Become a Healthy Owner

For Trevor, this means leaving the office after lunch on Friday and not working again until Monday morning. Weekends routinely filled catching up on work are now spent recharging and enjoying time with his family.

Rebecca’s firm is sufficiently staffed and managed, so she can dedicate a full day every week to volunteering her services with a local legal aid agency. Her business gives her the flexibility to give back in a meaningful way.

Allison’s business is on track to fulfill her goal of retiring by 55. In the meantime, she now enjoys having healthy evening meals and has time to prepare instead of dreading the terrible takeout she would have for dinner.

These are just a few examples of lawyers we know living their best lives while running healthy businesses. They fish, mountain bike, travel, scuba dive, live abroad for part of the year, run marathons, serve on charitable boards, run side photography businesses, volunteer, spend valuable time with their family and friends, and much, much more. The point is they have hobbies, interests, and well, quite frankly—lives, outside of their law firm. As Lab Coach Stephanie isn’t hesitant to point out, “Your business should exist to serve you.”

Isn’t that the goal? Isn’t that why most of us created our own business in the first place? We were looking for things like flexibility, balance, control, money, security, and impact.

How did we get so lost along the way?

The good news is by being intentional about building a healthy business, you can create a healthy owner.

Being a healthy law firm owner means you are:

Now, think about your current position or the current state of your business. Are you confident your current work situation will help you fulfill your personal goals this year? What about five years from now? Ten?

If you’re not sure, it’s time to do some evaluating. What needs to change? How can you set your path straight now? You can start small, but you can’t stay idle. Take the first step now with a plan to keep going forward.

Your vacation is also good for your team. First, it sets the right tone for your team that vacation is a real thing and must happen. Next, it gives your team a chance to flex their skills while you’re away. Maybe you’ll find out your associate can handle more than you realized. Or, your team will handle something you weren’t expecting. Your vacation allows them to build their confidence and further gain your trust. That’s a win-win!

Finally, your vacation is good for your business. You will quickly learn which parts of your business need attention. When you’re away, chances are something in your business will not work the same as if you were in the office. This is a great way to determine what you need to take off your plate or where you can build a better system. These are the essential steps to building a business you can scale and sell. In the beginning, this may feel scary, but eventually you’ll find yourself comfortably taking more and more time away from the office without anything needing your time and attention. That’s a great thing!

A healthy law firm owner understands that their return on investment (ROI) goes beyond paying themselves leftovers. They get paid market rate as a team member and also get a return on their investment. First, let’s get clear on ownership compensation.

If you’re a law firm owner or partner, there are two buckets of money you can make:

Law firms typically conflate these two buckets. In most firms, partners get paid all of the firm’s profits or whatever money left over at the end of their year.

Note: we’re not giving tax advice here. We want you to focus on the “buckets” or types of compensation rather than W-2 wages, etc.

Our approach is a big departure from traditional thinking, but it comes with benefits:

When starting a brand new firm, you often can’t pay yourself consistently or at a market rate. We get that. After those first six to twelve months, though, if your firm is going to be viable, it has to be able to pay you a regular wage, which means it’s paying a regular wage. If your business isn’t healthy enough for you to regularize base payments to yourself, it’s failing and you’ll want to act quickly.

This is where getting help from an outside source—like a business coach—could pay off. It’s an investment to pay for help, but if the coach can help you identify problems and quickly generate solutions, the return on your investment will make it worthwhile. Our team is happy to connect to see if we can help (and we also candidly tell you if we don’t think we can or there are better resources available for your exact situation).

The good news is, paying yourself with these two buckets and truly understanding the financial health of your business gives you much more than peace of mind. You’ll see how investing cash into your business can grow the business and potentially produce larger returns.

It also gives you flexibility. Maybe you’ll decide to replace yourself in the daily work of the business (or largely replace yourself). You’ll know the business can afford to hire someone to do your daily job. You’ll also continue to benefit from the investment in your business with regular profit distributions. Maybe that frees up your day to create a new business, pursue a passion project, or just spend your days doing things you love. Bottom line: healthy owners have lots of options.

Our picture of a healthy firm is not just a pie-in-the-sky dream. We see lawyers implementing these concepts every day into their firms throughout the US and Canada. Some have just started on their journey and others are further along. All of them are focused on improving their firms at least 1% each week. They know making small changes and practicing relentless incrementalism will lead to big changes in their business—and their lives.

At Lawyerist, we’re on a mission to guide healthier small firms. Solo and small-firm lawyers join our Lawyerist Lab community because they know they will benefit from implementing our step-by-step processes, working with our coaches in 1:1 or in group sessions, and learning from other community members. If this sounds like you, we’d love to connect.