Life Beyond the Briefs
At Life Beyond the Briefs we help lawyers like you become less busy, make more money, and spend more time doing what they want instead of what they have to. Brian brings you guests from all walks of life are living a life of their own design and are ready to share actionable tips for how you can begin to live your own dream life.
Life Beyond the Briefs
The $500K Law Firm Question: Can You Walk Away for 3 weeks? | Chelsea Williams
You’ve hit $500K in revenue—but can your law firm run without you?
While Brian’s sipping aperitivos in Italy for three weeks, Chelsea Williams—the Money Whisperer behind Core Solutions Group—is here to break down what it really takes to create a firm that functions (and flourishes) in your absence.
In this episode, we unpack:
- Why your bookkeeper ≠ your CFO—and why that matters
- How to build a financial team that gives you freedom, not more work
- What “Profit First” actually looks like in a law firm
- How to stop guessing your ROI and start projecting with confidence
- The mindset shift: it’s always—and never—about the money
If you're ready to stop grinding and start growing, hit play. Your future self (and your vacation calendar) will thank you.
🔗 Connect with Chelsea Williams & Core Solutions Group:
🌐 Website: yourcoresolution.com
📸 Instagram: @core_solutions_group
💼 LinkedIn: Core Solutions Group, Inc.
📘 Facebook: facebook.com/yourcoresolution
▶️ YouTube: @core_solutions_group
🎁 Free Resources for Law Firm Owners:
📘 Join the CFO Program
🎥 Watch the Free Masterclass
📥 Download the CFO Checklists
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Brian Glass is a nationally recognized personal injury lawyer in Fairfax, Virginia. He is passionate about living a life of his own design and looking for answers to solutions outside of the legal field. This podcast is his effort to share that passion with others.
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What do you want to do with your life when you are no longer required to work to make money? This is a really good question because, in my experience, a lot of people don't think about this and the question that you have to answer for yourself and it's probably not just going to be oh, I've got the answer right now in my head Like you're really going to have to sit here and think about it. This is where it's always a never about the money, right? What do you want to do with your life when you are no longer required to work to make money? Do you have grandkids? Do you have a spouse? Do you have kids? You got kids going through college. What's that going to look like If you paint a picture around what you want to do with your time travel, okay, how often.
Speaker 1:Where you want to go, how many times a year? Do you want a vacation home? You want a boat? Like, what do you want? Because all of these things that you are painting a picture of, and what you want to do and who you want to do it with, have a price tag.
Speaker 2:Hey friends, welcome back to Life Beyond the Briefs. Here's a real question for you. If you left your law firm for three weeks, would it still be standing when you got back? I'm in Italy right now for a three-week trip and today's guest, chelsea Williams, says your law firm should be able to handle that kind of break without chaos. Chelsea is the founder of Core Solutions Group and a fractional CFO for law firm owners who are ready to stop running blind with their finances. In this episode, we unpack what happens when you stop relying on your bookkeeper for strategy, how to set up your firm for true financial freedom, and why $500,000 in revenue is the tipping point for getting serious about your financial team. If you want your business to work without you and fund the lifestyle you actually want, this one's a must. Listen, let's dive in.
Speaker 3:Hello everybody, welcome back to the show. Today's guest is Chelsea Williams. Chelsea is the owner of Core Solutions Group and Chelsea is the money whisperer. And today we're talking about my favorite topic, which is money and personal finance, and I don't get to talk about this enough on this show, as it pivoted more towards like how do you market your law firm and how do you grow your law firm, and get to talk less about what do we do with the money once the law firm is doing well. So, chelsea, welcome to the show.
Speaker 1:Thanks for having me.
Speaker 3:First thing I want to ask you. So I ask everybody, like what are you excited to talk about? And you told me that you had just gotten back or you had taken a 10-day vacation to New Zealand. And that's timely for me, because tomorrow I leave on a three-week trip for Italy and I did not do a good job planning, and now I'm freaking out a little bit about all of the things that exist in my life back in Virginia that might need somebody like in the same time zone. And so I'm curious for you, like is there anything that blew up while you were away, or were there any problems that you couldn't wait to get back to and solve?
Speaker 1:No, there wasn't. I mean, I checked in with my team, mainly because I like staying in the loop, and we did have a thing come up, but my team collaborated and managed through it. It was really a vacation. It was a real vacation. And you know, my team is so amazing. They're a team of leaders and so there's rarely ever a situation, on vacation or not, where I have to jump in immediately and address a fire.
Speaker 3:How did you check in from 12 hours away? Slack, slack.
Speaker 1:Yeah.
Speaker 3:Yeah, I mean. So a couple of things. I have a team of VAs in the Philippines. They work synchronous for us, but they don't necessarily have to Right, you could do all that asynchronously. Slack, I think, is. I wouldn't personally do Slack because I feel like it would be disruptive and maybe you don't get the notification on your phone. But my method when I go away is like if I could sit down for an hour in the morning and then an hour after my aperitivo in the evening, I can triage almost anything that's going on. Is your experience the same?
Speaker 1:Yeah, and we have very. We have multiple lines of communication and we train everybody on when to use which mode of communication. So Slack is one of them, but we have, we have multiple.
Speaker 3:Yeah, that's that training on how and when to contact me through what means is really important. So that's the thing I was trying to work on. Today we have a beach property in Ocean City, maryland, and I have the renter from hell there right now and he leaves tomorrow. But now I'm problem solving for like what if that comes up again? So I'm working on can I get somebody who's here just as an emergency? If you need somebody who's in the same time zone, who's not sleeping at eight o'clock local time, who can answer your problems, need you to be able to text somebody. So I'm almost glad my wife is like it's a blessing in disguise that we had this guy three days before we leave, because I wouldn't have had this stopgap in place if we had left.
Speaker 1:I agree. I think and my team takes on the same mentality when something breaks because it always will, especially if you're growing there's always going to be some seam that cracks open that's never been addressed before or something that falls through the cracks at some point, and we really have the perspective of let those be opportunities. And I believe in the saying you will fall to the level of your systems. I'm also a type A brain. That's why I do all the money stuff, and so we're very systems driven and you know things fall through the crack.
Speaker 1:I think the biggest thing is we need to expect them. We shouldn't be surprised when something happens, because inevitably it will, you know. But then viewing it as an opportunity to implement a system that will hopefully prevent it from happening in the future is crucial. And especially you know we talked about going on vacation. That's one of the tests that I've heard a lot about around go on vacation for two or three weeks, let the things break so that when you get back you can collaborate with your team to fill those gaps with systems so that next time they don't break while you're trying to enjoy vacation.
Speaker 3:Yeah, that was my test last year. So last year we went on vacation for, I think, 10 days out to Arizona, because we had this on the books and, you know, let me go to a different time zone for longer than a week and just see what happens and everything went just fine. So I'm sure everything will go just fine for this trip. But let's talk about your CFO, fractional CFO program. Now one of the questions that I get from law firm owners who are growing their practices is some version of when do I need X? Might be a marketing director, might be their first hire, might be a paralegal. And then often, as we get law firms that are in our hero mastermind program that are doing just maybe under a million dollars in revenue, get this question about when do I need a CFO or fractional CFO? Who's somebody separate and apart from my bookkeeper and, by the way, the bookkeeper is very often the lawyer or the lawyer's spouse and you probably know that but when does somebody need a fractional CFO?
Speaker 1:Well, I like the fact that you distinguish like your bookkeeper is not your CFO, and I think that's one of the things that law firm owners you know.
Speaker 1:You don't know what you don't know and a lot of law firm owners are looking to their bookkeeper or their tax preparer for CFO level insights. And that makes logical sense, Like I applaud you for reaching out to who you think might know and understand, but the person that you are looking for is a CFO advisor and we find that when law firms hit that half a million dollar a year in revenue mark, that's when it makes the biggest difference Because to that point, they're probably solo, they maybe have a small team, their time is sucked up, their attention is sucked up, they need to hire. They don't know who, when or what they're going to be doing. And having that level of financial strategy not just financial clarity but strategy and seeing in black and white if I make these three moves, this is how it affects the money I make, the money I spend, the money I keep, because that's the most important part that level of clarity and strategy can take a half a million dollar a year firm to a million dollar a year and beyond quickly.
Speaker 3:So there are a lot of things that can be the lever that take you from a half million to a million. Why do you think that the CFO, clarity, is the one that can do it?
Speaker 1:Mainly because it helps uncover where the bottleneck is. For example, we have some people come in and they're saying no to new business. Their marketing funnel works great. They just can't get it into the pipeline because they don't have the team to accommodate it or the systems, the automations in place for onboarding. On the other hand, we have clients that are at that level but it's all because of referral and word of mouth. They've never marketed. So they need to focus on the front end of that funnel, bring in that revenue and strategically align when they need to hire who to manage the work volume. So it kind of depends on where's the bottleneck. Where are you struggling? What do you already have?
Speaker 3:Yeah. So that's a version of the answer that I give to that question, which is all law firms have one of three problems it's either leads, it's sales or it's production, and so helping to identify whether you're having trouble getting somebody to figure out who you are, figure out that you're the right lawyer for them. Or, like you know, I know some firms that have files sitting on their desk they just don't have the manpower to process in the next I don't know 15 weeks. And that might be a cash flow issue because you're not charging enough money, or it might be because you don't have the financial wherewithal to feel safe, to feel safe enough to make that next hire that associate or paralegal. And so, from kind of a high level, how do you go about with a new client, analyzing the balance sheet and the P&L and the bank statements to figure out where the bottlenecks are?
Speaker 1:The first thing we do inside of this fractional CFO program is to do a stress test to what we call the financial foundation. So before you can start looking into the future of your numbers and your options and the different scenarios, we have to make sure that the foundation is solid, because that term in the accounting world garbage in, garbage out is so real. All numbers cannot be trusted. All financial reports are not made equal. So when we go in we do basically an audit of the books. We look at the past three years of historical trends, if they have it, and we come up with kind of a where you're at situation.
Speaker 1:Also, what is the quality, what is the integrity of the numbers that you're getting in the books? And sometimes we find that and this is why DIY never works like I applaud you guys for trying, but outsourcing truly is worth it. But if we find mistakes in the books or things that need to be fixed and adjusted, we go in and we get them done. And whether that's our team, because we do offer bookkeeping and payroll but a lot of the clients that come into the CFO program are already working with a bookkeeper and we don't want to fix what's not broken and so we encourage them. There's a lot of value to staying with somebody who knows your numbers. So we'll collaborate with the bookkeeper to make sure that, in the end, we're solidifying the foundation so we can begin to build the framework.
Speaker 3:And do you have, and I'm sure this varies by practice area, but a recommended ratio or split of marketing versus production, versus what the owner should be taking home, is sometimes profit, sometimes net owner benefit.
Speaker 1:There used to be more of a cookie cutter answer to this and I know everybody wants a cookie cutter number to stretch for you know. But there are so many different variables With marketing. It's completely dependent on if you're getting an ROI. You know there's this industry number that says 10% and that's great if it's actually working and bringing in more money than it's costing you. On the other hand, we don't want to just chuck 10% of money towards marketing and not measure and manage the return.
Speaker 1:And as far as team is concerned, the biggest variable that is moving us away from this cookie cutter idea that payroll should be somewhere between 35 to 45% is COVID, opening up this new world for us, and offshore staffing, which is a fraction of the cost. So for me, some of that is up to the owner. It's really preferential. If they're very insistent on I want people in my office, people from my area, people in the States, then we have to let the numbers honor that strategy. And I have a lot of clients who, when I first bring up the option of overseas staffing, they're very resistant, very hesitant. Look, it's human nature. We don't like changing new things. It's very unfamiliar to us and so it takes some time to come around to the idea of maybe I could do this, and in my opinion, it's amazing, because when you have a team member that's not physically in your space, what it forces you to do is level up your systems.
Speaker 3:Yeah, well, and then you get one and next thing you know you have five Like I think we have five or maybe six between the law firm and great legal marketing, because, yes, it helps you, makes you create good systems.
Speaker 3:You know, I I got an EA about 16, 17 months ago. You've exchanged emails with them, fred, and you know, the biggest complaint that I have is like this sounds like a version of my greatest strength, is also a weakness. Like we're, I'm just making decisions so much faster because I'm not the one doing all of the research and I haven't. My brain hasn't caught up to the level of comfort with that speed yet, and so if you are out there and you haven't hired a VA to do anything yet, you know there's a lot of margin that you can find in your business just by doing that. So, like in the law firm, we have no longer we have anybody in the US doing medical records collection. All of that is in the Philippines and it's done as well and probably faster, and the people who are in that role stay for longer than 18 months, and I'm just perusing your website. It looks like you have a number of people who are from that area of the world as well.
Speaker 1:We do, and it was such a game changer, especially with we hired some of our data entry team overseas, before we hired our EVAs executive virtual assistants and we have two of those but that executive virtual assistant when I finally hired somebody to actually help me enforce the highest and best use of my time my gosh like I think it's important to recognize like we only have a certain amount of mental energy in any given day. I think there is. I heard something once that was like you can only make so many important decisions before the quality of your decision making goes down.
Speaker 3:So many decisions Right, and that's why it's important to make important ones and not All of them.
Speaker 1:Yes, yeah, exactly Like. My EVA goes through my inbox and every morning I just wake up to this high level bullet point. Here's the ones I filed, here's the ones I handled you don't need to do anything and here's the questions I have left, so I can keep a pulse on what's going on in my inbox and only make the decisions that I need to.
Speaker 3:How long did it take you to get used to that?
Speaker 1:I think I was need any taking used to. But the most important piece for me was training her on how to manage my inbox and that took a good three to four months and what that looked like for me. I would open up my Zoom, put it on my email inbox and I would just talk out loud and she would get like half an hour videos every day from me. And what she did with those videos is she created because a lot of times we think we have to be the people that create the systems. Our team sometimes is better at doing that than us. So from those videos she created this SOP on what to do with these things and it took a good three to four months and investment in my time and energy to get her there.
Speaker 3:That's a smart way to do that. I want to come back to the 10% on marketing number, right, Because I think everybody in the back of their head somewhere they heard in a mastermind 10%, or if you're in the PI space, you heard 20,. You hear Mike Morse talk 20% all the time and if you're in some other spaces it's 6%. But the challenging thing is like of what and what number goes into that, right? Does your marketing director's salary go into that as a portion of the intake Cause that sales does that go into? Or is that 10% spend out the door on things that are facing into the world, Right? I just think as we compare these numbers in whatever rooms and groups you're sitting in, he's there oh, I'm spending 10% on this. Nobody has standardized what it means to spend 10% on marketing. How do you approach that with clients who are working with their own bookkeeper, their own bookkeeper, who they may be happy with, and digging into the numbers and going all right, it looks like you're spending 10, but actually it's 35.
Speaker 1:Yeah, especially those team positions for marketing, they can make a huge difference as opposed to just focusing on ad spend or something like that. And I think what I feel about the whole cookie cutter because everybody's looking for a cookie cutter, you know, and yeah, we hear 10% a lot my opinion on it is, instead of spending time comparing yourself to what other people are doing or looking for this cookie cutter answer, get a grip on where you're at. How much are you spending right now? And then start measuring it. And even your team members everybody has a unit of measure on your team that you can rate them by and manage them by and set goals. And when it comes to marketing, start with where you're at right now. Where are you spending your money? How do you measure the ROI? What is the ROI? Is it new clients or is it clicks, awareness, exposure? You know these are things that we can measure and just let the goal be to make your numbers better and use what you're already doing.
Speaker 3:I think that's that's the answer I was hoping you would give is like everybody else's yardstick who cares?
Speaker 3:Because what the numbers that they're giving you probably aren't correct anyway.
Speaker 3:And so understanding first where you are and then second where you want to be right, so we I think we get so wrapped around the wheel of what are your revenue numbers or what's your head count.
Speaker 3:Really, the thing that matters is what was your total owner's discretionary take home last year, right? How much freedom did you have to go and do the things that you wanted to do in your life? And getting clarity around the numbers and helping you project yes, even in a contingency fee practice, with the amount of fees you're going to earn in the next 12 or 18 months, is one of those things that frees up the mental bandwidth and the decision-making power to let you enjoy the things like the vacation. So we were talking a little bit before we got on about revenue projection and how contingency fee lawyers have all convinced ourselves that it just can't be done. So walk me through and like I have a car crash practice, right? How would you think about projecting revenue for my firm for the next 12 or 24 months? What information do you need from me to do that.
Speaker 1:The most valuable thing that people like me, whether we know an industry or not, is to look at the historical data, Historical data, and the more we have the better. But that is the absolute best place to start because even when it feels inconsistent in the day-to-day, if you look back over a long enough timeline, you will see some consistencies and to some degree, you should be able to have an idea of these. Are at least our potential settlements coming right? This is about how much we're thinking, this is about when, and then building a plan around that, anticipating if it does come through, if it doesn't, I mean what we're looking for here really and truly is quantifying the possibilities based on what's already happened in the past, and then learning how to continue to dial in the accuracy of those possibilities and then planning for the alternative scenarios around it.
Speaker 3:And you know, it's just one of these things that we are, when, when the numbers are small, it is challenging, right, because you have one large fee and it spikes, or you lose a large fee at trial.
Speaker 3:Right, as a contingency fee lawyer, especially in a contributory negligent state like I am, you can try a case and get a zero and those can skew your data.
Speaker 3:But if you can figure out how to take, you know the 90% of cases that are kind of in the middle, and then what we do is we sort them by the type of injury soft tissue fracture, brain injury and then we have through Excel through Excel, because I did this before, we had good case management software kind of gone back and said, all right, here's those cases and here's when they come in, here's what the average fee for those cases are, and then here's about how long they take to process, and so we can look at a snapshot now of cases that are in our portfolio and do a pretty good job of predicting quarter over quarter what the fee is going to be and what's going to come in. Now it's still stressful to spend the money and invest money on more marketing or more people, even with all that knowledge, and so you've said in a couple of other places that I've seen online it's always about the money and it's never about the money. What do you mean by that?
Speaker 1:That is so loaded. I have an entire podcast around it with that name. You know, we started this business everybody that is a business owner. We started because we wanted freedom, yeah, and part of what you need to get freedom is money. And so, yeah, we are hitting goals to bring in X amount of dollars and keep this amount, and we're focusing on the money. But what the money really is a mode for us to live the lifestyle that we want to live, and everybody has a different price tag of what that is, and so we're putting that amount to how much is it going to cost you to live the lifestyle you want to live?
Speaker 1:And what does that look like? You know it also goes with the saying there are no money problems, only problems showing up in your money. I see money to be a mirror, and how business owners manage business finance is almost identical to how they manage personal finance. There's a Ramit has a show on Netflix called the Rich Life or something like that, and he said something that I find to be true, and he's like show me your bank account and your calendar and I'll tell you what your priorities are. Your priority isn't to make money. Your priority is to spend your most valuable currency, which is time doing the things you love with the people that you love.
Speaker 3:Yes, that's what everybody says. Show me your bank account and show me your calendar and I'll tell you what your priorities are, right?
Speaker 1:Exactly.
Speaker 3:I laughed when you said we started this business to have freedom. Because that's I see so many young lawyers and entrepreneurs like leave the company that they were with and go free. Like freedom, you go. No, bro, you're just not busy yet. You just don't have any work to do. It feels free now, but you're going to and it will feel free at some point in the future, but you're going to go through a period where you, like, you're not free. You are on your phone because there's new clients coming in and there's cases that need to be working. You don't have any staff and you haven't worked with the CFO to understand that you can't hire staff, so that that lack of freedom is coming. But fresh entrepreneurs they love talking about.
Speaker 1:Well, and that's one of those you don't know what you don't know.
Speaker 1:And there's another quote that I love. It says entrepreneurs are the only people that will leave a 40 hour a week job to make less and work twice as much. The gap between when you start and you're in that place and actual freedom comes in learning the things like how to be your own CFO, how to make marketing work, how to measure positions and ROIs, and how to protect profits and grow at the same time. It comes from learning all of the hats, but law school doesn't prepare you for that, and so it's something that a lot of people are confused about, and until they find something like this to really latch onto and learn, they kind of stay stuck.
Speaker 3:What are you following now? So I mean, law school doesn't prepare you for it, but neither does accounting school. So where did you learn all this?
Speaker 1:Brian, I got street smarts. That's where I learned all this. When I took my first accounting course in college Accounting 101, I had found out that my job was closing so I had to find a new job and so I went to Craigslist. This is telling you like what point in history this was. But I went to Craigslist and I found this position that was looking for help and he had no idea what kind of help. He just needed help.
Speaker 1:Well, there was a day where his CPA came into the office and it was that stereotypical. Here's the paper reel, boxes of statements and receipts and just crap. I think you might need Do something with it and bring it back. Well, his CPA ended up dropping the ball and I offered to pick the ball up with one accounting course under my belt and from there I took on mentors. I reached out to people who knew more than I did. Like a local CPA who ended up recruiting me. I became vice president at that firm. I was calling the Department of Revenue, I was calling all the agencies, like I was demanding the information for myself not demanding, but like I went out there and found what I needed and who I needed to really get an understanding of what was going on here.
Speaker 3:What you're describing, you know, as a young assistant, helper person picking up the CPA's box. It sounds like the beginning of that Dunning-Kruger curve.
Speaker 3:It's like I know, I know all about accounting, I have no problem, I'll solve everything that's in here. But what have you done? You must have done something since then to learn. You know the running of the business and the managing of the kind of a life that you actually want to live. So who are you paying attention to? Podcasts or books, or gurus or conferences to continue to learn and grow in that arena?
Speaker 1:So many over the years and honestly, it took me probably five years from the time I started at the tax and accounting firm, which is where I learned and saw all the things I didn't want to do in my own business, where the things were falling short. And then I mean your typical Tony Robbins, gary Vee. I have a set of business Bibles that I live by. One of them is Good to Great by Tim Corley. I think it does an amazing job of really dissecting what it takes to run a successful business that stands the test of time. The E-Myth was a huge one for me on delegation traction. The EOS system is something that we use loosely in my company, but those are some of the big ones. The Pumpkin Plan by Mike Michalowicz on niching and you know, being a master of few, not a jack of many.
Speaker 3:It's so funny because all of those books are industry agnostic and all of those books are on my bookshelf and the shelves of many of the lawyers that we work with. That's funny. You mentioned I forget, I don't remember it was pre-call or while we were going talking about the Profit First system, and now you just brought up Mike Michalowicz again. Talk to me about Profit First in the law firm context, maybe particularly in the contingency fee context, and how that gives a lawyer security in knowing when they can invest dollars and when it's time to scale back a little bit.
Speaker 1:I think, the reason why it works so well, and Mike does a great job outlining this in his book.
Speaker 1:So if you're a reader, do yourself a favor and listen to or go get that book and read it. But he talks a lot about the psychology behind the system and why it works so well. And for those that don't know what profit first is or haven't heard of it, it's like the old school envelope system, when mom and dad used to come home with cash and they had an envelope set aside for the mortgage payment and an envelope for groceries. It is physically separating your cash and giving it a job, and the magic that can happen, in contingency fee law firms especially, is making sure that you have cash for the things that you need in between that money coming in. You know when a big settlement comes in if we know, based on historical data, how much you need to set aside for your team. Even in the situation you don't have another settlement for six, nine months, whatever the timeframe is, this system kind of creates this safety net for you until that next win comes.
Speaker 3:And I felt very rich until five days ago when I had to stroke a check to the IRS. And Profit First saves you from that also, right?
Speaker 3:I laughed earlier when you said CPA as part of the planning team, because you know for my experience and we worked with a number of different CPA firms over the years has been you get an email at two o'clock saying taxes are due today and you got to write a high five figure check and everyone, every single one of them, tells you we're not going to do that to you. And three quarters later every single one of them is telling you you got to pay $45,000 by closing business today.
Speaker 1:I don't know what it is, but in my 17 years of working in the tax office and with other CPAs, they are notorious for overpromising and underdelivering, and so part of what we do in the fractional CFO program like we don't do taxes. I want a life from January and April. I don't want to do taxes, but part of what we do in that program is coach clients, coach law firm owners what you need to know to effectively manage your CPA Because, unfortunately, the reality that we're living in is they absolutely need managed. And when you know the points during the year that you need to be doing what and when you are comfortable with, you don't need to file a tax return on time.
Speaker 1:I'm one of those people I'll tell my tax preparer put me on extension. I'm not trying to have you prepare my tax return when you are inundated with everybody else's work. I want you having a clear head, a clear mind. We've already tax strategized during the year, so I don't need to go out in December and spend a ton of money to save, you know, cents on the dollar, which is not a tax strategy, by the way, that's a flag Right Go buy a big heavy car, yeah, no no, although I did do that last year, so there is a way to do that.
Speaker 1:But let's not get stuck in the idea of oh, I get a new fancy car, but it's actually costing me more money.
Speaker 3:Well, right, right, there's a way to do it, but think it through before December 31st, so that you're not doing it only so you don't have to pay a third of the money to the government.
Speaker 1:The tax credit isn't enough to buy a new car, just to buy a new car buy a new car just to buy a new car.
Speaker 3:Who should be on the financial team for a law firm that's doing $5 million? Totally selfish question Law firm doing $5 million in revenue. Who do I need on my team? Bookkeeper, cpa, fractional CFO, tax strategist? Who else?
Speaker 1:Those are four of the five key financial players. The other one that I like to mention is your business banker having a relationship with your business bankers, and the reason why I say that? Because people are like, oh that's so old school, I didn't even know business banker was a thing, or I don't know who mine is. Because we have to be prepared for what could happen. When COVID hit, relief for business owners came in the form of PPP, right Paycheck protection funds. Who did we have to go to to get that? Our banker, the people that had a preexisting relationship with their business banker. Their business banker all but filled everything out and did it for them and they had no issues. The people who did not had a very different experience. So those are the main five.
Speaker 3:I'm going to have to get a recommendation from you after this, because that pops up like once a year that we hate our bank and we bank at a big national bank and they are, you know, they're fine until something comes up and then they're paying the ass to deal with. But I talked to my friends who are in like real estate or own small businesses that are out of the law and they all have relationships with their banker. I saw my banker and we had coffee and you know this is what's going on in the markets and the rates are up or the rates are down. I've never once had a conversation with anybody from my big national bank about what's going on in the market and where I should be investing. If you have a good recommendation for somebody, for lawyers, I'm going to get it from you.
Speaker 1:Yeah, and you know, for law firms we have fewer options because you know if you have a trust account, you need to bank with a bank who accommodates that. But do realize you don't have to choose just one bank. You can, even in profit first Mike Michalowicz talks about, keep your tax funds and your profit funds in a completely separate account. Again, because that psychological piece, if we see it, we're going to think about ways to spend it so out of sight, out of mind, so you can have more than one bank. But the key with choosing a bank is I hate bank fees. It's 2025.
Speaker 1:The industry is very well deregulated to this point. You should not be paying bank fees. Making sure that you have a relationship with a business banker right. Making sure that you can set up the multiple accounts for profit first, and if that's an account or if that's a bank outside of where you leave your trust funds, that no longer is a requirement for this one. So an online functionality. I don't know about you, but like I am paper free, cash free, I love technology. I do not want to have to go, drive to a bank branch and do anything. I want to be able to do everything I need to do right online.
Speaker 3:You were depositing, physically depositing checks until about five years ago, which is crazy to think about now. Now desktop scanner just takes all the money, which also is like, in a way, that's crazy, right. What I remember when we were setting it up was like, what do you want your daily limit to be? And so I put 10 million just to see if it would give me a $10 million daily limit. They wouldn't, so anything over seven figures I still have to take down to the bank. But that's okay. That's a good problem to have. We have those five key financial planners within the law firm, but as the owner or as the high earning lawyer, who else do I need in my personal life?
Speaker 1:Yeah, and that's the key, because we have to have somebody who bridges your law firm which your law firm is a vessel towards retirement or financial freedom whichever phrase you prefer, right? And so what we need in our corner is either a financial advisor, a retirement planner, somebody who can take your business, plug it into the equation of your financial freedom and, when you want to get there, so that they can do the forecasting for your personal life. This point in history is it is more realistic than ever that law firm owners get to exit profitably. They get to pass it on via succession.
Speaker 1:There are a few states even that are allowing non-licensed attorneys to own law firms entrepreneurs which should be kind of a sense of urgency for law firm owners, right, because we talked about law. School doesn't teach you how to be a CFO, how to be an entrepreneur, how to manage and grow a business and protect profits. So what the industry is going to see are these entrepreneurs coming in and taking ownership of law firms, and it's going to change the game. And so the best things law firms can do today is position their law firm as a law business, learn the things, build the value so that you can sell it, and there's multiple different ways to do this down the road right. But your retirement planner, your investment advisor, those are the people that are going to help you put together the formula for your future financial freedom.
Speaker 3:Get out, while the getting out is good.
Speaker 1:No matter how you feel about it, it's kind of like AI. I know people have different feelings about it, but it is here, it ain't going nowhere and people are going to embrace it, so hard decisions.
Speaker 3:Yeah, so you talk about financial freedom and financial freedom number, which I think is a foreign concept to most lawyers. Right, I talk to lawyers who say I'm going to be billing until noon on the day that I die. Doesn't sound like a lot of fun to me, but I think you know you have this lifestyle creep and inflation with the car and the suits and the vacation, the Instagram, keeping up with everybody else. Right, can you just like one-on-one high level? What is financial freedom? How do you calculate your financial freedom number and how do you know if you're on trajectory towards that or not?
Speaker 1:This is a really good question, because, in my experience, a lot of people don't think about this, and the question that you have to answer for yourself and it's probably not just going to be oh, I've got the answer right now in my head Like you're really going to have to sit here and think about it. This is where it's always and never about the money, right. What do you want to do with your life when you are no longer required to work to make money? Do you have grandkids? Do you have a spouse? Do you have kids? You got kids going through college. What's that going to look like If you paint a picture around what you want to do with your time?
Speaker 1:Travel, okay, how often. Where you want to go? How many times a year Do you want a vacation home? You, how many times a year Do you want a vacation home? You want a boat, like, what do you want? Because all of these things that you are painting a picture of, and what you want to do and who you want to do it with, have a price tag and so how to calculate that. That's where your retirement advisor comes into play. They will quantify how much you need based on the investments you're making now what the average rate of return is. Now I'm getting into like formulas right, but this is why you work with a professional. You don't learn it yourself. Highest and best use of time.
Speaker 3:If all of this is a foreign language, go hire somebody. Yes, if you're tracking financial advisor, do the formulas and then trajectory to where you're going, and then what?
Speaker 1:Yeah, yeah. And then the formula gives you how much you're going to need per year essentially in retirement if that's the word you like to use for it based on what you tell them. And so that's where they'll say OK, you need five million dollars in your portfolio to be able to retire, you know, or you can go invest in property and have that passive residual income. There are a lot of different ways to create residual income, but that's essentially the calculation they're looking for. How much do you need in residual income from your investments in retirement?
Speaker 3:And in order to meet your monthly or annual financial spending needs, net of tax and medical emergency and all that other stuff.
Speaker 1:All the things, and they know some things you won't think about. And they know the average lifespan of a man versus a woman. I mean they have a very detailed calculation. They'll plug your numbers into.
Speaker 3:And the thing that you can do by yourself right now, or with the help of a VA or an EA right now, is just look back at the last 12 months and figure out what your spending was. How much did you spend? Where did you spend it? What of those things is going to go away in retirement? Like, if you have a daycare bill, you're not paying for that in retirement. If you're living in a house with a mortgage, maybe that's paid off in retirement.
Speaker 3:Maybe you've moved up and you've upgraded the house, but starting to put a framework around what am I actually spending? And then, what do I need my assets to be able to generate? For me is it's back to it's all psychology, it's all having knowledge of what you need and where you are right now and then making a plan to get there. And it's no different if it's in your business or outside of your business Absolutely All right. Well, chelsea, this has been great. I could talk about money for days, but I want to be respectful of your time and bring this episode to a close. Where can people find out more about you?
Speaker 1:Yeah, I make it really easy. Our website has all the places we are on and we're on so many places, but it is yourcoresolutioncom.
Speaker 3:We'll link to that in the show description.
