Mastering Financial and Leadership Challenges in Law Firm Ownership

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Are you a firm owner who needs some tips on creating a better business? In this episode of the Maximum Lawyer Podcast, Tyson and guests Brooke Lively and Pam Meissner, CEO & CFO of  Cathcap, discuss the unique challenges of law firm ownership, focusing on financial management, leadership, and team dynamics. They explore how different practice types affect cash flow, the importance of aligning leadership style with firm culture, and strategies for managing employee performance. 

Brooke, Pam and Tyson talk about the key characteristics needed for a successful firm. For Brooke, successful firms involve leaders who invest in themselves and elevate their staff. It also involves trusting your team to make good decisions and letting go of the reins so you as a leader can focus on other things. Pam talks about the importance of leaders having the right metrics and tools in place to trust their teams.

Certain leadership styles can affect team culture. Leaders that run their firm like a democracy and everyone has a say will often lose control. This can lead to a culture when there is no direction and staff are not pulling their weight. If a leader leads with an iron fist or is more likely to not listen to anyone, the culture can be toxic. It is important to know what kind of leader you want to be and implement practices so your firm and staff can flourish.

Listen in to learn more!

• 02:13 Why the $2 Million Benchmark?
• 06:19 Traits of Highly Successful Law Firms
• 19:59 Identifying and Managing Toxic Employees
• 33:16 Warning Signs of Owner Overload
• 41:27 Mindset Shifts for Law Firm Owners 

Connect with Brooke and Pam:

• Website 
• Instagram 
• Facebook
• LinkedIn
• LinkedIn Personal 

Tune in to today’s episode and checkout the full show notes here.


Brooke Lively

Founder & CEO, Cathcap

Brooke Lively is the founder and CEO of Cathcap, where she helps entrepreneurial law firm owners and business leaders build profitable, sustainable companies. After earning her MBA in corporate finance and investments, she helped her family’s firm hit seven figures in just eighteen months—sparking a career dedicated to turning gut-driven decisions into data-backed growth strategies. Since 2013, Brooke and her team have worked with hundreds of firms, bringing clarity, profitability, and stability. An EOS Implementer® and international best-selling author of Exit on Top and the From Panic to Profit series, Brooke is a sought-after speaker featured in Forbes, U.S. News & World Report, and on CNBC.

Pam Meissner

COO & CFO, Cathcap

Pam Meissner, COO and CFO of Cathcap, is a seasoned financial strategist with decades of experience as a CFO, COO, and CEO across industries. She specializes in turning complex financials into clear strategies that drive growth and profitability, helping companies scale to billion-dollar valuations. Known for her global perspective, adaptability, and problem-solving skills, Pam draws on a career that blends business leadership with personal resilience. Beyond finance, she’s an award-winning baker, avid reader, and self-taught fashion designer. Pam’s leadership is rooted in clarity, creativity, and a commitment to helping business owners achieve both financial success and balance.

Creators and Guests

Host

Tyson Mutrux

Tyson is the founder of Mutrux Firm Injury Lawyers and the co-founder of Maximum Lawyer.

What is Maximum Lawyer?

Maximum Lawyer is the podcast for law firm owners who want to scale with intention and build a business that works for their life.

Hosted by Tyson Mutrux, each weekly episode features candid conversations with law firm owners, business experts, and industry leaders sharing real strategies and lessons learned in the trenches.

If you're ready to grow your firm with less stress and more support, this is your next must listen. Subscribe today.

Tyson Mutrux 00:00:02 This is maximum lawyer with your host, Tyson Matrix.

Tyson Mutrux 00:00:11 Brick and Pam. Welcome to the show. It's going to be exciting. One, I can tell just by our pre-recording conversation. It's just going to be a it's going to be a lot of fun. But let's let's I'm going to jump right in. How? Because I think it's funny because I was asking, you know, do you prefer Cathedral Capital or Kath cap. And you told me not to use Cathedral Capital and I already did, but Kath cap, how would you explain what Kath Kap does and the transformation you can help law firm owners achieve?

Brooke Lively 00:00:42 So we're fractional CFOs and we plug into firms that are between 2 and 50 million who've reached a ceiling and know they need help. And what we do time and time again is we take them, we listen to what their goals are, And we customize our services to meet those. Many, many, many of our clients double their revenue in 2 to 3 years and they triple their profits.

Brooke Lively 00:01:12 And we do that by diving into the data and again listening to what does that owner want?

Tyson Mutrux 00:01:20 Yeah. Brooke, did you have more to add to that?

Pam Meissner 00:01:24 Well, I was going to say we believe that there are different kinds of profit. A lot of people think that profit is only about money, but profit is also about time or your reputation. It's really about having the firm that you want that gives you what you want and you need. And so that may be a firm that you only have to go into the office two days a week, or that may be a firm where you get to go to court and you don't have to do any marketing. But it really is. As Pam said, it's about listening to our clients and what their goals are in helping them hit that.

Tyson Mutrux 00:02:01 I wonder why you chose the $2 million mark is like that line in the sand. And because, you know, 2 to 50 is a pretty massive, it's a lot of money, right? But 2 million specifically.

Tyson Mutrux 00:02:13 I do wonder how you came up with that number.

Brooke Lively 00:02:15 Well, there seems to be certain gates, certain benchmarks that you have to kind of prove your concept of your firm. Right. And so 1 million is probably the time you start hiring others, right? When you get to 2 million. You've hired enough others that it gets really complicated. And what we know is that attorneys didn't go to school to run business. And therefore numbers are hard for them. And being a female led and and female founded organization, we're able to help those owners, be comfortable talking about money. But right after that, there's people issues. And what we found is that, Everything shows up in the numbers. And so we dig in. And quite frankly, at around 2 million, you can afford us.

Tyson Mutrux 00:03:07 I think I think that's fair.

Pam Meissner 00:03:09 2 million is also.

Pam Meissner 00:03:10 Where you really have a team that can help you. So it's not just you implementing what we're talking about. And and you as the firm owner doing all the work.

Tyson Mutrux 00:03:21 Well, I think it's important you know, what your niche is. And I think that that's really, really important. I think it's I think it's cool that you knew right off the bat exactly what you know, what it was. And so I think that's great. All right. So you've both worked with a lot of different law firms, all sizes, different industries, really different niches. So what would you say makes law firm ownership uniquely challenging from let's say like a financial and leadership standpoint?

Pam Meissner 00:03:48 I think that really depends on the type of law you're practicing. If we're talking about financial. So if we're talking about personal injury. Personal injury, you basically have to buy your cases. You have to buy that inventory and you work it depending upon, you know, what percentage of your practice is pre lit. You know, you work that for 9 to 16 months. And how much of it is litigation. And that can go three years. We had one client that was 20 some odd years into one particular case.

Pam Meissner 00:04:24 I don't know if he's ever going to get that thing resolved. So that is all about balancing working cases now and not getting paid until a much later date. Hourly cases when we're looking at the financials. Are we balancing what we're paying our people, what we're expecting them to bill our collections and we're monitoring the flow of cases. And in you know, with flat fee Again. What are we paying? What are we charging? And how were we monitoring production? So I think they all have had different things that we look at from a financial standpoint. They all have a different set of challenges, but they all have challenges.

Brooke Lively 00:05:10 I think another challenge that that I honestly enjoy of working with attorneys is they're really smart people. So they get concepts and you can move fast with them and they're kind of fun. Particularly the boutique practices that we work with. You know, they it's a nice match of of law and entrepreneurship. And both Brooke and I come from long histories of working in entrepreneurial entities. And yeah, it just speaks to the soul.

Tyson Mutrux 00:05:41 So yeah, I do remember whenever I went to law school, the thing I noticed the most was about just how many talented people there were in my law school class. And I do think that lawyers generally are very talented people. They had lots of different hobbies and are successful, different things. So I think that that is I think that's a really good point, I really do. You know, we were talking about the 2 million to 50 million and all that. I think what that allows, it gives you all a very unique viewpoint into different law firms. And you all can see the successful firms, what they're doing right and what they're doing wrong. And I wonder if, if you all have identified any key traits of the ones that are, that are highly successful.

Brooke Lively 00:06:19 Absolutely. They are leaders who invest in themselves and grow and delegate and elevate most many of them. And Brooks works with these run on iOS. I think it's a great place for them to to learn and grow as a leader, but also grow and invest in their teams, the ones who can let go of the vine and trust their teams and have the metrics and the tools in place to know if things are on or off track.

Brooke Lively 00:06:52 Those are the ones who succeed.

Pam Meissner 00:06:54 And in the other thing that that those attorneys do as they execute, they have worked very hard to get away from that paralysis by analysis. You know, in law school, you're taught don't ask a question until you know the answer. Don't make a decision until you know every possible outcome. And while that's great when you're working a case not so fabulous when you're running a business. So as Pam said, that letting go of the vine and that, you know, really just kind of taking the risk, okay, we're going to try this. If it doesn't work, we'll try something else. But taking action.

Brooke Lively 00:07:29 Yeah. Risk with accountability. The ones that know when not to throw more good money after bad money. You know, particularly in marketing.

Pam Meissner 00:07:39 Yeah.

Pam Meissner 00:07:40 Not huge fans of lighting the $100 bills on fire and throwing them out the window.

Tyson Mutrux 00:07:44 I'm not either. It reminds me of something that I talked about yesterday on the live show where its Jeff Bezos has a two way door where anytime they're very open to starting new things.

Tyson Mutrux 00:07:56 But and so they make decisions really quickly. But whenever they're heading down the path, it's not going to work. They they head back out the door. Right. So it's a two way door. Could they cut their losses and they move on? It does remind me a lot of that.

Brooke Lively 00:08:07 The other thing I'll say is that they have money to spend, and there's a lot of people who who want a piece of that. And so building that accountability, having tools to what to say yes to and what to say no to, how to make decisions. That's that's really important. And that's what we try to, to do is shed some light on where money should be spent and and why.

Pam Meissner 00:08:34 And that's something that Pam and in the rest of the team. But Pam especially is really great at. Okay. How are we going to make this decision. What is the lens that we are going to look through? What are the parameters we're going to use every single time. And there is an article that Pam wrote.

Pam Meissner 00:08:52 Pam, how long ago was that? Like 5 or 6 years ago? I love this article.

Pam Meissner 00:08:56 It was all.

Pam Meissner 00:08:58 About having a Oh my gosh, now I forgot what.

Pam Meissner 00:09:03 The circuit.

Brooke Lively 00:09:04 Breakers.

Pam Meissner 00:09:04 The.

Pam Meissner 00:09:04 Circuit breakers like when X happens, that throws the circuit breaker and we're out. Because so often, as you say, you know Jeff Bezos is in there. They try something new and they think, oh, you just put a little more in it and a little more in it.

Pam Meissner 00:09:19 And if we just give it another 4 or 5 months. No.

Pam Meissner 00:09:23 And that's part of that calculated risk that Pam was talking about. How far do we go? How much risk can we take on what is the potential return, and where is that point where we say, we're done, we're out.

Tyson Mutrux 00:09:37 Yeah. Something that I don't think that law school well, I know they don't teach this and they should is, is the whole idea of sunk cost where a cost is gone, you're never getting it back.

Tyson Mutrux 00:09:47 Don't throw more money at it because you're not going to get that money back anyways. So just cut your losses. I just that's something that you just never hear about. And you do hear people saying, well, you know, I've invested this much into the project. I don't doesn't matter how much you've invested into it, it doesn't matter. It's not working. You need to bail. Pull the cord. You're done.

Pam Meissner 00:10:06 It's new money. Starting now. It's new money that we're putting in.

Tyson Mutrux 00:10:12 You know, I've heard you all talk about. And I don't know how how related this is to it, but I've heard you all talk about right seats, right profits, which I think it's right people.

Brooke Lively 00:10:20 Right seats. Right. Profits.

Tyson Mutrux 00:10:22 Yes. So what? Explain what that what that is and how to how it directly affects the law firms bottom line.

Brooke Lively 00:10:28 Absolutely. So we do a two by two right. So you have an axis of competency. And then you have an axis of core values.

Brooke Lively 00:10:37 And you rate your people. And obviously the people in the upright quadrant are your stars. Right. And if you know, if it comes to mind who your stars are, they're aligned with your core values and they're great at their jobs. You need to to pick up the phone or text them and say, hey, thank you. I really appreciate you because they don't get enough love. The opposite of that are people who don't align with your core values, and they aren't really good at it. They are definitely not good at their jobs. They're called rats, stars spelled backwards, and they got to go. You can't tell me one story that justifies them staying. Okay, so you begin to see the financial impact of this analysis. The the other two quadrants are the ones where owners really struggle, really, really struggle. So you have the people that are aligned with your core values, right? They carry the, the, the firm flag and they're just nice to have around the office. But they're not really great at their job.

Brooke Lively 00:11:38 And we call these people puppies, right. There's cute, right? But they need to be trained. They need to be developed. Now we can have 1 or 2, but we can't have a whole litter of puppies because then it creates chaos, right? So we need to put a plan in place for those people to get them from being puppies over to being stars. The problem, and the piece that really has a drag on most firms is is the last category. And so that's people who are really good at their jobs. I think litigators really good at their jobs, but they don't align with your core values. So you build walls up around them. Right. Oh, you don't have to use the the practice management system. Oh, you don't have to track your time. Just I'll hire you an assistant. Track your time. Right. You do all this accommodation because they're so good and there's a lot of revenue at stake. The problem is those terrorists, they hold you hostage. They drive off your stars.

Brooke Lively 00:12:41 So Toxicity amongst your people has a direct financial impact. So that's that's one piece of the right people. Right seat. So that's the right people thing. The next thing has to do with, you know, are they in the right seat? Right. Every seat in a firm has a different DNA. Right. And and one piece of that DNA is their financial thermostat. We can go more into that if you want to. But the other is how they make decisions, right. There's all firm owners are tend to be entrepreneurial. And therefore, you know, they make decisions based upon their guts. Well, there's also analytical decision makers and collaborative decision makers. And I forget the book. It was, lead your firm by your customer promise. Was that the name of the book brick?

Pam Meissner 00:13:37 yeah.

Pam Meissner 00:13:38 Something like that.

Brooke Lively 00:13:39 And and it you know, everything of that era was about collaboration, right? That was the new business trend. And this, this litigation firm adopted collaboration and changed it from being the, the, the one intuitive decision maker.

Brooke Lively 00:13:56 And they began to lose their edge. They began to lose clients. And, you know, not everything is for everybody. So so right people right. Seats is one. You have to know what you need in which roles, and make sure you have that right person to fit into to what is needed.

Tyson Mutrux 00:14:16 So I pulled up is it lead right for your company's type or is that something else?

Brooke Lively 00:14:20 That's it.

Tyson Mutrux 00:14:21 Interesting. Okay, so I want to go back to that. So are you saying that the that they started to live by that book and then things went the opposite direction. Is that what you said?

Brooke Lively 00:14:31 No, no, what they did was they followed the info trend of the day. Right. We've all done that right now. We need to have radical candor. Now we need to, you know, be collaborative. Right. We have these trends that kind of move through the culture. The book of of the year or whatever. And they did that because they thought, oh, this is a great idea, but it didn't fit their customer promise.

Brooke Lively 00:14:55 Their customer promise was leading edge results. And the collaboration that they brought in slowed everything down. And and they diluted the power of the intuition of that litigator. And so it wasn't the right culture for their customer promise.

Tyson Mutrux 00:15:18 That's beautiful. Brooke, do you have anything to add to that?

Pam Meissner 00:15:20 It is interesting and it is subtle, but yes, you.

Pam Meissner 00:15:24 Really.

Pam Meissner 00:15:24 Can take your firm in a direction that is not to your benefit if you are just listening to whatever's hot. You know, like I said, oh, it's collaboration. We must be collaborative and and everyone has to agree. Well, you know, Gino Wickman, who wrote traction, is famous for saying. Consensus is for brunch.

Tyson Mutrux 00:15:49 Well, like, well, people, they don't think of it as like the leadership part of it. Like, people need you have to lead your firm. And when you are. And you can tell me if I'm if you think I'm wrong about this. But that's the aspect that we need to maybe talk about more is leadership.

Tyson Mutrux 00:16:02 You have to if you're doing this whole thing where you know, where it's a democracy and everyone gets to vote, no one's leaving the firm. They you have in one, you're bringing a risk in a second, but you're the one that's taking all the risk. You know, the employees are not taking all the risk there. There is some risk working for you, I guess, in some way. But they could also leave tomorrow and find another job. You're the one that laid out all this cash. You're the one that's paying all this money. You just put all that you're putting in, you know, the 80 hour workweeks and all that. And so. But you also need to be one that's leading the firm and having more of, like, everyone gets to vote. It's not it's just not the way of leading a firm, you have to be able to lead these firms forward.

Pam Meissner 00:16:41 There are kind of two things in there. One is we're not saying collaboration is wrong for every law firm.

Pam Meissner 00:16:48 We have seen very collaborative law firms that have done a phenomenal job, because that is their culture and that is their customer promise. You are right in that the firm needs to have one vision. Everyone needs to see the same vision. They need to agree on that vision. It needs to permeate the entire firm to the point where they can touch it, taste it, smell it, feel it. Like they can close their eyes and absolutely envision that, that destination where they're going. That can come from a collaborative discussion, or it can come from one person's mind. As long as everybody is on board, that doesn't matter. But you're right. You've got to lead by giving them that position.

Tyson Mutrux 00:17:37 Yet you rarely see. And I understand what you're talking about the difference. But you rarely do see very highly successful companies that have led by committee. You usually have one one vision led by one person. Yet what would you say? Pam.

Brooke Lively 00:17:54 Benevolent dictator?

Tyson Mutrux 00:17:55 Yes, sometimes. Sometimes?

Brooke Lively 00:17:58 I mean, it's not a bad model.

Pam Meissner 00:18:01 As long as the. The dictator really is benevolent. It's all good. But. Yeah. And when we talk about collaborative. So a collaboration is really a lot of what we do. So we are very collaborative in that we believe that we work very much in the team based environment in the company. We believe that the client is absolutely a part of that team and should be part of decision making and understand what's going on. And we also believe in working with other Providers to make sure that we're not saying one thing and somebody else is saying something that's the direct opposite. So we are very collaborative. That does not mean that everybody on the team got to vote on our ten year target.

Tyson Mutrux 00:18:51 So it's interesting because I kind of think about like, so I've got two companies, I've got maximum lawyer and I've got the firm. So matrix firm, I would say that I'm definitely more of the benevolent dictator at the firm, but with Maxwell is more of a collaborative. You know, we take the whole rising tides, sort of like when it comes to vendors, when it comes to other lawyers, other groups, we do, like take the whole thing.

Tyson Mutrux 00:19:12 We're all kind of working together. So it is there is a different dynamic. I think when it comes we have we have a.

Brooke Lively 00:19:19 Different customer premises. Right?

Tyson Mutrux 00:19:21 Absolutely, absolutely we do. Yes. Yeah. But we do have we have solid visions on both of them. We have we have very solid visions with the firm and with Max law. And but it's kind of funny as a as you were talking about that, I was thinking about the differences between, you know, different companies that I'm a part of. I want to go back, though, because about the four quadrants, I find it really interesting. It's a really because we, there's a couple things you said that really make me think about what I hear from lawyers all the time about you. I called them stars. Right? And I hear I hear all the time people mislabeling what you want. What are the toxic employee ones? What the what quadrant would you.

Pam Meissner 00:19:59 Terrorists.

Tyson Mutrux 00:20:00 Terrorists?

Brooke Lively 00:20:00 The rats and the terrorists? Yeah.

Tyson Mutrux 00:20:02 So the terrorists, they they label the terrorists rock stars and stars, and they do put up these fences around them, right? And but they're really toxic employees. Because I remember I did an episode months ago about toxic employees and the traits to look for. But you made it so simple. It's so much simpler. You okay? Do they live the values yes or no? And are they good at their job? You made it so much easier to identify those than what I did, because there are certain traits that you can identify easily to figure out if they are, if they are a terrorist. Yeah. And so I think it's beautiful the way you did that. I think it's a it's a really great. I also like the, the puppies because you hear about puppies all the time, you know, and like, well, they've been with me for so long and I think of all. And I am curious what you think. I think the ones that people have the hardest time firing are the puppies.

Pam Meissner 00:20:50 So I was I was at a conference and I was talking about the grid and, and the terrorist and the puppies and the and I had a guy come up to me and he said, so I think I have some puppies, but I need to keep them. I'm like, okay, why? Why do we need to keep the puppies? Are they trainable? Because that's a big question you have to ask. There are some people that it doesn't matter how many resources you give them, they're never going to learn. And by the same token, there are puppies that need you to give them resources and train them. And if you don't have the time to train them, you are doing them a disservice Service because you could be training them. But so anyway he said, oh yeah, no, they will never have the ability to do the job. But their emotional support puppies.

Tyson Mutrux 00:21:44 It's it's funny because for for the listeners, you.

Pam Meissner 00:21:47 Are you for trying.

Pam Meissner 00:21:49 But no.

Tyson Mutrux 00:21:51 I think it's funny for the listeners that can't see.

Tyson Mutrux 00:21:52 Pam covered her mouth whenever Brooke said that. I think that was pretty good. And I also, before you finish, it is interesting for those of you that can't see this, it's really interesting watching you all know each other really well. It's very clear because just the facial expressions you can, you indicate who's going to talk, who's not going to talk. You're nonverbal. You are just you all are talking to each other with that talking I think it's brilliant. So if for anyone that is just listening, you should go and watch this on YouTube because it's, it's it is really it is really interesting to watch you all how you communicate with each other. Anyways, I didn't want to derail that, but continue. Brooke.

Pam Meissner 00:22:24 Well, no, I mean, it was just I was like, yeah, we can't afford to keep emotional support puppies because they're not doing their job. They may make everybody feel really good, but you know, they're still puppies and they're still piddling all over the floor and we still have to feed them.

Pam Meissner 00:22:39 And so that costs time and money. And frankly, they're tearing up the office. So I gotta go.

Brooke Lively 00:22:46 Yes. And and I'd like to call attention to what we were talking about before, which is, is the role of leadership. Leadership's job is to identify puppies and terrorists with the puppy. It's important that you have that conversation and say, you know, you're absolutely aligned with our core values, but there's some performance issues going on. And because you're so bought into what we're trying to do here, we want to invest in you and we want to develop you. Do you want to be developed? Okay. To Brooke's point, I don't think they want it to be developed. But if they respond and say, yes, please train me, then you set a time frame to which you want them to go from being puppies over to being stars. And so if it comes the point in time when they are not, they are just going to be an internal puppy. Everybody knows, and it's no surprise.

Brooke Lively 00:23:45 The thing with terrorists is the moment you identify them and start to address it, you get so much loyalty from everyone else on the team, they're like, thank you. The thing with terrorists is it's not a quick decision, right? It's not like the rats that have to go. You need to have a strategy, right? You need to think, okay, this person brings in this revenue and you have to put things in place. And the thing I love most when a terrorist is addressed is the whole rest of the team is so grateful that they rise up and they fill the gaps. I don't want to I don't want any of your listeners to think you're not going to experience a drop in revenue. You're going to experience a drop in revenue, but you will make that up in more in a much shorter time than you probably think.

Pam Meissner 00:24:35 And that is the biggest thing. You know, first telling a firm that they have a terrorist. Frankly, it doesn't always go very well. So usually we just try to let them.

Pam Meissner 00:24:48 We just nudge them in that direction until they see it. I got an email from one of my firms, I think, on Saturday. She's like, yeah, well, we've been sidestepping it. We're going to have to call this person a terrorist. I'm like telling you for eight months, but okay. But what I hear from owners is I can't afford to fire them. I just can't afford to fire them. And Pam's right. You've got to come up with that strategy because they are revenue generators or they are the person you know. It could be a paralegal. That is really part, a pivotal part Heart of of the process, and they're the only one that knows how to do it. Yeah. Tough. Consistently, what we see is as soon as that person leaves. Employees come into your office. They say two things. Thank you. And what took you so long. And we see everybody else really pitching in. We see them taking up a lot of the slack, and we see their production, their own personal production going up.

Pam Meissner 00:25:55 I think part of it is they're grateful and excited. I think part of it is there's no longer this distraction. They're no longer sitting around the water cooler talking about the person or being upset by the person. And so, you know, the distractions gone.

Tyson Mutrux 00:26:11 So I can speak from personal experience. We just wrapped up last week a settlement with one of our employees that we actually had to sue. That was a terrorist, that yeah, it was a it was a big deal. And it was everything you said. It was like a six month thing where we had to plan it out. We did see what was what we we actually did not see a drop in revenue. We the team rallied. They were so happy with the decision. They and everyone kind of saw it coming. But it was one of those things where we had to plan for it and we did. And so we luckily we we have a great leadership team that implemented the plan and, and everyone rallied. Everyone was so happy.

Tyson Mutrux 00:26:51 Our revenues are at revenues increase. Even more important, our profits increased, which was, you know, was great. But it is. They can be. So the the terrace can be so detrimental to the rest of the firm because they, they don't they don't like to follow rules, you know, like they're the ones that want to. You're talking about like putting up the fences or walls around them because they don't want if they don't want to follow the rules, they want everybody else to follow the rules. But what I found was it was really interesting. And this has been a couple times I've seen this with employees is that they will hide the work that they're not doing so that they you think that they're doing work, but they're not doing it.

Pam Meissner 00:27:24 Yeah. And then they leave and you open their top drawer and you're like, Holy shit. You're like, we're screwed because there's so much stuff that they had been kind of squirreling away that you didn't know about.

Tyson Mutrux 00:27:37 Are there ways of identifying the rats and the stars and the tears and the puppies at the very beginning?

Pam Meissner 00:27:43 Absolutely.

Tyson Mutrux 00:27:44 So tell me. Walk us through that.

Pam Meissner 00:27:46 That is.

Pam Meissner 00:27:46 Super easy. It's about having core values. Do you have core values? Are they real core values? Do you live them and breathe them every day? All through your firm. And when I say core values I don't mean something like integrity. Right. It's. Well, I'll use one of ours. It's be a partner. I've already talked about this one a little bit. It's a short phrase that people can remember, followed by a sentence that explains it, and then a few bullet points below so that you can really look at it. It is hard to say based on one word, yes or no. But when you've got a phrase, a defining sentence in 3 to 5 bullet points, you're like, yes, yes, not so much on that one, but yes, yes, yes. So overall, on the whole, yes, this person lives this value. So it makes it really easy to grade people. They either get a plus, a plus minus or a minus and you set the bar and you say, if your score isn't this, you're out and you talk to them about that.

Pam Meissner 00:28:59 When you're hiring, you hire. Based on that, you do a 30 day check in where you talk to them about how they're doing on it. You do a 60 day check in where you talk to them about their core values, and if they're not a match, they're probably not going to make it to 90 days.

Tyson Mutrux 00:29:15 Do you all use job scorecards? All or do you recommend them, I wonder?

Pam Meissner 00:29:20 We have APIs.

Brooke Lively 00:29:21 When you say a job scorecard. What?

Tyson Mutrux 00:29:24 So we use something. I know that there's a lot like people like Brian Pitman who's a guild member. Like, I don't know if you know Brian, but so we like we have job scorecards for each position. And so what's the purpose of the role. And like what we're looking for in that, that, that type of a person and what sort of outcomes we're wanting and then what the KPIs are. Some people just have KPIs and they kind of call that their job scorecards are a little bit more advanced. I just wondered if you all had anything for that like that for every position?

Brooke Lively 00:29:48 Yeah.

Brooke Lively 00:29:49 We have I don't think we call it that, but we have all those components. What we have done is worked on not only the technical parts of the job, but the behavioral parts of the job. And so during our hiring process, which is fairly robust, and to Brooke's point, the way you avoid puppies and terrorists is by your hiring and onboarding process. You know, I talked to all our candidates. First thing is 15 minute conversation, five have questions and all the while I'm grading them. And it's an amazing, amazing filter in terms of where we found in our hiring process that we were missing something is we had, what did you call it, bias. Confirmation bias. And we're like, oh, you were just delightful. I want to hire you. And what we weren't picking up on is there were certain we're financial people. Right. And financial people are a dime a dozen easy to find. But the type of finance that we practice, that relational piece of it, the fact that we switch from client to client to client, it doesn't align with the behaviors of your your typical accountant.

Brooke Lively 00:31:05 Right. And so we had to build a behavioral profile for the ideal. And then we we test the the last batch of candidates against that. And nobody hits it right on. But it helps us know the gaps that we have to fill with them. And particularly then we lay there, their supervisors behaviors on top of theirs. And then we have a coach who who works with them to understand how they can be successful together.

Pam Meissner 00:31:38 And that made a an enormous difference. When we added that, we used to we used to hire in pairs, thinking that we were going to lose one. Thinking that one would be a bad hire. We now hire in pairs because it's easier to train in a pair, but we know we're going to pretty high chance we're going to keep both of those people because we're not hiring people. I mean, I swear there were times when Pam and I would interview people. You would think we were just shopping for friends. We're like, oh my God, she's so cute.

Pam Meissner 00:32:12 We totally need.

Pam Meissner 00:32:13 To hire her. One of our questions is.

Pam Meissner 00:32:16 Is he or he Margarita worthy? Would you want to sit down and have a drink with him? That goes back to one of our core values. And man, we could find all kinds of Margarita worthy people, but they weren't necessarily right for the company and for our clients.

Brooke Lively 00:32:31 And the thing we have going for us is that our core values are owned by everybody. And it's not just Brooke and I protecting the core values of the firm. And so during the interview process, everybody who talks to that candidate is grading them on core values. And it's very different to observe core values when when you're in leadership than when you might be a future peer of theirs. Right. People show up differently.

Tyson Mutrux 00:33:01 Definitely. Yeah. This this has been such a fascinating conversation. I didn't think we'd spend this much time talking about this part of it, but I do, I do, I do find it interesting. I want to shift gears a little bit because I want to talk about maybe a law firm owner that's taking on too much.

Tyson Mutrux 00:33:16 And and what are some warning signs that a law firm owner is doing too much and that they need to step back from some of the roles.

Pam Meissner 00:33:26 Besides the frazzled, working 60 hours, not remembering their children's names.

Pam Meissner 00:33:32 You know, never.

Pam Meissner 00:33:33 Being.

Pam Meissner 00:33:34 Present on vacation. Okay, so now that we've dismissed all of those.

Tyson Mutrux 00:33:39 So so it's funny because, like, I think sometimes people need to hear that, though, you know what I mean? Like some of those, they may seem obvious, but they they may need to hear it.

Brooke Lively 00:33:46 Yes.

Brooke Lively 00:33:46 And it it shows up in things like my books haven't been closed in a year. I have a huge receivable balance. I can't hire good people. These are all symptoms of the issues with leadership.

Tyson Mutrux 00:34:02 I wonder how much of that has to do with because I want to, I want to, I said, I want to get into risk a little bit. I wonder how much that has to do though. Also with they're not paying themselves enough money.

Tyson Mutrux 00:34:12 And I think sometimes maybe it's oddly related, but like, because I know you all talk a lot about whether or not people are getting paid enough for the risk that they're taking in the business. So can you talk a little bit about that part of it?

Pam Meissner 00:34:25 Yeah, I'll talk about that. But I also want to back up a little bit. There are a lot of people who refuse to give up jobs because they think that it's less expensive for them to do it. I'm not going to hire a bookkeeper for $1,000 a month, because I can actually get the books done. Okay, great. So it takes you, I don't know, pamphlet eight, ten hours a month. Let's say it's ten hours a month and your billing rate is $500 an hour. Is it a better idea for you to bill $5,000 or pay someone 1500 so they don't. They just think about what they can't afford. It's really easy when someone has an hourly practice to do that. When we start talking about contingency practices, they're like, well, you know, I don't bill hourly.

Pam Meissner 00:35:22 So I was in Buffalo. I was talking to one of my contingency clients, and I went through and I figured out what his, like, effective hourly billing rate was.

Tyson Mutrux 00:35:34 Oh, I don't know if I want to hear this, but.

Pam Meissner 00:35:38 We haven't gone over $2,000 an hour. We're pretty freaking close. And I'm like, and you don't want to pay someone. We were talking about bringing in, like, a financial person. Like, so you're costing yourself money and and they don't understand that. Yes. We want our our owners to get paid because you are taking risk. You are you're you're taking financial risk. You have signed the lease. You have guaranteed the loans. If you know when payroll rolls around, if the money's not in the bank, it's coming out of your pocket, so we want you to get paid. However, I would rather you run a slightly smaller, more profitable firm where you are working a reasonable amount. Then you go chase that top line number because there's a great expression.

Pam Meissner 00:36:34 Revenue is vanity and profit is sanity, and cash is king. So you know those people who go off and they're just chasing the revenue and they're doing it all themselves and they're going to burn out. And ultimately they're not they're not doing themselves any good and they're not doing their families any good.

Brooke Lively 00:36:54 And that's one of the things that we bring is that we see inside the real numbers of so many firms is that we can help benchmark it, and we can tell them how to prioritize the issues and tell them, you know, you're really doing well in in these areas. I think what we need to focus on is, is this piece. Because if we get this right, then it's going to help the 4 or 5 other things. And it's amazing how they relax when they see how they relate to their peers. So that that kind of benchmarking is, is a really valuable piece of what we do.

Tyson Mutrux 00:37:36 Yeah. It's you mentioned the vanity number of the revenue and I call I call that an ego number.

Tyson Mutrux 00:37:42 I call the number of employees you have as an ego number, because people think that they've got to have these massive law firms for some reason. I so anytime someone leads with like the, the revenue or if they lead with the number of employees, I'm thinking like, okay, does it mean anything? It's just your it's just ego, that's all. It's all you're talking about when it comes to that.

Brooke Lively 00:37:59 So you can also.

Brooke Lively 00:38:01 Find it on the PNL.

Tyson Mutrux 00:38:03 Say that again, Pam.

Brooke Lively 00:38:04 You can also find it on the profit and loss statement.

Brooke Lively 00:38:08 I.

Brooke Lively 00:38:08 Often add that line in as an expense item is the owner's ego.

Tyson Mutrux 00:38:14 I love that.

Pam Meissner 00:38:16 You know, I've got a former client who has her firm's doing 5 or 6 times what it was when we first started working with her, however many years ago, and she doesn't work with us anymore, but I keep up with her. I know what's going on. She's got three employees. Multi-million dollar firm. And can I tell you what she's taken to the bottom line? It's like a shit ton.

Tyson Mutrux 00:38:41 I bet she is. I bet she is.

Pam Meissner 00:38:44 You know, we finally got away from the. She had to have the biggest law firm in town, and now, frankly, she might have one attorney on payroll. Other than that, she has figured out a way to get her legal work done by contractors and hourly people. And she's crushing it. She lowered her risk.

Tyson Mutrux 00:39:08 That's awesome. Well, kudos to you all for for that. That's that's incredible. That's that's just testament to the the work that you all have done with her. But I want to I want to start to wind things down. But before I do that though, if people want to work with cath Cap, how do they get in touch with you? I do want to say this too. I want to thank both of you. You all are a sponsor of Max Lorcan and we wouldn't be able to put it on without sponsors like you. Also like from the bottom of my heart. Thank you. Because it's one of those things where these conferences are extremely expensive and we we are it's one of those things where we could have way more sponsors if we wanted, so we could have way more sponsor money.

Tyson Mutrux 00:39:44 But we choose not to because we want to be very selective with who we're working with. And so we're working with you all because we think that you will do amazing work. So thank you all really do appreciate that. But I do want to.

Brooke Lively 00:39:55 We.

Pam Meissner 00:39:55 Appreciate you bringing it back.

Tyson Mutrux 00:39:57 Well, it's it's one of those things where you have Becky and I were like one of the first things, one of the first decisions we did. So whenever I took over Maxwell, one of the first things we said, let's bring it. Let's bring it back. And I think people. People had been wanting want it. Wanting it. So we just said, okay, let's give the people what they want and. And so that's why. So I'm glad you all are excited about it.

Brooke Lively 00:40:16 No, we're very grateful.

Brooke Lively 00:40:17 I think the people that you attract, the messages, the the healthy, having healthy, happy firms.

Tyson Mutrux 00:40:25 Absolutely.

Brooke Lively 00:40:26 Speaks to us. We're those kind of people. We want people to to get what they want out of their lives and their firm, if they want to get in touch with us, is probably the quickest way is to email me directly.

Brooke Lively 00:40:39 And it's Pam. Pam at Cathcart. Happy?

Tyson Mutrux 00:40:46 You're good. So the this is a good segue into my last question I want to ask you all and it's about it's about mindset because you've both worked with burned out, underpaid, overwhelmed attorneys. You know you, which is funny because you all are so happy and bright and everything. And so it's it's good to see that that's not kind of like it rubbed off on you all. You are like, very, very positive, which is great, but I wonder, I want to know if you could share maybe one mindset shift that the, the ones that you they've gone from maybe overwhelmed and underpaid to, to happy and paying themselves a nice living, maybe one mind shift mindset shift that they've made to make that difference.

Brooke Lively 00:41:27 I think it is knowing that they're entitled, you know, they're taking the risk and they need to take care of themselves in their firms before they take care of, you know, it's put your oxygen masks on first. I think that's that mindset shift that I it's okay to make money, right? I am entitled I, I earned it.

Brooke Lively 00:41:56 And and when they get there I think that that helps them make tougher decisions to focus again on the bottom line.

Pam Meissner 00:42:06 I agree with that. Realizing that that there's nothing wrong with making money and that it's okay. It is okay. And it's okay to make more than your paralegal. You don't have to be the lowest paid person in your firm.

Brooke Lively 00:42:19 Or the no.

Brooke Lively 00:42:20 Paid person in your firm.

Pam Meissner 00:42:22 Right? I also think it's it's that shift where they really open up to possibility instead of seeing something. I can't do it. It won't work. See? Yeah, I can do that. It will work. It might work. And I think that comes from setting an achieving goals and proving that you can do it and winning. And and the more you win, it just creates this culture of success. And having that running through your firm Is it just really. You said it earlier. A rising tide lifts all boats and that really makes a difference.

Brooke Lively 00:43:08 I think the other thing is getting comfortable with trust.

Brooke Lively 00:43:11 And I don't know if that's a mindset trust. But Stephen Covey, the son, not the father, wrote the book The Speed of Trust. And people who learn how to trust themselves and others get a dividend. And people who businesses, firms that have low trust environments, they get taxed. And that's that's a skill, right? There are so many people that think that trust is earned, but once they realize that it's something that they, as a leader, have to cultivate and give freely. That's game changing, really game changing. And when you deal with, we come into the money side of it, right? And people are usually very, very tight. And, you know, I'm not going to share my numbers with anybody. It's like, okay, we'll start there. But when they can begin to trust that the people are all going with them on this, climbing this mountain, that's when it gets magical.

Pam Meissner 00:44:11 Your employees really do want you to win.

Tyson Mutrux 00:44:14 It's a beautiful message from both of you.

Tyson Mutrux 00:44:16 I think it's a great way of ending it. I also want to take a screenshot of the, the the facial expressions you all just made a few a few seconds ago. That was fantastic. At the same time it was really good. Thank you so so much both of you. This has been great. Great episode. If anybody wants to work with Cath cap Cath cap com, you can follow them on LinkedIn Instagram, Facebook. Thank you both very much for doing this, and I look forward to seeing you both in Nashville. Go to Max Lacon com for anybody wants tickets. But really appreciate both of you. Thank you so much.

Brooke Lively 00:44:44 You're welcome. Thank you for having us.

Pam Meissner 00:44:46 Thanks, Nathan.