Why Every Law Firm Needs a 10-Year Plan

Speaker A: When I got started in business, SMB team, I did a 10 year excel spreadsheet and I had this year by year breakdown of how much my company would do in revenues every single year for the next 10 years. And it was insane, it was delusional. The spreadsheet ended up going to a goal that I would have a $2.56 billion impact on the industries that I enter. At that point in time, I didn't know that I was going to focus on law firms and, and I had no idea how I was going to get there. But I knew that if I could create a $2.56 billion positive impact on the industries that I enter, I could collect 10% of that as commission. Now, I was a salesperson at the time@yellowpages.com when I made this. I was thinking of the world in a commission lens. But if I could grow businesses by $2.56 billion, I could basically earn 10% of that and have a business that does $256 million in annual revenue. When I showed this of 10 year plan to my roommates I was living with at the time, before I had any clients, I had zero clients. When I made this spreadsheet, it was embarrassing because for me it was so important for me to have clarity around where I was going and the big picture. Having clarity on the big picture, not just the small picture, not just what's the next client I'm going to sign up and how am I going to make money tomorrow. That focus on like, where I wanted to take things over the long term ended up being probably the most important thing I ever did in the construction of business. But when I showed it to my roommates, they were definitely critical of it and definitely called me delusional and, uh, thought it was unusual for sure for me to be doing something like that. And they probably were right because I had no proof. I'd never started a business before and I would have reacted the same way if I saw someone in my shoes make a, uh, ten year plan. And every year's revenues were decided in advance. I'd written out every single year's revenues for those 10 years and had the audacity to think that I could hit those goals every single year, right? Started with 500,000, then I went to 1.5 million, then I went to 4.5 million. Now think about that. That's in my third year in business. I got very close to my goals in my first four years. What was fascinating was then it started doubling past that point. Then it went all the way to 256 million. What was fascinating about this whole process was whenever you do something that other people aren't doing, you get criticism, right? Because people can't relate to the things that they don't do themselves. Right. So what's interesting is now I look back, you know, years and years later and I say that that's probably the most important thing I ever did. And why do I say that? Well, because there's like no competition for doing stuff like that. The majority of business owners who get started, they never actually learn the art of reverse engineering. They never actually learn how to take a goal in the future and bring it back to the present and break it down into what needs to happen this year, next year, the year it all becomes short term focus. When you start a business for 99% of business owners, less than 1% of business owners start their business with a 10 year plan, let alone a three year plan. The categories I'm going to walk you through right now in reverse engineering. Your law firm could be the most important decisions that you make. Just like it was the most important decision I made when I started S and B team. Starting with category number one, your revenue goal, we call these your five vision pillars and these are the pillars that you want to accomplish in the next three years. So we need a goal around revenue. Now you can drag this out to 10 years but I'm um. Start with three years. We need a goal around revenue, we need a goal around profit, we need a goal around how many free days you're going to have. We need a goal around your work focus and we need a goal around sale date. This is all broken down in such a way where there's number based answers because it's very important to be able to measure the progress of your goals. So let's start with revenue. This one's simple. How much revenue will your law firm do? I'm m not asking for you to do a mathematical projection, I'm asking you to decide. Decide how much revenue will your law firm do three years from today? If you had a windstorm of cash, if you had no limits on your abilities, if you could attract any a player to work for your firm if you had no limits and anything was possible for you and you could just pick from a scroll wheel exactly how much revenue you'd do in three years. Remove your frickin limits, remove your self doubts, remove what you think's possible and just decide what frickin number it's gonna be. Write it Down. That's what your revenue target is. Your revenue target is what you're capable of if you had no limits and if you fully went all out. Number two, your profit target. This is the percentage of your revenues that you take home or that hit that bottom line. Oftentimes when you haven't made a lot of money, it's hard to set a profit target because like you don't really know what it feels like to make multiple millions of dollars a year, right? But if you already have had that taste and, and maybe you've had, I know a lot of lawyers have this, especially in contingency fee. You'll have a year where you make millions of dollars and you'll have a year where you make next to nothing and you're break even, right? That feeling of making millions and millions of dollars in take home income. I want you to quantify that. I want you again to completely remove from your mind any limits and to decide not to project but to decide from your soul, from deep down what profit you want to do in your law firm per year. I want you to start with the end in mind and then we'll work backwards from it. How many free days are you going to have per year? Free days? Free days are measured as sunup to sundown. Actually the whole day because some of you work after sundown. So the whole day, a 24 hour stretch of a day, and you didn't do any work. That's what a free day is. You have to start with the end in mind here because again, when you scale your law firm, you will find things to fill your busy, busy calendar. Even if you have hundreds of employees in the future and you scale your firm to epic proportions. But if you start with the end in mind and say I'm going to have 124 free days a year, I'm going to take off every single weekend. I'm going to make a commitment to myself. I'm never going to work on weekends. So that gives you 104 free days right there. 52 times 2, 52 weekends times 2 weekend days per year, that's 104 free days. Plus if I take a five day vacation once a quarter, there's four quarters in a year, that's 20 free days, that's 124 free days. That's a minimum target that I set for most law firm owners. You have to set a target of at least a third of the year that you're not going to be working 124 free days a year. Number four big vision pillars. What are your work focuses? What are the three things you would do every week, every day that give you energy, that excite you, that make you wake up in the morning and go, I can't believe I get to do these three things every single week. Your three work focuses should be things that give you energy, don't drain your energy, okay? They should be things you're great at, they should be high money making activities, and they should be things you love. And all three of those have to be. You have to be great at it. It has to be top income producing activity and you have to love it. You have to enjoy doing it. There is things that you can be great at that make a lot of money, that you hate doing. That's not why we're doing this. There's things that make you a lot of money and you love doing that are unprofitable. You need all three of these. Something that makes you money, something that you're great at, and something that you love doing your work focus. I need you to write down in advance what are three things you're spending time on on an average week when your law firm is at this scale. And last but not least, your sale date. Three years from today, what date will your firm be sellable and for what amount sellable? This means someone throws you a 10, 20, 30, 50 million dollar check to buy your law firm. I want you to name the dollar amount of how much money your law firm's worth and I want you to name the date through which you will have a letter of intent from a third party to buy your law firm at that price. Okay? Right here, these vision pillars up here are the most important thing. They were the most important thing for me. Now I did this for 10 years, but you're just dragging this out for three years right now. Most important thing for me, because it allowed me to calibrate myself, to hold myself accountable to the decisions I had to make in the now, to set myself up for a world where I had free days, where I had the guts and the wherewithal to hire the amount of people I needed to have $10 million in revenue and $3 million a year in profit. So it allowed me to run my business in an identity level beyond where I was currently at. They say fake it till you make it. Well, yeah, that's kind of what you got to do. You've got to actually be a person that's beyond your current capabilities. You got to play in that sandbox a little bit. You're Going to get some bumps and bruises there. You're going to look like a dumb ass sometimes when you're there. But as you kind of shave the, you know, rough and you kind of figure out how to become that new person, eventually you'll get your sea legs and you'll start realizing, maybe I am this person. And it's a constant journey. Every time you hit the next level, there's another level of imposter syndrome. There's another level of can I do it again, right? Can I pull it off again? If you ever ask athletes who get injured, the number one thing that they tell themselves in their mind when they come back from injury is, can I do it again? Can I do it again? It could be a seven time super bowl champion and they're still going to come back and have that same little voice in their head, I need to prove to myself I can do it again. Why is that? It's because we're stepping into an identity that's further than us and that's foreign. And our body, you know, doesn't like that because it's way more comfortable to just stay who we are and not change. And that's why 99% of the public doesn't change and doesn't grow and doesn't challenge themselves and isn't willing to learn new ways of doing things right. It's because the reason I'm humble enough to know I need to learn more things is because I need to become someone bigger than I currently am so desperately that I have to learn. Otherwise I don't deserve to become the next level of myself. That's why having these future paced goals is so absolutely critical. So then we turn this into a 2026 plan. So your 2026 plan, or whichever year, we turn this to an annual plan of, uh, what am I going to do for the next 12 months? So this, if it's 2027, what's your 2027 plan? If you're 2028, what's your 2028 plan? What's your 2029? 30. Take the year you're in right now and create a bulletproof plan for how you are going to, in the next 12 months, set yourself up to be on track to hit this 10 and 3 goal. 10 million top line, 3 million bottom line, the free days, all the good stuff. What you'll learn is there's a reverse engineering formula that all law firms can follow to set themselves up to hit that vision pillar goal. We start with our revenue goal. So let's say you wanted to add $1.2 million to your firm next year. We start with the reven. We then ask ourselves, what is our average fee per case gonna be? Right? Our average case value, let's say it's 10,000 bucks. If my average fee per case is 10 grand, this is basically the average amount of money you get from a client on average. If I want to grow my business from 0 to 1.2 million or from 1 million to 2.2 million, meaning I want to grow my business by $1.2 million this year. Now, does that sound crazy to you? Let me just stop there. Does it sound crazy to say you can grow your business by $1.2 million in additional revenue in one year? Maybe it's not so crazy when you look at the math. If your average client pays you $10,000, you only need 120 clients to hit that number. That means you need 10 clients a month, each paying you $10,000 a month to get you to that 1.2 million annual number. If you convert 20% of leads into signed clients, you need 50 new leads per month. 20% of those leads turn into signed cases, which gives you those 50 leads, give you 10 signed cases a month. Those 10 signed cases each pay 10 grand. That gives you your 100 grand a month of extra revenue. 100 grand a month times 12 months is $1.2 million in revenue. That's the reverse engineering formula. I'm sorry to, like, break it to you. This is so stupid simple. And nobody does it. Nobody actually thinks and spends the time to go. If I want to accomplish this goal, here is exactly the math, because the math does not lie in this formula. This is exactly what I need to do. I need to get 10 clients a month. They each need to pay me $10,000 a month. So then your question becomes, how do I get the 10 clients a month? What most business owners focus on is, I've got one or two clients. How do I serve them? How do I serve them? How do I. How do I not my head spin off? Uh, very few business owners think is, okay, sign up my first two clients. That's not the goal, though. The goal is 10amonth every single month, and new ones every single month. So if your mindset is set on I'm going to get 10amonth every single month. If your mind is set on that, you're going to look at your first two, as I'm only 20% of the way there, I got eight more to go. I got to find someone else to do the work for these first two because I got to go get and hunt the other eight. So now you'll hire people. You won't do all the work yourself. Like, you'll get out of your own way a lot faster because you've started with the end in mind. That's the most important thing. We take this reverse engineering formula and then we have to invest in our law firm's growth right now, I broke this out in other videos. 20, 40, 10 rule. We take whatever our growth goal is. Now. This is where it all stops. This is where all the fun goes out the window. So, okay, Bill said I can do it. I can grow by 1.2 million. Uh, this is going to be great. And then I'm going to show you where you got how much money you're going to have to spend to get there. And then you go, whoa, maybe it's not the right time. Maybe I need to think about it. Maybe, uh, this isn't for me. Maybe that's too much growth. If you want to grow your law firm by $1.2 million a year, you've got to spend 20% of that 1.2 million a year on client acquisition. I can't spend that. I can't spend $240,000. Or what would that be? Yeah, $240,000 a year. There's no way I could do that. That's impossible. Okay, then don't do it. Don't grow your. Don't grow your business by $1.2 million this year. Your only other choice is to go shake hands, kiss babies, and do all the marketing yourself. It's very unlikely you're going to go from zero to $1.2 million in one year without increasing your marketing spend spend. So we need to spend 20% of that top line revenue goal that you want to grow your business by $100,000 a month in revenue, you've got to spend 20% of that on marketing on client acquisition. So that would be $20,000 a month in spend. Did I do this in scaling my own business? What do you think? This is exactly what I did. I started my first month on Google Ads. I spent like $6,000 a month. I launched Google advertisements on a credit card when I literally couldn't afford to run ads on a credit card. And by the time the credit card payment was due, I had signed up enough clients to pay down the credit card. So it actually didn't cost me any money to do it. It actually made me money to spend that much money. So I spent 6,000. I took the excess money from that and I scaled up my budget to $20,000 a month. It was actually closer to $25,000 a month because my goal was actually higher than 1.2, is 1.5 that year. This is the exact formula that I followed because all the business owners that I talked to that scaled rapidly were spending a higher percentage on marketing than the average business. Your client acquisition buys you revenue. That, uh, 20% buys you revenue. The 40% investment on team and tech buys you freedom as we establish. Okay, so 40%. So if you want to grow your business by $100,000 a month, we must remember we need a team to do the work. Because this formula breaks down real quick if you're the only one doing all the work. If you're bringing on 10 new clients a month, that's 120 clients over the course of a year. Who the hell is going to service all those 120 clients? Not you. So the formula is we're going to spend this 20%. It's going to feel like we're betting our entire life savings on something as we get the revenue from that. By the way, does it always work? No, doesn't. Doesn't always work. Sometimes you'll launch a campaign, you will get no clients from it, and you will waste $20,000. Got to ask yourself, are you willing to take that risk? A lot of people aren't willing to take that risk. It could happen. 40% of the hundred thousand dollars a month that you grow, you want to grow your firm by has to be spent on team, team and tech. Now, because I can do some of the tasks of employees, some of the workflows. So team and tech combined, you need a 40% budget there. That's $40,000 a month of spend. Now, uh, ideally, your team in tech should come from after you started getting revenues. And you take those revenues and you invest it into your team in tech. And last but not least is your learning budget. 10% on learning. Okay. Your learning budget buys you success and profit insurance. So your team is what buys you freedom. Your investments in your team and tech buys you freedom. Your investments in your learning buys you success and profit insurance. Again, I can only speak on behalf of what I did. What I did was exactly this and what I've talked to the most successful business owners that I've interviewed. They've done all exactly this. Okay, this is the formula. 40% on team and tech, 20% on client acquisition, and 10% on learning. What do I mean? By that, when I scaled my business, I would do anything to learn from someone smarter than me. I was desperate to learn from someone smarter than me. I was reading so many books at the speed of light. I was attending so many masterminds workshops. I was on planes going to every major city for conventions and entrepreneurship conferences. I was doing anything I could to not be a doofus for long because I didn't know crap about business. The faster I spent time in rooms of people who did understand business, the faster I picked it up. Just like a new language, I immersed myself. I didn't just take courses in the privacy of my own home to try to learn Spanish. No, I threw myself in the culture to where I had to speak Spanish every single minute of every single day. Right? That's how I learned business. I threw myself all in in the business. I had no other pursuits, Nothing. No side hobbies, no side things. Literally all business. I need to learn what is gross margin? What is net margin? What are the sales and marketing channels that ah, work for me? How do I public speak? How do I do webinars? How do I do content online? How do I manage a profit and loss statement? How do I manage my financials? I didn't have the answers for this crap, so I paid money to learn from people who had those answers. Remember, I went to this workshop in Arizona and it taught me everything about finance and it was transformational. It broke down. It was a CFO of a very successful company that did hundreds of millions in revenue and broke down everything about how to run the financials of the business. I left that workshop thinking I need to go implement this immediately. And within a matter of three weeks, I had finally turned my first profit in my business from being completely unprofitable. For the first call it year or two, I wasn't making anything from the business. And ever since then I've always made a profit because I learned how to profit from that workshop. I went to sales trainings like you'd never expect. I was told when I was in high school I would never succeed at sales. I was told the same thing when I went to college by a guidance counselor and by one of my teachers that I would never succeed at sales. I wrote this book called, uh, Worry 180 which was about me overcoming my challenges with anxiety disorders. A 280 page book that I wrote. And I never released it because I didn't know how to sell or market. So I wrote this book and the day I finished the book, I didn't even know how to build a website. I didn't know how to get the word out about it. I was so freaking pissed off. Spent eight months writing this book, and I didn't know how to sell or market. So I went to my mom and I said, enough is enough. I need to finally learn how to sell. And I became obsessed. Not because I wanted to learn how to sell, not because I thought I had the skills to sell. I actually don't think I did. I don't. I still, to this day don't think I'm very good at sales. I think I'm passionate about things I believe in and people buy from that. But I don't know sales technique naturally that well at all. I had to learn it. The first thing I ever bought online that was scary expensive was a sales training course. It was $5,000. It was literally a Discover credit card, blue Discover credit card that had a $5,000 limit. And I spent, I spent all of the $5,000 on a sales training course when I started my sales job. That sales training course has made me not just like a couple thousand dollars, that course has made me millions and millions and millions of dollars. Because the beautiful thing, when you learn how to invest in your learning, you accumulate assets that can never be taken from you, ever. You accumulate assets and skills and mental frameworks and ways of doing things that you will never, ever lose. However, when you make investments in your team, you're going to hire someone, they're going to quit one day, they're not going to work out, they're going to blindside you. You'll have shit happen. You will waste money on your team. Your team is not a perpetual investment. You will buy technologies that you will waste money on. You will waste a, uh, ton of money on client acquisition. Probably the most you'll waste is on client acquisition. Testing things, running on wrong ad platforms, advertising, messaging. That doesn't work. You waste so much money, it's not even funny on client acquisition. Money you'll never get back. But here's the thing. No matter what you do, when you invest in your own knowledge, you're learning your skills, your capabilities, you never lose that. There are courses I've taken eight to 10 years ago, investing in myself, that still are a part of me today. That's how powerful this asset is. So you're damn right. I take 10% of where I want to go, and I invest it in learning. I invest it in mentors, courses, coaching programs, masterminds, things where I can get in the room and I can learn and I can uplevel myself and sharpen my skills because I know this is the ultimate asset. No one can ever take my learnings from me. In summary, please just try doing a little more reverse engineering. It's very, very important if you want to be the most fulfilled, momentous version of yourself. If you want your firm to reach its full potential, if you want your clients and your local market to see that full potential, you start with the end in mind. Please go as far out as you possibly can see. Go out 10 years. If you can, ask yourself the insane question, what would I do? What would I accomplish if I had no limits on my abilities and expand this outside the law, what other businesses would you own? What other industries would you be in? What other things do you want to do? Go 10 years out, spend the actual freaking time. Don't just listen to me blabber my lips right now, Go and actually do it. And really spend time. And spend time in that imagination and really put yourself in that 10 year time window and picture what would success look like. And then draw that back to three years and then draw that back to this year and I promise you, you will become a different person the second after you do this exercise. And once you become that different person, investing the time and the money that it takes to get to where you want to go, that stuff is way easier when you know where you're going. If you don't know where you're going, you're not going to spend the money that I just broke down. If you damn know sure where you're going, you'll spend the money and you'll spend the time because you'll see the opportunity cost of you not doing that. I'll see you in the next video. Stay great.