<p class="wp-block-paragraph"></p> <blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow"> <p class="wp-block-paragraph"><em>&#8220;There are three ways you&#8217;re going to get compensated from your business. One is W-2 Salary. Two is K-1 distributions. Three is other benefits.&#8221; – RJon Robins, author of Profit First for Lawyers</em></p> </blockquote> <p class="wp-block-paragraph">How profitable is your law firm? The answer might be more complicated than what shows up on your P&#38;L statement. In this third part of our seven-part financial literacy series, we revisit a topic from season one: Total Owner Benefits. A topic of such importance that it has an entire chapter devoted to it. Listen in as RJon takes a law firm owner through an exercise to calculate the true value they are receiving from their firm. </p> <h3 class="wp-block-heading">Beyond the Bottom Line</h3> <p class="wp-block-paragraph">RJon poses a powerful question: Would you rather own Firm A (making $1M but working 70-hour weeks doing work you hate with no vacations) or Firm B (making $500K working 50 hours doing meaningful work with real time off?) Your banker might say Firm A is more profitable, but which would contribute to your family&#8217;s happiness more?</p> <h3 class="wp-block-heading">The Real Math</h3> <p class="wp-block-paragraph">In the 2019 workshop, RJon shows how a business that appears to have a 20% profit margin actually delivers 38% in Total Owner Benefits when you account for all three components (W-2 Salary + K-1 distributions + Other benefits). The difference is dramatic and changes everything about how you evaluate your firm&#8217;s true profitability. Understanding Total Owner Benefits reveals the value your business is actually providing you with.</p> <p class="wp-block-paragraph"><strong>Action Steps</strong></p> <ol class="wp-block-list"> <li>Follow along with your numbers during the exercise to discover your Total Owner Benefits</li> <li>Then ask yourself: What is my law firm actually giving back to my life?</li> <li>If you don&#8217;t like the answer, pick one small thing to change</li> </ol> <p class="wp-block-paragraph">Next Time: Join us for Part 4 where RJon walks law firm owners through normalized salary calculations. This is an eye-opening episode you won&#8217;t want to miss. So be sure to subscribe to the Profit First for Lawyers podcast. </p> <h3 class="wp-block-heading">Resources Mentioned</h3> <ul class="wp-block-list"> <li>Financial Literacy Series: <ul class="wp-block-list"> <li>Part 1 &#8211;<a href="https://profitfirstforlawyers.com/youre-not-bad-with-numbers/" target="_blank" rel="noopener nofollow" title=""> You&#8217;re Not Bad with Numbers</a></li> <li>Part 2: <a href="https://profitfirstforlawyers.com/understanding-the-stages-of-a-law-firms-growth/" target="_blank" rel="noopener nofollow" title="">Understanding the Stages of a Law Firm&#8217;s Growth</a></li> </ul> </li> <li>Chapter 9: Total Owner Benefits (pages 73-87 in the <em>Profit First for Lawyers</em> book)</li> <li>Season 1: <a href="https://profitfirstforlawyers.com/total-owner-benefits/" target="_blank" rel="noopener nofollow" title="">Total Owner Benefits episode</a></li> </ul> <h3 class="wp-block-heading">Connect</h3> <ul class="wp-block-list"> <li><a href="https://profitfirstforlawyers.com/subscribe/" target="_blank" rel="noreferrer noopener">Subscribe</a> to the <em>Profit First for Lawyers</em> podcast</li> <li>Watch episodes on <a href="https://www.youtube.com/@RJONROBINS/podcasts?sub_confirmation=1" target="_blank" rel="noreferrer noopener">YouTube</a></li> <li>And most importantly, <a href="https://htm.live/PF4L-Book-1" target="_blank" rel="noreferrer noopener">order your copy</a> of <em>Profit First for Lawyers</em> today!</li> </ul>