RJon Robins:
Real control comes from being able to accomplish your goals on your terms. Doing everything yourself isn't real control. That's just a job.
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. This Sunday, PIMCon is coming to Scottsdale. The first ever PIM conference brings together some of the best and brightest in PI. Our entire focus is to getting you more leads. If you haven't secured your ticket, hurry up because we're almost out. Go to pimcon.org. All right, let's dive in.
Rjon Robins is the mastermind behind the wildly successful coaching company, How to Manage a Small Law Firm. As a former insurance defense counsel, he's been in the trenches with law firms of all sizes, from startups to established practices, to rake in tens of millions of dollars annually. He has helped transform over 600 law firms, and his programs have a three year wait list.
In this episode, you get to cut the line. We're pulling back the curtain on what it takes to really run a successful PI firm in today's cutthroat market. He explains how to implement a Profit First approach in your firm, why most law firms are running without a real strategy and how to fix that ASAP, and the secret to gaining true control of your firm without chaining yourself to the desk. There's a lot to take in on this episode, so strap in. Here's RJon Robins, CEO of How to Manage a Small Law Firm.
RJon Robins:
My business focuses on helping entrepreneurs build successful businesses and the niche that we focus on happens to be entrepreneurs who own businesses that are law firms, because a law firm is a business, which I know comes as a surprise to lots of lawyers, unfortunately. They confuse the job of a lawyer with the business of the law firm, which creates business problems, very predictable business problems, which are equally predictable how to fix them.
I'm very much in favor of helping people reach their full potential. I believe that every human being, we as human beings owe it to ourselves to explore and discover our full potential. And I'm very much against self-limiting beliefs, and I'm very much against what's called the doctrine of sacrifice, which basically says we should take pride in how much we suffer and we should take pride in how much we sacrifice and we should take pride in how much we can endure. It's like a perverted version of stoicism.
And so what you see in the legal industry is where people take pride in how much they suffer. They take pride in how much they sacrifice. They take pride in how much they can endure, which is really unhealthy for the business. I've had this conversation with literally over 10,000 lawyers. Our definition of a successful law firm is a law firm that serves you. A successful law firm is not a law firm that you are a prisoner to, not a law firm that sucks the life out of you. A successful law firm is a law firm that serves you financially. It's got to generate enough profit for you to live the way you want to live, not just enough to survive on. It's how you really want to be living your life. It's got to generate enough net profit, net operating incomes, consistently, predictably, reliably enough quarter in after quarter out, year in after year out. It's true.
It's got to do that with efficient processes, systems, procedures, so that you don't ruin your life in pursuit of that financial profit. Because there's lots of ways to build a million or a multi-million dollar law firm, but some of them, if you're not careful, will ruin your life in the process, which paradoxically is what will be the downfall of the law firm eventually. So it's got to serve you financially, it's got to serve you personally, and it's got to serve you professionally.
Chris Dreyer:
A few of the things you said there, besides the financial component of it, of profit, made me think, I immediately thought of the Dan Sullivan who not how, where, hey, some individuals like to mow their lawn, right? They put their headset on, they kind of zone out, and it's like they enjoy that. But for me, that's like, nah, that's not what I want to spend my time on. I would rather find that person to take over that so that I could spend time doing other things that I enjoy.
I want to lean into, though, the financial component. So speaking from personal experience on the Profit First, when I started my business, I wasn't taking Profit First and I ended up accruing some debt because I didn't forecast properly in my infancy as a business owner. I didn't have my numbers as well as I do now. So you've written the book Profit First for Lawyers. So tell us what is Profit First, that whole mentality, and how did you get hooked up with Mike Mikalowicz and that story about the book?
RJon Robins:
Yeah, so I should give some context around this. So How to Manage a Small Law Firm, which is my business, we manage over 600 law firms all over the country, ranging from, I think our largest firm that we help to manage is something like $30 million in revenue, all the way down to, I'm just getting started. I was doing Profit First without knowing that I was doing Profit First. And throughout our community, because we have live quarterly meetings and we have a very active, robust community of like-minded entrepreneurial law firm owners, I started hearing about this book called Profit First.
And so I read it and I called the Profit First headquarters and I got in touch with Ron Saharyan, who is Mike's business partner. I called and the first words out of my mouth to Ron was like, "Mike wrote my fucking book." I mean, all props to Mike. He wrote the book and I didn't. But he described brilliantly and very clearly what I had learned through the school of hard knocks to protect my family, to protect my sanity. And when you implement Profit First, it actually helps you make much better business decisions because you're thinking more clearly.
And that relationship developed. Ron came to one of our live quarterly meetings. I put him in a room with, at that time I think we only had 400 members. So he came to one of our meetings, saw what we did in terms of helping lawyers turn law practices into real profit breathing machines. When the time came that they wanted to start writing industry specific books, they asked me to write Profit First for Lawyers. I didn't want to just write some cheap piece of crap search and replace where everything where it says business, you just change it to lawyer. I didn't want to write, I hate those kinds of books.
And so it took me two years to wrap my head around how do I write this book? And what I finally landed on was writing Profit First for Lawyers, which is meant to be a rallying cry. Owe it to your family, you owe it to yourself, you owe it to your clients, you owe it to your staff to take Profit First seriously. So it's sort of like a book about why you should do Profit First. We're about to go into a second production, and the publishers asked us to do an audiobook, and by second production, like an expanded version based on feedback people have given us. They want more.
Chris Dreyer:
I want to lean into some of those that you didn't want to do the search and replace. So maybe if you could just give us a couple nuggets from the book on maybe is there different buckets of allocation?
RJon Robins:
Profit First is extremely simple. Traditional accounting, generally accepted accounting principles, GAAP is not meant for the people in your audience. GAAP is meant for publicly traded companies. GAAP, generally accepted accounting principles, says that you have revenue, yeah, then you've got expenses, and then you've got what's left over as your profit. And the problem with GAAP is that you've got revenue and then all the vultures and piranhas and leeches fucking try to eat you out of house and home in every way, shape, and form in your business. Then what's left over, you live on. Fuck that.
First there's revenue, then I'm taking mine off the top, and then I'm going to creatively figure out a way to make my business run on what's left over. And if you think about it, everyone has done Profit First. You used to do Profit First before you knew you were doing Profit First. And so did everyone when we were starting our businesses, because we had revenue and then we had to take money to feed our families and to pay the mortgage and to live our life. And then what was left over, we figured out a way to run the business. We just didn't do it in a structured, organized, orderly, intentional, deliberate way.
And then we reached a point where we got fancy and we hired these fancy accountants and these fancy consultants and all these fancy fucking people with their fancy fucking degrees. And they came in and they started trying to jam GAAP down our fucking throat and it chokes us. And next thing you know, you're like, what happened to the good old days when I actually made some money out of this place? And what happened is they GAAPed the shit out of you. And Profit First is the antidote to that. It will bring you back the joy in your business because you start getting the benefits of it. And let me tell you, it's really awesome when every month you see your Profit First account growing and growing and growing.
So I mean, here's the basic idea. It's really simple. Every dollar on the top, every dollar of gross revenue, you take a percentage of it, you stick it aside into a Profit First account, and you take another 50 cents and you put it into a tax account so that you can pay the taxes on the dollar of profit. Everyone says, "Oh my God." But that's one percent. One percent. One percent, right? You're not going to miss one percent in your business, one and a half percent, one for you and half for taxes. You're not going to miss it. If you are going to miss one and a half percent from your business, then you desperately need Chris to help you with your marketing more than you know.
And then you ratchet it up to two percent, and then you ratchet it up to three percent, and before you know it, you're consistently, predictably taking 15 to 20% off the top for you. And then your business is truly financially working for you and for your investors.
And now your audience is thinking investors, RJon doesn't know anything about the business of how to run a law firm. I don't have investors. Yes, you do. You definitely have investors. You don't realize it, but you do. They're called your family. They have invested money in your business, they have invested sweat equity in your business. They have invested their patience, their infinite patience, listening to you come home and talk your fucking bullshit every fucking day. When my kid knows the name of someone who I'm complaining about and says, "It sounds like so-and-so is just not doing a very good job," I know it's time to fire their fucking ass, right? I mean, the time was well overdue, but the point I'm making is your family has invested in your business and you owe it to your shareholders to make your business profitable.
Chris Dreyer:
A lot of times people think of profit as being taboo, but if you don't think of a business as generating profit, you're a nonprofit or it's a hobby, and we've got to protect our own. And what do you have on that?
RJon Robins:
Even nonprofits have to make a profit. If a nonprofit doesn't make a profit, it will stop being able to do any good for anyone. The only difference between a for-profit and a not-for-profit is that the nonprofit translates the profits and instead of giving the profits to the shareholders, it translates the profits reinvested into more social services. But if a nonprofit is not run profitably, it's fucked.
Chris Dreyer:
That's fair, that's fair. I agree. And what about the PI attorneys listening? In terms of one of those budget allocations, like you said, hey, you take this, you set it aside. Would you allocate something towards the contingency side? Is there any different buckets, or is it kind of the same and the nature of it is being simplified to work for you and not complicated and trying to read a P&L with accrual or cash or it hasn't been reconciled and you have all this confusion. What about on the PI side? Is there a different bucket or is it thinking about the same concepts in the same way?
RJon Robins:
In the beginning, start simple. Start with just two accounts. Don't try to create all the different accounts they recommend and prescribe in the book. Just start with two accounts, start with your profit account, start with your tax account. Start with one percent in your profit account. Start with half of that in your tax account. Do that for one quarter. Ratchet it up, ratchet it up, ratchet it up. Then you can start getting fancy and having all these different sub accounts for all these different purposes.
If you want to know specifically for personal injury lawyers, a dollar of top line gross revenue is a dollar of top line gross revenue. And by top line gross revenue, what I mean is your fee. If you have a million dollar settlement, you don't take a percentage off the million, you take a percentage off of your contingent fee, what you've earned on that million.
The second thing that I'll tell you that will very helpful to your clients is if you really want to take the growth of your law firm seriously, I mean if you really want to strap yourself to the rocket, light the fuse, and go to the moon, take a percentage of every single dollar of revenue that you generate, goes into my marketing account. And the only way this money comes out of the marketing account is when it is invested with a plan, with a budget, with key performance indicators, into intelligent marketing that is intended to make a big ROI.
I don't take the money out to pay payroll. I don't take the money out to get a new office. And if you want to grow your firm a little bit, make it 10%. If you want to grow your firm more, make it 20%. If you want to grow your firm even more, make it 50%. You will literally hard wire growth into the DNA of your business if you'll observe this.
Chris Dreyer:
I love that and I love the percentages. I just spoke recently and I was on a panel with Cleo and I said 10% and everyone was like, "Oh, that seems high." And so you're reaffirming like no, that's kind of lifestyle bare minimum that you need to fuel the tank to keep the business growing. And there's disproportionate percentages based upon the type of firm.
RJon Robins:
I don't have FTC compliant data to share, so I'm not making an FTC claim here, but I'll tell you, we budget growth into the business. It's amazing how many people don't. Most law firms don't even have a business plan. I mean, it's a business that doesn't even have a business plan. What kind of business doesn't have a business plan? The answer is a badly run business,
Chris Dreyer:
RJon's lawyer specific Profit First approach is a game changer for many firms, but it's just one piece of the puzzle. Next we'll explore how strategic planning with systems like EOS and Scaling Up can take your firm to the next level.
So I was on Facebook and I saw Cameron Herold mentioned something about he was trying to get the size of people using EOS and Traction and I know you get the fireproof people, and then versus kind of like he was doing some comparison models of Scaling Up. And I know you have a relationship with Verne from Scaling Up and just maybe you could speak to those frameworks to help grow a business, and how you're partnering up and how you saw the change happen with maybe EOS to Scaling Up as you've grown.
RJon Robins:
Sure, sure. So How to Manage a Small Law Firm, let's start off with that.
Chris Dreyer:
Perfect.
RJon Robins:
We help entrepreneurs who own law firms run them as better businesses. That's what we do. We function as the fractional timeshare, if you will, CEO for over 600 law firms. We function as the chief operating officer for probably half of them. We function as the chief financial officer or the controller for about half of them. We even function as the chief marketing officer for maybe 25%. And I'm just explaining this because that will make you understand my relationship with Scaling Up.
So in the early days of How to Manage a Small Law Firm, I tried to use Scaling Up to help me grow the business. I think our revenues at the time were, I don't know, maybe we were only at a million dollars, a million and half dollars, something like that. And Scaling Up, quite candidly, it was too big for us. We weren't mature enough entrepreneurs at the time to use Scaling Up appropriately.
So we switched to EOS, and I love EOS, but you should expect that your law firm will outgrow EOS and you're going to have to start Frankensteining things together to make it work somewhere around the one to two, definitely by the time you get to $3 million in revenue, you will have outgrown EOS. EOS was built by stripping out what I think are the most important things for a five, 10, 20, $50 million law firm. EOS was specifically built by stripping out the strategy and stripping out the cash to simplify it and make it accessible to less experienced, less mature law firm owner entrepreneurs.
So it's a great way to get started. It's like great training wheels to get you started. And I used EOS. I used EOS to build my business. I've got nothing bad to say about it. Training wheels maybe sounds not good, but you need training wheel, right? But once you get to around $3 million, you need to switch, because otherwise it's just going to be like putting training wheels on a mountain bike. It doesn't work anymore.
Chris Dreyer:
So we're starting to see some of that. So from an agency's perspective, not a law firm perspective, we're on track for anywhere from 18 to 20 million and we're kind of Frankensteining and we're still on EOS. And so it's interesting you said a couple things. First, the finance, the cash part, I had to get an external CFO, get them involved, and actually a couple of really negative things happened to me personally where I accrued some debt just because even though Profit First was, this was kind of pre-Profit First and now I've got some of those guardrails in, but I just didn't have the clarity and I didn't think that EOS helped me there. So it's reaffirming that maybe those models or those things didn't exist.
RJon Robins:
If you're telling me that you're running an $18 million, $20 million marketing agency or professional services firm or law firm or anything on EOS, pretty sure I can probably predict the challenges you're having. And a lot of those challenges get better when you switch to Scaling Up, when you step up to Scaling Up because the problem is, I mean in broad strokes, this is the problems I bet you're having. How big is your team?
Chris Dreyer:
We're about 70.
RJon Robins:
Okay. How big is your leadership team?
Chris Dreyer:
Our core leadership is seven.
RJon Robins:
The seven of you have to get aligned enough on the strategy, on the long-term strategy. You have to get aligned enough on the annual strategy. You have to get aligned enough on the 90 day sprint so that each of you can go back to the teams you lead and get everyone working together in the same direction. Well, if you don't have a quarterly meeting where you get clear on what the strategy is, that's impossible. And EOS doesn't talk about what strategy is, which is why most people doing EOS don't even know a strategy is a theory. It's a theory about which of the possible outcomes you think you'll be most happy with. That's a strategy, right?
A marketing strategy is a theory about of all the different things you could present to your target audience, which one do you think they'll respond to the best? A sales strategy is a theory about of all the different ways that we can interact with the prospect, which one do we think they will most prefer and become a client? A financial strategy, of all the different possible outcomes that we could achieve in terms of maximizing top line gross revenue versus maximizing total owner benefits, money I take home for me, which of these possible outcomes would we most prefer?
I could go on and on and on. It's a theory. That's what strategy is. A good strategist is a person who has enough experience and they've been around long enough to be able to identify more possible outcomes and more possible options than someone who is less experienced. And then you make a decision about which of these possible outcomes do we think we would most prefer and why? And then you develop the tactics, which is really how you put that theory to the test.
So you develop the theory about what we think we will like the best. Then you develop the tactics to put the theory to the test, then you execute, execute, execute, execute, execute, which EOS is great at the execute, execute, execute, execute, and then you achieve the outcome and then you find out, did I really like it or not? And if you didn't, you go back and you develop a new theory, and then you develop new tactics and then you put it to the test.
EOS doesn't speak to the strategy. It doesn't get the team working on a theory of what we want to try to achieve. It doesn't get the team going through exercises to figure out and evaluate all the different possible options to choose from, because EOS is really geared for businesses whose strategy is very, very simple. Grow top-line gross revenue, cover all the bills, don't go out of business. And if that's all you're working on, then you don't need Scaling Up. You don't need a strategy. Necessity has given you your only strategy.
Chris Dreyer:
I'll confirm every bit of that. So the thing that's happening, even we have our quarterly scheduled Friday, and you look at the standard agenda that they give you and it's almost like a beefed up L10 meeting, but there's no actual ideation or thought around the strategy component. It's more tied to what was the annual goal that you established and what's the next 90 day Rocks to implement towards that. So we find ourselves doing supplemental things, the Frankenstein model, like we're doing the SWOT analysis, we're doing competitor analysis, we're doing all these things and Frankensteining them in our agenda to draw some of that out.
RJon Robins:
And that's very normal. You are on the right track. Everything that you're describing that you're experiencing is to be expected when you've outgrown that model. The other challenge that I would imagine you might be having is EOS doesn't address how you will manage cash. An extremely oversimplified cash management strategy, which is appropriate for a firm under a million dollars, right? Well, it's Profit First. Profit First is great. It's really all you need.
For Profit First, a bookkeeper who doesn't completely suck, a rolling six to eight week revenue projection, a budget variance report, that's all you really need to run a firm less than a million dollars. When you start getting into five million, 10 million, 20 million, now you have to start thinking about the velocity of how fast the dollar moves through the business. You put a dollar in over here and if it takes six months to come out the other side as positive cash flow, versus if it takes three months to come out the other side in positive cash flow, well now you've got half as many cash flow problems, and Scaling Up addresses those issues.
EOS doesn't because, quite candidly, most small law firms, they don't have the tools, they don't have the levers to push and pull, they don't have the dials to turn, they can't do anything about it anyway. But you start getting into $5 million, $10 million, $20 million, $50 million in revenue, and now all of a sudden you've got a lot more tools available to you that can speed up the cash through the business that changes everything.
Chris Dreyer:
So speak to me about the relationship. We talked about the evolution, the different milestones from zero to 250 and the different tiers. They have similar challenges and the one and a half million and then you go to three and five. You have this relationship with Verne, and I was wondering if you could speak to that relationship and kind of what you guys are partnering up to do the Scaling Up for lawyers on that 10 million, what the ascension is for those individuals that are listening that are at that eight figure mark.
RJon Robins:
The Scaling Up organization made a decision. They wanted to get into the legal firm. And I don't really know all the reasons why, but I'm glad they did. Scaling Up is used by billion dollar companies, but 50 to a hundred million is kind of like their sweet spot. I said, "Yeah, okay, that's great. I would love to do that. I can do that. I've worked with those size firms before." Between the time I left the Florida bar and the time that I started How to Manage Small Law Firms, I was working with 20, 50, $75 million firms for several years. So I know that world really well.
I said, "But that's not my business. My business is firms." Like I said, our biggest member right now is $30 million. We've got some 20s, we've got some 15s, we've got some 18s. Most of our members are really in that 500,000 to $3 million range. That's kind of like the sweet spot. And I said, "Look, I need to build a bridge between How to Manage a Small Law Firm to Scaling Up. I can't just have a gap. That would not be good for my business."
So they said, "Okay, that's fine. Do that." So that is what we're building now, and we'll be launching a podcast, Scaling Up Your Law Firm, and we'll be writing a book, which will be, we're deciding whether it's going to be Scaling Up Your Law Firm or whether it's going to be Rockefeller Habits for Law Firm Owners.
Chris Dreyer:
That's incredible. And like I said, I just had this question from Cameron Herold, and many of my followers on Facebook are on EOS, but they're considering, people are saying they outgrew it. So this is a great resource. I love that you're creating this. It's kind of an untapped market. Nobody's really concentrating and focusing on this group. It's more the smaller law firms on their growth trajectory towards it. So it's nice that the smaller percentage of our audience has something to kind of ascend to.
RJon Robins:
Once a firm gets to like 10, 15, $20 million, I mean, then things can get really fun. It's fun working with the small law firms because you see the growth and it's like boom, boom, boom. Things are changing every day, and it's exciting, exciting, exciting, exciting. But you could like, working with a firm that's got the resources, 10, $20 million, it gets really fun to work with them. I mean, how to manage this $30 million, the things that I can do today, I couldn't have even dreamed of doing 10 years ago.
Chris Dreyer:
Yeah, the bootstrap, you're limited on capital. You've got to do those belly to belly activities and the shaking hands and networking, compared to actually being able to pay for distribution. So I wanted to lean into that. Look, I own a marketing agency and I'm super curious, since you've worked with so many firms and you worked with Dan Kennedy and you have just a wide breadth of knowledge on many topics, one of which is marketing, it's essential, right?
You've got to get the leads. You could be a great attorney, but you've got to get the leads to grow the firm. So you wrote the Automatic Marketing Machine, and I was just wondering if you could speak to just overall tactics for PI attorneys that you find to be successful across all spins, all tiers, and just in general your thoughts on marketing to feed the machine.
RJon Robins:
I had a firm that hired me to build a marketing campaign for them, and this is back when there was phone books. You would open up the phone book, just imagine the telephone directory, right? You'd open it up and it was a full page spread of a stop sign and it said, "Stop looking. Don't hire anyone. Don't hire us. Don't hire anyone else you find in this book until after you've read our free report."
My entire strategy was to get the prospect to shut the book because the way that personal injury clients shop is they dial the first number. They don't like what they hear, they dial the second number. They don't like what they hear, they dial the third number. They don't like what they hear. Nowadays, they go to the first website. They don't like what they see, they go to the second website. They don't like what they see, they go to the third website. They don't like what they see.
You want to get people out of their buying cycle, get them out of the general population and into your own little pond. Stop looking, start educating. Let me start educating you. When you're looking for a personal injury law firm, you should be looking for a law firm that is being run with an actual budget and financial controls and an actual business plan to make sure that everyone working in the firm has a clear understanding of how they're going to contribute to you winning your case, from the receptionist to the lawyer. Because here's a bunch of ways that the receptionist can inadvertently screw up your case, and you want to make sure that the law firm that you're being represented by is being run like a real business and not just a hobby.
You have a right to ask, "Do you have a written business plan?" You have a right to ask, "Does your staff have clear job descriptions?" Well, of course, all of our members at How to Manage a Small Law Firm, they're all going to say, "Yes. Would you like to see it? Let me tell you all about it." They're proud of it. And of course, when we send our prospects into the lion's den to talk to the competition, the clients come running back to us. They're like, "Oh my God, that place is a shit show. I'm glad I asked." And we send them in with questions we know that 80, 90% of law firms out there can't answer.
Chris Dreyer:
I love that because it changes their, you basically control the buying experience and it gets them thinking differently. There's so many options out there, and marketing's just so much more fragmented. Back in the day it was TV and that was it. Now it's TV broadcasts. You've got Apple TV, Hulu, and even social. Now you've got Facebook, Instagram, TikTok, X, whatever. It's more fragmented. And so I think that having tactics to stand out controlling that experience are stronger than they ever have been.
RJon Robins:
That's why I like to align myself with people like you, who actually know that part of it, because that's not my area of expertise. That's not what How to Manage a Small Law Firm does. We're not a marketing agency. We run your business. We help you run your law firm like a real business, and one of the things we tell them to do, our members, is hire people like you who can drive the traffic. We stay in our lane.
Chris Dreyer:
We've covered the importance of financial management and strategic planning. Now let's shift gears and talk about how to implement systems that give you real control over your firm.
RJon Robins:
The best way to kill a badly run business is with great marketing.
Chris Dreyer:
You'll have the issues with intake, with the delivery, the cash flow implications.
RJon Robins:
If someone comes to you and you double their lead volume, and even if by some miracle their intake system manages to somehow choke through everyone to a sales call, if you only have enough salespeople to meet with half the leads, then they're either going to be rushing people through, which is not a service to the client, or they're going to be inadvertently signing up cases they shouldn't sign up, which is a disservice to the client and also the owner who's capitalizing the firm. Or they're going to give the client short attention because they're just backed up with too many sales calls. You're just understaffed.
And then you get to the next problem, which is let's say you have a firm that has a ratio of one attorney per, I don't know, 50 open cases, depending on the type of case. I'm just making it up. And you've got three attorneys. Well, you can only handle 150 cases. And then Chris comes along and all of a sudden you've got twice as many cases and all you've got is twice as many pissed off clients that are on their way to filing a bar grievance against you.
Chris Dreyer:
Yeah, the one star reviews, all kinds of issues, not maximizing the client value.
RJon Robins:
It gets worse, though, as if you didn't think that was bad enough. Because then you open up all these cases, but you are undercapitalized and you don't have the money to pay for them all, which means you're either dragging your feet on the case, which is bad for the client, bad for your reputation, or you're not giving the case all of the resources that it needs, and then the insurance companies pretty quickly figure out your number and then you're done.
Chris Dreyer:
Exactly right. Exactly right. Especially Colossus gets that data on you that you have crap numbers, they're going to keep shooting you the crap numbers and then you've got to fight them. You've got to go to war with them.
RJon Robins:
Because they know you're desperate. I believe that we owe an ethical obligation to our clients to run a profitable law firm because if the client knew the financial condition of some of these law firms, they'd run out the door. You don't want your personal injury lawyer sitting there at a settlement conference worrying about how they're going to pay their mortgage. You don't want your personal injury lawyer sitting there at a hearing thinking about how they're going to cover their payroll next week. You want them giving your case their full, undivided attention without any distraction.
Opposing counsel can smell the fear. You can tell when someone's stressed out. But if I was insurance defense counsel, I wouldn't be following the client around. I'd be following their lawyer around, and when I see their lawyer having financial problems, I'd be going for the jugular every time because I know that lawyer is going to run out of money on the case and I know that they're going to, despite their best intentions, they won't be able to help themselves. They're going, "Maybe we should take this settlement," even though they know they could go for more because the lawyer's desperate.
I don't know if any insurance defense counsel know this, but most, maybe not most, but a disappointingly large percentage of personal injury law firms are basically a Ponzi scheme, house of cards, cash flow disaster. And if I was defense counsel, I'd be leveraging the shit out of that to save money and force settlements.
Chris Dreyer:
You mentioned the fractional CEO and the fractional CFO. If I'm the business owner, what's the steps to give the fractional CEO the driver's seat? Because that's really relinquishing a lot of control, quote unquote. How does your clients work with these fractional components?
RJon Robins:
A lot of law firm owners settle for the illusion of control. They don't actually have control over shit, but they feel like they do. And for them, that's enough. And to illustrate this point, I've got to tell you this story. Years ago I decided I wanted a new boat, so I decided, okay, I'm going to give our members the opportunity to buy me a new boat. And so I went on stage and I was very transparent. I put up a picture of the boat that I wanted, and I said, "I've got good news and bad news. The good news is that I've decided, my wife and I have decided we want to get this boat." I gave the opportunity for nine law firms, three at a time, to come to Miami and spend the day out on the boat with me and just talk about the lifestyle of a fast growing entrepreneur and all the things that you don't really get to talk to anyone else about.
And being out on the boat, it's amazing because you end up talking about things and getting ideas. I mean, so many multimillion dollar side businesses got spun off on that boat. And someone goes to the mic, "Well, what's the bad news?" I said, "The bad news is I want a 32 foot boat." Why is that bad? I said, "Because if I wanted a 50 foot boat, I'd have more opportunities for you."
So we're on the boat, one of these boat days, and we're floating around. And I bring a captain out when I go out with clients. I run the boat myself all the time, but when I go out with the clients, I bring a captain. And we're floating over the sandbar and we're talking about this issue of control. And I said, "You're settling for the illusion of control." "What do you mean?" I said, "Well, you want to see some real control?"
I said, "So imagine you're on a little Jon boat with a little outboard engine. It's vibrating. You've got your hand on the tiller, you can make it go faster or slower, left and right. You feel like you're in control, but you're on a 10 foot Jon boat that can't go anywhere or do hardly anything. Now you get a bigger boat and you put the steering and you put a hundred horsepower engine on the back, and now you can control it with hydraulics, but you're not really controlling the engine. You're controlling the wheel that controls the hydraulics that controls the engine. But you can go further, you can go faster, you can carry more. You actually have more control over your life and where you're going. Then you get to a boat with a bigger engine."
And I said, "You want to see some real control? Watch this." And so I called out, "Captain Glenn." He has a South African accent, so I can't do it justice. He goes, "Yes, Rjon?" "Come get us." He goes, "Yes, sir." He goes, holds up the anchor, starts up the engines, comes over and gets us, and they're all impressed. I said, "But you want to see some real control? I'll show you some real control. I can call Captain Glenn today and I can say, I want you to go get my boat and move it from point A to point B, and he'll go do it. So real control comes from being able to accomplish your goals on your terms."
Doing everything yourself isn't real control. That's just a job. If you put a clear job description in place, if you have a smart, strategic recruiting process to vet out all the crazy people, and then you invest at least the first two weeks, please at least give me two weeks. In How to Manage, before we ... Every single position in our company goes through at least 30 days of training before we expect them to do the first lick of work, before we allow any of the advisors, the CEOs, the CFOs, the COOs, the CMOs, before we allow them to do anything, they go through seven weeks of training that we pay for. It's 45 hours a week for seven weeks before we let them do anything.
And every week we're testing them, we're testing them, we're testing them, we're testing them. Half of them don't make it through. And then you have clear key performance indicators that you can measure people's performance by, which allows you to be really, really ruthless on the problem and not such an asshole with the people, which is good for retention. And if you put the right training in place, you put the right key performance indicators in place, you put the right compensation packages in place, you give them the right training, you enroll them in the right mission and vision and values so everyone's excited about what they're doing and why they're doing it, well, now you have the ability to control a much bigger impact on the world.
Chris Dreyer:
I love that. That's incredible. And focusing on the outcome as opposed to the job, so to speak, that you said, and giving those individuals the training and knowledge to move that for you.
RJon Robins:
And by the way, you have financial controls up the yin yang, so you're watching all the money, you know exactly what's going on. You've got case management reports and case progress report. You know, you see that you've got a dashboard that shows you what's going on. I'm not saying you just hope that they do what you want them to do.
Chris Dreyer:
Right. And it also makes firing easier, I imagine too, because it's objective and not subjective. Like, I think this individual's not doing well as opposed to no, they're missing their metrics. These are the KPIs that we established together.
RJon Robins:
It makes the meetings with the staff much easier, because now you're giving them feedback every quarter and they can see exactly what they're doing and they can see it for themselves. And I'm not saying it always works this way, but a lot of the time when it comes time to have to let them go, they're like, "I know, I'm done. I can see the score." Okay, great. I'm not saying it works perfectly. Everyone should have EPLI insurance. Get your EPLI insurance, EPLI and cyber. If you don't have EPLI and cyber, you're an idiot. Just saying.
Chris Dreyer:
Love it.
RJon Robins:
You need those two insurances.
Chris Dreyer:
Love it, love it.
RJon Robins:
It's a hostile work environment for successful entrepreneurs, and the more successful you become, the more hostile the environment becomes. You become a target. You need your EPLI insurance.
Chris Dreyer:
I agree. Great advice, great advice. RJon, this has been amazing. So how can our audience connect with you and learn more about what it is that you do?
RJon Robins:
The company is called How to Manage a Small Law Firm. You can go to howtomanage.com. You're going to have all kinds of free resources that I'm going to share in the show notes so that they can find me through that. We have a waiting list. We've had a waiting list for the better part of three years. I mean, maybe if we don't have a waiting list one day I'll say, "Can I go back on the show? We don't have a waiting list."
But we've got a waiting list. We had a waiting list for the better part of three years. Basically the way it works is this, you schedule an appointment to speak with one of our relationship managers. We're only looking for long-term relationships. We will help you figure out where and how and if we can even help you. And we will figure out if what we need to help you with is mostly around marketing or sales or production or people or financial controls or mindset or goals or strategy or whatever.
And then we're just going to give you free resources. We're literally just going to give you free resources and you can try the free resources. And if it doesn't work for you, if you don't like it, then you know that we're not right for you. And that's okay. If you like it, if it works for you, you come back, we give you more free resources. And we're just going to help you and help you and help you. And eventually, if you want, you can go on the waiting list, and while you're on the waiting list, you get to hang out in what we call the waiting room.
And in the waiting room, we basically give you free coaching and free help until a spot comes open for you. And when that spot comes open for you, you pretty much know you'll want in or you don't want in because you can't, it's kind of like going to a restaurant and you hang out at the bar. If the bar sucks and the food is terrible and the staff is awful and your table becomes available, you're like, "No thanks, I'm going somewhere else."
But if the food is good and the staff is good and the company is good and the atmosphere is good, your table comes available and you're ready to go. It's a very organic way of building the relationship, which I think is why we have such a high retention rate, that and the fact we get great results, and why we have a waiting list.
Chris Dreyer:
Thanks so much to RJon for a fantastic conversation. Let's hit the takeaways. Profit First at every stage, always. Look, we've all been there. You're so focused on growing your firm and you forget to actually pay yourself. RJon's hitting the nail on the head with the Profit First approach. It's not just about bringing in cases. It's about making sure your firm is a profit-generating machine. It's okay to start small. Take one percent of every dollar that comes in and stash it in a separate account, then bump it up to two percent, three percent, and so on.
RJon Robins:
Even nonprofits have to make a profit, and before you know it, you're consistently, predictably taking 15 to 20% off the top for you, and then your business is truly financially working for you and for your investors.
Chris Dreyer:
Drive with both eyes wide open. Bringing your firm without a solid strategy is like driving blindfolded on the highway. Every stage of your firm's growth requires a strategic focus, but there is no excuse for pushing ahead without the map. So sit down and hammer out a real strategy. What kind of cases do you want? Who's your ideal client? How are you going to dominate your market? Once you've got that locked down, every decision you make in execution becomes a whole lot easier.
RJon Robins:
EOS was specifically built by stripping out the strategy and stripping out the cash to simplify it and make it accessible to less experienced, less mature law firm owner entrepreneurs. So it's a great way to get started. It's like great training wheels to get you started, but once you get to around $3 million, you need to switch because otherwise it's just going to be like putting training wheels on a mountain bike. It doesn't work anymore.
Chris Dreyer:
Discover real control. Real control isn't about micromanaging every little thing. It's about setting up systems that let you steer the ship without having to row the damn boat yourself. Start dominating your processes. From intake to settlement, get it all down on paper. Then train your team like their lives depend on it. When everyone knows exactly what to do and how to do it, you can focus on the big picture stuff that really moves the needle. And when it's time, you can bring in fractional C-suite positions to really take off.
RJon Robins:
A lot of law firm owners settle for the illusion of control. They don't actually have control over shit, but they feel like they do and for them, that's enough.
Chris Dreyer:
Huge thank you to RJon for coming on the show. For more information, check out the show notes. Before you go, do me a solid and smash that follow button to subscribe. I'd sincerely appreciate it. And if you don't want to miss out on 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.
