#175: Improve Law Firm Profitability (Tracking Your KPI’s)

Heather: ​Welcome to the Life in Law podcast. This is your host, Heather Mulder. And today we have a special guest on board to talk about how to utilize key performance indicators, also known as KPIs, to boost law firm profitability.

I am hoping to get into all of your need to know basics for getting started, beginning with budgeting, forecasting and ending with what on earth do you need to pay attention to the most? Since I am not a CPA, I am not the right person to have this conversation with alone.
I invited Kyle Smith, partner with Strata Cloud Accountants, to have that conversation with us today. Kyle is on a mission to help small and medium sized businesses, including law firms, achieve financial independence and foster a healthy work life balance for themselves and their entire organization. Welcome Kyle.

[00:01:57] Kyle: Excited to be here.

[00:01:59] Heather: Okay, so we’re going to get started with some basics. You are a fractional CFO. What exactly does that mean? What does a fractional CFO do?

[00:02:10] Kyle: Yeah, yeah, it’s a great question, the way I like to think about it. So you’ve got your accounting, your bookkeeping, and then you’ve got your compliance work, meaning like someone who’s filing taxes for the business.

The accounting and the bookkeeping, that’s backward looking. We want it to be as close to real time as possible. But it’s looking at the numbers and then assessing, analyzing them. What I do as a CFO is forward looking. So it’s all about budgeting, forecasting what’s going to happen in the next three months, six months, 12 months.

When we work with clients, we’d like to start with a three year plan. But that’s the biggest difference is that I’m looking forward with the business owner and we’re projecting out what does it look like if we grow to this range. How is that going to affect how much am I going to need to add in cost, add in headcount to support that growth? Is that growth realistic for me in the hours that I’m spending in the business?

Those are the type of questions that we answer as CFO and that I answer as CFO. And we go as short as next day, the next week when it comes to cash flow. So we work with businesses, they might not know what their cash flow was at all before. And we’ll set up where we do a rolling 13 week forecast where they can start getting a very good view into what’s it look like the next month, two months, three months, and then we’ll combine that with a long term forecast and just make sure we’re on pace.

So that’s the biggest thing that we do is forward looking. And then we measure against our targets and pivot if we need to and make sure that we’re hitting our business goals.

[00:03:45] Heather: So I see that as really a long term partnership for sustainable growth. Sustainability in the business, not so much what we tend to think of when it comes to bookkeepers and accountants who are just there to kind of like process the information and a real time. Here’s what’s already happened, here’s where you are today, is that correct?

[00:04:06] Kyle: That’s exactly it. So they work in partnership, but I can’t do my job looking forward. And the business owner, we can’t work together to make decisions about the business if the numbers aren’t accurate.

So you have to have a good base, you have to have a good accountant and bookkeeper that’s classifying things and categorizing things correctly and as soon as possible so we can get as close to real time as possible. And then we can start making forward looking decisions about the business. So they have to work together.

[00:04:31] Heather: Okay, so really another basic question. What is the difference between a bookkeeper and an accountant and do law firms need both?

[00:04:39] Kyle: They’re kind of interchangeable. What you would need is a full charge bookkeeper, which is really key for us and what we do. A full charge bookkeeper is doing the bookkeeping, but they’re also doing a balance sheet reconciliation, which is a scary word, but basically it’s saying, you know, bookkeeping is great, but it doesn’t really mean anything if they’re just bookkeeping the transactions and then going on with their day.

We need to make sure that what actually hit the bank and what actually hit those credit cards is one to one with what we’re bookkeeping in the accounting file and that they match and we’ve got all of our loans correctly recognized, all of those kind of nuts and bolts. They need to be in the right spot because then we can turn around and quickly make decisions about the business. But then we can also take that to investors, to banks if we want to get a loan or a line of credit and we’ll have accurate financials and be able to answer questions about that.

So a regular bookkeeper is basically just classifying transactions. A full charge bookkeeper and an accountant, I kind of would interchange those terms, which basically means you’re bookkeeping, but you’re also reconciling the banks and making sure that the financials are accurate when we’re talking about a balance sheet or an income statement.

And that’s the biggest difference. That’s what you’re going to want because otherwise your tax accountant is going to do all that work at the end of the year anyways and they’re going to charge a lot for that. And you might be behind the eight ball there. So it’s important to do it in real time and get a full charge bookkeeper, which I interchange with an accountant as well. But the last thing I’ll say is an accountant can also do other admin things like accounts receivable management, accounts payable management, that type of thing beyond just the bookkeeping as well.

[00:06:18] Heather: Okay. And when somebody is starting out right, starting their own law firm, where would you suggest they get started? Who do they need on their team? Externally? Obviously they’re not hiring them in house. But who. What I would assume at least a bookkeeper, probably an accountant or the full. So what you were saying, kind of the combo. Right. Anything else?

[00:06:43] Kyle: The big one – and I know law firms on the gamut, so it’s just with people that I work with, the law firms that we work with – the biggest one I’ve seen is exactly what you said. But then quickly, as fast as possible, find someone that is in charge of the receivables, the billing, and is following up, staying up to date because that can make a huge difference.

You can bring your payables down, you know, two weeks, maybe 21 days if, maybe more if you’re in really bad shape on that side. So categorize, prioritize the income generating piece, the cash generating piece. So I would get someone to own those receivables as quickly as possible as well, in addition to doing the bookkeeping.

And once again, they work in concert because you have accurate books. That means you have an accurate receivable statement. And then you can be following up with those people that owe in a friendly but persistent manner and make sure that you’re keeping that balance manageable.

[00:07:37] Heather: Yeah, I’m going to second that because I think most lawyers I know are terrible at collections. They kind of think of collections as well, I need to get my time in and the bill out.

There’s a lot more to it. First off, you want to make sure the bill goes out in a timely manner. The longer you wait, the less likely you are get to get paid and paid in full.

Secondly, you need to have a system around how to get it out quickly and then also a follow up system, whether that’s somebody internal or somebody external for following up with people. Because the fact of the matter is people get busy, they forget sometimes your clients are having cashflow issues and you don’t know, you really need to get aware of that as quickly as possible because there are issues around that that you then need to safeguard yourself on.

And so you need a system for that and you need somebody who actually does it so that you can get paid. Because this idea of why to send out the bill monthly and then it sits there for several months and then maybe I’ll follow up because, oh, they haven’t paid and it’s been three months. That’s ridiculous. And I see that a lot in both my law firm clients and then also my big firm clients with their own books. And I think regardless of where you are, whether you’re in a big firm, medium sized firm, or you have your own law firm getting behind, getting the bill out and then getting it collected as quickly as possible.

Huge from a cash flow standpoint and huge from a collection standpoint because it really does impact your overall collections.

[00:09:12] Kyle: Yeah, I would add two points, because I agree wholeheartedly. One, like you said, if you got the bill out, you’re saying that that’s revenue, and I’m done. When you’re really not done, if you never collect on that revenue, you don’t have the revenue. You have to have the cash.

So you have to have a mechanism to make sure that you’re getting those payments in a timely manner. And if you can, that’s cash in your pocket. Most people think that, oh, it’s just receivables, but if you never got paid on any of them, you would have no cash. So by that lot, you need to make sure that all of them are getting in as fast as possible.

And the second thing is this. This is where you can get the biggest return on your investment in terms of having someone that can do this work, because that person is not going to be paid at an executive level, necessarily to be handling the receivables. But if you get a good person and you have a good system, they can be generating incredible amount of revenue. Not revenue, but cash for the firm for what they’re getting paid.

So if I’m looking at it from a CFO perspective, I recommend this all the time with my clients. Like, they’re saying, hey, should I have a person that’s dedicated to this? And most times I’m looking at, I’m saying, absolutely, because your receivables are here. I think we can get them to here.

And you need to have a person that’s looking at this every day. And we work with a client where maybe 10% of our time is on the bookkeeping. The other 90% is working with the partners on bills, rebills, updates, final bills, sending it out, the whole receivables process, getting the bill finished and then getting the bill sent out and then following up on it is 90% of our time. And it should be, because that’s where the cash is going to the firm, and that’s where you got to have cash to have a business. So it, in that case, that’s where we spend the majority of our time is working on that receivable cycle.

[00:10:56] Heather: Okay, great. Yeah. And look, if you have a book, you have a business, regardless of where you are, and you need to start thinking of yourself as a business owner. You own a business, you have a business. It’s time to get comfortable with that fact and start getting comfortable with the numbers and how to budget and forecast and then how to pay attention to what is really coming in. Where are you and what tweaks do you need to make along the way?

So that’s a good segue into kind of that next step. So from a starting point you probably need clear objectives, clear goals, clear targets, however you want to define it. I saw something on your website that I thought was really spot on in all honesty and it talks about the silent killer that plagues many small and medium sized businesses and that is not having very good goals or objectives.

So obviously your starting point is having that. Tell me a little bit more about that and also how you go about recommending putting a good goal or objective together. Like how do, what do they need to think about? How do they even come up with that?

[00:12:03] Kyle: Yeah, I like the analogy of chopping down the biggest tree first. So it doesn’t – just like we talked about with receivables – it doesn’t make sense to spend time on something that’s not going to give you the biggest bang for the buck.

So we like to start with personal goals of the business owner or the executive team and work backward from there. So the example I like to give is if a client is of ours is looking to grow 50% year over year, what does that mean for you? And I also want to maintain my profitability as a percentage of sales, for instance.

We would immediately say that may not be possible because you’re going to have to have an infrastructure to build up 50% of the revenue that you’re looking to grow. So maybe you’re going to have to sacrifice on the bottom line and here’s what that might look like. Or I’m willing to work an extra 20 hours a week and I, and that’s what I want to do. And we can say okay, that’s going to be challenging, but here’s what it would look like in that case.

So one is get the goals aligned with the business owner and then it’s really starting simple. So a lot of people throw up their hands because I’m like, they’ll say I don’t have enough time for an entire budget for the year. But just start with revenue and take what you did last year month to month. If there’s a seasonality or we know that there’s, you know, you have a bunch of big payouts that are coming that are, you’re sitting on. You can account for those, but build out your revenue for the next 12 months and then just start there because if you look at that and then you just compared your revenue from the past Year to the current year, you’d be doing something, you’d be taking a huge step in assessing what’s going on with the business.

Because then you can start asking questions, why were we down 20% from last year? Why were we up? And then you can start making those decisions and that kind of builds it out. So to me, it’s a step by step approach. Don’t get overwhelmed is what I would tell people.
Just take the first step of projecting out your revenue as an initial goal. If you were looking to build a budget for the next 12 months and then that’s something that you can track against. Because that’s what we see is that there’s no ability to track. People throw up their hands and say, we’re done. Just pick one thing, pick the most important thing, track that on a month to month basis as a start.

[00:14:16] Heather: So, okay, I’m hearing a couple of things I want to break down a little bit because let me just say I help some of my clients put together business plans.

Thankfully, when I’m doing this, it’s usually small law firm owners and they have somebody like you also working with them, which is very helpful.

But they have such trouble with projecting out and budgeting out and looking forward and forecasting. Right. And you always, I’m sure you hear these reasons of, well, I don’t have control. You never know. It’s seasonal, all these things.

I like what you’re saying here. Like step back and look at your past and see what you’ve done on a month to month basis. And then see, okay, well how do you increase it from there, right? Like, what’s a reasonable increase? And look at the seasonality. And look at like, even if you have to look at the past few years, right?

I do that in my business. So like I wanted a 25% growth this year. And so when I was looking at, okay, is that realistic though, right? So when I, I think what you’re even saying is you come up with this, but then you have to step back and go, okay, let’s look at where we actually are, where we’ve been and figure out then, is that realistic? What else is that going to take? Does that mean more resources?

Does that mean I have to buy a new software? Does that mean I have to hire new people? Those are additional expenses, so what? So then what’s the cost of that?

So you start to break it down and you also look like month to month. Okay, what does that mean? And like for me, I’m very seasonal so most people hire me in the first quarter and last four months of the year.

I do have clients in between, but the vast majority of my money comes in those two times. That’s when lawyers are wanting to hire a business coach. Right. And so I had to look at, okay, where is that money coming from? When is that coming in, how is that coming in? How do I plan around that so that you’re shaking your head.

So, yes, this is kind of how you step back and you look at it. Did you also say, I’m not sure, but I think you said this. So let me clear this. So if you have a firm and it has, let’s say it’s got 15 people in the firm, five of them are partners and the business has a goal to increase revenues by 25% or whatever it is for the next year. Do you make them step back and go, okay, let’s look individually from partner to partner first to see if that’s possible. And like, because it sounds like you have to step back and look at each individual partner from that level first and then you can see is that realistic from a perspective of the firm?

[00:16:53] Kyle: Yeah. In that case, I love having basically an all hands partner meeting where we’re doing the planning session and we would address that. And you know, to your point, at a point of, hey, there’s a ton of variability, we get to push that pushback all the time. There’s a lot of variability. We don’t know what we’re going to do. We have no idea.

Okay, that’s a given. That’s for everybody. Let’s make a plan. The other people aren’t making a plan. Let’s make a plan and then measure against it and then we can know what we’re doing.

So for instance, if we make a plan with a client three or four months in, have a month that’s 20% less than they thought on the revenue side. To keep that example, then they’re hustling and saying, hey, we need to get some business. We’re taking a trip overseas because our, a lot of our clients are overseas. And so we need to have some face time there, see if we can make up this gap.

And they’re doing that with that knowledge, you know, where another firm might take them another one or two months and then they’re behind the eight ball and then they’ve lost that two months of biz dev and it could make a big, big difference at the end of the year in terms of revenue.

So the point was that you, that things might not go to plan. But then how do you keep – so you keep measuring month to month and then you can adjust. So part of it is knowing that it’s not going to go to plan. But that’s the biggest reason for actually doing the plan because then you can find out if you’re off instead of saying, well, I can’t control anything, so I’m done.

You can control some things and you certainly can control. If you’re measuring, you can make adjustments based on what you’re seeing from a month to month basis. So that’s the biggest thing that I preach is consistency. Make the plan knowing it’s not going to work, but you can adjust it. We adjust our forecasts and plans all the time, you know, even mid month, because it’s going to come up that change things around. And the whole idea is that, well, that doesn’t mean it’s time to throw up your hands. That’s where, hey, now we can get an advantage because we’re measuring this and we can make adjustments.

[00:18:45] Heather: Okay, that’s such an important point that I think every lawyer out there needs to hear is this idea, this mindset of just because you’ve created a plan doesn’t mean everything’s going to go according to plan. And in fact, you expect it won’t. It’s going to be rare that you are actually going to meet the exact objective every single month.

It doesn’t mean the plan is worthless. It doesn’t mean it wasn’t worthwhile. What it means is you have better data and information in which to act upon so that you can then meet and then exceed the plan over time. But without the plan and without measuring it like over time, you can’t make those tweaks.

[00:19:25] Speaker A: Absolutely. And this is across industry, but I think it holds true almost every time. Sometimes we see it, and I hope this happens every time. We’ll blow the plan out of the water. In terms of working with a client, they’ll blow the plant out of the water on the revenue side.

And if you’re not consistently measuring because you want to measure when it’s going well and you want to measure when it’s going bad, when it’s going bad. I think everybody’s ready to measure. Hey, let’s measure. Make sure that we’re cutting the costs where we can and being as tight as we can be.

I see it on the other side though, when it goes way over and we’re doing great, we’re 2xing our revenue goals. All of a sudden it gets a lot looser on the cost side. And it’s, you know, it’s a lot. When you’re, you feel like you’re successful, that part kind of goes away.
So that’s why it’s important to always plan to and be consistent. Because high or low, even when you’re blowing the revenue budget out of the water, you still want to see are you hitting your cost targets and staying as tight as you can be there. Because a lot of times it’s easier to get laxed when you’re blowing the budget out of the water on that side.

So either way, it’s super important. It really keeps you grounded on a month to month basis. And you know what I preach with clients is spend less than 30 minutes if you have to, but you got to do it at least once a month, look at your numbers and, and then adjust for those very reasons to kind of keep you grounded, keep you anchored, whichever way it’s going, if it’s going worse or better.

[00:20:43] Heather: And that’s an important point that will take us in a minute into the KPIs and what to, what to really pay attention to and measure and why. But collections is not enough. Like it’s not just about how much do you collect. Right? You’re making that point.

And I think a lot of times lawyers don’t do the best job of looking at, but what are also the expenses, what are the costs of. And then when we do really well, we tend to, oh, we’ll splurge or we have extra money and then we get disappointed at the end of the year when we don’t actually meet or just barely meet our goal, knowing that we actually killed it on the revenue side, right on the collection side.

So let’s go a little bit into like what are the things that you do measure, how do you measure for actual profitability and what do you need to pay attention to and why?

[00:21:35] Kyle: So one, there’s, like I said before, there’s a lot of variability within, you know, legal industry across different types of law, different types of clients. So what I’ll say is I’ll keep it at a high level. What we like to measure is revenue, gross profit, percentage net income, and then the difference between net income and net cash flow. And that’s what’s critical for us.

Just to go down to the last one. If you’re measuring net income versus net cash flow, that seems like an intimidating metric for a non accountant. But to me that’s one of the most important KPIs, and all you’re doing is looking at the bottom of your profit and loss statement, looking at that net income number on a monthly basis, for instance, and then going to a statement of cash flows and looking at that bottom number.

So you don’t need to know how to understand a statement of cash flows. It’s an incredibly complicated financial statement. But if you go to the very bottom, it shows you your net cash in or cash out when you run that, which I think is super important because you want to know your bottom line cash and how that compares to your actual net income if you’re on an accrual basis looking at your profit and loss statement.

So, for instance, you could have a positive net income. To go back to this receivables example, you could have a positive net income. You could even beat your budgeted net income and feel like you’re doing a great job. But if you look at net cash flow, maybe it’s break even or negative, and that would be a huge question of what’s going on.

And in that case, a lot of times when I’m looking at the books, I’ll see that the receivables balance is continuing to grow month over month over month. And we’ve got a serious issue that we need to address because once again, you’re not getting the actual cash into the business.

And that’s a general example. But that’s why it’s critical to measure. Because you want to be able to see, even if you don’t know anything about accounting or finance, if you saw that. That’s a red flag as a business owner, to me, “Hey, I’m a positive net income, but we lost cash in the business.”

Why? And make sure I understand, because it can be all legitimate reasons on why maybe that month you didn’t have positive net cash flow. There could have been certain things that happened in the business that you needed to outlay cash and it caused you to have a negative cash flow.

But you need to understand why. Because if you don’t, there could be a systemic issue in the business that’s compounding month to month to month, and you’re not going to be able to see what it is if you’re not measuring that.

So that to me is one of the most important metrics is look at your bottom line net income and look at your net cash flow and make sure that there’s not a big deviation or there’s a growing difference from month to month.

[00:24:05] Heather: Interesting. Okay. And then what else, because you mentioned several others.

[00:24:09] Kyle: Yeah. So revenue, we talked about gross profit percentage. And this is once again, this is highly variable. But I think it’s important to measure gross profit percentage.

And that basically as an example, you have your revenue coming in and then we work with a firm where their gross profit, their cost that make up gross profit is their contractors. So looking at that from a month to month basis, just making sure that that number is pretty consistent.

Because if you’re taking in the revenue, the work to provide the revenue should be consistent. So if there’s a big deviation one way or the other, we should be able to troubleshoot and find out why.

So for instance, we had one month where their gross profit, which means their revenue minus their direct cost, in this case that would be their contractors, contract lawyers that do work for their clients. Their gross profit shot up from one month to the next. And I knew that that probably wasn’t legitimate.

And so we were able to ask that question and find out, okay, yeah, we missed. We had somebody that didn’t turn in their billing statement for that month.

And so that would have been a big hit. Once again, if you’re just looking at the numbers, you’d see a bottom line that looks really profitable and you wouldn’t be able to troubleshoot and say, “Hey, this person actually needs to turn in their numbers.”

And next month they would have gotten hit with a big negative and they might have made a decision based on the profitability of that prior month where they didn’t have all their costs in.

[00:25:31] Heather: Right.

[00:25:32] Kyle: And it could have come back to bite them in the future months. So it’s really, once again, it’s really important to look at for us: Revenue, gross profit percentage and then looking at net income versus cash. And you can answer a lot of questions because you’re going from the top of a profit loss statement to the very bottom if you just look at those three.

[00:25:49] Heather: Metrics alone, I would think also, and I think you kind of made this point earlier, but just to make sure people are following. So for example, I have a lot of clients who have small law offices and they can’t always service everything that comes in. So they have contracts. Right. They have a lot of others, like referral based lawyers where they have a contract system with one another to handle things that are either overflow work or sometimes specialized work that they just don’t do.

And if you have an arrangement like that, often the way it works is the lawyer works and bills you. Right. And yes, you pass it through and you make money off of it often, but you don’t necessarily get paid by your client as quickly as how you’re supposed to be paying that contract lawyer that you owe money to now.

So one of these things that I think looking at these numbers will very clearly show you is, okay, every month I’m paying about X amount to these people that I’m needing to contract out on. But when it comes to this work and this work, I’m not actually collecting on that. You know, I’m collecting that every 90 days, not within 30. And I’ve got to pay this person within 30 of them billing me.

And so there’s this disconnect and it shows you where you need to really double down your efforts on collections and who with and why. And if you don’t, then you’re always kind of behind.

[00:27:15] Kyle: Yeah, absolutely. And it gets a little bit technical, but I’m just making this point to show it doesn’t matter how you’re set up, you just need to measure it.

If you’re on an accrual basis and you do what you just said, that means you’re matching your revenue regardless of when you collect on it, with that contractor amount. And you can usually get a more consistent net income, gross profit, month to month, if you’re accounting for it like that. But now you’re separated from cash. So you need to be aware of that if you’re set up on an accrual basis

And if you’re a cash basis, then you’re going to see more variability, but you’re going to know cash is cash. So if you didn’t collect it, it’s not going to count as revenue in that month. Your revenue is only with the cash you have in.

So in that case you’re going to see a lot more variability to your point in your gross profit or your net income, because there could be a big difference when you are paying the contractor out and when you actually collect, especially if you have like big clients and you get big chunks of money maybe at desperate times of the year.

So it’s just important to know that. And once again, ask those questions. If you have an accounting team, ask the accounting team. If it’s you, ask those questions and there’s a lot of resources to find out the answer.

But the idea is that reviewing those numbers, you know, just 30 minutes a month, those should, if you’re looking at those metrics we talked about, those questions should come up and don’t be scared of them. See if you can get to the bottom of them and it’ll make a huge difference in the long run.

[00:28:38] Heather: Yeah, I think the biggest lesson here is it’s not that hard to follow them from a big picture level.
You do need to understand them. Even if you have people on the outside doing this work, you need to understand them because it informs the decisions you need to be making for your business.

And thirdly, it’s not really as complicated as we all assume. It sounds complicated because we use terms that we don’t tend to use in the legal world. But once you understand them and you’re just focusing on these basics, then you can at least understand what’s basically going on in your business so that you can make better decisions around it and it helps you.

The thing I notice is I think a lot of lawyers tend to think, well, if I just work really hard and just focus on collections, everything will work out. Right. And I mean, it can work that way for a little while, but usually when you grow and you get bigger, it doesn’t continue to stay that way because you’re going to have more costs.

And you need to really gain this understanding so that you can really understand the costs, why the costs, the reasoning behind them, and then whether or not you need to change some of that. Right. What does and does not make sense as you grow. Because you do have to take on, whether it’s technology and software, whether it’s people, internal and external, you have to take on more costs of some sort to support you as you grow your practice.

[00:30:04] Kyle: Yeah, absolutely. And that’s why it’s awesome to have a bookkeeping team, a CFO. So I like questions.
If you have somebody on your team that’s not asking those questions, that’s… Or you’re not asking them, or the CFO or your accounting team doesn’t like to answer those questions, that’s not the right fit for you as a business owner.

In my opinion, you should be asking questions. There’s no accountant in the world that expects a business owner to be an accounting expert. I’m excited if that’s the case.

But the books, like you said, the whole point of accounting is that there’s nowhere to hide when it comes to the money. So you should be asking questions. There’s no stupid questions you should be asking because a lot of the time you’re seeing something that the accountant or the CFO might have missed and we’ve got to dig in and find out what’s going on.

So all that’s the key. Enough to be dangerous. You can be dangerous in accounting just by answering questions and a quick 30 seconds when you’re looking at the two big statements, when you’re talking about accounting is your profit and loss statement and your balance sheet.

That’s what you’re probably going to be going over if you’re looking at the numbers with your CFO or accountant or if you’re looking at it yourself. A profit and loss statement is just your money in, money out. That’s grossly oversimplified, but it’s really how you did from one point to the next. You know, the start of the month to the end of the month.

And the balance sheet is just what you have, which could be cash and other things and how you got it. You either earned it or you got a loan or you have equity. That’s it.

That’s what I like to tell people. If you can remember those things, profit and loss is just how you did as a business operationally. Did you make money or lose money? The balance sheet is just what I have as a business. And how’d the business get it?

And if you remember to think of it like that, the rest of it is just ask questions on anything you don’t understand. And then get an expert team to make sure. As you’re growing, get an expert team to make sure those questions can get answered.

[00:31:57] Heather: I think that’s actually a good place to kind of end this conversation. But before I let you go, I want you, if there’s anything else we haven’t covered or that you’d like to add or that you think lawyers specifically should know, what is your best kind of advice that you would leave them with?

[00:32:15] Kyle: Oh, we touched on it and this is kind of broad, but I believe in it. Just don’t throw up your hands, don’t stick your head in the sand.

Look at the numbers regularly at least once a month and ask questions.

[00:32:28] Heather: Absolutely. So why don’t you tell people where they can find you online should they be interested in learning more about you and the services your company provides?

[00:32:37] Kyle: Sure. So we’ll have a special URL. We actually have a downloadable KPI tracker if people want to get started. And I’ll give that to you, Heather, and you can put it in the notes.

But our website is stratacloudaccountants.com so once again, stratacloud accountants with an S at the end dot com. It’s got all of our resources there as well and talks more detail about what we do and how we’re valuable.

[00:33:04] Heather: Yeah. And you’ve got a pretty good blog. I flip through some of it with some really great information on there too. And I will definitely put a link to that resource because I think everybody should get it and understand it.

And I’ll just add even those of you who are in private practice in a larger firm and you’re not making these bigger picture decisions for the firm, you need to understand this stuff too. You need to understand the economics of the business of law and how it works. It will help you be a better partner in the long term.

And you never know, you may just go out on your own someday and you definitely will want to understand it even more so then.
Well, thank you so much for joining us. This was wonderful.

[00:33:43] Kyle: It was awesome to talk to you, Heather.