Make that Money, Honey: 4 Methods for Better Finances in Your Law Firm
There are a lot of things they don’t teach you in law school.
One of those things is how to run a business - especially the financial side.
Because we’re lawyers, we feel like we should already know this. So we decide to take an “out of sight, out of mind” approach and stick our heads in the sand. We say things like, “I’m not a numbers person” or “I don’t really have a math brain.”
Deep down, we feel scared and ill-equipped to look at our financial situation.
That’s something Leah Miller is working to change for law firm owners.
Leah started her career as a law firm office manager at the age of 27. She was working as a paralegal when the previous office manager left.
Leah looked at her boss and said, “I can manage your law firm.”
In a moment she’ll be forever grateful for, he said, “Okay.”
So she got a crash course and a book. She set up Quick Books, payroll, and all the things. Over the years, she worked her way up and got her MBA until eventually she became the firm administrator and CFO.
She never thought she would do anything else… until 2020.
COVID hit and for the first time, Leah saw what it was like to be home with her three kids and still be working. She loved it. She thought, “There must be a way I can do this all the time.”
In September 2022, a hurricane hit Florida and her office flooded. Once again, she was at home working with her kids. Again, she thought, “There’s gotta be a way this could be my life.”
Why couldn’t she be with her babies and still be professionally fulfilled?
So she started building her own business on the side doing bookkeeping and financial consulting for law firm owners. In May of 2023, she left her full-time job and started working in her business full time.
She saw the life she wanted, and she was ready to go after it.
Today, Leah helps law firm owners gain the confidence they need to look at their financial statements and use that information to strategically pursue their goals.
I asked her to share a few of the methods she teaches. Here is what she said:
Start with your big goal.
What’s your goal for this year? A lot of people say, “I want to hit a million dollars.” But that’s just an arbitrary number, so we need to backtrack and ask, “What is a million dollars going to do for you?” Is it allowing you to travel more? Hire more people? Serve more clients? Give it meaning.
Break it into smaller goals.
Figure out the average amount each of your clients brings in for you. Then, determine how many clients a month you need to reach your goal of a million dollars. If it’s 30 clients a month and you’re only seeing 10, the next question is, “What do you need to do to get to that 30?”
Do you need to increase your marketing spend?
Do you have all those clients and you’re just not closing them?
Is there a person problem or a process problem?
Breaking it down this way makes a million dollars feel a lot more attainable. You have a roadmap and a place to go.
When you’re not looking at your financials, you’re carrying around stress and worry. If you know how much money you’re spending and how much you have to bring in, then you’re not constantly avoiding your financial statements. You have a plan and you’re empowered to reach your goals.
Set Up Your Budget.
Set up your budget and re-evaluate each month. Don’t just set up a budget and then never look at it again (like Leah in her twenties). Go back and see how much you spent. If you were over your budget, why? What did you spend that put you over budget? Is that what you planned for? Was that necessary? How can you adjust next month?
Do a cashflow forecast.
A lot of clients have no idea what their average case value is. They know their cases, but they don’t know how much might be coming in from each case. A lot of people will use an average case value based on historical cases, which is fine. But at the same time, you need to know what you actively have in your catalog of business. If your current case value is under your average case value, then you need to make some plans to bring in more revenue.
If you’re reading this and in your gut you know you’re not handling your financials to the best of your ability, reach out to Leah.
It doesn't have to be anything hard or complicated. You can start with the basics.
Where to find Leah:
LinkedIn: Leah Miller
Website: www.lnmfinancial.com
And if you KNOW you need a community to help you go to the next level in your career, we have a spot for you at the Powerhouse Lawyers Retreat
Powerhouse Lawyers Retreat brings together a community of ambitious, forward-thinking female lawyers who are craving meaningful connections, career advancement, and a culture of encouragement, accountability, and support. Click here to check it out!
We’d love to have you with us.
Erin
