Luis Scott:
That's what we're doing. We're changing complete lives. The top 0.15% of revenue generators in the country are members of 8 Figure Firm.
Chris Dreyer:
Welcome to Personal Injury Mastermind. I'm your host, Chris Dreyer, founder and CEO of Rankings.io, the legal marketing company the best firms hire when they want the rankings, traffic and cases other law firm marketing agencies can't deliver. Each week you get insights and wisdom from some of the best in the industry. Do me a favor and hit that follow button right now to subscribe. You'd be the first to get every new episode delivered straight to you the moment it drops, giving you the edge.
All right, let's dive in. If someone grows a firm to eight figures once in under five years, you might think it was a little bit of luck, but what if you repeat the process 25 times. Luis Scott has done just that. Luis took a firm from 25 employees to over 150 all while securing nearly a hundred million dollars in settlements in just two years. Yes, you heard that right, a hundred plus million. But that's just the beginning of Luis's journey.
Where others see obstacles, Luis sees opportunities to learn, grow, and become better. He understands that the key to fast growth lies in flawless execution, and he's got the coaching, marketing and mastermind strategies to make it happen. Luis founded 8 Figure Firm consulting deliver insights gained from hands-on experience. He's on a mission to help a hundred law firms reach eight figures in predictable yearly revenue. Could you be next? What he shares today can help you get there.
In this episode, Luis shares his hard-won wisdom on strategic marketing budget allocation, the importance of tracking revenue per employee, and crafting a compelling USP that sets your firm apart. Here's Luis Scott explaining why he wrote his most recent book, It Has to Hurt.
Luis Scott:
I wanted to let people know that what you see on the outside isn't always the full story. Everyone is going through some journey, and it's like people are going through things that hurt in life, and the question is, what do you do next? So that was really the reason I wrote that, because it may look pretty on the outside, but sometimes we're really reeling on the inside from pain.
Chris Dreyer:
I think when we look on the outside on Instagram and Facebook, it's like this perfect picture of this perfect life, because people want to show the highlights, but maybe they're not as forthcoming when it comes to some of their actual struggles.
Luis Scott:
The struggles don't really sell. The only people who make money off struggles is the media, right? They sell struggle. You don't get a big brand following by telling everyone how miserable life may be.
Chris Dreyer:
Yeah, I couldn't agree more. In researching this book, there's this moment of realization you have where instead of feeling like the victim, to becoming this proactive agent of change, so how did that come about? How does that factor into your business decisions?
Luis Scott:
I think that at some point, if you don't make the realization that you're not a victim, you're never going to overcome the problems that you're having in life. So for me it was, I had already tried victimhood and it didn't work. Being the President of the Victim Society was not getting me anywhere. So I just asked myself, "What could I do to change? How could I become more powerful in my life?" And it really was that conversation I had with a consultant where he said, "Who do you become when you become who you were created to be?" And I was like, "I become powerful," and that's who you become. So that's really what changed it. But there's a book called The Power of TED, The Empowerment Dynamic, and they talk about how victimhood creates a perpetual cycle that is a downward spiral. It is not in any way going to get you anywhere, and so if you're having issues with victimhood, that's a great book to read as well.
Chris Dreyer:
Luis, you've got three books written. I've got one right under the belt, and I know how much time and effort and energy goes into this. So tell me just a little bit about how you've used books as an outlet before we jump in and talk more about King of Growth.
Luis Scott:
Many years ago I was writing as kind of a therapeutic thing and I never released anything. I had imposter syndrome. I didn't think I was an author. I didn't think I was qualified to write. And I wrote 13 books in a decade and I never released any of them. The first one that I released was The 9 Principles of Exponential Growth. It was like a dip into the water, and then I released The King of Growth. Then I released It Has to Hurt. Essentially, it was therapeutic for me. But what I realized was that there was something inside of me that gave me ideas. I don't know where it came from. I'm a person of faith, so I talk about that. I used to pray to give me an idea, "God give me an idea. I just want one idea." And by way of just learning and growing, I got a lot of ideas, and I started writing and writing and writing.
I really identify with the show Hamilton, where there's a song in there that says, "Why are you always writing like you're running out of time." And that's me. I write like I'm running out of time because the reality is I am running out of time. Every day is one step closer to that eternal glory, as they say. But I want to leave this world with everything that I have inside of me. And two years ago, I was challenged by a friend of mine to start writing a thousand words a day. Now, the way he writes a thousand words a day, he has his notepad and he just scribbles stuff down, and I didn't realize that that's what he did. I thought he wrote 1,000 meaningful words a day. I remember seeing his notepad and it was like trash. I'm like, "Dude, you can't even read that." He's like, "Yeah, well, I'm just unloading my mind."
But what I did is, over two and a half years, I was writing 1,000 meaningful words a day. I actually averaged 800 because there were some days I didn't do it. What happened is, two and a half years later, I had written 700,000 words across five books. This year I started the painstaking process of editing, and we'll be releasing five books in addition to The King of Growth Second Edition. So this year's going to be a big year from my author side. I'll finish the year with eight active titles. And it's going to be a combination of personal things that, similar to It Has to Hurt and law firm building, because my ultimate goal is to be the leading authority in law firm building. There may be consulting companies out there that are bigger, better, faster, whatever. No one's going to know more about building a law firm than I am, and no one's going to learn more about building a law firm than through reading my book. So that's my goal.
Chris Dreyer:
Well, you've certainly built and helped build a gigantic law firm, and so you've not only done the recall and the reading component, but you've done the application part, which allows you to create these amazing books and synthesize all that information. The King of Growth is right up my alley. I am a marketing guy and you have an approach to budgeting that's different. Some people are like, "Uh," they don't really have a plan. So first, can you start with the 60/40 rule in budgeting, what it is and how you think about that?
Luis Scott:
So that's actually one of the key updates that I've made because I realized that when I did the 60/40 rule, it was for a specific law firm and it was for the law firm that was halfway there to eight figures. And there was a different rule that I used to teach, but it never made it in the book and it was the 80/20 rule. But there's three primary rules when it comes to marketing, and it's dependent on the size of your firm. So if you're zero to three million, you do the 80/20 rule, three to eight million, you're going to do the 60/40 rule, and then eight million and above, you're going to do the 20/80 rule. Every one of those corresponds to the amount of money you're going to spend in direct response versus the amount of money you're going to spend in branding.
So the essential framework is, the smaller you are, the more direct response you need to spend on, because you need clients now. The bigger you are, the more you have to spend on brand because you need to build for a better future, and clients get more expensive in the direct acquisition game. So you can't pay per click your way to a fifty-million-dollar firm. The last time I checked, Morgan & Morgan doesn't spend a billion dollars on pay-per-click. They have to have a big brand. So as you get bigger in your firm, you should be spending more money in brands. So that's the framework of those three primary ratio categories when it comes to marketing.
Chris Dreyer:
With direct response, exactly what you said, it's short-term orientation. And that's the game all the big investors play, right? You see how that's impacted PE and mass torts, and it's just a numbers game, versus brands, where you get those really low cost. I had Angel Reyes on recently, and he was talking about for, geez, 20 years, I can't remember the period, that he just did heavy, heavy TV and then he shifted to digital. I guess there's something to be said too in that percentage like, "Hey, if you do brand for so long, maybe you could flip those metrics around a little bit."
Luis Scott:
If you don't have your digital strategy locked in, the branding, or what we call the big three, TV, radio, billboards, are not nearly as effective. So I actually don't recommend people to go on TV, radio and billboards until they've actually developed a very significant digital brand strategy. So yes, going backwards may seem like a good idea if you've never done digital, but I would have never recommended to do TV without having your digital strategy locked in first.
Chris Dreyer:
There's a lot of emphasis on creating the brand and being distinctive and things like that. So we're throwing out the word brand, but how do you think about brand and being distinctive in the market?
Luis Scott:
Every single lawyer has a USP. People don't realize this. I have a lot of conversations. They're like, "What makes me different than the lawyer down the street," or, "All PI lawyers do the same thing. All immigration lawyers do the same thing." I actually disagree. I think if you and I had the exact same vision and mission, the exact same one word for word, and we had the same practice area, the fact that we look different, sound different, walk different, come from a different area of life, is a USP. That's a unique selling proposition, because we bring in life experiences that are different. Our skills for the legal game are different, and those are things that you can really capitalize on.
So for me, the brand is, there's six parts to the brand, and I talk about this in chapter one, which is the formula for setting up your brand. The primary component, or I should say the heavy weight of your brand, is you. You are the heavyweight, and you really need to start asking yourself what makes you different and letting people know that thing. That is what sets you apart.
So I was on a conversation recently with a guy, and he's like, "What makes me different as a lawyer is that when I go to a meeting, I don't wear a suit and I put my hat on backwards," and he's a lawyer. He meets clients with his hat on backwards and no suit. That's very unique. That's very unique. And there's a group of people out there who are willing to hire a lawyer like that. So I think that we need to really dig deep and stop this 'We're all the same' mentality and say, "I have something unique about me that makes me special, that makes me desirable," and capitalizing on that in a powerful way, and that can separate you in the marketplace.
Chris Dreyer:
Luis puts so much wisdom into his books. In the 8 Figure Firm, he dives deep in the world of business development for hyper growth. One of the key components of building a wildly successful law firm is attracting and retaining legal talent. Luis explains how to create a workplace culture that keeps top talent.
Luis Scott:
Creating an organization where people want to come to work is probably the most important aspect of attracting top talent, is you have to become intentional about developing a place where people want to work. That means you should not be an a-hole, right? You want to make sure that you're non-toxic. And one of the things that I find with many law firm owners, entrepreneurial type people, is that they're the most toxic person in their organization, but because they're toxic, they don't recognize that. It's easy for them to recognize it in other people.
The second thing is creating a place where people are adequately compensated for the value that they bring. This is very different than just setting up market value. Market value is, compared to other people in the market this position pays X, Y, and Z thing. I think that that goes a long way, especially as your organization gets bigger, but really asking the question, "What is the full value that this person brings?"
In the past, I remember several years ago, in the law firm that I used to own, we had an employee who had major pull inside the organization. So we were contemplating whether they had the value of the increase that they had asked for. So they had asked for some increase, and I don't remember the numbers, but let's just say it was something really extreme, 25,000. They wanted a 25,000 increase, and we said, "The market value for this position doesn't warrant it." But what ended up happening is we didn't pay it. They ended up leaving, and four or five other people left because of them. See, we underestimated the value of this individual. So I think that the second key is truly estimating the value of people.
Then the third thing is giving people a place to make mistakes. We are so heavy-handed with disciplinary action in our organizations, write-up for this, write-up for that, suspension, and all these things, PIPs and all that stuff. We give no room for people to make mistakes. And I'll challenge you, any lawyer listening to this right now or any business owner listening to this right now, I guarantee you your mistakes cost the organization a lot more than any employee you have. So when you're ready to dish out the disciplinary action, like the saying goes, "He who has no sin, throw the first stone."
Chris Dreyer:
On the flip side of that, one of the things, and I'll be really transparent with my company, is you get these individuals that at a certain salary, let's throw an arbitrary number out there, let's say 50K, they were fantastic and you loved them at 50K. They showed up to do the work, but now they're with you for seven years and now you're paying them 70K, and the value just hasn't increased. They still maintain. How do you take that approach, where everyone always hears the, "You hire the talent, you train them up right," but the situation where you don't lose an employee and you keep compounding their salary and maybe their value doesn't increase at the same rate of compensation?
Luis Scott:
I think that that's the owner's fault. If you have an employee who at 50,000 did exceptionally well and you go to give them a raise and you move them to 55 and they don't do exceptionally well, and then the next year you still raise them to 60, that's the owner's fault. They should have set the parameters.
A couple of years ago, I had an employee who we had raised from about 45 to 60. It was a pretty substantial raise just to keep in line with market value. A year went by and they made so many mistakes, I'm talking about, I was frustrated and they knew I was frustrated, and I told them I was frustrated, and I told them where they weren't meeting the expectation. They still were not meeting the expectation. Their review came by and I said, "Listen man, I'm going to be a hundred percent honest with you. You know that you didn't meet the expectation. I'm not giving you a raise. Now here's what I'm going to tell you. I'm willing to reevaluate this in six months, but I need to see your butt really improving, but I'm not giving you a raise right now. Now, I know you may quit and that's okay with me. I like to end well, so we'll end well, I'll give you two weeks to pack your things and you can find a job or whatever, but I'm not giving you a raise."
Because I knew if I gave him a raise, I was going to resent the fact that he got a raise just because he was there for a year. So I do think that's the owner's fault for allowing that to happen. And in the event that the person doesn't improve, then they can either go to a place where they'll get paid what they want or they'll deal with the salary. What happened in this scenario is he took it in stride. In fact, when I left the law firm in December, he was still employed there several years later. So it was a combination of me being authentic, but him also being humble enough to accept that he was not doing the work that he needed to.
Chris Dreyer:
Yeah, and I think the radical candor that you gave him allowed him to just understand like, "Look, I don't have to guess where Luis thinks I'm bringing value or not. He just told me this is what I expect. So I appreciate that." And I think that was a little bit of therapy for me too on the business owner side. I want to talk next about the 8 Figure Firm and your consulting practice. So first, big picture, 80/20, what is 8 FIgure Firm, and then we can dive into some of the different coaching programs and things like that.
Luis Scott:
8 FIgure Firm is a legacy creating consulting business, and this is something that has become an epiphany to me. We are not your traditional consulting business where we're just trying to help you grow a million dollars a year or whatever. We're trying to help you create a legacy. The journey from one to 10 million is a very difficult journey. So one out of 667 companies get to 10 million in revenue, and we're trying to help people do it predictably using our system. So that's a legacy creating type of environment. I'm not trying to help you grow seven figures or multiple seven figures. I want you to be at 10, 15 million in predictable revenue. We've done it already 25 times.
I actually, right before I got on this show, had a client send me a text message with a screenshot, she just hit a million dollars in revenue in one month. So that's what we're doing. We're changing complete lives. And that's what 8 Figure Firm stands for, is the top 0.15% of revenue generators in the country are members of 8 Figure Firm.
Chris Dreyer:
That's amazing. So do the coaching programs are at a different levels of cohorts? Tell me a little bit about those different coaching programs.
Luis Scott:
Yeah. So the coaching program is based on services that you need. So the lowest program is the person who wants a couple calls a month, wants to be a part of our Mastermind program, which we're now calling the Accelerator Program, who wants the unlimited resources. Check this out. If you become a member of 8 FIgure Firm, you get a thousand resources the day you become a member, 1,000 resources. And we're talking about job descriptions, job ads, funnels, marketing tools, anything to run your business, review documents. That's very valuable. It's like a whole HR platform built into this system. You could start at that beginning level.
The Obsidian Level is what we call the, we'll run your firm for you level. That's where we come in and where you're a fractional COO, we're giving strategic advice, we're helping you build your marketing customer journey, and we're hosting meetings for you, et cetera. So it goes everything from, "We just want a little bit of help and we want to be a part of the community," to, "We want you to run our firm," and we'll do that on the Obsidian Program.
Chris Dreyer:
Are you doing Slack Zoom or are you doing in-person? What's the access component to the consulting?
Luis Scott:
So everyone has one-to-one access with a consultant once a week for an hour. Then as you graduate through the programs, you get more things. Like we do, we call it a five-point consulting program. It's CEO, COO, leaders, team, community, and those are the five points. So we work with the CEO owner, we work with the COO, second in command, we work with all the leaders in the organization, we work with the entire team, and we also provide a community aspect to it.
Chris Dreyer:
And then you've got the Conquering Cash Conference coming up in May, so give us just a peek behind the curtain, what's going on at the conference? What can the attendees get by going?
Luis Scott:
One of the issues that law firm owners have is understanding the metrics for their business and how to create predictability in their business. So they may have a two-million-dollar business, but their profit's a hundred thousand. Or they may have a 10-million-dollar business, but their payroll is 50%. So we're going to be discussing what are the correct ratios for your business, how to create a sustainable business that runs without you, how to analyze a P&L and use that for decision making. Because at the end of the day, metrics, data, P&Ls, none of that matters if you don't know how to make a decision from it. So we're going to teach people the right ratios, both for operating your business, marketing, the ratios we talked about earlier, the 80/20's and 60/40's, and we're going to talk about analyzing and dissecting your P&L. We also have a really cool Friday experience. So we always do an experience in every one of our Accelerator Conferences. This one's going to be super, super special.
Chris Dreyer:
Nice. And that's in Chicago, right?
Luis Scott:
That's going to be in Chicago in May, yep.
Chris Dreyer:
Just one KPI, and since you mentioned this, I've just been curious. From the agency side, one KPI we track is revenue per employee. And David C Baker and some of these other consultants will say, "Hey, if it's below 200K, you've got some issues," right? Profitability is going to be tough because labor is typically one of your biggest expenses. What's it look like from the firm side? Are there any type of baseline metric on revenue per employee?
Luis Scott:
Yeah, no, revenue per employee, according to the Small Business Administration, in a service-based business should be 200,000-plus. It's something that we ask law firms to strive for. The better firms are in the $300,000 range. The firms that are struggling and puttering along are in the $120,000 range. What I have found is actually fully virtual law firms tend to be on the lower range. I've always had this discussion, can a virtual law firm be successful? And I've never denied they could be successful. The question is, could they be as successful as an in-person law firm?
We're developing this. We're going to come out with this data later, but we've started charting our law firms, and we've worked with 150 law firms now, and unequivocally, the law firms who are in-person have much higher revenues per employee, from a data perspective. There's no comparison. There's a couple of outliers where an in-person law firm is in the middle of the pack and there's some outliers where a virtual law firm is maybe towards the top of the pack. Overall, you'll see that there is a consistent theme. In-person law firms just have better revenue per employee.
Chris Dreyer:
Wow, that's really surprising. I would think it would be the opposite just because the facilities cost, but I guess just the benefits of collaboration and connection for culture just outweighs?
Luis Scott:
Well, we're not charting profitability, we're just charting revenue, so revenue per employee. Some of these virtual firms have lower revenues per employee, but because they don't have the expenses, may still be turning a pretty decent profit.
Chris Dreyer:
Where can our audience go to connect with you and learn more about your business?
Luis Scott:
Yeah, LuisScottJr.com. It's L-U-I-S-S-C-O-T-T-J-R.com. They can find all my links, social media, my book links, also information about 8 Figure Firm and how to register for our conference.
Chris Dreyer:
Luis had some amazing insights. Let's recap. One size fits none. When it comes to marketing budgets, you need to allocate strategically based on your size. For smaller firms starting out, focus heavily on those direct response tactics to drive immediate growth, which makes perfect sense. But as they mature, look to establish a strong brand presence, gradually shifting those dollars towards long-term brand buildings, spot on. It's all about optimizing that marketing ROI and adapting your strategy as the firm evolves.
Luis Scott:
There's three primary rules when it comes to marketing, and it's dependent on the size of your firm. So if you're zero to three million, you do the 80/20 rule, three to eight million, you're going to do the 60/40 rule, and then eight million and above, you're going to do the 20/80. So the essential framework is the smaller you are, the more direct response you need to spend on because you need clients now. The bigger you are, the more you have to spend on brand because you need to build for a better future.
Chris Dreyer:
Focus on profit. Labor is typically your largest expense. Tracking revenue per employee is such a powerful way to identify areas of improvement and boost productivity.
Luis Scott:
According to the Small Business Administration in a service-based business should be 200,000-plus. It's something that we ask law firms to strive for. The better firms are in the $300,000 range.
Chris Dreyer:
You are the differentiator. Craft a strong, unique selling proposition, or USP. Every firm has unique qualities they can capitalize on, whether it's background, expertise, or even personality. It's all about identifying the specific value you bring to your target audience and communicate it to them effectively.
Luis Scott:
You are the heavyweight. You really need to start asking yourself what makes you different and letting people know that thing.
Chris Dreyer:
Before you go, do me a solid and smash that follow button right now to subscribe. I'd sincerely appreciate it. And you won't want to miss the next episode of Personal Injury Mastermind with me, Chris Dreyer, founder and CEO of Rankings.io. All right, everybody, thanks for hanging out. See you next time. I'm out.
