We originally released this episode on July 5, 2024, but our guest, Brooke Lively, perfectly encapsulates the essence of the Women of Power series, so if you missed her the first time around, listen to her conversation with Tom now!
Brooke Lively is founder and president of CathCap, a fractional CFO service provider focusing on lawyers and their law firms. Brooke has been named one of the Top 25 Women to Watch, one of Diversity Journal’s Women Worth Watching, and one of Fort Worth’s CFOs of the Year! She is an international speaker and best-selling author with two books under her belt.
Running a successful law firm requires more than just legal expertise. Many attorneys excel in the courtroom but struggle with the business aspects of managing their practice. Cathcap has helped hundreds of law firms optimize their operations. Here, she offers a blueprint for success that every firm can follow.
Here’s a Glimpse of What You’ll Learn
0:00 Preview - What Profit Actually Consists of
1:18 Introduction
3:15 How CathCap Got Started
4:54 What Do Fractional CFOs Do?
9:15 CathCap’s Ideal Clients
10:19 A Case Study on How CathCap Works
14:50 Understanding the Value of a True CFO
18:32 Book Alert: Exit On Top by Brooke Lively
23:38 The Key to Valuing a Law Firm
31:30 Me Inc. vs. A Branded Company
36:10 What Profit Actually Consists of
37:27 Wrapping Up
CathCap has served up top-tier CFO services to businesses of all sizes for over a decade, with a particular interest in helping attorneys grow and scale their firms like proper businesses. The company has built a strong expertise with all practice types, but they’ve also earned a particular popularity among personal injury and immigration firms. CathCap’s commitment to empowering businesses through strategic financial leadership helps their clients redefine their status quo and helps founders build practices they can later sell or hand off confidently.
Why Business Strategy Matters for Law Firms
Many law firms struggle with profitability and decision-making because they operate without a clear, data-driven business strategy. Brooke’s journey—from managing her father’s law firm to building Cathcap—revealed a critical gap: lawyers often lack the financial tools to grow their businesses effectively.
Brooke emphasizes that great legal skills don’t automatically translate into great business acumen. While you may be a brilliant litigator, knowing how to manage your overhead, optimize case efficiency, and plan for long-term growth requires a different set of skills. "Law school teaches you never to ask a question if you don't know the answer... business is all about making decisions when you don't know exactly what that outcome's going to be,” she said.
Making informed business decisions requires comprehensive data analysis to identify inefficiencies, optimize resources, and make confident decisions backed by reliable data rather than gut feelings. Brooke emphasizes the importance of tracking these key metrics:
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Case lifecycle and progression
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Average case values
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Payout timing and patterns
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Attorney productivity benchmarks
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Marketing campaign performance
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Client acquisition costs
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Return on investment for various initiatives
The Rule of Thirds: A Framework for Profitability
Brooke advocates the "rule of thirds" for revenue allocation:
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The first third goes to staff doing the work—this includes attorney salaries, paralegal compensation, and support staff wages. This allocation ensures the firm can attract and retain top talent while maintaining competitive compensation packages. For personal injury firms, where case values and timelines can vary significantly, this proportion might be adjusted to account for performance-based compensation structures.
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The second third covers overhead expenses—everything from office space and utilities to marketing costs, technology investments, and operational expenses. This category includes the essential tools and resources that keep the firm running smoothly and efficiently. Modern law firms must also factor in digital infrastructure costs, including case management software, cybersecurity measures, and online marketing platforms.
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The final third becomes profit, providing both immediate returns and capital for future growth. This portion represents the true value creation of the firm and can be reinvested in expansion efforts, used to weather economic downturns, or distributed to partners. For personal injury firms particularly, maintaining this profit margin is crucial for building a war chest to fund case expenses and marketing initiatives.
Building a Sustainable Practice
Creating a sustainable practice means developing systems and processes that don't rely solely on the owner's constant involvement. This approach not only makes the firm more profitable but also more attractive for potential future sale or acquisition.
Key elements include:
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Establishing diverse marketing channels
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Creating comprehensive written plans with clear objectives
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Implementing feedback loops to measure success
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Building a strong brand independent of individual attorneys
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Developing efficient operational systems
Foster Web Marketing's Perfect Practice System aligns with these principles. We integrate diverse marketing channels, automated tracking systems, and robust analytics to create a cohesive marketing ecosystem that works even when you're focused on serving clients.
Built from real success stories and proven results, the Perfect Practice System serves as a roadmap guiding practices from their current position to their desired goals through four distinct phases: Foundation, Progression, Prestige, and Perfect Practice status. By combining our technical expertise with proven marketing strategies, we help law firms establish a strong digital presence that generates consistent leads and builds lasting brand authority.
Ready to Transform Your Law Firm?
Foster Web Marketing is ready to help you build a more profitable and sustainable law practice. Our team of experienced professionals will work with you to develop a customized strategy that aligns with your specific goals and objectives. Schedule a consultation and take the first step toward transforming your practice into the successful business you've always envisioned.
Speakers Featured in This Episode
- Tom Foster of Foster Web Marketing
- Brooke Lively of CathCap
This episode is brought to you by Foster Web Marketing.
Foster Web Marketing is dedicated to providing cutting-edge, highly customizable marketing and strategic solutions specifically designed for law firms and medical practices.
Our award-winning marketing and systems solutions are what set us apart from everyone else.