How to Achieve Financial Success in Your Law Firm | YPM Podcast

Annette Sonnenburg: [: 00:00:00

So, it's really, really important to have somebody that knows what they're doing, take a look, clean it up. I mean, and if you're not sure, just go out and find somebody that will do a second, take a second look at your books. You can't make important decisions if the data isn't accurate. How do you know what to do if it's all incorrect, right? 


MPS: Hey Law Firm Owner, welcome to the Your Practice Mastered podcast. We're your hosts. I'm MPS, 


d many of our clients do one [: 00:01:00

And that's in this art and science of making sure that the books are managed and planning financially forward properly. And so, Annette, Michael and I are so grateful for you and your team and what you do for us and what you do for our members. Thank you for being here today. 


Annette Sonnenburg: Thank you for having me. 


MPS: Of course. Annette now one of the things we like to do to, you know, break the ice a little bit is start with what is something that maybe not everyone knows about you? 


Annette Sonnenburg: Well, I actually, way back in the day, I used to sing in bands. So there's just an interesting little tidbit. Those were 


Richard James: Actually, I knew that. 


Annette Sonnenburg: Oh, you did? 


dy was going to try to sing, [: 00:02:00

Annette Sonnenburg: that was, That was the most fun party that I thought for me. I I had a lot of fun there that I thought that was great. 


MPS: well it was funny because Annette comes on to the mic and then you know Everyone's eating and drinking and then everyone stops and looks for a second because it's like oh, wow There's someone that's really good going up to the mic 


Richard James: Yeah, it was 


MPS: Yeah, it was entertaining Well Annette You know Rich gave a good introduction there but why don't you share little bit of the high level of your journey as an entrepreneur? You Um, 


ng everything, much like any [: 00:03:00

And then I decided to go into business for myself. And that's where I was a consultant and accountant, just sort of helping everybody that I could in that just with whatever I could. I mean, really, I didn't have a focus. It was just, I can help people. I want to help people, whatever they need. And then sort of as time went on, that's where I had to really look at focusing my services. 


I was really helping people [: 00:04:00

So, I did that and things grew very, very quickly. And in my stubborn way, I kept trying to move the needle slowly. my way. And I did have professionals that were telling me there are other ways to look at and somehow, you know, I feel like as business owners, we tend to [00:05:00] just kind of stay in that lane of, I'm pretty sure it's going to work this way. 


And we barely move that needle. And then eventually we get to the point where sometimes you even have to look at drastic changes. Just, you know, People have been telling me to do this thing for years. I'm going to try it. And then it's amazing how things can happen when you listen to other people that know what they're talking about. 


So I've been very blessed to have a really successful accounting firm. I'm the founder of Sonnenberg Consulting. That is now run. I brought in other people. They're running that and now I'm focusing on those CFO services and consulting services that I like. And so that's, that's sort of the quick timeline of my experience as an entrepreneur. 


so as a younger individual, [: 00:06:00

You know, the dynamic of the friends and family, plus the real life stuff that had to be done in a business that you probably didn't even realize how to be done. 


And he just did it because you're like, Oh, this has to be done. I guess I'll go do that. Then you went and got the corporate structure by working in a job where they. showed you Basically how this formula works or gave you some frameworks to use and then you went through that season and you still always had that entrepreneurial bug. 


And you decided to open up your own practice, but you like a lot of lawyers that are listening right now. Decided to practice threshold business, right? You would take anything that walked through the threshold. If they had a problem, you would help them with it. And you said, sure, I can solve that. Sure. 


like Mike McAuliffe's book, [: 00:07:00

And I'm going to go off and do what I really want to build, which is the CFO business, which I'm passionate about and here you are you did it. And so. That is a wonderful, like life cycle picture of the law firm owners that we deal with [00:08:00] and what it's like to watch them go through this metamorphosis and really make that change. 


And so anyway, from me to you. Annette, congratulations on going through that process and coming out the other side. And you and I both know there's lessons to be learned yet still, right? There's changes that are coming yet still, but congratulations. I do have one question that might be able to help those that are listening. 


So, What did it take? What was the thing that made you have the paradigm shift to go? You know what? I'm just going to hire somebody else to run this part of the business that I've been running myself so that I can go build this other part of the business. What was the thing that pushed you over the edge to make you want to do that? 


me of year. I really have to [: 00:09:00

And I tried for the last couple of years to find the people who would run it and care enough about my business, like care about it like I do, but like, that's just really not the nature of employees. You can find good employees, but that's the struggle, right? Is how to find that right person. And look, a lot of businesses have struggled with finding employees. 


And so I went through that for a couple of years. And I actually, you know, look, I'm a, I'm very faith based in a lot of the things that I do. I prayed about it. 


So I was seeking in on that side as well. And I felt like that this answer kept coming up over and over. It was for a year that this kept coming up. 


my way. I just kind of kept [: 00:10:00

Richard James: So for those that are listening that have a faith based situation, and we're not judging those who do and those who don't, but for those who do, we do, Michael and I do, when you, you feel like, you know, in our world, God or the universe or whatever it is that your faith is telling you for us, it's God is saying very clearly by all the things that are happening to you, you need to move in this direction, Kind of like, you know, Jonah, right. When he didn't want to go to Nineveh. And God decided to swallow him up in a whale and take him there. Whether you think that's a childhood fairy tale or it's a [00:11:00] true story in the Bible is, is not here nor there. It still makes the point. Sometimes God will, in our faith, turn you away from the direction you're going either purposely or through inspiration, to point you in a new direction. 


And he's, he did that to me. I mean, I was. If I'm straight, I w I was just like really happy playing golf three days a week and building a business that was kind of nice and simple and didn't have a lot of crazy growth. I went through that period and I'm like, you know what, I'm 50 years old now. I'm kind of enjoying this. And then along comes my son. And he's like, Hey, yeah, I'm interested in doing this, but if you're going to do it, we really got to grow. and, I, you know, I wanted to, I was excited about doing it with my son, but God was saying, yeah, you definitely need to do this. And I'm like, all right, but what's it going to mean for me to work. 


. And we've got all sorts of [: 00:12:00

Coaching, being coached again by other people and really growing, and we're doing this together as a family and it, it's a lot of fun, but it felt like God was like building these walls around me. 


So I couldn't go other directions. I had to go in the direction he wanted to. So Thanks for sharing that. I hope that speaks to somebody that's listening today. MPS, where do you want to go from here? 


MPS: Yeah, so, obviously, Annette, you, you work with a lot of law firms on the, the CFO now, and I think you're starting to add maybe more on the CFO side. so what is maybe the biggest mistake you see law firms do on, the financial side of things? 


t catch things that were not [: 00:13:00

So it's really important to have somebody that knows what they're doing, take a look, clean it up. I mean, and if you're not sure, just go out and find somebody that will do a second, take a second look at your books. You can't make important decisions if the data isn't accurate. how do you know what to do if it's all incorrect, right? 


ok at making a change to the [: 00:14:00

You need to send the information, you need to work with that person. So those are the top three. 


Richard James: Yeah, it's thank you for sharing that. so it's funny, you know, we, we talked off camera that when we're done with this podcast, we actually have our meeting. And we're going to go through cashflow numbers because for us, we go, Cashflow negative for every new client that we acquire. There's a real hard cost for us to acquire a client in many different facets. 


g to understand how fast can [: 00:15:00

And Michael and I could theoretically go in and get the data, but it's so important to have that feedback. That conversation where the third mind can step in and between the three of us, we're going to come up with an answer that makes an awful lot of sense financially and well within our goals. And we may or may not come up with our exact answer today, but at least Michael and I are going to walk away with the information where we can make an educated decision. And I see so many law firms don't take that step. Now, to your point, some of them don't even have the cash to be able to make that step. and that's where we come in. And there's lots of reasons for why [00:16:00] they don't have the cash. It could be, they're not charging enough. It could be, they're not converting enough. 


It could be, they're not collecting the right amount. It could be there's money stuck in trust and the workflows issues. There's all sorts of issues as to why that could be the case. that's our job. that's what we do to help them. but for your perspective, you're the one who can give them the clear looking glass and just go, look, there's not enough money left for you to do anything. 


Right. And, that's the really important team member you need to have on your team. Cause Michael, you tell me, I mean, when we talk to attorneys, when we talk to them about arithmetic, what's the first thing we hear attorneys tell us, 


MPS: I went to law school, so I didn't have to do arithmetic. 


Richard James: right? They. 


most of the room, and guess [: 00:17:00

We get to arithmetic, we lose most of the room, and it's funny that occurs, but that's just their mindset, how a lot of attorneys think about it, they don't love math. 


Annette Sonnenburg: Well, and that's a lot of business owners, too. You guys know I present at conferences a couple of times. I, You know, it's hard to keep your audience engaged when you're presenting what I present. Let's just be honest. So, but another point that I, that I feel like is important is you guys can read your financials. 


And this is something that I think is really lacking for a lot of law firm owners. I mean, you say, you know, they don't like the numbers. They don't even know what they're looking at. So, yeah, that it's really important to bring in your person that's helping you with your accounting and help to help you understand those. 


Richard James: Yeah, that's what being a CFO is all about, right? That's why you decided to offer those services. That person who can actually read the numbers. I'll be honest. I couldn't read the, I was always really good at math. I don't know. It's just that thing that was born inside of me that I really like it. 


I [: 00:18:00

I'm all excited and they meet the accountant and got to file a tax. He goes, okay, I'm gonna need a check for, you know, $23,000 And I'm like, wait for what? He's like, well, for taxes, I go, what do you mean for taxes? I thought this was all taken care of. I thought he goes, no, no. And so we had to sit down and explain to me. 


And so that was my first, like, Oh man, I, I better like start to learn this a little bit. And my grandfather, you know, basically taught me accounting, which was, you know, the bills are in this shoe box and the money's in this shoe box. And when this shoe box is empty with the bills, whatever's left in the money shoe box is what you get to keep. 


ny that had inventory and we [: 00:19:00

Cause I can't find it anywhere. I don't know what you does. Although this money you're telling me I made, I don't have any of it. It's not in the bank. What happened to the money? And they would walk me out to the back in my warehouse and they'd go, there's all your money. It's all in your inventory. Right. 


And, or they would show me my, category of lists of future containers that are due in from China. And they'd say, there's all your money. It's on the water. It's in the manufacturing plant. And so. 


I learned at some point in my career that it was my responsibility. while I didn't love the theoretical side of accounting that I needed to wrap my arms around what this stuff meant, because I had a personal responsibility to my business to do that. 


smart people. If they would [: 00:20:00

Do you agree with that? 


Annette Sonnenburg: absolutely. And you just brought up another good point. One of the number one questions I get from people who are trying to understand their financials is. Where's the money? I see the net profit. I don't understand why I don't have that money. And so, it's because it's all on your balance sheet. It's not even on your P& L. 


So, you know, yeah, let's sit down, talk about that. I'll show you where the cash went. You were making loan payments. You were, you know, whatever it was. So, it's, yeah, absolutely. I think these are all smart. Every business owner is So smart. I think they're all doing so well at what they do. They can totally understand this if they just sit down and go over it. 


Richard James: That's a great point. MPS Do 


e some of the things from a, [: 00:21:00

Annette Sonnenburg: I would look at having somebody that, mean, I don't know who they're using at this time, right? And, but this is a really good time of year to that CPAs may have some time to sit down with you, right? Maybe it's your tax preparer. Maybe it's your bookkeeper. Maybe you want to look at CFO services like I provide Somebody who can sit down do some kind of financial assessment go over your financials with you and talk to you about what? 


way are messy and incorrect.[: 00:22:00

Too high of a percentage. It's unfortunate. 


Richard James: you know that the number one source of accounting services from lawyers that have been given, that gave me their books where I saw their books were a mess. It's when their accountant was their spouse. 


Annette Sonnenburg: Oh 


Richard James: It's unbelievable to me how often that happened. They would give, you know, whenever I'm in a consulting situation, one on one or whatever, I'm always going to ask for their PNL typically regardless of the point we're trying to make, because it tells a lot of stories. 


And It's unbelievable to me how many attorneys will say to me, well, I don't have access to that. I have to ask for my account. Well, who's your account? Well, that's my husband or that's my wife. I'm like, okay, well, can you get them to give it to me? And then I, I'd say, well, can you just log into QuickBooks online? 


send it to me. And it would [: 00:23:00

Annette Sonnenburg: actually have a really good story about that. I'll be quick, but it's a big enough story. I had a client come to me through a business attorney who was trying to help them. They were raising 42 million. 


They had already raised a couple million dollars, and the wife was doing the books, and she got on Zoom with me and was laughing about how she has no idea what she's doing. 


chool. And I'm thinking, you [: 00:24:00

Richard James: It happens all the time 


MPS: Yeah, might save on the front end, but it's not going to save on the back end, that's for sure. Well Annette, has been very helpful a financial perspective, but personally for you, got you excited and fired up? Could be personal, could be business, could be both. 


Annette Sonnenburg: You know, honestly, these people who are running the accounting, but I don't even know because I feel like my whole world has opened up that I have these amazing CPAs running the accounting. My life isn't based around deadlines, so I'm just looking at all the things I get to fill my life with. 


ght? Like sometimes it feels [: 00:25:00

Just go with it. Just at least try it. Move in that direction. My whole world has opened up just now. So, and you guys have probably never seen me this way. You're usually, I'm usually just like, I don't know. I don't have time to talk long, you know, I and it's different now. 


Richard James: Well, I mean when we're recording this we're only a couple weeks away from the extension deadline for filing having to be done which means you normally would be extremely busy right now And you're telling me you're not it sounds like you're not dreading january right now. It sounds like you feel like that. So 


Annette Sonnenburg: I'm busy, but everything just feels doable. Right. I mean, it's a huge shift. 


n that precipice and you've, [: 00:26:00

And what Annette just said is, you know, she didn't say it like this. I'm going to paraphrase, but leap. And the net shall appear, right? So, the opportunity is there for you. You're gonna have to take that leap, leap of faith, overcome your fears, you're going to have to take that leap in order to feel it. 


e ourselves in a run up that [: 00:27:00

I promise you it, maybe it'll be the first time. Maybe it'll be the fifth hire that you make. I don't know, but you're going to find the right one. And when you do, you're going to see your freedom quotient go through the ceiling and you're going to see, you're going to have a lot more joy and excitement when you do. 


About your business. So Annette, thank you for sharing that today. That little window of hope is so gratifying to hear. And I hope that you, somebody that was listening, you just gave them some light at the end of the tunnel. So I appreciate you being here. 


Annette Sonnenburg: I hope so too. Yeah. Well, thanks. having me 


MPS: Of course. And thank you investing your time on this and law firm owners, thank you. Thank you for investing your time and listening. tons of value to pull from this. Let us know down in the comments. What would you take out of today? And then depending on where you're listening or watching, make sure to hit that subscribe or follow button. 


ng listening or watching and [: 00:28:00

Annette Sonnenburg: Yeah, they can go to my website at ascensioncfo. com, on the accounting side, it's sonnenbergconsulting. com. So, yeah, we'd love to hear from people. Yeah, good. We'll 


Richard James: put your links in. Well, yeah, we'll put your links in the show notes so that you they'll have it. And look, Annette gets a thumbs up from us. She'd been running our books for a while now, and we, she, she's working with a lot of our members and that we hear nothing but great things back from those members about their experience with working with Annette and her team. 


So, if you need some accounting services, you need somebody just to look over the shoulder of the current accounting service you've got just to make sure somebody is paying attention. Annette and her team definitely the company to look at. Annette again, thanks for being here. MPS. It sounds like this is the pod. 


We're good. 


MPS: That's the pod. 


[: 00:29:00