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In this enlightening and entertaining episode, we look into the concept of Cost of Goods Sold (COGS) and its importance in law firm profitability. COGS, the direct cost associated with producing your law firm’s services, is a key metric that can reveal the true profitability of your offerings. For readers of the Profit First for Lawyers book, this episode draws from Chapter 15: A Much Deeper Dive Into The Drivers Of Profit Than Most Struggling Law Firm Owners Are Ever Willing To Take.
To drive home the simplicity of understanding COGS, RJon employed a unique approach: he taught the concept to a group of teenagers. These teens then presented it on stage to their lawyer parents at a How To MANAGE a Small Law Firm Live Quarterly Meeting. This innovative method not only simplifies COGS but also demonstrates why understanding this metric is crucial for law firm owners to identify their most profitable services and make informed decisions on their offerings.
Ready to transform your law firm’s profitability? Tune in to learn how knowing your COGS could be the boost your practice needs!
“You cannot lose money on your gross profits and think you’re going to make it up on volume, notwithstanding the fact that lots of lawyers try to do that. Eventually you got to pay the piper.” – RJon Robins
Key Takeaways
- How COGS can reveal which law firm services are truly profitable
- The simplicity of COGS when broken down into basic components
- The relationship between gross revenue, COGS, and net profit
Links & Resources
– Chapter 15 of Profit First for Lawyers by RJon Robins
– Episode 67: Labor Cost Ratio: Unlocking Law Firm Profitability with Greg Crabtree
– Profit First for Lawyers curated resources page
– Leave us a review on Apple, Spotify, Audible or wherever you listen to your favorite podcasts
– Buy your copy of Profit First for Lawyers
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