Get ahead of your Law Firm Finances!! In this episode, host Jay Berkowitz is joined by financial expert Leah Miller, Founder of LNM Financial Services, to discuss the importance of managing your law firm's finances through successful best practices. Uncover the most common financial mistakes you can make at your law firm, the top 3 core principles for managing your trust account, and the importance of forecasting cash flow. After listening to this episode, you’ll find the joy in accounting; tune in today!

Timestamps:

• 00:04 - Introduction to Ten Golden Rules podcast
• 00:26 - Intro to Leah Miller, Founder and CEO of LNM Finacial Services
• 01:36 - From paralegal, to law firm manager, to CFO; Leah’s journey through the legal industry
• 02:57 - Recognizing a need for fractional CFO services in small businesses
• 03:43 - Common financial mistakes + solutions for law firms
• 05:15 - Top 3 core principles to master your trust account: utilizing QuickBooks, 3-way reconciliation, putting the right people in place
• 06:39 - Three-way-reconciliation: what you need to understand
• 08:15 - The importance of having a bookkeeper for your law firm
• 10:07 - The positive impact of managing and forecasting cash flow 
• 11:54 - Projecting cashflow in a robust Personal Injury Law Practice
• 13:51 - Finding joy in accounting: discovering goals, educating clients, using the KISS method
• 15:46 - Getting to know Leah on a personal level
• 17:33 - Career pivots and lessons learned in the legal field: Paralegal turned CFO
• 20:02 - Jay’s career journey: finding a passion for 
• 22:03 - Leah’s top personal productivity tools: Asana, iPhone Notes app
• 22:53 - Book recommendations: Profit First, Charley Mann’s ‘They Don’t Teach This in Law School’
• 26:29 - Getting in touch with Leah: LinkedIn and lnmfinancial.com

Book + Podcast Recommendations:

• Profit First by Mike Michalowicz
• They Don’t Teach This in Law School: Law Firm Alchemy with Charley Mann

Mentioned Resources:

• Subscribe to Ten Golden Rules on YouTube 
• Schedule a free consultation with Leah
• Connect with Leah Miller on LinkedIn
• Connect with Ten Golden Rules on LinkedIn
• Follow Ten Golden Rules on Facebook
• Connect with Jay Berkowitz on LinkedIn

About Leah Miller:

Leah is the Founder and CFO of LNM Financial Services after 13 years in the legal industry working as a paralegal and law firm manager. After almost a decade of being the firm administrator and CFO of a small law firm, Leah understands the unique challenges that small businesses face when it comes to managing their finances. She uses her experience as a law firm CFO and paralegal to provide fractional CFO services to law firms that are looking to reach growth goals. Leah combines her financial expertise with her real-world law firm perspective to help firm owners make the best strategic decisions for their firm goals. As a fractional CFO for small businesses, Leah helps improve financial operations by providing strategic financial guidance, managing cash flow, and analyzing financial data to identify opportunities for growth and improvement.

About Jay Berkowitz:

Jay Berkowitz is a digital marketing strategist with decades of experience in the industry. As the CEO of Ten Golden Rules, he has helped countless law firms and businesses harness the power of the internet to achieve remarkable growth and visibility. Jay is also a renowned keynote speaker and author, sharing his expertise at various industry events and in publications worldwide.

About the Ten Golden Rules Internet Marketing for Law Firms Podcast

Join host Jay Berkowitz on an innovative journey through the world of digital marketing for the legal industry. With his expertise and passion, and world-class guests, Jay empowers legal professionals to thrive in the digital age. Explore topics like Search Engine Optimization, Google advertising, Artificial intelligence, intake strategies, content marketing, and other law firm growth strategies. Jay’s practical advice and industry expertise equip legal professionals to navigate the online world. This podcast is your invaluable resource for unlocking your law firm’s full potential. Get ready for an extraordinary adventure with Jay Berkowitz as your guide in the ever-changing realm of internet marketing for law firms. Your success story begins here!

Thanks for listening!

Thanks so much for listening to our podcast! If you enjoyed this episode and think that others could benefit from listening, please share it using the social media buttons on this page.

Do you have some feedback or questions about this episode? Leave a comment in the section below!

Subscribe to the podcast

If you would like to get automatic updates of new podcast episodes, you can subscribe to the podcast on Apple Podcasts or Stitcher. You can also subscribe in your favorite podcast app.

Leave us an Apple Podcast review

Ratings and reviews from our listeners are extremely valuable to us and greatly appreciated. They help our podcast rank higher on Apple Podcasts, which exposes our show to more awesome listeners like you. If you have a minute, please leave an honest review on Apple Podcasts. 

Welcome to the 10 Golden Rules of internet marketing for law firms podcast, featuring the latest strategies and techniques to drive traffic to your website and convert that traffic into clients. Now, here's the founder and CEO of 10. Golden Rules, Jay Berkowitz.

Good morning, good afternoon. Good evening. Whatever time you're listening to this podcast, welcome to the 10 Golden Rules of internet marketing for law firms Podcast. Today, we're here with Leah Miller from l n m financial. And I like to touch on different areas of legal. And she's fantastic at helping attorneys manage their books, manage their money, manage their trust accounts. So super important stuff today. Before I get going, I think this podcasts gonna come out right around the holidays. So Happy Holidays, hope you're having a great break, and maybe sitting on a beach somewhere and trying to capture some legal marketing, and legal business strategies. And I hope you enjoy the podcast. If you do, by the way, take a minute to give us a five star review on iTunes or Spotify, wherever you're listening to this, it helps us a lot. Anyways, with that, Leah, welcome to the 10 Golden Rules podcast. Hi,

it's great to be here. I'm excited for this conversation. So

I always like to start a little bit with your early background, and some of your formative years. And you know how you got into financial stuff and how you got into legal. So

I started as a paralegal. 13 years ago, I graduated with my paralegal degree. And my goal one day was to be a law firm, Manager administrator, I thought, you know, like when I was old, and in my 40s, or something, which doesn't seem old now, because I'm almost there. I would like do that. And so, through Right place, right time and hard work, I became a law firm administrator of a personal injury law firm, when I was 27, our firm administrator left and I looked at the owner of the firm, and I was like, I can do this, I can manage your law firm, and he gave me a chance that I will forever be grateful for. And so that kind of started my journey of being a paralegal and a firm administrator. And I went back to school and got my MBA. And so my role really shifted into CFO from administrator, personnel that did all the things in the office. And that's how I got into the legal field. And then I really just liked the financials. And so that's kind of how I've gotten into doing my own thing now with Financials.

That's great. So you've managed cases, and you've managed the firm, and you've got the MBA, what a great package to bring to a law firm. So what's your current role? And what problems do you solve for people?

So now I am working for myself, I left the law firm in May of this year, because I started doing bookkeeping and financial consulting primarily for law firms and also other small businesses. And I realized that there's such a need for that in small business and in law firms. And so now I provide fractional CFO services and bookkeeping, like I said, for primarily law firms or law firm adjacent businesses, and other small businesses.

Great. If you could give like your top three tips for managing the books. Let's start with the books first. And then let's get into the trust account. Second, what are some of them, you know, common mistakes and most important practices for a law firm? So

I think first and foremost, is to have a good bookkeeping system. I know a lot of people try to save money in the beginning. So they either don't want to pay for the software, which is primarily QuickBooks. And they don't want to pay for a bookkeeper to do it, they try to do all of the things. And I think it's something that you should hire out early on, it's pretty cost effective for a small law firm to hire a bookkeeper. And so it really gives you that firm foundation in your financials. And then the next thing I think you really need to do as a law firm owner from day one, and as you grow, is to actually look at your financials. So you have a good firm foundation, you have somebody taking care of your books, you need to actually look at your profit and loss statement every month and your balance sheet and really understand and try to learn what those things mean for your firm. And then when you're making decisions for your firm as you grow, you know, hiring employees or spending money on marketing or whatever it may be, use that data and those financials to make informed intentional decisions, instead of just looking to make sure there's cash in the bank and I can spend money today.

Great point. Great point. And then you said one of your real expertise is helping folks with their trust account. And we were chatting a little bit before this and you said something eights don't really care pacifically. And then they were both in Florida, they said, You've got to balance your trust account completely. And it's going to look beautiful at all times. So, you know, what are two or three core principles of making your trust account look beautiful for the state of Florida.

So you know, when you're first starting out, and you have a trust account, a lot of people, they'll just use an Excel spreadsheet. And that's fine, that can work. It can be more efficient if you have a software like QuickBooks, or trust books, or one of those that you can really have all of the information in. And so there's not as much that can go wrong in it. Like, if an Excel spreadsheet, there's a lot of human error there. And then doing the reconciling every single month, and doing the three way reconciliation so that you know exactly what is in your trust account, and what goes for each client. And so it really should balance down to the penny, you need to make sure you're keeping good records as you're moving money in and out of the trust account. And just make sure you have good practices for that. And also hiring somebody to kind of oversee that manage that as well. Because you get busy in your practice of law, you're not necessarily paying attention to you know, the day to day in that. But you really should I encourage attorneys to always keep some kind of role within their trust account so that they know what's going in and out. Because, you know, you can get in trouble. Like that's a it's a really big thing, especially in Florida,

manage manage the three way reconciliation, what does that mean? Exactly. So a

three way reconciliation is when you reconcile your account, normally like your operating account, you're looking at your bank statement, and making sure that it matches to your accounting software. And that becomes important because I have seen many times where you write a check for $105 and the bank cashes it for $205. And so that puts your trust account or your bank account out of balance. And so that's why you do a reconciliation. Also, because there is a I built into accounting software now, but I'm here to tell you it's not perfect. And so just getting your eyes on there looking at it, the three wave part comes in with your trust account, because you need to reconcile how much is in each client's account. So you have clients one through 10, you have their names listed. Client, one should have $500 in his account time 2000 so on. And so when you reconcile it every month, you need to make sure that you're reconciling how much each client has in that account as well, because you don't open separate bank accounts for each client. It's all in one big bank account.

Cool. And so you said you should reconcile every month, like literally you sit down with your bank statement, and your checks and your online payments and and literally just check through is that the lawyer's job, or the bookkeepers job? Or? I'm going way down, you know, bookkeeping for dummies? Because, yeah, you know, it's one of the areas that I prefer to assign to my partner.

So if you have a bookkeeper, and this is why it's important to have a bookkeeper, your bookkeeper would reconcile the accounts every month. And that's going through and seeing if checks you wrote didn't clear or what checks didn't clear. And all of that, especially in your trust account, if you write a check, and it doesn't clear in six months to a year, then you need to reevaluate, you know, does that money need to be do you need to reissue the check does it need to be sent somewhere else. So sitting down and reconciling every single month gives you that information. So if you hire a bookkeeper, the bookkeeper will reconcile your account and then they should give you financial statements to review every month. If you're doing it yourself, then as an attorney, when you first start out and many do and that's fine, because you're just trying to get through the day and make enough money to live. You don't have the extra couple $100 a month to pay a bookkeeper. So make sure if you are doing it, you carve time out and you know put time on your calendar to sit down and reconcile your accounts because especially in your trust account, if the bank cashes the check for $500 more than it was supposed to be and you don't reconcile your account for a year. You may not have any you know recourse in that you may not the bank may not help you they may say hey, did we did that a year ago, you should have caught it that so

God bless people like you because putting time on my calendar to reconcile my bank account just is not something that I'm jumping up and down to do but call me crazy. Okay, so another thing that you said you do for firms and super important is helping them manage cash flow but projecting cash flow. So talk a little bit about you forecasting for the future and cash flow and the difference between, you know the contingency and the fee base type of firms.

Alright, so first I like to tell people because they're, you know, they talked about, oh, I have a CPA and a bookkeeper. And those people generally look at the past. And so, for forecasting, from a CFO perspective, that's why you get a CFO or fractional CFO, is your going to project into the future. And so it's really important, especially in a contingency firm, but in all firms, because in a law firm, your income is up and down, it varies greatly, month to month, sometimes. And so it's good to do some projections into the future, so that you can make plans and know like, I have this amount of money in the bank today. So I'm going to hire an associate and pay them you know, a certain amount of money. Well, if you don't have any cases, settling in the next six months, then you may not be able to make payroll in six months. And so that's why it's important to kind of do those projections and see where you're going so that you have goals. And I like to do it several different ways. If it's a contingency firm, we can look at historical data. But I also like my clients to keep track of what cases they actually have right now. And estimate how much those cases are going to settle for and when they're going to settle so that we have a good idea of what's actually happening in real time.

Cool. And how do you project like, you know, we deal with a lot of personal injury firms. And those, I guess the check, could end up being, you know, $10,000, net to the firm or 100,000. net to the firm, and it could be coming in eight months, or it could be coming in 18 months. So how do you project cash flow in the event of a personal, you know, robust personal injury practice.

So that's where I really encourage people to keep track of your current inventory, and use your best guess and update it, you know, every month or two. So that, could you have a case today that may be worth $100,000, you have a deposition next week, that kind of screws up your case a little bit. So next month, when you sit down with your inventory list, that case is only worth 10,000. And so we have to constantly like it has to be a really fluid thing, where we're constantly updating it with the thought that yes, it really is always a guest. But as you do it for so many years, you kind of should be able to guess it a little bit. And then we also look at the historical so we can look at your data for the last couple of years and know that your case is that settled pre suit, they average about $10,000 a case, we have 30 cases right now that are going to settle in the next six months. And so we can kind of estimate it that way. And so I like to use both of those sets of data, what's actually happening in real time and what happened in the past to make a better educated guess on what it may look like for you know, cash flow in the future? Well,

so, like, how do you make accounting fun, you got a guy like me who's like, oh, boy, we got to do the accounting. And you know, this, I've got scars, you know, I used to be the director of marketing for McDonald's restaurants and Coca Cola. And we had about, I don't know, a $40 million budget in my region, which was crazy. And the accounting department would come in with a stack of invoices, I had to sign off. And there would be, you know, this radio station and this billboard campaign, and then these happy meal toys, you know, literally like, we could do an hour and it'd be it'd be like just a stack. So that's where some of my PTSD comes from. So, you know, how do you make it fun for people like me?

So my first thing that I do with when I'm talking to new clients, is I ask them their goals. And it has to be a goal that's not necessarily revenue based. Yes, you want to make $3 million next year, but what is that $3 million going to do for you? What can you do with that revenue. And so I try to get my clients to kind of dream and come up with those goals, so that they have a reason to think about the money a little bit more. Because if it's if you don't have any goals, and you don't have a reason to get to $3 million, then it's, it's kind of a chore to talk about it. And then I am also a big believer in education. And so I try to educate my clients and make them feel more help them feel more comfortable with the financial side, I find that a lot of people like you, or you know, have bad experience in the past or they just don't understand it. And so they just don't want anything to do with it. And so I try to explain it in a way that they can understand it. So that one it's not so scary to talk about and to they want to do it a little more than they want to talk about it. Also Working with me, I get into like the deep, nitty gritty numbers, and they give them the big picture. And so they're not getting into like the nitty gritty boring stuff, per se. So that keeps it a little more fun as well.

Yeah, definitely the kiss method for me keep it simple, stupid. My previous bookkeeper was pretty good. Like she gave me about a 15 line. p&l, it was like, super easy to understand. And that God that helped me, you know, it's like, and I've been begging my current partners for that. And they've got this whole complicated system, and it just boggles my brain. So Enough whining for me. Let's get into a little bit more about, you know, where you're located and what you do for fun. Tell us a little bit about Leah. So

I live in southwest Florida, on the west coast of Florida, I have lived here almost my whole life, I went away to college in Orlando for two years. And then I lived in Missouri for six months, and it was cold, and I came back to Florida. So I live here with my three kids, I have a four year old seven year old and nine year old, and they're all girls and my husband. And we have two dogs and three cats. So it is pure chaos. But part of the reason that I started working for myself and left the law firm is so that I could have more time at home with my kids, we got hit by the hurricane really hard in September 2022, our law firm flooded. And so we had to get a new new building. And it made my commute a little bit longer. And so that's kind of why I left back in May, so that I could be here more. And so I try to in between working, spend a lot of time at my kids school, and do things like that and just spend as much time outside as we can. Because you know, Florida's beautiful most of the time.

That's great. So one of the questions I love one of my CEO networking groups, we're audited by the MBA class. And we always like our speakers, we ask them, you know, tell us about a pivot or major life decision, and what you weighed in that decision? And what was your valuable learning from that? You know, I guess in particular, sounds like you made the paralegal choice. And then you made the management choice and you convinced your boss to take a ticket, give you a try, and you did great in the role. And then you chose to do your MBA, talk about those pivots, and what lessons a young MBA or young attorney could learn from your experience. So

I was really kind of lost in the beginning college didn't know really what I wanted to do. I had, you know, a couple different majors then. That's when I had the opportunity to work at the first law firm. I worked at years and years and years ago. And I remember that first day, I heard the word interrogatory. And I was like, what, what is this, but I fell in love with it. And so that was kind of the first Pivotal, hey, I want to be in the legal field. I really like it. So that's when I went, you know, changed my major to my paralegal studies, and did all of that. And so then I was at a crossroads of do I want to go to law school? Or do I want to be a paralegal and manage a law firm one day, and at the time, because I was just starting my family and all of that law school just wasn't in it for me. And as I ruined my management role, I realized that, while I do love the legal field, I love the management side of it more than helping people you know, I pride myself on, I used to hire people to be receptionists, and kind of train them up and like help them become paralegals. And so I really liked that side of it. And that growing that side of it, I went back to get my MBA mostly for myself, because I had no intention of leaving the law firm at any time. Like I said, my ultimate goal was to manage a law firm. And so that's why I went back to my MBA. And then I really started learning more of the financials and things like that. I think the first pivotal moment for me in becoming an entrepreneur eventually, was during COVID, because I worked from home during that time, I was around more for my kids. And so then, like I said, when the hurricane hit last year, I realized, I worked from home again for three or four months. And I realized, like, that was really important to me. But my career is also very important to me, I never wanted to just, you know, stay home or anything like that. So, I have found a way now, to do that by leaving my job, which was a very, very, very scary thing to do. I left a solid salary, you know, position that had no chance of being eliminated at any time to take the leap where if I don't work, I don't get paid kind of thing. And so, I've learned that, especially in business, my plans are always going to change the goal is always going to change. I'm kind of especially in my business, just kind of letting it go with what's coming naturally to me. So that's kind of Hi, my journey has gone.

Yeah, you know, it's a interesting way of making decisions a lot of people look at, okay, I'm going to take the leap, and I'm going to go out on my own, and they look at it as like, you know, pass or fail. And I was once making a decision, it was actually hiring, you know, $150,000, a year sales guy or something, you know, pretty significant chunk of dough. And, you know, I was hesitating and humming and hawing, and the, actually the CEO group I mentioned, we have a dinner we have every quarter or so and we call it a mini meeting. And we, we just sort of go around the table and talk about any business issues we have. And then this virtual board of directors, coaches you on that decision. And, you know, one of the guys was very astute. And he said to me, Look, how long do you have to commit to this guy? And I said, three months? He said, Okay, so it's at $500 a month, you know, can you afford $25,000? If it doesn't work, and I grown, but I said I could. And I took the flyer and actually, the guy turned out to be, you know, one of the pivotal reasons why we got into the legal space, and we ended up getting five or six, you know, real significant chunk of lawyer clients at one time. So it turned out to be great for us. So I would share, build on what you said, that leap, you know, you don't have to make a decision on the leap as a, it's going to work or it's not, and my life is over, you know, okay, in three months, six months, it doesn't work, you know, put some savings aside. And then, you know, God forbid, you apply for a job again, and a lot of employers of hiring managers myself, you know, I actually like if somebody has taken a crack at something entrepreneurially and then they can, you know, particularly the management side, because they can understand what you go through. When it comes to finance and payroll and budgeting and forecasting, you know, they really, they can really feel it, such as theory. So I got a couple of quick snappers, what are some apps or tools that you use for personal productivity.

So I have my, I'm kind of still figuring this out. I'm like, figuring out my processes and stuff. But I use asana and my business for keeping track of all of my tasks. I live and die by my calendar now. Especially like on my phone, I have my family calendar, like my business calendar, everything in there. And then I today I like for content ideas and things like that. I use my notes app on my iPhone all the time. And so I'm always like jotting down notes in there and things like that. So that's kind of what I'm using right now.

Okay, great. And any best business books, again, tips for perhaps some of the attorneys and some of us who are dealing with finances or, again, back to the young attorneys or young MBAs? What, what are those pivotal business books for you?

So I have read and I know a lot of people have profit first. And I don't I follow it not to the tee in my own business. But my theory when it comes to books and business and things like that is like read everything and then use what works for you. And so I like that because it helps business owners save for taxes. And I know so many business owners get behind on taxes and things like that. And and so if you start from the beginning with good habits of saving for taxes right off the bat, you know, you get money in, put money away for taxes. That's what I'm big on there. So I know for me personally, in my business, obviously going from a W two pay to, you know, working for myself, I made sure to set up those processes from day one. And then I really do believe in if

I can just jump in first Mike McCalla wits, you're the second person to recommend that book in about a month. And what I really loved about it from you know, my my take on it was the way I perceived it. I mean, obviously, the tax is mission critical. But basically, Mike would say also put in a separate account together, which is your profit account. And he said, so many people, you know, spend what's in in the bank account at the end of the month. And it's so important that you've got to put money into a profit account, maybe fired off your financial advisor, you know, by some kind of IRA or something, so that it automatically comes out every month. And that, to me that was the model of profit first. I mean, I absolutely agree. Taxes first, profit, second first. Love it and any blogs or podcast or YouTube that you subscribe to and never miss. I

really some of them are CFO focus. So there's a couple that I've joined for, like for what I'm doing with CFO, other than that, you know, I've I've listened to a couple that I've like law firm ones. Charlie man has a good one law firm alchemy I listen to that he's had some good interviews on there. So those are what like that's law firm specific. And that's

it right now. Great. And who's your NFL team?

Dallas Cowboys?

Yeah, Dad come about.

I've grown up in Florida and my sister loves Miami Dolphins in the early 90s. And so I had to pick another team and I picked Dallas. And I've been hardcore Dallas since then. And we are actually going to the Miami Dallas game on Christmas Eve. So bringing my mom's a Miami fan. I went to the Dallas playoff game last year in Tampa and my husband was supposed to go but he couldn't because it did it on a Monday. And so I was like, we'll go to a game this year, we'll go to Miami. And so when we were looking for Miami game to go to and bring the girls to Dallas was playing in Miami. So Christmas Eve. And all my kids are wearing Dolphin's stuff, except for one I talked her into being well, I

think this podcast is gonna come out right around December 26. So I hope you had a really terrible night and the Finns gone, but I do you know, Dallas is actually my backup I kind of see team so

it'll be a good game. They're both playing really well this year. So I'm excited.

I've been down here for 22 years now. So I've got a got a couple dolphin shirts now. Awesome. Well, what's the best place for people to get in touch with you if they think you could be of service. So

I post on LinkedIn, just about every single day, and I post tips and tricks and operating things, everything law firm, because I can bring all of that together with my experience. So LinkedIn is really the best way to get me an information from me. My name on LinkedIn is Lea Miller MBA. And then I also have my website is ln M financial.com. And you can schedule a 30 minute consultation that's free on there and, you know, talk to anybody you can send me DMS on LinkedIn as well. I love talking to people in DMS about my posts. Leah, thank

you so much. Appreciate it.

Thank you.

Thank you for listening to the 10 Golden Rules of internet marketing for law firms podcast. Please send questions and comments to podcast at 10 Golden rules.com That is podcast at t e n Golden rules.com