The Sterling Family Law Show

Tom’s Trek: The Law Firm Metrics System Behind Our Success - #170

• Jeff Sterling Hughes

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Law firm metrics made simple: Track your waterfall from calls to clients. Tom's 12-month journey shows exactly what to measure.

Family law firms struggle without proper client acquisition tracking and legal practice benchmarking. This law firm waterfall analysis breaks down every metric from call answer rates to attorney close rate optimization.


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📄 CHAPTERS
0:00 - Law Firm Metrics Breakdown: Tom's 12-Month Performance Review 

4:53 - The Complete Law Firm Waterfall Analysis: Calls to Clients 

8:37 - Sterling's Law Firm Conversion Rates: Real Numbers From a $17M Firm 

13:38 - Attorney Close Rate Optimization: Why Sterling Hits 33% 

16:29 - Legal Practice Benchmarking: How to Compare Your Numbers 

20:38 - Attorney Marketing ROI: Working the Waterfall Backwards 

24:55 - Law Firm KPIs Tracking: Cost Per Lead and Budget Planning 

33:03 - Sterling's Marketing Cost Target: The 15-17% Rule


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SPEAKER_00:

The fact that you track leads, consults, and hires puts you, I'm not exaggerating here, above 80% of the family law firms out there. At least. Well, hello, and welcome to the Sterling Family Law Show. My name is Jeff Hughes. I'm your co-host. I have with me Tyler Dolph, the other co-host, and we are back with attorney Tom Harton out of Long Island, New York. Now we've been following Tom since last June of 24, and he is just completing this month in August. So we're shooting in August, and he's just completing his 12th full month as we've been watching him build and grow his firm. And so today we're going to take a deep dive into what we call the waterfall. We're going to look at Tom's numbers. We're going to look at Sterling, Sterling's numbers, and kind of help him benchmark a little bit, share what we're doing. And so if you want business in your firm and you have any struggles at all in tracking that, this podcast is going to go deep into that and it's going to be full of amazing information on how to look at your waterfall in your particular firm. So welcome back, Tom. How have you been over the last month?

SPEAKER_01:

How are you doing, Jeff and Tyler? Thanks again for having me on as always. This month has been good. I actually didn't, I kind of forgot that I was coming up on my one year. So glad to hear you say that. But yeah, we're here talking about July. July was another good month, a little bit slower than the two months before that, but still uh still a solid month. Um so just jump, I'm gonna jump right into the numbers if that's okay with you. So yeah, top line revenue for July was nine just about 19,000. And I had, let's see, nine leads. And again, I need to start tracking calls separately, but nine leads. Uh seven of those leads turned into consults, and of those consults, only two turned into hires, which is a little bit uh that's a smaller percentage than usual. I will say off the top of my head, I believe one of those signed on like August 1st or August 2nd, but still, uh two hires for the month of July, um, two files closed. And again, my total expenses are usually pretty steady around 7,000. So looking at uh profit of uh about$12,000 for the month of July.

SPEAKER_00:

Great. Another another strong month. So I just want to point out I look I'm looking at your numbers from May, June, and July. So those are your your trailing three months, you're averaging about$22,000 a month. So for your for where your firm at that is at, that is awesome, Tom. So well done there. Um anecdotally, I want to point out too that in August, our firm over the last week and a half has slowed down. That has everything to do with vacations. So we started off the July was incredible for us, a record month. First week of August was strong, and over the last two weeks, it's been super slow for all these vacations. So um you're not alone in that feeling.

SPEAKER_01:

Gotcha. Good to know. So, based on based on uh your data, when does that pick back up?

SPEAKER_00:

Uh, it picks up right after Labor Day.

SPEAKER_01:

Okay, cool.

SPEAKER_00:

Yeah, so we expect to see it kind of soft over these last 10 days of the month or so here in August, and then get into next month, it'll pick back up. September and October, and the first two weeks of November are usually our strongest eight or so weeks of the year, eight or nine weeks of the year.

SPEAKER_01:

More so than like March, April.

SPEAKER_00:

It's super comparable to that. Um yeah, so maybe I'm maybe it's those 20 weeks combined are our best 20 weeks, but we're going into another another strong season for us, we expect.

SPEAKER_01:

Cool. Might be time for me to start running some ads, which I know we are also going to talk about today.

SPEAKER_00:

Yeah, you're talking about your LSA ads, right?

SPEAKER_01:

Yes, yes, sorry. I should use that word more swiftly. Google ads. Oh, how's that?

SPEAKER_00:

Yeah, in our prep time for the for this today, we're we wanted to talk about your waterfall and sterling's waterfall. So I'm gonna let you kind of direct us where you want to go here. What what are you curious about and um how can we break down your numbers, help you out thinking about them?

SPEAKER_01:

Sure, yeah. So I I guess I'm trying to compare. I have almost a year's worth of data at this point. So trying to move this window over, trying to see how my numbers compare to to your firm and and just to other firms in general. Uh, and and I'll admit I am I am bad at tracking, just because I I have so much on my plate. So sometimes numbers might be off by a little bit. Um, but you know, it's good to know. I think what when I am good at tracking is how many leads turn into consults and how many consults, obviously, how many consults turn into clients. That one that I think I'm pretty strong on tracking. But in terms of how many, you know, how many calls. I guess this is this is how we break down the waterfall, right? What's the total number of calls you get per month? What percentage of those calls are qualified leads? And I think we're kind of defining that as someone looking for a divorce or family attorney in my geographic area.

unknown:

Right.

SPEAKER_01:

So total number of calls, what percentage of those are qualified leads, what percentage of those qualified leads turn into consults, and then of those consults, what percent turn into clients? And I think from my perspective, let's see. So let's go over. Oh, I closed out the last three months. Um, are you able to see how many? Oh no, here we go. How many leads I'm averaging over May, June, and July, right around 10. Uh, and then number of consults is probably about seven, and then number of hires is about three.

unknown:

Yeah.

SPEAKER_00:

Looking at what I have.

SPEAKER_01:

So of my of my leads, about 70% of those are turning into consults.

SPEAKER_02:

Which is great, by the way. Oh, thanks. Like that percentage, I was in I was excited to see that the leads you're getting to your firm are qualified and they are willing to at least have a conversation with you.

SPEAKER_01:

Yeah.

SPEAKER_02:

Now we can have a whole uh podcast on paid versus free consults and what happens to the behavior. Um, but the fact that you're getting those meetings, I think, is very encouraging.

SPEAKER_01:

Good. Yeah, I I actually thought I'm glad to hear you say that because I almost think 70% sounds low when I am offering free consults. Because, you know, I'm it's kind of odd to imagine a situation where someone says, I'm looking for a divorce lawyer. Do you offer free consults? And I say yes, and then they say, Never mind. Right. I guess to say what's that 30% is uh, I don't know, no shows. You're you're bound to get some of those um cases that resolve uh you know, people just time to contact, also though, Tom, right?

SPEAKER_02:

Like you're a busy guy, you got a lot going on in your life. If you're not getting back to these leads within you know the first five, ten minutes that they're coming in.

SPEAKER_01:

Yeah. Oh, and that's that's another thing I can mention quickly is I did it's more of an August conversation, but I did bring on an answering service, uh, which has been awesome to make sure, make sure I'm not missing any calls. Um, so that's good. And then, yeah, my I don't know, my hires, hires from my consults. So let's see, about out of average seven consults, I'm getting about three of those turned into clients. So that's I don't know, under 50%. Um, and then I guess from leads to hires, that number would be about 30%. So I don't know. I I don't know. Are those strong numbers? Are those terrible numbers? I honestly have no idea. So um I reached out to you guys to see if you could pull some data from from your company. And I know it will be a little different because you you do paid consults and you do fixed fees. So you're in a kind of a very different, different universe than I am right now. But still, it would that those are both places where I hope to take my firm uh eventually. So it's good, just would be good to know to have a benchmark of what I should be shooting for.

SPEAKER_00:

Yeah. So, Tom, I'm gonna walk you through our what we call our waterfall from call all the way to funding the agreement. Um, a couple caveats as I share this with you. You know we're fixed fee, so you're gonna, it's not an apples to apples comparison between fixed fee and hourly. We also have about a blend of 60% of our consults are done by non-lawyers. So that impacts the numbers. I would argue it impacts the numbers in a positive direction for the firm. And I think our numbers bear that out. And I'll I actually break down for you that if you want to know that on terms of how they each close. Um, yeah, and I think it and I've learned this from going to masterminds and talking to other family lawyers. It is very, very difficult to compare numbers between firms. There's so much noise in that, there's so many different ways that data is input, and there's so many different definitions that go into that, that it's it's just at best directionally helpful. So, what I'm sharing with you will be directionally helpful. Um, don't like compare like percentages between the firm and say, Oh, I suck because I'm not there, or I'm like gray because I'm so much better. Okay. All right. So let's start up first with what how we report the numbers from an intake standpoint. So this is calls coming in. Over the I'm gonna give you 91 days. I'm kind of gonna stick at 91 days because that's that'll help us say stay consistent as we talk about numbers across our waterfall. We had 62.3, so 62 inbound calls a day. A day. Yeah, that's great.

SPEAKER_01:

Okay. So we now we're like your daily average is my my three-month total.

SPEAKER_00:

Well, we're aggressive on what we even count as inbound. So we get a ton of calls we don't count as inbound calls because they have to do with subject matter we're not interested in, we can't help them with. We get marketing calls. I get like people call, want to talk to Jeff Hughes every day. Like, I want to, you know, so we get those calls that we have to weed out. So, and then we make for what it's worth, we make about 88 outbound calls. So we're calling people back that we weren't able to get to or whatever. Um so and then we also do a fair amount of text messaging as well. So, out of those calls, those 62 inbound calls, we qualified that what we define as qualified is they have a family law matter in our jurisdictions that we can help with. Um we're not making any judgment on whether or not they have the funds or the means or the timing is right. That that doesn't go into it. But out of those 62, we qualified 53 of them, and we set means we we scheduled the appointment. That's a paid consult on 26 or no, excuse me, 23.6 of those. So 24 of those. You track them so far? Okay. Now, what what's interesting is that we have a show rate, uh a show number of 21. So we set 24 and 21 of them actually show up. So there are folks who pay for the console who just disappear and go away. Um, some of them come back later and want a refund or whatever, which we certainly give them, but you know, that's our set rate. Now, on that set rate, we are actually doing a lot to make sure we have a high set rate. We're we're we're sending them text messages, reminding them, we're calling them, emailing different things for for different folks. So the show rate 21 out of that 24. Okay, so that's the intake side. We're answering over these last 21 days, and we are we're working on improving this. We're answering 79% of our calls. So 21% are going into wherever the ether somewhere, hopefully calling us back. Uh, maybe they're getting caught by our answering service and we're getting a hold of them later or whatever.

SPEAKER_01:

Um, so you're so if someone's if your answering service is answering it, you're not counting that as an answered call.

SPEAKER_00:

I can't, I don't know for sure. I didn't put these numbers together. I'm not sure on that. I I think the answer rate, I'm about 80% sure that it's our intake team. Okay.

SPEAKER_02:

Not not by the yeah, because our ideal situation is that we answer the phone on the side.

SPEAKER_01:

Right. Which is funny because I I am starting to switch to having my answering service do it because they will they will book my consults directly.

SPEAKER_00:

Yeah. Now I we can our gold standard we're trying to get to is 85% answer rate. That's what we're trying to get to. Now, I've run call centers for a long time. That's a that's a pretty healthy answer rate. You're just not going to get to 100 unless you want to way over staff, um, and then you won't be profitable. So 85% is what we're trying to get to. Um, and that number changes based on a lot of factors. Seasonality goes into that a little bit. And having we should have Mary on the because she could tell you exactly what's going on with that. So, okay, answer rate. Um we we measure we go deep on a lot of this. We measure overflow set rate. So the calls that are overflowed to our backup center, we measure that set rate, and it's certainly considerably less. So we do measure a lot of that. So I'll just stick to the big numbers right now. Um, okay, let me shift over to now we've got the actual consult in front of us, and we do almost all of ours on video. So we don't or we don't do it in person a lot. I'm gonna give you our entire team, and if you want to break it down, I can into non-lawyers and lawyers, but our entire team will take those sets and they'll get seven hires out of this. Is the last 91 days, they'll get seven hires out of those 21 shows. Okay, so they're about a third, so we're that's our our number. Um, our potential matter value, which we calculate based on what each client is potentially worth, is 10,311 over the last 91 days. Um, and here's an interesting little quirk on this. We actually get about 8.5 funded agreements because some folks come in and they do like a one-hour consult and they come back and they fund later. We count that as a part because it's like we get technically it's two funded agreements for that particular client, but um out of those 21 shows, 8.5 ultimately hire us for a full rep type of scenario.

SPEAKER_01:

And is when do they so you do fixed fee, right? When do they find out what their price is? Is it on that console?

SPEAKER_00:

In that initial console, almost everybody gets a quote on that initial console. It's a very high number. I may have it here somewhere. I know we have it somewhere, but it's a very high number. We don't like them to go away without not without knowing what their what their quote is going to look like. Every once in a while, especially on post-judgments, they're just so complicated, we just can't quote them there. It we need to do some follow-up research and come back to them, talk to one of our managing partners or even a partner if an associate's doing it.

SPEAKER_01:

So could you give, and you can push us to the end if you want, could you give an example of a post-judgment, like why you wouldn't be able to quote it?

SPEAKER_00:

Um very common one is um we have a we have a two-year look to bring a case into court within two years at our post-judgment case, let's say you're on a custody placement issue, you can't do that within two years unless you show a major change, a substantial change.

SPEAKER_01:

Yeah, we have that too. It's three years, but we have okay.

SPEAKER_00:

So for us, it's two, and then even after that, there's some it's a lessening standard. And so what qualifies a substantial change is varies by county by county, by judge, and you just you just gotta have the experience to know that. It's it's not yeah, we can't just go look it up and say, Oh, okay, that qualifies. So that's a common one.

SPEAKER_01:

Okay, so it's not so much an issue of how much to quote, right? It it's or is it more of like whether whether I can give you a quote at all?

SPEAKER_00:

Well, how much to quote is based on what we anticipate the work to be, and on some some of these, we don't know, like a younger attorney won't have inexperience, one won't have as much knowledge to fall back on. So that's one. And the other one would be can I even is this even a case we can handle? Because I don't know if there's enough of a change of circumstances. So that would be a legal analysis and then a kind of a business analysis for both of those.

SPEAKER_01:

Okay.

SPEAKER_00:

So so our close rate is 33%. So let's just kind of overlay that with your close rate. You're closing three out of seven, so you're actually closing better than us.

SPEAKER_01:

Okay.

SPEAKER_00:

Now there are other hourly firms that are above 50% that I know of.

SPEAKER_01:

Of course, yeah.

SPEAKER_00:

And so, you know, how qualified are they is their data, right? You know, like how qualified are their leads or their sets? Maybe they're ultra qualified because they have a$500 consult and they have they've already asked them if they have$10,000 to pay the initial retainer. So there's so many ways to slice this up. It's so hard to compare.

SPEAKER_02:

Right. And I Tom, what's your um what's your gut on the reason or the majority of reasons why people don't end up closing with you?

SPEAKER_01:

Um that's a great question. I I don't know that I have an answer to that. Um yeah, I don't I really don't know.

SPEAKER_00:

Um also, Tom, around 30% of our sets that come see us never go to court. Meaning they never have a case. Never their case never matures into a legal matter. They just had, you know, they had a rough time in their marriage, they want to get some advice, um, you know, a whole bunch of reasons why they would come in and talk to us. So you back that out, all of a sudden our close rate for people that actually litigate skyrockets right into the 60s, high 60s.

SPEAKER_01:

So um Yeah, and I and I think that that's that's probably a a good answer to Tyler's question. You know, given that I do offer free consults, I think I do get a lot of people that are just coming in looking for some advice. Maybe, you know, maybe they're thinking, thinking about a divorce, but they're not really sure if they want to do it yet. Um I don't know. I I assume there's some percentage that just decides to go with another firm, uh, but I I don't know what that percentage is. Um but yeah, there there definitely is a fair amount of people. And and I could I can tell pretty quickly whether someone is serious about wanting to, you know, move forward with the case or they've already been served, you know, in which case they have no choice. Um you know, versus someone who's just kind of feeling things out, something like that. Um and you know, I two things I would I would love to do, which we've talked about before, is I mean one going to paid consults, but there there are just there are two uh major firms in my area that I know offer free consults. And they're they are like the major players. It's two firms that probably make up like a third of the attorneys in my area. Um, you know, and they offer free consults. So that's hard to hard to compete against to to moving to paid consults. Um and then the other one is fixed fee, which you know, we've talked about it in New York comes with some is a little bit more difficult based on our rules of professional conduct. Um, but I think you know the paid consult one is is definitely tricky.

SPEAKER_02:

Yeah, I think we should do a whole uh podcast on that, Jeff, on paid versus Oh yeah.

SPEAKER_00:

I've been thinking about that since a few minutes ago when that came up. That's that'd be a great podcast.

SPEAKER_02:

Yeah, a lot of psychological benefits to getting people to commit early. And though it may change your call to consult rate, my guess is it will increase your close rate.

SPEAKER_00:

Yep, yeah, I agree. We've got a lot of data on both both sides of that equation. So we could actually put together a really good side-by-side comparison of the behavioral differences.

SPEAKER_01:

Yeah. And then, yeah, another factor is right. I just got this answering service, answering legal. They're a very well-known company. I'm sure you've heard of them. Um, so that's who's answering my phone now. They're booking consults. And I'm sure they'll be great at booking free consults, but because again, that's that's not difficult. That person's already found me and reached out to me. But would they be great at booking paid consults? Probably not, right? That's I would probably want someone in-house doing that.

SPEAKER_02:

Well, I think this is back to the data point. And Tom, I want to commend you on your use and leverage of data. And I think any of our listeners who are not tracking at least calls, consult rate, close rate, this is an easy thing that can be done that will definitely inform your firm and able to improve it. Um, but it'd be also Tom interesting to see, okay, from call to consult rate, how's the answering service doing versus if you answered every call?

SPEAKER_01:

Right. Yeah, I don't have that. It's only been two weeks, so I don't have that data yet. Um and it was it was great time because I was on I was on trial and then immediately went on vacation. So getting that answering service was that, you know, for the two weeks they would have been amazing because my answering rate would have been horrendous, um, particularly while I was on trial. And then one of oh yeah, so one other thing I was gonna say for my just in terms of the number of calls I'm getting, I base that number again. I I'm I am very poor at tracking every call that I get. Um, and then you know, marking how many are just garbage calls, ad calls, uh, you know, telemarketers, stuff like that. But I I do get the Google analytic reports every month, and I will say uh March, which was from March, which was the I believe you guys came on, I um retained Rocket Clicks, I guess that's a better word to use, uh, in February 15th. I guess that's when we started working together. Um and so up till now, so we're we're coming up right on on six months of that. And I'll say, so I looked at my March call volume compared to July. So a four only a four-month difference there, right? April, May, June. Yeah. And I had 17 calls in March, and I had 26 in July. So things are, and that's all organic, right? Haven't run any ads. So things are starting to definitely starting to pick up. Again, that is that is all Massapiqua. Um, that's uh you know, all still my Nassau County office. So I think if I could get a second office similar to this location, and I and I have I have some ideas in mind of actually I have one location that you know, if I were to pull the Melville office and open another office in Suffolk County, um, I do have a location in mind that I think would would crush it, would be just as good as Mass Pekua. Um that plus plus starting to run some ads, I think, I think I'd see a pretty strong fall.

SPEAKER_00:

Tom, you you're kind of hard on yourself here. The fact that you track leads, consults, and hires put you, I'm not exaggerating, you're above 80% of the family law firms out there. At least.

SPEAKER_01:

So cool. All right. So this, I guess maybe now any did you have anything else on the waterfall? I would love to talk about the Google.

SPEAKER_00:

Any other questions you have there? And then I'll pass it over to Tyler and talk about your LSAs.

SPEAKER_01:

Yeah, that was that was really helpful. Again, it is, like you said, kind of a bit comparing apples to oranges, especially based on you know paid consults and the fact that you do fixed fee. But so yeah, as expected, you know, you're gonna, I'm probably gonna have a um, what do you call it? Higher I'm gonna get more higher percentage of consults out of calls because they're free. Uh, but you're probably going to have a higher closing rate after those consults. Um, and that's that's pretty much what I was expecting. Um so yeah, hopefully I'll I'll get more data over the next few months. Hopefully that call volume just continues to pick up um you know in September and October. And yeah, that plus running some ads and and potentially another office will hopefully start seeing things really really start uh picking up. So yeah, Google Ads, what what I am and again, we this will be again probably another apples to orange comparison because we are comparing uh you know Wisconsin to the uh New York City suburb. Um but I'm curious, I could I think so. Maybe the cost might not be the same, right? What is what is an an average LSA? I guess we'll just use the term LSA, right? Because that's probably what I would run um rather than a PPC campaign or something like that. Um so what what like ROI do you expect to see on an LSA campaign? And Jeff, do you have the sterling LSA?

SPEAKER_00:

I don't have the sterling, no, I don't have that.

SPEAKER_01:

And so my it's kind of it's almost to me like trying to work the waterfall backwards, right? Because if I I'm saying, let's say how many clients do I want to sign per month? And I think I would, you know, if I'm trying to traditionally that number has been about four, that's where I would be comfortable. If I'm trying to hire someone, I want to get that number up to six, right? So let's say I want to sign six clients per month. Now that I have this data, you know, the waterfall data kind of work backwards. All right, how many consultations do I need? Right. So if if I'm finding that seven consults turned into three leads, uh three clients, I mean, if I want three clients, then I would need 14 consults. How many of those, in order to get 14 consults, how many leads do I need? And if I want that number of leads, how many calls do I need to get?

SPEAKER_02:

Yep. You are thinking about that in the absolute correct way, right? The thing to remember is that as you turn on ads, your call volume will absolutely increase. The percentage of qualified leads will probably decrease at the beginning, would be my guess.

SPEAKER_01:

The percentage will decrease, right? Not the number. Yeah.

SPEAKER_02:

Not the number, the percentage of qualified leads will decrease, but the number will increase. So we did a some quick math for you. And knowing, okay, we want to get 36 more leads for you, we believe that if you spent$5,000 at a cost per lead of$140 per lead, you would generate 36 more leads uh with that additional$5K in budget based on okay.

SPEAKER_01:

So 36 more leads using my numbers.

SPEAKER_02:

And if you assumed a 15% close rate of those 36, that'd be five additional clients. Is that where is that what my number said?

SPEAKER_01:

Five 15%?

SPEAKER_02:

That is what I'm assuming your close rate would be.

SPEAKER_01:

Okay. Oh, because you're okay, because you're saying that the leads will drop. That's right. Um, okay, so that would get me to five a month. So you're thinking 36 leads per month turns into five signed clients per month.

SPEAKER_02:

Correct.

SPEAKER_01:

Okay. I'm leveraging a platform like LSA. And how did you how did you come up with the 5,000 number?

SPEAKER_02:

Uh so we looked at two different budget options. One was 5,000 and the other one was 10,000. Um, if you wanted to spend the 10,000 with the same close rate of 15%, there would actually be 71 leads um and potentially 11 new clients.

SPEAKER_01:

Okay. And so let's say that is in that's in addition to everything to everything I'm already doing, right? So if I'm already getting two or three per month, uh, so then I really, you know, I'd be happy, you know, getting that same number out of the ads, right? So if if I change that five signed clients per month from the ad campaign, reduced it into three, realistically, it could be like 3,000 a month.

SPEAKER_02:

Correct.

SPEAKER_01:

Okay, interesting.

SPEAKER_02:

Yep, there's a lot, there's a there's a ramp up law, and then there's a law of diminishing returns as you think about uh leveraging ads in uh in and around your law firm location. There's also the realization that other people are doing the exact same thing you're doing. So there's competition in the space, the cost per lead is going to fluctuate based on the number of competitors in the space. And so that's why we always push our clients to focus on local visibility specifically in the maps and organic first, and then leverage ads to uh essentially put gas on the fire.

SPEAKER_01:

So here's a question for you that you haven't prepped for, but I'm sure you know the answer off the top of your head because this is what you do. How do Google ads, how do I compare with somebody else, right? So let's say another major player in my area, um, right? Let's say we both have five stars, but mine is based on 50 reviews, and this person's is based on 500 reviews. Uh so how would how do I compete with that person in the Google ad space? Is it all money based? So like how let's say we're both, you know, we're both running ads in Massapua. Um, but hit my office is in Massapiqua and his is not. Let's say his is 15, 20 minutes away. Does that give me an advantage in in the LSAs? Like where my office location, what are the major factors that go into that?

SPEAKER_02:

Yeah, is it just name, address, uh, phone number. So consistency of information across the web as it relates to where your information is is listed, not only on your website, but on directories and fine law and super lawyer and all those things. Um, number of reviews, and then budget. Those would be like the three major categories. Obviously, there's a lot more going on within the algorithm, but if everything was equal and you were in uh MassPua and the search took place in MassPiqua, and the search was divorce attorney near me or divorce attorney in Mass Pequa, uh, then you would have a higher chance of ranking above a competitor outside of that space if everything else remained equal.

SPEAKER_01:

Okay. Yeah, because I I know again of one firm that's spending over 100 grand a month in Google Ads. I know that for a fact. Uh obviously I'm nowhere near being able to compete with that. Um, so that's good, just knowing that. It's doing everything else. His office is 20 minutes away, right? Then yeah, that at least gives me some edge there.

SPEAKER_02:

And then everything else comes into the equation, right? Are you answering the call on time? Are you empathetic and can you hear the, you know, can you have good bed. manner with the potential client? Can you book the console? Can the console go, you know, so all there's so many factors that go into this, but it's from a visibility standpoint, being able to leverage ads, whether it's search or LSA, is gonna is going to allow you to increase your visibility.

SPEAKER_01:

Gotcha. And if what what type of ROI do you expect on a Google ad? So if you're running, let's say I'm running an ad campaign of 5,000 a month, do you know at your firm, obviously this is going to be specific to my numbers, do you see like a three times return on that, a five times return on that, a two times return on that? What like what do you expect out of that?

SPEAKER_02:

Well I think it depends on the mission, right? If you're leveraging Google ads or ads in general as a uh cherry on top as I just need more leads to fill the capacity I have, then I'm gonna have a different perspective on what my return needs to be on that because I already have the attorneys, right? I already have the capacity. I just need to fill it up. So even if it's breakeven or a bit above breakeven, I'm still winning because I'm filling the capacity and and and uh offsetting the expense that I've had. If I'm sitting in your shoes, I'm saying well I'm only gonna do ads if it's gonna be hyper profitable because I have a limited amount of capacity.

SPEAKER_01:

Yeah. So yeah so I guess I'm imagining the scenario where I were to hire someone I don't know after like two, three months from now and I say, all right now I have this attorney I'm not quite getting the amount of leads I need from organic to get this or turn at least at the start to make this attorney profitable you know I need to crank on the ads. Then it's then it comes the question of risk.

SPEAKER_02:

Right? If it were me I want to fill that attorney up and pay for that salary as fast as I can and I'm willing to do so at a break-even rate but then over time I expect that to become more profitable.

SPEAKER_01:

Yeah would you ever recommend again your answer could be this a topic for another day which is totally fine someone to operate at a loss for a short time period if they if there's a good opportunity for them.

SPEAKER_02:

Again risk profile right I know Jeff Jeff and I are both kind of hypervisionaries big risk takers are willing to to see a solution take shape and and definitely willing to take that risk but you know that's to each their own on on how far into the pool they want to wade.

SPEAKER_00:

Yeah I feel constrained because I am like that I'm a big risk taker but stamp kids at home yeah do you have any perspective on that and kind of when when you were starting Sterling well we've we've yeah we've gone negative before and it's no fun and you really can't do that in a direct response type of strategy which is kind of where you're at almost right now in terms of you spend you want to get paid you're not trying to brand with that um I can give you directional answers to your previous question on LSA return what you're looking at. I don't have that data in front of me I know we have it on your team somewhere uh Tyler but with respect to what we look at is we want our sales and our marketing costs or our marketing and our sales team all combined under 17% that's what we target and we are we're around 15 right now so um 15% now there's also blended in there just return clients that we're not paying for to get back. There's just name recognition and blended into that we've had it as high as in the 30s before in our earlier days where we were just trying to spend and get growth and cover our costs and that sort of thing. So you know I wouldn't expect your on your situation to be below where we're at as a more mature 11 year old firm.

SPEAKER_01:

So that just helps you get a sense for you know my maybe where you can be right and for the record I I am I would be completely fine with a with a break even temporarily because I do have and when I say break even I mean I don't even have to pay myself a salary right if I can hire an associate again probably a topic for another day but if I can hire an associate that can cover their salary plus you know my marketing expenses that's that's all I need for now just knowing that it would it would grow from there.

SPEAKER_02:

Right because you're investing in growth and that's your mindset. And I think that's really important to anyone listening to this they may not be in that same position right they may be in a this is my only job and I need this to survive and put food on the table they're gonna make different decisions and and I would recommend they make different decisions. Yeah of course of course okay all right a lot to think about yeah maybe let's in terms of next month let's kind of come back Tyler with some ideas for Tom on incremental FAs or funded agreements what what would that look like as he's looking at maybe adding another associate what can he what can he spend to get those incremental above where he's at now or what do you mean by that well I now you're you're you're spending 3500 to 5000 a month and you're getting three hires out of that every month right so what would what would that look like to move that to seven what would four incremental funded agreements how much more do you have to spend to get to the seven if you wanted that I'm just picking numbers up here I don't know what what you were looking for but it's probably going to be in the LSAs or the page search I did yeah I think that'd be a good episode Tom as we really just kind of dive into that topic of like okay I'm I I've grown to where I am I'm looking to add capacity in the form of an associate. What should I be thinking about as it relates to making this hire

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