In this episode, Steve Fretzin and Moshe Amsel discuss:
Key Takeaways:
"What I have found is that lawyers are scared of the numbers. And that fear, which is completely irrational, is actually what keeps them from fixing the issue." — Moshe Amsel
Connect with Moshe Amsel:
Website: ProfitWithLaw.com
LinkedIn: linkedin.com/in/mosheamsel
Twitter: twitter.com/moshe_amsel
Show: Profit With Law Podcast - podcasts.apple.com/us/podcast/profit-with-law-profitable-law-firm-growth/id1457441443
References:
Profit First by Mike Michalowicz: mikemichalowicz.com/profit-first/
Connect with Steve Fretzin:
LinkedIn: Steve Fretzin
Twitter: @stevefretzin
Facebook: Fretzin, Inc.
Website: Fretzin.com
Email: Steve@Fretzin.com
Book: The Ambitious Attorney: Your Guide to Doubling or Even Tripling Your Book of Business and more!
YouTube: Steve Fretzin
Call Steve directly at 847-602-6911
Show notes by Podcastologist Chelsea Taylor-Sturkie
Audio production by Turnkey Podcast Productions. You're the expert. Your podcast will prove it.
Moshe Amsel 0:00
It's not just lawyers. But this was an industry that I could start with. And I can work with to kind of start paving the way and helping them to understand the financial conundrum and understand how to start changing their behaviors and their mindset to realize that there's way more to it than just what the office looks like and what the outside world thinks about my firm and actually having a great life out of it.
Narrator 0:27
You're listening to be that lawyer, life changing strategies and resources for growing a successful law practice. Each episode, your host, author and lawyer coach, Steve Fretzin, we'll take a deeper dive, helping you grow your law practice in less time with greater results. Now, here's your host, Steve Fretzin!
Steve Fretzin 0:50
Hey, everybody, welcome to be that lawyer. I am Steve Fretzin. And your host, and I'm so happy that you're joining me today. I've got a really interesting guest, Moshe Amsel. He's the founder of Profit with Law. He's also the chief troublemaker over there. So we'll introduce him. How's it going Moshe?
Moshe Amsel 1:06
Awesome. Steve, thank you so much for having me on your show. It's an honor and a pleasure to be here.
Steve Fretzin 1:10
Wow, that is a very formal way to say thank you. I appreciate that. I appreciate your appreciation. We've got a lot to cover today and a little bit of time. So do me a favor and just give people your background, because it's an interesting way that you kind of found your way to the legal space.
Moshe Amsel 1:25
Absolutely. So I've taken the long road, the road less traveled, I got an early start on life. And I kind of had this notion when I was in my teen years, that there was some sort of race to life, I had this idea that I wanted to be retired at 40 or 45. So I got married at 19 became a dad at 19, had three kids by the time I was 22. And I was also a homeowner and I had a six figure income by the time I was 22. So I was on this fast path of making it to this ultimate eventual plan. And I started in the IT industry also stepped into that by mistake. I was hanging out with the wrong crowd. My mom wanted to get me off the streets at night and getting to productivity during the day. So she knew that I had a knack for technology and got me an internship at a local computer store, which then turned into a 20 year it career. But in 2006, I went through a divorce, which kind of made me reevaluate my entire life. And I looked at everything religion work, the way that I was showing up as a dad for my kids. And really everything around my existence was on the chopping block and in question. And in doing that, I realized that staying up at night and fixing somebody's server to get it online and get them back from some ransomware hack. That three in the morning was not my life's calling, even though I was really good at it. And I started down this journey of what do I want to do and who don't want to help. And my grandfather came from Nazi Germany with his dad, and lost his mother and his twin siblings in the war. If you want more on that story, you can check it out on my podcast. I have an episode all about my grandfather and that story. And maybe I'll email you the show notes for that the link to that.
Yeah, for sure.
I don't have that episode in front of me. But basically, he got here and he started with nothing. He was 11 years old, his father had been a business owner. So he started a business here. My grandfather started a business when he as he became a young adult, and ultimately ended up getting together with some cousins of buying a piece of real estate in Manhattan. They had an apartment building on the west side of Manhattan, which obviously went up exponentially in value over the years. And when I was a newly married a new Dad, I found out that he was going to be giving me money for the down payment of first home. And they then found out that he was doing this for each of his 36 grandchildren. He also helps pay for private school tuition for myself and my siblings, as well as our children. So his great grandchildren, and then being the recipient of that kindness and that wealth was so impactful and made such a difference in my life. And the grand scheme of things. As we get older, we realize that this amount of money is really so insignificant. But at that juncture in my life, it was super significant. And it made a huge difference. And I want to help people be able to do that for their generations for their children, their grandchildren, their great grandchildren to be able to leave a legacy that gives them a leg up, not makes them spoil, makes them not want to go out and make their own path in the world. But something that allows you to make a difference. So my mission is to empower all people with wealth generation so that this and future generations can lead a better life. And that's really what's the driving force behind what I'm doing now. Why lawyers?
Steve Fretzin 4:46
Everything you've said up to this point I totally get another thing I don't get why lawyers? I'm just kidding. Right lawyers.
Moshe Amsel 4:52
So when I started on this journey, I said when people who are best positioned to be able to control their destiny with wealth are business owners, so I wanted to serve business owners and I started an accounting practice that was primarily an advisory services firm. And really early on I realized business owners inherently have a problem. And that is that no matter how successful they are, they can't figure out how to bring the money home. Now you can be so successful that you can't not bring some money home. But generally 90% of business owners really struggle with this. And I ran into this book well profit first by Mike mccalla wits. And Rafa first basically has this dummy proof system that doesn't make you change the way you behave. And it uses grandma's envelope system for budgeting using bank accounts for business. And essentially, you have multiple bank accounts where you earmark the money where it's going. And the operating expenses account is where you make your decisions from instead of the main business account like most people operate with. And essentially, it allows you to not change your behavior, but at the same time, set yourself up for success. It's kind of like pay yourself first. And this way, you don't spend that money somewhere else. I really embraced that system, I became a profit first professional. And I started to sell that as a service. And a lead came in to profit first headquarters, and it was a law firm in Manhattan, I met with that law firm, they became a client, they were happy with me, I did some work for them and introduced me to another law firm. And before I knew it, I had five law firms as clients. And what's crazy is that every single one of these law firms had exactly the same symptoms. They had a beautiful office, they had a decent sized staff, I mean, we're talking multiple attorneys, everyone's busy, like they're all working throughout the day. And on the outside, that law firm should be super successful. But on the inside, the owners were literally transferring personal funds every payroll cycle to make payroll. And they certainly were not paying themselves what they should have been earning for the amount of work that they were putting in, to not only serve their clients, but to operate a business. And I realized that here's an industry that has an illness. Now, it's not just lawyers, but this was an industry that I could start with. And I can work with, to kind of start paving the way and helping them to understand the financial conundrum and understand how to start changing their behaviors and their mindset to realize that there's way more to it than just what the office looks like, and what the outside world thinks about my firm and actually having a great life out of it.
Steve Fretzin 7:20
Yeah, that's amazing. And I found the same thing and legal around business development and marketing that there's all types of illnesses happening, where again, lawyers aren't trained for any of this in law school. They're rarely trained for business or business development at a law firm level. So we're dealing with people who are highly intelligent, highly motivated. However, we've got a systemic illness and an on a number of levels that you and I can step in and help. And I think it's a really noble thing to do, and not to pat ourselves on the back. But I mean, this is something we've all I think, both identified in different spaces.
Moshe Amsel 7:53
Yeah. And I think that you touched on a point that I think is worth going into, and that is, most lawyers say, well, we didn't learn this in law school. And I think that is actually something that they're hiding behind rather than solving the problem. So when we're faced with a problem, we have two choices, we can either blame it on somebody and just continue to have that problem. Or we can do something about fixing it. And what I have found is that lawyers are scared of the numbers. Like because I don't have the background and the training on it, I am afraid to try to understand it. And that fear, which is completely irrational, that fear is actually what keeps them from fixing the issue. And if I told you that, by not fixing this issue, you will lose 10s of million dollars over the life of your career. By doing that by not fixing it, you probably would fix it, right? So the thing is, is that they don't recognize the opportunity cost of not fixing this problem. Every year that goes by that I haven't earned at least $250,000 of take home pay from my law firm is a year lost, that I'm never going to get back. And that money I could have generated for myself could have provided a better lifestyle for me and my family. But it could have also helped me start saving for retirement start to build my wealth portfolio outside of the law firm, because hey, you don't want to have all your eggs in one basket. So many people are working for Oh, one day, I'm going to sell my firm. You know, 90% of law firms have almost no value at all, because they haven't done a good job in building a business. They've built a name for themselves, but when they leave it what's left?
Steve Fretzin 9:32
Yeah, they're the name and I hate to pick on my dad because he's retired now. 20 plus years, but he, I think did a terrible job on succession planning. He was a solo guy. He had a client base, he had regular business, and he just didn't plan effectively for it. And so I think while he's still retired with a good amount of money, he's not wanting for anything. The reality is that I think he kind of dumped in on a couple of knucklehead lawyers at the last minute and they drove it into the ground within six months. And he could have had a better situation had he met you had he taken some steps? So what are the transition that into what are some of the tactical things actionable things that you work with law firms and lawyers on that helps them get out of this place where they're not sellable. They're not making money. They're not running things the way it should be run.
Moshe Amsel 10:19
You know, there's one word that really solves everything. And that's intention. Yeah. And that's what I help my clients with. When you go about your day to day business. And you don't have an intention of where you want to go and what your plan is to get there. You're just going to be going through the motions. And if you keep going through the same motions, but you're basically think of it like this, I am out at sea and a motorboat but the engines not on, right, or the engine is on but I have the wheel turned in one direction. Right? Yeah. So that's basically where every single law firm is, until they start to think about what is it that I actually do want? What do I want personally? What do I want the firm to produce? And what is the plan for me to make that happen? When somebody first starts working with me, there's two main ways to work with profit with law. One is with group coaching that I'm currently personally running. Hopefully, it'll get to the point where I have other coaches who are doing that. But I also have a program called the incubator, which is for really small firms that are looking for support along the way. And with that, I collaborated with Mark Homer from gf, a marketing company, and Melanie Leonard from streamline legal, and attorney who started a business around getting your tech set up for your law firm. So they do the marketing of the tech, and I focus on the business and the finances side of things as well as staff development. And we provide weekly calls every single week in that incubator to just give you support. We're always talking about news topics, we answer questions, things like that. That's the one thing but what I do with my group coaching clients is you have to start with my 90 day program. And the 90 day program is called a 90 day law firm turnaround. All I do in that program, like literally all we do is I help you navigate why it is that you're doing what you're doing. What is it that you want to have, at the end of the day, like if we look at the long term, 10 years from now, what I want my firm to look like, and in the next 12 months, what is going to make that impact for you to really change your life from where you are today. And then let's figure out how to get there. What's crazy is, and I'm sure you have questions, but I want to leave with this one point.
Steve Fretzin 12:29
I have questions my friend.
Moshe Amsel 12:31
I have one point to make. And then you can ask me as many questions as you want. what's crazy is is that when we sit down with paper and pen, and we map out what we're currently doing, the problem is glaring you in the face, like you can't avoid it, you look at it, you're like, well, if I keep doing this, and keep doing it better and better, all I'm gonna be doing is making a bigger and bigger problem for myself. But if I now say, Oh, I have this idea of how I can fix it, and I put it on paper, I can see if that's reasonable, I can see if that's gonna fix the problem. And by doing that over and over again, until you find the one that works. And then you execute, you save yourself so much pain and so much waste of time, because we're always experimenting with things instead of actually planning them first and then executing. And I think if there was one thing that I could change about any business owner out there, its intention, your intention, be really clear on where it is that you want to go so that you can actually have a chance of getting there.
Steve Fretzin 13:29
And I think you mentioned something earlier about the fear of knowing the fear of change the fear of taking action, and you come in and help to relieve that fear. Okay, now we get to the next piece, which is execution. So if you could share two general typical problems that you're seeing these law firms having? And then what are some solutions, hypothetical or real, that you would share that would Oh, I see that now here's the problem. Here's the solution, or here's the diagnosis, here's the prescription. And I think that would really make it clearer or clarify for my audience, what types of things you're working on, and why the 90 day program, incubator or group coaching would be a good fit?
Moshe Amsel 14:08
Yeah, so I'm going to give you two problems. But I'm gonna give you one before that, because this is really a tee up for you and what you do. The first problem is getting more clients, the number one problem of any business is I need to get more clients. But let's just assume that you figured that part out. The next thing that happens is no matter how many clients you get, you may never get the goal that you want, right, you may never get to take home any money because if other things in the process are broken, or if it's costing you too much to bring those clients in, then there's no room for you to make any money. So the two problems that I see, problem number one is a poor business model where either they're spending too much or they're not charging enough or a combination of the two. That's Problem number one. But along with that problem number one is also poor cash collection practices, which means that even if the business model is good, but if you're not actually collecting the money that you're Like, then you're still not achieving it. So that all goes into one bucket that can really be looked at and fixed. And you can come at it from pricing packages, how you're pricing your fees, you can come at it from cash management, there's a different ways you can approach that, depending on how that problem is facilitating in one specific law firm. The second problem is the ability to buy other people's time in an effective way. And many law firm owners struggle with this at every step of the way. And really, what we're talking about is team building. And whether you're convinced that you want to always be a solo solo doesn't mean you can't get more help, just means you're not hiring another attorney. And it doesn't mean you can actually bring in another attorney when things get busy. So you can have a solo law firm, and still bring in these other things to help. But even a larger firm we have as business owners, and especially law firm owners, we have a tendency of saying, I can't hire that next position until I know that I have the income coming in to support that position. And the problem is, is that that is backwards, it said, which came first the chicken or the egg problem, you have to hire the person first to make room for the new business to come in the door. And that's where it doesn't make logical sense. And it's just the way it works. It's kind of like I suppose if you understand how I suppose this works, it's higher pressure and lower pressure, right. So when there's lower pressure on one side, higher pressure on the other side, the water is going to cross the permeable barrier to get to the other side. And your business is the same thing. The clients are out there. And until you have this pressure vacuum in your firm, where there's room for more business, they ain't come in through the door. Now there's a logical explanation that I can give you as to why that's happening. And most of it is you getting in the way, right? I am not going to effectively sell myself to somebody else, if in the back of my mind, I am questioning how are we going to handle this case in the first place, we don't have enough manpower to do it. Or we're already behind, we're getting doing lousy customer service to other people. So how can I tell the next person that we are the most amazing firm to work with, because we're doing everything ahead of schedule, and we're gonna over deliver under promise and over deliver and all that kind of stuff. You can't sell from that place where you don't trust your own ability to get it done. So you're getting in your own way. And you're actually preventing these clients from signing up with you. Because you don't have the rest of it worked out.
Steve Fretzin 17:23
And I get accused on a regular basis that the stuff that I teach is simple. And I go Yeah, it's not supposed to be complicated. I'm not here to teach you how to build a rocket or take a tumor out of someone's brain. I mean, business development is simple, but it's also unknown. And there are proven methodologies to get it done effectively with the right way, the right process, right people, etc. And I don't think what you're doing is any different I don't think anything you're talking about is completely confusing to people, but they don't know it, and they need to hear it. And they need to then take action on it, right. So it sounds like the business development or the business model is sort of broken in the sense, they may not have the right rate structure, the right cash flow, they might onboarding, I mean, there's all these different pieces that are not in place. And then on the backside of it, they may not have the team or the delegation or the right people in right seats to get it done. So there's just two great examples of how things can fail or go off the rails terribly, because they don't have the right structures.
Moshe Amsel 18:21
Absolutely. And, Steve, with what you do with business development, it's almost like if you help somebody to really kill it on the business development side, but you ignore these other pieces, or they ignore these other pieces, you're essentially setting them up for failure. Because what's going to happen is, is they're going to do a great job of bringing these clients, but then the clients are going to have this lousy experience where deadlines are missed, things are not done. Maybe they're never even asked to pay. And all this stuff is happening behind the scenes. And you've got all this front piece fixed, but nothing else is working. It's almost a lot of law firm owners are like, I want results now like I want them yesterday, I want to go from 500,000 to a million in a year. Sometimes growing that quickly is actually the worst thing you can do. Sometimes you need to grow a little bit more slowly so that you can experience the pain in smaller pieces and solve those without completely blowing up everything you've built so far. And that's this constant. If we think of our business as a spiral staircase, there's this constant stepping stone that has to happen where we bring in more clients, we then bring in more staff, we then improve our processes, we then have some more money so we're able to reinvest in the firm. And now we can bring in more people and it's just this constant evolving thing that happens. And if you try to go out of water and you're trying to accelerate one faster than it's supposed to go, everything else starts to suffer and things start to come off the tracks. It's almost like a train that's going to fast that's going to most likely derail.
Steve Fretzin 19:51
Yeah, and I think I regularly ask questions to identify support systems, right. So like even an attorney and a big firm I asked about their assistant about paralegal, how many associates Do you have working under you? I need to know the landscape. Because if we're going to go from a million to 2 million, or some of these ambitious things that we do together, which is wonderful. But yeah, if they don't have the support, oh, yeah, my assistants going on maternity leave my associates just left to another firm. Well, yeah, let's get that fixed, we can still do business development while we're getting that fixed. But let's make sure that's a top priority, because it's just gonna end up blowing up to your point.
Moshe Amsel 20:24
Yeah, and the crazy thing is, is that often you have a firm owner who says, Hey, I want to go from a million to 2 million. And really what they want is not to go from a million to 2 million. Really what they want is to go from taking home 100,000 to taking home 200,000. So in their mind, they think, Oh, I have to go from a million to 2 million to double my take home pay. But if you really start to ask yourself the question of why is it that you want this number, the top line revenue numbers, the last thing to focus on? The first thing is, is what do you want? Like, do you want another car? Do you want a bigger house? Why do you want this, let's identify what that looks like, financially for you. And now let's back that into a business model that's going to produce that for you, you may be able to do that without changing your top line revenue number, which is crazy for people to wrap their heads around. But if you just changed how you do things in different ways, you can essentially increase your profit margin and take home more money you already have going on, it's harder to do when you're in the smaller throws a business, you only have 250, 500k in revenue, you're not going to be able to take home 250, or 250 k in revenue. But if you're running a million plus operation, you should be able to take home a minimum of 250, 300,000 with the revenue you have coming in. And if you don't, you have a broken business model.
Steve Fretzin 21:38
And now's a good time to do it because a COVID. And because of the current environment to shed dead weight of either underperforming employees or space that's unnecessary, like there's no better time to make things profitable than right now. And I think everybody needs to get some help in their corner to do that. So if people want to reach out to you to get that advice, and to look at you as an option for help, how do they reach out to you?
Moshe Amsel 22:01
Well, the first thing is, is tune in to my podcast profit with law, definitely continue listening to Steve's podcast. But profit with law is where I mean everything that we have going on is there. And then you can visit the website profit with law calm and continue the journey from there, Our email address is there, you can email the team, we generally have my 90 day law firm turnaround program, we generally run it four times a year. So we usually have some sort of promotion or something that we run. For example, we just did our law firm growth summit, a three day conference that we hosted virtually. And on the last day of the conference, we sold the program and we brought in our new cohort of students from there. And we constantly have various things that we're doing free information sessions, one day summit, things like that, where you can get access to a ton of great information for free. But on the back end of it, we can tell you how to start your journey on getting this and implementing this.
Steve Fretzin 22:52
Really important stuff. And I appreciate you spending some time on the show and sharing this with my audience. Great to get to know you and I really appreciate what you do.
Moshe Amsel 23:00
Same. Thank you so much for having me, Steve. Folks. Remember intention? It's one word, but it's everything because without it, you're like driving a car going to a destination with no GPS and no map and trying to figure out how am I going to get there?
Steve Fretzin 23:15
Yeah, generally a bad idea. However, that's what most people are doing, unfortunately. So again, that's another reason to listen to the show and to check out Moshe's podcast and continue to get educated and and get information about how to do things in a more efficient, effective way to drive results and have that balance at the end of the day. As you guys know, it's all about being that lawyer someone who's confident, organized and a skilled Rainmaker and we help y'all take that to heart today. Thanks so much everybody and take care be safe.
Narrator 23:47
Thanks for listening to be that lawyer. Life Changing strategies and resources for growing a successful law practice. Visit Steve's website Fretzin.com for additional information and to stay up to date on the latest legal business development and marketing trends. For more information and important links about today's episode, check out today's show notes.