In this episode of Profit First For Lawyers, RJon explains the revolutionary concept of categorizing overhead expenses as either “static” or “dynamic” to better control costs and increase opportunity for growth.

RJon goes into detail about the differences between Static Overhead and Dynamic Overhead. He explains Static Overhead as fixed costs like rent, utilities, and subscriptions. Dynamic Overhead expenses include marketing, staff training, and financial planning. While Static Overhead costs are necessary to conduct business, these types of overhead expenses do not directly boost growth or increase profits. On the other hand, Dynamic Overhead fuels expansion and increases growth opportunities.

To illustrate the difference, RJon shares a cautionary tale about a law firm with stalled growth. Upon investigating the firm’s tightly controlled marketing budget, it was revealed that a successful employee networking initiative delivering great ROI was sidelined by an overzealous controller. By capping the dynamic marketing initiative, the firm likely missed out on hundreds of thousands in profits.

And most importantly, order your copy of Profit First for Lawyers today!

Your future self will thank you!

Fear and self-doubt can prevent us from achieving our biggest dreams and reaching our fullest potential. In this special Halloween episode of the Profit First For Lawyers podcast, Karli and Raul discuss how to face fears, unmask ego, and breakthrough limiting beliefs.

Their conversation revolves around a clip from a Facebook Live in 2021 of RJon talking through an early draft of the Profit First For Lawyers book. In the clip, RJon challenges the assumption that running a highly profitable law firm requires extreme luck or privilege. He asserts that if instead of making excuses, struggling lawyers spent time with highly successful lawyers they would realize the only difference is the choices made – choices struggling lawyers can also make.

Tune into this episode of Profit First For Lawyers to discover how you can unmask the fears holding you back.

And most importantly, order your copy of Profit First for Lawyers today!

Your future self will thank you!

Listen to past episodes with Raul Longoria: Killing Your Ego | The Power of Boundaries

Resources mentioned:

Additional information on the Dunning-Kruger Effect can be found in the Killing Your Ego episode.

To learn more about Live Quarterly Meetings visit https://howtomanageasmalllawfirm.com

An overview of Total Owner Benefits (TOB). Looking beyond just salary to the full profit potential law firm owners can receive as outlined in Chapter 9 of the Profit First for Lawyers book.

RJon explores conventional vs. creative definitions of profit. He also tackles law firm owner pay as it relates to fair market salary for their work roles. He discourages inflated owner salary beyond what the firm would pay anyone else for the same job, as doing so reduces company profitability.

Attorney Andrea Shoup shares how she is implementing Profit First reporting and planning at her law firm with great results so far.

And most importantly, order your copy of Profit First for Lawyers today!

Your future self will thank you!

In this episode, we are joined by RJon’s personal accountant, Daniel Ferro to discuss perspectives on profitability. Daniel shares his journey from traditional accounting jobs to joining RJon’s fast-paced team at How to Manage a Small Law Firm. Daniel offers a glimpse of what it is like to work closely with RJon and the insights he has learned along the way.

Daniel explains how RJon taught him the win-win concept. Which states that every honest exchange is profitable for both parties involved. Karli shares her own discussions with RJon about the win-win mindset as well.

Karli and Daniel discuss what profitability means both professionally and personally. Daniel reveals he is using Profit First accounting principles in his personal life. Which shifts the conversation to prioritizing what matters most in business and life.

In a clip from chapter nine of the Profit First For Lawyers audiobook, RJon expands upon the possible answers to, “How profitable is your law firm?” A question with conventional and unconventional answers dependent on who is asking the question. The answers may surprise listeners.

And most importantly, order your copy of Profit First for Lawyers today!

Your future self will thank you!

We continue exploring how Generally Acceptable Accounting Principles (GAAP) was not meant for non-publicly traded companies like private law firms.

RJon reviews how GAAP was created by regulators to standardize publicly traded company accounting after the 1929 stock market crashes. He argues GAAP has nothing to do with maximizing private company profits. This is only one of the many reasons why law firm owners should take a closer look at their accounting practices.

RJon says GAAP treats profit like luck and lawyers who use GAAP leave their profit to chance. Yet many lawyers still allow bookkeepers and accountants to manage their firms’ accounting using GAAP. In an impassioned plea, RJon urges lawyers to liberate themselves from an accounting system that does not put their law firm’s profits first.

And most importantly, order your copy of Profit First for Lawyers today!

Your future self will thank you!

Denise Doonkeen returns to discuss how truthful yet kind communication, even when uncomfortable, leads to better outcomes in business and life.

We hear a behind-the-scenes clip of RJon coaching Karli in the studio. After a “flat” reading, he urges her to give him candid and honest feedback about his narration performance. He explains that hard truth is far kinder than being nice.

Denise shares a story from a previous employment about an uncomfortable talk with an employee. Her kind yet direct approach brought an underlying issue the employee was dealing with to light, which led to a solution.

Karli and Denise emphasize the value of a thoughtful delivery when dealing with issues directly. They also discuss the importance of being open, coachable, and lifelong learners. Which is something they have observed in RJon.

Listen to Denise in episode 12: Perception vs. Reality

And most importantly, order your copy of Profit First for Lawyers today!

Your future self will thank you!

In our ongoing accounting and tax series, we begin a two episode deep-dive into Generally Accepted Accounting Principles (GAAP). RJon takes a hard look at the origins of GAAP, explores why accountants and CPAs continue to use it, and why opting-out of GAAP is worth consideration.

We hear a brief history lesson on the creation of GAAP. To do so we journey back to the Roaring ’20s when a booming stock market crashed triggering the Great Depression. This sudden financial collapse underscored the need for standardized financial reporting of publicly traded companies. So, GAAP was created with the goal of establishing rules and regulations to ensure transparency and accuracy in financial reporting. Which allowed investors the ability to make informed investment decisions. Which is a very good thing…for investors of publicly traded companies.

This is where RJon reminds listeners that small law firms are NOT publicly traded companies nor are they required to adhere strictly to GAAP. This is also where he encourages law firm owners to prioritize their profits and challenge the conventional use of GAAP by their bookkeepers and accountants.

The second part on the topic of GAAP continues in episode 31. For anyone who wants to skip ahead, turn to page 67 in the Profit First For Lawyers book to read more of RJon’s actionable insights.

Reference Source:

Visit http://archives.cpajournal.com/2005/105/infocus/p18.htm for additional information on GAAP.

And most importantly, order your copy of Profit First for Lawyers today!

Your future self will thank you!

In this episode, Oscar Ferenczi, General Manager of How To Manage A Small Law Firm, joins Karli in the studio. Oscar with a rich background in business discusses the importance of truth in business, growth strategies, and why it’s essential to seek advice from people who have themselves achieved success.

While accountants may be adept at accounting for revenues and expenditures, their entrepreneurship and growth expertise might be limited. He emphasizes how important it is for professionals, including accountants, to walk the talk and how crucial it is to be entrepreneurial and growth-focused, not just technically proficient. He challenges listeners to question their CPA’s or bookkeeper’s own business growth strategies and plans with the goal of seeking advice from professionals who practice what they preach.

One way to know if you are working with an accountant who has an entrepreneurial mindset is to ask them questions about how they run their business. The questions RJon asks in this clip will sound familiar to those who recall the 7 Parts of Every Successful Law Firm series.

Oscar shares the most profitable advice he’s received from RJon who holds a firm belief in “truth above all”. He and Karli discuss how transformative understanding (and receiving) truthfulness can be as an accelerant to personal and business growth. Oscar also discusses RJon’s “win-win” model, a driving force in deciding when and if projects move forward.

And most importantly, order your copy of Profit First for Lawyers today!

Your future self will thank you!

In this episode, we explore the differences between the oaths and responsibilities lawyers and CPAs have to their clients. Discover what sets them apart and the case for finding a CPA who will advocate for your law firm.

To gain insight into the core tenants and motivations of professionals such as CPAs or attorneys, RJon examines their respective oaths. One distinction is that an attorney pledges to zealously advocate for their client’s best interest while a CPA’s oath emphasizes serving the broader public interest.

Larry Brown (previously featured in episode twenty-four) is back to shed light on the public interest focus of CPAs. Wearing the hats of both CPA and attorney, Larry discusses the benefits of offering CPA services while advocating for client interests as a tax strategist. With his dual backgrounds in accounting and law, Larry Brown presents a singular view on the responsibilities inherent in each profession.

And most importantly, order your copy of Profit First for Lawyers today!

Your future self will thank you!

In this episode we look at the difference between costs associated with an expense and an investment.   Something may seem expensive, but if it helps you achieve your goals, it’s likely an investment not just an expense.

Delisi Friday, returns to discuss how one piece of RJon’s actionable advice encouraged her to challenge her mindset and cultural norms. She shares how what was once considered an expense is now a valuable investment in more quality time with her daughter, reduced daily stress, and more joy in her life overall.  

RJon reveals why expenses aren’t inherently bad or to be avoided. He explains that just because something costs money does not inherently make it expensive. On the contrary, certain expenses allow you to strategically reinvest in your business and personal goals. The key context is ensuring these costs truly align with and serve your short and long-term goals.

We hear the hilarious (and heartfelt) backstory behind Karli’s extravagant bonus gift which came out of a conversation during a book marketing meeting earlier this year.

After the overwhelming success of the Profit First For Lawyers book launch, RJon surprised Karli with her dream bathroom appliance. Delisi shares the many discussions she had with RJon regarding this particularly unique bonus and the planning which went into turning Karli’s dream into a reality.  

We also hear a humorous clip from the recording studio when this particular bonus was discussed in great detail. Though unconventional, this thoughtful gift illustrates the importance of listening, investing in, and celebrating team members who achieve key goals. Have a tissue on hand, because this episode will have you laughing and perhaps even shedding a tear or two. 

And most importantly, order your copy of Profit First for Lawyers today!

Your future self will thank you!

Listen to Delisi in episode eight: Procrastination & Your Favorite Ice Cream Flavor