The Art of Growing a Profitable Law Firm - Attorney Bert Diener

Transcript - YPM Episode 18

MPS: [: 00:00:00

Richard James: Richard James and Michael, I'm looking forward to our conversation today. Not only is Bert a member of our world and certainly wildly successful, and we can't wait to hear his journey, but we also consider him a very good friend, him and his wife, Stephanie, and we're partners in other businesses.

So I've got a pretty intimate relationship with the Dieners. And so I'm excited to have this conversation just cause I've been able to watch their journey and now. Like, explode past anything that, you know, he learned from me, that's for sure. So I'm excited to hear this journey today,

MPS: Yeah, explode past might be an understatement, but Bert, I'm curious for everyone. That's listening. Why don't you kick us off, break the ice a little bit. What's something that maybe not everyone knows about

in terms of what people may [: 00:01:00

So, I'm trying to become a mountain man is my goal in life to grow a big beard and just become isolated and just hop on the internet and go back to. You know, doing my things here in the mountains, so maybe that's kind of where I'm at,

Richard James: but you're a mountain

MPS: the mountain. Now I was going to say the mountain with fiber internet

Bert Diener: Yeah, that's right. Hey, look, you know, you gotta be a smart mountain man, right? That's right.

MPS: So there you go. There you go. Yeah. I love it. I love it. So, so look to, to kind of kick things off obviously we're very familiar with the journey, but everyone that's listening, you've got a pretty cool and exciting journey with lots of different split off avenues to it. So why don't you just give a high level of some of the highlights of your entrepreneurial journey as an attorney up to this

orney you know, did a lot of [: 00:02:00

But didn't quite have the skill set. So, I built it up to like seven offices and then I met Rich, I met partners club and downsized. And then from that point forward, once we figured it out you know, we're significantly bigger by multiples, more than 10 X bigger than what we were beforehand.

And we're kind of at the rinse and repeat kind of component as we continue to scale and move forward. But but yeah, I no longer practice. I just manage and we've saw, we've figured out a couple other business challenges that, that most law firms have, and we created, we tried to be, get create businesses out of them so they become so that instead of being weaknesses, they became strengths.

And so we've just kind of doubled down on that. So, you know, you guys have known for a long time and y'all educated me in quite a few things. And luckily now I can learn with you guys in a lot of stuff.

chard James: Yeah. You know, [: 00:03:00

But your understanding of that is that alone is not success. Now that you've gone through that, would you agree with that statement? Can you expand on that a little bit?

Bert Diener: 100% Yeah, I thought I was one office away from making money, right? I was, we had more offices, more cases. All I thought I just needed more. If I just had more, everything would be fine. And nothing could be further from the truth. I mean, more is good. If you have a formula. And you have a way of, understanding your profit model.

. But there are lessons that [: 00:04:00

And as a result yeah, I can say that whatever problem anybody else has out there. I either had, or I still have that same challenge, but, we may have just put a couple of zeros behind it or something in terms of trying to do it at higher volume,

Richard James: Yeah. So, I'm in that boat. Like I, I wear, I have that t shirt. Right. So I had legal pads loaded with explanations to my wife. Why East coast, Italian bride. Why we should take on this additional debt load for the company because how we were going to do more volume was going to lead to our success, right?

And so in the early: 2000

Here's why we got to go get another, you know, string, cause this order is going to put us over the top and then inevitably something always broke down and it wasn't driven by profit first. It was driven by growth first and profit will show up eventually. And the model was all upside down.

And so that didn't lead to a happy ending for us. Thankfully. You weren't going into debt, you just were, you know, that's maybe, you know, you were going to debt because you weren't making a heck of a lot of money. But so you didn't have to save yourself in that regard, but you did learn the concept of let's grow while being profitable, which is a super powerful tool. Michael, I didn't mean to cut you off. Where'd you want to go from there?

MPS: No I mean, so obviously profit's a big underlying tone here, but I'm curious, Bert was there a particular moment in, in that journey that you counted as like a really, either a failure or a really big learning opportunity, like one pivotal moment for you?

g of several moments, right? [: 00:06:00

Probably, you know, one of the things. I think the better realizations that, you know, and I'm not here, you know, we're here to talk about kind of what people can apply or what they can learn about us that may apply to them, but rich, I mean, one of the aspects that you kind of brought up is in terms of like collections.

We discussed my collections rates, what the collection rates were. And so whether you're talking about collections or whether you're talking about profitability, the question comes down to is you do need to be profitable every day. And so what does that actually look like? And so I would say that, you know, one of the biggest challenges that I had beforehand is I thought I had to choose one or the other.

ns. But when you learn to do [: 00:07:00

Richard James: What are you passionate about? What is there a market for? And what can you be best at and slice what is, what can be profitable and have the positive cashflow and that Venn diagram overlap that and really is where it all comes together, doesn't it?

Bert Diener: Yeah, no, absolutely. You know, I mean, I would argue that, you know, from some, from a standpoint of like, even marketing in this kind of sales, like, well, listen, you know, I need more clients, but I don't have enough money. I was like, well, you're going to, you know, how can you spend money, but you know, you're going to make more money.

How do you do both at the same time? Rather than it being a wish, how solid and focused and consistent can we be with that execution?

But I assume you see that to [: 00:08:00

MPS: Well, yeah, because look, if you go spend a bunch of money on marketing and you don't have any of your other systems built out, like getting that lead to turn into an appointment, getting that appointment to show up, getting that appointment to hire. And then, of course, getting that person to pay in full, if none of that is done and you don't have systems there. All you're doing is blowing a bunch of money on marketing to get lackluster results and maybe increase volume a little bit, but the conversion metrics aren't where they need to be. So I just see it taking money and lighting it on fire, essentially.

Bert Diener: Let me plus one on you on there, Michael, because, you know, so we have a marketing company as well. We've got an HR company and we have a software company on the marketing company side from working with, you know, hundreds of law firms in the marketing side. Everybody says, I want more leads and they think that's going to equal more clients.

is going to come from sales [: 00:09:00

Well, the truth is that there's only a small percentage of client people who are ready to hire right. The second, but the people that are close to hiring, there's a massive amount of those leads available. And when you learn how to convert those you start to play, that's what, that's one of the secret.

That's one of the things we figured out. We don't compete on the people who are absolutely ready to hire. We'll take all of the people, all the immigrants out there who aren't quite sure, give me them because no one's fighting for them anyways, I'll learn how to convert them at scale and we grow as fast.

And in fact, I'm going to throw one thing out here, Rich. So we're coming up on the one month mark in a new office. I don't want to say the market. Right now, but one month in 50 new clients, the first month, that one office.

t? The client's worth, what, [: 00:10:00

Bert Diener: Yeah. You know, I'm working on some new measurements on that, but yeah, anywhere from the 3, 500 to probably 5, 000 range on average.

Richard James: Right, so just to equate that for anybody who's listening, once you get the... I want to summarize what Bert just said for those who maybe didn't catch it. So Bert said, okay, you gotta, you know, number one thing was learn how to be profitable, grow while you're being profitable. Then you got to invest in marketing.

And the only way you invest in marketing is if you're confident in being able to sell them through what we call the perfect client life cycle that Michael talked about. And then, but once you figure that out and you really have it dialed into a system, well, now you can rinse, repeat that in different markets.

And now you already know your math. And what he's able to do is go to a brand new market. And within a single month have 50 new clients, ergo 200, 000 in gross sales value in the course of a month or 2. 4 million on a, on an annual run rate. And we're only 30 days in, right? And so that's the power of this Bert.

Like that's what you [: 00:11:00

Bert Diener: And a lot of people may not want that level of complexity, but that's okay. The lessons are the same, regardless of the size. I do not have different lessons, you know, at our velocity. We have the same lessons. The only question is that, are you willing to embrace what works and apply it, because if you want to stay small and do it, that's fine, it'll make your life easier, but you know, I have a heck of a lot more choices than other people.

Let's just be honest. A lot of other lawyers. I have a lot of choice. I can hire fire, whoever I want. I can do whatever I want. I don't have to work again. I don't have to do any of that stuff, but it's fun. And I love seeing other people succeed. And this, I mean, the vast majority of it, I mean, honestly started with partners club.

most other problems go away.[: 00:12:00

Richard James: But I think it's important what you said, right? I mean, Michael, we see it all the time. Like, most of the people we meet with are small in souls just because that's what the world of attorneys seems to be, right? And so there are guys who, you know, just want to do 300, 000, 500, Oh, by the way, It's interesting.

They all tell me they want to do 000. But then when they get there, surprisingly, they want to go to the next level. Right. But for now, they just want to do three, four, 500, 000. They want to be highly profitable while doing it. These, this, what you said is accurate, Bert, what you need to know to get there or to get to 50 million makes no difference.

It's zero difference in concept. The concept is the same. It's just the. Velocity at which you want to apply these lessons. Michael, I have completely derailed your conversation today. I'm going to let

MPS: No, I think

Richard James: question.

o that'd be, but principally [: 00:13:00

Richard James: yeah, but you just said it, right? Like systems run your law from people run your systems, which means if you go to move at that scale, you end up with a whole bunch more people, but like how many people do you have now, Bert?

Bert Diener: You know, in the law firm, it's, you know, somewhere, give or take, you know, we're around 200 people.

Richard James: Okay, so, like, somebody just fainted, right? That the thought of, you know, there's somebody driving down the road. We almost lost them, right? Because they're like, they think 200 people and they're like, oh, my gosh, I couldn't imagine, right? They don't they can't figure out how to manage them and an assistant, let alone 200 people.

So, I don't know where you were going next, Michael, but what are some of your. Horror stories or lessons that you learned about or maybe advantages or opportunities you learned about the adding people like what do you need to be able to add that type of people force to your world?

Yeah. I mean, so, I mean, I [: 00:14:00

It's that transition from small to where you want to be. What does it take? So we know in the sales, kind of the client acquisition side, it's going to take some resources, right? That's, you know, sales, you got to get them good and keep them good. And so it's going to take some people there. We know that from, in terms of getting paid, you know, some people have to call and remind their clients to pay.

Some people can take them on auto payment or they get all paid up front. Good for them. But if not, it's probably going to take a few people. We know getting the work done, it's probably going to take a few people. If you're going to be, you know, doing, realizing your opportunities. And then we've just got to kind of figure out, you know, how are we keeping these, the people on track and how do we keep them growing in a firm?

ority of people in our firm. [: 00:15:00

Richard James: That's a writer

MPS: Very well put.

Richard James: That's a writer

MPS: Yeah,

Richard James: Got

MPS: That that's very well put. So Bert, as you've got this hot machine running here what are some of the success habits that you follow or just some of the things that you do in a day to, to kind of help keep things moving forward?

Bert Diener: Yeah, so we have like, we have, we're pretty exhaustive when it comes to what we measure. And and we're always coming up with new measurements, but it's one thing for the leader to measure. And it's another thing to have the subordinates measure and when we can have them measure and they're making course corrections without you and you can ask questions.

ciplined people, followed by [: 00:16:00

We don't tolerate that. This number has to get better that discipline and then execution that follows afterwards. That's simple process rather than living in reaction of something just blew up here. Something blew up here. No. We have to be in the front end of that. We don't need to let things fester.

So 1 number after the next number after the next number and people learning to make objective decisions, Progressively builds a healthier company because people are dealing in, in, in there, you know, that they learn how to be preventative. You know, they're changing the oil before, you know, the car locks up, right?

That's the whole name of the game. You want your car to last follow the preventative maintenance. You should do the very same thing in your law firm.

the funeral business. Okay. [: 00:17:00

This is how much I had screwed up my life. And so I'm ready to rock and roll. I'm all in. And now I get to wear a suit every day. And all of a sudden, you know, we're not all that busy sometimes. I mean, there's times in the funeral. I mean, you can't convince anybody to want to die. Right. I mean, you got to kind of wait until it happens.

Right. So, so there's times where there's downtime and what I didn't know about the business is during that downtime, there was a list that my grandfather had made of all the maintenance that had to be done on the building that was our responsibility to do it during the downtime. Which meant cleaning the inside of the awnings and tarring the roof and you know, re pointing the blue stone in the front and like, you name it, we had to do it.

d. It was like, Oh, this was [: 00:18:00

He didn't wait until something showed up. And the only reason he knew to do it, the only reason he knew to do it is because something happened, it broke and he learned and he got caught. And you learn never to get caught again, and he goes, Okay, now we need a system to do this all the time. That's basically what you've done is you've figured out all of these moving parts.

Thank you for the shout out for a little bit of our guidance throughout the years. And then you've put the systems and the people in place so that now they're preventively. But they're looking at it in advance to avoid the problem before it actually happens. And so that's what allows you to sleep at night because now it's not you looking at everything because you'd never be able to look at everything at this point, right?

, I'm still doing, I'm still [: 00:19:00

Whether it's on an appointment, whether it's going to be in something, when do they do that and how do we put them on a list and try to get them back on track? Because we get paid. We are, you know, we don't win unless our clients get approved. So I got to make sure that they stay out there. So what are my triggers to make sure before they do it?

And how do I get it on a list, get that person back on there. And we know it's going to affect all the rest of the numbers. This is when the, this is when the job gets fun.

It's like, Oh God, you know, I wasn't like this at the beginning. When we first started, I was just trying to. Pay my bills. I would have been happy just to pay all my bills and not just be broke.

ds over time. And that's why [: 00:20:00

It's perspiration. You know, well, are you are you passionate about this? Well, I'm passionate now because I got good at it, you know, beforehand. I'm not sure if I was passionate or not, but once you get good at something, then you become passionate. So all the people out there are saying, follow your passion.

That's crap. Follow what's going to get you paid and take care of the job and take care of your family and take care of others. And just get that going. And if you can either be compassionate, if not, let it make enough money. You can find something else to do, but don't give up on this. We got licenses to print money and licenses to do good.

And it's up to you. If you're not doing it, you got to ask yourself some hard questions. What's stopping

Richard James: I love

MPS: Well, there's the short. That's the intro for the podcast. There

Bert Diener: you?

MPS: go.

Richard James: it. That's it. We got it

said. I love it. I love it. [: 00:21:00

Bert Diener: So we're getting ready. I opened another office on Tuesday. And I opened another office in two more weeks. So I'm fired up about everything we did in this last office to get up to 50 hires in the first month. And I am going, and I want to see, all right, was this just a lucky market? We know we have, we're going to get some traction.

We know we're going to do pretty well, but I want to see if. These offices can do as well or better, and what is my playbook to make that happen? That's got me fired up right

Richard James: Yeah. The Bill Belichick, man. What does that playbook look like and how does it have to be adjusted market by market and people by people and can the playbook can work regardless of the player? He obviously needed Tom Brady. And you probably need,

Bert Diener: now. It's easier. Hey, if you got a time, Brady, all your plans are easier, right?

You know, you said something [: 00:22:00

This isn't just about you buying a plane if that's what you want or whatever. This is really for you About taking care of those who help you get there. And you've, you have a philosophy around your profitability and how you do it. I don't know how much of that you want to share, but you do share with your team, don't you?

Bert Diener: Yeah, I'd be happy to. So, you know, I will say that, you know, I was in the Marine Corps. I have post traumatic stress disorder. I got struck by lightning, a whole other story. But part of my way that I think I overcame or turned the PTSD into a strength is I was always trying to learn something new and grow.

ally kind of came down to is [: 00:23:00

So with our staff members and when I wasn't giving him a whole lot of, but I wasn't giving me any bonus, you know, I was just begging him to hang around. Don't leave us. You know, I was like, don't worry when we're doing well, I'll make sure you're taken care of. So, you know, you know, we're pretty daggone profitable and you know, we're probably anywhere from 40 to 50% profit in terms of our gross revenues.

And so we basically allocate 75% of the profit to allocate to. The attorneys and the non attorneys. And we, so we try to make sure everybody's very well taken care of. So we don't have much of an issue with attrition for obvious reasons. Right. But I'd like to think that it's more than that. It's like, you know, it's like, we're not here.

We didn't do this alone. You know, we need to take care of everybody that we can. And if we're smart and we're good hearted, everybody should benefit. Everybody should grow. The client should grow. The team should grow. You know, my family should grow and yeah, sometimes it's a little bit challenging and sometimes people get greedy, but that's okay.

f the opportunities we have. [: 00:24:00

Richard James: You know, when you originally made that comment about 200 employees, I thought we might need to put a disclaimer that if you're driving while listening to this, be very cautious now that you said that you give away 75% of your profits. And you are profitable to the number of 40 to 50% on gross revenues.

We will just lost a couple more people driving down the road. There's no doubt about it. I mean, come on, man. I mean, you know, most law firms don't believe they can get there, right. When they're doing 500, 000 or a million, let alone the numbers that you're doing now and most law firms, most owners never think about how to take that profitability as such a high level and poured back into their team.

your commitment to share and [: 00:25:00

Bert Diener: Yeah, that's definitely happened a couple of times,

MPS: Yeah.

Bert Diener: but when she gets the thank you emails back afterwards, she feels like a million bucks. So it's like, you know, it's like, Hey, you know, let's just keep it going.

Richard James: What an amazing legacy. What an amazing legacy. I, that's so exciting. Sorry, Michael. There you go.

MPS: No you're good. Bert, I mean, if people did want to get in contact with you, obviously don't give your cell phone. This goes to a lot of people. But if people did want to get in contact with you, just to learn a little bit more or just connect, what's a good way for them to

he team who do it, I kind of [: 00:26:00

MPS: Excellent. Well, Rich, I can't speak on behalf of you, but I think this has been a very valuable conversation. Podcast today and Bert very appreciative for you popping on very thankful for all you had to share for other law firm owners and We do something called the gentleman's agreement around here Which means to us if this is not your first time listening or watching to watching the podcast Excuse me And you got some value all we ask for in return is you like Comment if you got any questions and then hit subscribe or follow depending on the platform You're listening or watching on in exchange for us investing our time money and resources into the show because I got to tell you we Really like doing it and we want to make sure you guys are getting value So this is a great way to show support in that

sly the natural flow of that [: 00:27:00

We just ask the reciprocity in return is to go out and like share and get this out there into the world of The law firm owners that probably that could use it like you who's listening to this and got inspired today Somebody else across the united states could get inspired as well. So Bert, thanks so much for being here Appreciate you being such a supporter of our world Not only that a good friend and a great partner to be in business with so we appreciate you Thank you for taking some time out of the mountains away from The deck that's being built where the water is running underneath and you and the kids are waiting to jump in.

And so I thank you for that. You can get back to the family and getting back to the fun up there in the mountains.

Bert Diener: Thanks guys.

MPS: Thank you