My goal was to become an office manager of a law firm one day. I thought I was going to be really old when that happened in my 40s, almost there now. And so now I'm like, that's not old, but at 25. Jared Correia (12:01): No, that's definitely not old. Leah Miller (12:03): Yeah. At 25 I thought when I'm old, I'll be an office manager of a law firm. And when I was 26, the personal injury firm I worked at, our office manager left and my boss, who I will forever be grateful for, looked at me and said, "Do you want to run my law firm?" And I was like, "You know what? I do. " And so I got a crash course in QuickBooks and I started running a law firm at 26, new- Jared Correia (12:27): Wow, that's crazy. Leah Miller (12:29): And yeah, I was the litigation paralegal, worked my way up to CFO, firm administrator. I was there for over 10 years, did a little bit of everything in the firm. So that's my story. Jared Correia (12:40): I like how you were like someone completely eviscerated me at work and I was like, "This is the job I should have. " Most people wouldn't have that reaction. Leah Miller (12:50): I thrive in chaos and I feel like the legal field is chaos all the time. I always thought back when I was working at the firm as a firm administrator, I was like, "Man, I wish some days I had a job where when I was done for an x-ray tech, my friend was an x-ray tech. So I'm an x-ray tech. Take x-rays of people all day. I go home. I'm done. You go back, new patients the next day. And in the legal field, it just never ends. There's always something built. Like you take a two-week vacation, you come back and nobody did your work for two weeks. You're literally doing it all. So I don't know, maybe I just thrive in that environment. But yeah, I love the legal field. I love that everybody gets representation. I love what it stands for. I believe in it. (13:40): And so yeah, I spent most of my time in personal injury and I believe in that. I believe in fighting for clients and doing what's right by them. And so I've just always really loved it. Jared Correia (13:52): It's been a very joyous show so far. So when you took over the firm, you were running, it sounds like almost all aspects of it. There are lead paralegals that don't do financial management stuff at all. I feel like that's a rare occurrence that you would be doing all of that. So how was the adjustment? Was it crazy? Were you like, " Well, I got to figure this all out right now or ... Leah Miller (14:16): "So yeah, that first year it was like, I'm just going to figure stuff out as I go. I always loved financials. So before I worked at the personal injury firm, I worked in bankruptcy for a short period of time. Probably the best place to work as a 24-year-old is learning how to do budgets for people and learning what not to Jared Correia (14:34): Do. You have a strange idea of fun. If I was 24, I don't know if I'd want to be running spreadsheets. Leah Miller (14:40): So I always have loved that though. Everybody I worked with, they'd ask me about to explain their taxes to them and W2s Jared Correia (14:50): And Leah Miller (14:50): Things like that. And so I've just always loved it. I've loved that aspect of it. People ask me like, " Do you wish you had gone to law school? "And I'm like, " The only reason I wish I'd gone to law school is because I could own a law firm right now and I could run a really awesome law firm. "But other than that- I say that Jared Correia (15:07): All the time. I'm like, You're lucky I don't go back out and do my own thing. Leah Miller (15:11): But I loved the business aspect of it. So that first year I was still the litigation paralegal. I was a really good litigation paralegal and I was running the firm. I was figuring out malpractice insurance. Who knew that you had to figure out all that? And I was paying people, I was paying bills, I was figuring out trust accounting, trying not to make mistakes there. And so yeah, those first couple years were a litle bit hectic. I was having babies in the middle of all that as well, but- Jared Correia (15:45): You're like, " Let me ramp up my degree of difficulty here. Why not? Leah Miller (15:50): But I loved it. That foundation is what makes it where I'm so good at what I do right now. I love it. Jared Correia (16:00): Yeah, it's funny. I think people on the outside of law firm ... Yo came into a law firm not having a knowledge of how they run. I think it's funny that people are willing to hand you stuff. When I was a new attorney, I remember the guys I worked for, I worked at a small firm. They were like, "Hey, we're going to be doing these other projects for several months to years. Here you go. Why don't you run the firm for us?" It's crazy. I feel like that stuff happens all the time at smaller firms. So you do that for a little while and then you decide to launch your own business. It seems like you like what you were doing. So why'd you decide to go that route? Leah Miller (16:41): Like I said, I thought I would be old when I became the firm administrator and I wasn't. Did Jared Correia (16:48): You say retirement age earlier? Is that what Leah Miller (16:50): You're telling me? Maybe. No. I started doing financials on the side, bookkeeping, things like that. My mom worked for my uncle who was a CPA. She worked into bookkeeping for him and the original idea was maybe we'll start this bookkeeping business on the side when my mom retires. It'll be a good little side hustle for her and a little something extra for me to do. This was in early 2023. I had a note in my phone that said I would quit my job in 2025. And so it just started out something small and really it started out as I just needed more challenge. I'm a very driven person. I love challenge. I love chaos. And at the time I was doing all the things in the firm. I'd done a lot of ... There wasn't a lot more growth to be had in that particular firm. (17:40): I didn't want to go anywhere else because I did have a lot of freedom and authority in that firm, which may not have been the case if I went to a larger firm. And so I started doing some financials for people on the side and (17:55): I realized that attorneys really needed help with their financials. My old boss, he was fantastic with it. And so he was a good example of cashflow management and things like that. And so I didn't realize that there were those issues outside of my little bubble I worked in. And so yeah, once I realized that and I saw we got hit by a hurricane in the end of 2022, our office flooded. We had two feet of water in the office. We bought an office that made my commute about an hour away. And like I said, I was having babies during all this and so I had Jared Correia (18:28): A Leah Miller (18:30): Three-year-old, five-year-old and eight-year-old at the time, something like that. And so yeah, I was ready for a lifestyle change. I'm a very financially conservative person until I buy farm animals where- I'll Jared Correia (18:46): Do it to you. It's like a boat with legs is what I tell people. Leah Miller (18:52): Me taking the leap to work for myself and not for the law firm with a steady paycheck was huge. And it was- Jared Correia (19:01): And you Leah Miller (19:01): Hadn't Jared Correia (19:01): Started a business before then, right? This was the first time? Leah Miller (19:04): No, no, no, no. My husband had a job that he had been in for 20 years. I had a job I had been in for 10 years. We had never done anything like this. And so I took a chance on my phone. Jared Correia (19:19): You went from prot to Cantor as it were? Did I do that correctly? Leah Miller (19:22): Gallup. Jared Correia (19:24): Because Leah Miller (19:24): My husband quit his job a year later also after I started the firm. But yeah, we bet on ourselves and it paid off, but it was a lot of hard work. Jared Correia (19:35): Yeah, it totally is. Okay. So you're doing this sort of fractional CFO deal. So for people out there who don't know what that is, can you talk about what that means? Leah Miller (19:45): So people often get confused what bookkeeper, CPA, financial advisor, CFO. Who are all these people? Your bookkeeper is keeping track of your data, making sure it gets into QuickBooks right, everything's reconciled. All of the historical financial stuff is in line. Your CPA is filing your taxes, making sure all that's done, hopefully helping you save money on taxes. Same with your financial planner. They're investing your money. They're helping you save money on taxes. A CFO is looking forward. We're talking about budgeting, cashflow forecasting, especially in personal injury firms. What is the goal for the firm? Where are we going? So we're looking to the future and we're doing forecast and analyzing data and helping you track the data to make decisions. I tell everybody it's using the financials to make operational decisions. So when you first start a firm, you're hiring people based on like, do I have enough cash in the bank? (20:43): And this is, we are figuring out, yes, you have enough cash in the bank to hire these people, invest in the marketing, do those for growth. And so a fractional means, you would pay $250, $300,000 for a CFO full-time in a mid-sized firm. Fractional is you get me, my knowledge, my team's knowledge at a very fraction of the price as you're growing. And so for firms that are between like two million and $20 million in revenue, it's a really good place where you get all the help you need at a fraction of the cost. So you can take that savings and invest it in another associate attorney or marketing, things like that so you can grow faster. Jared Correia (21:25): That was a great description. I also like whenever anyone decides to run the numbers on a hire, usually a good idea, often not done. So one thing that I thought was interesting is you're talking about like projecting finances for a PI firm versus like a transactional firm. That's a big deal. If you're in an estate planning firm, you get paid within a window of like a month, not so in PI firms where cases go on and on. So without giving away the firm, what do you tell people about that? How do you do that in an effective way? Leah Miller (22:01): So people argue with me all the time. They're like, it's always going to be up and down. You can't stabilize it. You have high highs, low lows in PI. I believe and I'm seeing because we're doing the work to do this, you can one, stabilize cashflow so you're at least in the positive every month and that is through the right amount of marketing, people keeping your expenses under control. A lot of what we do for forecasting revenue is we're looking at historical averages, looking at time on desk, things like that. I also like to look at what's actually coming down the pipeline and when do we think those cases are going to settle so we can move up and back. And so it's all this data that a lot of firms aren't even tracking when I start working with them. And so we always start completely basic average case value, time on desk and how many cases you have come in your pipeline. Jared Correia (22:56): It's funny, whenever I talk to a lawyer and they're like, "I'm having a bad month," which they sometimes say. My first question is always like, "Well, how was this month last year and the year before that? And what's the three year average?" And so I was like, "Oh, I don't know. " And then I'm like, "How do you know you're having a bad month? You could be having a good month for all we know. " So I love the database approach to that. I want to get back to that in a second, but before we do, you talked about this like two to 20 million revenue range. So that really is something I was going to ask you, which is how does a law firm know when they need a fractional CFO and then how do they know when they grow out of a fractional CEO? (23:35): Is it strictly revenue? Is it other factors? What are your thoughts on that? Leah Miller (23:39): I don't think it's strictly revenue. I work with people below that $2 million mark. If we're talking about margins and averages and things like that, being under that two million mark may throw off the benchmarks, but if you are ready to make the aggressive investment into your firm, then the cost of CFO services would be worth it underneath that two million. 20 million plus, that's where you start talking about, does it make sense to hire somebody full-time? Sometimes it doesn't. I have firms that are doing that 15, 20 million a year and they have in- house COO and CMO and things like that and they're still getting what they need with the financials that you don't need to go anymore in depth. Law firm financials are not, I shouldn't say they're easy. They're not as complicated as like if you're a construction company and you're Jared Correia (24:37): Analyzing- I think any math is complicated for an attorney. Leah Miller (24:41): Let's Jared Correia (24:41): Be Leah Miller (24:42): Real. What I'm saying is when you hit that 20, $30 million mark, it may make sense to still have the fractional. What I base is on and firms that I want to work with is once firms get to multiple partners and there's a lot of people making decisions, that's where I like to back away and I like to work with founders or two to three partners, things like that. So it's more of a corporate structure as opposed to a revenue type of thing. Jared Correia (25:13): Fair. So on the other side of that coin, what are my feelings and emotions when I'm a law firm that needs an outsource CFO? Leah Miller (25:24): The biggest thing is if you are making operational decisions by checking your bank account, that is when you know you need a plan. Jared Correia (25:34): It's bad sign. Leah Miller (25:35): Bad sign. Does it work? So I had this conversation recently, does it work for some law firms? Yeah. I've met with law firm owners. They've been in business for 30 years. They are so successful. They're doing just fine. They've never done any planning, but do you know how much better you could do or how much more confident you can feel? So if you have a plan and you have a down month, like you said, you talk to firm owners and they say, "We're having a down month," that causes panic and then you stop investing in marketing and you pull back over here, you decide that you don't want to hire an associate. Do you know how much it costs to put off hiring an associate? It can cost you $300,000 in lost revenue because you don't want to pay $100,000 a year salary over 12 months. (26:24): And so (26:26): If you are making operational decisions based on gut or cash in the bank and you have the margin, because here's the thing, a lot of law firms have the margin. So the margin's not as tight as in other industries. I'm always saying growth driven legal finance that gives you confidence. I want to give you confidence in the decisions you're making. And so if you're like wishy-washy, a lot of times I work with people, they don't even have problems. They've got too much cash, but they're not investing the cash because they're emotionally attached to it. I'm not emotionally attached to your cash. So I can come in and say like, "Hey, it is okay for you to do this. " So it's if you're feeling overwhelmed like you don't have a plan, another big red flag is if you're not paying yourself consistently. So you want to be paying yourself consistently. (27:19): Every law firm owner should pay themselves. I'm a big advocate of paying yourself what you deserve. And if you don't even know like basic, basic, if you don't even know what your net profit is, you need somebody to help you come in and figure that out. Jared Correia (27:34): Great. We'll see if anyone's feeling shaky out there today during the show. You may get some calls. All right, let's talk ... You're a data person. I love that. What are the major financial reports at a baseline level that law firms should be looking at and how often? Leah Miller (27:56): At least once a month, you need to look at your profit and loss and your balance sheet and I want you to understand what you're looking at when you look at that. So profit and loss, revenue, everybody looks at revenue. Everybody knows what their revenue is off the Jared Correia (28:10): Top of your head. Top line revenue. Everyone loves it. Leah Miller (28:11): Everybody loves revenue. Within your expenses, I break everything into three buckets. I want you to look at how much you're paying your people, so your wage expense, how much your operations expenses are, which is all of your utilities and pretty much everything else and then how much you're spending on marketing. So I look at those three buckets and then your net profit. I also would throw in there your average expenses. Something that I do with all new clients is we set up a budget and we look at that baseline. So like I said, we are stabilizing cash flow in a personal injury firm by knowing what our baseline is. So you have a revenue goal, you want to hit $250,000 a month, but your baseline is $100,000 a month. So we want to hit at least 100,000, but the goal is 250. So I always break it down of what do we need to do to hit at least the 100,000? (29:06): How many cases do we need to handle a month? All of that kind of stuff. So know your baseline expenses, but you need to look at your profit and loss at least every month and understand what those expenses are. You don't have to do anything with the information. I just want you to look at it and by looking at it, you will subconsciously start making operational decisions based on those numbers, especially if you start looking at trends over time. And then your balance sheet, I want you to know how much cash you have, how much your debt is. And then also a lot of times your balance sheet will show if your trust accounting is being done right, but that's a whole other can of Jared Correia (29:44): Worms. Trust account. Do you want to talk about trust accounting? Should we? How badly do the lawyers fuck up trust accounting? Pretty badly. Pretty Leah Miller (29:50): Bad. I have had the conversation. Jared Correia (29:55): I mean, you said before the law firm finances are not super complicated. Trust accounting is not super Complicated. It's Leah Miller (30:00): Not complicated at Jared Correia (30:01): All. No one does it well. Yeah. Leah Miller (30:03): Okay. Jared Correia (30:03): So you want to cook on trust accounting for a little bit? I'll seed the floor. Leah Miller (30:07): My biggest thing with trust accounting is whoever's handling your trust account. Ask them if they are doing a three-way reconciliation, ask them if they know what a three-way reconciliation is. And if you can't pull a client ledger today showing you the balance of every single one of your clients in the trust account, if you can't pull it within seconds today, you have a problem. And that's the biggest thing is, do you have a client ledger? Can you pull that information? I have straight up told people, I had somebody ask me one time, will it take us a couple days to get reports for the Bar Association if they ask us for them? I said, if the Bar Association asked you for reports, you will be disbarred. Jared Correia (30:48): Massive. Yeah, yeah, yeah. Well, I mean, Florida's very tough. Leah Miller (30:51): This Jared Correia (30:51): Wasn't Leah Miller (30:52): Even Florida, but yes, Florida Jared Correia (30:53): Is tough. I mean, there's different leeway in different states, but I mean, you can only help yourself if somebody's like, "Can I see your reconciliations?" And you're like, "Yeah, here you go. " But right, if they're asking you, they're asking you because there's an issue. Leah Miller (31:07): Yeah. So I would ask whoever is handling the reconciliations of your trust account, ask them what a three-way reconciliation is and can you see your client ledger? And if you cannot see those right now, you have a problem. Jared Correia (31:22): Now that everyone is shaking visibly while listening to this, let's get back to the other item you were talking about, which we were talking about reporting and all that stuff. Do you get in with firms in terms of like, "Okay, we got these financial models. Now let's build some KPIs to figure out how to reach that. " Okay. So you want to talk a little bit about that? How does that process work? How do you go from report to KPI and how do you maintain that? Leah Miller (31:46): So I start with, what do you have right now? Some people will have, they'll know average case value, time on desk, things like that. If we don't know those, I start high level. So for example, average case value, what is your average case value overall? We're talking PI firms right here now. From there and time on desk, from there I want to say, "Okay, what is your average pre-lit case value? What is your average litigation case value?" So then we're going to split it even more. And then from there, same with time on desk. What's your overall time on desk? Okay, let's split it. And so that's where we want to start analyzing the data and making sure we're collecting the data and that we get our team bought in. So the hardest thing with the data collection or the KPIs is getting your team bought in. (32:36): So that's where I like to start high level. And then once we figure out the high level, we can go deeper. And then maintaining KPIs, it's reviewing it at least once a month. And I always say with my engagements, it's at least once a month meeting. And I say at least because I have people who pay me and don't meet with me. You have to be looking at this stuff Jared Correia (33:02): Because Leah Miller (33:03): It doesn't matter. I can make pretty dashboards. You want a pretty dashboard? You tell me what pretty dashboard you want. I will make you a pretty dashboard. If you're not looking at it and making decisions based on that, it doesn't mean anything. And so once we set up those KPIs and those data points, we need to make sure that we are digging into them and looking at them and making the decisions based on them. So it's like you set a budget. We've all done it. We set budgets, but nobody ever looks at it and follows it. Jared Correia (33:32): Yeah. And then you just blow past it. Leah Miller (33:33): Yeah. So that's where every month we're looking at budget versus actual. Did we spend too much? Did we spend enough? So we'll set a budget of 20,000 a month on marketing, but we're still in that mindset of holding back cash because we're just not sure. And so then I have the conversation of, why didn't you spend the money? And I will tell people, I want you to get off this call, contact your marketing person and say, where can we spend $5,000 tomorrow? So that's a lot of like going back and actually doing the thing you say you're going to do with the KPIs that you make. Because a lot of times it's theory and we don't want theory. We want action. Jared Correia (34:11): Leah, as they say, you can lead a horse to water. I had to. Okay. You mentioned time on desk a few times during that response. For people who don't know what that is, you just want to explain it quickly. Leah Miller (34:25): Yeah. So that's how long it takes to get a case from the moment it comes in the door till the moment the money is in your bank. And so I want to make a huge distinction on the back end of that. If you settle a case and then it takes you three months to get the money in the bank, that three months is also a problem. And so you want to know timeline desk for every stage and this is where you start really dialing in with your team and giving them tangible goals. So again, we don't want to talk in theory. We want to say like, "We need to get this much out. " Part of the time on desk conversation is we don't settle cases just to settle cases. We don't ever want to come from a place of needing cash so bad that we are making time on desk shorter and shorter and shorter and shorter. (35:14): So there's a balance between efficiently managing time on desk and maximizing the value of the case for the client because that's always number one. And so that's where you need to know that. And then I've been having a lot of conversations about that time on desk between settlement and disbursement recently because it can dried on for different variations. So yeah, that's time on desk and time on desk can be broken down to how long does intake take? And you can do this for non PI firms too, if you have estate planning. Jared Correia (35:44): It's sort of a version of lien methodology for legal, which is helpful for lawyers. All right. Last question for you before we move into our next segment. I know you don't only work with PI firms. So how do you feel about lawyer fee structuring and management in general? I find that lawyers are consistently undercharging. Leah Miller (36:10): I'm laughing because when I first started on LinkedIn three years ago, I knew nothing about anything and I posted a flat fee versus hourly billing post. Just because I was generating content, I didn't feel that strongly about it. It was like my first viral post on LinkedIn. Jared Correia (36:26): Oh, people feel strongly about it. Oh, Leah Miller (36:29): People feel strongly about hourly billing versus flat fee. They get angry. Here's my thing. Jared Correia (36:36): Yeah. There's a lot of anger around that topic. Leah Miller (36:38): Yeah. Hourly billing will always limit you because you are selling time and there's only so much time we have, but I completely understand that there are some areas of law where we just have to do the hourly billing. I do think there are some law firms that are not increasing their hourly rate enough or they're not tracking their hourly rate. So I do work with a firm that does hourly billing and they have different rates for different clients just based on their fee structures. And so we've been doing a lot of analysis on what's our average hourly rate, how do we increase that, all of that. I prefer flat fee. So even in my work, everything's flat fee. I don't charge by the hour at all. You're providing value to your clients, you're not billing your time. (37:32): I will say on flat fee side, that is a lot of times always under billed. And so I had a conversation recently with a client and it was like, we were debating between 2,700 and 3,000 a month. And I was like, nobody is going to question you charging 3,000 over 2,700. And then I modeled it out and I was like, look, if you just do that extra 300, this is the change This is what puts you over the edge. And if you get too much pushback on the 3,000, you can quote the next person at 2,700. So there's ways that you can go back and forth. I think in a flat fee structure, it's important to track your time at times in your firm and your staff will hate it if you ask them to do it, but you need to make sure that things are still being done efficiently. (38:28): I have my team, because I do bookkeeping as well. I have my team, my bookkeepers track their time per client so I can do an analysis to see what the profitability is. So you still need to track some time, but I do prefer flat fee because there's no finite end to that. Jared Correia (38:48): Yeah. I mean, that all makes sense. I think to your point, you're right that it is tough to crack the code on flat fees, value-based billing stuff with like litigation, for example. It's tough to move over hourly for that. But every firm is like its own infrastructure and you can say something that works for you. Good stuff. Good financial conversation. Feel free. Take the last word and then we'll come back for our last Leah Miller (39:13): One. Oh no, I was just going to say that's where I always tell people they always ask me about benchmarks and things and what their firm should look like compared to other firms. And I ill tell you right now that every firm is completely great to love that shit. Do not believe the things you see on the internet when it comes to firm management and profitability and you should do what works for you and figure that out. And that's something that I work with clients on a lot is like, what makes sense for your firm? Jared Correia (39:42): Yeah. It's like, God damn, look at that perfect family on the internet and you got a half eaten chocolate chip muffin on the floor with ants all over it. You're doing fine everybody. Leah Miller (39:52): Yes. Jared Correia (39:52): Leah, this was fun. Will you come back for one last segment? Leah Miller (39:55): I will. Love that. All Jared Correia (39:57): Right. We'll return with Liam Miller in a moment. Welcome back everybody. Yes, it's the counter program. It's a podcast within a podcast. This is a conversational space where you can address usually unrelated topics that I want to explore at a greater depth with my guests. Expect no rhyme and very little reason. Leah, welcome back. How you doing? Leah Miller (40:21): I'm good. How are you? Jared Correia (40:23): Good. I've created a fun little trivia game for you. Leah Miller (40:26): Okay. Jared Correia (40:27): It's based on somewhat on equestrian stuff. (40:31): I'm calling it horse feathers. It'll be fun, at least for me. Horse feathers, as you may know, is an early 20th century term, slang for horse shit and it was popularized in a comic called Barney Google, which was an actual comic that's not related in any way to the search engine. And then later by the Marx Brothers movie called Horse Feathers, which was massively popular for its age. So we're going to proceed as follows. I'm going to read three statements and we're going to do the two truths and a lie. One of these statements is a lie. Two of them are true. Your job is to pick out the falsehood. Leah Miller (41:13): Okay. Jared Correia (41:14): Easy. Leah Miller (41:14): Yeah. Jared Correia (41:15): And we're going to do six different categories and they're going to increase in difficulty level as we go. So group one, thematic group number one are statements about food. Again, I'm reading three statements.One is a lie. Statement number one. Honey never spoils. Archeologists found edible 3000 year old pots of honey. Statement number two, white chocolate contains zero actual cocoa. Number three, carrots were originally neon blue before Dutch breeding. Honey never spoils. White chocolate doesn't actually contain chocolate or carrots were originally neon blue. One of these statements is false. Which one is it? Leah Miller (42:01): Carrots neon blue, although there are purple carrots. Jared Correia (42:05): Oh, there are purple and yellow carrots. So that is untrue. Correct. You're one for one. However, back in the day there were no orange carrots. There were purple and yellow carrots and the Dutch interbred them effectively to create the orange carrots we see today in honor of William of Orange. Leah Miller (42:31): Okay. Jared Correia (42:32): We like to educate here at the Legal Late Night Podcast. You're one for one. Every time somebody gets the first question, I feel compelled to say that in almost 20 years of podcasting, no one's ever gotten a perfect score on one of our quizzes. No pressure. Question number two. The category is pop culture. Pop culture. Statement number one. Barbie's full name is Barbara Millisent Disney. Barbara Milson Disney. Number two. Godzilla's iconic roar was made using a leather glove. And number three, the original voice for Shrek was Chris Farley before he passed away. Number one, Barbie's real name is Barbara Millison Disney. Number two, Gazillo's roar is actually a leather glove. And number three, Shrek was originally voiced by Chris Farley. Which one of these statements is a lie? Leah Miller (43:32): Oh my gosh. I know Barbie is Barbara Milicent, but I don't think she's Barbara Millisent Disney. She's got nothing to do with Disney. So I'm going to go with that one. Jared Correia (43:49): Correct. You're two for two. What were you wavering between? Was there another one you liked? The Leah Miller (43:54): Chris Barley one, because I've never seen that, but it would make sense. Jared Correia (44:00): Barbie's real name, Barbara Millison Roberts. Roberts. Chris Farley was actually the original voice of Craig. And there's pencil tests. So there's a whole, I think it's like a 12 minute promo they did with Chris Farley Shrek. The Mike Myers version I think was better, but we'll never know what the full Chris Farley version looked like. All right. You ready for question number three? Leah Miller (44:24): Yes. Jared Correia (44:26): Okay. Music. Music. Number one, Prince legally trademarked his own custom shade of purple. Two, vinyl records play from the outside edge moving inward. The kids don't know what records are, maybe you do. Three, the Beatles used a real anvil on Maxwell's silver hammer. One, Prince legally trademarked the color of purple, A color of purple, a shade of purple. Two, final records play outside to in. And three, the Beatles used a real anvil on Maxwell's silver hammer. Leah Miller (45:07): Which Jared Correia (45:08): Of these is untrue? Leah Miller (45:09): To say Prince. Jared Correia (45:15): Prince is a lie. Leah Miller (45:17): Yes. Can you Jared Correia (45:19): Trade Leah Miller (45:20): More of color? Jared Correia (45:21): That is correct. That's correct. Leah Miller (45:24): You can't Jared Correia (45:24): Trademark more. I should have answered the question and led you in a different direction. Well, Prince has tried to trademark. Leah Miller (45:29): That's Jared Correia (45:30): What I was thinking before. But has been unsuccessful. Yes. I Leah Miller (45:34): Knew nothing about the Beatles. Jared Correia (45:35): I don't know if you can't trademark or Cole. You might not be able to, but Prince has tried to ... He's got this color call. Purple call. Love symbol number two, which is very Prince thing to do. And they have been unsuccessful in trademarking the color yet. The Beatles one is true. Yeah. In this song called Maxwell Silver Hammer, which almost everyone hates. They bang a hammer on an anvil. They make that noise in the song. Three for three. I'm getting nervous. Okay. Number four. Question number four. Sports is the category. Statement number one, Olympic gold medals are 92% pure solid gold. Statement number two. Tug of war used to be an official Olympic sport. Statement three. An artist wants won gold for sculpting a public toilet. Statements one. Olympic gold meals are 92% pure gold. Tug of war was an Olympics bore. An artist once won a gold medal for sculpting a public toilet. (46:37): One is false, true or true. Leah Miller (46:39): Three is false. Jared Correia (46:40): Three, the public toilet. Leah Miller (46:41): Yeah. Jared Correia (46:43): One is false. Leah Miller (46:45): Oh, really? Okay. Jared Correia (46:47): There is a higher concentration of silver in those metals. Oh, that makes sense. Than actual gold is 92.5% silver. Leah Miller (46:56): Okay. Jared Correia (46:56): That Leah Miller (46:57): Makes sense. Jared Correia (46:58): Dang it. An artist once won a gold medal. They had art competitions, the Olympics for like 20 years in the early 20th century. And this artist won a gold medal for creating the Olympic stadium and he designed the toilets personally by hand. Leah Miller (47:17): Okay. Jared Correia (47:18): Crazy shit. Leah Miller (47:19): Interesting. Interesting. Jared Correia (47:20): But three for four is no joke. Leah Miller (47:22): Okay.This Jared Correia (47:23): Is one of our better performances. Okay. So we've got two more. Okay. Steal yourself. Question number five. The category is horses. I feel like this might be a layup for you. We'll see. Statement number one. Horses can't breathe through their mouths only through their nose. Statement number two, a horse's teeth and mouth take up more space than his stomach. Three, equine eyes are larger than any other land mammals. One, horses can not breathe through their mouths. Two, horses' teeth and mouth are bigger than their stomach. And three, equine eyes are the largest of any land mammals. One is false. I want Leah Miller (48:10): To say number two is false. Jared Correia (48:12): Number two is false. Brett. I know they can't- What's that old saying? Your eyes were bigger than your stomach. Go ahead. Leah Miller (48:19): Well, they just eat constantly. There's got to be room in there. I pay that feed bill. I know. Jared Correia (48:27): So often misquoted animal fact. The truth is that a horse's brain takes up less space than his teeth. Leah Miller (48:36): That makes sense. Jared Correia (48:38): Is there stupid? You're like, no, horses are smart. Fuck off. Only Leah Miller (48:43): The ones Jared Correia (48:44): Named Diamond Sparkles. Fucking diamond sparkles. I'm glad we got another diamond sparkles shout out here. All right. You are four for five. Can we make it five for six? Question set number six. An expert topic area. Financials. Financials. Leah Miller (49:05): I fucking want to get this one. Jared Correia (49:08): Statement number one. The US government once backed its currency with dried cod. I know I walked into the convenience store yesterday and bought something with some dried cod. Number two Apple owns a shell company called Brayburn Capital just for managing its cash. Number three, a single tulip once costs more than a mansion. Number one, US government backed its currency with dried cod. Number two, Apple owned a shell company named Rayburn Capital or owns a shell company. Statement number three, a single tulip one cost more than a mansion. Which one is the false statement? Leah Miller (49:48): I'm going to go with number one. Jared Correia (49:51): Correct. Wow. Five of six. Leah Miller (49:54): That's the Jared Correia (49:55): Easiest quad thought in the group. Oh, you thought that one was easy. Okay. Tulip Mania, if you're familiar with it. From the 1830s, when Tulip Bulbs first started selling, they were outrageously expensive and Bray Burn Capital is a real hyper secretive asset management firm in Nevada. Apple's got 100 billion plus. Yes. Apple's got a hundred billion plus in cash. That makes Leah Miller (50:22): Sense. Jared Correia (50:22): Out in Nevada. That's a very apple thing to do. Leah Miller (50:25): Yeah. Yep. Jared Correia (50:29): Not the kind of apples you would feed a deserving horse. No. Leah Miller (50:34): No. Jared Correia (50:34): Leah, truly, truly, maybe we can pipe in like an applause thing here. Maybe Eva can do that on a fine level. Five of six well played. Thank you for coming on the show. Thank you for putting up with the counter program. We enjoyed having you. Come back again some time. Leah Miller (50:50): Thanks. I loved it. Thanks for having me. Jared Correia (50:53): Thanks to our guest, Leah Miller, who is the founder and CEO of Firmly Profits. To learn more about Leah and Firmly Profits, visit firmlyprofits.com now. Because I'll always be a 90s kid who knew almost intuitively the groove was in the heart, but whose true passion is burning CDs for anyone who would listen. I'm now just doing the modern version of that, which is creating Spotify playlist for every podcast episode that I record where the songs are tangentially related to an episode topic. For this week's playlist, we're uncovering the truth still. But in song, yes, we have a whole ass collection of music I'm calling True Tunes. Don't lie, you know you love it. And it's sponsored by Dr. Pepper, which causes me to wonder, why isn't there a Dr. Salt? Either way, we have no soda sponsor so we're open for one. We'll even welcome you new Coke. (51:49): You weren't that bad. Definitely not the Edsel of carbonated beverages. Join us next time when I clean a bong, which is not even my own. I'm just a good Samaritan. I