I’m Melissa Shanahan, and this is The Law Firm Owner Podcast Episode #262.

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Hi, everyone, welcome to this week's episode. I’m so glad you're here. We're going to have a talk today. This is going to be a little ranty. Listen, I'm not saying I'm right without exception on this topic. But certainly I have some points to make based on what I'm learning from people that I get to talk to, law firm owners I get to talk to, on consult calls, where they're learning more about Velocity Work, and I get to learn more about them.

There are things that I'm learning on those calls that is truly disturbing. And I want to talk about it here so that you all can think about this in a way that feels right for yourself. So, this is the claim I'm going to make.

If you're listening to this, and you do not know what your gross revenue was for last year, and you don't know what your net profit was for last year, and you don't know what your gross revenue is this year, and you don't know your net profit for this year, you should absolutely not be paying more than $1,000 a month on a coaching or consulting program or practice, period.

There are some basic things that the coaching programs out there are not helping people get, they're not helping law firm owners get. I don't know why. I mean, I have assumptions on why, but who knows, right? But everybody I'm talking to, that are in different programs or have taken part in different programs, it is nothing to do with the person or the company running the program.

There are so many people out there that offer so many great things. This is not that I'm better than them, at all. But here's what I do know. Some of y'all are in programs that are like $1,500 a month, $2,000 a month, $2,500 a month, $3,000 a month.

And when I ask you for reference, just so I get to understand your firm and you a little better, when I'm asking you, “What was the income for the business last year?” “I don't really know. I could look it up, but I'm not sure. I don't know,” sometimes I’ll hear that. Or, “I have to get those numbers from my accountant,” or whatever. Basically, you can't answer the question.

And when I ask what your profit margin was, you can't answer that question either. What you can tell me is what you took home, which is a good thing for me, that that can be a reference point. But that does not tell me the health of the business at all. And so, not knowing what it was for the last calendar year, not knowing what it is so far this year, even “-ish,” right? Not even close. People can't tell me these things. This is very common.

And for those of you who are out there who just can't believe that someone doesn't know this, listen, do not be judgy. You are actually not the norm. Most people don't just know these numbers. But what I'm surprised by is the people don't know these numbers, and they're paying thousands of dollars for coaching or consulting. I can't wrap my head around it.

If you do not know some of these basic numbers that I have just shared, the gross revenue and net profit, if you do not know those numbers, if you're not familiar with those numbers, you should not be in a program that is thousands of dollars. You have some basic stuff to get under your belt.

Now, it doesn't mean that those programs are bad. But you are going to get so much more out of an advanced program, a higher-level program, with fees like that if you know your numbers.

What I'm learning is that most programs, coaches out there, they do not ask for these numbers. You are not on the hook to tell them these numbers. They are there to troubleshoot, to help you move through barriers, to address what's coming up. I'm listening to the people who are telling me on consult calls what their experience is with their own business. What their level of knowledge is with their own business, and it is not enough.

So, if you are listening to this, and you do not know those numbers, and you are in a coaching program that's thousands of dollars, I am not going to tell you what to do, but I would evaluate your options and make a call. Because it's not that you can't ever go back to that program if it's really fulfilling and it's really giving you what you need in so many ways. Alright, but can you just get back to the basics, the fundamentals, first?

There is no one that I work with, that I don't ask them to know this information and that we talk about these numbers. We do math around these numbers that is guided and led by me; for those of you who just feel like you're not good at math, that's why.

People like me exist, is to help you work through these things. And it puts you in the driver's seat. Some of y'all want these numbers from your accountant. By the way, the two numbers I just said, aren't the only important numbers. But those are seriously basic.

When you can't answer those questions around gross revenue and net profit, we'd back it up a bit, get your house in order, and then move forward in new ways, in more advanced ways. And by doing that, you will allow yourself to fly further faster when you're ready to focus on more advanced conversations. And all of it could be based on facts and not feelings; numbers and not hunches.

So what I was saying is that some people rely on their accountants or bookkeepers giving them certain numbers. And that's not a bad thing, but if there's not regular reporting for that, you should change it. If you have to ask, when you are asked and you have to go ask somebody for those numbers, that's not how this should go.

You are a business owner, you should get reports. If you have an accountant doing your work, or a bookkeeper doing your work, you should have monthly communication, or a link to your P&L. Or depending on the level of service that you're getting from your accountant, even just at the end of the month, a scheduled time for you to go look at your P&L in QuickBooks or Xero, or whatever you're using. This is stuff that needs to be kept up on.

What I'm just shocked by is the number of law firm owners I am meeting who are in expensive programs… and I know expensive is a subjective term... but I'm telling you, if you don't know your numbers, that's expensive. They're in expensive programs, and they have so many question marks about the basics of their business, the health of their business. They have hunches, they have opinions, but they don't have facts.

What are we doing here? This is backwards. Now, I've said that in a really ranty way, and here's the flip side of that, that I want to say that I think is just as true. There's nothing wrong with you, that you join something that you're paying thousands of dollars and you don't know your basics.

It doesn't mean there's something wrong with you. It just means we need to be more discerning about our choices. We need to have higher standards for our knowledge base on the health of our business. It is not the consultant or coach's job, it is yours. That's true, right?

But if you have a really good coach or consultant, this part of the conversation is not skipped. It is talked about. It is addressed. It is reported on. It's not the only thing that's reported on, but it's one of the things. Guidance on how to be intimate with your business, to understand what's under the hood of your business, is important and it is missing from a lot of the focus out there in the coaching/consulting world.

I don't understand it. I don't understand it. I don't understand how you can have productive conversations without knowing the numbers. I don't understand how you can build on that lack of knowledge, that lack of foundational knowledge. So, to me, to get yourself out of whatever you are in. If you are paying over $1,000 and you don't know these numbers, you need to stop it.

It's not anybody's fault. It doesn't mean the coach is bad. It doesn't mean the consultant is bad. It doesn't make sense. I know that's a claim, that I'm saying like it's a fact, and that is my opinion. But I have a lot of experience working with law firm owners. A lot of experience in the numbers, with owners. And the fact that you are engaged in a program that is costing you thousands of dollars and you don't know these things is unacceptable.

I'm going to put that back on you, not the coach or the consultant. So, I think you should view it as unacceptable for yourself. There are standards here, and you need to meet your standards. And if you need to guidance for that, get guidance for that. But you do not need to go spend thousands of dollars for guidance on fundamentals.

Fundamentals is something that I'm very, very focused on with every level of client that I work with. That is one reason why the price point for Mastery Group is what it is; it's $500 a month. There is a lot of knowledge, there's a lot of guidance, there’s a lot of templates, for you to become intimate with your business. For you to become familiar with what's under the hood.

And when I see other people charging $2,000 and $3,000, and they would love the idea of joining Mastery Group but they can't, they are spending thousands of dollars and they are in a contract, my advice to them is, “Look, I don't care if you come to Mastery Group or not. I would love to work with you, but I don't care. What I do care about is that you are making healthy calls for yourself.”

And what I am hearing repeatedly, this is a recurring thing that I'm hearing with consults… And it's not just one company out there. It's not just one coach or consultant at all. This isn't pointing the finger at anyone. This is just about the offerings that are available to law firm owners and what is chosen by law firm owners, it’s not giving you what you need.

I know that for sure, because if you don't know the gross revenue of your business and you don't know your profit margin… I mean, those are just two very basic numbers. Those are not the only two numbers that matter…. if you don't know those, if you can't answer those, you have no business being in a coaching program that is thousands of dollars and focused on stuff that can be helpful, you are missing the bedrock. You are missing the foundation and you need to go get that.

And it doesn't cost thousands and thousands of dollars. It just doesn't. It doesn't have to. I don't know all the coaching programs that are out there, but I do know that I have one that is set up for the basics, and for people to get very organized and very knowledgeable.

Not only do you get the numbers that you need to be looking at, but you also learn how to think about the numbers that you're looking at. How to make decisions based on numbers that you're looking at. How to let those inform your forward path. That is really what this is about. And if you can get that skill down, if you can get really used to looking at things from this perspective, you have a strong foundation for the future of your firm.

A lot depends on this. Your freedom depends on this foundational knowledge. Stability in your business is determined on this foundational knowledge. If you don't have this, it's very hard to create stability and sustainability. It's very hard to create real freedom for yourself. And by freedom, I mean profitability, evaluating the ROI of certain investments, including people that you're spending money on in the firm, attorneys, paralegals, assistants, etc. This is all foundational knowledge.

So yes, as a business owner I know you have a lot of barriers. You have a  lot of things that would be really nice to talk through things with someone about. But the truth is, you're focusing on the wrong things first, if you do not have this foundational knowledge. So please, please take a moment and really think through, and be discerning and have high standards.

If you are paying thousands of dollars, is what you are paying for giving you the return on your investment that you need? Is it helping you thrive, meaningfully thrive? Is it helping you make strides in the ways that you want to make strides? Or is there a gap in knowledge that you're really tired of having still?

You want it? You need to figure it out. Then make a decision that is useful for your and your firm's future. And if that means getting out of a contract… if you can, I don't know. In some instances, you won't be able to. But you just need to let it run out… But if you can, you should, because it's the best thing for yourself.

And get yourself familiar with the numbers. Get yourself familiar with just the basics of being able to own and evaluate your own business in a very healthy way. If it feels like there's a huge gap from where you are now to that level of understanding, get guidance. I have a program that offers guidance. There's other people out there, I'm sure. I don't know who, but I'm sure that there are.

I have given this a ton of thought, and I've curated a program that is specifically designed for this. And it just makes me sad every time I talk to someone who is making under $500,000 a year, they're paying thousands of dollars a month for some sort of coaching or consulting, and they cannot tell me their gross profit or their net profit. What is wrong with this picture?

They can't come into my program because, first of all, I don't want to work with someone who's working with two coaches. That's a no. You should be all in with whatever you're investing in. So, they are not coming in, partially because it doesn't make sense for the reason I just stated, and partially because they're just spending more money, right?

It doesn't make sense for them to come in and get the help that they need for $500 a month versus what they are spending, and they need to either let ride out, or they need to get themselves out of it. It's not because the program sucks, it's because it's not giving you what you need if you don't know these numbers.

Hopefully this is helpful. I think that there needs to be a bit of a wakeup call. There are a lot of businesses set up out there that charge a lot of money because law firm owners can and will spend it. There has to be better discernment. You have to figure out if who you are signing up with does feel like the guide for real, the guide that you need, and the partner that you want. All of that matters.

Someone who's going to meet you where you are, help you from where you are, and not just teach you a bunch of principles that should be done. Really, is willing to dig in. Is really willing to help. And I just don't see it enough. I’m hearing too many things. Too many specific instances about scenarios that are not in the best interest of the law firm owner.

So, I'm calling it out here. And if you need to hear this for yourself, if this is a little too close to home when I'm talking about it, yeah, this is something you need to think about. I don't know your best answer. I tried to create an answer that makes a ton of sense for a lot of law firm owners. But I cannot know what's best for you. Even if I think I know what's best for you, that's totally ignorant. You know what's best for you.

But you’ve got to get honest. Sometimes it takes a wakeup call to say, “What am I doing? I'm spending $36,000 a year and I don't know my gross profit and my net profit numbers?” Come on, we’ve got to wake up and smell the coffee here and make some good decisions for ourselves.

So, wherever you are, if this hit close to home, I want you to take a minute to evaluate this for yourself, to get really honest with yourself, and make decisions about your future. And if that means you stay in what you're in until the end of it, okay. If it means you attempt to remove yourself early, okay. You get to make these decisions, but don't unconsciously move forward in a scenario like I've described today.

Alright guys, rant over. Have a wonderful, wonderful week. I'll see you here next Tuesday.

Hey, you may not know this, but there's a free guide for a process I teach called Monday Map/Friday Wrap. If you go to VelocityWork.com, it's all yours. It's about how to plan your time and honor your plans. So, that week over week, more work that moves the needle is getting done in less time. Go to VelocityWork.com to get your free copy.

Thank you for listening to The Law Firm Owner Podcast. If you're ready to get clearer on your vision, data, and mindset, then head over to VelocityWork.com where you can plug in to Quarterly Strategic Planning, with accountability and coaching in between. This is the work that creates Velocity.