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
Scaling Without a CFO Is Just ‘Creative Drowning' | Kelley Brubaker
You’ve hired the bookkeeper. You’ve got the tax pro. You’re making money. So… why does it still feel like you're flying blind and low-key drowning?
In this episode, Brian sits down with Kelley Brubaker, a Fractional CFO who’s been called the Numbers Whisperer for law firms, and not in a “look at this pretty P&L” kind of way. She helps firm owners ditch the chaos, decode the metrics that actually matter, and stop scaling their misery.
They get into:
- Why your P&L is lying to you (and what to use instead)
- The KPI trap most lawyers fall into (and how to escape it)
- What “scaling” really means and why most firms do it backwards
- When to stop DIY-ing your finances and hire a grown-up
If you’ve ever said “I just want to grow,” without knowing what the hell that means, this is your wake-up call!
Connect with Kelley:
🔗 LinkedIn
🌐 Profit Scale Thrive
📅 Book a Curiosity Call
____________________________________
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.
Want to connect with Brian?
Follow Brian on Instagram: @thebrianglass
Connect on LinkedIn
Hello and welcome to another interview episode of Life Beyond the Briefs, the number one podcast for lawyers choosing to live lives of their own design and build practices that they actually like showing up to on Monday. Today's episode is an interview with Kelly Brewbaker. Kelly is a fractional CFO, and this intro is gonna be a little bit non-standard because I think there's some meta stuff that I want you to take away from this episode. So I met Kelly at the AfiniPay 8 a.m. conference down in Austin, you know, maybe a little over a month ago by the time this episode releases, and but I knew who Kelly was because Kelly had been interacting with all of my not with all of them, but with my stuff on LinkedIn, right? So I already had familiarity with who Kelly was, which gave me the ability to go up to her and say hello, or the ability to come up to me and say hello. So that's number one, if you are not creating content on LinkedIn and you're a lawyer or you're a vendor, you should at least be interacting with other people's content. If for no other reason that when you find people at conferences who you think are interesting, it lowers the barrier to going up and introducing yourself to them. So if you are not the kind of person who feels inspired to create something every day or every other day or once a week or whatever it is, like at least engage with other people's content so they have some familiarity with your face and they know who you are. That's point number one. Point number two, I actually just hired Kelly as a fractional CFO for our law firm, and I did it after this interview. And that wasn't the reason that I asked her to be on the show, but what I learned, hear me learning during the course of this interview when we're supposed to be talking about fractional CFO stuff, is we're really talking about the business. And I hired Kelly, not because I think she's the best fractional CFO, because how the hell would I know? But because I think she really understands the business of law, and especially the business of personality for law very well, and I came across in this in this episode. And if you have ever dealt with somebody who is a professional providing services to your business, but they don't actually understand how the business works, you know how frustrating that is. And as I look back, that's how I have begun relationships with so many vendors that we trust now. Like I look back to um when I first met Matt and Manny from Hona, and we were my firm became client number two of HONA and they really, you know, they had a product, but it wasn't much of a product. It definitely didn't have an integration, actually, with my case, management software, which was Case Pure at the time, but they understood what we were trying to build, and I understood what they were trying to build. And that for me was more important than are you the best at XYZ? And if if you can either, as a law firm owner, start to build relationships with people who understand what you're doing, become a huge fan of theirs, they will start to tailor their product, especially in a smaller company, towards the things that you need, which really is like this is what we want. We want to be building alongside people who we like to see winning. It is a reason why I'm such a big fan of the Lunch Hour Legal Marketing podcast with Gisakalakis and Conrad Sam, because these guys actually understand what we're doing. And I was just three weeks ago when this episode comes out, probably in Vegas for that event. And you know, every like he is a quintessential lawyer-turned marketer because every question that somebody asks him from the audience, his answer began with it depends. Like it depends on what you're trying to build. Where are you in your law firm life cycle? Where are you in your growth cycle? What kind of cases are you trying to attract, right? And so many marketing people or CFOs or vendors or whatever it is just think that their hammer, their tool is what you need, um, and that they have the best hammer. Well, like maybe you needed a screwdriver, right? And so the vendors and the people in our space who take the time to understand what it is you're doing, and then tell you whether number one, they are the right solution. Number two, whether they have a tool in their toolkit that can help you. And and number three, how they would help you. And that's like the least important part, right? That's less important than whether they actually can. So many people are so caught up and just trying to sell you something. Without overthinking, are you the right person for them to be selling to? The more that you can tailor your search for a solution to does this person actually understand what the fuck we're doing. The happier you're gonna be with your vendors and the people who are working for you in your law firm. And so that's really kind of the bent that I want you to listen to this episode through. There's some. I thought it was gonna be about, you know, gaps in law firm finances. Uh, really, it really is not. Uh, it becomes two people who are interested in business talking about business. And I think that makes for a better episode, frankly. So hope you enjoy this episode with Kelly Brewbaker. Hello, everybody, and welcome back to the show. Today's guest is Kelly Brewbaker. Kelly is the owner of Profit Scale Thrive, which is a fractional CFO firm specializing in law firms and helping lawyers make more money and keep more of the money that we've made. Kelly, welcome to the show.
SPEAKER_00:Well, thank you, Brian, for having me. I was so excited. I followed you for a while on LinkedIn, and we finally got to meet at Kaleidoscope in uh what, Austin a couple weeks ago. And I've really enjoyed your content. So I'm excited to be on your show today.
SPEAKER_01:I'm excited to have you as a guest on the show. This is one of the benefits of actually showing up in person for conferences and events, right? So it beginning in 2021, it became really easy to just hole up in your office and you know, for lawyers and I assume CPAs is kind of the same way. Absolutely. And it's really easy to do that um online from your home office. But what you're missing is all the interaction that goes on outside of the room during the vendor happy hours and then at the very nice happy hours that Kaleidoscope through at their event.
SPEAKER_00:No, absolutely. Yeah. So I so as a CPA, I have to get a minimum 40 hours every year. 40. Well, it or an average. Yeah, I have to average 40 hours every year. But what's actually worse for me is I could do all of mine virtually. So I could just never go where I think most states require that some of your CLE has to be done in person. And I think that's a good thing, actually. Because yeah, I miss out on some of the stuff because I'm like, oh, there's a there's an app specifically for CPAs that they take podcast content and create that as a CPE. For me, it's CPE. I I'll get so I do one a week, so I get 52 a year. I get to where I'm at the end of the year and I'm like, I did not go to one conference this year. Well, I do go to conferences, but I'm going to attorney conferences. So not for me to get continuing education.
SPEAKER_01:Well, like I've got to get 12 hours every year. Four of them I think have to be live, two of them have to be in ethics. And every year I'm scrambling on October 29th, 30th, and 1st to find some kind of crap to fill into my 12-hour bucket. Yeah, I'm I'm ahead. I'm gonna be finished on time this year, and I got my ethics taken care of earlier this week. But, you know, it's funny for us, like Virginia is so highly regulated that the kaleidoscope, I don't get credit for any of that. Any out-of-state events I typically don't get credit for because the Virginia State Bar has to approve individually the courses. And I get so much more value out of being in rooms with lawyers that are talking about how do you take a million dollar case and turn it into a$10 million case? And we're not really putting that event on in Virginia. So it is a little bit backwards, but good. I'm glad that you can get it just for for you know your kind of self-education and the podcast class. Yeah, like that's what I'm saying. So anyway, that's that's not what we're here to talk about.
SPEAKER_00:No, absolutely. Sidetracked already, and that's like the first five minutes.
SPEAKER_01:Your your business is called Profit Scale Thrive, which is the the three steps to firm ownership and the reason that we're doing any of this in the first place. So talk to me about how your firm came to be and then what's the meaning behind the profit scale thrive.
SPEAKER_00:Absolutely. So I've been a CPA for longer than I care to admit. Um, it's been multiple decades, but um, I started my firm in 2005. So this is year 20 for me. And I did the same thing that I like any of my clients I talked to, everybody does the same thing. I'm capable of doing this. So I just opened my doors, I took on every single client. I mean, I was doing if if it was any work for any client, somebody was willing to pay me. I'm like, yep, I'll do it. So when I first started my firm, I had a CP on staff, she handled all the tax work, I handled bookkeeping, bringing on new work, bookkeeping, uh payroll, all that, you know, anything else. And it was very frustrating for me because I had at one point I had um a print shop, a dog groomer, a dog kennel, a retail store, an online store. Like it's just too much. I oh even a manufacturing, it was some type of uh machine shop or something. And every single time I'm going through and I'm like, I'd have a conversation with somebody, and then I'm like, oh, but it's different for your industry. And for a long time, I just thought I I should be able to support any business, right? But then I got to a point where I'm, you know, graveling with my uh, you know, venting with my business coach. And she's like, I think you need to niche. And I'm like, no, that's restrictive. She's like, no, no, no. Restrict like getting a niche does not mean exclusive. And I'm like, okay, that makes me feel better. She's like, so if you saw some, you know, a client, a potential client comes in and somebody you really want to work with, you can still do that. I'm like, okay. And she's a start. I said, I don't even know where to start. And she goes, look at your client list. I look at my client list, I'm like, oh my God, 80% of my clients are law firms. And it was something that started with one attorney who referred me to another firm. And before you know it, my whole roster, you know, most of my client list is law firms. And I'm like, well, these are the conversations I'm like, I'm kind I'm having the same conversations with different firms. And so I, you know, I want to stick with law firms. So I changed the name of my firm, and then that's where Profit Scale Thrive, I created a DBA name for my firm. And the idea behind Profit Scale Thrive is I want to guide law firms to overflowing profits so that they can scale their growth and then have thriving lives. Because for me, being a business owner, it started because I am not good with bosses. I mean, I was a great employee, but I don't like being told what to do. So I got to a point where I needed the freedom. I always question why am I working Monday through Friday, eight to five? Like, why in the summer can't I work seven to four or six to three, or like so I could leave early and enjoy the summer, right? And any boss I've ever had is like, it's eight to five. We've always done it that way. That's just how it is. So I just got frustrated at my last job and said, that's it, time out, I'm done. I can't do this anymore. And I like the ability to be a firm owner, to be able that I can sit down at my desk today. And if I have a kid that calls me and says, Hey, mom, I'm sick, I need to come home. I don't have to go to a boss and explain to them what I'm doing. I can just get up, go, you know, do what I need to do, take care of them. And then if I need to sit down at my desk at 6 p.m. to finish the day, I do it. Like I just know I I'm responsible enough to finish the work I I'm committed to. But I just couldn't ever comprehend why I'm restrained to that eight to five uh day. So that just got really frustrating to me.
SPEAKER_01:So the scale part of your business's name has really become a buzzword for lawyers. And and maybe I'm a little biased because I'm in the consulting space and I pay attention to a lot of other consultants, but everybody talks about scale. But nobody have talks about very much about what happens on the other side of scale. Or if they do, they tell you that the other side of scale is you're working half as many hours and you're making twice as much money, which I I have never found to be actually true.
SPEAKER_00:I haven't seen it.
SPEAKER_01:What's on the other scale is the other side of scale is is the thrive. And if it's not, if you're not working towards, you know, a fulfilling life where you're working only on the things that you want to work on and you're making good money, then what's the point of scaling? And so how have you helped law firms through that space or seeing them, you know, scale unintentionally or through the use of over leverage? And what are what are some of the landmines that we need to be conscious of and try to avoid in that part of the business growth?
SPEAKER_00:No, that's a great question. Yeah. So scale, I have a lot of times where people will talk to me about scale and they're not really talking about scale. So scale is the idea that you can take on more work, meaning more money, but you're not using more resources. So if I can help you with your current staff and free up their time because either they're doing things inefficiently, not through, you know, anyone's like I'm not trying to, you know, lay blame anywhere. Sometimes we just figure out something and it just works one way and we don't think about, oh, hey, it works. Is there a better way? As long as it works, it works. So, you know, so I'm trying to help firms that are, you know, how do we free up time? Or may sometimes it's we have to add one more person that's maybe an offshore person who can do some admin that work that is anybody can do it, you can teach somebody to do it, but they're at a cheaper rate because just the exchange rate on the currency and the standard of living where they are, like you get that benefit. And so you might add one person at a lower rate, but you're gonna free up a whole bunch of time from some of your experienced people that then they can take on more work. So scaling is doing more work with less or the same effort and or the same resources, as opposed to the word growth, where I frequently am hearing people talk about growth. I want to grow my firm. And I'm like, what does that mean to you? I want more money. Okay. Well, if you keep doing the same thing, if you have chaos now and you grow with your current state of affairs, like nothing changes, other than you have more work, you're just growing the chaos. And so as frustrated as you are now, multiply it. So every time you take on more work, you're just gonna be more frustrated. So the idea of scale is it's it's controlled, it's controlled growth so that you know when you take on somebody new or take on a new client, you already know that you have systems in place, nothing's falling through the cracks, and you have the staff that have the capacity to take that work. Because the other part of it is you don't want to take on work where the clients are constantly calling and you never have time to call them back. Okay. That they can never get a hold of you. Because isn't that the number one? I mean, by far, the number one complaint I hear.
SPEAKER_01:It's the number one complaint about work.
SPEAKER_00:Exactly. Is the and same with in my position as well. I can never get a hold of them, never can get a hold of my CPA, can never get a hold of my, you know, my my attorney, whatever it is, I can never get a hold of them. And so you definitely don't want to take on work that you can't properly serve the client. And the ways that we do that is I'm looking at firms now, obviously, you know, as a CPA and a CFO, I'm coming at it from the money perspective. But I'm gonna start those conversations with are you happy with your current staff? Are you, do you think that they're getting the work done efficiently, or could you get them different tools? Or maybe the same tools that you already have. Maybe we're not using them correctly to be faster. Is there a way? So, like I like in my firm, I actually just sat down yesterday because I had realized that I was doing something manually that I could set up a zap for. So I have a new lead that comes in. I use calendarly as my calendar because that's something I'm like, I don't have the patience to sit and talk to people about when are we gonna when are we gonna get together? Just go to my calendar. It's just always current, right? And I realized that I was taking as a new lead would come in, I would manually go into my email system and add that contact to my distribution list for my next because I send a newsletter out every week. And I'm and then it occurred to me yesterday, I'm like, what am I doing? What I like, I don't have time for this. And so I went in, you know, to Zapier and I'm like, hey, can you take when something a new appointment comes in, add them to this email list and then done? Like it took me two minutes, and now it's just something I don't have to do anymore. Those are the things that I'm looking for. I want to spark those conversations to say, you know, and and I try to, so I I have I would say it's uh like a quandary in my head because I'm not an operations person per se. Like that's not my background. My background is money, right? But I'm not gonna come in and tell you how to change things. I want to give you the ideas on how you can change things. And so, and part of that is also looking at from the money side, saying, you know, you're paying, you know, a thousand dollars a month for this software. Are you even using it? And that's part of it is the operational side and the financial side. Can you justify a thousand dollars for some software you're using? If you can, great, let's move on. Let's go to the next thing. Let's see. Because I'm always looking to see can I save you money? And you know, or are we using the tools correctly? Or can you get better mileage out of the tools that you currently have? So it's always looking for doing something better today than you did yesterday.
SPEAKER_01:The more mileage part is is really, I think, the thing that most lawyers and small firms are constantly trying to figure out, and we're doing it right now, what's the appropriate number of cases per paralegal that actually makes sense? And we're getting number one, maximum value for the client, delivering great service to the client, but also like I don't know, saying it this way is a little bit funny, but extracting maximum value from the employee. Yeah. Um I we try to the the exactly what you described, where I, you know, don't tell me that I can only work from eight to five. We're very flexible on that. But I do expect that the eight hours that you're here, you're actually I could really care less what eight hours they are, but do enough work during them, right? And so is 40 cases, is 50, is 60, is 70 cases the right amount? Well, what happens if it's 40 really large cases is very different than it's a different workload than 50 mid-sized cases. And so this is that constant like juggling act where you're like, all right, this person has um less cases, but they're more valuable, but they seem to be getting less done. Is it a person problem or a systems problem? Have we given them all the tools that they need? Why aren't they keeping up with the rest of the team? Like, this is the kind of stuff that keeps lawyers up at night and the kind of things we talk about in our mastermind groups at Great Legal Marketing. It's like, what's the right number? And the thing is for every practice area and every size of case and every state, there's a totally different number.
SPEAKER_00:Absolutely. Well, and that's where I will caution clients so frequently, like with my so I have some clients I only do bookkeeping work for, and then I have others who are like, no, I need more of an advisory. I need you to mentor me, coach me. Like, what am I doing? You know, what can I financially do better, right? Or what's on the horizon? Keep an eye out for me on that. And, you know, a lot of times we'll have these conversations, and I'm like, okay, well, I'll put together a KPI dashboard. Like, let's focus on your key numbers. What are your top goals? You know, what and and I try to limit it. We're not talking about a hundred goals, we're talking about three to five goals, and we're continually evaluating those because once you reach one goal, are you gonna change the goal value or are you just gonna change to a new goal, right? But I always caution just in for exactly what you just said, just because you see a number on a chart or a report or however you, you know, dashboard, however you want to call it, be very leery of comparing it to anybody else, any other firm, but also think about what are the things you don't see in that number. So there might be one paralegal who is working on the largest cases. So you're a PI firm. So maybe you have one person who works on very complicated cases, and then you have another paralegal, and you know, no for just just however cases got assigned has a has a lighter, like the cases are less involved, okay, smaller cases or whatever. It wouldn't be fair to say that both of them have to be working 40 cases at a time because you know that there's there's reasons why they are different. So that's where I caution a lot because I'll have clients will say to me, like, oh, my KPI here, it's supposed to be, you know, the industry standard is this, and I'm not there yet. And I'm like, okay, but you don't know but first off, the industry standard self-reported. You can't guarantee that that's correct. That's just what somebody picked up.
SPEAKER_01:The industry standard is is self-reported, or what the guy selling a membership in a consulting program from a SAVES says the industry standard is, and it's always higher than yours is.
SPEAKER_00:Yeah, exactly. So so I just I just caution. I I like to use numbers, and my whole thing is numbers don't lie. Um, I had to reframe that a little bit that accurate numbers don't lie, but but as long as you have solid information, you can use it, but you still have to judge, like you still have to have some criteria and experience with the information to be able to translate that into real world results, right? And so, you know, it's it's like how do you you can justify why you're not hitting an industry standard other than it might be a made up number. So that's crazy, but it happens. I see it all the time.
SPEAKER_01:You know, the start listen frankly, the starting point for most firms is to figure out what your numbers are, right? Yeah, most firms get so overwhelmed by what you and I are talking about that they they don't even go back ever and look and see, well, how many cases it is everybody handling. Absolutely. And so most of us, most of most law firm owners, are fumbling in the dark for that number. And if you did nothing else in the next year, but wrapped your arms around, I don't know, five to ten KPIs and started tracking them, it doesn't even matter, I think, if they're the right KPIs. I agree, I agree. Really, if you have a goal, yeah, just pick 10 things and track it. Yeah, and and you can adjust once you're going, but like get the ship moving at least.
SPEAKER_00:Yes. No, and I agree, and I tell people that I will say some information is better than no information. And this will change your KPI, like your main metrics you use today. I mean, I what I evaluated for my firm 20 years ago is like nothing now. I want, you know, I want meaningful information, but today what's meaningful for me is going to be different than in six months from now. And so I try to say, and so then it's the overwhelm with, oh my God, there's got to be a thousand KPIs. What what do I pick? How do I pick five or ten? And I try to pick ones that are not the same. So let's talk about of all the leads, what are the percentage you close? So you kind of have some idea on your intake, right? And then let's do some information, you know, let's look at something about, you know, billing, whatever that looks like. I know it billing looks different for you for contingent, but um, you know, what is some some type of a revenue, you know, the the idea behind revenue coming in, something about your costs. Are you at least getting enough money coming in to cover the costs you have every month? You know, what's your I have clients that will say to me, or at least at least knowing what your costs are every month. Well, that's and that's the other part of it. It's crazy to me. I'll have somebody who will come to me and say, Hey, you know, I'm just struggling. I'm like, well, okay, well, how much is your, you know, how much is your overhead every month? Like, what do you have to pay? I don't know. And I'm like, well, let's start there. Let's figure out what do you need just to keep your firm going month to month? How much money do you need to come in the door? And then I'll say, you know, somebody will say, Well, I want to grow. I want to hit a million dollars. And I'm like, okay, but every case is not the same. So it's case value. So what what does one new client look like for you? Is that like what's and and it's always the like I get the blank stare with, I don't know, because they're all different. I'm like, you're right, they're all different, but you can somehow go through your client, like through all the clients you've had, and you can come up with on average, you know, and I'm sure you know this. So you know, like a car case where it's involved with a motorcycle, you probably know the value of that case depending on who you're representing, you know, what what that value is versus somebody in a commercial, like commercial vehicle, so a truck, you know, semi-truck. So there's different, you know, there's different case values. So I would tell you it's not that you want to grow the number of clients you have, you want to grow your ideal clients. So let's figure that out. And then we'll talk to your marketing person. How do you change your marketing messaging to be able to attract the clients you want, your ideal clients, and repel the clients that you don't want? There's certain leads you just don't want. I mean, for you, DUIs, you're like worthless. I don't I can't help you, right?
SPEAKER_01:So well, unless you got hit by Well, that's okay.
SPEAKER_00:Yeah, yeah, yeah.
unknown:That's true.
SPEAKER_00:That was a bad example. Okay, divorce, bankruptcy, rewell completely.
SPEAKER_01:So so it's it's funny because I can, you know, even then talking to the financial uh woman, like you can hear that the Cleveland Dan Kennedy coming through, and you're like the attractive attractive marketing, attractive people who uh you want to work with and repel the people that you don't. It with our numbers, I remember saying, you know, four, five, six years ago when we started tracking all this, like it first thing that we did was exclude all of our six-figure fee results because those skewed the numbers. Yeah. But then if you look back, actually it turns out that we had a six-figure fee result, two in every hundred cases. So for every 50 cases that I sign up, I know I'm gonna have a six-figure fee in there. And I can just add that back in now. So like our average fee is uh if you include that, it's eighteen thousand. If you uh disinclude it, it's sixteen thousand. And it when you're when you're working with small numbers, yeah, you should you should uh not count on those. But as you grow, you know, we'll probably sign like 200 cases this year. Now I'm comfortable putting that number back into our our buckets, and then we broke down um Kelly by injury type. So sprain strain, fracture, surgical, brain injury, DUI is is an injury type for us. Bad example, I know.
SPEAKER_02:Right.
SPEAKER_01:And we broke down what's the average fee in those. And so now I have pretty good tracking on if I look back at the cases that we signed in August and I categorize them by what the injuries were, I've got pretty good tracking on when that'll turn into money and how much money it'll turn into at some point in the future. It's not perfect, but it's a hold of a lot better than it was five years ago.
SPEAKER_00:Absolutely. And it's gonna evolve. I mean, just as there's gonna be things out of your control, it's gonna evolve because you don't know if the state laws are gonna change. I mean, there's gonna be things, so that's your true information right now. Use that. You have to use the information you have right now, and then over time, as things change, whether it's within your control or not within your control, your metrics change. And then you just make better decisions based on your current information. It's a continual process that it's evolving, and today's answer is not the same as it is in six months or what it was six months ago. So yeah, it's continual. And I love and I see it more in in PI practices than other types of law, where somebody can go through and say, Yes, I know for this type of injury, but how this is should play out for me. Should doesn't always happen that way, but should. And so then you can make better decisions.
SPEAKER_01:Here's the the one metric that most PI law firms are not tracking that causes you to overestimate how much money you're gonna make next year is the um the drop case ratio. So everybody tracks everybody tracks my sign rate and how you know, whether it's as a percentage of total leads or as we do as a percentage of qualified leads, everybody tracks that. And then you multiply number of cases you sign by your average case fee. But the way that we got to average case value is we looked in QuickBooks and we took all the cases that we settled and that paid us, and then we divided the revenue by the number of cases without remembering that there were 5% in most firms, 10% in some, much higher in a medical malpractice practice, that we signed up that never turned into any money. And so you have to add those zeros back in that will either do, you know, it'll either reduce your average case value or you have to add that into your equation when you're looking at how many of these cases that we signed last month do we expect to drop within the first 90 days. I first I came across that metric maybe a year ago. And that was a big light bulb for me because it not so much in the personal injury practice, but on our in our disability practice, we'll go and get the claim file. And 25% of every claim file that we get, we find something in there, we go, no, actually, we can't help with this, right? So that's a dramatic reduction in the amount of money that you're gonna make when you say 25% of the cases that we signed up, we're gonna review and then tell the client we're not able to help them.
SPEAKER_02:Right.
SPEAKER_01:So if you do nothing else, go figure out how many zeros you have in your in your average fee column.
SPEAKER_00:Absolutely. And it's why. Why is it zero? That's the other piece of it. But you're right. You can't like I get frustrated when somebody will tell me, well, I I latch onto this key metric. And I'm like, well, why? And they're like, well, because it makes me feel good. And I'm like, well, the idea of KPIs is not to make you feel good, it's to give you information. And so I like your approach, making sure you include the zeros. I mean, I had a client a couple of years ago complaining about his marketing, changed from one provider to another, and he's like, Oh my God, this new people, this agency is amazing. With like the phone is ringing off the hook. And I'm like, Well, I thought you changed like three months ago. And he goes, Yeah. And I said, Okay, well, why isn't your revenue changing? Well, because the phone calls coming in are for things I don't do. And I'm like, Okay, so you have this marketing agency that's just knocking a grand slam for you and getting your phone to ring off the hook, but none of them are ideal clients. So what are we gonna do about this? I need you to turn this into money, which for him we actually did figure out. We had a way where he had other attorneys that he so a call comes in and he could refer it out to somebody else that does that, you know, whatever it is. And uh, so then that turned into referral fees. So we did turn this into a positive, but it didn't even click to him. He was so excited the phone was ringing, and I'm like, I'm glad that your phone's ringing, but we need to turn this into money because you're spending a lot of money.
SPEAKER_01:Well, this is I mean, this isn't this isn't supposed to be a marketing podcast, but right maybe it'll end up being one. You know, you you're if you have a new web vendor and they're showing you all this traffic is up and to the right, but your your assigned clients aren't increasing at all. It's it's interesting to like take a look at what is attracting the clients. So I'll tell you two stories. We used to have a criminal defense lawyer here, and so we our website was doing like PI and medical malpractice and LTD and some criminal defense. And and this is back in the day where anytime you had an idea for an article, you would just type it up, blog it, and slap it on your website.
SPEAKER_02:Yep.
SPEAKER_01:And um and so so all of a sudden we're getting all these calls for like how hard can I hit my child with a belt before it's child abuse? Why are we getting why are these and why are they all originating in Southwest Virginia? Well, it turns out the criminal defense lawyer had written an article about the Virginia statute, which talks about exactly how hard you can hit your child and what you can hit a witness before it's a criminal charge.
SPEAKER_00:I'm not sure I want to be part of helping somebody figure out the limits, but yeah.
SPEAKER_01:I'm not gonna know where the limits are. You know, the other the other thing that we had done for a long time is every every time we were we were like explaining to a client why they didn't have a case, we would go and write an article about that. Like slip why slip and falls are hard in Virginia. Well, you know what that article attracts is more slip and fall cases, which are hard in Virginia. So we stopped doing when we figured that part out and we we started only creating content around. This is back to like magnetic marketing. We started only creating content around the kinds of things that we wanted to attract. Yeah, not necessarily trying to repel because the search engine doesn't really know you're trying to repel the flip of the case.
SPEAKER_00:It doesn't know not. Yeah, it doesn't understand not. Don't send me this. Yeah.
SPEAKER_01:Yeah. No, I agree. Yeah. So it again, not not supposed to be marketing.
SPEAKER_00:I could talk all day long about any of it, but but yeah, I mean, and again, I usually will start these types of conversations with clients, and then I'm like, okay, take notes, and then you gotta go talk to your marketing person. Like I can only give you so much inspiration, and I can just kind of point you into there's being an issue. Now you gotta kind of you gotta you need the next professional to help you carry it across the line.
SPEAKER_01:So what's the what's the average size, you know, people or revenue of of the firms that you're working with?
SPEAKER_00:So I'd say probably average is maybe like two to four million in annual revenue. Okay. I definitely have clients below that and I have clients above that, but like two to four million is kind of a sweet spot where you need some help, you've got a bookkeeper, and you may love this person and they're doing amazing with your day-to-day bookkeeping. But every time you go to ask them a question, they're like, I don't know. Or they give you an answer and you're kind of like, Are you really sure about that answer? Or do you want to change your answer? Like there's a little bit of uncertainty. And it's no knock at all against bookkeepers for like any company cannot survive without a bookkeeper. You've got to have somebody because bookkeeping, the essential function of that is the day-to-day financial history. It's they're a historian, they're keeping track of everything going on. And but just some bookkeepers, if you have a bookkeeper that has a bookkeeping practice and they're serving multiple clients, they may just not have time to be able to sit, like they're going through and updating your books, but just don't have time to slice and dice information to make a determination. So that's where I'll come in. And I'm I'm trying to bridge that gap because, oh, and then the other part is you have a tax person who is like telling you something completely different than your CPA. Right. Yeah. I get these calls like, oh my God, my tax person just called me and told me I, you know, I made$100,000 last year. I owe$50,000 in tax, and I don't have any cash in my bank account. Where like where did it go? And I'm like, well, let's talk about it. And I can pull up reports and show them where the money went um and and explain it. And part of it is timing that your tax person is looking, you know, like like uh we're mid-September. Business returns were just due a couple days ago. So that's nine months after year end. So part of it is timing that we're nine months away from year end, but the tax person is all about tax compliance. They're just concerned about getting a correctly prepared return to you for you to sign so that it gets e-filed. They're not gonna have time or inclination. Like they don't have it, like tax people generally don't have enough insight into your numbers to be able to give you any advice at all.
SPEAKER_01:And they don't ask enough questions about them.
SPEAKER_00:Exactly. But their job is tax compliance. It's putting the correct number in the correct piece on the uh the correct box on the form. So it's not for them to go and audit, is that even the correct number? They take for face value. I can guarantee any engagement letter for a tax prep is saying I take at face value what you're telling me, and I take that information, I put into the correct box. That's my role. Now, tax strategy is a whole little bit different where somebody who does tax planning or tax strategy, they may do tax return like to tax prep, but they're saying, okay, did the prep, filed a return, but how can I make the tax you owe less? And so there's planning, like you can structure transactions differently or time them a certain way to be able to benefit better on your taxes or at least defer and pay. Right. Oh, good lord.
SPEAKER_01:Or you could invest in an oil field somewhere in Texas and get exactly three years worth of uh worth of write-offs as a general partner, all while hoping the well doesn't explode.
SPEAKER_00:Like praying.
SPEAKER_01:All of all of this stuff, all of this stuff is out here. And the and the my gripe with the financial I have two gripes really with CPAs, CFS.
SPEAKER_02:Yeah.
SPEAKER_01:Number one, the only time you ever hear from your CPA is three days before your quarterly taxes are due. Yes. With an estimate that you need to pay 50% more than you thought you were gonna have to pay. Yeah.
SPEAKER_00:And the money's not two.
SPEAKER_01:Number two, it's very hard to get the whole team to talk to each other because your tax strategist is telling you one thing and your CPA is telling you no, it can't be done that way. So, and and the people like like I I try to stay on top of this and remain educated and and listen to podcasts. And and maybe I'm listening to like here's the super aggressive way to run your finances. And maybe that's why there's always pushback on that. But I feel like I'm constantly educating my CPA on no, actually, this can be done. And here's the statute, and here's the white paper on, and here's here's how it should be done. Um I don't know. I I I don't think I'm alone in that in that complexity.
SPEAKER_00:Oh, you're not, no, you're not alone.
SPEAKER_01:And I only hear about it three days before.
SPEAKER_00:Yeah, no, I encourage so part of my so part of my background, and I so I'm not currently. There's a book called Profit First, and it's a book by Mike McAllowitz. I am not currently a certified profit first person. I had been for years. I still love it. I just stepped away from the group, so I'm not actively, I can't coach you on profit first, but it's a cash management system. It shows you how to save money. So money comes in, and for every dollar that comes in, you have a way, like you have a plan on where it's gonna be spent. And part of that is making sure you save for taxes. And so when I work with clients, I'm saying, hey, I think your income this year, like it's it's trending this way. Do you at least have this much put away for your taxes? Because I think your CPA is gonna call you on you know November 10th or whatever and say on April 12th. Right, on April 12th. Well, April 12th is even the worst because you've got your first quarterly payment and hopefully your returns being filed with the hopefully not a balance due, but but right. It's so I'm trying to help you to make sure you're putting money aside. So, which is you know something I have to ask about because not everybody, so some people will have a bank account within their business just for taxes. So I can see it. Other times they take the money out of their firm, put it in a personal account, which is fine. Like, however, it works for you is great. But those are the things I'm asking, like, hey, did you know, do you have enough money set aside? You don't have to tell me what it is, how much you have set aside, but I think your tax person's gonna tell you this is how much you owe right now. Do you have that much money? But yet I'm in full, like I completely understand what you're saying and I hear that often. And I continually offer to my clients, let's jump on the phone. Let's jump on the phone with your tax person, let's jump on the phone with your bookkeeper if I'm not doing the books. Is there something that we can change to make things better? What information does somebody need from me that I can help? Like, let's make this because it's a team effort. I mean, that's the thing, like from my perspective, I'm here to serve my clients in the best way possible. And to me, it's a team. There's not one person that's gonna make make or break a firm. You need a team. And so whatever I can do to make that team happen, that's what I'm here for.
SPEAKER_01:So I I heard you say most of your clients are in the two to four million range. Where and and listen, most guys and girls that have grown their own law firm from zero to half million to a million are DIY efficient autos, right? From marketing to bookkeeping to the practice of law, all of this, right? Assuming this person has a bookkeeper on set that's not the lawyer, when does it make sense to engage if a fractional CF?
SPEAKER_00:So the answer is different for every firm. Usually the answer is based on what is your intention with the firm long term. If you're happy, I have some clients, some of my smaller clients are like, I have a great life. I walk away every year with 200 grand. Life is good. I've got good intake, I've got good, you know, funnel leads coming in. I have great cases. I love my clients. I'm just happy. I never want to grow. At that point, I'm probably not gonna be able to help you. I could, but the stuff that I'm telling you, you're gonna be like, yeah, I know it's the same as last year. I'm happy with the status quo. So those are not my ideal clients. Those that that seek out CFO is people who want to grow their firm. So, I mean, I have one client right now I'm working with do so I have some clients who are like, I really need the CFO expertise. I can't afford your CFO package. And I'm like, okay, maybe they're at 500, 750, they're trying to hit a million. So I have something that I do quarterly. So I have a quarterly package where we meet four times a year, but I'm still available all the time. So if you have questions in the middle, like in between meetings, you're still contacting me and we're gonna figure it out. But it's something that now you can get better information so you can make better decisions so that you can continue to grow. So it's more about your intentions with your firm. Like, what are your long-term intentions? That's gonna determine better about when you need because CFO, I tell people, CFO is like the GPS in your car. You're in the car, you you know, you jump, you pack the kids, pack the car, you're like, okay, let's go to Disney World. And then you're like, Well, I know what highway to get on to start, but I don't know where to go. And then, you know, so your GPS, you just type in Disney World and then it like, you know, calculates your directions, but you get halfway down the road and and it's like, oh, this exit ramp's closed. And so you you somehow have to take a detour. That's so that's what I am. I am your GPS. You tell me where you want to go. And then I because I will tell you, there's never a trip where there's no accidents, no closures, no detours. There's always something. So I'm telling you, and sometimes like Google Maps or ways it'll come up and say, um, you know, traffic ahead slowing down, you know, stuff. That's what I'm trying to help my my firms. I'm trying to help them. Like, hey, in part is the tax. Hey, I see your income went up. Are you saving more for your taxes? Like it's the warnings ahead of time, you know, as soon as I can see them. Um, you know, or hey, you told me this, but I'm seeing your your funnel is drying up. What's going on? Did something change in your marketing? So it's it's looking ahead. And then what do I need to help you change direction to be able to get you back on your path to where you want to go?
SPEAKER_01:So so here's my my plug if you've made it to the end of this episode is you know, you should have somebody on your team, on your marketing team or your financial team. When you get past the million dollar mark, the other players on your team have to understand the rest of the business. Right. And the things that I've heard you say about marketing and understanding the funnel and all of the like we're 40 minutes into a podcast, we really didn't talk about financial management. Directly on the nose, hardly at all. Right.
SPEAKER_00:Right, right.
SPEAKER_01:This is these are the conversations you should be having with the people that you're vetting to bring on to do the work in your business. So, Kelly, where can people find you if they find that to be a compelling sales pitch for your profit scale thrive?
SPEAKER_00:No, absolutely. So, a couple ways. The best way is to follow me on LinkedIn, because that way you can either see my current content or you can send me a DM. The other way is through my website, profitscaltrive.com. Uh, I have a YouTube channel as well, Profit Scale Thrive. And so between those, I have my own podcast, which you and I had recorded in an episode the other day, which I can't wait. That hits, you know, a couple in next week or two weeks from now. And uh yeah, I mean, I would just love to have the conversations with people to see if they even, you know, what do they really need? Because I've had people come to me and they're like, you know, I and I've had this conversation with Guy Sakalakis, who you know, and he's you know, he hasn't met a marketing agency.
SPEAKER_01:He's the other one that came to mind as marketing guy, but understand the rest of the business also.
SPEAKER_00:No, absolutely. Well, he and I had the conversation where, and he and I, we kind of do the same thing when we talk to potential new clients, where, you know, are you even a position to hire us? So, like, you know, and when Guy was telling me this, I was like, gosh, I'm actually impressed that you do this. So it's it's not about the money. Do you have the money to pay me? It's are you even in a position? You know, it's kind of doing an evaluation. For me, it's it's a it's a natural conversation to to kind of understand where people are. And then me understanding can I meet them where they are and get them where they want to go. And so it's um, you know, so I would love to just even have the conversations. If people are on the fence, like I'm not sure, just call me. Like set up a you can go to my website, you can set up an appointment, and I'll let you know. Like, I'll be honest about it. I don't chase every I've I've definitely had the calls where I'm like, I don't think you're where you need to be. Like, I don't think I'm the best person right now. I think you might need somebody to help you with your marketing, or you might need somebody to help you with your operations. Once you get that in place, call me. And then then we'll get things moving. So, you know, it's um I I'm definitely not chasing everything, but I would welcome any conversations to see if there's even a possibility or if I can guide you into a better direction for a next step.
SPEAKER_01:That's another good trust clue, somebody who's not chasing everything. So we will link to all of that in the show description. If you want to reach out to Kelly, you should do so. Otherwise, we will catch everybody on the next episode. Thank you, Kelly.
SPEAKER_00:Thanks, Brian.
