In this episode, Steve Fretzin and Ryan Kimler discuss:
- Understanding the amount of money you need to keep your law firm and your personal finances healthy.
- Reinvesting money into your firm.
- What a typical comp plan looks like for small firms.
- A breakdown of what minimums a financially healthy law firm looks like by the numbers.
Key Takeaways:
- As a law firm, when you’re paying hire salaries, you need to look at your bonus plans because those can eat into your firm’s profitability.
- You have to have enough cash to keep the law firm running and financially healthy.
- Don’t be afraid to do the math or raise fees when needed. If your attorney cannot bring in the right amount to keep the firm on secure financial footing when working their hours, consider raising fees. Even small amounts add up over the year.
- Retirement is the biggest financial piece most law firm owners miss.
“Salaries are definitely continuing to grow, and they’re on the higher end. And I think when that’s the case, as a law firm, when we’re talking about financial health here, you have to pay attention to and really look at your bonus plans. Because when you have a higher payroll cost, those bonus plans can really cut into profitability. So you have to be careful with those.” — Ryan Kimler
Read more from Steve at Above the Law: AboveTheLaw.com/tag/Steve-Fretzin/
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Episode References:
- The Money Guy Show: https://moneyguy.com/show/
About Ryan Kimler: Ryan Kimler is the Founder of Net Profit CFO, and he is the host of the Net Profit Podcast. At Net Profit CFO, Ryan and his team use their background in Accounting and Finance to help law firm owners do one thing; have a growing and more profitable business. Helping law firm owners have a growing and more profitable business means two things. One, your law firm has enough cash to grow and maintain a strong financial health. And two, your law firm produces enough cash for you as the owner to fulfill your wants and needs.
Connect with Ryan Kimler:
Website: https://netprofitcfo.com/
LinkedIn: https://www.linkedin.com/in/ryankfinancialclarityllc/
Connect with Steve Fretzin:
LinkedIn: Steve Fretzin
Twitter: @stevefretzin
Instagram: @fretzinsteve
Facebook: Fretzin, Inc.
Website: Fretzin.com
Email: [email protected]
Book: Legal Business Development Isn’t Rocket Science 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
[00:00:00] Steve Fretzin: Hey everybody, before we get to the show, I just want to share that I’m now writing for Above the Law. If you enjoy this podcast, you might also enjoy my monthly columns. You can go to Above the Law and type my name into the magnifying glass in the top right corner to read my latest articles. Thanks and enjoy the show.
[00:00:21] Narrator: 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
[00:00:43] Steve Fretzin: Hey everybody, welcome to the be that lawyer with fretzin podcast where we are here to help you to guess what?
[00:00:49] Steve Fretzin: You Be that lawyer. Yes. Someone who’s confident, organized, and a skilled rainmaker. We have a lot of fun on this show, but we also think about like, Hey, what can you take away twice a week? That’s going to help you improve the way you’re running your practice, the way you’re growing your practice, the way that you’re living the best lawyer’s life.
[00:01:06] Steve Fretzin: And a big part of that comes down to the financial side. Interestingly enough Ryan, I find like it’s, there’s the business financial side of like, what’s a healthy law practice or law firm. And then the other piece that people don’t talk about very much is the personal business side, the person, or the not personal business, but like the personal side of finance that you may be making 500, 000 a year, right at working at a law firm.
[00:01:29] Steve Fretzin: But then what are you like putting away and what are you, how are you really able to like, there are lawyers that want to work with me and I’m not the cheapest guy, but I’m not the most expensive. But like, Let’s just say if it’s 1, 000 a month for a period of time and they can’t do it and they’re making a half a million Here I go.
[00:01:44] Steve Fretzin: I kind of scratch my head. I go. What the what’s going on with that? Like they should have like money coming out their ears and and I think people are living beyond their means Anyway, I’m going down a down a path here too early. But Ryan, thanks for being on the show We do as everyone knows first of all, welcome.
[00:01:59] Steve Fretzin: How you doing?
[00:02:00] Ryan Kimler: Thank you. I’m doing well. Absolutely. I’m, I’m glad to be here. And I love the points you’re making so far. I’m completely on board with what you’re talking about.
[00:02:07] Steve Fretzin: Kind of shot out of a can a little bit here right off the, out of the gate, but let’s take a step back. Let’s hit your your quote of the show.
[00:02:14] Steve Fretzin: This is from your mentor, Jeff Brager. The goal of a business is to make money enough money to keep the business healthy and fulfill the personal needs of the owner or owners. So, you know, tell talk. Why is that such a powerful quote for you? Seems pretty straightforward.
[00:02:30] Ryan Kimler: Yeah, it is straightforward. But as you were just talking about, right?
[00:02:34] Ryan Kimler: A lot of business owners, I think, don’t even get that far. Don’t even plan that far necessarily, right? You know, how much money? Do you need to keep your business financially healthy? I think if I asked a lot of business owners, a lot of lawyers, that question, they might not have an exact dollar figure right now on the personal side.
[00:02:53] Ryan Kimler: A lot of times I will get a number, right? How much do you really want to make personally this year? Right. Yeah. You know, that part of it is, you know, easy, easily covered. Right. But you got to have both sides, right? Because if your business is not financially healthy, you’re not going to be able to pull out the money that you want to personally.
[00:03:11] Ryan Kimler: Right. Right. And so it’s just so powerful and, you know, that’s really what I help my clients do. I want to make sure that those two numbers are really in check and where we want them to be. And so it’s just, you know, that’s a quote that’s, it’s stuck with me for years.
[00:03:27] Steve Fretzin: Yeah, and again, I think it’s important for, there’s a lot of lawyers out there that are running their own law practices where they really don’t know what, what real health is from a business perspective and they’re just like living check to check, they’re just living in debt, they’re just, they’re not paying their bills, and they come, sometimes, again, not to put it back on me, but they come to me In this predicament of debt and hardship and everything and I’m like that makes it very difficult for them to invest in in themselves through me because Where’s the money they got to either get a loan from a rich uncle or something to do it And it’s like the chicken or the egg, right?
[00:04:01] Steve Fretzin: What comes first and, and you can’t engage someone to help you with marketing or business development or even your services, Ryan, right? When they’re so broken. So I just, I try to advise and just try to get them on a proper track with an understanding that, that they’re, they’re, the road ahead is going to be rough.
[00:04:18] Ryan Kimler: Yeah, absolutely. Absolutely. When you, when you dig a hole in business. I think it’s, it’s harder to get out of that than it is if you dig a hole on your personal side.
[00:04:27] Steve Fretzin: Yeah. Yeah. That’s interesting, but yeah, I can see that, you know, but but no, that’s why business development too is so powerful in marketing because you’re really in a position to proactively create the wealth versus just waiting for it to happen or waiting for things to improve.
[00:04:43] Steve Fretzin: That’s not something that I would always, you know, that I would ever recommend. I think that worked in the past. You know, built on reputation and built on relationships and you could just sit back and the phone rang and everything was groovy. And today it’s just, there’s too much competition, there’s too much pressure, rate pressures, whatever it might be.
[00:05:00] Steve Fretzin: But let’s go back in time and how did you get into working in finance and more specifically working with lawyers?
[00:05:07] Ryan Kimler: Yeah, great, great question. So, yeah, my background is in accounting and finance. That’s, that’s where my degrees are. But I got right out of school and I started working for another CPA firm.
[00:05:16] Ryan Kimler: 1 of my 1st jobs early in my career and we were actually doing accounting for law firms. And we, this was back 2015, 2016. We were completely remote, you know, before the remote was really a big thing, right? I mean, we worked with law firms nationwide and like I said, probably 80 or 90 percent of the clients there were law firms.
[00:05:39] Ryan Kimler: And so really quickly, you know, I got to experience what it was like to do accounting for law firms. I got to experience meeting with a lot of lawyers, different practice areas, different states, because we were nationwide. So they all had like different trust rules and all that. And during that period of time, I mean, probably over a period of about 2 years, I worked with well over 150 law firms because, you know, as a staff, we always used to kind of cross train, right, and we, you know, we would sit in on each other’s meetings so that if, you know, somebody got sick, right, it was kind of their hit by a bus policy, right?
[00:06:13] Ryan Kimler: Somebody got sick, somebody got hit by a bus. There’d be somebody to step in and take over. And so, you know, not only was I working with my own clients, right. And, and added a few here and there. Right. But I was also learning my staff members, clients as well. And so, and we would literally like, we would literally, we would have a trade month, right.
[00:06:31] Ryan Kimler: Where it was like, Hey, I’m taking your clients this month and I’m going to do the work and you’re taking my clients. And then, you know, we would get back kind of in the driver’s seat at the end of the month that we would, you know, check everything over and kind of review the work and make sure everything was good to go, but.
[00:06:43] Ryan Kimler: That’s really where everything started for me, was working for somebody else and I got exposure to a lot of law firms really quickly.
[00:06:49] Steve Fretzin: Okay. And that, that sort of leads into where I want to go today, which is, let’s talk a little bit about the business side, but, but specifically lawyer comp, I think I, I could be wrong that I’m feeling like things are at, are, are at the very tip of the mountain right now as far as how much lawyers are getting paid and have been paid.
[00:07:09] Steve Fretzin: And again, that’s pretty natural, but I think there’s a premium right now. For, and there’s not a lot of lawyers. I think I was talking to someone on my show the other day, it’s like 0. 04 percent unemployment or some ridiculously, like there is no unemployment in, in for lawyers right now. And so with that all being said, what’s, what, what have you seen change in lawyer comp and how lawyer comp is done?
[00:07:32] Ryan Kimler: Yeah. So I would completely agree with you. Salaries are definitely, I think higher for sure. Okay. In order to be in a place where it’s competitive, right? And you know, I, and I completely agree with you as well. I I’m working with a couple of law firms right now. They’re having a hard time hiring for sure.
[00:07:46] Ryan Kimler: And, and it’s been, that’s been over the course of quite a few months here. Even though they have a really high salary offer and a, they’re an hourly bill firm and a pretty low hourly bill requirement so. You know, that it’s kind of, that is kind of a little bit scary, you know, from a, especially from a profitability side.
[00:08:09] Ryan Kimler: Right. But yeah, I would say, you know, salaries are definitely, I agree with you. They’re, they’re definitely continuing to grow and they’re on the higher end. And I think when that’s the case, you really, as a law firm, when we’re, you know, kind of talking about financial health here, you really have to pay attention to, and really look at your bonus plans.
[00:08:29] Ryan Kimler: Because when you have a higher payroll cost, those bonus plans can really cut into profitability. You have to be careful with those.
[00:08:36] Steve Fretzin: Yeah. And I think the smaller firms are struggling with, all right, I’ve got, you know, I used to pay someone, you know, 75 or a hundred, and now it’s 150. And how can I be profitable with someone where, where, you know, I, they’re untested, unproven, they’re new.
[00:08:52] Steve Fretzin: There’s training involved, there’s whatever it might be, and I’m starting them out at 150 as a small firm, and I think that’s, that’s scary to the small firm owners these days.
[00:09:02] Ryan Kimler: Yeah, absolutely, and, and the answer is probably, you know, you’re not gonna be, at least for a little while, right, which means, You know, in order to really make that higher, you’ve got to have a little bit more capital buildup, right?
[00:09:13] Ryan Kimler: Which also kind of goes back to the quote of my mentor, you know, you’ve got to have enough cash to keep the business financially healthy and having enough cash coming in the door and having a strong enough profit that you can stack up some reserves. Is really important for hiring in today’s market for sure.
[00:09:31] Steve Fretzin: Yeah, I think it comes down to how are, how are law firms planning to reinvest money into the firm versus, you know, just taking it all out or. Or just not having enough where you, where you, you know, you’re, again, you’re barely making in speed. You’re not going to be in a position to grow or thrive without having those reserves.
[00:09:48] Steve Fretzin: So I love that. And then is a, is a comp package, just the dollars and just the numbers, the, the, the salary and the bonus, or are there things that law firms should be thinking about to make their comp package look better and be better than maybe their local competitors?
[00:10:06] Ryan Kimler: Yeah, so I definitely think, you know, when you’re a law firm and you’re looking at a comp plan as a whole, from a cost perspective, you know, you need to factor in, you know, above salary and bonus.
[00:10:16] Ryan Kimler: I mean, you’ve got taxes you’ve got to pay, health care, retirement, right? Like you were just mentioning, you know, 150, 000 salary to attorney, right? That doesn’t mean that they cost the firm 150, 000 a year, right? And So we’ve, we’ve got to factor that in. Right. But I think having those pieces anymore is, is pretty much a must have, right?
[00:10:36] Ryan Kimler: I mean, unless, unless you’re, unless you’re finding attorneys that are, you know, unless you’re in this marketplace kind of shopping for attorneys that are semi retired that want to be part time and kind of just a contract basis. I mean, those kinds of things are going to be must haves for sure, even for a small firm, right?
[00:10:52] Ryan Kimler: I mean, I think 401k at an absolute minimum 401k match, you know, in today’s marketplace is just You have to have it.
[00:11:01] Steve Fretzin: Yeah, really, really interesting. And so I think and then let me turn it around a little bit from the lawyer’s perspective who maybe they’re making great money. Maybe they’re not at, you know, they’re at a big firm or they, they don’t really want to go out on their own, but they doubt they want to maybe think about changing now might be the, the best time to make a move.
[00:11:20] Steve Fretzin: What should they be looking for in a, in a good culture environment, financial comp.
[00:11:26] Ryan Kimler: Yeah, so that’s that’s a great question and that’s getting tougher, right? Because, you know, I know kind of some old rules, right? Where partners would make 20, sometimes 25%, sometimes a little bit more on originations, right?
[00:11:42] Ryan Kimler: And, you know, you start thinking about that in today’s world where salaries are higher, right? Let’s just say that that’s the bonus number that they’re starting at. And, you know, as the partner, you’re not doing all of the work, right? You’ve got associates that are doing the work. Let’s just say you’ve got a firm that’s getting a forex return on an associate.
[00:12:01] Ryan Kimler: Let’s just say that’s the case, right? So you bring on a case the firm is going to pay you 20 or 25 percent for origination. And then in order to get the work done, if they’re getting a 4x return on the associate, that means that that associate is costing them 25%, right? So now all of a sudden there’s a, there’s a potential scenario where you bring on a case and 50 percent of that case, of the revenue of that case, Is getting paid out to attorneys.
[00:12:30] Ryan Kimler: So now we’ve got 50 percent costs and That doesn’t even count your salary as the partner, right? That 25 percent was just bonus figure. And so now when you add in your salary, right? And, and hopefully, you know, if you’re in this position and you’re a partner and you’re generating a lot of cases, you know, hopefully as a, as a percentage on a case by case basis, Hopefully your salary is small, right?
[00:12:57] Ryan Kimler: Because you’re generating a lot of dollars, but let’s just say it’s 5%. So now on one case, We have 55 percent that’s going to payroll and bonuses before the firm gets anything for marketing and overhead and profits. And so, so I think it’s really important, you know, you might be a partner, you might be looking to move, maybe you have, you know, what looks like a really good offer on paper, 20, 25%.
[00:13:25] Ryan Kimler: But I would really want to know, you know, if those are the numbers, right, how is the firm staying healthy? Because I think that’s important too, right? It’s not, it’s not just about, you know, am I going to go to a place that makes some really good money and a really great culture? It’s also about are we stacking cash?
[00:13:43] Ryan Kimler: Are we really healthy? Because if something the reality is, is if something bad happens, what’s the first thing to go, you’re probably cutting people, right? Right. And so even, and even if it’s not you, right, even if you’re really a producer, you’re really a partner, you’re bringing in cases, even if it’s not you, do you really want to see people that you’re working with that you’ve, you know, if you’re going to be there for a while, you’ve probably built relationships with, be cut, right?
[00:14:11] Ryan Kimler: I mean, nobody wants that, but I think that’s really, you know, some important things to think about.
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[00:16:00] Steve Fretzin: Locally at fretzin, we use Get Staffed Up for Marketing Person and you know how good our marketing is. Learn [email protected] slash be that lawyer. So then what are you seeing is the like the typical and appropriate comp plan for a small firm? We’re just going to pick on small firms because getting into firms and other details is tricky.
[00:16:23] Steve Fretzin: But if, if I’m running, let’s say a five person firm and I’m busier than, you know, You know, imaginable. And I do hire a recruiter or I, you know, work with, with, and there’s a lot of great people out there to help. I don’t think doing it on your own. Molly McGrath was on the show about a week or two ago.
[00:16:42] Steve Fretzin: And, you know, she was flat out just saying, look, you know, you can’t do it yourself and expect to get quality and expect to have it done unless it’s a full time job. You know, job for somebody, but what would a good comp plan look like? What should, what should I be willing to invest and what can I expect if I have the right hire back in return?
[00:17:03] Ryan Kimler: So it definitely depends on the position that we’re talking about. But I think associates, you know, when you’re looking at it from a law firm perspective, you should put yourself in a position where you’re at least a four X return. Right. And that’s in collected dollars, right? So again, I just, I just want to go back, you know, to your example real quick.
[00:17:24] Ryan Kimler: If you’ve got someone that’s salaried at 150 K, right, realistically, you know, you guys can, I know your lawyer’s listening and you don’t like math, but if you plug that into a calculator and hit four times four, right? You’re like, okay, so they need to bring in 600 K, right? But we’ve got to remember, as I talked about earlier, you’ve got taxes, 401k and a health insurance.
[00:17:48] Ryan Kimler: Right. So I would factor in a little bit more than that. And I would say they’ve got to do a little bit more than 600 K. Right. And that’s really in collections. That’s dollars that we’ve got to bring in. So you’ve got to keep your collection rate high.
[00:18:01] Steve Fretzin: Okay.
[00:18:02] Ryan Kimler: And, and where this can really, you know, kind of get out of whack is there’s going to, you’re going to hit a certain point where it’s like, Wow.
[00:18:08] Ryan Kimler: It’s like probably not even possible for my associate to do that right with the hours that they have. Right. Yeah. And if that’s the case, then we’ve got to start looking at pulling the pricing lever. Right. Because that is going to move the needle leaps and bounds, right? Even raising prices, 10, 20 an hour, because we got to remember that over the course of the year, this associates probably billing 1500 hours.
[00:18:33] Ryan Kimler: Right. So, so
[00:18:35] Steve Fretzin: let’s, so like to get, but to get to, let’s say 650, 700, 000 on an associate at 1500 hours, if we call that sort of the standard, not 2000 and not a thousand, right. And they’re billing it, you know, 400. And I’m not asking you to do the math on the spot, but I mean, that’s sort of getting us there.
[00:18:53] Steve Fretzin: Is that the idea? And then they’re making their 150 plus bonuses, plus. whatever other things we have to put in. And of course, now the firm is also producing that that 4x that we talked about being so, so important.
[00:19:07] Ryan Kimler: I do, I have a calculator on the other screen. So I ran, I ran real quick, right? Yeah. So, so yes.
[00:19:13] Ryan Kimler: So six, so what I do is 650, 000 in a year and I divided by 49 weeks, right? I take out three weeks for vacation holiday sick time. Right. So that would mean we’re collecting about 13, 265 a week. On this associate, if we divide that by 400, you know, an hour, that’s 33. 16 hours. Okay. So, you know, now you’re not going to collect a hundred percent.
[00:19:40] Ryan Kimler: So we know that they’ve got to hit a little bit over 33 hours. And you know, the question that I always ask is, is that really doable? Is that sustainable? Right. And to me, I, I think that’s in the ballpark. I think that’s a realistic number. So I would say yes.
[00:19:56] Steve Fretzin: Right. Okay. Okay. Yeah. And again, you know, the, the, the, the, the idea is that, that a law firm has to be not only busy enough to bring in that extra person to make it make sense, but also that would hopefully free up the managing partner or free up one of the other partners who makes it rain to go out and develop more business to make sure that that.
[00:20:18] Steve Fretzin: Faucet stays on. So you can get the 4x out of that associate because you’re giving them 30 hours, 40 hours, 50 hours, whatever it is that they’re billing a week to ensure that, that you’re staying very, very profitable.
[00:20:32] Ryan Kimler: Yep. And then the only other thing I would add to that is, you know, sometimes the trap that law firms can, can fall in or, or kind of, You know, they’re going to experience a downswing for a short period, and it’s not just while that associates getting ramped up, but a lot of things that small law firms don’t think about, too, is if you’re the partner and you’re billing at a higher rate, right, and you take a bunch of work off of your plate, transfer it over to an associate, even if it’s a 100 difference.
[00:20:57] Ryan Kimler: Right. That is, you know, over the course of a month, let’s just say that you’re building 150 hours in a month. Right. It still makes a difference. So that’s another kind of opportunity cost that I know a lot of firms are structured that way. Right. Different rates for associates versus partners. So that’s something we’ve got to think about too.
[00:21:17] Steve Fretzin: Okay. So I just, I think this is just a great conversation because there are a lot of, Okay. Law firm owners that are, you know, afraid to, you know, pay a little extra and get that, get that new person in. They may not, aren’t, they maybe aren’t thinking about how the math works and how the ROI can work on that if it’s done properly.
[00:21:35] Steve Fretzin: So I think that’s great that you were able to break that down for us. So then, how does a law firm owner of a, let’s say a small practice or even an individual practice, Know that their practice is healthy. What is, what is healthy mean to you as someone who’s involved in, you know, dozens and dozens and hundreds of law firms, you know, a year in your past?
[00:21:57] Ryan Kimler: Yeah. So I would say the, I’m going to give you some minimum numbers that we really should be hitting. Okay. So first of all, and this is also operating under the assumption that the owner is on payroll, regular steady paycheck, right? We’re not just taking distributions, regular steady paycheck. At a reasonable salary.
[00:22:17] Ryan Kimler: Now, when I say reasonable, I’m not talking IRS terms, right? There are IRS guidelines that if you have an S corp, you have to have a reasonable salary for tax purposes. That is not what I’m talking about. I’m talking about a reasonable living salary. So as an example, I’ll kind of throw out some numbers just so we know where I’m talking.
[00:22:35] Ryan Kimler: Right. If you have a law firm that’s doing a million dollars a year, right? I would say 70, 000 in salary and out of a million dollar law firm is probably not reasonable, right? That’s probably low. At the same time, I would also say. 350, 000 of a salary is also not reasonable. Okay. So just so you guys kind of looking at, you’re
[00:22:58] Steve Fretzin: looking at two extremes,
[00:22:59] Ryan Kimler: correct?
[00:23:00] Ryan Kimler: Yeah. So I would say it’s a, you know, it’s a, it’s a, it’s a decent six figures, right? 150, 175, something like that, right? You’re on payroll, consistent paycheck. So that’s number one. But then from there, I would say a strong, healthy law firm has a net income of 20 to 25%. Okay, so that means if you’ve got that million dollar law firm, that means 200 to 250, 000 in profits for the year.
[00:23:31] Ryan Kimler: Okay, that would be kind of my minimum threshold of where a healthy law firm would operate. Now this again, this would be, you know, this would be a firm that we’re really, we’re optimizing for profits, right? This would not be a firm that’s trying to, you know, have crazy growth and hire five associates in one year.
[00:23:50] Ryan Kimler: Okay, that is, yeah. You know, if you’re, if you’re doing that, you’re not going to hit 20, 25%. Yeah.
[00:23:55] Steve Fretzin: That’s a different story. And maybe it’s correct, correct.
[00:23:58] Ryan Kimler: But this, this is just, you know, you’re really trying to optimize your firm. Have people. You know, somewhere between a 20 and 25 percent net income, you know, percentage.
[00:24:09] Ryan Kimler: So every dollar that’s coming in, you know, you’re keeping 20 to 25 cents. That’s where I would say that a firm is healthy out of that as the owner, you’ve got to pay taxes. You’ve got to pay any debt that you’ve got and any distributions that you’re going to take also comes out of that money.
[00:24:28] Steve Fretzin: Yep. And then there’s the, the other thing I just wanted to hit you up before we kind of wrap up in the next couple of minutes is.
[00:24:34] Steve Fretzin: There’s the business side of what’s healthy on the business, but then people, you know, make their 175, but they’re living the life of someone who makes 300 or 250, and They haven’t looked at the numbers in their personal and I’ve got a financial planner who absolutely love a shout out to Justin crane out in California, who mean this guy doesn’t just look at my P and L and look at all my business numbers, but he looked at my wife and I finances at home and all of our bills and we can’t we come up with exactly, you know, we want to travel, we want to do this, we’re going to, you know, upgrade downgrade or home at some point, whatever it might be, and really work out the personal finance, do you have some thoughts about about the importance of that?
[00:25:15] Ryan Kimler: Yes. Yeah. I would say one of the biggest pieces from a financial perspective that I think most law firm owners and business owners miss is retirement for sure. Hands down. Right. I think a lot of business owners have the mindset of, well, one day I’m going to sell my business, right. Or I’m going to sell out to partners and I’m going to have a big exit, right.
[00:25:35] Ryan Kimler: And it’s going to give me kind of this nest egg and I’m going to have that for retirement. Right. Right. And unfortunately, I think a lot of times it doesn’t it doesn’t happen that way. No. Right. That’s really good. So, yeah. And so I would say that retirement piece is missed and I completely agree with you on the personal side.
[00:25:53] Ryan Kimler: You know, I think you should have some help there, right? And and you know, not getting yourself into bad debt positions or anything like that, because. Cause the other thing is, if you’re, you know, like you just mentioned, maybe you’re making good money in your 200 K and you’re kind of living that 300 K lifestyle.
[00:26:10] Ryan Kimler: Now you’re putting pressure on your business, right? Yeah. Versus if you operate debt free in your personal life, right? Or close to debt free, right? Don’t be unreasonable. Then you don’t have as much pressure on your business, but also you’re more prepared for if something bad happens or. You know, if you’re growing your law firm and maybe you can’t take as big of a bonus this year, right?
[00:26:35] Ryan Kimler: You’re not putting pressure on your business to really perform and crank out cash for you.
[00:26:42] Steve Fretzin: Again, it’s, it’s something that I’m not just going to put it on lawyers. I’m going to put it on, you know, entrepreneurs as well. Right. And, and lawyers are entrepreneurs in many cases. And. We’re not taking a look at the numbers.
[00:26:54] Steve Fretzin: We’re not bringing in experts like Ryan to help us understand the numbers, understand how much, you know, financially we can handle at work, how much we need to take home, how we’re handling our personal finances. It’s all, it’s all part of what we’ll, we’ll end up putting you in a, in a position of, of reliability and sustainability and health or stress, right?
[00:27:15] Steve Fretzin: And then having to make bad decisions because you know, you can’t, you can’t keep your staff or there’s something’s going to get.
[00:27:22] Ryan Kimler: Absolutely. Absolutely. One, one side always affects the other.
[00:27:27] Steve Fretzin: Yeah. And I, and I’m sorry to everybody listening that this, that this, you know, isn’t something you learn in law school or it isn’t something that it really is.
[00:27:35] Steve Fretzin: It’s not really taught anywhere. So you’re just figuring it out on your own. I mean, business development, same thing, financial side, marketing, branding. These are all things that you were, were never really provided any kind of education on. And it’s, it’s unfortunate because it’s so important as more and more attorneys turn to go out on their own or to, to start a small firm or join a small firm that they don’t have this, this, the business side of, of things sort of figured out.
[00:28:00] Ryan Kimler: Yeah, absolutely. Absolutely.
[00:28:02] Steve Fretzin: Yeah. Hey, as we wrap up want to talk about your game changing podcast, which is the money guy show.
[00:28:09] Ryan Kimler: Yeah, absolutely. Yeah. So, so we were just, we were just talking about this, you know really focusing on the retirement side of things, right. And me as a, you know, as a financial guy, I’m always trying to learn, you know, there’s areas of finance that I definitely don’t know about.
[00:28:21] Ryan Kimler: Right. Tax is probably my next one. I don’t do taxes. I’m not interested in it, but I am going to start learning more about it. But right now, yeah, I’ve been on a retirement gig. And the money guy show is two financial advisors that, you know, they, they have their own podcast. They posted it on YouTube, but it’s all focused on.
[00:28:39] Ryan Kimler: Retirement, not just for individuals, but also for business owners they talk, they get into some of those things and they also kind of give their opinions on some of the bigger financial players in the space, right? On like, you know, they’ll play like a Dave Ramsey clip and then they’ll kind of give their take on it.
[00:28:54] Ryan Kimler: Right? And so I’ve really been able to learn, you know, a lot, a lot from them. Backdoor Ross and like backdoor mega Ross and you know, you can really stash a lot of money away tax free. If you do it the right way and have it all set up. And so, yeah, I’ve been, I’ve been watching them a lot lately and just learn more about the retirement side of things because a lot of business owners miss it
[00:29:15] Steve Fretzin: now.
[00:29:15] Steve Fretzin: Well, I think it’s an important piece that that everyone needs to sort of get educated on. I, I hate like that stuff. I hate details. I hate like, yeah. That’s why it’s so important for me to have an advisor like I do now because I, I, you know, it’s one thing for someone to just like watch my money and like stick it somewhere, it’s another for someone to step in and say, look, we need to break down everything into what you’re doing, you know, what your overhead is monthly.
[00:29:37] Steve Fretzin: What bills you have coming up, what big, big things are coming up tax wise. Let’s start planning for what is tax free, what maybe you want to put in that isn’t tax free, but it’s set aside and you won’t have to pay tax later, whatever it might be. It’s all, it’s all again, part of the financial health that we need to consider.
[00:29:53] Steve Fretzin: As we wrap up, I want to thank our sponsors, of course, Get Staffed Up, phenomenal option for people to not have to pay for healthcare, not have to pay for all that extra stuff, and have a full time employee that isn’t under your umbrella, but works directly for you. I’ve got Chris working for me full time.
[00:30:11] Steve Fretzin: Out of Mexico, he’s unbelievable getting everything done for me that I need done on a daily basis. We’ve got PymCon for the personal injury folks that want to go and have a first class experience and see some of the top players in the world help you to be a better marketer. And of course, we’ve got Laumatics, just again, you know, breaking everything down on the marketing side and helping me stay stays, you know, Focused on the business where a lot of the automations are happening behind the scenes.
[00:30:38] Steve Fretzin: Ryan, you’ve been such a phenomenal, you know, this is your second time on the show, and I think we, we covered a lot of ground the first time, and now we’ve even covered more. If people want to get in touch with you, they want to learn more about the NetProfit CFO talk to you about the numbers what’s the best way for them to reach you?
[00:30:52] Ryan Kimler: Yeah, best way to reach me is NetProfitCFO. com, right? Very, I keep it very, very simple. In the upper right hand corner is a link to my calendar, right on the homepage, so. You can definitely book a short meeting with me and that’s, that’s definitely the best place to find me is just net profit. CFO. com.
[00:31:09] Ryan Kimler: We can go from there.
[00:31:10] Steve Fretzin: Yeah. You’re not a very salesy guy. I mean, people are going to reach out to you and you’re going to just like walk them through what you do and what their needs are and how that matches up. And I think that’s, you know, that’s really what’s nice about, you know, I do the same thing, right?
[00:31:23] Steve Fretzin: I do this 30 minute eval, which is. You know, just, hey, how do we get to know each other? Are we a good fit? Don’t have to sell you anything. All I need to do is listen and ask questions and figure out, hey, this matches up with what I do and you really need this badly or not. And if not, here, let me, you know, throw a book your way or, or some other advisors.
[00:31:42] Steve Fretzin: Absolutely. Really great. Yeah. Really. Yeah. Really great, Ryan. Thanks so much for being on the show, sharing your wisdom. This was so helpful for, I think, a lot of the people listening. And again, even if you’re at a big law firm, you may someday want to go out on your own or you may, you know, just want to understand the financial side of things better.
[00:31:58] Steve Fretzin: And Ryan, you’re just the tip of the spear, man.
[00:32:00] Ryan Kimler: Absolutely. I appreciate that. Thank you very much. It was, it was my honor to come on and be a guest today. So thank you.
[00:32:05] Steve Fretzin: Awesome, man. And thank you everybody for spending some time on the be that lawyer with fretzin podcast, helping you to continue to, you know, grow and develop that law practice and and be that lawyer, someone who’s confident, organized.
[00:32:16] Steve Fretzin: And a skilled rainmaker. Take care everybody. Be safe. Be well. We’ll talk again soon.
[00:32:24] Narrator: 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.