From Attorney to Investor: 4 levels of business ownership
Are you building a law firm that works for you… or one that works you into the ground?
If you're feeling burned out, struggling to find time for yourself, or wondering why your law firm isn’t supporting the life you’ve worked so hard to create, you are not alone.
After working with hundreds of law firm owners, I've personally scaled a firm from 0 to $3.5M in less than 3 years while achieving more freedom and profitability than I ever imagined.
In this episode, we dive deep into the four levels of law firm ownership and the exact steps it takes to move from attorney to business owner to CEO and beyond.
What You’ll Learn:
The 4 levels of law firm ownership and how they shape your journey
How to move from the Attorney Level to the Manager Level (and out of "Law Firm Hell")
What it takes to build a law firm that runs without you, so you can finally take a vacation
How Attorney Bert Diener went from struggling with multiple offices to becoming an Investor Level law firm owner with a healthy profit margin
The critical decisions that will determine whether your firm supports your lifestyle or drains it
Transcript
YPM POD - EP098 - From Attorney to Investor: 4 levels of business ownership
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[:Richard James: As the owner of a law firm, do you find yourself thinking life's got to be better than this?
Richard James: Do you think to yourself, why am I not making the amount of money that I deserve to make after all the effort and work I went into becoming a lawyer?
Richard James: Why do I not have any time? Can't get home in time for dinner.
Richard James: Don't have weekends to myself. Can never take a vacation without my laptop and my cell phone. My gosh, that's a dream.
Richard James: Why is it that I'm not sure if I have a plan for retirement after all these years?
Richard James: Listen, I get it.
Richard James: I've worked with over a thousand law firm owners just like you. I built a law firm myself and I'm telling you it is possible to achieve building a law firm that supports your lifestyle rather than undermine your lifestyle.
Richard James: The law firm that I built in Phoenix, I built it from zero to three and a half million, but most importantly, the owner of that firm was able to take a month long vacation just after our first year in business and we maximize profitability.
Richard James: See, that's the key.
Richard James: time and money, right?
o the question is, how do we [:Richard James: There are four basic levels of law firm ownership.
Richard James: And I'm going to give you tips as to how to go from one level to the next, so you can hopefully identify where you are and then identify where you want to be.
Richard James: So let's talk about the very first level.
Richard James: We'll call this the attorney level, right?
Richard James: The attorney level is where you as the law firm owner are doing just about everything. You're the chief cook and bottle wash. Every single thing that has to be done at your firm is likely done by you. Maybe you have a little bit of help, but primarily it's all resting on your shoulders.
Richard James: Does that feel familiar? Let's look at this, shall we?
Richard James: So we have the attorney level.
Richard James: And the question is, how do we go from the attorney level to the next level?
Richard James: This reminds me of of Ron Kohler. Ron is still today an attorney who started his practice back in the 80s. And for many years, he ran his business like a professional practitioner.
d James: The thing we talked [:Richard James: Ron was very much a professional practitioner,
Richard James: but at some point, Ron decided that he wanted to be a business owner. And when Ron and I met. We started to set a plan in place for Ron to be able to break free.
Richard James: Ron wants to keep it small and keep it all. And that's okay. You don't have to grow your business to some massive number. It's not about topside number. It's about building a law firm that supports your desired lifestyle rather than completely undermines it
Richard James: the first thing that we did with Ron,
Richard James: was we started by making sure he raised his prices.
Richard James: That was the primary goal. The second thing is we helped him find an executive assistant.
Richard James: Once we helped Ron understand that he had to get somebody to help him manage all of the minutia that wasn't legal work.
money and gain more freedom. [:Richard James: Does he want to keep going and grow his firm to the next level, or does he kind of want to stay where he is and maximize that level?
There's no wrong choice.
Richard James: But if you want to go to the next level,
This is what we call the manager level. Also known as law firm ownership hell.
Richard James: This is where a law firm is generating, 800 to 1. 2, maybe 2 million in revenue.
Richard James: And They feel like everything is still on their shoulder. They have multiple direct reports.
Richard James: All the legal work, all the lead flow, all the initial consultations. Everything flows through the owner and everybody else is there to do what the owner tells them to do.
Richard James: Jamie Miller came to me over a decade ago.
Richard James: Back then, Jamie was stuck in this manager role.
Richard James: He had to work every single Saturday. Many hours during the day.
Richard James: He stopped trusting his team.
as to continue to spend more [:Richard James: You need to figure out how to get out of this level. Quickly, because whilst you're here, you're going to be in hell.
Richard James: So if you want to escape this level two manager hell, your path out is profit.
Richard James: If you don't have enough profit in your firm, then you can't afford to hire people to replace you in the jobs that you're doing.
Richard James: How do you gain more profit? Raise your prices. Make sure your fees are at the right amount.
Richard James: Then, start to systemize your lead conversion system. You didn't need to spend more money on marketing or advertising. You just needed to convert the lead you had better. This is going to start to generate more clients at a much more profitable level,
ur replacements So that they [:If you're not quite sure what level you are at right now, you can go ahead and visit lawfirmanalysis. com. And then we're going to allow you to take this free assessment. And at the end, it's going to spit you out a result and you're going to be able to identify where you are right now. And most importantly, where you want to be and how to get there.
Richard James: Today, Jamie doesn't work Saturdays anymore. As a matter of fact, last year, he took his very first month long vacation. And he was able to now have somebody else run the business because He's ascended to the third level of law firm ownership.
Richard James: That's the CEO level.
Richard James: A level where you can run your law firm from the mountains or from the beach.
Richard James: Most lawyers tell me they don't actually think about selling their firm, because there's not a lot of places currently for them to sell their firm.
r the beach, in order to get [:Richard James: which means we have to get to about just somewhere north of 2. 5 million dollars in sales.
Richard James: It's practice area dependent, but 2. 5, probably 3 million dollars, this is where we can start to see the CEO level come alive. Because you should have approximately a million dollars at that point in owner's benefit making a lot more money than you spend.
Richard James: And when you're making a lot more money than you spend, you can really ramp up the systems and you can start to pay attention to all the pipelines.
Richard James: In some past videos, we talked about the four pipelines you absolutely have to pay attention to was the new client attraction pipeline. It was the workflow pipeline.
Richard James: It's the profit pipeline. And it's the talent pipeline. And as the CEO, at that 5 to 3 million or above, you've definitely figured out how to generate clients.
you're pricing correctly, we [:Richard James: and allow you to become a better leader.
Richard James: Now, this might be enough for you. I can tell you that George and Danielle McCraney, so George McCraney out of rural Georgia, criminal attorney who's now added immigration and PI to their practice area, they were generating, sub a million dollars in revenue when I first met them.
Richard James: Danielle used to take their baby, to the office and work from the office while George traveled hundreds of miles every single day going from court to court as a criminal attorney.
Richard James: George thought to himself, I'm always going to have to do this.
Richard James: This is what attorneys do. They go to court, they go to court, they go to court.
Richard James: And then he realized he could start to ascend to the business owner,
Richard James: he, was a professional practice owner at one point, and then he transitioned over to the business owners.
line, figured out how to get [:Richard James: George probably considers himself retired. Danielle considers George retired. He spends the majority of his time managing the family assets, making goodwill happen at the firm by showing up and making everybody feel good about what they do and helping raise their daughter.
Richard James: Now, this is important because they've chosen to build a firm that runs from anywhere.
Richard James: Danielle has chosen to be the CEO and they've started to master these four levels. Now, the question is, will they want to go to the next level of law firm ownership?
Richard James: We call this the investor level.
Richard James: The level where you're not the CEO, you're not the attorney, you're not the salesperson, you're not doing anything actually working in the business.
ou're the chairperson of the [:Richard James: Instead of having a top down mentality, you have a bottom up mentality. Around here, we call that flow.
Burt Diener is an immigration attorney a decade plus ago when he first came into our world, Burt had multiple different offices, he was doing multiple seven figures and by many people's Thoughts he was successful.
Richard James: The challenges he didn't have enough profit to even afford a plane ticket.
Richard James: And so the first thing that we had to help Bert do was become profitable. And as soon as he saw all the other frameworks and systems for the other four primary pipelines, he started doubling down on building these systems.
's officially arrived at the [:If you're going to retire from working in your business or on your business, and you're just going to be an advisor to the people who run your business, you have to have something else that takes up your time, you have to have a project.
Richard James: When we look at the four categories, he really had to pay attention to the talent category. He had to learn how to become a much better leader. He had to figure out how to become a level. three leader at this CEO level, not top down, but rather bottom up. Or if we can look at it left to the ownership of the firm from the perspective that
Richard James: his team, were going to make it better.
Richard James: What you have to do is figure out where you are right now. Are you in the attorney level? Are you in the manager level?
ility at the CEO level or do [:Richard James: There's an easy way for you to figure that out. I've created an assessment tool.
Richard James: It will ask you a series of questions, and at the end, it will spit out for you where you currently are. And even better, it'll give you guidelines as to what you have to do to go to the next level.
Richard James: So I invite you to go ahead and take that right now.
Richard James: There's a link below. Just click on it and it'll take you to where you want to be.
