Maximizing Value in Law Firm Operations with Guest Victoria Collier

Prepare to unlock the strategies that can catapult your law firm to new heights, as we sit down with the incomparable Victoria Collier of Quid Pro Quo Law. Witness the journey firsthand, from the founding of a successful estate planning and elder law firm to its high-value sale, and beyond. Victoria, an authority on the topic, generously shares the blueprint for understanding your firm’s worth, fostering growth that doesn't hinge on the owner, and the power of business valuations to target improvements across marketing, sales, and production. 

Navigating the complexities of law firm management and acquisitions requires a masterful balance of maximizing profit and minimizing risk—areas we dissect with finesse throughout our conversation with Victoria. Explore the transformative benefits of contingency planning, staff cross-training, and marketing diversification to future-proof your practice. Take in the wisdom on succession planning, the art of delegation, and how these can not only reduce legal liabilities but also vastly improve your quality of life. Our discussion is packed with actionable advice and real-world examples, making it an indispensable listen for any law firm owner poised for success and yearning for a fulfilling 'life after law.

Grow Value and Sell-ability in Your Firm
Quid Pro Quo helps lawyers build law firms as a business that have value and can be sold.

Disclaimer: This post contains affiliate links. If you make a purchase, I may receive a commission at no extra cost to you.

Video version on YouTube
Book your free Discovery Call with my team.

Transcript

Jennifer Goddard: 0:00

Hi and welcome back to the Marketing LawCast. I'm your host, jennifer Goddard, I'm the CEO of Integrity Marketing and I'm so happy today to be having our guest, victoria Collier of Quid Pro Quo Law.

Narrator: 0:14

Before we dive into today's episode, a special shout out to our sponsor. Quid Pro Quo. Are you a law firm looking to scale or sell your practice? Qpq's expert team can help you unlock your firm's full potential. Stay tuned for valuable insights brought to you by QPQ.

Jennifer Goddard: 0:29

Hi Victoria. It's always great to see you. For those of our listeners who maybe aren't that familiar with you, could you give us a little bit about who you are, your background and your company?

Victoria Collier: 0:40

Sure, I'm Victoria Collier and prior to creating Quid Pro Quo in 2021, I actually started my own law firm right out of law school in 2002. In estate planning elder law specifically I became known as the expert in veterans benefits within those subsets. I operated that business for 18 years and I sold it in 2020, before the pandemic, which was great timing for me. I learned how to build a law firm from scratch. I took it over seven figures for about five years before I sold it and then I sold it. After I sold it, I was actually, as you know, I own farm animals and I bought a farm and I started farming.

Victoria Collier: 1:29

But my colleagues who I had known for 18 years, who I had coached in the estate planning world, were reaching out to me and they were asking me how did you sell your law firm? Can you help me do that? And so I started Quid Pro Quo to fit that need, because there's just not a lot of resources for law firms or law firm owners who want to exit and actually make money off of the sale, because the traditional way was just handing your cases over to a colleague and be grateful that somebody's taking care of your clients. But it doesn't have to be that way anymore and, as you've seen, jennifer, over the past five to 10 years, law firm owners are becoming much more astute and being business owners and not just lawyers. So if you're just a lawyer, it is still very hard to offload your firm and have what I call a great life after law. But more and more lawyers are becoming business owners and then they can sell their business and that's what Quid Pro Quo does.

Jennifer Goddard: 2:36

Yes, and also like anything that you've ever pursued. When you started this company, you got all the education. You got your certification in business valuation and exit planning. You never do anything halfway.

Victoria Collier: 2:52

No, I learned early on. I was a paralegal before I was a lawyer and I was taught that if you're going to do something, you do it to the best of your ability.

Narrator: 3:03

I mean, I was in the Air Force.

Victoria Collier: 3:04

Our whole motto is aim high. You can't do that by dabbling in a topic. So, yes, I became a certified value builder person who values businesses, and then also a certified exit planning advisor as well. And so I go just like lawyers go to CLEs, I go to my own conferences and educational events for this industry.

Jennifer Goddard: 3:30

Yeah, that doesn't surprise me one bit. That's exactly how you approach everything Today, victoria. We wanted to talk a little bit about, you know, it being the beginning of the year and if someone has an exit timeline in mind, let's say, well, I'll let you talk a little bit about that, because people have different timelines in mind but sometimes it comes down to the last minute. But if someone has a timeline in mind, what kinds of things should they be doing and thinking about now, at the beginning of the year?

Victoria Collier: 4:03

First of all, most people, when they have a timeline and I say when, because most people actually don't have a timeline, but vaguely in their head they think of a certain age. And so when I hit this age, I want to phase out is the way I hear it most often from people is I want to phase out when I hit this age. That age generally comes down to either retirement age, like at 65 or 67, based on social security, or it comes down to when their children are graduating from either high school or college, because they feel at that point they have the freedom to not have the same kind of income that they've been striving for every year. So that age or that stage could be very different for people. It could be a year from now, it could be 15 years from now. Regardless of that, what they don't ever know and that is what is the value of their law firm they just don't know that they might have a hint of gut desire as to what they want from their law firm when they sell it. So they might know that I want to make a million dollars or $3 million, or I'd be happy if I walked away with $200,000. That doesn't mean they know the value of the firm. They just know that somewhere along the line that's what they believe they can live on in retirements. However, they define that for themselves.

Victoria Collier: 5:29

So I would say the first part of the year is the best time to actually get an evaluation, because when we do the evaluation, it actually gives you strategy on how to increase the value of your firm if you want to increase the value. So when best to put a plan in place in the beginning of the year? So I would say that it also helps us define the gaps. If I'm here and I want to go there, where are the gaps? And even without evaluation, okay, I would say that the two biggest gaps that we see that have the greatest impact on selling our law firm, our profitability, is what's your profit margin? And so can we increase the profit margin? And second would be is the firm autonomous from the owner? What can we do that would get the firm to be autonomous from the owner in any aspect whatsoever? That could be in marketing, that could be in sales, that could be in production, that could be in you name, it. Just pick one of them and work on that, you know.

Jennifer Goddard: 6:38

One of the things that I hear from people is that they're afraid if they're trying to improve their profitability, they're afraid of hiring out anything. They feel like I've got to do everything myself, because anytime I spend money on marketing or sales or an administrator or a CEO, then I'm reducing my profitability. So how do you kind of change that mindset?

Victoria Collier: 7:04

Well, it's hard to change that mindset if you're talking about somebody who's been a sole practitioner for 40 years or 30 years and they're not a business-minded practitioner, and sometimes you can't change the mindset and for you just cannot do it. But the best way that I found to try to at least have them see that there is a possible shift is breaking down. What is the hourly rate you would pay for someone to do that other task, whatever that is, how many hours does it actually take you to do that task? And if you were charging your hourly rate in not doing the task that you shouldn't be doing, what would you be doing with that time? Some people don't think about that. They just think about the added cost which, first of all, there's your first mistake. It's not a cost when you do it right. It's an investment. But people don't do it right sometimes. So therefore it is in fact a cost, right.

Jennifer Goddard: 8:05

Right, exactly.

Victoria Collier: 8:06

But let's assume they do it right and it's an investment, which means that either that other person is creating money for them like I'm paying you $10 and you're making $30 for me or if you're not making any money for me because it's not a money type task, maybe you're saving my time, which then I can be charging $150 for that same, for that same amount of time that I'm paying you $10 for, and so that's where the investment is. Now I can reallocate my time to higher, best use profitable activities. So, for example, I could be out giving a seminar. I could be having three more consultations per week if I weren't doing my own bookkeeping, which is the biggest thing that I see that law firm owners do is their own bookkeeping.

Jennifer Goddard: 9:00

That was gonna be one of my next questions is where are the big ones that you see that people need to start not doing?

Victoria Collier: 9:09

So I would say, first of all, a lot of lawyers still do their own intake calls, even before the consultation, because they feel that they are the only ones that can screen the call well enough to decide if this can even possibly be a client. So that's number one is spending all these five to 15 minutes on the phone with someone just to decide if they can come in and have a consultation. Those five to 15 minutes really add up, and so that's number one. Number two is definitely bookkeeping the lawyers that still do their own books. Number three is billable hours in reviewing the time sheets, not just for themselves but all their other employees.

Victoria Collier: 9:52

And I'm not. This is not a this is not a anti billable hour discussion, but it is a discussion around where do we waste our time? And if I am the owner of the firm and I am spending hours per week or per month reviewing everybody else's time and adding to it or cutting from it, that's a waste. That's a waste. Somebody else should be trained to do that. If you're on a billable hour schedule, Somebody else should be trained to do that. Those are the top three.

Jennifer Goddard: 10:25

Those are the top three. So if you were to work with someone who is doing those things themselves right now, how do you kind of help them extricate themselves from that?

Victoria Collier: 10:39

So the first thing we do generally is I have them make a list of every single thing that they do and, secondarily, a list of their other staff members they already have on staff, and then preferably having a list of everything they do, and we get to know their competencies to the extent that the owner can share what they believe those competencies are right. So does this person have the smarts, the intelligence, to be able to do certain things? Do they have the bandwidth? And how do you know if they have the bandwidth? Because you know, I hear all the time that, oh, everybody's so busy all the time. Do you know how much time they're spending on certain tasks? No, because we don't chart time.

Victoria Collier: 11:24

That is one of the first things that I have my clients do is everybody needs to start keeping track of their time on every task, to include breaks and lunches and things like that, whether they're considered billable tasks or not.

Victoria Collier: 11:40

We need to know how they're spending their time, not just to see how long it takes to do a particular task, but also to see if I can do a quick review of so much time I can see if they're working efficiently as well, for example, if I'm going to the copy machine room and then I'm making a phone call and then I'm drafting a letter, and then I'm doing this and I'm not grouping my activities together like factory work, then I'm going to be feeling like I'm overwhelmed and running all over the place and I don't have time for anything. But if I can actually know what my tasks are and I can group like minded tasks, I can stay in the same mindset and get them done in a much faster way, which then means they have more capacity to take off things off the owner's plate, because now they have time to do it, because now they're working more effectively. Does that make sense? Absolutely.

Jennifer Goddard: 12:34

Do you get a lot of pushback about people that don't want to ask their staff to do it, or their staff doesn't want to do it, or they don't want to do it for themselves. Of course they get pushback.

Victoria Collier: 12:46

But I can say this I do get pushback and then I pushback because I was like you know, you came here for a reason. What do you want and are you willing to do what it takes to get there? Those are two separate things, right. And so if you want these results, then you have to take certain steps, and the reason you don't have these results is because you've never taken those certain steps. Now, if you want to sell your law firm and not take these steps, that's okay too. It's just know that you're going to be missing tens of thousands, if not hundreds of thousands, of dollars of opportunity that you could have if we were to take these steps. And that's not my decision, that's their decision.

Jennifer Goddard: 13:30

Right, exactly. So if I'm a buyer and I'm looking to buy a law firm, what are some of the things that make me say this one is so much better than that one?

Victoria Collier: 13:45

Buyers first of all come in all kinds of different cloths with different motivations, and so what one's looking for and a different one's looking for could be completely different. But let's assume you're first of all the type of buyer. It's more of an investor, a business type for sure, that wants a profitable turnkey law office. So what they're looking for is they're looking for predictability and they're looking for consistency. Can I predict that this company, this law firm, is going to get 30 clients a month, every single month, based on the marketing it's doing? Right? And how do I know that? Because I can tell from the website how many people ping on the website. I can tell from the phone records how many times the phone rings per month Right. I can tell from the files how many new open files they've had historically per month, right. All of those are indicators as to predictability. That's what I'm looking for. Then, of course, I want to look at if any one person in the firm was to be hit by a bus tomorrow, what would it take to replace them and to train the new replacement? Do we already have somebody on staff that is cross trained in that? Do we have policies and procedures or training manuals that can train that so I don't have to sit down and spend all kinds of time. Or even if not me, another person I'm paying to do a job is now spending all their time training someone, when in fact, we could have videos or training manuals training this person instead. So I'm looking at what is the impact on my business when the risk factors hit Right, and so if I lose one stream of marketing, do I have three others that's going to soften that blow? If I lose one employee, do I have others that are cross trained into that, or am I going to have to spend eight months hiring somebody Right? So those are the things that, as a business person that's looking to buy a law firm, those are the kind of things I'm looking for us to mitigate my risk.

Victoria Collier: 15:50

But there are some buyers that are just looking for kind of like law firms that have consistency. They make $400,000 a year, every year. Their staff has not turned over at any time, but they don't have any standard forms. And let's say, for example, it's a state planning firm that you know. They just copy and paste from this trust to that trust every single time. They don't have no standard forms, no database like no database where their client files are in there, you know where they take notes, where they can see where the file production is, nothing like that. At best they have Excel that might have a list of those clients somewhere.

Victoria Collier: 16:33

So we're talking about, you know, practices that are still 30 years ago operating the way, and so I could be a business person that comes in and says you know what the bones are. Good, but we just need to start working out and put some muscle on this, and if I do that, I know I can take this $400,000 firm up to 1.2 in a matter of 12 months, if I can just put in my systems and processes, because the people are good, the clients are good, it's just our way of doing things is really bad. So you know you could have a buyer that looks at a firm like that too.

Jennifer Goddard: 17:10

If I'm looking at my own firm, how should I be looking at it in terms of making the most, maximizing my profitability, maximizing my enjoyment and minimizing my own risk?

Victoria Collier: 17:24

Yeah Well, and then I'm going to say something that you start off with, which is people think this is the cost and so how can I maximize my profits?

Victoria Collier: 17:32

But to me you mentioned your own enjoyment, profitability and one other thing, and for me it comes down to who's the team and what are the systems. When you've got team members who are all involved and they believe in the mission and they really want the best for the firm, and if you've then got systems and processes that support the team, then you can rock and roll and you yourself, as the owner, can step back out and start enjoying your life a little bit more and not spending every day there to include Saturdays and Sundays. And this is one of the things I say is there's two ways to exit. You exit your role first and then you exit the firm second. But you might have six different roles that you've got to exit. So we've got a strategically plan which role will I exit first, which role will I exit second, and on down the line until eventually the firm just doesn't even need me. And now I'm exiting the firm.

Jennifer Goddard: 18:37

That is such an insightful way to look at it, and it's so true that if you are a small firm, you're probably wearing a lot of hats and deciding that you want to take some of those off, but you don't want that role, you don't want that job to fall Right.

Victoria Collier: 18:56

There's so many options now with virtual assistants, with people working remotely, with standardizing forms that can be automated right from your case management system or even your website, or even if you just email it to somebody. There's so many things that can be done to help you get out of your roles, and it's just finding out what are those things and implementing them.

Jennifer Goddard: 19:21

When I talk to people who are coming to us to see whether we could help them with the marketing role, oftentimes the motivation is not so much that they want to stop doing it, but, particularly in more successful firms, it's just taking all of their time and they can see that it's not cohesive, so it's not as good as it might be and yet still it's hard to let go of it, particularly those people who have had success doing it. But they're just like they can see the opportunity if they could offload it, but they're really afraid to offload it, yeah.

Victoria Collier: 20:02

I mean first of all two things ego and control. Right, and both of those are hard to let go of, no matter who you are, and certainly as lawyers that we're trained to mitigate risk, to identify the risk and all that. And if my name's on the door, it's all risk to me and so if I let go of anything, then that could come back on me. So but what they don't understand is that holding on to all of that is actually riskier and much more costly and could lead to actual legal liability. Because if they're focusing all their time on marketing, for example, and they're missing deadlines for court or they're not really reviewing what their paralegals are doing, then that actually is worse than if they were to step aside and let your company do the marketing.

Jennifer Goddard: 20:53

Absolutely. And you know, victoria, we've both been working with clients long enough. I'm sure you've seen it, I've seen it over and over If a lawyer is in business long enough, they're going to hit a time in their lives when the business, the law firm, can no longer be their number one priority, whether it's their health, their spouse's health, a family member's health, there's all these things. And you know, I've seen so many lawyers who were just rocking and rolling and then something happened personally and every defect in that law firm just boiled up to the top. And I think that in looking, if people will start to look at their firm you know any business owner in through the eyes of would I buy this firm, I think I can start to maybe mitigate some of see those risks of being the center of everything and start to mitigate those.

Victoria Collier: 21:57

That absolutely. You know, I learned more about how to sell my firm after I went through the process of almost buying a law firm and everything I went through to try to buy this law firm, which ultimately then fell through. But it made me so much more aware of what I needed to do. But some people, jennifer, are going to sit out there and say, yeah, but I'm not going to buy a law firm, so I don't want to go through that exercise, just like people would say nothing's going to happen to my health, even though things happen to all of us all the time. So you know, years ago I took a 30 days off and that was as if I had died because my firm could not reach out to me during that 30 days, and so I would say that chunk it down into ways that people can realistically see them doing things. So we don't start with 30 days off. Start with stop working on weekends. What would that do to the firm? Take a half a week off or take a full week off. What does that do to the firm? Really? Take the time off and don't be attached to email and don't be attached to text and stop calling and rescuing everybody. Stop rescuing your firm and see how they do. Everything can be repaired Everything. You're not going to get a bar complaint that you can't answer in eight days when you come back. If you needed to, the more we do that.

Victoria Collier: 23:24

That's where the cracks are exposed. Like you said, that's where you start seeing what can we work on, not just the owner leaving, but we need to make sure our staff leaves for a significant period of time, at least a week here and there, because we need to see what's falling through in their cracks, because they have them. So many lawyers realize so much on their team members that they've ultimately abdicated the responsibilities. If that team member were to leave, they would completely crumble. Then they're going to find all the malpractice suits that are waiting for them as well.

Victoria Collier: 23:59

Because that happens, I'd say it's just as important to you take time off and then have your staff take time off and then find where those cracks are. Some of them are hairline cracks, some of them are the Grand Canyon, but we don't ever know them until we've left. I would say we need to start with repairing them, making small tweaks that have the biggest impact. So one of those, for example, in my firm that after I had a staff member leave who had been with me a while and I just loved her and I could really rely on her and I sang praises all the time.

Victoria Collier: 24:36

Nonetheless, after she was gone, we were finding that there were deeds that were never recorded. Never recorded and that's a malpractice issue. That's a huge Grand Canyon, but it was a small tweak that we can then have a big impact by putting together a more solid, standard operating procedure with checks and balances beyond one person who is responsible for that, and then that had a huge impact because of that, if not eliminated, at least mitigated my malpractice opportunities, if you will. So look for the small things that have the biggest impact and start there and make a list and just start working down the list.

Jennifer Goddard: 25:20

So if we wanted to take maybe two scenarios to wrap this up, we're at the beginning of the year. Let's look at a scenario of I want to be able to exit in some way by the end of this year and then maybe look at a scenario where I'm not really thinking about an immediate exit but I would really like to optimize my law firm.

Victoria Collier: 25:43

So the beginning of that answer is going to be the same and that is there's essentially six main parts of a business. There's your finances, your marketing, your sales, your production, your facilities and equipment, and so you want to grade all of those. How is the firm doing in each of these areas and what would have the biggest impact to change these? So if I only had a year, I would pick my top two biggest areas of default, like find a black eye in those two areas and I would work on repairing those two areas to make them as strong as possible. If I had much longer period of time, then I would put in a strategy to actually increase each of those areas 10%, 20%, whatever it might be and I would prioritize those based on, again, what would have the biggest impact? Probably profitability.

Victoria Collier: 26:42

If I had the time, profitability would be the biggest impact. If I have just a year, profitability is not there. I mean, we just don't have the time for that. So instead I'd want to probably focus on team or systems. But if I have more than a year, I'm going to look at profitability, I'm going to look at autonomy and then all the other things beyond that.

Jennifer Goddard: 27:01

Awesome. I know you have some free resources on your website that people could go to and download, but also can you tell me a little bit about how you work with people? If somebody says okay, I would really like to have Victoria help me with this. What do they need to do?

Victoria Collier: 27:19

So the first thing we do is we do a consultation, like everybody else, and we try to identify what are their goals. Are they looking to just have a sellable law firm in 20 years from now? Are they looking to enjoy themselves more? Are they looking for profit? Or are they looking to get out of their firm, like immediately, a year from now, three years from now? And so that then helps us identify what product or service would be best suited for them.

Victoria Collier: 27:48

Our foundational product is get a valuation, because no matter where you go, that's the starting point as far as where am I? So I know which direction I need to go. Sometimes we do a valuation and somebody had on the horizon I want to sell in five years. But the valuation comes back and they're like, oh well, I could accept that now if we could find a buyer. And I'm like, well, would you like us to look for a buyer? Or we get the valuation and they notice that there's a big gap between where they are and where they want to go, and then we put in a strategic plan for that. And when we put in a strategic plan, then we can actually do one-on-one coaching with them to help them implement that plan to actually increase the value of their firm. And so when people coach with us, you said what's it like to work with us? We don't have like term limits or anything like that. We don't coach with people until it just doesn't make sense for them anymore, and so we do it either one time a month or twice a month as far as our opportunities to work with somebody.

Victoria Collier: 28:50

So we got the valuation, we got the coaching, and then for people who like self-paced stuff, instead, we do have an online course to help you increase the sellability of your law firm, which helps you put together the pieces that we're talking about that have the impact on the law firm, that make it desirable for someone else to want to buy it.

Victoria Collier: 29:11

So a buyer can say, hey, I like this firm versus this firm because you have all of the things that you should have in a firm. So that's one online course we have. The other online course we have after someone's done a valuation but they can do this on their own is that valuation provides you a 30-page report with eight key factors as to what drives value, and then that report will tell you what you can do to increase the value. Well, there's also an online course that goes with that report that they can do at a self-pace to increase the value by working on each of those eight key factors. And what I love about that so much is that not only does it tie to the report and you do what it says and you go through the modules and it should increase the value, but it doesn't have to be the owner going through that. It can be the office manager or paralegal or whoever makes sense in the firm.

Jennifer Goddard: 30:11

So they actually get done.

Victoria Collier: 30:13

Exactly, instead of on the shelf Right.

Jennifer Goddard: 30:17

Not just another subscription that you bought.

Victoria Collier: 30:20

Exactly.

Jennifer Goddard: 30:21

Exactly so. Those are tremendous variety of opportunities, depending on how much help people want and how much they need it, and, if they want to, like you said, if they want to be self-paced, that sounds great. What's that website address?

Victoria Collier: 30:37

again, yeah, so our website is quidproquolawcom and all you know there's information about the firm, information about me, but as far as those products and services, you would go to the shop link and then take you through those Terrific.

Jennifer Goddard: 30:53

Well, we're just about out of time here, Victoria. Is there something that I didn't ask you, something that, a specific point that you want to be sure we get made today?

Victoria Collier: 31:02

I would just say that you know it doesn't matter when you want to exit. What does matter is when you start preparing for that, and you know there's nothing that should stop you from starting today in the preparation for tomorrow.

Jennifer Goddard: 31:17

Terrific. Thank you so much Until next time, which I'm sure will be bringing you back. This is a topic that's important for people, whether they're wanting to exit their law firm or just be more profitable and have a more enjoyable law firm. These are all great pointers. Thank you so much, victoria. Thank you, jennifer.

Narrator: 31:39

That's a wrap for today's episode, and a big thank you to our sponsor, quidproquo. Qpq is your partner in law firm success, offering expert guidance on scaling, selling and optimizing your practice. With a team of experienced professionals, they bring real world insights to the table. Are you ready to take your law practice to new heights? Visit their website at wwwquidproquolawcom to learn more and start your journey toward a thriving and sellable law firm.