From $250k to $750k: How Not to Fall Into “The Crack”
Join us for a next level episode of the NewLaw Podcast for Entrepreneurial Lawyers
Ali Katz is speaking to those of you who are making the leap to scale from 250k to 750k, sharing how to navigate this part of the journey without falling into the cracks and pitfalls along the way that would keep you from reaching your goals. Ali, as always, shares how you can reach these goals while still having your time, attention, and energy, and how to enjoy the process along the way.
Key Takeaways:
- Recognize the Critical Stagnation Points: Transitioning from $250k to $750k requires different systems and mindsets. Identifying and planning for these stagnation points can prevent your practice from backsliding.
- Importance of Financial Management: Developing a financial roadmap and understanding cash flow forecasts is crucial for making informed investment and growth decisions. This helps in anticipating financial gaps and planning to bridge them
- Building a Reliable Team: Hiring the right people and creating a supportive team environment are vital for sustaining growth and reducing the owner's load. Effective delegation and leadership can substantially enhance your firm's capability.
- Strategic Marketing Systems: Moving beyond basic networking and referrals to systematic marketing efforts is necessary for reaching the $750k milestone. Integrating new marketing channels can drive consistent client engagement and revenue streams.
- Mentorship and Hands-On Support: Continuous coaching and guidance from experienced mentors can smooth the scaling process. Personalized advice helps in navigating the complexities of business growth more effectively.
Transcript
00:00:03 so in our scaling foundations program and we're taking our members from 250 to 750 we're mapping a three-year plan we're mapping a three-year financial plan so that you can see oh exactly this is how many clients I'll need this is what my average fee will be this is the team I'll need to be able to deliver on that capacity this is the marketing plan that I'll need in order to be able to get that many clients and when you can see all of that then you can decide you want to fund it now you're not terrified
00:00:33 of using credit you're not terrified of going into debt if you need to cuz you can see oh I'll be able to pay it back once I make that leap to that 750 but if you don't have that you're going to fall into the crack and of course you're going to go backwards welcome to the new law podcast for entrepreneurial lawyers here at personal family lawyer we want to help more families and business owners make Eyes Wide Open legal and financial decisions but we cannot do this without you which is why we started this podcast
00:01:01 to find those of you ready to offer a better way to serve your clients so if you are a legal professional who wants to help improve the legal and financial well-being of your clients and offer a service model that differentiates you while meeting the needs of your community and rest easy knowing that you are running your law practice like a real business then join us on this journey by subscribing to the show and find out how you can use a new law business model to love your life as a lawyer [Music]
00:01:35 hello hello everyone this is a special birthday treat from me to you and today's episode is an important one because we're seeing it more and more lawyers who are coming to us and asking us oh I've seen your ads about helping lawyers get into estate planning or build their new estate planning practice or get to $250,000 but what about lawyers who are doing $250 ,000 $300,000 already do you help us as well and oh boy do we help you as well absolutely 100% we don't advertise that as much because there's a much bigger Market of
00:02:11 lawyers who are looking to get into estate planning or transition into estate planning but because I've been doing this for so long and I've been helping lawyers for so long be able to transition their law practices into businesses that they love and our first level goal for our lawyers is $250,000 because Topline Revenue cuz that's really where business starts that's really where business starts up until 250,000 a year of Revenue you've got to practice it's dependent on you you don't really have the revenue to be
00:02:41 able to build any systems in place for the most part and yeah you're in practice mode but at 250,000 that's where your business starts and so as our personal family lawyer firm leaders hit to 50 now it's about getting them to the next level well what is the next level you might think that the next level is 455 00,000 but actually that's not the next level the next level is 750 what do you do to make that leap from 250 to 750 that's what we're going to be talking about today that's what we're going to
00:03:11 be talking about today so let's look at it and by the way I didn't know this when I was starting on business I didn't know this at all really by luck I would say was able to make the leap from the 250 to a million satisfactory because I was really good at sales and marketing and I got okay at building my team but because I didn't get good at what I'm going to be sharing with you today I was able to get to $1.5 million in Revenue two times in business before ending up in bankruptcy falling into the crack
00:03:45 that I'm going to be sharing with you about today big time now once I figured this out I was able to get over the crack I was able to get to 3 million and then 5 million 7 million now 10 million in revenue and I'll tell you at every single stage there's cracks for you to fall into at every single stage there's cracks for you to fall into and the crack that I'm talking about today is that 400 that like 300 400 500 $600,000 crack that you can leap over with the right support with the right systems
00:04:17 with the right Focus from your 250 to 750 and then you can stabilize at 750 okay we call that our staffed practice model you can also stabilize at 250 we call that your solo model you can also stabilize at about a million and a half Empire model but 450 500 even a million those are two cracks or what we call stagnation points my coo Ariel and I were teaching a new training for our members called scaling foundations and we were talking about these stagnation points and one of our members said that sounds like the crack
00:04:57 that's where I'm falling into the crack right and so it's the place where if you don't have what I'm talking about today you will actually go back you will go back you will not make the leap you will go back and you will think to yourself I'm bad at business I'm a bad leader I don't want to grow and you might have trauma around hiring I don't want to have a team I just want to do it on myself I don't want to invest in marketing I'm not good at marketing right these are some of the things that you'll tell your yourself as you fall
00:05:31 into the crack if you know what I'm talking about this crack this stagnation point this place where you're starting to think to yourself I don't want to team I don't build a business maybe I just want to stay to practice maybe I don't want to learn how to do marketing my marketing isn't working it's actually none of that it's actually that you don't have the right systems in place to support you and it's why we give every single one of our Members First a law business success coach to help them get to that 2D and
00:05:59 then then support them to build these systems that I'm going to tell you about today so what are the systems the first and most important system is a system for learning how to work with your financials that's what I never did in my first two go rounds you can get pretty far without it but you're going to be in constant stress worry and fear of running out of money because you are going to run out of money when you're leaping over the crack and with enough foresight and vision and a financial forecast to support you what we call a
00:06:26 cash flow forecast and a calendar to match and the support of either coach or a CFO and knowing how to work with your CFO and knowing how to work with your bookkeeper and knowing how to work with your tax adviser this a huge piece of what we train on in our scaling foundations level oh now you can see okay I know exactly what I need to do to leap over the crack I know what investments I need to make I know what I'm Investing For I'm investing to buy back my time and I see when I'm going to get to my next level of stabilization of
00:06:55 consistent income consistent cash flow that I can count on and now I'm going to have an asset that I've built where I can go into my office 2 3 4 days a week and know that the clients are still coming in and getting served I've bought back my time and at 250 Topline Revenue you're going to be able to take home 1 to 150 because you've got business expenses You' got taxes at 750 you're able to take home 2 to 250 maybe even three depending how efficient you get but at 450 to five your take-home doesn't look very good because of what
00:07:27 you need to do to service the client base to attract the clients and service the clients at that 450 to 5 and it's really hard to get consistent it's very it can be up and down it can be up and down it could be up and down and so we want to get you to that stabilization place of 750 and what that requires is new Marketing Systems new team new technology systems and new Financial systems different systems than what got you to 250 now what gets you to 250 a service model a high value service model
00:08:00 knowing how to engage clients knowing how to price those services and engage those clients at the right average fee for you to be able to deliver on that service model and this is why we teach our service model first Life and Legacy planning is the first thing that we teach and this is a proven model developed over the past 20 years we we teach our pricing model how to help your clients choose their own fee and we teach our engagement system and intake systems most of our lawyers have nearly a 100% engagement rate once they learn
00:08:32 the system that's the first thing that we teach because once you know that that can get you too about that 250 and you could do that with free marketing with networking then once you want to get from that 250 up to that 750 what do you need would you love direct support to help you grow your law practice into a business you love go to newlaw busm model.com slow and sign up for a call with one of of our trusted law business advisers each of our advisers has been trained directly by me over the past 5
00:09:06 years plus to help you chart your path from wherever you are now to where you want to go as efficiently and effectively as possible you're ready to grow we are here to help now you need team you need more technology and you need to start doing marketing in a different way adding in new marketing sources new marketing channels and you need a financial model that helps you know what investments to make when and as you start to make investments where it feels like oh my God as I earn more money so do my
00:09:40 expenses go up yes of course you're able to see exactly why that's happening and plan for it and leap the Gap the financial gap that you're going to have and know how to do that whether it's going to be from investing credit savings retirement borrowing from friends and family maybe your parents credit score like like my mom invested in me and you know you're going to do that with your what we call Your Eyes Wide Open Your Eyes Wide Open that's one of my uh sets of teachings in fact I think I have the Eyes Wide Open time
00:10:10 money and taxes group linked here if you want to join our broader Eyes Wide Open Community where we focus on supporting with your time money and taxes using a lot of these principles not just for lawyers because they're across the board the same right so in our scaling foundations program when we're taking our me numbers from 250 to 750 we're mapping a three-year plan we're mapping a three-year financial plan so that you can see oh exactly this is how many clients I'll need this is what my average fee will be this is the team
00:10:43 I'll need to be able to deliver on that capacity this is the marketing plan that I'll need in order to be able to get that many clients and when you can see all of that then you can decide how you want to fund it now you're not terrified of using credit you're not terrified of going into debt if you need to CU you can see oh I'll be able to to pay it back once I make that leap to that 750 but if you don't have that you're going to fall into the crack and of course you're going to go backwards of course
00:11:08 you're going to walk away or think about walking away constantly because you don't have a plan and this is again why we do the handholding because if you're trying to do this alone it's really easy to get caught in your head and just get absolutely terrified and then just turn around and head back the other way or make bad decisions that just reinforce the idea that oh I'm not good at business oh I'm not good at being a leader oh I'm not good at managing financials right but that's not what's true that's not what's true you just
00:11:37 haven't learned how to leap over the crack and you can either learn that the hard way like I did I learned it the hard way because nobody was able to break it down for me like this or you can let us help you you can let us hold your hand so yes we absolutely help established firms make this leap and you know you're an established firm if you've got a differentiated service model where you are able to consistently engage clients that you meet with for average fees of four or 567,000 for a systematized service that you love to
00:12:11 deliver and you're ready to buy back your time you're ready to move Beyond just networking or referral-based marketing that you're not really sure if you can rely on you're ready to get to that consistent income consistent cash flow that you can really rely on and you're ready to become a leader and that's what it will take to get from that 250 to that 750 I'm so glad I got to come here this way today and you know one of the other things that I'll say to you about this is that as a entrepreneur
00:12:42 as a business owner one of the things that you're going to need to do and get really good at is finding a way finding a way when life tests you right seem like oh I'm not going to be able to record my podcast today because something's not happening working with my podcast software I could have just given up I could have just given up and said ah not going to do it but I found a way found a way I was committed really wanted to record on this topic today because I could see that it's really critically important for you all to
00:13:09 understand what do we need in order to scale these foundations in order to make the leap in order to go from that 250 to 750 in order to not get stuck at 450 or 500 and then have to turn around and go back learning to become a leader learning to manage your financials getting that threeyear road map in plays oh and by the way way this January every January I run a program called Practical Magic it's a three-year strategic Vision planning process that I learned with my mentor in 2004 it was amazing it helped me achieve all my
00:13:43 three-year goals so much more quickly in like one year so I do that every January you can mark your calendar now January 18th 2025 is when it will happen you'll hear about it here you'll see ads watch the emails uh for you to be able to join that and the key though that I have found is Translating that threeyear Vision into that Financial road map so that you can see the numbers so that you can know exactly where the Gap that you're going to need to fill financially so you don't get scared when you do that
00:14:13 and then being able to work that back into your hiring plan your marketing plan the Investments right that you're going to need to make so you can get there so you can take home to 250 300,000 a year and have all your time energy and attention to enjoy it and then you're probably going to want to go to a million and then you're probably going to want to go to a million just note that that's another crack that's another crack a million sounds like a great goal but really the next level is a million five million 250 a million5
00:14:45 because that's going to let you take home about 400,000 again with new team new level of Team new level of marketing channels new level of Technology new level of financial management for that next level cuz what got you there isn't is going to get you there right what gu you here won't get you there you're going to need to uplevel in those four areas and yes we absolutely support you to do that if you are serving with a relational law model right now just we just support the estate planning lawyers through new law
00:15:15 however that will change in 2025 you can look forward to us expanding Beyond just the state planning lawyers super exciting to all relational lawyers all lawyers who offer a relational service that they can package with a very specific high value outcome for the people that they serve and if you are not offering estate planning we do have eyes wide open mentorship right now available for you right now where I support not just non-estate planning lawyers but people who have other businesses because any service-based
00:15:46 business in so many ways is the same business is business is business is business now your business is not the same as a construction business or a manufacturing business or restaurant but your business is the same as pretty much any other service-based business in terms of what it needs right in terms of what it needs all right everyone tomorrow is my 51st level birthday and so this is my gift to you today I hope you get to watch it please do comment here as you do and let us know that you saw it that will help it get more reach
00:16:16 as well and of course this will end up on the podcast later you can find the podcast at newlaw buus model.com podcast thank you so much everyone have a beautiful day bye-bye for now