Profit First for Lawyers

“Entrepreneurially immature people won’t deal with unpleasant emotions, which is why they just end up trapped in this cycle of mediocrity their whole life.” – RJon Robins, from The Exponential Entrepreneur podcast This week we’re doing something a little different. Instead of our regular Profit First for Lawyers format, we are sharing a special episode from The Exponential Entrepreneur podcast hosted by Erika Ferenczi. The clip in this episode was originally recorded as part of the Practical Profitable Mindset program while RJon was recording the Profit First for Lawyers audiobook. This lesson explores one of the most surprising obstacles to business growth: the fear of profit. Profit Requires Discomfort According to RJon, profit requires doing things that feel uncomfortable: Raising prices Sending invoices Collecting payments Making difficult hiring and firing decisions Having honest conversations Fear naturally tells us to avoid discomfort. But when we avoid discomfort, we wind up avoiding profit as well. And there is science to back up this instinctive behavior. Drawing on the science behind the fight-or-flight response, RJon explains how fear affects our thinking, why our brains begin rationalizing emotionally safe decisions, and how those decisions can quietly limit both personal and financial growth. What Kind of Profit Are You Choosing? One of the most thought-provoking ideas in this lesson is that every voluntary exchange creates some kind of profit. Some entrepreneurs choose emotional profit over financial profit. One example is undercharging a client or failing to send invoices because they want to avoid rejection. By recognizing these patterns, business owners gain the opportunity to make more intentional decisions that align with both their personal values and their business goals. The question is not whether we are making a profit. The real question is: What kind of profit are you choosing? Mentioned The Exponential Entrepreneur podcast Break Through Your Profit First Mindset Blocks with Erika Ferenczi Take Flight: Elevate Your Mindset to Profitability with Alejandra Leibovich Does Your Accountant Have An Entrepreneurial Mindset? with Oscar Ferenczi Connect Subscribe to the Profit First for Lawyers podcast Watch episodes on YouTube And most importantly, order your copy of Profit First for Lawyers today!

“Someone in your office is stealing from you. They may not be stealing money and putting it into their own pocket, but they’re stealing time. They’re giving away work for free.” – RJon Robins, author of Profit First for Lawyers Many law firm owners focus on generating new business, increasing billable hours, and growing revenue. But bringing business into the firm is only part of what makes a law firm profitable. Have the Hard Conversations In this episode, Jose Luis Perdomo, Fractional CFO at How To Manage a Small Law Firm, discusses one of the most common threats to profitability: unpaid invoices and growing accounts receivable balances. Drawing from a Chapter 14 clip by RJon Robins from Profit First for Lawyers, Jose Luis explores why outstanding balances create more than a cash flow problem. They impact: Attorney and staff accountability Client expectations The long-term financial health of the firm And because collections conversations can feel uncomfortable, overdue balances are often allowed to linger while additional work continues to be performed. But every unpaid invoice that lingers as an accounts receivable balance represents labor, overhead, and resources that have already been invested. A best practice is to develop healthy collections practices long before an invoice becomes overdue. When collections become an afterthought, profitability suffers. Creating a Healthy Sustainable Business Every unpaid invoice tells a story. Often, that story begins long before work begins. Clear communication, well-defined expectations, replenishment policies, and accountability systems all play a role in the final outcome. The goal is not simply to collect money that is already owed. The goal is to build systems that make timely payment the natural outcome. That prevents “free work” from becoming a common practice in your firm and collection problems before they occur. This leads to stronger cash flow, healthier profit margins, and a more sustainable business that can help even more people. Mentioned Law Firm Diagnostic by How To Manage a Small Law Firm Business Plan worksheet G.A.S. Calls resource Chapter 14: For When You Really Take Profits Seriously Connect Subscribe to the Profit First for Lawyers podcast Watch episodes on YouTube And most importantly, order your copy of Profit First for Lawyers today!

“Happiness is not accounted for in Generally Accepted Accounting Principles. Neither is peace of mind, propensity for burnout, or the quality of your life.” – RJon Robins, author of Profit First for Lawyers Before you can build a roadmap for the future, you need to know where you are today. Evelyn Aucoin, Financial Literacy & Strategy Expert from How To Manage a Small Law Firm, joins us to discuss understanding your starting point. Whether your goal is greater profitability, more time with family, or long-term financial security, meaningful progress begins with an honest assessment of your current reality. Drawing from core financial literacy concepts found in Profit First for Lawyers, Evelyn explains why financial reports are not simply accounting documents. She introduces the seven key financial reports and explains how they help law firm owners understand where they are today so they can make better decisions about where they want to go. Defining Success on Your Own Terms One of the central themes of this episode is that success is personal. For some law firm owners, success may mean growing a multi-million-dollar firm. For others, it may mean working fewer hours, spending more time with family, or creating greater flexibility in their lives. Before measuring progress, law firm owners must first define what success looks like for them. Once that destination is clear, financial reports can help answer an important question: Are you currently on the path that will get you there? Key Takeaways Financial reports provide visibility into the health of your business Success should be defined by your goals, not someone else’s expectations Total Owner Benefit offers a more complete picture of financial success Financial literacy creates confidence and clarity in decision-making Knowing where you are today is the first step toward reaching your goals Financial literacy is not an end goal. It is a tool that helps law firm owners make better decisions. If you are ready to take action on the concepts discussed in this episode, start here: Action Steps Define what success looks like for you and your family. Review your current financial reports to understand where you are today. Identify the destination you are trying to reach. Determine which financial metrics will help you track progress toward your goals. Commit to building a regular habit of reviewing your numbers. This is not a one-time set-it-and-forget-it exercise. The destination you choose today may need to change as your business and personal goals evolve. That’s why it is important to keep your hands on the steering wheel. While this may seem challenging at first, regular monitoring keeps you in tune with the direction your business is headed, allowing you to adjust for road hazards and stay on course. Mentioned Profit Leak Assessment Calculating Your Total Owner Benefits episode Seven Key Financial Reports (Chapters 13-15 of Profit First for Lawyers) Bookkeeping That Does Not Suck Connect Subscribe to the Profit First for Lawyers podcast Watch episodes on YouTube And most importantly, order your copy of Profit First for Lawyers today!