Was 2021 a great year, a bomb year, or something in between? Do you know? There’s only one sure fire way to tell and you guessed it, the proof is in the P&L.
Members all across the country have been submitting their most intimate financial information from 2021, and the Academy has been sitting down to review, analyze, and discover the secret stories that they tell. This annual process starts with a detailed review of a firm’s Cash Basis Profit & Loss statement, Revenue and Case Summary, as well as various other law firm data points, like the number of clients in the database. We comb through the information and consolidate it into a standardized format that lets us discover the individual firm stories, as well as the story of Academy Membership for 2021. As each new P&L gets added, characters and themes emerge. New heroes are discovered and old villains revived, and once the stories are found, the time for story telling begins.
After each P&L has been crunched, the coaches then schedule individual calls to review findings with each of the Members. We each have our own style when telling the story of your numbers. I tend to be more on the direct and straight to the point side of things. I zero in on metrics we know will either make or break profitability, like a ravenous tiger with hawk-like vision. As one of our Members might say about me, I go straight for the jugular. While all of the coaches here have a slightly different style, the story we tell is always written for us in your numbers.
The life blood and artery of revenue into the business is most often lost or gained through fees and attorney retention rate. They can either be the hero of your grand epic, or recurring monster of your tale. The other tell-tale metric is revenue per person on payroll. Being overstaffed is the vampire of profit. It can quickly drain your take home if you take your eye off of it.
I’m happy to report that, it looks like 2021 may tell a different, happier story. It may well be the year we tell the story of The Comeback Kid and we are looking forward to telling it based on the initial submissions we have been receiving.
We’ll know for sure when we do our locked doors, invite only financial database meeting, at our Spring Summit in Austin, TX. If you haven’t been to this session before, there’s nothing quite like it. To set the stage, it’s consistently remarked as one of the single most valuable sessions the Academy offers. In addition to the detailed individual analysis each participant went through with their coach, all participants receive an aggregated benchmark summary report of submissions. Think of it as the playbill for this year’s hottest production. Each character from our story will be highlighted with their stories explained. Once the curtains rise, several Members openly share and talk about the stories of their numbers with everyone in attendance. The vulnerability and transparency in this session is something special.
Regardless of your plans to participate in the financial database this year, you need to make time to listen and review the story your numbers tell. Here are a few key characters to look at:
- Fees – How does your average fee for a service (revenue divided by cases) compare to your fee schedule? If your average is lower than your fee schedule, why?
- Retention – How much money walked out the door as a result of low retention? If you retained just one more client per month, what could you do with that money?
- Expenses – Where is your money going? This is especially important with marketing. You need to have your marketing expenses allocated to be able to assess your ROI. How else would you know if you’re getting bang for your buck on that new shiny thing you tried this year?
- Staffing – Are you overstaffed, understaffed, or just right? What are your expenses? Are you paying more to your team than to yourself?
Comment below to share your 2021 story title and tell us who are your heroes and villains from last year.
Alicia Durante
Director of Member Services
American Academy of Estate Planning Attorneys, Inc.
9444 Balboa Avenue, Suite 300
San Diego, California 92123
Phone: (858) 453-2128
www.aaepa.com
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