17. Fireproof: Maximize Firm Profit with EOS

Mike Morse (00:03):

When we first started out, I think I was probably doing three, 4 million in revenue and now we’re doing 55 million in revenue.

Maria Monroy (00:09):

Wow.

Mike Morse (00:10):

And we’ve grown from 30 employees to 180 employees.

Maria Monroy (00:14):

That’s amazing.

Mike Morse (00:15):

And in a short period of time.

Maria Monroy (00:16):

There are so many more efficient ways of doing things and even projecting and saying, “Okay. Well, how many people are we going to need in this org chart if we know that we’re going to sign X amount of clients?”

Mike Morse (00:27):

Letting go of whatever it is is tough for most lawyers. But once you do it, it’s addicting.

Maria Monroy (00:41):

In law school, attorneys are taught to challenge everything, tear things apart, break them down, but the qualities that make lawyers great can be some of the worst for running a business.

(00:51):

At every stage of growth, running a business and practicing law can feel overwhelming. And what happens when you try to add life and family to the mix, it can feel nearly impossible.

(01:03):

You don’t have to do this alone. I’m Maria Monroy, co-founder and president of LawRank; a leading SEO agency for ambitious law firms. Each week we hear from industry leaders on what it really takes to run a law firm from marketing to manifestation. Because success lies in the balance of life and love, we’re here to help you tip the scales.

(01:28):

Author of Fireproof: A Five-Step Model to Take Your Law Firm from Unpredictable to Wildly Profitable, Mike Morse helps law firms run smoother, faster, and ultimately more profitable.

(01:40):

He has worked with hundreds of firms and knows how to create efficient machines primed to scale at unreasonable rates. We know that a law firm needs to run a business to stay competitive. Mike shows us how to do it.

(01:55):

Today, Mike and I get into hiring and firing to manage the number of direct reports a firm owner has and why rocks and jumbotrons will help you move your business forward. But first we get into EOS.

Mike Morse (02:13):

So it is a system which is like a collaboration of dozens and dozens of business concepts and books that have been written for years and years. And Gino Wickman, who’s a serial entrepreneur, who is my professional coach and friend-

Maria Monroy (02:33):

Stop bragging.

Mike Morse (02:34):

… and he wrote the-

Maria Monroy (02:35):

He wrote Traction.

Mike Morse (02:35):

He wrote Traction, but he also wrote the preface of my book Fireproof. And he came up with a system called EOS that is now being used around the world to help businesses run better, smoother, faster, teaching people how to delegate, teaching people how to have good meetings, teaching people how to do a good scorecard, and on and on.

(02:56):

And so, in 2007 we started with him, learning the EOS process. We still meet with Gino four times a year. And then about two and a half years ago, John Nachaze and I wrote a EOS type book for lawyers called Fireproof, which is basically EOS for lawyers and law firms.

(03:18):

And it’s selling like wildfire. And we have lots of private coaching clients and we have a mastermind and a community that we’re building to help as many law firms as we can grow and scale and become more predictable.

Maria Monroy (03:30):

How did EOS help your firm?

Mike Morse (03:33):

EOS taught me what a business was, taught me that my law firm was actually a business.

Maria Monroy (03:40):

Do you think lawyers forget that?

Mike Morse (03:42):

Lawyers don’t know that. Lawyers don’t forget it because they never knew. Because they don’t talk about that in law school. So they teach you how to be a lawyer, but they don’t teach you how to run a business. That’s why most lawyers are in two, three, four-person firms.

(03:53):

They don’t know how to grow or scale or how to have proper meetings or how to hire properly or understand the concept of a COO or a CFO or an HR director. These are business concepts that law firms don’t know.

(04:05):

So when we go into a law firm and look under the hood, or when an EOS coach goes in and does the same thing, the eyes of the lawyers are so wide like, “Holy cow. That makes sense. I wish somebody taught me that a long time ago.”

(04:18):

So the reason I wrote the book, John Nachaze and I wrote the book, was to hopefully give it to every law student who’s coming out of law school. When they go out to open their own firm, they understand the business concepts because lawyers are at a huge disadvantage because they just don’t know.

Maria Monroy (04:33):

Interesting. So can you just take us back, how did you hear about EOS?

Mike Morse (04:39):

I heard Gino lecture somewhere in a big auditorium and I remember it very, very well. I talked to him after that. Back then it was expensive. Five, six grand a day. Now it’s more of course.

Maria Monroy (04:53):

Now it’s more.

Mike Morse (04:54):

Now it’s double. And you had to close down your shop for that day.

Maria Monroy (04:56):

Yeah.

Mike Morse (04:57):

So 15 years ago I’m like, “Nope, not going to close down my shop and I’m not going to spend that kind of money.”

(05:01):

And I waited a year and a half to two years until I pulled the trigger. And to this day I kick myself because I could be two years further along if I would’ve pulled the trigger to get my coach earlier.

(05:14):

And so when I go around the country and lecture and talk to people, it’s like, “Don’t wait. If this resonates with you and you think you need a coach, do it now. I don’t care what it costs, I don’t care…”

(05:24):

Yes, you have to shut down your office for the day or two, but it’ll pay off times a thousand.

Maria Monroy (05:30):

What about, can we talk numbers? Where were you then? Where are you now?

Mike Morse (05:35):

So when we first started out with Gino, I think I was probably doing three, four million in revenue. And now we’re doing 55 million in revenue.

Maria Monroy (05:43):

Wow.

Mike Morse (05:43):

And we’ve grown from 30 employees to 180 employees.

Maria Monroy (05:48):

That’s amazing.

Mike Morse (05:48):

In a short period of time.

Maria Monroy (05:49):

Congrats.

Mike Morse (05:50):

Thank you.

Maria Monroy (05:51):

And you think primarily was because of EOS?

Mike Morse (05:54):

Yes. And I give Gino that credit. I was with him this week. We did a 90-minute session, just him and I. And I would not be where I’m at today without Gino and EOS.

Maria Monroy (06:03):

So tell us a little bit about EOS and the beginning stages of it. Just walk us through it.

Mike Morse (06:10):

We do the same thing with our Fireproof coaching clients. You just discover the firm or the business and you help them set up their core values and their why and teach them what a scorecard is and teach them what a leadership team is and teach them how to hold people accountable. And we teach people how to delegate.

(06:34):

I mean, there’s a million things, but all of these concepts are foreign to most lawyers because most lawyers think that they’re the best at what they do. I thought I was the best. Nobody could try a better case than me. Nobody could negotiate with an adjuster better than me. Nobody could calm a client down better than me. Nobody could convince a client to sign with the firm better than me. And I could go on and on.

(06:53):

Every lawyer who you interview in this chair, Maria, I promise you think that they’re the best at something. And learning how to delegate is very tough. Learning how to let go, Gino calls to let go of the vine, letting go of whatever it is tough for most lawyers. But once you do it, it’s addicting.

(07:13):

And I have mastered delegation that there are certain days that I don’t have much to do other than what I exactly want to do, which is where you’re supposed to get with EOS or the Fireproof process.

(07:26):

You get to be working on exactly what you love to do and what you’re great at. And I believe 96% of the time, that’s what I’m doing. And it’s an exciting life.

(07:36):

And that’s what EOS does for any business person is what exactly should you be spending your time on. What is your unique ability? What is your sweet spot?

Maria Monroy (07:45):

I read the book so long ago when there was probably four of us total and we thought about implementing it then, but we were like, “Oh, we’re probably too small,” at that point.

(07:56):

And then as we started to grow, we’re like, “Oh, we have to do EOS.” And we kept pushing it off. And now that we’re doing it, we’re like, “Fuck. We should have done this years ago.” And I really deeply regret not having done it.

(08:07):

One thing that I did take advice on from you and someone else that has implemented it is get it implemented. Do not do it… Try to do it yourself. It’s way better.

(08:17):

And this idea that we know how to do a meeting because it’s a meeting, right? I mean, I never thought that there was a process to doing a meeting. It’s just like, well you jump on a Zoom nowadays and you go through the meeting.

(08:29):

No. There’s actually a right way to do a meeting and a way that you’re literally just wasting time and it’s completely just pointless. And what you learn is that most meetings are just a complete waste of time. What is a scorecard?

Mike Morse (08:45):

So Gino calls it a scorecard. We call it a jumbotron. A jumbotron is your most important numbers for your particular business. And every jumbotron is different. So yours, Maria, would be different than mine, would be different than Alex Shunnarah’s. Everyone is different.

(09:04):

And the way that Gino taught me to look at it that I love this analogy is imagine yourself, Maria, on a desert island. As you’re sitting there on the beach and you have a fax machine sitting next to you. Remember fax machines? Are you too young to remember fax machines?

Maria Monroy (09:17):

No, I remember them.

Mike Morse (09:18):

And you’re allowed to get one piece of paper a week and that piece of paper will have all the important data on it to tell you should you get on the plane and fly home or can you stay another week on the desert island.

Maria Monroy (09:29):

Yes.

Mike Morse (09:30):

So you want to cram everything you can on this one piece of paper, your most important numbers, whatever it is. And I could tell you mine, but it’s…

(09:38):

Obviously, write-ups and revenue and who’s doing what and all the important things. And now our jumbotron is probably 20 pages long at this point. I look at it every Tuesday morning at 8:30 because that’s when our level 10 starts.

(09:50):

Every Tuesday morning, 8:30 to 10:00, no matter where I am in the world, I’m on that call. It’s the most important 90 minutes of my week. But we’re looking at… For 10 minutes, we’re looking at our jumbotron and we know their numbers and I get to hone in on the trends. Or if it’s not going the right way, we make it an issue. If it’s going the right way, we just skim over it. Fine. Okay.

(10:10):

If our goal is to sign up 50 cases and we sign up 52, there’s nothing to talk about. If we sign up 32, there’s something to talk about.

(10:16):

So the jumbotron, it shines a spotlight on the numbers in your business that you should pay attention to and that there’s an issue rather than a year going by when you sit down with your accountant maybe in January and you realize, “Oh, you wanted to sign up a thousand cases, but you only signed up 600.”

(10:35):

And if you’re only looking at your numbers quarterly, twice a year, once a year, you’re never going to see that problem. So by looking at your important numbers every single week, you can stop the bleeding immediately.

(10:49):

And then there’s sometimes there’s a reason. You’re in political season and all your ads got bumped or it’s a holiday or it’s this or that, or the weather’s good, the weather’s bad, you got COVID, whatever it is. You can find reasons, or do you need to put more money into whatever you’re doing? Is there something broken?

(11:05):

We once we’re having an issue and we found a broken link on our website. You know what I mean? But if you’re not looking every single week, you won’t know. You should know. We’re based on averages.

Maria Monroy (11:15):

So I think the most important thing as a business owner is time. And what I feel like EOS is giving us as a digital agency, obviously we’re not a law firm, is we’re prioritizing what matters.

(11:28):

And I think it’s really easy to get pulled in different directions and not work on what’s most important. And I’ve had a lot of vendors that have asked to come on my podcast and I’m like, “I’m not here to promote services.”

(11:44):

The reason why I asked you to come on this podcast is because I truly believe that EOS is amazing. And I see what law firms go through and they’re so disorganized and sometimes they’re not even tracking anything.

(11:57):

There’s no attribution, and this really… You say, “Okay, what’s most important? What’s going to have the biggest impact? And that’s what we’re going to work on this quarter.” So can we talk a little bit about rocks?

Mike Morse (12:08):

Of course.

Maria Monroy (12:10):

Tell us what rocks are.

Mike Morse (12:11):

So a rock is a 90-day task, usually a bigger task that everybody on the executive team or leadership team, whatever you call it takes. And nobody takes more than three to five a quarter. And those are the things that you must get done in 90 days.

(12:32):

And so you pick them yourself, the team approves them. And every week in your meetings, we ask you if you’re on track or off track for that particular item.

(12:45):

And if you’re off track for more than a couple weeks, we become an issue and we say, “Maria, why aren’t you getting this done? You were supposed to learn how to do this or that, or organize this or that, or hire this or that, or write this process and you’re not doing it. Why not?”

(12:58):

So we talk about it. And imagine having four or five, six people on your leadership team. Every person has three to five rocks. At the end of the quarter, you’ve gotten 20 plus things, major things done. That is true traction. That is what moves your organization forward. That’s how you move.

(13:16):

And we teach them what a good rock is. A good rock is something that you can say, “Done or not done,” to. Not, “I got the spirit of it done.” No, that’s BS. It’s done or not done.

(13:27):

We’ve been doing this for 15 years. Every single quarter we’ve been setting rocks and doing our rocks. We get over 90% completion every single quarter.

(13:35):

That’s how we went from three million in revenue to almost 60 million in revenue. That’s how we went from 27 individuals to 180 individuals in a very short period of time is because of these types of things that EOS teaches you.

Maria Monroy (13:49):

Yeah. It makes you so organized. And like you said, it helps you delegate, but really it holds people accountable and it shines light on the issues and on goals and all of that. How many law firms have you helped implement EOS or Fireproof?

Mike Morse (14:07):

So over 50.

Maria Monroy (14:09):

Wow.

Mike Morse (14:09):

And we now have a community platform that we’re building out with a couple dozen firms in it for a pretty low monthly rate. They’re able to be part of our masterminds, part of our community teachings, which we do live. We have office hours, we have two live events.

(14:27):

Now, we had all of our Fireproof clients at our house, at my house last night, and they’re here for the conference. And then we’re going to do another live one in Detroit, probably in April or May.

(14:37):

Fireproofperformance.com if they want to learn more about that. And every single firm we’re working with… And we work with some major established firms who are…

(14:45):

I mean, Rick Harris will go around who’s runs one of the best law firms in the country and says since he’s been working with the Fireproof, his intake has doubled and his revenue is up and his processes are better.

Maria Monroy (14:57):

How long does it take to implement it and how time consuming is it?

Mike Morse (15:02):

Well, to implement the whole process, I mean, it depends on how fast a firm or business wants to move. I mean, we have clients that we work with weekly and we have clients who we work with just quarterly and we have clients who just watch the videos and attend our masterminds and attend our community events online.

(15:22):

And they’re basically self-implementing, the ones who are doing just the online stuff. But we did the quarterlies only. I think Maria, the first day or two, you’re off and running, implementing. I mean, you’re off and running, putting it together.

(15:36):

I tell a story in the book Fireproof that my first day of working with Gino, I felt like 50% of my work was delegated. First day. So I’ve never really been asked that question, how long it takes, but the first day I got major, major relief because I was just running as a solo even though I had 20 something employees. I was still running it like a solo. I was doing everything.

(16:01):

When I got vulnerable with my team and I said, “Guys, I’m dying here. I can’t do it all.” I had 20 direct reports, they were all coming to me and I didn’t have an org chart and he taught me what an org chart was. Right? Never heard of an org chart.

Maria Monroy (16:15):

No.

Mike Morse (16:17):

No.

Maria Monroy (16:18):

Really?

Mike Morse (16:18):

No lawyers know what the heck an org chart is until you learn what an org chart is. You definitely do not learn that stuff in law school.

Maria Monroy (16:26):

I just think that it’s… I’m having a hard time explaining how in depth this is, but how eye-opening and how… It’s so different. It’s like you go from just winging it, I almost feel like, even though we have so many processes and we’ve had an org chart, but just actually implementing it and realizing, “Wow, there’s…”

(16:52):

It’s almost arrogant to think that you can just pull something off without knowing better. I don’t know how else to explain it, but when you implement it, you’re like, “Oh wow. There are so many more efficient ways of doing things.”

(17:05):

And even projecting and saying, “Okay. Well, how many people are we going to need in this org chart if we know that we’re going to sign X amount of clients?”

(17:14):

We’re just getting started. So we are moving at a faster speed than maybe the way you guys implement it. Because we’ve done two full days already within a two-month period. So once a month we’re doing a full day and we haven’t rolled it out to… It’s only upper management right now.

(17:32):

I think eventually it gets rolled out to everybody in the organization. Correct?

Mike Morse (17:35):

True.

Maria Monroy (17:36):

So we’re not there yet, but for us, it’s been super, super eye-opening. Again, even the way that we hold meetings, now it’s very, very focus.

Mike Morse (17:45):

Yeah. You have an agenda.

Maria Monroy (17:47):

You have an agenda, and you’re going to go through it. And I love that it can be implemented by…

(17:53):

Anybody can implement it. I just think that it’s tough to even just stick to the way that a meeting is supposed to be ran because there are time constraints and it’s very easy to get sidetracked.

(18:02):

And with EOS it’s like, “Nope, sorry. Is it an issue? We can move it to the issue if you want and we can talk about it. But right now we’re just going through this,” right. It’s just so, so focused and you gained so much clarity too that I feel like we didn’t have before.

Mike Morse (18:20):

I don’t know how to say it any better than you just said it. I mean, this process works. We tweaked the process a little bit. You’re a business.

Maria Monroy (18:30):

You’re a law firm.

Mike Morse (18:30):

Yeah. You’re a business.

Maria Monroy (18:30):

Yes.

Mike Morse (18:31):

We’re a law firm. They’re completely different. We’re dealing with lawyers and we’re dealing with people who don’t understand business. You understood business, you are running a business.

(18:37):

Lawyers don’t understand that their law firms are businesses. And I’m telling you that because I guarantee there’s 30 people in that room that we just left that do not think they’re running a business. They think they’re running a law firm.

(18:47):

And they’re just lawyers and they’re getting cases and they’re handling cases and they’re going on to the next case. They’re not having meetings.

(18:53):

I go into law firms all the time. “Do you have an executive team?” “A what?” “A leadership team?” “A what?” “Are you having regular meetings with your team?” “No, but we talk all the time.” As you know, that doesn’t count.

(19:04):

So they’re not on the same page, they’re not organized, they don’t have traction. And once they start understanding EOS or Fireproof, they get it and they start getting traction. They’re dialing in their numbers, they’re dialing in their meetings, they realize they need certain managers.

(19:22):

Once they have an org chart, they realize that certain people have too many direct reports or certain people are doing too much.

Maria Monroy (19:30):

How many direct reports do you think a person should have? What’s a max?

Mike Morse (19:34):

I mean, I think Gina would say 10 to 15, but I have lawyers who have 50 people under them.

Maria Monroy (19:39):

And they all directly report to that one person?

Mike Morse (19:41):

Yes, yes, yes, yes. With our 180 people, I have 10 managers, nine managers under me. Yeah, I mean it’s too many. And we’re working on getting upper level managers because we’re growing so fast.

(19:55):

We have such a demand for our services in Michigan that we hired 33 people this year already. I mean, it’s going pretty smoothly, but some people have too many direct reports.

Maria Monroy (20:04):

What are some of the pain points that you think EOS addresses? What are the top three pain points that this addresses?

Mike Morse (20:12):

Well, if you’re in growth mode, it addresses… You set your core values and then you hire, fire, reward, and recognize around those core values. So I have hired the last 15 years every single person I believe at the beginning shares our core values. They all do assessments and testing.

Maria Monroy (20:35):

What type of assessments? Is it like a disc? Is-

Mike Morse (20:37):

So we use several tests depending on the position, but we use the preview test, we use the Wonder Look test. We’ve used Colby in the past. We’ve used Enneagrams.

(20:47):

Jennifer Harlow, who’s one of my Fireproof coaches is actually talking about it tomorrow. So she knows way more about that because I haven’t obviously administered a test, but I took the tests 30 years ago.

(20:56):

Every single employee for the last 30 years actually has been getting assessed. I believe that cuts down mistakes and the flawed interview process that most businesses use. So that’s a pain point for us.

(21:09):

Understanding our data and having a really robust jumbotron; knowing all of our trends; and quite frankly, we forecast at our firm and all of our Fireproof firms have a forecast, meaning my COO, John Nachazel, can tell me almost to the penny what I’m going to earn on January 1st for that year and what the firm’s going to bring in and what the firm is going to settle or… for the whole firm.

(21:39):

He’s been accurate for the last 12 years within one 10th of one percentage. It’s basically magic. Having predictability just takes away so much angst and so much nervousness.

(21:51):

I’m never nervous around that. If we’re not signing up enough cases or whatever, I know exactly what I’m basically going to earn that year, 12 months in advance, which to me is mind boggling. And the fact that John’s able to pull that out is remarkable.

Maria Monroy (22:13):

You can only manage what you track. Systems will improve your practice by allowing you to identify potential problems and get rid of unpredictability.

(22:23):

From meetings to hiring and data reporting, there’s always a more efficient way to run your practice. Mike has put in the work to figure out the best practices so that you don’t have to. His book, Fireproof, is linked in the show notes.

(22:43):

Thank you so much to Mike Morse, at Mike Morse Law for everything he shared today. If you found the story valuable, please share it with someone you want to see succeed.

(22:52):

Subscribe so you never miss an episode and leave a five-star review. It goes a long way to help others discover the show. Catch us next week on Tip the Scales with me, Maria Monroy, precedent of LawRank.

(23:04):

Hear how the best in the business broke out of limiting beliefs, overcame adversity, and built a thriving, purpose-driven business in the process.