The Sterling Family Law Show

The Moneyball Method: Building Law Firm KPIs for Predictable Revenue - #195

• Jeff Sterling Hughes

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➡️ Register Here: www.RocketClicks.com/learn-moneyball-method


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Law firm KPIs are lying to you. We tracked the wrong metrics for years—batting average instead of on-base percentage.

In this episode, we’re giving you a sneak peek of our upcoming free webinar called “How to Moneyball Your Family Law Firm”. It will reveal why most family law firms chase leads while their intake conversion rate crumbles. We’ll also show you why close rates drop from 58% to 32% when leads increase and how our framework fixes that.

Register here to learn the exact system we used to spot revenue leaks and scale Sterling Lawyers from startup to $18MM in revenue: www.RocketClicks.com/learn-moneyball-method


📲 Subscribe Now: https://www.youtube.com/@karls.anthony

📚 Order The Waterfall Method Book here: http://rocketclicks.com/the-waterfall-method/ 

📝 Schedule a FREE Family Law Firm Audit: https://rocketclicks.com/schedule-a-family-law-quick-audit/ 


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📄 CHAPTERS  


0:00 - Law Firm Dashboard Intro: Leads Are Like Dogs Chasing Fire Trucks

0:45 - The Moneyball Method for Family Law Firm Scaling 

3:03 - Why Most Firm Owners Don't Know Their Own KPIs 

5:36 - Downstream Data Loss: The Intake Tracking Gap Nobody Fixes 

13:34 - More Leads, Worse Results: The 58% to 32% Wake-Up Call 

15:03 - When Marketing Works, Your Intake Team Performance Breaks 

16:22 - Using Your Revenue Waterfall to Predict Breakage Daily


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Leads are like dogs chasing a fire truck. If you catch the lead, you got to know what to do with that. A dog chasing a fire truck is going to catch the fire truck and not know what to do with it. So we always focus first on making sure you're ready to catch the leads. If we're going to ramp up your marketing and get you leads, you got to be ready to catch them. Welcome back to the Sterling Family Law Show, the podcast designed for family law firm owners who want to grow their profits, multiply their cases and set a clear roadmap on what they need to do to build the firm of their dreams. Today, we have a great episode for you. We are breaking down the proven business growth, digital marketing, and revenue first strategies to help you scale smarter, not just busier. We are about to launch our next webinar called How to Moneyball Your Family Law Firm. And today we're going to give you a sneak peek on what you'll get from that free webinar. In this episode, we're breaking down how family law firm owners can apply the Moneyball method in baseball. Billy Beane had a $40 million budget to beat the Yankees, who had $125 million budget. Instead of chasing flashy stats, he focused on the number that actually mattered and won 103 games. It's the Moneyball method. Most family law firms run the same way chasing vanity metrics, clicks, impressions, busy work without knowing what actually drives growth. What if you could track the numbers that actually matter? See where your winning spot revenue leaks and know exactly what to fix next. That's exactly what we did at Sterling Lawyers, and we money balled our way to over $18 million in revenue. And now we're going to show you how to do the same thing. All right guys, welcome back to the Sterling Family Law Show. Today we're actually giving a preview into the webinar that we are having later next month revolving around creating the Moneyball system around your law firm. At the end of the day, you need to know as a law firm owner, am I growing, am I winning, am I making money or am I not? And we talked to lots of law firms about their growth plans, their intentions on being a successful firm. And a lot of the things that we find relate to their inability to actually understand what's working and what's not working within their law firm. We have a number of guests with us today. We have Tony Karls who is the co-founder of our very own law firm, Sterling Lawyers, that's grown to over $18 million in revenue. We have the head of business development here at Rocket Clinics, Christian Diaz, as well as our head of data. Jay. And we're going to talk and just have a conversation about what we're seeing, both in our own law firm as well as the law firm clients we work with. And I think to start things off, Christian, give us a little background on some of the things that you uncover in discovery calls with new law firms as it relates to where they're at today and where they want to go. Well, I think the most important thing that I typically discover, within the first 10 or 15 minutes, is how much they don't know about what's happening inside of their law firm, right? So it's mostly lack of clarity as far as what the their KPIs are, what their KPIs should be. So it's really just more of on discovering, before I can provide some sort of prescriptive cause just descriptive site. Right. What exactly is happening within their firm? What is causing their intake team to suffer bottlenecks? Is Leeds the actual solution or should we first focus on their SEO and their website and all that jazz? So that's pretty, pretty important. And kind of the first thing that, that I typically find within the first few minutes. I love it. And Tony, we were the same way right when we started Sterling. We didn't know what we didn't know. We didn't know what data was important, which metrics to track. A lot of what we were doing was through gut feel. Tell us why that is such an expensive system. When building a law firm. I mean, I would say we didn't go off gut feel because we had understood that the waterfall was from our promotion base when we were building that, affiliate call center. But just like in Moneyball, for people that don't know what Moneyball is, Moneyball is the, process of finding cheap wins and and inefficiencies in the marketplace. Like, in 2002, the A’s use this. And they started going against traditional statistics like batting average. So in a law firm that's like the comment I need more leads. Any more leads, any more leads because I don't have enough funding agreements. And in the reality, what they found was on base percentage and walks were just as important. And that actually led them to finding more and more runs, which in our world would be funded agreements and and now isn't necessarily I need more players with a higher, traditional batting average. I need players that get on base. I need leads that are qualified leads, and I need an intake team that takes those qualified leads and moves them into a consultation. So I would say our our approach is very much kind of like that story. If you haven't seen it, it's good a good movie. Brad Pitt does a real good job. It's fun, fun and entertaining. I would say probably C-list actors here in terms of our ability to match Brad Pitt's enthusiasm and energy. But we're going to try our best. And I think there's a lot to learn here. Just like really understanding. Like, what is that revenue waterfall and what are the actually the most important metrics? Because it isn't if you're saying I need more leads or you're saying you're going off a gut feel, I just need to do something like you're probably not looking at your data correctly. totally agree, I think that's a great segue, Jay, for you. Yeah. Jay leads the effort, here at our agency to help law firms better understand their data and put together dashboards, what we affectionately call the waterfall, to help create visibility on the metrics that truly matter. But, Jay, give us some perspective on some of the situations that we find ourselves in with clients before we get them a waterfall. Yeah. I. When we first have our initial conversations, the biggest thing we always run into is data loss. It's I don't know what's happening downstream. I have a number of leads. I get, but I don't know what's happening downstream. I don't know how quickly we're talking to that lead. I don't know how quickly we're getting them into a consult. A lot of our our clients we work with, they have an operational flow that they follow, but that flow is not tied to any data points that are relevant to actually evaluate it. So you you get into a state of, oh, we see things moving through, but you lose the context of time, which is vital to converting a lead. That's probably the most common thing we run into. And then the other piece we run into is, is we just see a lot of broken systems. We have our website connected to an email address, and we hope the person that's supposed to be looking at it is looking at it. Well, when you've got 20 minutes to talk to a lead, you need to ensure that that is not an email inbox. If you actually flowing into your CRM system, which you're already investing in. So there's just gaps in the systems function. And a lot of this is is really around not having the technology person in their organization, nor could they really have that person sitting in a seat in their organization. That's where we're able to really help them out. Love it. And on the webinar we are doing, we are going to answer just that. We're going to help, the attendees understand what metrics they should be tracking and actually give them the exact waterfall scorecard that we use to help them measure it. Just to add to that, one of the things that I've after writing the book and talking with several people, internally just on our team, is the waterfall is a method of thinking. It's not it's not a it's not like a fancy dashboard that we're going to build you or the specific spreadsheet that you need or, writing it on paper. All three of those things like a fancy dashboard, a spreadsheet, or you just writing it down on paper. All three of those work. There are benefits to each one that are different, and it depends on the size of your business, what you can afford. But the waterfall is really a method of thinking like, can you break down all of the events that occur that happen from the point that we all really care about is like a funded agreement actually paid like a client came to our firm and they paid us working that all the way back up. All of the interest points to when they originated their search online, or they started doing some research or connecting with people or conversations or whatever. There's break points in between every single one of those steps. And the more you understand about those break points and think about how to optimize them and what's the best way to do that, the better you're going to actually be able to run your business and solve the real problem, which is likely on base percentage. It's not batting average. And like it's it's really important to like actually understand it because it isn't a fancy dashboard. Once people think that there are many of these fancy dashboard them, everything's gonna be fixed. Nothing's gonna be fixed. If you get the spreadsheet, what's going to get fixed is if you think differently about your business and think about how do I break this thing down and actually solve the right problem, because if you're just looking for some a golden ticket, you're not going to find it. That's not that's not what this is. This is a visibility tool. It's a it's like what we've learned from our own perspectives and two different businesses and how we apply it's family. Well, but I would say it's it's more of a method of thinking than just a here's how you, here's a spreadsheet you should use. If that's your intention, don't come to the webinar. 100% agree, and I think this is this is taken from our own real life examples. Tony, maybe you can talk to how you know, at the law firm, we fell into that trap of let's just get more leads, let's get more leads, let's pour it on. And what we didn't realize was that that adversely affected our ability to follow up and set appointments. For sure. I mean, so when we when we brought on a real president who's Jeff Kerlin, he's currently the president and CEO at Sterling. I played I played president for a while, wasn't the right person. And when he came in and saw the scorecard, he's like, oh my God, you guys have so much data. I've never seen this amount of data in any business. I've worked in. And as he kind of got used to it over the first year, one of the things he brought to the team that really challenged our our thinking because we were blind to like, why are we not getting more through the system? We were missing a data point in the system, which we call just in time leads. I write about it in the book, but he came from a manufacturing organization and he understood, like just in time manufacturing. And he's like, what if we what if we just got enough leads to fill our capacity on the calendar? Here's how many calendar slots we have over the next three days. How do we keep the lead flow equal, as equal as possible to actual calendar capacity? We save tons of money immediately after that implementation, but it wasn't a get more leads problem. What we were thinking is like we need to hire more people. We need to just constantly hire more people. And we weren't able to fill them and get the quality consults that we used to have. From an execution perspective, we get people in the seat, but we can execute them well. We can hire them fast enough and it created a whole bunch of different problems. So solving the right problem, thinking through this like like a waterfall method, you're going to address the right issue. You're going to save save money. You're actually going to see very different results than what you're expecting, because you might think you know the problem and you might be identifying the wrong problem to a symptom that, should be addressed different. And Tony, just double click on that a little bit further. What what was the actual outcome of having too many leads? So we we generated, I think it was an excess of like 17 to 18% more leads than we could handle. And what happened is we reprocessed them with the intake team. So they got through the first portions of the waterfall. But then when it got to setting the console, we started seeing our consultation days continue to go out further and further, and we ended up averaging 10 or 11 days from point of initial phone call to the point of the consultation. And what we saw was when we ran, when we ran the numbers is if you schedule the consultation out more than three days, you're closing rate goes down and your cancellation rate goes up. So you get a double negative. Plus you perpetually create this calendar problem because now you have a killing a person sitting in a calendar spot that isn't going to show up and they're not going to close at a high rate. So then you're putting the next one out ten days and the next one out ten days. And you just kind of in this like weird negative cycle. And the problem wasn't how do we add what if we could have added more people? We would have. But the reality is like there's constraints in the marketplace. We actually need to reduce our leads and our closing going up. Our profit went up, our everything went up. We had three. So tons of positivity overall in the funnel because we were actually generating the correct amount of leads for the capacity that we had, instead of just like creating this big fat little, and being very unhealthy. That was the reality of what a, what occurred and that was what was found, kind of really analyzing like something's not working. Our thought process has always been what metric. And we're not measuring that we should be measuring so that we can figure out what's actually the problem here. Because we didn't have that metric in. And once we had it, it was like, oh man, of course this isn't working. We don't need more leave. We need less leads, which is completely the opposite of what you would traditionally think. And our funding agreements went up as a result, and we spent less marketing. So many things happened positively. know, I did that analysis for for one of our newer clients. They were growing their law firm. They're growing rapidly. They saw stagnation in the numbers. And they were starting to flatten out. And, their initial assessment was like, we need 20% more leads. So what I did is I went I looked at their actual numbers over the last three years. And what it shows is that as their leads went up, their ability to do consults and close cases and get people actually into their office went down. It went from I believe the number was around 58%. Now it went down to around 32%. So if we were to continue to shove more leads into that business, that number will continue to grow down, go down. That's why one of the things I would say it is Leads are like dogs chasing a fire truck. If you catch the lead, you got to know what to do with that. A dog chasing a fire truck is going to catch the fire truck and not know what to do with it. So we always focus first on making sure you're ready to catch the leads. If we're going to ramp up your marketing and get you leads, you got to be ready to catch them. And it always starts with us looking at their waterfall. Can you confidently answer this question in three seconds? Do you know if your firm is winning or losing? If you can't, that's something we need to fix urgently. We are hosting a free webinar that shows you the eight numbers that answer that question. You'll learn where you're leaking revenue, what to do to fix it, and how to embed this into your daily operations. It's called how to Moneyball your law Firm. Get bonus templates, checklists, and worksheets. If you show up live, link in the show notes to register. Christian, I know you say this all the time. When marketing works, other things break. How how do we help clients understand that paradigm? And what can our listeners and attendees to the webinar expect? Experiencing something different? Great question. So just to be completely candid and transparent, I came from a different marketing agency that works with family law firms. And what I noticed happen was, okay, marketing is working, but everything internally is falling apart. Right? And they would they would hit a certain ceiling in their growth cycle. So now most marketing companies start depending on vanity metrics, vanity KPIs. And that wasn't really moving the needle on the PNL sheet for a lot of my clients. So to answer your question, what can they expect in this webinar? A real growth path, right? And before we can start winning that World Series, going back to the Moneyball analogy, let's try to win a division. Let's try to win our conference. Let's try to get to the playoffs, and we're going to lay out the lay the groundwork on exactly what you need to do from an internal team side of things, to get to the playoffs. So really excited for my clients to join there. And, Tony Karls is going to play your manager role. So. That's right. We're gonna love it. Tony, last question. Let's assume that the attendees both listen to this podcast and they come to our webinar are going to get a waterfall. Like you said earlier, you can't just get a spreadsheet and hope that it's going to solve all your problems. Talk to us about how you leveraged that data on a day to day or week by week schedule, to influence the rest of the offer. For sure. So, I mean, we we obviously understood kind of how the data flowed through. And as we were scaling new metros and adding more locations, what we would see is a pattern of breakage, kind of like what Christian just just saw. And we were able to then start predicting what do we need to do if we are actually going to ramp marketing. So the first thing that typically breaks is you get your answer rate drops and your time to lead drops. And like you, it's because like your intake team wasn't prepared for an increase of, you know, 10 to 15% of my revenue and like stuff didn't get through. And now you have marketing versus intake team saying, well, the leads are the leads aren't quality. That's why we're not closing enough from the marketing's like, we didn't change anything. I'm not sure what you want me to look at. Like, that's not how marketing actually works. It's not like we go in push dials every day to do something different. There's not like, magic sprinkle dust we throw on it. So we we increase budgets, we add new campaigns that are the same and we see this break point. So now we need to figure out like what are what is the next thing we need to do. So okay, we get the intake thing figured out. Now we're gonna have a consultation problem. We get the consultation problem. Like if during that whole process we're actually talking about there is like, do you have a process for recruiting and interviewing and onboarding and doing things with people that you may not, may or may not be ready for because it's easy to do with eight. It's much harder to do with, you know, 20. And it becomes even more difficult, decentralized when you're, you know, at at our size and we have almost 100 employees. So it's all just like what, what happens through the different break points. And obviously we've learned through our observations like what to what to watch out for and like where to predict it's going to happen and then stakeholders attention so that we can kind of drill down into that team's version of their own waterfall. So like every aspect of a business, whether it's a or content marketing or SEO or paid marketing or even your intake team, each one has has a waterfall. There's one for technology, like there's one for every aspect of the business, and it's your ability to like, see, how does how does your information flow through? And like where does it break? Because like maybe your, as an example, one of the outputs that we kept that we were able to like, really ascertain is from a recruiting perspective, we had to, learn how to get more applications in the pipeline because we wanted to weed out all of the the non great potential intake team members. And when you post someone for call center role, you get 5 to 600 applications for one soup. So like how do we do that efficiently. So like that's a different waterfall that you need to build for a completely different team. That's actually not even on the waterfall that we're going to build for you, but it's an output that's going to you're going be able to dig into if you really adopt the method of like understanding how this works. to come back to your question, like how do we use it? Can we use it to understand the revenue stream. But then we try to use it to understand, like, right, what are the other areas of the business that are going to exactly mimic this, but they're just going to have a slightly different metrics, like how often do we need to post our jobs? How many applicants do we need? How many culture interviews do we need to do? How many operational interviews do we need to do and like? How do we build a system for getting the next intake person onboarded and like, what's the right onboarding process? And we can do this at scale. And like that's kind of the outcome that you're going to get. It's like as you adopted everything in the business changes just because you're thinking about your business through these, through this new paradigm of data. Perfect. Love it. Well, our hope on this podcast was to incentivize you to join our webinar. There is a link below that you can utilize to sign up. We are going to deep dive into everything that we talked about here and much, much more. So make sure to sign up today and we will see you all next month. If you want the exact playbook broken down step by step, register for the 45 minute webinar using the link in our description. We will see you there.

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Jeff Hughes

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