The Payment Policy Behind a 98% Law Firm Collections Rate - #228

Your law firm's collections rate says more about your business than revenue does. This firm hits 95-98%. Here's how. 

Law firms chase money they have already earned. So Ronald shared their tight client payment policy so you can stop chasing and start getting paid. 

An evergreen retainer and a no-free-work rule keep your firm's cash flow. Get paid first, chase nothing.  

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📄 CHAPTERS

0:00 - Meet the Five-Attorney Firm Built to Stay Small 

2:37 - From Taking Any Case to Family Law Only 

7:49 - The Slow Climb That Exploded Into Three Big Years 

9:53 - The Payment Policy Behind a 98% Law Firm Collections Rate 

11:37 - Why Attorney Turnover Became His Biggest Struggle 

17:24 - Why He's Capping the Firm at Six Attorneys

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Transcript

0:00

Ronald has a five attorney, family only firm in downtown Cincinnati. He's been practicing for over 18 years and has built a great practice. You're going to love this episode. Welcome back to the Sterling Family Law Show. The podcast, designed to help family law owners and attorneys build the practice of their dreams. I am your host, Tyler Dolph. I'm also the CEO of our law firm only marketing agency that was built out of our own family law firm, Sterling Lawyers, that has grown to over 27 attorneys. Today we are continuing our owner operator series, and we're talking with Ronald, who owns a great family firm in Cincinnati. He's grown into five attorneys. He really likes that size. He wants to keep it that way, but continue to build on his reputation to build a firm of high net worth, kind of complex divorces. And he's a great family man. We talk about some of the things that he did well, some things that he's working on improving. Ron, thank you so much for your time today. Very excited to have you on the Sterling Family Law Show. Would love to have you introduce yourself to our audience and then give us some background. How did you get started? How long have you been in this in this game? Yeah. Thank you for having me. Name is Ronald Petrov. Originally from Cleveland, Ohio. I went to undergrad at Vanderbilt University in Nashville, Tennessee, and then I did my graduate degree at the Ohio State University Moritz College of Law. Which, as most people know, is in Columbus, Ohio. And I stayed in Columbus in the area after graduation and worked for about a year. I kind of call it my residency year at a boutique family law firm in one of the suburbs of Columbus called Dublin. I kind of learned everything I needed to learn or what I thought I needed to learn to get going after the first year. And then I linked up with a other attorney who was about five years my senior, and we started our firm in 2007. At that point in time, we were taking anything that walked in the door. We were young, hungry, doing, you know, we were on the court appointed list for felonies and and misdemeanors. We were doing name changes. We were doing speeding tickets. We were doing anything and everything that get our name out there in the community with the focus, with my my goal to be a high end boutique, family law only firm. And now about 18, 19 years later, I feel like we've achieved there's been some name changes, some partnership changes. But as we sit here today, you know, I've had previous partners in the past, but right now I'm the managing partner. I'm the only partner. I have four associates and three support staff. And we are, I would say, one of the market leaders in central Ohio for family law only law firms. Love it. Congratulations on your success and tenure in the space. I want to go back to the do whatever it takes. Anyone that walks in the door period. Give us some perspective on one how long that period lasted and then two, what what happened that forced you to say, you know what, we got to stop this chaos. We got to focus in. We're going to do family only. Give us some perspective during that period. Yeah. So when we started, you know, the growth of the firm actually tracks the the actual physical office space. So we're we were sharing offices. My then partner at the time, we basically were doing a sublease with another, you know, law firm, a smaller law firm. And we were just renting two of the two of the empty offices and one administrative desk back in 2007. And at that time, you know, the we had to pay our bills. And so we couldn't we couldn't specialize or we couldn't only focus on one area of law. So at, you know, I was interested in real estate and criminal law, and my partner was interested in general business, personal injury and family law in addition to family law. And so we were doing anything and everything we could to, to get to, to be, you know, not to have to take loans out and to be able to be self-funded. And so we were on the criminal appointed list, you know, we were on court appointed lists for municipal court and felony court. And it took, you know, the first kind of real break came. We I ended up going to a networking meeting, and I ended up meeting an attorney who was involved in sort of this employee assistance program. It was called CLC, and it was out of Sacramento. And basically it was a fringe benefit that 14,000, 1000 companies offered their employees, which was reduced, you know, basically like a preferred vendor list. And that preferred vendor list would provide reduced rates and a free consultation. And so I signed up for that, and I was vetted and I was approved as the family law. Only one of the family law, only providers for, for for this company that offered this fringe benefits. And, you know, revenue took off from there. It was reduced rate. So obviously, you know, that wasn't ideal, but that kind of buttered our bread at the beginning. Fast forward six years to 2013. My partner and I kind of had a different vision for the firm. You know, we I wanted to be family law only, and I wanted to just, you know, stay in my, you know, stay in my lane. And he was more of a jack of all trades, master of nothing. And so that was the beginnings of the, you know, I would say the cracks in the, in the partnership, there were, of course, were some other things that led to all out at the end. I ended up buying him out in 2013, and he went and started his own general boutique firm in the suburbs. I stayed in our space downtown Columbus, and I eventually took over the lease and I had the place to myself. And since then, now I've had two different, you know, t budgets of construction tenant. And now we've overtaken the suite next to us and we, you know, redone the firm multiple times. And so back to the original answer was you could really track the genesis and growth of the firm by just taking screenshots or snapshots of the physical office space over the last 17, 18 years. It's amazing to hear. And we hear this all the time on the show. The power of focus. You know, I think as you're starting your firm, you have to do whatever it takes. You have to take whatever is coming through the door. But there's always an inflection moment when it's time to double down and to say, we're going to become an expert in this space and this is going to be our niche, and here's how we're going to do it. How long do you feel like it took once you had the space to yourself and the partnership, you know, and now you're on your own to really start to like, gain that momentum and traction and take off, like, was there a year of stability and then, you know, acceleration or how You know, to be honest, you know, it was steady growth. We were and I actually have my I look at my numbers all the time, my billable hours, my my firm revenue and then my, of course, my my my income, my take home pay. I I've been tracking it, you know, pretty regularly since 2018 and unsurprisingly probably for the Sterling firm as well. There was a huge uptick during and and right after the pandemic. So I would say we were we were doing very well, very comfortable. But we kind of went into orbit in 2022, 23 and 24. The last three years was was exponential growth where, you know, you know, so the revenue went up by $1 million from if you if you go from 2018 to to 2024, almost by $1 million. So those six years was where it really went up. And, you know, a lot of it has to do with, you know, back in 2007, you know, before SEO coding was, you know, a big thing and linking campaigns and all that. We had a website and we were out there and we were doing paperclip. And so we have a pretty good organic reach. And like you said, kind of off the record. You know, 50% of our business is from, you know, online reputation, online reviews and sort of digital marketing. And another 25 to 30% is honestly repeat clients or personal referrals, and another 25 and 30% is just other professionals or collateral sources. That's awesome. Being a pioneer and kind of early adopter definitely helped during that growth period as more and more people started leveraging the internet and and all of that. So that's that's awesome. As you're thinking back and reflecting on this period. What were some lessons learned, like things that you didn't do well, that you would either do over or that you did really well, that you're really proud of? Now reflecting. So I can answer a strength and a weakness or, you know, as I as I when we ever have family. I have three girls starting their freshman year, seventh grade year, in sixth grade year. And whenever we have dinner, my wife and I with the girls, we always ask him for the rose and their thorn of the day. So that question kind of reminded me of that. So my my rose, I'll start with my rose. It's our collections practice. We have a very specific collections practice where we have 95 to 98% collections. And we do things a certain way. You know, I don't chase money, I don't work for free. And if you can't afford us, that's fine. We're not for everyone. There are plenty of other attorneys out there that can service your need, but we're a very strict payment policy, and that's something that I started in 2007 or 8. I've always been very I've always looked at, you know, it's funny because I feel like you and I have two jobs where we're an entrepreneur, but we're also a family law litigator. And so I go back and forth on which I, you know, I feel like I'm a better entrepreneur than I am a family law litigator sometimes. And so that was one of my first business goals, was to have a very good because back in 2006 and seven, it was lawyers never called you back and you're chasing money. The collections, you know, we never get paid for what we do. The checks in the mail, the checks in the mail. And I was like, I'm starting this firm and I'm not going to have either of those problems. And so we have a very, very stringent communication policy and even more stringent payment policy. Now, what I've done horribly is HR. I don't know the first thing about HR. I don't know how to manage HR, how to hire, how to fire I. That's something that I've never learned. I've never been trained. I don't know how to keep talent necessarily. And it's like hit or miss. Like I'll have people with me for five years and I'll have people with me. You know, some people just say, oh, it's just the nature of the business. Associates leave. They want to start their own firm. They want to go to competitors. Nowadays, I feel like, you know, I can't hold on to it. I mean, they're always leaving and so. And poaching, you know, 15 years ago, the top dogs didn't try to poach each other's people. But, I mean, now it's like all's fair. I mean, it's it's nuts. And so holding on to both administrative like, you know, support staff and attorney, that's the one thing that I think I have struggled with the most is turnover. HR turnover in my firm is a killer. And it's it's defeating. It's almost like you almost like you have to start over all the time. The training, the learning curve, the culture fit, like how you do things. So like I, I mean I know it turns can't sign non-compete but like I almost wish they could because that would solve a lot of problems. Have you thought about, you know, the intentionality around culture or the culture of your firm and how you're incentivizing your employees so that you can create retention and improvement? Yeah, I have, but everyone's motivated by different things. Some people are motivated by, you know, a laissez faire management style where they don't have to clock in, clock out. And so some people are saying, oh, flex time, work from home, mental health days. Other people are saying it's money, money, money, money. Other people are saying, oh, it's benefits. You know, you have to have health insurance and and pay for parking and you need to have retirement. And then other people are just like, they don't want to work hard, you know, they don't want to grind. So it's like, I don't know, I honestly like I've been doing this 20 years here, you know, and I'm, I'm about to start my 20th year, finishing my 19th year of family law. You know, I think that, you know, that's something I've got to focus on the next ten years is figuring out how to keep I have a good I say this all the time. I've got a great people now. I got to figure out how to hold on to them. You got to have an open door policy, but who knows? It just takes one person to come in and offer partnership or offer, you know, equity or whatever. And they're gone. There's no loyalty these days. Yeah, I agree. I mean, I think it's what we found at our firm is it's truly building a culture where everyone is aligned on a common goal and having a shared fate around the the growth goals that we're trying to achieve. You know, and as those are, as those are hit people get rewarded accordingly. How many attorneys firm wide are you? And how many partners, associates and equity partners? Right. No equity partners, two co-founders. And we have a partnership team of four. I'm not as close to it as I used to be. And then we have a attorney paralegal associate layer as well. So all in about 100 Oh, wow. That's great. That's for a family law only firm that's got to be up there with with, you know, some of the probably some of the biggest ones. It's been it's been a very special ride, as you mentioned, the the internet, our website garners a lot of attention. 86% plus of revenue comes from our website and the marketing engine that we've built. But just back to the culture idea and the retention piece. You know, it's not easy and people leave and that's part of the deal. So having a good hiring pipeline also is something you know, continue to think Yeah. But again we're we're nine employees. So it's like a small business. Any any turnover is so disruptive. And so you know and sometimes this has nothing to do. Sometimes it's I've had two attorneys who are just like family law is not for me. better you know now But how does that you know, what does that do? Thanks. Well, I'm glad you figured that out. But, you know, I've got 38 clients that need, you know, servicing right now. So. And then other people are, you know, you know, they just they don't like the they don't like the grind, the billablle hours. They're more of a they want to go to the government and kind of cruise. And so it's just like, I get it. People need to find what their best fit. But from from management's perspective, it's incredibly disruptive. You know, you put in all this time and energy and and training people and you know, and then it the days are gone by where there's someone that stays at the same company in my experience, for 20 years. Plus, I don't know about you or your firm. Maybe you've got the secret sauce. I know there's a few right. There's a few long long time. But our growth has been I would say. Exponentials the wrong word. But as we've continued to grow, obviously the hiring pipeline has become easier. Our word of mouth has gotten out there and it's become a little bit easier. But from a retention standpoint, we've been lucky. We've had some really, really great hires. But it goes back to the culture, like, what are you building? How are you getting your team involved, and how can they be a part of it? And creating long term incentive see the writing on the wall that they they can grow? Yeah, I think I'll need to. I'm going to start doing that, offering long term incentive plans like that. Yeah. For sure. Ron, just getting back to you as you're thinking about the future of your firm and the future of kind of family law in the Ohio area, how are you thinking about continuing to build and any additional like experiences that you can share with our audience? So we're at a pretty good point. I mean, I think for as far as growth is concerned, I mean, I think we kind of max out cap out at six attorneys and and you know, for support staff with maybe a law clerk. I mean, I think 1011 is is is is is where I want to be for a variety of different reasons. You know, I don't I don't want to open another office. You know, there's that famous there's that famous rap song that I'm sure you and I are a certain age probably. No. And it really rings true. More money, more problems. Right? Like, you know, the the more you grow, the more issues there are, etc.. So I think finding content, being content is very important both personally and professionally. And like I'm in my mid 40s and I think I found I'm content. I'm pretty content with, you know, my personal life. I'm pretty content with my professional life. I don't always have to grow, grow, grow. People are always suggesting, why don't you? Because I'm from Cleveland. Like, why don't you open an office in Cleveland? I'm like, because I'm good. Like, you know, everyone wants me to do this. Do that. Why don't get everyone has these ideas. But, you know, I think, you know, I have a good firm. We're right downtown. We do one thing very, very well. We have great customer service. We're very responsive. And more than anything I found over, you know, I think I think we calculated I've done over 3500 consults in 18 or 19 years. And the overwhelming thing that the feedback I get is I'm very direct and honest. And so as far as growth is concerned, I'd like to do a lot of the the intake and meeting with the clients at the beginning to assess their case. So I think it's more about sustaining than than growing at this point. Then? Honestly, like nothing wrong with that. You you are clearly a family man. I love that you have family dinner every night and you have the girls do Rose and thorn. Part of being an entrepreneur is having that freedom to say, listen, this is the lifestyle that I've worked really hard to achieve and I'd like to maintain Right. And every time you grow right it's more overhead and and but you know, obviously the Sterling Firm has done it pretty well. There's a there's a competitor in town that's more of a national name that you probably know or heard of them. They only specialize in representing men. And so, you know that, you know, from a business standpoint, you know, you know, I applaud their growth and their business model. I don't necessarily know if they have the best legal training for some of their folks, but from from a purely business standpoint, you know, they're commendable. I don't want to be like that. Right. Yeah, 100%. Listen, I really appreciate your time. I appreciate your insights. It's been great hearing your story. I really wish you the best. And we'll look forward to following you on the Absolutely. Thank you very much for your time. It was nice to chat with you.