Cash Flow for Law Firm Owners Part 2: The #1 Fix for Lumpy Revenue (Ep. 135)

Written By Adedayo Adekunle

If you’re a law firm owner, you know the drill: some months your bank account is flush, and others have you worrying about how you’ll cover payroll, personal expenses, or the next big marketing bill. The financial ups and downs are more than just stressful, they can derail your personal goals, undermine your wealth, and create tough moments at home.

But what if one simple change could turn that chaos into stability? On this episode of The Lawyer Millionaire Podcast, hosts Darren Wurz features guest Charley Mann as they share practical advice to help law firm owners like you transform unpredictable cash flow into lasting financial growth.

Why Is Cash Flow So “Lumpy” for Law Firms?

A common pain point for many firm owners is that money comes in waves. Settlements arrive sporadically, clients delay payments, and big annual expenses like SEO retainers or software bills can catch you off guard.

Charley Mann, founder of Law Firm Alchemy, sees these challenges every day. He explains that in practice areas like PI (personal injury), you might work for months before seeing money from a case. Criminal defense lawyers may receive payment upfront, but their costs and time drag on throughout the case. This mismatch makes it easy to ask, “Where did all the money go?”

Overspending or not paying yourself as a priority can lead to a situation where the business always comes first, while your own wealth-building efforts get sidelined. Over time, this creates not just financial uncertainty, but emotional stress on both you and your family.

The Power of Paying Yourself First And Paying Consistently

Here’s the good news: stabilizing your cash flow is often as simple as making your own salary a non-negotiable, fixed business expense.

Think about it when you treat your own paycheck just like you do payroll for your employees, you force yourself to plan around it. This discipline unlocks a host of benefits:

  • Clarity: You finally know what you can count on every month, making it easier to manage family finances and save for big goals.

  • Reduced Stress: No more last-minute transfers from personal to business accounts (or vice versa). Your money habits become consistent and predictable.

  • Better Decision-Making: When you’re not worried about covering this month’s bills, you can confidently plan for growth, invest in your business, and say yes to smart opportunities.

As Darren Wurz put it, “Consistent personal income is the bridge from unpredictable firm cash flow to predictable wealth building.”

But What If My Firm Can’t Afford It?

It’s inevitable sometimes your firm will face a lean patch. The answer isn’t to abandon your salary altogether. Instead, review your financial data: Are these tough months a seasonal blip, or a long-term drop? If you must, adjust your draws carefully, but use business reserves or a line of credit first, before dipping into your personal funds.

Most importantly, a temporary squeeze shouldn’t become an excuse to undervalue your own contribution to the firm. If you pay yourself less than a market wage, your business is not truly profitable, and you’ll always be playing catch-up.

Law Firm Owners, Take Action Today

Ready to break free from cash flow chaos? Here's your next step:

  1. Decide on Your Monthly Salary or Draw: Choose a fixed, realistic amount you’ll pay yourself every single month.

  2. Treat it Like Payroll: Automate transfers, and don’t “borrow” from yourself for business expenses except in rare emergencies.

  3. Plan for Seasonality: Build a cash reserve or secure a line of credit to cover lean months, so your salary remains consistent.

  4. Review Regularly: Every quarter, revisit your compensation to match your firm’s growth or changing needs.

The Real Reward: Wealth Beyond Your Law Practice

Imagine waking up with total peace of mind, knowing your personal finances are stable, your family is secure, and you’re steadily building wealth outside your practice. That’s the power of paying yourself first.

If you’re ready to take the next step toward true financial independence, consider joining our free book club or connecting with a financial planner who understands law firm business models.

Resources:

 

Connect with Darren Wurz:

 

Connect with Charley Mann:

 

About Charley Mann:

Charley Mann is the host of “They Don’t Teach This in Law School” and founder of Law Firm Alchemy, a company dedicated to providing resources and coaching for law firm growth. With over 15 years of experience in the legal industry, Charley guides law firm owners in optimizing their practices and achieving success. He emphasizes the importance of networking, providing value, and maintaining strong client relationships, focusing on both business operations and personal growth. Known for his approachable demeanor and deep industry knowledge, Charley values integrity, transparency, and genuine connections

Transcript:

Darren Wurz [00:00:00]:

What if paying yourself a consistent salary was the key to ending the cash flow chaos in your firm? Welcome to the Lawyer Millionaire podcast. I'm your host, Darren Wurz. Does your income fluctuate wildly depending on when cases settle or when clients pay? You're not alone. Irregular cash flow is one of the biggest stressors for law firm owners, leading to sleepless nights time, tough conversations at home, and reactive business decisions. The good news is you can stabilize your personal finances with one simple habit. And we're going to talk about that today. Paying yourself consistently. And we have a special guest joining me today on this great conversation, and that is Charlie Mann.

Darren Wurz [00:00:45]:

He's the founder of Law Firm Alchemy and a coach to law firm owners nationwide. All right, we're here with Charlie Mann, the man. All right, welcome to the show, Charlie.

Charley Mann [00:00:55]:

Oh, we're starting off hot with a last name pun. My goodness, Darren.

Darren Wurz [00:01:02]:

Absolutely. Why not? I've been watching your content on LinkedIn for some time and we finally had a chance to connect, which is really, really great. You work with law firm owners as a coach, helping them with their businesses. We're on mostly the financial planning side, helping them grow the wealth outside of the business as well. And lately we're doing a series on cash flow and, you know, cash is king, as they say. Oh, but so many law firm owners do struggle so much with cash flow. Can you tell us a little bit about what you see and what your experience has been with that?

Charley Mann [00:01:44]:

Yeah, it's actually really interesting. I was just writing about some of this recently for a membership newsletter and the. The discussion I was having via print was that when people manage their money, when they start looking at their money, there's a big question that they often will end up asking, which is, where did all the money go? Right. And it's. Yeah, it's oftentimes a misunderstanding of things like timing of the difference. Like, you and I could speak about the difference of cash based versus accrual accounting and how that can be helpful in different types of practice areas. It's. It's the weird cash flow issues that you experience in a PI firm where you bring in the work today, you don't realize the money for it later, but you still have to pay for the staff to get the result taken care of.

Charley Mann [00:02:32]:

Today it could be criminal defense firms where they bring in the money up front, but the case may take a while and they don't really realize, oh, I'm actually bleeding cash little by little. Like, my hourly value on this case goes down because I am constantly trying to extend it. And, you know, the criminal defense attorney may say, well, oh, yeah, you know, we're. We're pushing it out because good for the negotiation for the client. And that is not always the case. So there's a lot of things that happen in law firms where this. Essentially what it is, is an erosion of the hourly value. And they don't realize they're eroding that and that they are creating a future cash flow deficit because they're spending to take care of the work right now without it being, you know, in a business where you have monthly recurring revenue and you can kind of moderate and figure out your.

Charley Mann [00:03:20]:

Your, your expenses, you can create a proper budget. Like for law firms, when you're budgeting, you do have to walk a little bit out on a limb, right. And make some, some smart hypotheses. I don't know if that's a plural of hypothesis, but let's just go with it, Darren.

Darren Wurz [00:03:39]:

Yeah. And.

Charley Mann [00:03:40]:

And make those assumptions and take historical data and project and do so confidently. I'm curious, does that vibe with what you see?

Darren Wurz [00:03:49]:

Oh, yeah, yeah. You know, cash flow is one of those things. As a financial person, I see a hesitation to collect on accounts that are outstanding or we're extending, like you said. And the problem with that is there's a cost of capital, and your money is out there. You're lending, but you're not getting paid. Right. There's a time value that money has, and the longer times it's out there, the more you're extending and you're not getting the benefit yourself, where you could be reinvesting that back into your firm and seeing that. The other thing that we're talking a lot about in this series is the lumpiness of cash flow and the irregularity of it.

Darren Wurz [00:04:31]:

And how do we fix that problem? One of the things that we really advocate for is paying yourself a consistent salary. Do you agree with that? What do you see as a best practice?

Charley Mann [00:04:47]:

You know, I, what I like is. Is the, the word consistent in there? And consistent could be consistent salary. Maybe you're, you know, trying to be aggressive with your S Corp, right. And so your salary is not huge, which means we still need to look at having a regular quarterly draw that comes out, because if you're taking money out of the practice, but then you will end up spending it while sometimes imagining that it's still available for you. And then you get to the end of the year, and all of a sudden you realize, oh, I pay my annual SEO contract at the end of every year and there's a $60,000 bill due on that right now, or maybe $120,000 bill due on that and you haven't been paying yourself and you've been investing and cool. You're doing like all the growth mode stuff. Celebrate that, love that. Obviously encourage it up to a point.

Charley Mann [00:05:38]:

Because if you get to the end of the year and you go, wow, I did a bunch of modifications on my home this year. We added an extension to the house or we finally replaced our deck and our master bath and you were expecting like, oh, it's fine, it'll all come out in the wash at the end of the year. That affects the home front. Right. And that creates stress. Like, cash flow is as much as a financial tool. It's an emotional tool. And you know, Darren, when I talk about clients, about the money thing, whether it's, do you need to set aside a war chest? Should you be tucking away for taxes? Are you going to do the profit first methodology or whatever it might be, I see money as enabling proper executive decision making.

Charley Mann [00:06:22]:

If you are stressed about your money, you will not make good decisions. You will be very reactive. Like, it hurts when you don't have money and you can start flailing and make the problem significantly worse.

Darren Wurz [00:06:36]:

Oh, yeah. Oh, thank you so much for saying that. You really can. You go into almost like panic mode and you, all of a sudden you're. You're redoing the website at 2 in the morning and that's not what you should be doing. Right?

Charley Mann [00:06:49]:

Yeah. Truly, it is amazing how money can be such a trigger point for folks. And when you started the law firm, the idea was probably you wanted a level of freedom. Now to achieve freedom, freedom feels like it's in its most pure form. It's almost a void. Right. Like, I can do whatever I want. But it turns out when you start a business, you're just adopting a different version of how you establish freedom.

Charley Mann [00:07:15]:

There are still numbers that help you represent what freedom looks like. For many, that number can be, I only work X number of hours a week. Or the old entrepreneur saying, you know, I became an entrepreneur so that I could choose which 70 hours a week that I work. Right. And the other number of that, because we have two primary resources, that's our time. The other resources are money. And if you're not using money as a measurement of am I achieving freedom? You will build an incredibly elaborate trap. Talking about cash flow.

Charley Mann [00:07:44]:

One of the main cash flow leaps that happens with the clients that I work with is A lot of times they'll come to me, and they are the primary attorney in the firm. Even if they have maybe one or two associates, they're an attorney who carries a caseload. So they're an owner operator. Right. It's a. It's almost like owning a Subway franchise. Right. Subway franchises are sort of famous, that you buy yourself a job when you own a frame franchise.

Charley Mann [00:08:08]:

A lot of subway franchises were set up and, like, people would pay themselves, you know, 40 or $60,000 a year, but at least they were the boss. Yeah. And they had all the other overhead because they weren't thinking like an owner does. And as you think like an owner, if you are constantly in the work of your business, you are capping that business's ability to. To grow. And part of the reason is cash flow is so dependent on your personal output. If we're looking at entrepreneurship and ownership, it's most pure format. The scale of the business and your ability to make money from it should not be dictated by your personal output for the product or service that you provide.

Charley Mann [00:08:47]:

This is where a lot of crafts people get stuck now.

Darren Wurz [00:08:50]:

Yeah.

Charley Mann [00:08:50]:

This can be very high profit. Right? This can be very high profit. Like, so I'm of the opinion, Darren, that if you've ever made money on something, you can consider yourself a professional at it. So I consider myself a professional leather worker because I've sold leather working pieces. I've sold wallets, desk things, like all this other stuff. But most leather workers, most woodworkers, they never escape the trap of, I am paid for my personal output because it's their art as well. And for attorneys, being a trial attorney feels like an art. But guess what? You started a law firm.

Charley Mann [00:09:25]:

You made this incredible choice to give yourself a unique advantage in life. And that's what owning a business really represents, a unique advantage in life to achieve the level of freedom most will never experience.

Darren Wurz [00:09:35]:

Yeah.

Charley Mann [00:09:35]:

But when you cap yourself and you say, I'm still going to hold a full caseload, which it's done for like a million different reasons. It's all psychological. It's conversations I have all the time with law firm owners. Oh, yeah, right. Like, it's just. It's tough. They have to unwind some ego things. They have to unwind a desire to be valued in a specific and very tangible way.

Charley Mann [00:09:58]:

And when they make the leap out of that, now we can really get into the percentages and the cash flow and how are we establishing a real business rather than a trade or, like, group that pays you very well?

Darren Wurz [00:10:12]:

Yeah. Yeah, absolutely. You know, that that is what we see all the time. And I want to go back to what you said about how the difficulties with cash flow affect the home front, because that is what we see all the time. And in fact, that's one of the number one reasons. One of the number one problems that clients come to us with when they first come to us is what I see is they're not paying themselves a consistent salary. Or maybe they are, but they're still taking draws from the firm at random. Or they are putting money back into the business from their personal accounts because the business is running low and there's just money flying back and forth.

Darren Wurz [00:10:51]:

And the problem is, if that's the case, you're never going to start building real wealth outside of your law practice. Because how can you consistently save when you don't know you might have to send that $10,000 back to the law firm? In fact, this was one of my very first clients. This was the exact problem that he came to me with. And we just. All we did was say, okay, let's figure out how much you're going to pay yourself in a draw every single month. And we did that. And his life changed. It is amazing.

Charley Mann [00:11:25]:

It is amazing because that just changes the way that you think about things. If you become part of the overhead now, you have to plan around it, make decisions accordingly. You know, that idea of profit, first decide on what you're going to take home and then build the rest of the business around. Makes perfect sense. You know, it's. I was writing about this recently. The other issue being on the. The home front side, timing of certain expenses.

Charley Mann [00:11:52]:

So there's this PI firm, and I kind of alluded to it earlier at the end of the year, had about a $60,000 SEO bill, digital marketing services bill that they would pay normally in December. Right. Kind of the classic thing I'm going to prepay for next year. A firm that's doing kind of mid five figures, but really looking to. And had just gotten close to seven figures, and they were really looking forward to kind of breaking through. That's why they're making this investment. Well, what ended up happening is they paid that bill in December of one year, then the following year, based on the way that settlements were happening at the end of the year, timing wise, there was a case that was going to be coming in January. And so he actually talked to the SEO company, was like, hey, can I pay this in January?

Darren Wurz [00:12:34]:

Yeah.

Charley Mann [00:12:34]:

So now he had technically a full calendar year that didn't have that $60,000 expense on it. So it then felt like the money was coming home in that excess. He gets into the next year, he pays it. Basically. At the, at the end of the day, there was kind of this, what we looked at $180,000 emotional gap that occurred, that if just we had time that differently, it would have brought that down by like 66%. Not just in the finance. What felt like the financial gap, but was the emotion gap. It's like, do you imagine, imagine you tell your spouse at the beginning of the year, hey, we're going to make $250,000 in our household this year.

Charley Mann [00:13:12]:

Right. And you get to the end of the year and you look at how much you actually made, and it was $150,000. I bet during the rest of the year you've been spending like you're going to make a quarter million.

Darren Wurz [00:13:21]:

Yeah, yeah, yeah, that's all right.

Charley Mann [00:13:24]:

And then you go, ooh, I overestimated by about, about 60% on our income. And so we're, we're significantly underwater here. Yeah, that's unpleasant.

Darren Wurz [00:13:35]:

Yes. I've actually experienced this.

Charley Mann [00:13:40]:

We all have. Right. If you're an entrepreneur, you managed to muck this up at some point.

Darren Wurz [00:13:43]:

You know, we were doing like quarterly profit distributions and, you know, clients, we have some clients who pay in full at the end of the year for the next year for tax reasons. And it was great. Our Q4 looked amazing. It was like, this is fantastic. And then Q1 sucked and I was like, what the heck happened? So sometimes you have to, you know, you can average things out. You can look at like rolling 12 months or something, rolling three months or, you know, kind of. You got to spread that out in some kind of mathematical formula to make it make a little bit more sense. Because you, you know, you get a huge influx of cash and you want to spend it right away.

Darren Wurz [00:14:27]:

And same thing happens in our personal lives. You got to be careful with that. Yeah.

Charley Mann [00:14:31]:

And look, when you get that big flux, if, if you have that, if you have something that's within, within a modest percentage amount that you've been looking to do, like let's say you've been looking to bring that ghostwriter on to handle writing your book, or you've just been waiting for an opportunity to hire someone to do some new landing pages for you, and that cash comes in and it's, it represents 5% of that cash that came in. That may be an appropriate way. The problem is, is this the firm I'm talking about? The other issue is they kept making what I just loosely referred to as five figure mistakes because that tends to be the mistake area in a lot of law firms. It catches up with you quickly. It's. Oh, you know what? It's $15,000. Right. I'm gonna go do this.

Charley Mann [00:15:15]:

Yeah, that sounds really good. And it feels great at the time, like, oh, I'm gonna buy that big video package for $15,000 and I'm gonna have a fancy shoot. And because you've heard about other people are doing video and you've heard, you know, you went to a conference and.

Darren Wurz [00:15:28]:

Oh, boy.

Charley Mann [00:15:29]:

Yeah. I mean, right. You. You have these conversations all the time.

Darren Wurz [00:15:32]:

I'm sure I guilty sometimes.

Charley Mann [00:15:35]:

Yeah. Yeah. You know, look, I've. I've made the five figure mistakes. Right. No one. I am. I do not hold myself outside of this group.

Charley Mann [00:15:46]:

I'm very much within it.

Darren Wurz [00:15:48]:

Yeah.

Charley Mann [00:15:48]:

Just a little bit more discipline now than I used to be, to say the least. And they'll go and spend the $15,000. And the problem is, it's not necessarily that that was specifically the wrong spend or it was directly. It was a bad faith agreement or anything like that. It was. I paid $15,000 for a video package, but I realized I don't really know why I want to do these videos. I don't know what's going to go into these videos. I'm not sure if video is the perfect medium for my audience even.

Darren Wurz [00:16:15]:

Yeah.

Charley Mann [00:16:16]:

But I heard someone say stuff, and it sounded really good, and this felt like a quick solve.

Darren Wurz [00:16:21]:

Yeah.

Charley Mann [00:16:21]:

And that becomes the issue. And you can pile up, you know, it's $15,000 here, it's $17,000 there. Then suddenly it's a $40,000, you know, package or website redesign that you weren't even sure that you needed. You just heard from a couple of people who said, oh, your website kind of sucks. And you go, I guess my website sucks. I mean, it's been converting pretty well. But I do have two people that I respect telling me that it sucks. So I guess I have to rebuild it, and suddenly you're five figures deeper in the hole unnecessarily.

Darren Wurz [00:16:50]:

Yeah. Yeah. So easy to do. And the monthly things get you too. It's like, oh, it's only 500 bucks a month. Right. But it's six grand, you know, or whatever it is.

Charley Mann [00:17:01]:

Yeah. A lot of times. So I had a client who, he was doing about $600,000 per year in PI revenue, and he was looking at his expenses. He's like, something just feels weird. And so we started looking at all of his subscriptions, and about half of the software subscriptions that he had, he didn't use and should be told. I think we only saved him about 400 bucks a month, and we might have cut six programs that he had 400 bucks a month. Though what it would it represented, you know, going back to the emotional side to him. It felt like I'm back in the driver's seat.

Charley Mann [00:17:34]:

I feel like I have more control over this. I'm not letting decisions run away from me. And I'm no longer making the excuse of what? Well, it's only 80 bucks a month. It's only $50 a month. Because anytime you look at that excuse or you kind of go, well, I don't know, I could see myself using that fancy AI tool. Like, a couple months from now. I'm sure I'll be reengaged in that part of my marketing. I'll totally win it.

Charley Mann [00:18:00]:

And the reality is, is you can just rebuy it. It's okay.

Darren Wurz [00:18:04]:

Yeah, like. Like your streaming services, you know, put it on pause and come back later, you know.

Charley Mann [00:18:10]:

Yeah, absolutely.

Darren Wurz [00:18:12]:

Let me ask you a controversial question, Charlie Sweet. How about if we are experiencing some challenges with profitability? You know, let's say we have pushback from, you know, we have a client, and we're like, you need to start paying yourself a salary, a fixed amount, you know, whether that's salary or draw a fixed amount every single month. But there's a shortfall in the business or maybe they're profitable and then there's a shortfall. Should they make changes? Should they adjust? What's your take?

Charley Mann [00:18:43]:

Wow, really good question. So I would lean on. The first thing I would want to see is historical data to see if this is something that occurs regularly and we failed to plan properly for like, oh, it turns out early Q3, the back end of the summer is just a difficult point for us, and we really should have planned better and tucked away more in reserves earlier on. But historically, we know that late Q3 actually gets. Gets better. So while we may run the operating account thin, we have every statistical reason to believe that it will replenish by early Q4, in which case I try not to be too reactive to it. I would rather us see that this is the right amount. Because, look, the truth is that as an owner, yes, you can write a check back into the business.

Charley Mann [00:19:37]:

I know no one wants to do that, but if you've been paying yourself a healthy amount and your goal is to grow and pay yourself even healthier amounts in the future, having to dip back in for payroll. Everyone has had to do that at some point or another. I mean, you know, minus some lucky few or some who like listen to this information were really disciplined from the beginning. I'll say. I've never, I have never personally had to dip back in to personal finances in my businesses to pay for payroll. That being said, I open both of my businesses having stocked up on all of this information and very conservative in how I hold money in the business. And this might be one of the important points here. I have a specific methodology that I am extremely comfortable with that allows me to make strong executive decisions.

Charley Mann [00:20:30]:

And I'm also comfortable having money in the business knowing that I won't specifically spend it. So I know myself really well. I know my money mindset.

Darren Wurz [00:20:41]:

Now.

Charley Mann [00:20:41]:

Let's imagine it started, dipped in and yeah, I couldn't pay myself as much. Yeah, at some point you do have to realistically say, in my opinion, I need to lower my salary here. I should be able to make it up on profit on the back end. Talk with your tax professionals, talk with your accounting professionals about that. Understand what that change, how that change could possibly affect you when you are filing taxes later down the line. But the other thing that you might need to do is just reduce expenses. Like, I don't know why it took me that long to kind of come to that, that point right there, Darren. I feel like we took a long walk around it.

Charley Mann [00:21:23]:

But if you are starting to experience, yeah, if you're starting to experience a squeeze and you have been running properly with like solid financials, percentages that make sense for your style of firm and how you run it, and you start feeling squeezed, then you have to look at it and say, okay, where are my percentages becoming overloaded and where do I now need to save money? Like, theoretically, if the revenue is going down, chances are your total client inventory is representative of it going down, which means you probably don't need as many team members on your legal operations side. And there may be someone that needs to go or maybe gets replaced by a part timer or a virtual assistant. Those are tough decisions to make. And like, with everything you can hear, I always look at the variability. I'm not an absolutist, Darren. Like, I don't believe there's one. I have hammer problem as a nail. So I'm curious, you know, you deal with this even more than I do in terms of helping lawyers with their finances.

Charley Mann [00:22:21]:

Where do you land on that question?

Darren Wurz [00:22:23]:

You know, it does depend on the situation. And I think there could be situations in which, you know, it would be okay to dial back your salary a little bit. I would not, I would try to avoid at all costs putting money back into the business. If you have, you know, a stockpile, a war chest on the business side, which you should have if you have a line of credit. I would tap into those and for two reasons. Number one, you need to value yourself. You are valuable and you are a valuable aspect of your business and you deserve to get paid.

Charley Mann [00:22:57]:

Right.

Darren Wurz [00:22:58]:

You are a line item expense and that should be part of it and it should be planned for. The other thing is the squeeze is what motivates us sometimes and it can be okay to feel a little pressure and a little pain, you know. And you know, the solution to the problem isn't pay myself less. I mean that might be the short term fix, but the longer term solution is we need to become more profitable, we need to make more revenue, we need to be leaner with expenses.

Charley Mann [00:23:28]:

You, you know, you mentioned the thing that oftentimes, Darren, I, I don't know why. It's because I don't use. It really is the line of credit. So that's the one deficit that I regularly have in terms of my financial like mental model is even though with every firm I encourage all of them to have a line of credit available to them because it's also just good to build that to have it available. Also have a relationship with the bank already having put that together. Yeah, I just, it's not one of those automatic defaults. I actually have a client though who for him debt is like really a no go. So like line of credit really not something he.

Charley Mann [00:24:07]:

I believe he has one technically but there's a philosophical refusal to outside of pure apocalyptic measures. So he remains very disciplined on keeping the money in the business and not getting too aggressive with what he draws out. Even though he has fairly aggressive goals for what he wants to get over the course of the year in case of an emergency. He wants his break glass solution to be inside of the practice already, not outside of the practice. I have other clients who are much more comfortable with a line of credit. They manage it well, they don't let it get out of control. And then there are some who. There was an attorney who I worked with for a while.

Charley Mann [00:24:48]:

We just did not see eye to eye on the money side. And here's the wild thing Darren is my argument was I want him to get paid substantially for the work that he's doing.

Darren Wurz [00:25:01]:

Yeah.

Charley Mann [00:25:01]:

His argument was I Don't want to get paid substantially right now because I want to get paid more substantially in the future. Which was an argument he had been making to himself for a couple of years and it had not come to fruition. And he was always saying, at one point I told him, like, I can't hear the phrase, it's just going to be a few more months anymore. Like, you can't deal with that. And we ultimately parted ways as client and coach because there was that kind of philosophical disagreement there.

Darren Wurz [00:25:35]:

Well, I'll give you another one to think about. You know, paying yourself a market wage, what you're really worth is one of the only ways to really know if your business is truly profitable. And this comes from. I don't know if you've read Greg Crabtree's Simple Numbers, but I love some.

Charley Mann [00:25:53]:

Of the bookshelf somewhere back here.

Darren Wurz [00:25:54]:

Yeah, yeah. One of my favorites. He's like, look, if you're paying yourself way under market wage, you don't have a profitable business. You don't know if your business is truly competitive and profitable. So you've got to do that.

Charley Mann [00:26:08]:

Yeah, yeah, that's one of my favorites. Oh. I mean, it's a fantastic book. As a matter of fact, I sort of, I try and keep a, a canon of business books. Like, if you're going to ask me in a specific category, this is the recommendation I'm going to give every time. Because I don't like people who get real wishy washy and they're like, I'm going to just recommend the most recent book that I read. There's true standards for me when people talk about accounting, financial processing and sort of the financial data. The books that I go to first are simple numbers, simple numbers 2.0 and profit first.

Charley Mann [00:26:41]:

I'm like, read those. Then you'll have the frameworks that you need to start making better decisions and to understand the ebb and flow and meaning of money within your business.

Darren Wurz [00:26:53]:

100%. Yep. And we're going to be diving into Profit first in more detail on this series a little bit later. So thank you for mentioning that, Charlie. We're coming close to the end of our time here, but I have a few last questions for you. I want to throw one at you here. So this is a fun question. We'll do our money Mythbuster.

Darren Wurz [00:27:16]:

Okay, cool. So think back over your career, your business, your life. Was there something that you believed about money when you were younger, that now that you're older, you kind of see differently?

Charley Mann [00:27:31]:

Yes.

Darren Wurz [00:27:32]:

Okay. Controversial. Yeah. Let's see what it is.

Charley Mann [00:27:37]:

And I've never talked about this before in any other place. I am not a huge fan of the primary retirement account options for their tax benefits. I'm fine with it. But to me, the, the mythology that has been sold is that all you have to do is tuck money away in an IRA Traditional or Roth or a 401K and you'll be set for life. To me, in terms of velocity of money and how it grows, I feel like I'm loaning that money to large corporations to make money off of me while I wait to enjoy my money when I'm 65. So I am a more active and aggressive investor, and my money works harder for me than people who are tucking their money away into those traditional vehicles. Now, I like money and I like money's velocity. I don't worship money by any means.

Charley Mann [00:28:34]:

I like it as a tool and I like it as a game in many ways. And so I am more actively invested than your average individual.

Darren Wurz [00:28:42]:

Yeah, very interesting. Well, I might disagree with you just a little bit.

Charley Mann [00:28:47]:

That's fine, by all means. And by the way, that's why I mentioned at the end the context of who I am and how I feel about money, because I also. I'm actually quite conservative in the way that I handle it, but it moves a lot faster for me than a traditional vehicle would. But I'm capable of handling that. And if you're not capable of handling that and you would just gamble it all the way, don't do my method, please, Don.

Darren Wurz [00:29:11]:

Well, yeah, I'll insert a caveat there. I mean, I have great respect for the market and what the stock market can do. But at the same time, as someone who is a financial planner who works with law firm owners, I see this all the time. You have a decision to make make. Right, with extra capital. Do I infuse that extra capital into the business to get a certain rate of return, or do I put that into the market to get a rate of return? You know, there are. The market's going to give you probably somewhere between 9 to 10% annually. Over the long term, you might be able to get a far higher return in your business now there is more risk.

Darren Wurz [00:29:50]:

You got to make sure it's a smart decision. You got to make sure you really know what you're doing. Or like you said, you could be just gambling away. But we have great respect for that. And that's exactly why we created the model that we have, which is much different than the traditional financial advisory relationship. I mean, Most financial advisors really, they're trying to get a larger portion of your portfolio so they can manage it. We came up with a flat fee program for law firm owners.

Charley Mann [00:30:17]:

Love that.

Darren Wurz [00:30:17]:

So we don't care where your money goes. We just want to help you make the best decision for you.

Charley Mann [00:30:23]:

And by the way, I should say what I don't look to do is I'm not interested in like a Roth IRA putting money into a Vanguard, you know, 6%, 7% every year. I'm a big fan of financial advisors overall and I appreciate that you have a fixed fee model. It's for me just blindly tucking it away into the Roth ira, into the traditional Iraq. So I actually, I do have a traditional IRA for myself and I do put money away in there, but even within that, I remain an active investor in that as opposed to just tucking it away into the indexed fund or whatever it might be. And that has worked very well for me historically. But it's not right for everyone because I like, again, I like the game of it. And if you don't enjoy the game of it, you should have a financial advisor who helps you out. I love financial advisor services for law firm owners who are really busy being practitioners, being owners and trying to figure out that part of the game.

Charley Mann [00:31:27]:

I just, yeah. The truth is, Darren, I, I, I'm fortunate enough that because I've been mired in a lot of this philosophically and practically for some time, being able to approach my business and how I line up my life and how money moves in a way that works extremely well for me, I was able to get to it earlier in life and I'm very happy about that. But if I didn't have what I know, absolutely there's a financial advisor on my team and I do technically have, by the way, a financial advisor who I work with.

Darren Wurz [00:31:58]:

Yeah, yeah. Well, I'm, I'm a big fan of Vanguard too, so that's okay.

Charley Mann [00:32:03]:

Again, I'm such a, like everything is. And Gisakalakis who's, he's a digital marketer who I really respect. He and I are so guilty of giving the answer of it depends.

Darren Wurz [00:32:13]:

Yeah, yeah.

Charley Mann [00:32:15]:

And because like I regular, by the way, yourself included, when I'm talking with law firm owners and they talk about the huge amount of cash that they may be bringing in, I am recommending people like you that they go talk to because the, the money language and the money mentality for law firm owners is very complex because a lot of them have lived in a space where money moves quite a bit. The money has a different type of velocity. It can get spent very fast. There can be a lot of keeping up with the Joneses that happen.

Darren Wurz [00:32:46]:

Yeah.

Charley Mann [00:32:47]:

There's a lot of spending rather than saving and investing that can occur. There are a lot of attorneys who are, have high income but are cash poor.

Darren Wurz [00:32:55]:

Definitely.

Charley Mann [00:32:56]:

I always tell them, like, you need someone to help you out. You need someone who's going to help you make decisions. And even better, can you turn those decisions over to them? If you go and hire a professional to do search engine optimization for you and take care of an incredibly valuable tool and asset that you have because you don't have time to handle it. If you don't have time to properly take care of your money, why wouldn't you handle. Get a professional to be making decisions for you?

Darren Wurz [00:33:24]:

Yeah. And the question I often ask law firm owners is, you know, wouldn't it be great if you could wake up tomorrow and just say, heck with it, you know, throw your keys on the desk and walk out the door and just be done because you know, you've got enough passive income coming in from a portfolio of some kind. So for some law firm owners, that is an ideal that they want to aspire to, to have that sense of, of confidence that I could just walk away and I would be just fine. And that's. We try to help them get to that point in their lives.

Charley Mann [00:34:01]:

Yep. And most of my family members are people who have, who, who are invested with Vanguard. Right. Like they have.

Darren Wurz [00:34:08]:

Yeah.

Charley Mann [00:34:09]:

All that stuff. I, I, but my money philosophy, my money philosophy for me. And I don't believe it's right for everyone. Goodness gracious. It's not right for everyone. As a matter of fact, I know people personally who I would never share with them what I actually do because they would mess with it and turn it into a gambling addiction, essentially. And that's not what I'm doing at all. I won't specifics, but it is, it is absolutely right for me.

Charley Mann [00:34:36]:

And that's what people have to find when it comes to the cash. You really need to know your relationship with money, which all of us have a messy relationship with it. You need to know your deficits. You need to know where you get it wrong. You have to know that you're going to get it wrong at times and if you bottle it up too tight that it could explode at some point on you.

Darren Wurz [00:34:57]:

Yeah.

Charley Mann [00:34:58]:

Get help. Find people. You need a team of advisors on this. You know, it's like you need your estate planning attorney, you need your financial advisor Sometimes you need to just pay for a financial planning strategy session. Go and do that.

Darren Wurz [00:35:13]:

Yeah. And pay yourself a consistent salary.

Charley Mann [00:35:16]:

Yeah, yeah. That's nice, too.

Darren Wurz [00:35:19]:

Charlie, one more question for you here on the topic of books. I know you've read quite a few books. Is there anything. What are you reading right now? Tell us about that.

Charley Mann [00:35:30]:

Okay, so what I'm reading right now, and I'm looking over at my bookshelf because it'll give me the clue.

Darren Wurz [00:35:35]:

Oh, right here.

Charley Mann [00:35:35]:

Let me actually pull it up right here. All right, so this. And I. I've been going through this little by little. It's the. The 38 letters from J.D. rockefeller to his son. So this has been.

Charley Mann [00:35:48]:

This is really interesting. I. I've. There was some time ago, someone advised me to. Dan Kennedy advised that you should read shareholder letters from Amazon and Warren Buffett and those other spaces. Interesting.

Darren Wurz [00:36:02]:

Yeah.

Charley Mann [00:36:03]:

I've really enjoyed reading a lot of those and getting insights. So when I saw that there was this collection of letters, I mean, they're not shareholder letters, they're to his son from J.D. rockefeller. And some of them are, like, about dressing well, basically, but others are deep and interesting strategies and yada yada. So that has been quite a treat. I'm working my way through a reread of American Gods by Neil Gaiman. I always like to have something.

Darren Wurz [00:36:29]:

Okay.

Charley Mann [00:36:30]:

On my table.

Darren Wurz [00:36:31]:

Nice.

Charley Mann [00:36:32]:

And then I'm also parsing back through, and I've got it right over here. It's very well tabbed, so you can tell it'll be a second. Read my copy of Unreasonable Hospitality by Will. And that is, I'm going back through to like, lock some of the stories and everything into my brain.

Darren Wurz [00:36:50]:

Okay. Very, very cool. Well, that's great. And the reason I ask is we have a book club for law firm owners that we run, which is pretty cool. We just read Buy Back youk Time by Dan Martell, which is one of my.

Charley Mann [00:37:01]:

That one's right over there.

Darren Wurz [00:37:02]:

Yeah. And next up is A Random Walk Down Wall street by Burton Malkiel. It's a classic on the markets and investing, and I'm super excited to dive into that one because we're going to be talking about all of the misconceptions people have about markets and all of the myths that are out there and really distilling it down for people. So I'm really, really pumped about that.

Charley Mann [00:37:30]:

I am just writing that down real quick. Random walk down Wall Street.

Darren Wurz [00:37:34]:

Random walk down Wall Street. We'll put that. And we'll put Charlie's Reads in the show notes for you guys so you can check those out. Actually, before we go, why don't you tell our audience a little bit just about your backstory and what you do.

Charley Mann [00:37:49]:

Sure. So, you know, for the past 15 plus years, I have worked in, on, for, and with law firms, and I absolutely love to do it. And you know, the fast forward to today version is right now. I have two companies that work with law firms. One of them is my coaching company, Law Firm Alchemy, where I work in different capacities with law firm owners on a coaching and consultative capacity, specifically with law firm owners to build their entrepreneurial skill set. And that's just purely rewarding. Been doing that for a long, long time. Love helping them sort out some of the identity issues, some of the, you know, entrepreneurship challenges.

Charley Mann [00:38:23]:

The other company does email newsletters for law firms. We help law firm owners get their weekly email newsletter out the door consistently and to represent the best possible version of themselves that gets clients, referrals, reviews, et cetera for them. And that company is called Red Cracking Creative.

Darren Wurz [00:38:40]:

And that is such a great idea because almost every law firm owner I talk with, they don't have an email newsletter. And I'm like, what are you doing?

Charley Mann [00:38:50]:

It's a gold mine. It's an absolute gold mine. They tend to have the list, they've got the emails, they're just not pressing send. And I get it. There's not a lot of time to do it. Just like there's not a lot of time for them to go in and always understand what their numbers mean or get take care of their investments. We're like, look, we'll take care of it for you so you can go make even bigger decisions and work on bigger projects.

Darren Wurz [00:39:11]:

That's right. That's right. All right. Great stuff, Charlie. Well, thanks again for joining us. It's been a pleasure.

Charley Mann [00:39:18]:

Pleasure is all mine, Darren. The first time that you and I had an opportunity to spoke, I was like, I really like this guy. And immediately after, start bringing up your name in conversations as people talk about money. So I appreciate everything that you're doing for the lawyer community.

Darren Wurz [00:39:30]:

Thank you so much. All right, a huge thanks to Charlie Mann for joining us today. Connect with Charlie at Law Firm Alchemy or find his newsletter company, Red Kraken Creative. We've linked his sites and socials in the show notes for you. My challenge to you today is this. Pick a fixed monthly salary or a scheduled draw and start that this month for yourself. And treat it like payroll, even if you're not running payroll. Give yourself that predictable regular income flowing into your personal accounts.

Darren Wurz [00:40:02]:

You will thank me for it. Consistent personal income is the bridge from unpredictable firm cash flow to predictable wealth building. When your paycheck is steady, you make clearer decisions, you reduce stress at home, and you're finally able to start investing beyond your practice. And that's exactly what we help law firm owners do every single day. We've put together a simple guide on paying yourself as a law firm owner. You can check that out in the show notes. And if you're not yet in our free book club, you need to be. It's a great way to connect with other ambitious law firm owners and read some great books.

Darren Wurz [00:40:45]:

And as I mentioned in the show, that next book coming up, that's going to be a Random Walk Down Wall street by Burton Malkiel. It's a classic. And you owe it to yourself as an investor, as a business person to learn more about the investing world. It's really going to help you. So I'm super excited to dive in with you. And we'll be talking more on that, more about that on the show. But stay tuned for next time. We'll be diving into the next segment in our series on cash flow.

Darren Wurz [00:41:14]:

All right, friends. Well, who is the lawyer millionaire? It's you, my friend. That's right. So go out there and own it and live it. I'm your host, Darren Wirtz. Thanks for joining me. I'll see you next time.

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Cash Flow for Law Firm Owners Part 1: Why You Must Separate Business and Personal Finances (Ep. 134)