First quarter every year my eyes go a little bleary. Anyone who knows me knows that the last thing on the planet that I am… is an ACCOUNTING PERSON! But this time of year I have a chance to look at the Profit and Loss Statements from over 60 law firms across the country and I have to say that it is one of the most interesting parts of what I do here at the Academy.
Over the past ten years or so that I have gone through the financials from these estate planning law firms, after I re-enter the information into our format, I then spend about an hour on the phone with each firm who submits to make sure I’ve interpreted their numbers properly and further discuss with them where they are in relation to the “benchmarks” of certain categories.
Once we collect, crunch and counsel… we compile all the financials into a giant spreadsheet and take off the law firm name. Every Spring at our Summit (New Orleans was just a couple weeks ago) we have a private meeting for only the attorney/firm owners who submitted financials where we distribute the spreadsheet and go through it!
For this room full of law firm leaders to look at the owner’s comp across the country, then to see what percentage of gross is spent on marketing, rent, payroll, CLE and professional growth… and how they compare… is pretty amazing. If that’s not mind-boggling enough – 5 or 6 of these attorneys take the stage and reveal which anonymous law firm on the spread sheet is theirs. They explain why their numbers are what they are, which numbers they focused on changing and what will be happening with certain numbers in the coming year… then they take questions.
Just as an FYI – we have a full report for non-Members that goes into detail about what the benchmarks for specific categories should be, feel free to ask us for it at firstname.lastname@example.org. Some of the benchmarks we’ve established are:
- Owner’s Comp should be around 40% of the gross revenue
- Gross Revenue should be OVER $130K per person on the payroll (and that counts all attorneys, owners or part timers)
- Marketing costs should likely be between 8%-12% of the gross
When your numbers are different than some of these benchmarks it opens up a great place for a conversation about what precise law firm management or legal marketing action items will have the impact you’re looking for!
Director of Member Services
American Academy of Estate Planning Attorneys, Inc.
6050 Santo Rd Ste 240
San Diego, CA 92124