Episode 360 | Is Revenue a ‘Vanity’ Metric? Understanding Revenue, Profits and Wealth-Building
“Revenue is vanity, profit is sanity.” You’ve probably heard it from someone who thinks growing your law firm means chasing a number you can brag about.
I understand why people say it. I’ve seen owners cross seven figures and take home less than they did as solos.
But if you’re paying for every new hire and every new system out of what your firm brings in, where do you think the money to grow comes from?
I started my first law firm with $5,000 I borrowed from my husband. Once that money was spent, the business had to fund what came next.
In this episode of the Wealthy Woman Lawyer® Podcast, I’m talking about three numbers firm owners often treat as one: what the firm brings in, what it earns after paying for the work, and what you’re able to turn into personal wealth.
I’ll introduce you to Danielle, a family law attorney with high six-figure revenue and a waiting list of clients. She still reviews every document before it’s filed and takes her laptop on vacation. When we asked how much she actually made, she had to guess.
I’ll also tell you about Grace, an estate planning attorney who counted on selling her practice to fund retirement. When she talked with potential buyers, they saw something very different from what she thought she was selling.
We get into:
- Why a firm can have strong revenue and still struggle to fund its next hire.
- How the wrong clients can make your revenue look better while leaving your team with less capacity.
- The number to look at when you want to know what the firm earns beyond paying you to practice law.
- Why years of healthy fees may count for less than you expect when a buyer looks at your firm.
- What it takes to build wealth along the way instead of counting on one big payout when you leave.
If your firm looks successful on paper but you’re still the one holding it together, I want you to hear what changes when you start looking at your numbers as the owner.
Before you decide you need more revenue or less overhead, listen to this episode. The number you’re chasing may be telling you only part of the story.
LINKS TO LOVE
Ready to grow beyond what you can earn and deliver on your own? Book a call with me. We’ll talk about where your firm is today, what you want it to provide for you, and what may be keeping it from getting there. We’ll also explore whether working together is the right next step.
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