Goal Setting Approach for Estate Planning Firms with Maintenance Programs

Happy New Year. I’m Melissa Shanahan, and this is The Law Firm Owner Podcast Episode #292.

Hey! Before we get started, there is something you should know. Mastery Group is opening for enrollment on January 15th. Last round, we opened up enrollment, and we had a different plan we were executing to go more in-depth with the new members. And holy cow, it was incredible. I can say this with certainty. There is no other program that exists out there that serves this segment of law firms as effectively and as comprehensively as we do. We meet you where you are.

We provide hands on support to help you gain clarity on where you want to go and get a clear grip on your firm's data. And that sets you up to be able to plan better than you ever have before. And then with tools that we cover, for example, Monday Map Friday Wrap, plus accountability, sets you up to actually follow through on your plans. This is the work that creates velocity.

If you are a firm whose annual revenue is somewhere between $250,000 and $1,000,000 and you would like to work together next year, go to velocitywork.com/join. You'll be led to fill out a form and be given a link to schedule a consult with me. I can't wait to meet you. I can't wait to work with you. Let's make 2025 the best year yet.

Welcome to The Law Firm Owner Podcast, powered by Velocity Work, for owners who want to grow a firm that gives them the life they want. Get crystal clear on where you're going, take planning seriously, and honor your plan like a pro. This is the work that creates Velocity.

Hey, everyone, welcome to this week's episode. I am back. This is the first time I'm recording since the holiday break, and it feels really good to be back in the swing of things. We have been hosting clients in the workspace, kicking off their 2025 in a really strong way. We have been kicking off our groups that we lead and it's just been a wonderful return.

This year for us as a company is really all about sturdiness, about yes, we have systems and we have processes, we're going to dial those in more and just put our best foot forward and keep a very good pace. You know, last year was a year of really big growth and development for our company. And this year we are going to really remain steady in what we have created so that we can focus on being able to put our foot on the gas should we want to in 2026.

So this year is really all about calibration and becoming more sturdy within our systems, within our processes. I know that you all listening have either had years like this or phases like this and some of you want to have phases like this. It seems as though as time goes on for my own company but also for the clients that we work with.

There are years that you're pushing at growth, you're expanding on purpose. And then there's years when you focus more internally so that you can grow more sustainably in the future. I had a mentor once that would call these non-growth years. And though inevitably it seems every time you have a non-growth year, you do grow, but it's not the push. That's not what you're pushing for.

The things that you're pushing for in that year are more internal, focusing on the foundations of the business. So that is the year that we are walking into as a company with Velocity Work. Inevitably, I know, I understand the cycles of our business and we're going to grow. Inevitably, we are. That is the nature of the way that we've set things up. The work that we did in 2024 is going to really allow us to grow without putting our foot on the gas in 2025.

And so this is the year for us, for sturdiness is the word that I keep coming back to. And I'm really looking forward to I'm looking forward to spending more time with the team, development of the team, development of our systems and our processes. We're, you know, changing up some of the technology that we're using so that we have a sturdiness from that perspective. And I'm just really excited about all of it. I hope wherever you are, you are excited for what's ahead of you as well.

Alright. So today, what we're going to dig into is something that when I am working privately with a client and we're doing a bunch of math on the whiteboard and we're figuring out their plans and we're reverse engineering and we're testing it out, and there's a couple of different ways that you can set goals and depending on where the client is and what the focus is, it really helps us determine what we're gonna use, what methods we're gonna use to be able to achieve a goal and to be able to set a goal and determine what goal is right for the company, for the business that year in particular.

Now, I will share both of those things. That's not the point of the podcast, but just as a quick aside for any of you who are kind of in the goal setting mode right now, there are times where I'm working with someone and they know they have got what it takes to be able to just really strive for a number, even though they can't see their way to it. They don't know the how. And once they tell me what that number is, then I can reverse engineer backwards from that. Or we can build up to determine what goals are the right goals to set for that year.

And this is really looking at with the people in place and the capacity that exists within the business and looking to add certain capacity based on growth and what is happening and when they'll be ready to pull that lever of hiring someone. We think about it from that perspective and we look at, okay, what's the production that is going to be possible because of this team and because of the capacity that exists in this company? And when we map all that out, it really helps us define the projections for the year.

And then you can get you can decide if you want to just shoot for those projections, or if you want to push at those and you want to actually, you want to do more than what the current capacity and what the projections are, then we look forward to that. And we decide how to hit bigger numbers, like that's what they're trying to go for bigger numbers. And that may be by adding people.

Now, this is why it's so important to do this work in a room, I think with people or guided, because we have our own biases. And when you are working on your own stuff, it's easy to get pie in the sky without really considering things from every angle, without looking through different lenses at how you can get to that number and the bear anticipating barriers along the way.

So I have some clients that growth is not a problem. They are growing fast through internal marketing or referrals are coming through. They're not even spending that much on external marketing and they just cannot keep up with the growth. So that's a very different conversation when we talk about projections within the capacity of the team that they have, and they have to deal with the growth.

Now, they can throttle the growth technically by either raising their fees or creating a waitlist or, or, or, right? Like that's one way that they can sort of throttle the growth. But if they don't want to throttle the growth, if they want to allow for the growth to come in, then that's when we talk about what does that scenario look like? What people do we need to add or what technology do we need to add so that we can increase the capacity within the company in a healthy way and looking at what that means. And then what does that get us to for the year?

So that's a very different conversation than talking to a firm that they need to spend on marketing. They are not growing at the clip that they could or that they know that's possible. They are not really attempting to win a share of the market at all. So they have a bunch of opportunity there and they're not really budging too much with growth. It's not just coming quickly, sitting back and just focusing on the legal work itself, the growth is not just happening to them. It is, but it's trickling and they need to push at it. They need to have some marketing efforts into place, etc.

So then that's a very different conversation because never in a million years would I suggest adding people for production purposes to increase income into the business. When you have producers, they produce and that is an investment. When you do that, you know that by making that decision to hire someone who's going to produce work and produce revenue for the business that you expect to return on that hire, on that position. That's the name of the game.

So if they are not growing very quickly, then you have to be very thoughtful about who you're going to hire because you could very easily hire and not have the work, their plate is not gonna be full for a long time. So you have to think about this.

So simultaneously, a couple things need to happen. Maybe they do start looking for someone because there is some work that can be given and then in the interim, they are pushing at marketing efforts that can increase the amount of work that's coming in and what does that look like? Do we just go out and find a full-time position whether that's a paralegal or an associate, depending on where the firm is. And then in the interim, what do we do? Maybe do we hire part-time? Do we hire contractors to help fill in as needed with the work instead of putting ourselves on the hook for full payroll.

So thinking through these things is really important. And it is totally fine to have a goal that you're going to shoot for. But it is not as easy to get to a bigger number, like a stretch goal, without a very different kind of effort.

So anyway, we get into a room, we get to hash all this stuff out. It's one of my favorite things to do is really meet people where they are, evaluate things from every angle, talk about the smartest move because I'm telling you there is not a blueprint for growth. There are different scenarios, different sets of circumstances, and you have to be willing to look at all of the solutions, not just what your successful friend that you know online who has a very successful law firm, like what they did and their path, that does not matter. It's good to hear people's stories, it's good to hear people's paths, but so often I meet people who are just doing what they see people they look up to doing, and that is not the right solution for their set of circumstances for their business.

So having a partner to help you look at things from every angle and make a plan and be able to get creative with solutions, especially in interim situations, that is the way to go. And that is difficult to do. So it's nice to have a partner to help you think through those things.

And in my job, in my role, I'm able to do that with private clients where it's just us and them in a room. I'm able to do that with the groups that we work with. We're able to talk through their specific scenarios and their specific circumstances and really help create a customized plan that makes the most sense for them to achieve what it is that they care about the most because it's not always revenue. And we all know that.

But I always, always, always set revenue either just projections if you're not trying to grow, but it's just projections or if you're trying to grow a revenue goal. And if you're not trying to grow and we use projections, it's because you are focusing internally. You are shifting your focus to focus on the foundation and have a "non growth year", even though there will, there's always inevitably growth, but you'll have a non growth year because that's our way of saying you're not pushing a growth. You're going to push at things internally so that it makes it so much easier to grow in your future. That is playing the long game.

All right, I sort of went on this tangent here just thinking of all of you who are starting out your year thinking about setting goals and hopefully some of these points just help you think maybe a little bit differently or approach more thoughtfully what you're going to shoot for and how you're going to decide what to shoot for.

Are you going to build up to see projections and then based on your growth and based on the pace of your growth, maybe you'll stretch it beyond that and figure out some solutions to handle the growth to be able to get the capacity that you need in order to serve the growth that is happening to you, quite literally. Or maybe you're not growing at that kind of a clip. And so instead, you're going to think through, I always start with projections, like if this, then that, like this is what this is going to mean.

And then deciding what levers you want to pull this year that make the most sense for the business, the health of the business, and figuring out then what does the revenue target need to look like based on your answers there. Because then you'll be able to determine if you do pull that lever, what is that going to allow you to bring in in terms of revenue? What is that going to allow you to save in terms of the money that you are spending inside of the firm for expenses sake? It really just helps to give you the lay of the land when you start to focus on what is so, so, so important.

And knowing what your targets are, knowing what you care about the most in the firm really helps you determine what levers you're going to pull and so what initiatives you need to set into motion so that you are able to honor what you say is most important. And sometimes that's increasing revenue. A lot of times it's increasing revenue. And sometimes it's increasing profit margin and just sort of pulling in a little bit.

And that makes me think when I said pulling in a little bit, that makes me think of a visual that hopefully helps some of you. When you think about year over year, how you approach the different cycles of your business and the different years of your business as time goes on, you can look at a year as a cycle. But you can think of it as high tide and low tide.

When it's high tide, you're going out towards the world. You're coming closer into shore and it's almost like you're reaching for more customers, more people to work for you, more opportunities, da da da da da. And then when it's low tide, you're basically pulling back in and you're focusing on elements internal in your business that are really going to set you up for a long-term sustainable growth and sustainable health within your business. So high tide versus low tide.

And you know, with what I was saying for my company, this year is a low tide year and that's deliberate. It's on purpose and it's the best thing that we can do for our company long term. Now there's years where high tide, it makes way more sense and where we are going to have our far reaching out into the world and letting people know who we are, what we are, what we do, putting out tools and value into the world.

Not that I won't do any of that this year. Of course, I'll put value into the world to the best of my ability this podcast for one, but it's just a different approach, a different kind of push certain years. This year is not the year for that for us. It's low tide.

So for you thinking about is this a high tide year or is this a low tide year? What feels more appropriate? What do you need? What would be the most helpful when you're playing the long game? Taking that into consideration can help when you're deciding what kinds of goals to set. I hope this was helpful to someone out there. I was not planning on going off on this tangent, but here we are.

And let's get to what we were going to talk about. Really what I wanted to talk to you about today is this conversation is for estate plan mostly I could see a world in which this could be helpful to someone else as well. But for all of you estate planning firms out there that have maintenance programs for your clients, this episode is built with you in mind specifically.

So when I am meeting with an estate planning firm that has a maintenance program, there are a couple of things to keep in mind as you are setting goals. And I'm just going to give them to you here because maybe they serve as shortcuts when you are trying to plan out your year.

So let's say we are trying to determine with the different aspects of your firm, where you will ultimately get in terms of revenue. So if you have a category of income for estate planning, and you also have a category for estate and trust administration, and you also have a category for elder law. Okay, great. So those are the three main revenue streams inside of the firm.

Okay, I'm using those categories, those revenue streams, because we have a couple of clients we work with that do that. So I'm well versed and I have my paperwork in front of me here so I can use an example from that. So that's the scenario. But they also have maintenance program. Now, the maintenance program is for one firm that I'm working with, it's generally somewhere between 8% to 12% of their overall revenue. And we do look at what it did last year, considering the growth that they had, what we want that maintenance program number to grow by.

You know, if we're doing a good job, making sure that people are funnelled or cycled into this maintenance program once their initial service is complete, then that's a win and we have to keep our eyes on that because that's the whole point right of the maintenance program is getting people into it so that it's easier for them to get updates and and service when they need.

Now here is how I'm gonna position this because it gets hairy with numbers while we're trying to figure this out but it's always so fun. You have a goal let's say it's $2.5 million and you're gonna lob off this is to keep it clean when you're setting your goals. Otherwise, it's messy and the projections are not nearly as accurate as they could be.

So you're going to lob off, you're going to take off what you expect the maintenance program to do next year. And I highly recommend that you make it a conservative projection about what that maintenance program is going to do or a goal. So if you have a goal and you want your maintenance program to grow by 20%, maybe just hear me out back off of that a little bit. If 20% is your total ideal, maybe you do 15% and if you go over a bit, that's okay. But when you're really projecting this stuff outwards, it's so deflating to be so off from your goals and it would be a win and it would be growth with 15%. Hopefully you can get 20. So just be conservative with what you are expecting out of something like this.

So you decide what that dollar amount is, you take that off of the top. And actually, I said $2.5 million. The paperwork I have up, I'm going to use a firm that is going for $3 million this year. That's what I'm going to talk about. So basically, the maintenance program, they expect to be about 11% of the revenue goal. And that's we talked through that. So that was a growth of about 10% for their maintenance program as a whole. So that's what we decided in terms of revenue.

That's how we determined that we're going to have 11% of the revenue be from maintenance come from the maintenance program. And so that dollar amount 11% of 3 million is about $330,000. So okay, now they have two cycles to their maintenance program, one at the beginning of the year, one in the middle of the year. So we know that the one at the beginning of the year is always bigger for them. So we're saying about 65% of the maintenance income is going to come in in the first quarter. And then about 35% of that maintenance income is going to come in in the Q3. So we know that, good to know. We have that set aside as what is gonna be happening this year for them.

Now, what's left over, we are now gonna split up because each revenue stream that I mentioned earlier, estate planning, estate and trust administration, and elder law, they each are going to contribute to what's left over of this goal. When we figured out, so we looked at in previous years and trends that have been happening in terms of what percentage of revenue each of these practice areas contributed to the overall revenue number of the legal work.

Now what we decided when we looked back at the historical figures and what percentage of revenue estate planning contributed, what percentage revenue estate and trust administration contributed and then same for elder law. When we looked at those and we decided what we wanted to set the target percentages at for the upcoming year. Like what portion of our business do we want to be estate planning, estate and trust administration, and elder law? What do we want to push at?

And really good conversations come out of this because there are certain things, certain processes or systems that they know that if they streamlined, they could probably get more money through the door. So it kind of helps inform really good conversations about foundationally what needs to happen with the business so that they see an increase or a bump within one of these in terms of contribution to the practice.

And so we have that conversation and we then we set target percentages for each of the practice areas. So in this example, we're using estate planning and that's 70% of the legal work revenue. Estate and trust administration be 14%, elder law be 16%.

And so then we're able to figure out, you know, we have this $3 million goal, we lobbed off $330,000. So then what's left of that, we expect estate planning to do 70%, estate and trust administration to do 14%, and elder law to do 16%. And so from there, it's easy to figure out the goals for each practice area for the year.

So I hope you guys can see where I'm going with this. And this again, I'm just going to pause here for a second. I know this is hard when you're listening. It would be so much easier to see it. But this is what I do with members and clients all day, every day. This is the stuff I'm focused on.

So yeah, if you wanna see it, can you please just come and get involved with us? I am giving it to you. If you do sit down and you push pause and you write your own notes down for your own firm as I'm talking about this, you can guide yourself through this. If you want to see it, if you want visuals, if you want help thinking through this, that is why you should come into our sphere so that we can help you do these things.

Your firm doesn't need to be a $3 million firm for that, by the way. This applies to a firm that's $350,000 a year in revenue or a $7 million firm. It doesn't matter. It's all the same. And how you look at this, this is facts, not feelings. This is breaking things down. This is having really good, informed conversation.

So if it sounds confusing coming through a podcast and maybe it does, it's hard for me to know. This is my job all day, every day. And I do realize that for some of the listeners, they can be like, what is she talking about? So I just want to acknowledge that I understand that some of you may be feeling that way, but I'm still going to give it here.

I've done other episodes that feel like this to very, very math heavy, but it's to show or provide an example on the podcast. That's my hope is to provide value in this way.

So going back to this example as I've sort of round this out, if we lob off the $330,000 of the maintenance program that's $2,670,000. Okay. Now I'm not gonna dig into or go into amounts from here because at least I don't think I am because I don't want it to just be too many numbers thrown at you.

But essentially from there, that number $2,670,000, that's what you'll say, okay, we want estate plan to be 70% this year, or you're just trying to keep it the same as what it always has been. Fine. So this year, it's going to be 70%. If that's what it has been in the past for you. So 70% of $2,670,000 is what? Whatever the answer is, that would be your goal. So that's the goal that they set this firm that's working with they set for their 2025 goal for estate planning income.

And then if you want estate and trust administration to be 14%, you're going to do $2,670,000, same number, same 2025 firm, like the legal work goal. And you're going to take what is 14% of that. That is the estate and trust administration goal or target.

And then same for elder law, it's 16%. So you'll take 16% of $2,670,000 and you'll get a dollar amount. And that's the elder law goal.

Now, you can break that up by quarter. A lot of firms that I work with prefer to break it up evenly so that all four quarters are the same. So they just divide their annual goal for each practice area by four. And that's the quarterly goals.

Some, however, give weight. They know that some firms are just busier in some seasons than other every single year and they know it. So they're going to actually give more weight to a certain quarter than the other quarters. So you can see what I'm saying. You get to decide here how you want to break up the annual goal.

And so if you break it up evenly, so you get the quarterly goals, break it up however you want to break it up, but you get your quarterly goals, right?

And then you get the monthly goals. Then you divide by three to get the monthly goals. And from there, that's just the targets every month that needs to be hit within each practice area. And then what we can do is divide the goal for each practice area by the average revenue of each matter or case inside of that practice area.

We know that because when I'm working with people, we work hard to make sure we're on that and we maintain that number that we always know what that number is because it's a fulcrum number. I've talked about fulcrum numbers inside of this podcast before. It is a number that you can use so that you can project in a way that makes sense for the firm better than anything else you could do.

So we get the average revenue. So, you know, whatever the goal is for a given time period, you divide it by the average revenue and it tells you how many matters you need in order to hit your goal. So that's the way we start to reverse engineer backwards.

And so now I'm gonna stop, because this is sort of enough. My whole point of the conversation was to mention the maintenance program. Oftentimes what people will do, and actually this happened in Mastery Group, there was a firm that was an estate planning firm with a maintenance program.

Because it's group setting, it took me a second to get in tune with that firm and realize like, oh, wait a minute. Okay. We need to lob off your maintenance program income from your goal and then you do these calculations with the percentages of each practice area.

And so I wanted to do an episode on this because it's not always obvious. When you're in the weeds with your own numbers, it's not always obvious. And I'm hoping that I can create a shortcut here for someone with a basically subscription revenue or recurring revenue that is not legal work inside of your business.

So the maintenance program is an example of that. If you are a firm that has a different version of this, where it's some sort of a subscription people are in, or if you have income that's not directly because of legal work, but it is an offer to clients that is income coming in that's not produced, right? It's not production, then you're going to need to do this. If you don't do it, it's going to make things very messy.

Your projections are going to be wrong. They're going to be off. You may actually discover that once you kind of get down to the nitty gritty, but you just spent a bunch of time doing a bunch of math that you didn't need to do, and now you've got to start over.

So my goal here is by sharing this, helping you understand, you have to lob it off of your goal and then use that number that's left. That's like a nut number. Then you can break it into the practice areas in a way that makes sense for your firm. And remember, these are meant to be smart targets and projections. They're not going to be exact, but you'd be amazed if you just follow the process. If you trust the process that I share here and that I work with my clients, you would be amazed at how close you actually get to your targets. It's pretty remarkable. And I want you all to be able to hear me when I say that. Trust the process. Don't think too hard.

And there's times you'll have realizations that are helpful or useful and it's because your gears are turning. But when people start to think, well, that's not the perfect way to do it, there's gotta be a more perfect way to do it. I'm telling you, you will blow your own mind with how close you get if you just trust the process, some of which I've laid out here today.

All right, guys, thanks for tuning in. If you're still with me, I know this is a very numbers heavy episode. So if you're still with me, thanks for hanging in there. Don't forget if you're listening to this in real time, Mastery Group opens tomorrow.

The enrollment opens once a quarter. It opens tomorrow. We're letting people in. We have a really great hands-on onboarding. We lead people through eight weeks, helping them get their numbers in order and their data collected. We work with them. We customize the trackers. And then we focus on Monday map after that. And this is all in preparation for you to actually have a productive strategic planning retreat. The next one that we offer, which will be at the end of Q1.

So we are very much looking forward to whoever comes in. If you are a listener, you like tuning in, you want help with this stuff.

Me and my team would love to be a part of that journey. And by the way, people ask all the time, "Are you in this? Or do you have people teaching for you?" No, this is me. I have a team that helps me and supports especially logistically and Giselle, you know, our COO, she's great on the operation side.

But no, I am very involved. I know every member and I get to know every member and I love meeting them where they are. So if this is something that you really want to do, the investment is ridiculously reasonable. We do that on purpose.

So come on in, get the help. Let us be your partner in helping you figure out and plot out your path that makes the most sense for you and your firm and what you're wanting out of your firm ultimately.

Okay, thanks everyone. I'll see you here next Tuesday. Happy, happy New Year. Bye.

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.

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