On this episode of Your Practice Mastered Podcast, we sit down with Todd Farmer and Sam Wright, two successful law firm owners who have mastered the art of profitability. We dive into their journey of growing their bankruptcy law firm, overcoming challenges, and maintaining a high level of profitability.

They share valuable insights and actionable tips on how to squeeze the most out of your current resources, make smart compensation decisions, and run your firm based on percentages. If you're looking to boost your firm's profitability, this episode is a must-listen.

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Right? No. Right. And so you got to drop some of those self limiting beliefs that you have about, you know, where your labor might be.

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MPS: Hey, law firm owners. Welcome to the Your Practice Master podcast. We're your hosts. I'm MPS,

MPS: That's the goal. And we're in for an exciting episode today. We're joined by Sam and Todd, and so we'd like to welcome you guys into the Your Practice Master podcast.

Sam Wright: Thank you. Thank

MPS: you. Of course. So, for anyone that has watched the podcast, one of the things we do around here is break the ice a little bit. So why don't you start by sharing something that maybe not everyone knows about you, and either of you guys can do this individually. One of you can do it.

Sam Wright: Oh yeah. So if I could trade the dollars. If I could be in the same situation, dollar-wise, I would much rather do landscape architecture and dig in the ground than do what I'm doing.

MPS: Really

Sam Wright: shocker, right.

Richard James: By the way, you could trade the dollars.

Sam Wright: Well, and I, so somebody on the stage I have done his landscape design and installation.

Richard James: Oh, and did he give you a, I don't think that you're right for this business. Kind of.

Richard James: that's great. I love that. I love that. Yeah. I actually love that. Talk about instant gratification.

Sam Wright: Well, see that's part of the issue. Like the bush is in the wrong spot. Pick it up and replant it. Your PCLC numbers are off. You gotta tweak all these different stages, but I can fix it immediately outside.

Richard James: Yeah, I agree. I, you know what, there was a day when, years ago when I was in the funeral business, I took 26 weeks off. Okay. So my partner and I, we would work two weeks and then we would take two weeks off work two weeks and take two weeks off.

And so Maria and I had traveled and done all this stuff and then finally we were like sick of it and I'm like, what can I do? And I decided to build a deck on the back of my house with my grandfather. And not only was it splendid time with my grandfather, but it was immediate gratification and I got to buy all sorts of cool power tools.

Sam Wright: Tools, yeah.

Richard James: That I never would've had before. Right?

Sam Wright: Yep.

Richard James: How about you, Todd?

No experience.

Richard James: Did you really?

Todd Farmer: I did.

Richard James: Was it a success or a failure?

Todd Farmer: Yeah,

Richard James: we,

Todd Farmer: it was, I owned it for about 14 months and sold it.

Richard James: Nice

Todd Farmer: and realized it was like having, well, I had 110 employees between the ages of 18 and 25 and that's why I sold it 14 months later.

Sam Wright: It's also why it doesn't handle HR at our company.

Richard James: That's perfect. Oh, that's great. Okay. Michael, where do you wanna go from here?

Sam Wright: Yeah. So we currently handle bankruptcy cases, social Security disability. Immigration and personal injury.

MPS: Got it. Perfect.

Sam Wright: Yep.

Todd Farmer: Another thing about that I wanna share that people may not know about us, we are probably in the smallest city of anybody in the room. The town that we live in. 40,000 people. Mm-Hmm. And we're now the biggest bankruptcy firm in the state. Hmm. So when I hear people say, well, that wouldn't work in my market 'cause I'm in a small market, and that's a fallacy.

Richard James: Okay. So 11 x growth over the period of 8 or 9 years, we could run the math on that, but it's not necessary. I think everybody gets the picture that, that's pretty aggressive. Yep.

Todd Farmer: Yep.

Richard James: Yet, and you were 45 profitability this year. Yet. and I think you would tell me that there were years where you were maybe even a little higher than that.

Todd Farmer: Yes.

Sam Wright: Yep. Yeah.

Todd Farmer: So, I'm a CPA by training and we've always been fanatical about our numbers. I. The day on the stage that you said, you can wake me up in the middle of the night and ask me this question and I can tell you exactly what those numbers are, that we have lived by that And you can ask us what our numbers are anytime, and we can probably tell you, and we could have, I think we could have grown faster than we've grown, but

Sam Wright: it would've been at the expense of our.

Profit,

Todd Farmer: it would've been we, there was a, certain margin that we were not willing to go under.

Richard James: Mm-Hmm.

Todd Farmer: And so we've had times where we've asked people to row harder.

Richard James: So unpack that a little bit. What does that

mean?

Sam Wright: Well, so I've got some action items, like how can you, how can you keep,

MPS: yeah. What's the prep that,

Sam Wright: what can people grab onto?

MPS: Yeah.

So if you look at your PCLC numbers, there are some tiny things you can change that will really result in significant money at the very bottom.

Next,

Richard James: by the way, if I can stop there.

Sam Wright: Yeah.

Richard James: Do you think in your conversations with people around here or in other. industry meetings that you have that people take that PCLC data for granted.

Sam Wright: Yes. And, and I have.

Richard James: Yeah.

Todd Farmer: You know, the easy answer is, well, I just need more leads. That everybody always says, I just need more leads.

Sam Wright: I bet you a hundred dollars that there's not one group in here that has that problem. I think they might think they have that problem, but I think like you've taught us, I think they've got leads. Enough leads,

Todd Farmer: You know, uh

Sam Wright: Mm-Hmm. Another action item I have, Hold on. Flashy objects. Okay. So hold on. Flashy objects. If there's some new piece of technology that you think is so flashy and so awesome.

If you don't have the cash flow for it, hold on it. We started with three by five note cards. That's what we started with. Our phone rep had a stack of note cards and each evening when she left, she would take the note card and put it on the seat of my chair, and the next morning when I came in, I would pick it up out of the seat. And look at the numbers.

Todd Farmer: Then we got really advanced and we went to Excel.

Sam Wright: Yeah.

Todd Farmer: Right. And, and look, now we're,

Richard James: how many cases were you filing while were you, when you were using note cards? A month?

Sam Wright: 25, 30?

Todd Farmer: Yeah, probably 25

Richard James: 25 or 30 cases a month. You were using note cards?

Sam Wright: Yeah, sure.

Richard James: And then you went to Excel?

Todd Farmer: Yeah.

Todd Farmer: You know it wasn't

long.

Richard James: It wasn't long.

Todd Farmer: But when we went to software and. Sam loves tech

Sam Wright: software. Yeah.

Todd Farmer: Loves

software.

Richard James: it's the builder in you,

Sam Wright: maybe it's the landscape architect in you.

Richard James: You're a landscape Architect

Sam Wright: Yeah,

Richard James: yeah.

That's right.

Todd Farmer: Yeah. So we, so, you know, and, but the other thing I had is an action item is everything we've always done, we've talked in terms. Of a process. You used the word system. I used process. everything we've structured in terms of a process, is this, replicatable? Is it repeatable? Is it understandable? Is it teachable? Right. And we've kind of gone down that pendulum for everything we do in our office has to be a process.

Sam Wright: I got another one.

MPS: Yeah.

Richard James: Okay.

Todd Farmer: Well, for example, you're paying people per hire, well, you look up and they don't do a very good job. They got a 40% hire rate and they wanna know what their bonus is at the end of the month. And, we've taken the position, well, your base salary has to cover a certain level of proficiency, correct? And a bonus is for doing something above the base level of proficiency.

MPS: I couldn't agree with that more.

Sam Wright: Here's another one.

MPS: Go ahead.

Todd Farmer: You want another one?

MPS: Okay. I welcome.

Sam Wright: I really thought about this, Michael. I did good, right?

MPS: Yeah, you did.

Sam Wright: The next thing is if you can't afford it, based on cash flow. Okay, so we saw the example of the backpack on that video that was played yesterday. If you can't afford it based on cash flow, do it yourself.

And everything in between. So if you don't have the cash flow, you're gonna have to do it yourself.

MPS: So you recognize that despite not having the cash flow to maybe hire outside of the firm or even bring someone in to do that. It was important enough to still get done.

Sam Wright: Absolutely. And then,

Richard James: so wait,

Sam Wright: I

Richard James: gotta, stop. So how do you prevent, falling into the trap of doing it yourself and not allowing others to do it because you have the knowledge of do it all?

Sam Wright: That's a tough one because we found ourselves sometimes doing it ourselves five years ago.

Todd Farmer: I still do it.

Sam Wright: Yeah, we could have,

Todd Farmer: it's a constant. you know, I've, I've got a really high level employee, rock star unicorn. And that person is a bottleneck. Hmm. 'cause they're a perfectionist.

Sam Wright: The highest and best use.

Richard James: Did you ask yourself that question?

Todd Farmer: Yeah. Absolutely.

Sam Wright: And that's, probably how to answer that question. Look and see, is this my highest and best use? Do I have the cash flow to support it? Let's have somebody else do it.

Richard James: It sounds like you waited till there was enough pain before you added another body to stop.

Sam Wright: That's how we typically did it.

Richard James: Is that how you did it?

Sam Wright: Yeah.

Todd Farmer: You know, the axiom, nobody ever changes unless the pain. Of staying the same is worse than the pain of changing.

Richard James: Right. Okay. Okay. So give everybody a scope real quick. How many hours, because you're, doing really well, obviously, and, now you know, they think you're still, have this hands in the mud kind of approach to it. But how many hours are you working now a week?

Sam Wright: How many hours do you work? Let's get this on the record. Let's get it on the record.

Todd Farmer: He wanted me to go first,

right? if I was to be really candid, I'd probably work 30 hours a week. Okay.

Todd Farmer: He is a little more than I am 'cause we're doing a major tech project right now. Yeah. And he's,

Richard James: but you will also still bill hours. Yeah. And you'll work on projects like tech.

Sam Wright: Yeah. So like he'll, he's got like, he almost tried a case recently and so he's got some pain there and I've got my own pain. So Yeah. You know, misery loves company.

Richard James: I think we should come back to the conversation about salaries real quick. How did you decide, you decided ultimately to come to Mexico to start to hire people?

Todd Farmer: Yeah. So why,

Richard James: why did you make that decision and, well,

Todd Farmer: it's,

Richard James: it's, how was that affected?

So Sam flew down here during Covid. Sat up at a hotel, started interviewing Mm-Hmm. And off we went.

Richard James: Now that fed your builder mentality. That felt your, it felt you fed your, you know, go get it done mentality, and yeah, it gave you some pride, but would you recommend somebody else do that from scratch the way you had to do?

Sam Wright: I think I, I think I have a couple ulcers from it, so I probably wouldn't recommend it. Yeah. It. If it takes intestinal fortitude and,

Todd Farmer: and if, I thought I was going to have 5 to 10 people, 12 people, 15, I would absolutely use a service. Yeah. to handle the,

Richard James: you guys,

Todd Farmer: how many,

Richard James: how many people down here?

Richard James: So how often are you here?

Sam Wright: Almost every four weeks.

Todd Farmer: One of us, yeah. Without one of us comes every four or six weeks because, people have this impression about outsourced labor that it set it and forget it.

Richard James: Yeah.

Todd Farmer: And one of the reasons I think our people are happy is they told us that you're the first US company that we've ever worked for. That comes to see us and asks us about our family and asks us about our, you know, our kids and things.

And so

Richard James: one of the reasons why you have to come as often as you do is because it's, you've built your own support system and it's, you guys, you don't have an agency to help you with that.

Sam Wright: And it comes at a significant cost. Look, I've got young kids, I have a wife. I mean, when I'm, you know, gone all the time, you're missing ball games and

Mm-hmm.

Things like that. So it's, come at a pretty significant expense.

Richard James: Yep. Okay. Where do you wanna go from here? Or did you have any other points

you wanted to add?

Todd Farmer: Yes. So I looked, we ran two lane and you told me this for a long time.

Mm-Hmm. And I was. I was gonna have to buy our freedom a little bit and give up some. And so like our payroll last year was about 38 Right. Total

Sam Wright: Too lean That's too lean.

Todd Farmer: That's lean. I mean, that's lean. Yeah. But we were able, if that was all, uS based labor,

Richard James: if that was US based labor, you'd be over 55

Todd Farmer: We wouldn't,

Richard James: we wouldn't, there's no question You wouldn't,

Todd Farmer: we wouldn't be sitting here.

Richard James: We wouldn't be sitting here. You wouldn't be sitting here. Exactly.

MPS: So for the firm that's, debating the, decision right now of, they're looking for an appointment setter or they're looking for a staff member and they're not entirely bought in on the idea of outsourced labor, whether it's in Mexico or abroad.

What would you tell them?

Todd Farmer: know, I've been blown away by the quality. Of the worker here. you know, I think America's Rome, right, we're gonna fall 'cause of our own arrogance one day and, but we have this impression that we have a monopoly on intelligence in America. And that is completely false. They are very smart, very competent, very eager to work, and very eager to please.

Todd Farmer: Yes. This would be even easier for us if we were in a major metropolitan area.

Mm-Hmm.

That was really a diverse area. This would be even easier for us. Right, right.

Sam Wright: But it, but when our own clients are calling Comcast. And the phones are answered right down the street in one of those towers that you can see from this hotel. I'm like, come on. Okay, hold on. Yeah, yeah.

We can do this.

Richard James: That's a really good point.

MPS: That is a very good point.

Richard James: Yeah. So they've got people, they've got, they're doing business with other businesses that are already doing business here. And so you think, well, I'm in the deep south, or I'm in the northwest, or whatever, and my, the accents gonna get in the way or they're not gonna, and the reality is they're already doing business with people who have offices down here, and they're used to it. They may not like it as much as they would prefer somebody in their own backyard answering the phone, but it's happening.

Todd Farmer: we cut 'em loose, cut 'em loose.

MPS: I like that.

What's got you guys fired up and excited today? Could be business, could be personal.

Sam Wright: Oh, I've got something.

MPS: Yeah, let's hear it.

Sam Wright: It. You all are gonna think. This is so simple. I'm sorry. I'm just now getting it. Okay. So the PCLC numbers, I decided I was tired of being the only one jumping up and down flipping tables when the PCLC numbers were off.

So I went to the ops person, I went to our integrator and said, I'm tired of being the guy that's hair on fire. I'm tired of doing it. so I tell the operations person, I said, okay, so these are our benchmarks for the set show and higher percentages. Okay. If we deviate from these benchmarks, something needs to happen.

And she looked at me and said, yeah, we just need to have steps that people follow. I'm like, oh, okay, dummy.

Richard James: So if, if this mark turns red,

Sam Wright: here's what happens.

Then here's what happens.

Todd Farmer: If our,

Richard James: okay,

Todd Farmer: go listen to X number of phone calls.

Sam Wright: Yeah, so it's step by step, but I have it even better. It's like a military operation. Burt would really appreciate this. So, so it is, if set rate drops below X, go to intake team, lead intake team lead then does steps. One, listen to three no sets. Step two, get with the people with the low set rate. Step three, email line manager. We deviated from our set rate. We initiated protocol. Protocol complete.

Richard James: Wow,

Sam Wright: how about that?

So though this,

Richard James: oh, that, that's a give-a-love moment right there. 1, 2, 3.

Todd Farmer: Oh, but, but I wanna say about that. That happened in the last two days. Okay.

Sam Wright: Yes. Seriously? Yesterday. I'm sorry. Yesterday.

Todd Farmer: Yesterday. What? I mean that, that. We've been in this world for 8 years, but that is our insistence about going back to the basics.

Mm-Hmm.

Going back to the basic,

Richard James: so you didn't, you didn't cover Michael's question of what are you excited about?

MPS: No, he's excited.

Richard James: That's what you're excited about

Todd Farmer: So I think we've got we've gone into another, we're going into a couple other districts. We'll probably open a couple other offices this in the next year.

Mm-Hmm. I think we've got. 50% upside mm-Hmm.

I think

MPS: that's pretty exciting.

Richard James: That's pretty exciting. Yeah.

Todd Farmer: You know, I've gotten a little, I kind of got a little distracted this year, and then you talked about embracing the suck and it's hard and. I mean, it's still hard.

Richard James: It never changes.

Todd Farmer: No, it

never changes.

Richard James: And as you get older, and for some things like exercise, the suck gets worse. Right.

MPS: It always comes back to exercise.

Sam Wright: We have to, we've talked a lot about profit, we talked a lot about how, we've been blessed. Yeah. And I wanna make sure everybody understands a couple things. Number one, to my knowledge, we're the only bankruptcy law firm in Kentucky that has a deal with Kentucky Legal Aid that says. Certain protocols, if they meet them, send them to us and we'll handle their bankruptcy case pro bono.

Richard James: Right.

Sam Wright: The second thing is we always have a pro bono immigration case going.

Always,

Richard James: always.

Richard James: Yeah.

Sam Wright: It's like, take the money, take the money, you know, take this, this is pro bono, here's the donation to the church, to the schools. It just keeps coming back in waves. So. I don't know what to do with that, but I'll keep doing it.

MPS: Well,

givers get, yeah,

Richard James: givers get, let's put it under that general premise that givers get.

MPS: Absolutely. Well,

hey, law firm owners, thank you for taking the time to tune into the Your Practice Master podcast today, Sam and Todd. I appreciate both of you for sharing your insights and your stories and for the law firm owner listening. And this isn't your first time listening. If you got some value from today, you like the new format, make sure to go ahead and hit that subscribe or follow button depending on where you're listening or watching.

Hit the like button and show some love for Sam and Todd down in the comments. Let us know if you have any questions and let us know if you like the new format of things today.

Richard James: Hey, Sam and Todd, thank you so much.

Todd Farmer: Thank you. Appreciate you.

Richard James: How about a little bit of love? 1, 2, 3. Alright.

MPS: Awesome.

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