Mike Chastaine: Building a Profitable Law Firm

In this episode, Steve Fretzin and Mike Chastaine discuss:

  • Understanding your financials and having money set aside for the rollercoaster of owning your firm.
  • Having the courage to say no.
  • Lessons for young lawyers and those going solo.
  • Qualifying your clients and listening to their stories.

Key Takeaways:

  • If you’re worried about paying your rent, you’re not focused on your clients.
  • For you, you need to know what is both profitable and enjoyable for you. Say no to everything else.
  • Be willing to invest in mentors – you can’t do it all yourself.
  • Invest in your education. Law school gives you the right to practice law but doesn’t teach you how to practice it.

“The basic rule of my firm has always been if it doesn’t require a bar card, I don’t do it. I’m not running to get paper clips, I’m not answering the phone, I’m not setting the appointments. I’m doing the legal work because I can bill for it.” —  Mike Chastaine

Connect with Mike Chastaine:  

Website: https://michaelchastaine.com/

Email: [email protected]

Book: https://michaelchastaine.com/books/

YouTube: https://www.youtube.com/user/noalittle

LinkedIn: https://www.linkedin.com/in/michael-chastaine-4683104/

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Connect with Steve Fretzin:

LinkedIn: Steve Fretzin

Twitter: @stevefretzin

Facebook: Fretzin, Inc.

Website: Fretzin.com

Email: [email protected]

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.

FULL TRANSCRIPT

SUMMARY KEYWORDS

lawyers, firm, people, business, money, practice, profitable, mike, paying, call, law, profit, years, clients, big, absolutely, marketing, duis, systems, invest

SPEAKERS

Narrator, Steve Fretzin, MoneyPenny, Jordan Ostroff, Mike Chastaine, Practice Panther

 

Mike Chastaine  [00:00]

So as I was saying before, you know, during COVID, having, you know, 100 grand in the bank really saved us because we had a big downturn like most firms did. And we didn’t have to borrow money, we didn’t have to go into any kind of debt. We were able to live off of that until we kind of figured out what we were going to do during those kind of dark days.

 

Narrator  [00:27]

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, will 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  [00:49]

Hey, everybody, welcome to be that lawyer. I hope you’re having a wonderful and lovely and fabulous day. I just got back from a wonderful pro visors event in California and La got to hang out with all my friends, some of the coaches you know, la Yagnik, and Gary Johnson and just a bunch of great people out there networking. Shout out to pro visors. Love the pro visors, and I’ve got Mike waiting in the wings. How’s it going, Mike? Great. Yep, you’re ready to go what’s the deal with you got that cool vast in the was that a bow tie? Not a bow tie. Let’s call the bolt I bolo bolo tie. bolo tie.

 

Mike Chastaine  [01:21]

Yeah. I’m in Santa Fe, I wanted to be appropriate.

 

Steve Fretzin  [01:24]

All right. A lot of great art in Santa Fe. Yes.

 

Mike Chastaine  [01:27]

Yes, there is. Yes. As part of the reason we moved here.

 

Steve Fretzin  [01:31]

Okay. All right. Well, listen, I’m not too far off. I think I passed through there a couple of times and really enjoyed that. Everybody listen, you know, this show, be that lawyer. It’s all about helping you to be your best version of yourself. And how do you make money have fun of balance, have a great life. And and so Mike and I are gonna hit it hard today, obviously have to thank our sponsors who we love. It’s legalese marketing, helping on the marketing side, we got money, Penny, doing the live chat on the website, and of course, the virtual reception. And then lastly, practice Panther who’s helping you control and take control of your of your life through automation in their practice management software, which is second to none. And we’ve got a great quote of the show, Mike, in your quote of the show, is that very famous. We don’t know if it’s Einstein, right? We think it is, but we can’t prove it. Is that the deal?

 

Mike Chastaine  [02:20]

Yeah, I and Stein actually claimed that he didn’t say that, but always been attributed to him. And the definition

 

Steve Fretzin  [02:26]

of insanity doing the same thing over and over expecting different results or something there abouts. Correct. Correct? Yes, exactly. But don’t we do that, like most people do that? Why did you submit that quote?

 

Mike Chastaine  [02:40]

Well, because I think a lot of people get into a rut where they just keep, you know, plowing the same field and thinking that they’re going to start growing something different. And, you know, the journey of being a successful business owner, I believe, is, you know, doing something different than what you’ve done, if it hasn’t been successful in the past, and remaining flexible, because the market changes, the industry changes. And it’s changed a lot during my 37 years of practice. So yeah, I think that that’s very appropriate.

 

Steve Fretzin  [03:12]

Yeah, I do too. And, you know, I think that there are lawyers listening, whether they’re at a big firm, they run their own small practice, whatever the case might be that are there in the billable hour. Game, right. It’s just how can I get my 2000 hours? Can I get my 2000 hours in or whatever the number is? And they’re not recognizing that there’s more to practicing law than just the billable hour? Right?

 

Mike Chastaine  [03:36]

Absolutely, you know, I mean, results, matter of core lifestyle matters, and then the ability to actually do your very best, you know, to have peak performance, you know, if you want to be a really good lawyer, you have to focus on, on doing that. And part of it, I believe, is, especially if you own your own firm, is having been financially solid. I mean, if you’re worried about paying the rent, you’re you’re not focused on your clients. And, you know, and that was a big motivator for me, when I finally realized I was spending more time worrying about paying the overhead than I was, you know, working on the case is, that’s when things had to start to turn around.

 

Steve Fretzin  [04:15]

Yeah, and I think there’s something about having, you know, I’m just gonna make up numbers and say, you know, 50 $100,000 200,000 in the bank that just makes you just relax, because when you got the credit card bills coming in, when you have, you know, you got payroll coming up, you know, the ground a rollercoaster ride of business and, and lack of business, right, that’s just no way to live. That’s no fun.

 

Mike Chastaine  [04:37]

No, absolutely. Having having money set aside, you know, for those times that are going to happen, and you are going to have ups and downs. It’s part of the nature of the business, but I agree, you know, having money set aside and I’ll say, Well, during COVID, that made a huge difference. We had, you know, quite a bit of money sitting in the bank, and we were able to ride out, especially the early months of COVID When there was a lot of uncertainty about what would happen without ever going into debt without ever having to use a credit card, that made a huge difference in my ability to sleep at night.

 

Steve Fretzin  [05:09]

Yeah, my chest pain is the founder of chest pain law offices, which is now Chasteen Jones. And I want to thank you for being on the show and taking your valuable time. And I have so many questions, I don’t know where to start, except I think we have to start at the beginning. And that would be in the form of your background and sort of, you know, from kind of your ride to success, where you are today. And then I’ve got a bunch of very pointed questions prepared for you. So why don’t we start there? And we’ll we’ll cook in there.

 

Mike Chastaine  [05:36]

Okay, great. So I graduated in 1985. From Santa Clara law school, I immediately went into the public defender’s office in Santa Clara County, which is in San Jose, California. And stayed there for about 17 years, during the big.com bust that was going on, the Bay Area was getting really crazy. So I moved up to Sacramento and joined a very prestigious criminal defense firm there, stay there about six years. And through a whole bunch of things that happened, it became apparent I would need to go out on my own. And so in 2007, I opened Chasteen law, the fallacy that I had in my mind was, you know, I was very good at what I did, as far as being a criminal defense lawyer had a had a lot of success. And I just thought that that was going to translate into dollars, and it didn’t. And so we struggled for a number of years until I finally got the mentors that I needed to help me with the business side of it, because I had never run a business, I never studied that part. And then over a very short period of time, after I connected with some mentors, and started doing a number of other things, we went from being very struggling to doing seven figures routinely every year. And ultimately, at the end of 2021, I made a decision to have a life change. And I sold the firm. And so that’s why I went from Chasteen law to Chasteen Jones. And now I live in Santa Fe, New Mexico, I’m still have counsel to the firm. But with the exception of one case, it’s still hanging out there. I’m not actually personally handling any cases.

 

Steve Fretzin  [07:15]

Yeah. So well, then what’s your what’s your new gig? What’s your jam? Like? What are you doing now? Like, what have you morphed into?

 

Mike Chastaine  [07:22]

So what I’m doing now is I’m working with other small law firms solo and small law firms to help them through that same journey of turning their their business into basically an asset that if they choose to sell they can, that journey will typically make you more money, let you sleep better at night, take better care of yourself. Because the process is exactly the same whether you decide you want to sell it or not. I never had, you know, considered selling the firm that never really crossed my mind. Until at one point, it just became apparent that this was an asset that actually was very valuable. And it gave me an exit strategy when I made that decision.

 

Steve Fretzin  [08:05]

Yeah. And was there and this is a newer segment on the show called The be that lawyer tipping point. And, you know, you mentioned you know, mentors and coaches and stuff like that, but that may not be what you’re gonna say, but like, what was the moment where things sort of changed for the better for you? I mean, what was that all about? How’d that go down?

 

Mike Chastaine  [08:24]

Yes, I would say there were two things that occurred that made a big difference. The first was having the courage to say no, having the courage to say no to clients having the courage to say no to work. I’m having the courage to actually really niche my firm. And in 2020, we stopped doing DUIs that had been a big part of our firm, we found that it wasn’t going to be profitable. And we just made that decision. So the courage to say no. The second thing, actually in sequence. The first thing was, I read the book, profit first by Mike McCalla wits I met my saw his presentation. And that really changed how we did our accounting, how we began to save our money, and how we ran our firm. And that made a huge difference in the ability to actually put money away. So as I was saying before, during COVID, having, you know, 100 grand in the bank, really saved us because we had a big downturn like most firms did, and we didn’t have to borrow money. We didn’t have to go into any kind of debt. We were able to live off of that until we kind of figured out what we were going to do during those kind of dark days.

 

Steve Fretzin  [09:36]

Yeah. And I think that one thing I’m taking away from what you’re saying already, and it aligns very well with a recent article I put in the Chicago Daily law bulletin, and it really is about quitting. And I say you know that not to, you know, it’s a little tongue in cheek, you know, but I am a big fan of saying no, I’m a big fan of quitting things that aren’t working that aren’t profitable, and I’ve taken every chance entrepreneurial endeavor. I’ve heard that I could grab at, because that’s just how I’m built. But ultimately, if I can figure out in 90 days that this is a good idea, not the right direction, and I can cut it short versus a year or two of investment of time and energy and money, right. So that’s really a big deal. I love that point of realizing something isn’t profitable, or the right direction, because you can get pulled so many directions, but it’s not the one that’s either what you enjoy, or what is profitable, which I think are two things that people’s ears should perk up when they are profitable and enjoy. Right.

 

Mike Chastaine  [10:32]

Right. Absolutely. Well, and part of it is about having the data, you know, having the data of your personal firm, what what is actually working for you. I mean, we measure everything, you know, from, from our lead funnel all the way through the profitability of every practice area that we do. And as I said, during COVID, we had a very robust DUI practice. But when the bars and the restaurants all shut down, we had to rethink that. And ultimately, when we crunched all the numbers, were like, we’re really not making any money doing the DUIs anymore. And so we’ll let everybody else fight over, you know, over those scraps.

 

Steve Fretzin  [11:11]

Well, the other thing that might come out of it is alright, so you’re feeding out the DUIs. But there might be some folks that specialize in that, that that aren’t going to handle the complex criminal stuff that you can. So maybe there’s some quid pro quo there.

 

Mike Chastaine  [11:23]

Yeah, I mean, I have to say, we haven’t gotten a ton of that. We niched, our firm in such a way that we built a reputation around the kinds of cases we do primarily sex offenses. Not a lot of people want to do those. We do them very, very well. And so, you know, that’s the lion’s share of the work that we do nowadays.

 

Steve Fretzin  [11:45]

Yeah. And it just kind of like observing your practice and the lawyers and the law practices and firms around you. What are some of the things that you’re seeing them struggle with? Maybe today, maybe more than ever? What What are kind of things that you’re observing?

 

Mike Chastaine  [12:00]

Well, I think the biggest mistake most of the firms are making that I see is that they’re competing on price. You know, they’re all racing to the bottom. Yeah. And the problem that I think that’s occurring is they don’t really understand how much it costs to do the case. A couple of weeks ago, I went back through our numbers, and I realized our acquisition costs for a case was $500. You know, when you talk about marketing, and all the things that go into it. So to take a case for 1500 means you are losing money, you’re actually paying money to represent those people. You got to know those numbers, you got to know how much it cost to make the phone ring, you got to know what your overhead is, you got to know what your data is. And I think most small firms in particular, they just don’t have the system in place to measure that. And without that data, they’re just guessing. And the you know, the I think the challenges, especially with criminal defense firms is many of them are going to Desplat rate model, and then the race into the bottom to have a lower flat rate than the the guy next door. And they really don’t know what it costs. And that’s why at the end of the year, you know, when they look at their p&l, and the bottom line is zero, and they’re scratching their head going, I’m working my butt off, why am I not making any money? Well, it’s because they’re not charging enough. That’s a fair base problem.

 

Steve Fretzin  [13:21]

And I’ll just add to it, Mike, that the other thing I’m seeing because I interviewed a guy you weeks ago, where not only was he you know, not profitable, but he was in debt working 60 hours a week. Well, he had no admin, he had no paralegal he had, he’s doing everything himself. He’s billing himself. He’s got more work than he can handle, but he’s not making any money. He’s just going further debt. And when I asked him about that, and he just kind of shrugged his shoulders as well, I’m, I’m a control freak, I go, Oh, my God, well, you know, I empathize for you, my man. But you know, that’s not going to make you that’s not going to make you happy at the end of the day.

 

Mike Chastaine  [13:57]

Now, you got, you got to be willing to let go, you know, trust but verify has been kind of my motto. But you got to let go. You know, if you’re running down if you’re a lawyer, well, the basic rule of my firm has always been if it doesn’t require a bar card, I don’t do it. And so you know, I’m not running down the staples to get paperclips. You know, there, I’m not answering the phone. I’m not setting the appointments. I’m doing the legal work because I can bill for it. And that’s where the income comes. But I’ve been I’ve been where you know, that fellow you’re talking about I I’ve been what I call a super solo, I did everything myself. And I was going broke. And that’s it. And that was part of the decision as I just can’t do this. I’m not a bookkeeper and I can pay someone you know, 30 or $40 an hour to do it better. Take it off my plate and free up the time to actually bill so that I can generate income. Yeah.

 

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Steve Fretzin  [15:32]

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Jordan Ostroff  [16:02]

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Steve Fretzin  [16:23]

So young lawyers are coming out of law school and realizing they want to go into their own practice. I think there’s been a mass exodus of people from big law and mid market to go out on their own. And they’re going to make a lot of mistakes. And so let’s let’s try to help them out for a moment. And what are some lessons that that you would you know, some some tips or lessons ideas for, you know, either young lawyers or people kind of jumping into their own their own ship?

 

Mike Chastaine  [16:49]

I think that’s a great question. And what I would say is that you’ve got to be willing to invest in mentors. You know, part of the reason that the public defender was such a great experience for me is I got to spend time with senior lawyers here listening to their words, war stories, seeing how they handled, you know, the big, the death penalty cases and the life cases and the really serious cases, why was still doing misdemeanors and trying to you know, figure out where to stand in the courtroom. Business isn’t any different. I mean, unless you have a business, you know, even if you have a business degree, practicing law and running a law firm, or more accurately running the law business, a business that provides legal services, that’s really the frame of mind you got to have you have a business that provides legal services, what are you going to learn that you’re not going to get that law school, so you need to have someone who actually is interested in your success. And frankly, you’re gonna have to invest in that. So, you know, don’t be afraid, in my view, to invest in it. The pull of technology makes it sound like you can do it all yourself. But you can’t, you know, it just makes things a little bit easier.

 

Steve Fretzin  [17:59]

Yeah, I think the automation has come a long way. And I mean, the just the automation I’m using as a non lawyer is insane contracts, automating my appointments, I’ve got this remarkable two that I get zero sponsorship dollars for but talk about all the time, and shout it from the rooftops because I have no paper. I’m paperless completely. Everything’s organized in folders, like in lawyers, I think automation is embracing the automation and what works for you and then outsourcing, what the bookkeeping, you know, VA for maybe marketing or for, you know, just like the you know, like a mani pedi, right. Why do I Why am I paying, you know, 3040 $50,000 for earnest for a receptionist right now, I get people walk in. And that might be something but if it’s mostly virtual, yeah, I mean, you need to have, you don’t want to have a, you know, phone tree?

 

Mike Chastaine  [18:53]

Well, it depends on your practice. I mean, we have a very good phone person who is, you know, the voice and face of our of our office, which means that the calls aren’t coming to me. And then I have lawyers, and so all of that gets done, all those leads get followed up with. And so it depends on the nature of your practice.

 

Steve Fretzin  [19:12]

Yeah, know, for sure, for sure. And I again, you know, whether you’re the it sounds like just having, you know, having a mentor or a coach, someone that has been there, done that and understands that this is a process this is these are systems, you know, there’s there’s ways to set up, you know, standard operating procedures that most In fact, I had someone bring that up to a group of mine, and they were all like, leaning forward on their elbows, because everybody wants standard operating procedures, but you know, how many lawyers have them for different right things they do, like non very few,

 

Mike Chastaine  [19:45]

right? It’s and it’s critical to have it because if you you know, if you do have staff, and someone leaves and they will, you’ll have turnover, who’s going to teach them right in our office we have you know, a manual and videos so when someone comes in You know, the only thing that they really have to talk to us about is the quote, you know, the few questions that they have the details that maybe, you know, weren’t totally clear. But the, their job description is completely outlined. And you know, any reasonably intelligent person could follow the script. And that’s what we want them to do is we want them to follow the script. Yeah.

 

Steve Fretzin  [20:21]

Did you find that the lead generation and how you get new clients in the door? Was it for you? Is that more marketing focused? Or was that more business development focused? Or, or a combination of the two? And I’m happy to define those better, although I think you know, exactly what I’m saying.

 

Mike Chastaine  [20:37]

Yeah, I think, I think, a combination of the two, you know, first, you’ve got to get them to answer, you know, call the, the office, right, so you do have to mark it, you got to get your name out there. And, you know, I, for about four years, I did a radio show. You know, I’ve been in the community for a long time. So, you know, we did a lot of marketing, and then the name started to get to not be known. But when they come in, you still have to sell them from the perspective of do they trust you, especially given the serious nature of the kinds of cases we’re dealing with? You know, do they trust you with their life? And so, having, you know, controlling the the client experience from the moment they walk through the door? What do they see? What do we give them? What do we say to them, all of that is critical. So, you know, and then also developing, you know, referrals from your own clients. You know, people say, hey, you know, Mike did a great job for me, and he did, you know, do a review and all of those things. So it’s, I don’t think it’s one, one thing alone, you got to get him to, you got to get them to call you. But you also have to provide the service. And it’s not just the lawyering, but they have to feel that they’re getting the job, not just, you know, yeah, get the result, the end?

 

Steve Fretzin  [22:01]

Well, I was going to ask you about that. So I teach a philosophy for how I mean, I’ve got systems for everything around business development, but when someone comes in as a potential client for that, you know, in taken for that initial consultation IMT, you know, lawyers know about what are called Pitch meetings, we pitch, we pitch our services, we, you know, and that sales, right? And I’m teaching the opposite I’m teaching, how do we get them to trust us? And like us? How do we set you know, a tone for the meeting through a form of an agenda or game plan, and a lot of questioning to really identify their willingness to open up to us. And if we can identify compelling reasons for them to continue to talk with us and work with us, they kind of buy into what’s more naturally, because of that trust, versus having to sell them through, hey, we get, you know, we get people off, or we get this kind of result, or we get, you know, the big, you know, big settlements, you know, things like that. And so I don’t know if that aligns with with what you do, but I’m curious what your kind of philosophy is there?

 

Mike Chastaine  [23:01]

Yeah, absolutely. So we take a very holistic approach, when somebody comes through the door, we ask a ton of questions about what their main concerns are, and we try to drill down into what got them into the situation that they’re in. I mean, the vast majority of our clients are good people who just did something bad, you know, did something stupid, drugs, alcohol, you know, and as you start to dig down, you find out, you know, there was a divorce, or there was a death in the family or there, you know, and they didn’t go through the grieving process. So they’re acting out in some way, by finding out really what is going on in their lives, and we can actually address it holistically, which not only allows us to help them more, but it gives us a story to tell the to the judge and say, Judge, you know, don’t hammer this guy, here’s the situation. And we have a solution to that. So if it’s a drinking problem, for example, you know, we get them into AAA and those kinds of things. So, absolutely get him you know, because most lawyers, in my experience, just don’t ask enough questions, you got to find out, you got to let them talk, you know, let them talk. Find out what what’s going on in their lives.

 

Steve Fretzin  [24:11]

Yeah, that’s, that’s really yet and I would take it one step further, that one of the things I’m training lawyers on almost weekly is the ability to qualify, because you might have the best client in the world, but if they can’t pay your fees, you know, how much time do you really want to spend with them? And how much time or can you afford to spend with them? So when it talks about the efficiency and time and you know, kind of qualifying people in or out so, you know, I talked about a do they have problems that I solve? B? Are they committed to going forward and solving those problems? Obviously, in your space, they have to they probably are, especially if it’s a criminal matter. Number three is, Am I really talking to the only decision maker because even though you might be talking to this person, they might have another lawyer that they’re friends with a brother who wants to be involved and help his you know, alcoholic brother out whatever it might be. And then lastly, do they have the financial capacity and capability The willingness and ability to pay. And so most lawyers don’t really know to go through all of those qualifiers. But I find that that’s really critical. Because if you don’t, you might be presenting and getting someone to move forward with you that it really isn’t able to

 

Mike Chastaine  [25:15]

write well. And it comes back to what I said earlier about the willingness to say no, yeah, to, you know, let somebody who, you know, if you, if, if you estimate, your bill is going to be 50 grand, and they say I got 30, and I can give you 30 today, but that’s it, that’s the end of it. Are you willing to say thanks, but no, and we do that a lot. You know, it’s taken a while to, you know, to get to the point where you’re willing to let the money walk out the door. But at the end of the day, I don’t want to take a $20,000 loss on the case. And I don’t want to feel like I didn’t, you know, I’m not getting paid for my time. So that’s a challenge for sure. No doubt, especially when you first start, you know, yeah, you’re gonna

 

Steve Fretzin  [25:55]

take on anything. And again, you know, I mean, look, I interviewed my father. And everybody kind of knows that, that listens to the show, it was show number 200. And he was making in the 50s, late 50s $10 a day. But what the interesting takeaway was, he got two years of hardcore litigation experience that he said, was game changing for him, like, he learned more in the first two years of practicing than most people will and, you know, lifetime, potentially. So I think that, you know, that’s so important to just to understand, you know, who’s qualified, who’s not? And how are we going to invest our time and, you know, getting a winning reputation is one thing, but another is, how are you? You know, bringing the right people in the right way?

 

Mike Chastaine  [26:39]

Yeah, absolutely. I mean, it, you know, after 37 years of practice, it’s a little easier for me to say no to somebody, then, you know, when I first started, but, you know, I had the same philosophy, I went to the public defender, because I wanted to do trial work. I did 12 trials, the first year, you know, I’ve done, you know, well over 90 jury trials, most of them life cases, death penalty cases, yeah, that’s the kind of litigation you got to invest. You know, in the 80s, if you wanted to public service, you were not making the kind of money that that my colleagues were making in big law. But I also knew I wasn’t going to be carrying someone else’s briefcase, I was going to be the man in the courtroom, fighting the battle. And so that was, you know, part of the offset. It’s a different, it’s a different lifestyle. Now, I mean, things are different than they were then. But, you know, you still have to be willing to invest in your education. Because, as you know, you know, law school only gives you the right to practice law doesn’t really teach you how to practice. Yeah,

 

Steve Fretzin  [27:39]

I mean, I’ve got Ohio State law, bought a bunch of copies of my books, I’m trying to, you know, see if I can present to the class, because I’m just so impressed that someone figured out that, you know, my book, legal business development, rocket science can be used as a curriculum, because I have so many chapters on so many different subjects that lawyers just aren’t going to think about, you know, from simple relationship building, to you know, how to manage your time to, you know, how to, you know, how to just get started on LinkedIn, I mean, all the basics are there. And so I think, you know, that’s just, that’s maybe a flavor for what’s to come, if that type of momentum can continue to educate the young lawyers about the business of law. And so they can get educated on how to practice law. But yeah, also, you know, how to run and whether you’re at a big firm, or you’re on your own, it’s still the business of law, it’s still you Inc. I mean, you need to figure out how to build that book and be in control. The last thing I want to ask you, before we get into game, changing books, is turning your firm into an asset that’s actually sellable. And that’s something lawyers I think, are really in the dark about, how do they know that it’s profitable? Where do you have to be to have the right numbers together to be able to sell a law practice? Can you take a moment on that?

 

Mike Chastaine  [28:54]

Yeah, absolutely. So that really all boils back down to data. You know, when I sold my firm, I was able to, you know, turn over many, many years of profit and loss showing, you know, how much we made, and having the systems in place. So it literally was turnkey. I mean, this year, barring some major disaster, you know, Martin will, will do better than, you know, a million dollars gross revenue, I mean, right out of the gate, okay, it took me a lot of years to build it to that. But you got to have the data, you got to be able to show because selling that law firm is like selling any other business, you got to show that it’s profitable, and it will continue to remain profitable. And this is part of, you know, being able to step away from it. It’s got to be profitable without me being there. Right? While my name is Phil on the right, my name is still in the door and I still have you know, a toe in man, I still do do certain things, but I’m not actually handling any of the cases. So it’s got to be profitable that way, and that’s where the systems really come in.

 

Steve Fretzin  [29:56]

Yeah, wonderful. Well, thank you so much, man. Let’s let’s go to game changing books. You mentioned earlier Profit First, you know, why is that a game changing book for you? I think you’ve shared a little bit. But is there one thing about that book that lawyers should consider reading it? Or consider buying it? Because it’s, it’s something that, you know, would really benefit them the way it did you?

 

Mike Chastaine  [30:16]

Yeah, absolutely. I think. So. If you go way back, and you go to the book, The Richest Man in Babylon, and he talks about paying yourself first, right, and that’s what Profit First is about, you know, the typical p&l is revenue minus expenses, least profit? Well, you know, most of us just burn through all of our revenue. And at the end of the year or month, or whatever, you know, we have this big zero sitting at the bottom line. McCalla wits really pushed, and I believe you got to pay yourself first. So his accounting system is basically revenue minus profit. So you, you cut a small percentage out, I started at 1% of every dollar came in, I took, you know, I took a penny, and I put it in a separate bank account in a different bank. So I really didn’t even have access to it, you know, without having to physically go down to the bank. And then what’s left is your budget, what you have to spend on your business. And so that pretty much guarantees at the end of the quarter, you know, month, whatever, you will have some money in and you know, at the end of the first quarter, my wife and I were out able to go out and buy a new hot tub cash, just out of the profit first account. And it would, you know, it didn’t change anything else. McCalla wits talks about having lots of bank accounts. And you know, we had a lot of different bank accounts, you divvy everything up predetermined. So you really know where you stand at any given time. If you have it all sitting in one, you know, operating account, you think you’re fat, you think you got all this money. Um, it’s new iMacs for everybody. But you forgot about payroll, and Uncle Sam and you know, having money set aside for, you know, a rainy day, and, you know, other expenses that pop up periodically. So, it’s, it was very, very helpful when we completely revamped our accounting system, and it made a world of difference.

 

Steve Fretzin  [32:14]

Oh, fantastic, man. So Profit First everybody, it’s not just a book, but it’s a way you should be thinking about your business every day. And my chest in, people want to get in touch with you, they want to hear, you know, they want to reach out to you maybe help them with Profit First or with, you know, looking at their business as an asset. I mean, how do they find you? What are your digits,

 

Mike Chastaine  [32:36]

so you can get a hold of me through email, M Chasteen, the CH a s t i n e, most chastise don’t have the E on the end Chasteen at Gmail, you can go to my website, Mike chasteen.com. Or you can also go to my YouTube page under the same name, Mike Chasteen. And I post almost weekly on various things. Last week I posted on you know, the importance of systems. Um, so I don’t do a podcast like you do, Steve, but I have all this material on YouTube so people can get a feel for, you know, the kinds of things that I show and then I sit down with somebody I go over what’s the health of their firm today? Where are they trying to go? And and then, you know, begin to help them develop solutions to make their firm much more profitable. And their practice happier. You know, if you’re not happy doing it, then you know, maybe you should consider doing something else.

 

Steve Fretzin  [33:33]

Yeah, I mean, you got one life to live and you know, when to be unhappy and I know that there are a lot of unhappy attorneys hopefully not the ones listening to this show. But that’s a fact I mean, there’s unhappy people in every industry right but but think in legal and some other professions it seems to be at a higher level and life’s too short man you got to make some changes and whether that’s get out of it or or improve it but you can’t just keep being on the on the merry go round if you’re miserable. So thanks so much, Mike for being on the show sharing your wisdom and hopefully you’ll come back and visit at some point you know, as I make round twos, you know, as I get above, you know, three 400 episodes eventually. So, thanks for sharing your wisdom.

 

Mike Chastaine  [34:14]

Well, thank you very much. I really enjoyed it, I’d be more than happy to come back.

 

Steve Fretzin  [34:17]

Awesome. Awesome. And hey, everybody, thank you for spending time with Mike and today you know, again, this is just you know, another opportunity to understand systems process enjoyment you know, how to set up your investment and your for the long term and it’s not a game I mean, we can have fun but it’s not a game we’ve got to be serious about how we we make money and how we enjoy what we do. And you know if you liked the show and you’re enjoying it every week or twice a week, you know don’t be shy about giving us a good review on your Apple phone and and and help others you know, share with other lawyers that you know that are also ambitious and and interested and will keep helping you be that lawyer someone who’s confident organized in a skilled Rainmaker. Hey everybody, take care be safe be well, we’ll talk again soon

 

Narrator  [35:03]

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