How Winning Professionals Earn What They're Worth...

“Many professionals are wasting time trying to invent solutions to problems that have already been solved a hundred times…they just don’t know these solutions are available.”

David W. Cottle 1993

“Managing for Profitability: How Winning Professionals Earn What They’re Worth.”

I started KMS in early 1988, and made it a practice to read everything I could that came onto the market in my area of interest, the profitability (or I should say ‘the absence of profitability’) of most small law firms.

Cottle rightly went to some lengths to explain why if many professionals properly understood the finances of their practice, they would have a sick feeling in the pit of their stomach about how poorly their professional businesses were performing.

With a series of points made over just ten key pages he takes readers from “sick feeling in pit of stomach Number One” to “sick feeling in pit of stomach Number Six”.

In that relatively short chapter, aptly titled, “Analyze Your Practice Like a Business”, he surfaces what I’ve been banging on about for 37 years.

Talking about how poor genuine profits are in many firms, he concludes, “…your true entrepreneurial results can give you sick feeling in pit of stomach Number Six. For some firms the number is negative!”

Recently I’ve been focusing my content on the importance of improving financial literacy in legal practices, and have taken the opportunity to refresh my perspective by re-reading many of my early purchases. Disappointingly, for the financial health of the profession, not enough has changed since 1993, or 1988!

Cottle’s book from which the quotes above are taken is self-evidently one I have read many times, because all its pages are littered with my highlighting and scribbled comments! Some of the pages have picked up more of my "input" recently!

Robservation: The thought that struck me this week was that today many small firm lawyers are not even trying to invent solutions to the financial challenges that face them. They’re just hoping it will all work out, because they feel far too busy dealing with massive, rapid, change and the consequences of unknowingly doing many things that are highly ineffective in generating the profit needed to underpin a successful practice, with the financial health to guarantee practice longevity and a less stressful practicing life.

?The Bottom-line: With increasing challenges (of which AI is merely one of a big bunch), and the inevitable further increase in stress on many small law firm owners, the profession and its small law firm owners need a serious re-set in approach to managing a practice to create a sound platform for surviving and then moving forward in an enjoyable and rewarding way.

Lots of team members will have views about what needs to be done, and will be watching closely to see whether it’s in their best interests to remain on a particular boat.

They will have many good ideas, and some bad ones, and not necessarily have the experience to take all relevant factors into account, but clearly many of those owners who should have the right experience do not have the correct answers anyway.

KMSProfitPower? Tip…owners wanting to get themselves out of the frying pan without falling into the fire will need to find cost-effective help in places that are proven, battle-hardened, sources of wise advice.

Sadly, but inevitably, many of today’s small firms will not be around in 2026. Many of those who want to be will need practical actionable help early in 2025.