The Real Reason Some Attorneys Build Wealth (and Others Don’t)

So why is it that some law firm owners succeed and some law firm owners struggle?

we are in the golden era of owning a law firm right now.

prices that law firm owners can charge are at the all time high levels, efficiencies brought on by technology and artificial intelligence are continuing to grow, which are fundamentally bringing expenses down.

Law firm owners' understanding of how to run a business is increasing.

Their business acumen is starting to go up, which means we are in a period where law firm owners are maximizing profitability.

Like few other industries before them law firms are starting to trend in the direction where law firm owners are actually able to taste real freedom.

that's assuming they build their law firm based on systems, hire people to run those systems and focus on profitability. That's all true.

But the question is why do some law firm owners succeed rapidly while others succeed slowly or flail for a long time before they finally quit and just go back to somewhat level of mediocrity where they're toiling away for less than they deserve for longer than they should.

Now I wanna be clear, I'm not judging those who are not succeeding right away. I believe that everybody is just one small carburetor adjustment away from succeeding at the level they want if you follow the fundamental guidelines and principles of building a law firm, that you can indeed build a law firm that's successful.

And just because you're not successful today doesn't mean you can't be successful tomorrow.

if you're listening to this right now, it's not over for you. You can get there.

Hopefully this message will inspire you if you're moving in the right direction.

trying to figure out how to get out of law firm ownership hell, and to the CEO level.

Well, great. This should hopefully help you. There might be a limiting belief that's stuck in your way.

So let me illustrate this by telling the story of my rich grandfather and my poor grandfather.

So Robert Kiyosaki wrote a book, rich Dad, poor Dad and I remember reading it years ago thinking, oh, I had a rich grandfather, poor grandfather.

I mean this solely in the sense of business acumen, by the way, because you can be rich in more ways than just money and business, right? my poor grandfather, while didn't have a lot of money. made up for it in love, charisma, patience, lessons taught to me, from how to change the oil in my car to, how to play pinochle and how to fish

I respect that he raised me like his own from age five until age 10 when my stepfather stepped into the picture.

And so, I owe him a lot.

My rich grandfather was the one who by definition was successful in business.

My rich grandfather, was in the funeral business and it was a failing funeral business. His father had taken it over from his father's, so my grandfather was a third generation and his father, as I understand it had really made the business Not grow. And a matter of fact, he made it go the other direction 'cause he did some basic things wrong.

And my grandfather, just out of pure hard work, didn't really know what he was doing, and faced some really challenging times through that period. Where they didn't think they were gonna make it, and they had to cut corners and watch costs at all points.

It was probably 10 years in the making before he started to see some traction.

He started in: 1946

So he died in a way that some people would call a success, monetarily speaking in that myopic view of business.

Yet my poor grandfather, was also a business owner.

He had Owned a grocery store. This is back when small mom and pop grocery stores were the way the neighborhoods bought their groceries.

There was not big grocery stores.

We were in Scranton, which is where the store was, and he moved to the Poconos because the New Yorkers and the Jersey people were coming there.

And there was a great opportunity.

He wasn't wrong. There was great opportunity. however my grandfather ran up against the landlord that, made things difficult for him.

he went from owning a very successful store, to go to grasp for the Golden Ring, and he ran into somebody that caused a lot of problems, so much so that my grandfather ended up closing the store.

And he quit and went back to working for another grocery store as a butcher.

Consequently, my grandfather never had much money I don't know exactly what he made, but he didn't make much more than. 12 to $15 an hour, maybe at the height, way back when. he was an expert grocer, an expert butcher, a kind man, extremely patient, diligent, hardworking, raised as a farmer, and I would say he was an expert at his craft and he was a business owner at one time.

Now, again, my rich grandfather, also hard worker. Expert at what he did in the funeral business and he was an expert at managing money, and he too ran into some really difficult times over some really long periods He went without seeing growth in the business.

What was the difference between my rich grandfather and my poor grandfather?

I think the first was choice. my poor grandfather in business, he chose an industry that didn't have a high level of price elasticity. Now, if he specialized and he became just the best butcher in town, he could have, but he didn't. He was a generalist and as a generalist, he didn't have a high level of price elasticity.

My rich grandfather was in the funeral business, the professional service business, and people paid premium for the services that he offered because,

they were willing to pay somebody an expert pay.

So look at you as a law firm, how that translates over.

You've chosen an industry that has high price elasticity. I spoke about this earlier, that you're in the golden era of law firm ownership. Great.

Check. What's next?

Next is mindset.

My. Rich grandfather, lived really. Frugally, to make the dollar stretch. But he did it over a long period of time because his mindset and his attitude about grit was that eventually is going to pay off

my poor grandfather, unfortunately, when he ran into one of his first real obstacles, he fundamentally quit on the business.

and I think that haunted him most of his years.

I love him as a human, but as a business person, what was the difference? I work with attorneys all the time and some of the attorneys that have been with me for years, some of them for 15 years, will say to me, my gosh, you have a lot of patience.

I heard you tell this same answer to this attorney three months ago, and they didn't do it then, and I don't think they're gonna do it now.

And you don't get mad at them, you don't get upset you don't get frustrated with them. You just keep telling 'em the same thing again.

And I'm by no means perfect. I do sometimes jump up and down on my desk yelling, and I lose my patience.

But for the most part, what I realize is that I don't know where you are at. but I do know that after working with attorneys for a long time, many of you didn't see yourselves as business people going into this

many of you, opened up your own practice, because you didn't wanna be under somebody else's thumb.

You felt like they weren't paying you properly. You felt like you could do a better job because you felt like that's just what you were supposed to do. there's lots of reasons for it, and now you find yourself.

May be overworked.

likely you feel undercompensated, and for some of you, you feel like you're in hell and you're wondering how to get out.

I can't promise you how long you'll be in hell, but I can promise you that there's a path out and it first starts here in your mindset that you're gonna do whatever it takes to stand in front of that mountain and turn into gold.

Whatever it takes, you are going to absolutely, positively make it happen. And you're not gonna get stuck into the thinking that has been entrenched in your brain about the way things should be done.

You're gonna go find out what the truth is, there's what you think is true, and then there's what's actually true, right?

You're gonna find out the truth and you're gonna see somebody else who's done something like you, and they're gonna inspire you and you're gonna actually take action.

And if it bothers you to be in business. I implore you to not grow your business past the level one law firm, owner level.

Keep it small, keep it all, maximize your profitability. Don't grow your firm to try to go to the CEO level. You'll drive yourself crazy and just keep, your two, three, $400,000 a year to the bottom line if you're doing, 900, a million, 1,000,002, depending on your practice area and live a life of balance.

And if that's not interesting to you, because there's still all the moving parts of owning a business, then go maximize your earning in the practice area you're in by working for somebody else and save yourself a whole bunch of aggravation. 'cause

 

the reality is,

in order to make it in business, you have to be willing to do some things that you were taught as a law firm owner, or let's specifically say as a lawyer

Weren't, are not normal for you. They're not along the same lines as which you were taught.

 

There's nothing wrong with everything you do as a lawyer, but sometimes the things they taught you in law school are in contrast with the things that are required to be a great business owner.

If you're that attorney, law firm owner who's constantly keep going. Keep trying. Keep testing, keep iterating, keep increasing your skill sets.

Be happy with failure. Try and fail. You'll learn from it quickly. What I love about lawyers. Is when the light bulb finally goes off, the ratio of speed to success is fantastic to watch.

A law firm is actually in the golden years.

Here's the bad news that's gonna come to an end. And when it does, it ain't gonna be pretty. So for now, while we're in this golden era, make as much dough as you can, serve as many clients as you can. Help as many people as you can.

Do as much of God's work as you can, and allow yourself to be rewarded along the way so that when it's over and the music stops, you've got a chair to sit in that we call. Your pile of assets that you'll still be able to live off of and retirement from. hope this was helpful to you.

Let's go build your law firm one mindset at a time.