The Lies You Believe Around Money (and Why They’re Choking Your Profits)

The biggest thing that holds firms back from profits is the belief around money. If you believe it’s hard to earn 1 Million in annual revenue, your path to becoming a 1M+ firm is going to be a rough one. You’ve heard, “if you say you can, you’re right and if you say you can’t, you’re right”?

Remember when you were a kid and one hundred dollars was equivalent to millionaire status in your mind? Nothing has changed in this regard since you were that little kid. If you think the amount of money you want to make is a ton of money, you’re going to settle for less.

Generating healthy profits is not about hitting it out of the park. It doesn’t just happen one day because of a stellar client you land. Profit is a habit, it’s hitting singles. You hit enough singles and you win the game. The better you understand and manage your money, the more real hitting (and exceeding) your financial goals become.

Here’s my list of the 10 lies we tell ourselves around money.

1 – My firm is a unicorn, therefore systems on how to make, spend, and keep money won’t work for me.

While your skill level may be unique, the fundamentals of your business are not. I talk with lawyers all the time who think that the methods we use to manage cash flow just won't work because their firm is too different. Don't make it more complex than it is. Money is simple, you get some, you spend some, and preferably there’s some left. No matter where or when your money comes from, there are ways to manage it. We came up with a guide on how to do this, Cash Management For Law Firms.

2 – You must spend money to make money.

If you're willing to activate those creative juices, you'd be pleasantly surprised at just how much you can accomplish. It's never a lack of resources, only a lack of resourcefulness.

Revisit Part 4: Parkinson’s Law and Practicing Law. This lie costs us SO MUCH money!

3 – You must make a lot of money before you can start saving.

Saving money is much more about creating a habit than the actual act of putting aside money. Habits are created by doing something repeatedly, no matter the measure.

4- It’s not worth saving in small amounts.

See myth #3. The amount is not what matters, actually doing it does.

5 – Credit cards should be avoided.

Credit cards can be used in a way that helps regulate spending. The key is not relying on them or allowing them to accumulate. Why not get the points and benefits!?

6 – It’s too soon to start planning for retirement.

First, see myth # 3. Saving for retirement means capitalizing on compounding interest and putting your money somewhere where it can make money (more than minimal savings account interest yields). Compounding interest grows substantially over time, so the sooner you start, the more money your money makes.

7 – Money is hard to make.

If you believe it is, it is. If you believe it is not, it's not. The mind is a powerful thing and we tend to put caps on our earning potential in there. Find ways to believe it's possible and get going. Find someone who's already doing it and know that if they can do it, so can you.

8 – I need money to be happy.

Myth, just ask Britney Spears, Justin Bieber, Corey Feldman, a bazillion other music legends, self-made millionaires, and other actors/actresses. While money may help, it’s up to you to find your happy because money’s not the indicator.

9 – All lawyers make boatloads of money.

While your clients probably believe this one, we know better. Especially when you're first starting out, things can be tight. We know lawyers who aren't in it for the money and live on a medium salary that they're perfectly happy with. Don't try to live up to an unspoken, misguided standard. Know what you want, be reasonable, and build your practice around it.

10 – Profits and taxes are bad things.  

No one writes a check to the IRS while humming happy days and tapping their toes joyfully. Let me ask you, are you going to be applying for a loan or buying a house in the next 3-5 years? Are you hoping to exit your firm when you retire and make a healthy amount of cash when you do so? People don't loan money or invest in a business that's not profitable.

After all, it’s not really about the numbers (hah, had you going this WHOLE time!)

While most lawyers think they went into business for themselves to gain more time and money, the real reason, if you are truly passionate about what you do, is that you wanted to make a difference. Whether it be one person’s life at a time or by being a legal warrior for the greater good, you have the heart to change the world and this world needs that. BUT… you need to get paid too, as a byproduct you know? Don’t let money be the reason you don’t achieve greatness.

If you’re ready to get to the next level, give us a shout.