On this week’s episode of the Wealthy Woman Lawyer Podcast, we speak with Chelsea Williams. Chelsea is the founder of Core Solutions Group Inc. which provides accounting, tax, and cash management solutions for law firms to maximize your growth and profits.
Chelsea says: “One of the realizations that I came to when I worked in the traditional tax and accounting world was how very reactive the services tended to be. When I say that, what I mean is, maybe the accounting firm would hand over the monthly financials, but it kind of stopped there. Business owners would look at the financials and almost go cross-eyed. They weren’t actually being proactive and taking the time to understand their financials, and we weren’t working with them to do that. When I founded Core Solutions Group, I founded it based around the idea of proactive services and engaging with our clients to go above and beyond.”
We chat about generating wealth and using it in impactful ways, as well as:
- Addressing the challenge of understanding our financials and learning what numbers to focus in on
- Creating and working with a budget in useful ways
- Using budgetary information to allocate money towards business growth
- Accounting for pandemic relief loans
- And more
Mentioned in this episode:
Davina Frederick: Hello and welcome to the Wealthy Woman Lawyer Podcast. Our mission is to provide thought-provoking, powerful and practical information to help you in creating your own sustainable wealth-generating law firm without overwork or overwhelm so you can live your best life. I’m your host, Davina Frederick, and I’m here today with Chelsea Williams, founder of Core Solutions Group Inc. Core Solutions Group provides accounting, tax and cash management solutions for law firms so you can maximize your growth and profits. Welcome, Chelsea. We’re so happy to have you here on the Wealthy Woman Lawyer Podcast.
Chelsea Williams: Thank you. I’m super excited to be here.
Davina: Great, great. So money is one of our favorite topics. We love to talk about money, how to make it, how to account for it, how to get it to multiply for us how to, you know, be able to use our wealth in a way that’s impactful. So we’re really excited to talk with you today. Why don’t you tell us a little bit about your background and story, sort of how you came to do the work that you do?
Chelsea’s Background In Money Management
Chelsea: Absolutely. I’ve been in the tax and accounting world for a little over 10 years now. And one of the realizations that I came to when I worked in the traditional tax and accounting world was how very reactive the services tended to be. And when I say that, what I mean is, you know, maybe the accounting firm would hand over the monthly financials, but it kind of stopped there.
And business owners would look at the financials and almost go cross-eyed like, Oh, this is great, this looks good, thanks. See you next month. But they weren’t actually being proactive, and, you know, taking the time to understand their financials. And we weren’t working with them to do that. And so when I founded Core Solutions Group almost three years ago now, I found it based around the idea of proactive services and engaging with our clients to do that, above and beyond step of, Okay, here’s your financial, but what does it all mean and how do I make decisions based off of them?
Davina: Right, right. I do think is one of the biggest challenges for a lot of lawyers, law firm owners, because, you know, we got a law school to learn how to practice law and a lot of us take that route because we’re not, you know, numbers people and that’s not what we think we’re going to be dealing with.
But when we choose to start our own business, we really have to understand numbers because that’s the purpose of a business is to make profits. And too often, you know, it’s much easier just to focus on working in our business instead of focusing on working on our business and really addressing our challenge with numbers and really saying how do I take the information that I’ve been given to by my bookkeeper, my accountant and really understand it, right? Do you, have you encountered that a lot with new law firm owners or even a law firm owners who’ve been in business for a few years?
Chelsea: Yeah. No, no, you’re absolutely right. And I think an important concept to understand, especially for business owners is, you know, there’s two types of income, there’s fixed income, and there’s residual income. Fixed income is what we’re used to before we start our own business. We clock in, our money starts, we clock out, our money stops. It’s parallel to the time that we have to give it, right? Residual income says, You set something upright and it continues to make money for you, no matter the time you have invested.
When you start your own business, you step into this realm of residual income where systems, processes and your team become what generates the revenue as opposed to your direct hours. And it’s interesting that you bring up working in your business versus on your business. One of the reasons why I chose the legal industry as a core solutions niche is because in all the few states, in order to own a law practice, you have to be a licensed practicing attorney.
You are the rainmaker. You can’t be the guy down the street that has a store and can just let employees take over everything and he’s off, you know, in Cancun somewhere. You have to be directly involved. And so it’s even more important for attorneys to understand the power of delegation and, you know, the power of removing yourself from your business as much as you possibly can and exercising the highest and best use of your time.
Davina: Mm-hmm. I think one of the, you know, having worked with women law firm owners for the past, you know, seven years and having owned my own law firm, one of the first recommendations I make and what I see a lot of women law firm owners do is their very first hire is a bookkeeper. I mean, they may outsource it to a bookkeeping service, but a CPA is usually the first and then they’re looking for that bookkeeping service after they have that CPA.
We need somebody else to handle our taxes and make sure we don’t get in trouble with the IRS and we tend to think of CPAs for that. But then bookkeeping is one of those things that we quickly want to delegate because, but delegating the data entry of our numbers into a bookkeeping system is not, we can’t delegate that but we’re not abdicating our role and responsibility, right? We can’t abdicate that. And that’s really knowing how to work with those numbers and what to do and what business decisions to make based on your financial status, right?
Chelsea: Yeah, yeah. And I think it’s important that there is a difference between keeping the books and using that data to make business decisions because some people will keep their books and they’re there and they exist but they’re not using them. They’re not looking at the financials, they’re not analyzing profitability and planning growth and scaling while protecting profits based off their actual numbers.
Davina: So tell us some of the things that we can do, some of the things we should be looking for when we’re looking at our numbers. When we say to the bookkeeper, give me a p&l and a balance sheet, you know, what should we be looking for?
What are Meaningful Financials?
Chelsea: Yeah, so the first step is having meaningful financials. There’s a difference between having a set of financials and having a meaningful set of financials. And what I mean by that is 9.5 attorneys that come to me, when I look at their income statement, there is one line item for revenue. And based on that you can say oh, I made $500,000. Awesome. But I have no idea where it came from and I have no idea how much money it cost me to generate that revenue.
And so what we do when we make the financials meaningful is we focus on the chart of accounts, and that’s an accountant term, but it’s basically the income and expense account name that are listed on the income statement. So for example, a meaningful income statement would break revenue categories down by matter type and that information can be efficiently got if you’ve got, you know, if you use with a software, a practice management software that has those reports.
You can very easily see if you’re tagging them in the practice management software correctly, what your revenue is made up of in terms of matter type. So as we move down from the revenue, there are a few specific expense items that we are very adamant about breaking out. One of the most important is payroll. It’s not enough to know how much payroll you’re paying out. What we do is we separate the payroll out by owner’s compensation, revenue-generating wages, and then fixed wages.
Wages that don’t move like, you know, an office personnel, office manager or receptionist, whatever that might look like for your firm. But by getting more specific with that, it also helps translate to a budget much more efficiently so that when you go to forecast your numbers, which I’m moving ahead of myself a little bit, but it gives you the information and it gives you the formulas to be able to forecast your financial future. And then another area that we really like to break out is marketing. It’s 2020. If you’re not marketing, you’re going to die on the vine, right?
And with marketing, it is so easy to dump money and get nothing for it. And so by listing out your marketing expenses on your income statement according to who the vendor was, or if you have marketing strategies based on matter type, you can very easily create a KPI, or key performance indicator to measure your return on investment for your marketing dollars. So meaningful financials is definitely the first step into getting financial clarity so that you can start to work with, okay, these are my numbers. These are my formulas. Now let’s look at what could be.
Davina: Right. Right. I love that. And when I first, you know, we meet with my clients and we’re developing a plan, and we’re sort of a, you know, a growth plan and we’re assessing, we have to assess where they’ve been to be able to create a growth plan for them. And when we’re assessing where they’ve been, we really dig into those numbers, like what, you know, things like value per matter. Like what is the value per matter?
And you may look at your average value per matter for all of your cases, but it’s much more informative if you can look at your different practice areas and different services you provide within those practice areas and you’re able to tell what’s kind of an average value because then you’ll know, you know, where am I making the money? Where’s the money coming from? And should I put more marketing efforts into a book to promoting this practice area or that practice area? And if we don’t have that data, and the only place that we’re going to get that data is going to be in your financials, right? So let’s talk about forecasting and budgeting.
And we’re kind of jumping ahead, but I want to talk about that because I think that a lot of people find it really challenging to, like they want to create a budget but then they don’t really, their budgets tend to be sort of thrown out the window right after they’re created. You know, they don’t really, because they don’t really take into account things like growth, or things like recession, the unpredictables, and so their budgets, you know, so how do we create and work with a budget in a way that’s useful?
Chelsea: Yeah. So a couple of things. I have a lot of free tools on our website and one of them, which is the most popular tool and it’s also multifunctional, is the profitability per practice area tool. So you talked a lot about, you know, let’s look at the matter type, let’s figure out the margins. And that’s exactly what this tool does. It helps you to break down your services by matter type and then incorporates the time component, as well as your team. And so what this tool does is it says, what’s your average fee for this matter type? Who on your team is involved? Of course, what’s their hourly rate?
How many hours do they put into any one given matter of this type? What are the other expenses involved? And then it exposes your margins down below that, and then what you can do after you’ve analyzed all your margins on all your matter types is now you can turn it into a forecasting tool that’s going to show you if I have this many matter types within this given amount of time, this is how much money is going to cost me, this is how much money it’s going to bring in and this is the time involved, and the time is per team member.
And so that kind of plays into, you know, encouraging attorneys to delegate, you know, figure out what you can delegate to people and then incorporate that into your tools. And so to speak to the budget process, this is a very overwhelming thing. I mean, I think just even getting started on a budget is a huge step because there’s so much going on. And in my experience, your transactions are all over the place. You know, you got some on your personal credit cards that are really business, you’ve got five different business credit cards. You’re not even sure how to log into one of them. You’ve got three bank accounts. I mean, it can be extremely overwhelming.
Davina: Are you peaking in my windows? What do you doing? I don’t have that many business credit cards, but it’s getting more complicated every day. The more, the larger you get, the more you grow, the more complicated, you know, it can be to sort of keep track of all of these different pieces on parts. I don’t mix my personal and my business but I know a lot of attorneys do.
Chelsea: They do. You see it a lot, for sure. And, you know, the budget is reliant on historical data. We don’t have to have it. There are other ways. And the thing about a budget is let’s just find somewhere to start, okay? Let’s get it in black and white. Let’s get it on paper. The value in creating a budget is actually following through, which, as you said, a lot of people don’t do that. They don’t look at a budget variance report every month to show them what they thought was going to happen versus what actually happened, and then break it apart to figure out why and then adjust it into the future.
Davina: Right. One of the biggest challenges I see with law firm owners growing their businesses is they haven’t budgeted for the marketing. Certainly, marketing first and secondly, marketing the right amount for marketing, you know enough for marketing. If you’re in that high growth stage of your business, you have to allocate money toward the growth, right? And that could be not just marketing, but also all the things that come along with growth, you know? Where can we look for that sort of information?
Chelsea: So when we’re going down the budget, it is and, you know, this profitability per practice area tool comes in handy as well because if we’re forecasting an increase in revenue due to, say, a marketing strategy that you’re about to deploy that targets a specific matter type. In the budget for when those things start to turn and actually happen for you, using the profitability per practice area tool, we can see okay, your hours are going to increase this much for each team person and this is by how much.
And so we can transpose that over to the budget so that it’s accurate. And, you know, there are some items we go through and it’s the percentage of revenue. And that’s how we budget for it. Merchant fees are a perfect example. Typically we see between one and 2% of overall revenue. And so the budget, the merchant line item, is simply a formula of one or 2% of the total revenue that we’re budgeting for.
Same thing with payroll. So, you know, depending on how your compensation structure looks like, we can say if revenue increases by X amount of dollars, our variable payroll line item, because remember we’ve split the stagnant or overhead payroll line items from the variable line items. So then we can estimate how much as a percentage, your payroll, your variable payroll expense is going to increase based on an increase in revenue.
Davina: Right, right. Are you seeing a lot of, you know, I’m thinking about, you know, the revenue-generating wages, we’re talking about attorneys, paralegals people that you can build their time, right? And what’s wonderful too, as you’re talking about, like, let’s actually see how much time they’re billing. You know, there’s so many firms now that don’t, law firm owners don’t want to track their time and they don’t know how to set goals for their attorneys that they’re trying to hire associates.
And so a lot of times, law firm ours will say you can do flat fees, and flat fees are the answer to all my problems. And while there are some people I know who do flat fees successfully, there are a lot of people I know who really stunt the growth of their firm because they’re not using flat fees properly. Have you seen a lot of attorneys in the accounting work that you’re doing that are using flat fees and maybe what are some of the good things and maybe some of the pitfalls that you see in that as far as accounting goes?
Effectively Incorporating a Flat Fee Model
Chelsea: So the goal of flat fees is to remain profitable at the end of the day, right? There are going to be outliers, there’s going to be some that take less time and money and it’s a higher margin than normal. And then there’s going to be the other side where you just dump all these hours in and it seems like a nonprofitable case. But in the end, flat fees’ goal is to minimize the admin behind the hourly tracking but still remain profitable.
And, you know, back to the profitability tool on our website, we’ve used that to help firms established flat fee models. But the importance of tracking time cannot be substituted. To even get to the point to where you can figure out what your flat rate fee should be, you have to track your time, even if it’s the temporary, on a temporary basis. And then once you get to the flat fee level, it’s important to periodically track that time again to make sure that you’re still in line with where you should be with your flat fees.
Davina: Absolutely. You are singing my song now. I totally agree with you. Because it is really about what is being a business owner and making sure that you have accurate data. Like if you don’t have accurate data, whether you’re looking at your numbers, looking at your time, which is time is money, right? You have to have accurate data to make decisions.
So you can create flat fees, if it makes, you know, if it makes selling it easier for you or if you feel like it’s just an easier process for you all the way around or if you think your clients like it better, but you have to have the data. And that is knowing what it costs to litigate a case or settle the case or handle a matter in any sort of way, whether it’s estate planning or family law or whatever. You have to have the data before you can make those. So that’s an example, that’s a great example of a business decision that you make from the data that you have.
Chelsea: Yeah. Yep. Can’t forget about time. It’s so often forgotten about. And, you know, I say, what’s a million dollars if you don’t have a minute to spend it?
Davina: Wow. Let’s talk about when you and I are recording this, we’re in the middle of this COVID-19 pandemic. People are starting to now go back out into the sunshine and we’re going to see what goes on there. But because of that effect and everybody being on lockdown in the country, or most of us being locked down and so many people losing their jobs and things like that, we, as law firm owners may have taken advantage of some of these opportunities for disaster relief, like the economic disaster loan or the payroll protection loan.
And I know that a lot of people have a lot of questions about those kinds of things. What kinds of questions are you hearing that law firm owners may be having about how to account for, manage, spend, you know, these loans?
Chelsea: Most of the questions are around the PPP forgivable loan, for sure. And I think the last official update was the 15th of last month. And most of the questions are coming around, you know, how do you get forgiven? What do I need to do to just get forgiven? And so, you know, we’ve been talking to a lot of people about that. They continue to have discussions around changing it even further even after the updates that were released last month.
So, you know, what I tell people that come to me with a lot of questions is that, you know, at the end of the day, do your very best to maximize the forgiveness potential based on whatever new decisions they’ve made tomorrow, right? And if you’re not forgiven for all of it, it is a 1% interest bearing repayable loan. You are never going to find another loan with that little percentage.
So, you know, as a backup plan, we’ve been working with clients to strategize, okay, if we don’t get forgiven for all of it, what’s our course of action? We’ve got a lot of people that are knocking out debt with whatever is less than not forgiven and utilizing that. So people have options. And I think that to spend your time trying to keep up with these changes, I work with an SBA author at a local bank that I have a relationship with and he said on many occasions, if anybody claims to be an SBA loan expert right now, they’re lying to your face.
I mean, nobody knows what’s going on. I feel like the SBA doesn’t even know what’s going on quite yet, but it’s understandable because they made such a fast response. They tried to get this stuff out there as soon as possible for people, and they’re like, we’ll figure it out later, right? So I think that being too stressed out or spending too much time trying to figure out how to get forgiven is not the best use of your time right now.
I think that focusing on your business, doing everything you can with the information that you do have to qualify for forgiveness, but kind of letting it go after that. And let’s get back in focus because if you’re on the right path anyway, if you have financial clarity, if you have direction, if you have purpose, even if you end up owing some of the loans, so what? It’s 1%, you know, over I think two years. So let’s not stress about that, right? Let’s get back to business and let’s focus on what we can do right now to get in a good position with all this going on.
Davina: Right, right. I mean, I think now is the time really to be reaching out. I mean, what I’ve been talking with my clients about over the whole period of quarantine and all of that is reaching out to your past clients, to your current clients and saying, How can I help you? What can I do for you? What’s going on with you right now? And I think that that is going to go a long way. And, you know, people are going to raise their hand for your services because, you know, so many things are changing quickly and they are going to be a lot of legal ramifications.
And they’re going to be a lot of people needing to talk to their lawyer, their counselors and putting your focus on that and getting a good CPA to, and tax advisor to advise you on what you need to do with your loans but shifting your focus back to generating revenue because if you do that a lone is really going to be a non-issue. You’re generating enough revenue. So what are some of the biggest mistakes that you see law firm owners making in their business that shows up in their financials, in their books?
Chelsea: Keeping the numbers in their head or doing their books themselves and it’s an incomplete set of books. So not having the books at all is one of the biggest things. You know, it’s flying blind. If you can’t see your numbers, if you don’t know your financial position, you know, we’re on the Wealthy Woman Lawyer Podcast, right?
And if you understand wealth, you know, there’s a difference between having money and having wealth. Wealthy people get there because they understand how money works. If you don’t understand and have, you know, the basic foundation of how money works, where you’re at now, where you want to be, work with someone to figure out what those steps are in between, you’re just not going to get there.
And there’s a lot of things that go into that, right? It’s not just about the money, the paper. There are mind blocks that people have around money that put caps on their potential because they have this mind block thinking, you know, oh my goodness, a million-dollar firm is so hard to get to. If that’s how you feel, your journey is going to be hard.
On the other hand, if $10 million is so hard to get to, chances are you’re already making five to seven. And so, you know, to get wealthy, to get to that point to say that, you know, you have wealth, you have to have the mindset to do it, the understanding of how to do it, and even your habits. There’s a book called Rich Kids by Tom Corley, and it has a chart in there, and he explains it 40% of our daily activities are habitual, so we’re on autopilot for 40% of our life. That’s crazy, right? When I heard that, I was like, You gotta be kidding. That’s a lot.
Davina: This does not surprise me.
Chelsea: Well, they did this seven-year study and they studied the habits between the wealthy and people living in poverty. And they have a wonderful chart in there. And not all of them are money-related but you can see that the byproduct of good mindset and good habit translates for these people.
Davina: Wow. Yeah, that’s great advice. It’s absolutely spot-on is that you have to have a desire for wealth, first of all, to create it. And a desire that’s not just like a loose fantasy, but one that says, I’m going to do this and I have the ability to do this and I’m going to reach out and get the help that I need to figure it out, right?
I’m willing to do that and I want it bad enough to be able to do the hard work of it. Whether that hard work means learning, you know, how to account for your money and learning how to understand reading financials and talk with financial advisors and with experts about your money or whether it’s around, you know, growing your business, marketing your business or some other example.
Figuring out how to assemble the right team. I mean, I know so many people that, you know, they have, they let one bad hire scare them and keep them from hiring anybody else for a year. And that’s a huge setback, you know? And that’s all a mindset sort of thing, right. And I’ve had that, I’ve had people tell me they’ve had that experiences with bookkeepers where they said, you know, I’ve tried to outsource my bookkeeping, I’ve tried to hire bookkeeper, and, you know, she was terrible.
So, like, what are some, and same thing with CPAs. You know, most people tend to really, actually feel attached to their CPAs, which I find interesting, but they’re bookkeepers. They’re like, you know, I hired a bad bookkeeper once, I can never do that again. So what are some things that we can look for when we’re hiring our bookkeepers or CPAs or financial advisors, what kinds, what should we be, is there one or two things that you could tell us that would be red flags for you?
Red Flags to Look Out For When Hiring a Bookkeeper or CPA
Chelsea: Yes. So there are bad apples out there just like anything else. And, you know, to speak on what you said earlier, it’s not just about the bookkeeping, keeping your books in order and having financials is not going to make you wealthy. You have to have, we’re not the only piece. You have to have your key financial players at the same table. Your financial advisor, your tax preparer, your accountants, I mean, all of these people need to communicate and be on the same page about your financial positioning at the same time. So, you know, this is just a piece of it.
And, you know, in terms of finding a good bookkeeping service, I always, I believe in a niche, find somebody who studies what your industry does specifically because there are things that happen, you know, in the legal industry, for example, that don’t happen in most other industries, like trust accounting. It’s not something that, you know, a bookkeeper would understand if they have never done it for a law firm. The financials, I know I keep coming back to it but, you know, if you’re looking at working with a bookkeeper, ask them, you know, what is important in your financials.
Ask them questions that you have yourself, you know, what should I be looking at? You know, what are my KPIs? What if this happens, how do we do this? I mean, having someone that understands the output of the bookkeeping function, I think is super important. And when it comes to taxes, so often, you know, people come to me and they’re like, okay, here’s the last year. Just make my taxes go away. Make the profit go away. I don’t want to pay taxes. No taxes for me. But here’s what I ask those same people. Do you ever want to buy a house?
Do you think you’re ever going to need a loan? Do you ever want to exit your law practice profitably? Because if you do, if you want any of those things, you have to show a profit, which means you’re going to have to pay some taxes. Nobody is going to give you money or buy your business if you aren’t profitable on paper. It’s a matter of balancing the two to find this sweet spot. And there’s a difference between preparing tax returns for one year and creating a tax strategy that looks three to five years in the future and accounts for your financial goals that are going to be coming up.
Davina: Right, right. I think that’s powerful what you just said because I know that, you know, there are some CPAs out there who will do your taxes for you and then they’ll go here’s your, here’s what you’re gonna owe in taxes. And then you get it you’re like, Oh, my God, what? And then they never tell you, they never give you any advice in the year prior when you can actually do something about it, right? They just wait till after and they go, Oh, here you go. This is what happened in your business and you’re like, oh, wow, I really could have used some advice. If I’d only known, right?
Chelsea: That’s that reactive piece. And business owners don’t know to ask. It’s our job as the professionals to initiate the conversation throughout the year. There’s a quote from a judge and it says there are two tax systems in America. One for the informed and one for the uninformed. A huge red flag if you have a CPA and you get that bill at the end of the year, and you’re like, Oh my gosh, I have, I owe this much in taxes?
And they say well, we’ve done everything we could. There is a lot of tax strategy out there that unless, it’s a craft, you know, it’s a craft all in itself. Because what it, you know, how does AT&T and how do all these big corporations make all the money that they make, but they’re paying so little in taxes, yet these small businesses are paying 10s of thousand dollars in taxes? There’s a reason for that, you know?
Davina: I think that, you know, a lot of people will be very careful, be very conservative in their approach because you don’t want to trigger an audit. I don’t want to trigger an audit. If I’m not taking full advantage of tax strategies, you know, if there are certain things that may be audit triggering, if I do that, yes, I’m allowed to do it. But, you know, there’s a fear around that kind of thing. Have you heard that from people? Has, you know, has that been your experience?
Chelsea: Absolutely. I think it’s a natural concern, pretty normal. But both of the systems that I was referring to for the informed and the uninformed, both of them are legal, meaning if you get audited and you’re doing what you should be doing within the bounds of the tax laws and you’re keeping good records and you have your supporting documentation, please Mr. auditor, be my guest. Come waste your time. Have fun. That’s the way I see it anyway.
Davina: Yeah, yeah, absolutely, absolutely. So what, you know, there’s a lot of talk now about recession and what is, you know, what are things going to look like in the coming months with everything that’s going on, what’s been going on in the economy? What kinds of things would you tell me? We’re halfway through the calendar year now. What kinds of things would you tell women law firm owners that they should be really looking at and thinking about right now in their business?
Now is the Time to Get to That To-Do List
Chelsea: One good thing that I can see that COVID has done is that it has forced the legal industry, courts and law businesses alike to enter this technological realm. Some that people thought wasn’t possible. I’ve talked to attorneys who, like I can’t work remote. That’s, you know, that’s just not a thing. And another reason why I can really resonate with the legal industry coming from the tax and accounting industry, there are a lot of parallels. We both deal with government entities and agencies which are slow to respond, slow to act, slow to change, right?
So, therefore, we adapt this kind of same mindset of, well, the IRS isn’t utilizing as much technology as they could be, or I can’t do remote hearings through the courts. So, you know, in-person is where it’s at. And I think that when COVID hit in, you know, and I’m sure it was a stressful time for firms that weren’t utilizing technology or didn’t know how to work remotely, I know it was. But now after the fact, my hunch from the beginning has always been this is going to stick. This is going to stick.
We’re going to see more attorneys working remotely. We’re going to see the courts utilizing technology more. And I personally think that it is a great thing for your business for a number of different reasons. And, you know, when COVID hit and everything started, I am in a lot of different legal networks and groups and I started watching the webinars that, you know, people and organizations started putting out there and all of them had a common theme. All of them encouraged law business owners, no matter what’s going on with your revenue even if it sucks, work on internal operations. Work on your business. Now is your opportunity.
Now is your time. Get to that to-do list. Create processes, plan for growth. If you’ve talked to some attorneys who were practicing in 08, they’ll tell you the same thing. What got them through was focusing on moving forward, not getting caught up in what was happening then but being able to see after. What happens after, because crisis are not a new thing. Crisis, they happen every,m you know, six, eight years or so. I mean, this is not the first time that has happened. More importantly, it’s not going to be the last.
So to get prepared for what is to come, and that’s part of being an entrepreneur, right? We say that, oh, you take the entrepreneurial leap. I jumped off the cliff. It’s not one jump and you’re done. It’s jumping again and then again, and then again. And if you’re lucky, you get to a place where you’re looking for cliffs to jump off of if it makes sense, right? So I think that there are a lot of valuable lessons to be had because of COVID. And I think that, you know, the law firm owners who have made it through 08, that’s proof that, you know, the best thing you can do right now is plan for what’s to come.
A lot of practice areas are going to experience a dump if they’re not already. Criminal attorneys almost stopped completely overnight. They almost lost all of their revenue. But my, you know, they’re going to get a dump. Are you prepared for it? Are you going to be positioned to where you don’t have to say no, or give a client a poor experience because you weren’t prepared and you didn’t see it coming, you didn’t have that foresight to know what you need to do now to prepare for the aftermath.
Davina: Right, right. Yeah, I’m always saying to our audience that, you know, if you get, if you’re focused on oh my gosh, this is what’s happening right now and you’re sort of myopically focusing on that and you’re not thinking about what the plan is going to be for your business three months from now, six months from now, 12 months from now, 18 months from now, right?
And because, like, for instance, with the COVID-19, I always use that as an example since that’s what we’re in right now, experts are saying it could be 36 months before we have a vaccine. I mean, some of the most horrific diseases in the world, you know, they’re still looking for vaccines for them and it’s been 10, 12 years, you know?
So, you know, experts are predicting that it may get better, it’s probably going to get worse before it gets better. And if so, if you’re not taking action right now in your business, don’t think that by sitting on your hands and sort of waiting to see what’s going to happen that it’s going to get any better. Because if you’re sitting on your hands right now, what’s your business going to look like?
We can always tell 90 days from now what you were doing 90 days ago by looking at your numbers. You can look at it and say, Okay, I know what you were doing. You were sitting on your hands freaking out and not taking any sort of action and get answers and trying to make a reasonable prediction and think about your business and what you want to do next. So I think that’s really key is to, if you’re a business owner, you really have to get comfortable sort of being a futurist, you know? And the more data we have on our industry in our business, the more metrics we can look at the more accurate our predictions are going to be.
Chelsea: Yeah, and I mean, we are on the woman lawyer podcast and I personally think that women have the upper hand in this position, I did a presentation. back a few months for NAMWOLF and I crunched the numbers from the ABA annual report. Out of the 2018 law school applicants, only 1.1% of them, and there were 60,700, 1.1% of them were made up of women. And what that tells me, because I’m coming from the tax and accounting industry, right?
A lot of parallels as I mentioned. One of those parallels is women are still making not as much as men and there are less of them in leadership roles. If you look at other industries over the past 20 years, women came up and or surpassed men in their respective positions. Accounting and legal is behind the average trend. So women who have made it through law school who have chose to hang their own shingle have already overcome so much more than your male counterparts.
Davina: Right. I don’t know if you’ve read the ABA report walking out the door. And it was about how female partners, usually in their 50s, are leaving big law in droves because they are not satisfied with what the experience has been for them and they’re kind of tired and done. And so where they should be enjoying kind of the fruits of their labor and be at the height of their earning years and their careers, they’re leaving.
And I think that’s why you see so many women now who are graduating from law school and starting their own practices and maybe a lot of them creating virtual practices and they’re starting to look for other ways that they can enjoy a successful career as a Lawyer as opposed to trying to fight against these institutional law firms that no matter how many women lawyers they hire, very few are going to be on the annual reports with their bases, you know, as a named partner right?
And so you’re starting to see a lot of women who are forging that path. And that’s, you know, that’s our audience and who we’re talking to are those women that are doing that. And I encourage them to, you know, have the confidence that they can create their own big law firm, if that’s what they want. I mean, you don’t have to go work your way up somebody else’s big law firm. If you do the work to become business savvy, you can create your own big law firm.
Because at some point, those things, those firms that we call big law started with two white guys who got together, became a partner, you know, said let’s start this business, this firm and then they’ve grown it to these big law firms. So why can, why aren’t we as women able to do that? We’re absolutely able to do that if we want to, but it does take that investment in learning how to be a business owner, not just a lawyer. Or in your case, you know, an accountant or, you know, in the financial services industry.
Chelsea: Yeah, and that’s another mind block, right? I’m a female attorney, I am going out on my own. I don’t know if I can do it. But you’ve already overcome more than the male that steps out and does his thing by himself, you know? And I think that, unfortunate as it is, that women are leaving big law because of this. I also see it as an opportunity. I had a really good conversation with a lady a while back, and she pointed out that, you know, in big law, in any high up table, if you have a table with 20 seats and only two of them are for women and you’ve got five women in the firm, what do you think those women are going to do to each other?
How do you think they’re going to view each other? They view each other as competition. They’re no longer helping each other and have a mutually fruitful relationship. Now they’re competition, and I think that women already, we’ve had that problem already, right? The fact Oh, I can’t get along with other women and this and that. No, we need to get along with other women. We need to network, you know, with other women, and be in an environment where we’re not each other’s competition at a limited seat table.
Davina: Right. Well, we never think, you know, it’s, we have to divide up this pie and if you get a bigger piece, that means I get a smaller piece. We never think well, we can just bake more pie or we can just buy more pie. You know, whatever, right? In my case, we’re going to be buying a pie. We’re not going to be baking a pie. But, you know, I mean, that’s really, there is opportunity out there for any of us if you’re willing to work for it. And I think we need each other too, because we can’t do everything.
Like, even if I physically could do everything in my business, I am not the best person to do everything in my business. So it’s critical to make those connections with other women business owners and other service providers and other, and our colleagues and have those resources and build those networks and go against that old story of women don’t get along, you know? I like men more than I like women, so I’m going to work with men, you know? That kind of belief system. We don’t have to have that, you know?
Davina: Well, I appreciate you being here today and talking with us about money, money, money, because that, it’s a topic that is hard, I think, for women to discuss a lot of times, or people in general, you know, they may be brought up in such ways were discussing money is not appropriate or we don’t want our ignorance to show. And so I appreciate you being here today and helping to educate people and get them thinking. And tell us where we can go to get to access those tools you were telling us about because you have a number of tools on your website, calculators and things that I think women law firm owners will find really beneficial.
Chelsea: Yeah, yeah, the website is yourcoresolution.com. And on a website, you’ll find links to all of our other social media outlets, so I won’t go through and list all of those.
Davina: Yeah, we’ll know how to find you if we go to your website, we’ll be able to go from there. Well, thanks so much for being here and sharing with us today. Is there any final thought you’d kind of like to leave us with before we check out?
Chelsea: You know, I think for the woman attorney who’s looking to go out on your own or looking to grow, it really all boils down to financial literacy. And that’s my personal heart mission. It’s something that we’re not getting taught in school. High school’s not teaching it. I’m willing to bet law school didn’t teach it to you. But in order to get to a place of wealth, you have to have the financial literacy to understand where you’re at, where you want to go and how to get there.
Davina: Mm-hmm. I would add to that, if you want to create generational wealth, you also have to educate your children in finances, and the younger the better. And if you show a willingness to learn and educate and understand and model that for them, that’s going to go a long way. And then, you know, one day they’ll be the rich kids we’re talking about in books, you know?
Chelsea: Exactly. You know, I have a 12-year-old. She already has a credit card on her name. So she’s building her credit. She works for my dad. She has a job generating her own revenue. She has a savings account and a retirement account. It’s completely possible to instill these fundamentals into your kids.
Davina: Wow. I do. I love that. I love that 12 to have a retirement account. I wish I had a retirement account at 12.
Chelsea: Me too.
Davina: That’s wonderful. Thanks again, Chelsea. We really appreciate it.
Chelsea: Thanks so much for having me.