Money… for lawyers, it’s a source of untold amounts of stress. This stress comes from not fully understanding the four categories of money created by a law firm and how they function together in a successful practice. As a lawyer-entrepreneur, until you really understand the function of money within the context of your practice, you’ll be haunted by money problems.
The first thing to understand is that, no matter how much of it your firm generates, money alone will never be the source of happiness or contentment. And, if you’re seeking a lifetime of happiness, contentment and fulfillment, you have to do something that’s impossible for a lot of lawyers… you have to give up the idea that you are what you do. Put another way, you have to understand that you are not your practice – it’s separate and distinct from you. If you can separate your duties as owner of your firm from the work you do as a lawyer, then you’ll have made a huge breakthrough.
As owner of your firm, your goal is not only to understand the function of money in your practice, but also to make sure that every single employee in your firm understands its function as well. I’m not talking about a superficial knowledge of your firm’s “philosophy” on how money should be handled. What I mean is that your people need to have an in-depth understanding of how every action taken by each staff member affects the profit and loss of your firm – and ultimately, their paychecks, raises and bonuses. In other words, you need to teach your people to think like owners, not like employees.
Of course, before you can teach anyone else, you need a solid understanding of your firm’s finances yourself. So, our next few blog posts will be a crash-course on the categories of money created by your firm, and how those types of money function in the day-to-day life of your practice.
President & Co-Founder
American Academy of Estate Planning Attorneys, Inc.
6050 Santo Rd., Ste. 240
San Diego, CA 92124