Listen in on Seth and Jay discussing how they encourage their teams to cross sell and generate referrals, and learn about some missteps Jay made when trying to develop a firm-wide program for referral growth. They talk about how incentives for referrals can work and what makes them more successful in the long run. With Covid-19, new methods of customer acquisition are being made to successfully find people that can fit with your firm. Referrals for lawyers are especially apparent and can be useful when people come to you that need an attorney that is in a different specialization than you. Experience when being a lawyer is very important, so lawyers refer customers to other specialized attorneys all the time to best serve them. Making this a part of the firm’s DNA is the best way to generate new business and partnerships that can serve you in the long-run.
Hello, hello, and welcome to another edition of Maximum Growth Live. I’m one of your hosts, Jay Ruane, CEO of FirmFlex, your Social Media Marketing Agency for lawyers, as well as managing partner of Ruane Attorneys, a civil rights and criminal defense firm here in Connecticut. With me, as always, down there in DC, my man, Seth Price, is one of the founders of Price Benowitz, DC, Maryland, South Carolina, Virginia, and soon to be dominating the East Coast, as well as the founder, I guess, as well, of BluShark Digital, SEO for law firms, one of my vendors that I use. So, as always, Seth, how’s your week going?
Going well, challenges, cold at night, like having to spend last winter in Florida, I really enjoyed it, invigorated me, I am finding the cold is getting me down, and it’s not… I, you know, especially I’m a social person, I can’t visit people because of COVID. It’s cold, I’m stuck inside, the kids are annoying, you know, it’s, you know, a part of me, like I really enjoy the Zoom world where I could be sitting somewhere else and, you know, I got to figure out lifestyle wise, is there a way to make it so that you can, you don’t need to be freezing, but with kids in school, it makes it harder.
Yeah, I bet. You know, it’s funny, I was talking to somebody yesterday, and they’re like, so what’s your plan? Where are you going? And I said, well, I’m stuck here for another 12 years, or 11 years, you know, with my kids; my youngest is in kindergarten. I said, I’m not going anywhere, but I got to figure out a way because, I tell you right now, I used to love the cold. I can’t stand it, I mean, and I’m going, my plan is to go skiing, take the kids up to Vermont to the place I bought pre COVID that I haven’t been able to be back to, since then. And they’re talking about a high of zero, and a low of negative 27 on the mountain and I’m thinking, I’m not going skiing in that. Hell, I’m not even getting in the hot tub when it’s that cold.
So, I’ll tell you, this is my goal. And I see other friends of ours in our extended circle doing some traveling with family. It’s a long way to wait, but, you know, when the boys are out of high school, and they’re in college, there’s going to be a moment where we have one kid at home, which for you seems like, you know, what can…
It’s forever away.
And she won’t be in high school. Now, she’s probably gonna have such a social circle that she won’t go for this, but I would like nothing better than to travel for a year, you know, let the kids go to college, you know, because it’s so, getting them out of high school, it’s not easy, but figuring something out where you can really pull the rose and travel the world.
Yeah, I mean, that would be fantastic, is a long, long way off for me but that’s the life that I’ve chosen. I’m sort of stuck with it, but I do like the idea of being able to travel and I think that opens up something to kids. And that’s one of the reasons why we all want to grow our firms and sort of live the life that you’ve imagined. And this is something that I’m going to tease, because I’m in therapy, I guess, with, I’m talking to somebody about it, but I’m at a point now where I’ve almost sort of achieved my vision, and I don’t know where to go next. And so, I’m going to be working on that, I’m going to be very vocal about it and bear my soul here over the next couple of months as we, as I work on figuring out what’s the next vision for me, because, you know, I’m stuck at home, so, it’s not like I can travel, but I’m not marginalized. But I’m working my way out of the business, and so, it’s gonna be a challenging time for me, but one of the things that comes up quite frequently and in my firm of 14 lawyers, and I’m sure in your firm, is the idea of lawyers referring each other business. And, you know, I’ve got to think about that as something that matters, you know, we had a case essentially fall through our fingertips recently where it was a bad stop and the case got dismissed, after some good lawyering by one of my lawyers that works up at the other end of the state, and he didn’t think to refer that case to our civil rights lawyer in our office. Client went out on their own and hired somebody who’s now got a very viable civil rights case for the bad stop. And I want to know how you guys, at a firm like Price Benowitz that’s got the trust and estates and the criminal, and the family law, how are you guys handling it and how do you incentivize it?
Well, this is, so we’re, my fundamental business principle, talked about before on the show, is a 25-25-50 setup for the non PI world, and the idea being that if you have a criminal lawyer or family lawyer, in theory, you can pay 25 cents on the dollar for origination, 25 cents on the dollar for the work done, 50% if they do both, which is very aggressive, but with volume that works. And that’s actually something I struggle with, because my deal works well when people are doing something, which I would call breaking their base, when they’re doing numbers beyond whatever their drawers that we give them, and as they get to numbers that approach 500,000 a year, like 40 a month is what I’m finding. These numbers work well, because even if they take a handful of cases at 50 cents on the dollar, even with support, that’s not as profitable, but it works nicely, and it retains people. We have like a dozen people that are approaching, or at or above 10 years. I mean, they would not be with us, these are senior badass lawyers, would not be staying with us for that type of tenure if it was not economically in their best interest, the same time worrying about margin. So, to me, I have the economic piece in there, where, in theory, and on PI it’s even better because there, you have a third to play with in our market. That’s sort of how people look at it, so that we can bonus and we can really incentivize people on it. But I’m really, you know, there, I am torn in the sense that I would expect, and this is true for everybody, there’s nobody out there ¨Oh, my God, my firms do amazing¨, I shouldn’t say that, there’s some people that I think do really well with staff and they’re getting staff to get cases. But I have not been able to get that philosophy pushed down where it’s part of the culture, and I get it, I hear stories of firms that do it, particularly PI firms, where it’s an expectation, it’s part of it, but I’ve seen stuff as hard. Over the years, I had a moment where my intake team, one of the co-managers of the team thought that asking for reviews was slimy, which meant all of a sudden nothing happened. So, if you have lawyers that are used to going out and pounding the pavement, and going to happy hours, one of our few lawyers that does this asked me to sponsor his college happy hour the other night, was $500, it was the night, the earlier in the evening of one of our office parties, and I said sure, and he goes out and he brings, so like, you and I do that, right? You can’t not go to a hockey game and take a shot at bringing something back. The question is, is there any way to scale? Incentives are one thing, but I think this is beyond money, making it part of the firm DNA.
Yeah, you know, this is a real challenge. It’s been a challenge for me. I mean, I have lamented to you over the years and often said, I’d say pretty much to anybody that’d listen, that it’s almost impossible to get associates to do that type of stuff, like generating business. And I think it comes down to really sort of, it’s going to be in the person or it’s not, like, you know, sort of the whole, you know, you can’t teach hungry, like Morgan said, and, but I think there’s some things that you can do to sort of make it part of the person that you are recruiting, number one. So you, I think maybe you start talking about some of those things in your job postings, where you talk about how this is the kind of job where you’re gonna, you know, we’re gonna be asking you to go out, and there’s a lot of lawyers that will say “Yeah, I’m not applying for that job because I won’t do that.”
Yeah, hold on. Timeout. Okay, look, I know we, one of our next topics is talking about how to put an ad that gets the right people in and retention, all that. But when we want to find a lawyer, we’re so freaking desperate to find somebody who subsequently knows what they’re doing, isn’t going to steal from you, hasn’t jumped jobs three times, has good… There’s so many pieces. That’s why I’ve always looked back and some of the, sort of people who spoke from stage and talked about having for a resume, for a job, having a resume, they fill out, they type something in single space, they put it in a pink envelope, they FedEx it to you. I’m like, yeah, there’s one story of that happening once, I can’t even find somebody with a massive thing. Are you saying no, because you do it this way, you’re getting a different type? So, I’m…
I’m with you, I think those, you know, pink envelopes, FedEx… using digital…I think that’s crap.
This is part of it, which is, we can say as part of our culture. Look, you could say that we care about mental health, you can say these different things, but I also am cynical because I go back to my, I relate much of my business to dating, I talk about it in house, whether it’s in sales or…
Which is amazing because you basically had one girlfriend your whole life and married her.
I got married pretty late, to be fair, but I had enough bad dates before I got married. But that, you know, it’s sort of like in sales, you don’t ask somebody to marry you with the first date at the bar, you take them out for dinner, you create a relationship, there are multiple touches, and that the more you do that, the more of a relationship you have. There are 1000 different times a day at work where I use the dating analogy, and so, I’m sitting there where if you look at every, I was a JD person, you may have been a match or some other one back in the day…
After you’re done, I’m gonna tell you one of my worst match stories.
Well, I got plenty of bad, bad JD. One who cried about rent control, and I’ve had a bunch of bad ones, but the thing about it was, if you read everybody’s profile, this was before you could just swipe world like right now, I put, I posted the other day on Facebook that my kids have never heard of MTV when I was playing Video Killed the Radio Star, so, my mind is sort of blown. But in every profile, every woman that I was selected, loved her family, was everything to her, and they love to travel. And then, when I got on my date back in the Manhattan, back in the day, they hated everybody in their family and they never left their Manhattan apartment. So, we say things, like, and to me, that’s why I sort of, you can talk about these things in an ad, but it really is the cultural DNA that matters. And yes, you can’t teach hungry, I get that, but I don’t need hungry, I would just like somebody who is at least thinking in that direction, you know, on our annual, I did a estate meeting for the whole firm, it was great, and I said, hey, once or twice a month, throw something business into a social media post. I said, do you think anybody’s actually going to do it? Maybe…but the idea is, is there, like, you’re a very, like, lovable rate, you know, sort of, epi center of a firm, are there things that we can do? It, part of it was, going back in person, you could at least go and glad hand and slap people and that, half the people aren’t in the office anymore, more than half, two thirds. So, what can you do? And I think, again, this dovetails to our next conversation about the DNA of a firm, and how do you make it special for somebody who wants to stay when somebody wants to stay, in theory, they’re out there advocating for people to come in, versus a JOB, where I want to get through the day and get my paycheck.
Right. So, this is really interesting. Okay, so, I’m gonna give you my answer, and then I’ll tell you about one of my match horror stories. So, there’s a little tease for everybody that’s out there, that’s watching or listening. So, I thought, you know, gamification is huge, and if I make it a game, then I’m going to, and I tie their financial rewards to this game, people will apply themselves. And so, I don’t know, like five or six years ago, I created this rubric, this spreadsheet where, you know, if you published an article in a local magazine…
I remember thinking, we talked about this, or some precursor…
I mean, we’ve definitely talked about it. If you know, if you sent out note cards to referral sources, everything you could get points, and the minute you hit 100 points, you get a guaranteed raise, you know, and so it was set up so that you can make a 12% a year raise, which is really unheard of, you know, in the most part, and everyone said, oh, this is great. I’m going to do it. And then, you know, they each accomplished, like five or seven points, and then they hit it, the first thing, and I was like, I hit my 100 in three weeks, where are you guys at? And I was like, and I just realized, I’m naturally going to do all these things and they are not, it’s just not in their personality, which is why I’m, my name is on the firm door and their names aren’t…
Andrew Finkelstein would tell us to shut up and just advertise more, bring the cases in and let them do their freaking work. They’ll bring in what they bring in, but they’re not going to be motivated beyond it, that would be his genius. You know, look, I’m guilty of this, we had a contest, I don’t think, I think the people looked at it, thought it was bullshit, and we never looked at it enough to show that they were actually right. Like, hey, whoever does the most things in this category gets a trip. It was sitting on our frickin website, you know… and like, we’re sitting there, where we’re not like, we’re not even following up on it but it’s so demoralizing because it’s just not happening, you know, there’s one on one mentoring, but then you’re sort of like, you’re the commodity. You know, I almost wish there was SAS base, like the 15Fives of business development, where somebody could, like, do touches on reminding you ¨hey, have you tried this today?¨ That we may just have…
Hey, we may have our next thing, you know, we could turn that into finalize and say ¨Hey, what did you do today?¨. That would be something that we should look into… or do this today…
Right. And it’s like, because, look, as that original finalize it when I tested it, it just got annoying in my text messages because it was like, you know, I either did it or didn’t do it, or whatever. But the idea being, if there was some way that it became accountability, let’s talk to somebody about coaches, I really would, just cold weather and with real things. At BluShark very, very well, systematize, and finally a person, I have more breathing room. And now, I’m sort of, like, now I need the motivation. I know that’s crazy, but like I’m sitting there without some of that stuff, I want to let people do their job and not get into the weeds, so I’m struggling with that, but it’s almost like, I think that what we’re seeing here is, unless there is a system where, I got to talk to you about this, how can we even pretend to motivate and remind? Like, this week, you get, we don’t take Ubers as much as we did a few months ago, like we were a couple years ago, but like, what are the touch points? How are they, not that up business cards is the be all end all, when you do that, it triggers something in your mind. Oh, that’s business development? Oh, maybe, rather than I’m just getting through the day to feed my kids and get back to work.
Yeah, you know, it’s a real challenge. It’s a real challenge. I know a lot of people in our profession think of, well, I made it through the Marathon of law school, now I’m done, and now the work will just come to me. Because for a lot of them that’s, they never gave any thought to developing business, obviously, all of us that are a part of this show and listening, are the types of people who are like, I got to go out and find business. And so, you know, it’s a real challenge, I mean, I don’t know any other way to say it, but it’s probably one of the ultimate challenges we have.
Or do we just shut up and say yes, we should be doing this, but you know what, just, you know, some my cynical West Coast friends, just buy your freakin cases, get the pipeline there and support it, it just seems that I built a multidisciplinary firm, it’s just insane. And, you know, then, I’m gonna be very clear, I have one practice area which is not as profitable as the others, and I’m sitting there with a person in that group saying ¨hey, hey, me, I want my attention with the group¨. Like, there’s not enough money to be interesting in this, and yet, I want to be able to… it’s the right thing to do, but if you only have limited bandwidth, you can’t think of somebody as everything, you know, you’ve talked a lot of times about, you know, over expansion versus not, and, you know, we’ve made some, we’ve called the hurt to a certain extent, right? We talked about how I passed off an immigration practice earlier this year, then the question is, okay, now what are our thoughts? What can we do that, is it further calling, you know, in that, if you reduce your skews?
Well, let’s talk about this in terms of the next topic that I want to talk about, is should you be recruiting with that mindset, and actually putting up ads saying: lawyers, this is a job at a law firm, you will not be expected to do any business development. You will not be expected to do this, that, the other thing and tell them say, this is the ceiling of what you’ll earn, this is your hours, this is what your, here’s your KPIs that we will measure you against, and if this appeals to you, which it could, see, here’s one of the challenges that I think you and I have, a lot of people who listen to us in our audience have is that, we are the weirdos, right? Like, we are not your standard person, we’re not your standard lawyer, we have a much, much higher risk tolerance, I mean, huge risk tolerance compared to 99% of the world and like 99.9% of other lawyers. We are the kind of people who would be out there, meeting people, greeting people, networking, doing all those things when you’ve given that opportunity, whereas other people are like, I’m just gonna go home, I want to go sit on my couch, and, you know, and watch something on Netflix. So, we have to, it’s almost like we have this cognitive bias, and so, maybe what we need to do is take a step back and think about what we are offering and who we are attracting, because you and I, I mean, if I came in to interview with your firm for a criminal lawyer position, you would probably be like, oh, I’m gonna hire this guy, he wants to go out, he wants to be aggressive, he’s, you know, he likes to talk, but I wouldn’t necessarily be the best for getting the work done in your office.
That’s why I’m particularly proud of our non-PI model. In that it gives you, let’s say you did come, I think I can have the best of all worlds, because you are going to get your work done, and if you do that, at 50 cents on the dollar, your margin is pretty good compared to if you put your own shingle out, right? And then, you get all the work we give you. So, I, to me, I get it, and we actually recruit for, if you’re not going to deliver a single piece of business, fine. If you deliver a couple cases a month, couple, not enough that you’d be starving on your own. We can make you a lot of money because we have the stuff we give you plus a little bit of your own, get you to numbers you really like. If anything, our issues come out when people do zero on their own, because over time they don’t get, they’re not satisfied, and as a final thought on this, the added complication. Look at you and me, we’ve known each other about 15 years or so. How many times have we shifted, marriage, kids, desire like, now it’s cold, I’d rather be in Florida, like, that wasn’t me when you first met me, I was grinding, right? And so, the thought being, it’s not just when you get somebody, but does that change? Does the person go from ¨Oh, I’m pregnant now, my outlook changed¨ or does it look from ¨Oh, I’m getting divorced, now, I really need to make money¨, or, you know, or whatever it is, things keep changing in people’s own beings. And so, we’re supposed to not only hire for today, but to anticipate where it’s going, that becomes just, you know, an unfathomable complication, which is why it’s very, you can do your best, but it’s certainly what I’m looking at it to make money in years 2,3,4, I think it comes down to what you hear a lot on Shark Tank, you’re getting the person, if that person is great, whether they’re a little bit more motivated, a little less motivated, whatever it is, you’ll be fine. It’s, is this the bones of the person who’s going to do right by you?
Yeah, and talking about the person is something that I want to talk about in our next topic, because Ryan McKean posted something in one of the forums about the Georgetown legal profession, University Law Center report that they did with Thompson about the report on the state of legal market. And it was interesting, because they say that, you know, 25% of all law firms were at risk of losing their associates back in November, of course, they’re probably talking about big law, they’re not necessarily talking about people in our positions, but we’re still at risk of losing people.
And staff even greater, I would argue.
Staff, for sure, for sure. And, you know…
Basically, this is their way of taking the great resignation and trying to get some clickbait out of it, you know, it legitimately is a thing, right? Can’t sugarcoat it, would you, both inflation plus the mental health issues associated with COVID have led to a, you know, a dumpster fire of firm management.
Right, and one of the things that they say as a result of this survey that they did was that, basically, you cannot buy loyalty, that, you know, even if you just throw money at the associates, at some point they’re gonna say, this isn’t worth it anymore, and that may be because they got to spend a year and a half at home. And so, they say, you know, ¨I can still get my work done, why, you know, and be able to be home at five o’clock to have dinner with my kids every night. Why am I not able to do that working in the office?¨ And so, one of the things that I have been contemplating is going in, and sort of changing all of my job descriptions for when we do recruit and say, we practice what we preach, we want you to have dinner with your kids, you know, we are, knowing full well that…
Here’s, what’s in your description, it’s how you live. Look, I’m going to get real…
Not necessarily how you live but I think you need to describe it, because not every other firm is describing it that way, and they can help you attract talent.
Oh, agree 1,000%, right? What you’re saying, gold. And look, it’s also true, if we hire people and say you must be in the office five days a week, they may tell you that, but within a week, they’re not going to be, right? Meaning I hired an amazing firm administrator. She’s awesome, she’s like commute’s wait too long for her own good, she took uber credits, and I’ll be there every day through the year, she was, you know, snow, COVID, it’s a personal issue, next thing you know it’s, and again, I’m fine with it, she did what she did to be able to work remote and we are good with it. I’ll give you the flip side, being very raw in the negative, right? So, that’s a success story. We brought somebody in, we stretched, we both sort of like, looked past, I knew that she couldn’t really be there every day with that type of commute but I knew she was good enough that she would be fine from a distance with whatever reasonable amount of the office. So, we have, I have one off practice, I don’t wanna get too specific, but it’s a one-off practice with one attorney. Our attorney turnover is extremely low with one person, who’s the manager of attorneys. Now, they will tell you, we just had a regular call that they were in a position that they tell everybody go home, don’t work so hard. This person kills themselves, no argument, they make a lot of money, it’s one of the highest grossing single lawyers out there that you’re going to meet. If you saw numbers, you’d be like, oh my God, but nobody else wants to work alongside that. Not only is it required to be in the office, there’s no virtual for this particular lawyer, they don’t work in our main office, but we have now burned through people, now each one has a story. Somebody else went off to an association, other guy went back to the government. It wasn’t like people stayed in that but after a while you, like, exactly what you’re talking about. And this person, if you interviewed her and said ¨hey, what’s going on? ¨ I’m telling people to go home, I don’t know why they’re not, bullshit, right? It’s one thing to change your job description, it’s another to change your core culture. At Price Benowitz, what’s the main office, look at our PI department, people do what they need to do. There are people, there’s one guy who shows up every day because he likes it. There’s another guy who I thought was going to show up every day, I’ve seen him three times, he’s the one who brings in the most business of anybody, probably because he’s not commuting to the office and he spends that after work time networking, you know, so pick your poison, but I always go with job description. Yeah, great. It needs to be done, and I don’t want it, like, that’s why you’re mister systems and it’s the right, right way to do it, but I would say, I don’t really care what it says in there. The question is, what is genuine expectation? And is anybody giving you an odd look, if you leave at 5:30 to get home?
Well, you know, so, this really brings up a good point, and, you know, I’m taking some time away from the office this month, not being in at all, still obviously keeping, knowing what’s going on, but I’ve come to the realization that I have to take away from my lawyers the concept of unlimited vacation because, because it’s unlimited, they just don’t take it, and they’re not taking it. And so, I’ve got a couple of people that, you know, have not taken time off in two years.
It’s not unlimited, look, I call bullshit each way. The unlimited concept is bad both ways. It’s bad if they don’t take it, bad if they take it, right? So, it sounds like a talking point, but it’s…
But I want to force them to say, hey, look, you need to take time away from the office, it’ll be better for both of us, and, you know, I’m booking you here, for one of the guys, I’m going to book them a vacation. I’m gonna say, we booked you…
It’s one more thing, we have so much stuff, we have compliance here, we have compliance there, we have hiring, we’re keeping people, and now, all of a sudden, you now need literally, and you’re right, you’re not wrong, but it’s just another overhead expense added to everything else, where you literally need to take, keep track of vacation, not for the fact that they’re taking too much, but they’re taking too little. Well, one way to do that is not to have rollover, because that is the one thing that, I’m not saying that we don’t, but by not rolling over vacation, it forces the conversation. Now, you got to be careful that you don’t make an exception that gets you into trouble with a lawsuit, meaning you’re not treating people equally, but to me, that’s one of the great failsafe, where people are like, Oh my god, I’m like, okay, as long as you book it now, we’ll honor it, but you, if you, otherwise you really, you’re gonna have a, you know, how do you keep track of that? It’s so, because people also take time off but very often it’s like a day here or there for their kids versus a real meaningful vacation to recharge.
Right. And so this is something that we’re grappling with now and I’m trying to get to a point where we can have a workable program, because, you know, what we were seeing, unfortunately, when we had a defined vacation schedule, especially when it came to the staff was, well, I know I got three weeks’ vacation, I didn’t take it, just pay me an extra week at the end of the year, you know, and I don’t like doing that. I don’t like just having, you know, I’d rather them take the vacation and not come to, you know, the last week of the year.
I mean, it’s hard in our world, it’s impossible in the PI world. I love the idea that, I’ve seen this in the digital space, of closing Christmas to New Year’s. Where it’s just part of the ethos. It’s just really tough as a law firm to do that, if not impossible.
But I’ll tell you right now, I would have lost a ton of money this year, because the last two weeks of December were great.
Right. So, I don’t know, maybe it’s finding that money, that month in the summer in a criminal shop, where all the cops are on vacation, and like, you know, you know like last five years, what’s that slow month and just basically say, hey, we’re gonna have a skeleton staff on, we’ll answer the phones and we’ll just make sure we don’t, but I don’t know. But the question is, and I think it comes down to this piece, which Ryan sort of sparked this ABA paper, which is, hey, we’re not the same unit. Before, we had three floors downtown by the nicest restaurants, you, if I wanted to give somebody a treat, I took him to a Rasika, the nicest Indian restaurant, Jose Andres has three restaurants, and I could really make this a special occasion to come down. People like, the places are depressing, nobody wants to eat inside, it’s freezing outside, so what are you left with? How do you keep that core? Again, we talked about 15Five, we were talking about different economic incentives. There are things you can do but it’s, you know, we both did the, you know, do the state of the firm things, but how do you create stickiness? Because you say it’s not about the money but as the different accoutrements disappear, like being downtown and having a nice lunch and being able to go to a game after work, as those things spin off, you do become a creature of money, assuming that you’re not forcing people to a job they don’t want to be up because they want to work remotely and you’re not given that flexibility. But that’s one huge thing is flexibility, but I think what’s happening is money becomes a factor. The news just came out the other day about inflation, some crazy numbers, 7%, and that’s, you know, in what period of time? You know, it is crazy what’s going on with costs right now, I mean, like, my grandfather now about what things cost and the fact that like a burger is now closer to 20 than it is to 10 is just insane, but the idea that our staff is getting squeezed, and that I’ve already seen this with intake, part of what we talked about the international recruitment was, we had this issue where I physically wasn’t keeping up with domestic salaries, partially my fault, but partially getting to numbers that are just, especially with overtime. So, it’s one thing to say, hey, I’m now paying somebody $55,000 a year, but we’re now approaching the numbers that overtime wasn’t intended to apply to. We’re now at net, like fast food managers that run restaurants are 55, 60 as of a couple of years ago, I know those numbers are going up, but we’re like, it’s equating to the new normal, and figuring out, how do you keep people happy and motivated? And I think it’s a little bit of everything, right? You know, if you don’t have your numbers competitive, you may hold on for a little bit, but it’s not going to be for long.
Right, right. I mean, it’s a challenge as you’re growing your firm, and that’s really, you know, part and parcel of why we do the show is to sort of talk through these issues that both you and I are facing, and talk through the solutions that we find, sometimes they’re the same, sometimes they’re different, and that’s what we want to share with our audience, because we want to make sure that they are aware of it, because, you know, one of the biggest challenges as you grow, as you scale, as you go from, you know, none to 1, 1 to 10, 10 to 20, and so on, and then, you, you know, up to 80, 80 plus people, you know, the problems are more complicated. They’re challenging in their own way, and if you don’t approach them, rationally, you know, the decisions that you would have made, you know, I know I can’t speak for you, I can speak for myself. I made decisions when I was a staff of 20, using the knowledge when I was a staff of 5, and I’ve made mistakes, and I’ve learned from those mistakes, and I don’t want people to make those mistakes. That’s what we’re all about, you know, there’s…
I have a simple piece of advice that I think will save people a lot of headaches down the road. We started way, way back with 26 paychecks a year, every two weeks, staff liked it. If we had just started, and we are now moving to it, finally, BluShark moved to it, but Price Benowitz finally in February, after January will be three paychecks every two weeks, we are finally, God willing, future tense, going to go to 24 paychecks a year, two per month, infinitely better for budgeting, those two paychecks a year, two times a year, when you have three payrolls, just what a cluster. So, I know that people like to be able to budget in certain ways, but if I had my way to go back, so you’re talking about what I wish I knew now as people were starting their firms, they have limited payroll. In fact, one or two people, you throw a couple $100, get yourself to 24 twice a month, not every two weeks 26.
This is where you and I disagree. I pay every week.
Well, you want to do that, god bless, it’s a different beast.
It’s about, you know, I came from the bar business, you work this week, you got paid this week and if I gotta cut you, I gotta cut you. That’s just the way life goes, I will continue to stay with 52 pay periods a year because it helps me…
It’s not as dramatic on the weekly, what I don’t like is, I want to be able to see my numbers more clearly and I like the ability to see month after month and not see months that are away, it comes out in the end annually, but when you’re looking at monthly budgeting, again, for you, the most you could be off is by essentially a half week, which is not the end of the world, but for me, I have two pure pay periods a year where we are looking at basically a huge expense, and it gets ugly, and then you want to make good decisions and the other months are under, so you’re not, you know, and it’s, so again, God bless you for your way, I’ve never heard of another firm does it this way, but it works for you, and you’re happy and it’s fine. But I’m telling you, it’s like with the over time, the ability to get that dialed in, and I would say if it’s, if I were doing that, I would do, for me, I would go, again, to 48 pay periods if I’m doing this right, per year where you’re not paying on a week where it’s, like you get four per month, because from budgeting for the employee, they have rent and everything else, and you may be at the point where you’re giving people, now, if it’s that immediate, you have less issues, but I like the idea that they pay their bills monthly, make sure that money is there monthly. It’s the change that’s so painful.
Yeah, I mean, I can remember going, you know, when we switched over to our payroll provider and we had to go, we used to be, you work this week, you got paid on Friday for this week… very early on… a bunch of times, and then we went to one week in arrears and that’s where we stayed for a couple of years, and it seems to work for us. You know, I’m constantly looking at my numbers and it allows me to know where I’m going to be pretty much every week, and it makes it very easy for me to give my sales team, hey, this is your goal, you know, this is what our payroll and our expenses are going to be for the week, and so, this is the goal. And so, we can, you know, when we, we know where we’re at, and basically, I have a spreadsheet, where this is what we need to earn, and you can see either we’re above or below that number.
To me, we gotta go but I’ll leave you with, I don’t wanna leave you with negative, but I’ll give you the opposite side of this. A lot of my friends are criminal firms and a buddy in Philly did this. And his price is one guy shop, right? His pricing would change based on how he was feeling about his week. And to me… no, no, no, I know, but that, the idea of looking at on a weekly basis, to me, it, again, it works for you, I just, there are things that work for you. I just asked you, challenge you to think, is that too myopic? Are you looking at too small of a sample size, rewarding people for micro behavior? Where, yeah, great, we had a great week, but that’s because they bear the, they front-end load this stuff from another week, and I just, it just gets dubious.
Oh, there’s downsides to everything, but that’s what really what it’s all about. It’s finding the one that works for you and your amount of risk tolerance and that type of thing when you’re growing a firm…
Let’s call this a week.
All right. So, folks, that’s going to be for us this week here on Maximum Growth Live. As always, if you want to follow us, please check out our podcast. Wherever you download podcasts, we are available. Of course, you can always check us out every week here live to 12pm Pacific, 3pm Eastern, on Thursdays for our episode of Maximum Growth Live. If you want to keep up with Seth, please check them out, as the Law Firm Insider, as available on the BluShark YouTube page. And if you want to join me, we’re almost up to 1000 people. Please join me, my Systemizing Your Law firm for Growth Facebook page. So, for that, for us, we’re going to be out of here. I’m going to hit the mountains and try to do some skiing this weekend. Probably not going to do much because it’s going to be bitter cold. Seth, you got anything fun planned for the weekend?
I’m gonna be in New York, if anybody’s in New York, and taking my son for his birthday to the Caps Islanders game at UBS, and…
Oh, nice.
Granted, everybody, including my mom, has COVID, so hopefully we’ll wear our N-95 masks and try to stay safe.
All right, folks. So, stay safe, wear your masks, and we’ll check you out next week. Bye for now.
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