Latest / Wealthy Woman Lawyer Podcast, Helping you create a profitable, sustainable law firm you love / 223: 3 Internal Law Firm Systems Every Law Firm Needs to Scale

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223: 3 Internal Law Firm Systems Every Law Firm Needs to Scale · Wealthy Woman Lawyer Podcast, Helping you create a profitable, sustainable law firm you love

• 0:00
  Davina: If you want to scale to 7 figures though, or even more in your law firm, you are going to need a team. You're going to need other people. Even if you just wanna have more time off without your law firm falling apart in your absence, then you will need a team that they're gonna get you out of the doing and help you transform into the high level CEO you want to be, or even just to be able to say no to work that you don't want to without the law firm you know, falling apart in the process.
• 0:32
  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.
• 1:03
  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. Now here's Devina.
• 1:23
  Davina: Hi, this is Devina. And before we jump into today's show, I'd like first to introduce you to some of our sponsors. When prospective clients are looking for an attorney, they usually turn to Google first. Optimize My Firm helps law firms grow their practices and attract more right fit clients through on page and back end search engine optimization. Optimize My Firm can help your firm rank higher on Google so that clients can find you before they find your competition.
• 1:54
  They serve personal injury, family law, workers' comp, immigration, and other types of law firms. Optimize My Firm does seo the right way, delivering meaningful results with geographic exclusivity and no contracts. Contact them today at optimizemyfirm.com or click the link in the show notes. Hi, everyone, and welcome back to the Wealthy Woman Lawyer Podcast. I'm your host, Devina Frederick.
• 2:20
  And today I want to take a deep dive with you into part two of my two part deep dive into the world of law firm systems. So I'm sure if you followed me for a while, you've heard me say that systems and automation are not the same thing. So oftentimes though they are conflated. What I'm gonna be talking about today is systems and not automation. So this is not about specific automation tools.
• 2:44
  A system is a method for consistently accomplishing repetitive tasks rather than repeating and reinventing the wheel each time we undertake a task. We record each step of the process so that we or someone else can accomplish the same task when it is required to be accomplished again in the same or similar manner we accomplished it the first time. Automation on the other hand consists of technological tools applied to systems to make the operation of the systems faster, easier, more efficient. And automation can change so rapidly over time that it's really important when you're setting up systems in your business that you focus on your systems and then consider what automation you want to apply to those systems, right? So I've also shared with you that there are seven essential systems every law firm requires if they want to scale to seven figures and beyond.
• 3:39
  And I've written a book on the subject. So if you wanna go even deeper than I go in today's podcast, you might wanna get a copy of the book. It's called The Wealthy Woman Lawyer's Guide to Building a Systems Driven Law Firm Business, Seven Essential Systems You Need to Take Back Your Time, Avoid Burnout, and Create Lasting Wealth. So if you've not yet read it, I encourage you to do so. You can purchase a copy using the link in the show notes.
• 4:02
  Today though, I thought I would share with you three internal systems. And I've divided the seven essential systems into four external and three internal systems. External systems I've defined as client facing systems. These are processes or procedures that bring prospective clients into our world, get the right ones working with us, fulfill our role as attorneys to help them solve their legal issues, and then wrapping them up so we can get the case closed. I covered the four external systems in last week's episode of the Wealthy Woman Lawyer Podcast.
• 4:36
  So if you've not listened to that, I encourage you to do so either before or after this. You don't have to listen to the external before the internals. You can keep listening to this and then go back and catch up on that. Internal systems are systems that all businesses need going on behind the scenes if they want to operate properly and profitably. And that's what I'm going to go into with you today.
• 5:00
  Essentially, there are three internal systems and these systems are not unique to law firms. Every successful business must have systems for these three categories. So internal system number one is people management system. A people management system is a system for hiring, training, retaining, reviewing, managing, leading, and terminating employees or independent contractors and or independent contractors in your organization. In the world of large, I wanna make this distinction for you because you may hear this used differently in other places.
• 5:35
  In the world of large corporations, you might hear the term HR or human resources for the legal and compliance side of management of team members in an organization. So maybe you've worked for a large firm before or a large organization, they had an HR department and that HR department was the one that was responsible for making sure that you signed your employment agreement or you got the policies and procedures manual, or they went over your benefits with you, like your insurance or whatever, that's typically what the HR department does in a large corporation. If they are a large enough corporation, they may also have a people management team and or department. And that's a term that may be used in large corporations as people or department that helps people in an organization create work life balance, focus on wellness and or develop their career path within the company. For our purposes though, I have coined the term people management, one of my internal systems that I've identified.
• 6:41
  And for small law firms, that can include any and all of the above. So we're not separating these out into two different departments. We're not large enough to do that, right? But if you hear the term people management defined differently, that's why. So in other words, most small law firms, until they scale into a large national or multinational, international law firm business, they're lucky to even have an HR department.
• 7:05
  You've gotta get to be a pretty good size to have an HR department, at least midsize, what's defined as midsize. If you're a solo or a small firm, as the CEO or a managing shareholder of the law firm, you're likely to be handling most of the HR tasks yourself. In other words, you are the one, perhaps you have a team member or two helping you, but you're the one who's probably handling setting up the hiring process, the training process, a process for reviews and raises and promotions, and of course the firing or termination process, right? You likely are also responsible for setting the tone and the culture of your law firm with regard to work life balance and helping to create a career path for employees inside of your company. So perhaps up until now, you've been kind of winging it or taking it as it comes.
• 7:58
  Maybe you haven't hired anyone and probably the thing that's keeping you from doing that is not really knowing how to, or maybe you're afraid of making mistakes because you don't really have a process or procedure in place to help you figure out how to hire people, how to manage them, lead them, and to implement all the other processes that are required. If you want to scale to seven figures though, or even more in your law firm, you are going to need a team. You're going to need other people. Even if you just wanna have more time off without your law firm falling apart in your absence, then you will need a team. Team is going to be, they're gonna get you out of the doing and help you transform into the high level CEO you want to be, or even just to be able to say no to work that you don't want to without the law firm, you know, falling apart in the process.
• 8:55
  In the Wealthy Woman Lawyer League, we have a wonderful training called the five day hiring challenge, and this helps our members of the league create a hiring system so that they can start to expand their team and really get make quality hires and the right hires at the right time. This program has been absolutely transformative in its ability to help create a hiring system without starting from scratch. So check out the link in the show notes for more information about the Wealthy Woman Lawyer League and how you can join and get access to just this one gold nugget course, plus every other course that we offer in the Wealthy Woman Lawyer League. All right, internal system number two is financial management system. A good financial management system will help you accomplish three objectives.
• 9:46
  One is it will provide an accurate picture of your law firm finances at all times. So you know exactly what amount of revenue you're generating, what cost you must cover to successfully operate your firm without burning yourself out and the amount of profit in your pocket. Number two, it will allow you to make data driven and smart decisions. So not these gut or I'm guessing, or I think other people, or I feel other people are doing this, or this is what the quote unquote market will bear. What good financials will help you do is make data driven smart decisions about the management and growth of your law firm business in the long term, what is right for you and your business and how you can create your own economy.
• 10:33
  And number three, it will help you see the triggers that you need to pull to leverage your resources. So you can see what's out of whack, out of balance, and it's not just in the expenses category. Oftentimes it's in the income category, but you have to know how to read and interpret your financials to make those decisions. Good financial management is essential to creating and operating and managing a profitable, sustainable law firm business. And when I say profitable, sustainable, I mean more money in your pocket and also the ability to operate without your day to day involvement in all details of your business.
• 11:09
  At a minimum, your financial team should include a bookkeeper and a CPA. You can add to that a baker, a financial advisor, maybe somebody to advise on insurance, maybe one day even a chief financial officer or a fractional chief financial officer, CFO. One thing you should never do though, is abdicate your responsibility as a law firm owner of having a deep understanding of your numbers, the numbers in your business, your financials. Your financials are like a GPS guide to seven figures or more. Without understanding your financials and key performance indicators you should be tracking and what they mean, how to track them, you will struggle to grow a profitable, sustainable, wealth generating business that can operate without your daily involvement.
• 11:57
  Nothing is more stressing to me when I meet with a law firm owner and ask them questions about their financials only to have them respond, quote, my bookkeeper has that information or I'll have to get that information from my bookkeeper or I'll have to ask my CPA. At a minimum, you as a law firm owner should be able to quickly answer basic financial information about things like the amount of revenue you brought in last year, your profitability, what you're on track to do this year in revenue, the percentage you're investing in things like marketing to grow your business, the cost to acquire a client, cost to provide a particular service, the average value per matter based on a matter type and other similar questions like these. You should be able to understand that. And you only gain that understanding by understanding how to read your financials and then actually doing it and making it a part of your priorities and your routine. Your bookkeeper is responsible for entering data for you, but it is your responsibility and entering it correctly is your responsibility to understand what that data means.
• 13:08
  And so you must practice that to be able to get good at it. Your CPA is responsible for, if you have a good CPA, developing a tax strategy as well as paying your helping you pay your taxes and do that. Right? Good CPAs can also help you make decisions with regard to investments and things like that. If you do not feel like you can do this because you don't like math, because so many people always are hanging it on lawyers' necks.
• 13:33
  The reason I went to law school is because I don't like math or I can't do math. Trust me, it is much easier to understand than you think. If you can put yourself through law school and you can pass the bar and you can start your own law firm business, you can do basic business math and you can understand your financial reports. In the Wealthy Woman Lawyer League, we teach you how, and we also can answer your questions about financials so you never have to feel embarrassed or lost again when somebody asks you about your basic financial data. Internal systems number three is a technology management system.
• 14:10
  Technology management system includes systems for selecting, implementing and managing the technology, so software and hardware that you will need or you want to use in the operation of your law firm business. It answers questions like what technology do you need? Who will make those decisions? How will we purchase it? Who will implement it?
• 14:32
  Who requires training to use it? How will it be used to improve your law firm's efficiency, bottom line, and more? One of the biggest mistakes I often see law firm owners make with regard to technology is they see other attorneys on social media in these popular social media groups talking about specific tools, brands, or types of technology, and they feel they must get that same tool or technology that they needed, even though one, they may already have a piece of technology that performs that exact same function, but two, they are not fully trained or knowledgeable about the technology that they already have. And three, they don't really feel, they don't really have a great enough need for a particular technology to warrant investing in it just because someone else uses it who has a vastly different circumstance, different type of practice, different desires, or understanding of how to use technology. And I'll give you an example.
• 15:36
  There is an attorney who is always talking about technology and encouraging people to get tools because she has not used regular case management software. She's put together her own case management process and procedure and systems using other technology tools that may be used in other industries. And she's put them together in a way that really works for her. But she's also somebody who one is a technology thinker. So she thinks like somebody who has that technology brain.
• 16:10
  She's not intimidated by it. She loves it. She loves to spend hours setting things up, certainly the exact way that she wants them. Also, she is somebody who has a lot of time and is willing to invest and devote the time into learning new tools and experimenting with them, trying them out and rejecting them if they don't fit and acquiring new things that they do. So while that from the outside, that looks really like fun and exciting and like really cool to be able to do that, there are certain people who can do it and there's certain people who can't.
• 16:44
  I'm one of those people who doesn't really like to mess with the technical part of technology. I love tools that work for me, but I want somebody else to set them up and getting them working for me because my mind does not work that way. And I don't really want to learn that. I wanna know how to use things properly, but I definitely have a team of other people involved in helping me purchase and implement my technology and make good decisions about what I'm using. So as with anything else in the management of your business, developing a process of how you'll onboard new technology, just like developing a process for onboarding people will save you from making costly mistakes.
• 17:25
  Everyone loves automation and what it can do for us as lawyers. And we are living in a really exciting time when there's so many wonderful automation tools available for us. Automation has transformed the law firm industry in many ways, but it also can be a money suck if you keep purchasing technology you do not need, or you will never use properly because you don't have time to learn it, be trained on it, and you already have something that could do the same job that you probably haven't even invested time and energy in getting trained on to begin with. So it's good to have a system in place to manage this process of incorporating technology and automation in your law firm business. I see a lot of automation software subscription line items under expenses that are too high for people who are experimenting with things that they don't use and then letting those subscriptions run and not really getting trained on it.
• 18:19
  It's a waste of money. It's a leak in your bucket. So having a good process for logically, reasonably analyzing whether or not you need software is important. Right, so that's it for today's episode. I'll be back next week with more great content.
• 18:32
  If as you were listening, you realize you do not have all three of these internal systems in place or set up as well as you should be, then I invite you to enroll in the course I have created as a companion to my book on law firm systems. That course is called Law Firm System Solution. And in it, I teach you everything you need to know to implement systems in your law firm with total ease. Also included are the templates, resources, guides, cheat sheets to make it as easy as possible for you to get started. So no having to recreate the wheel yourself.
• 19:07
  The link is in the show notes. So grab this resource now. In honor of the season, I'm not waiting until Black Friday to offer this powerful training for 50% off. It's never been and never will be more affordable for you to get all the help you need to set up your law firm systems now. The code for 50% off is in the show notes with the link.
• 19:28
  Just go to the link, use that code, and you'll get 50% off from now through Cyber Monday. So thanks again for making the Wealthy Woman Lawyer Podcast the number one podcast for women in law in The US. Please leave us a review if you are loving the content and enjoying it. We so appreciate it. Every review tells Apple that we're a popular podcast and they should expose it to more and more people so they too can get the help they need to scale their law firm.
• 19:55
  I will be back next week and see you soon.
• 20:00
  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.