This week we have Tim McKey as a guest on the podcast! Tim co-founded Vista Consulting in 2009, along with his partner Chad Dudley. Vista’s aim was to help plaintiff law firms reach their full potential. In December 2017, Tim acquired Chad’s interest in Vista. Tim has decades of CPA experience with local, regional, and national CPA firms. However, it is through Tim’s prior consulting practice that he found his passion.
Developing a management philosophy with business owners along with the associated systems and processes that assist in delivering outstanding management to Vista’s client teams is Tim’s forté.
Tim’s experience and interest allow him to assist Vista clients with developing a realistic vision of their firm into the future, creating a strategic plan to achieve that vision while working with firm owners in designing their desired lifestyle. From a technical standpoint, Tim assists Vista clients in reviewing firm tax entity structure, accounting systems analysis, and financial reporting.
Watch the recording here.
7:04 macro data
8:44 not tracking data
10:50 qualified leads
13:20 law firm KPI’s
15:45 client contact system
17:34 almost doubled case values
20:20 financial KPI’s
22:25 internal controls
Jim’s Hack: Stop telling yourself you’re not good with math and numbers, you don’t have to be great with them to make numbers work for you.
Tim’s Tip: Use electronic sign ups to stop clients from shopping. Use TT and E – tools, training and expectations when accessing a team member.
Tyson’s Tip: Zazzle – Tyson got custom branded iphone cases for his team.
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Transcript: “Making Decisions with KPI’s ” w/ Tim McKey
Jim: Welcome back to The Maximum Lawyer Podcast. I’m Jim Hacking.
Tyson: And I’m Tyson Mutrux. What’s up, Jimmy?
Jim: Tyson, my friend, good to see you on election day. You know this episode’s going to air probably– we have so many in the can, probably in 2021, so it’ll be hard for people to remember but you just got done voting and it’s election day so it’s an unusual day.
Tyson: This is one of my favorite days, in general. You know, I can’t say one of my favorite days of the year because it doesn’t happen every year but I love election day. It is one of my favorite days. Like, it really is. All the excitement around it is just– and there’s like so much emotion wrapped up into it. I love it. I think this is just fantastic. I’m sure a lot of people feel the same way.
Jim: I voted by mail a couple of weeks ago so I’m all set. So, that made life easier for me. And I’m glad I did.
Do you want to go ahead and introduce our guests for today?
Tyson: Yeah. Today, we have Tim McKey. He is the co-founder of Vista Consulting. They opened that in 2009. He opened it with his partner, Chad Dudley. And Vista’s claim is to help plaintiff law firms reach their full potential. And we’re going to get into more of that in a second.
Tim, welcome to the show.
Tim: Thank you. Thanks for having me. Excited to be here.
Jim: So, Tim, tell us a little bit about your journey. How did you get in a position to even want to start Vista? And then, maybe explain to our listeners what VISTA is?
Tim: Yeah. Jim and Tyson, I wish I can tell you that this had been planned out for years and years and it all came together just as I thought but that’s probably about the furthest thing from how Vista came into existence, really.
I am a CPA by training. I went to work for Deloitte, which most of you have probably heard, out of college in the mid-80s and worked there a couple of years. Decided that that big outfit really wasn’t for me. I’m a pretty rural guy. Actually, born and raised in very rural South Mississippi. I’m in Baton Rouge, Louisiana right now and have been here for over 20 years. Actually, close to 30 years. But in any event, worked for Deloitte. Then, left there.
Practiced traditional accounting for probably about 18 years. I was a tax guy. And then, I had what I affectionately call a little breakdown. My partner told me I should call it an epiphany, my CPA firm partner at the time. But what we did, when that happened, I was just very tired of always looking in the rearview mirror with the CPA-type work. And it seemed like we were always after the fact, when we were trying to help our clients and very busy invoicing by the hour, the only way I knew how to do it.
And just got really, really bummed out with that, to tell you the truth. And I made a decision, with my partner at the time, to convert that practice to a consultancy where our mantra at that time was, “We want to help you affect your score and not just keep your score.” And we started working with an array of different clients in delivering consulting type services. We took our CPA numbers and measurement training and applied it to operations and started looking at operational metrics. You know, “Hey, how many phone calls did the automobile repair shop get? And how many customers do we actually get into the automobile repair shop? And what is our script for getting them in?”
We basically escorted, out of our CPA firm, our 1040 practice, the individual practice, and concentrated on businesses and the owners of businesses. And one of those businesses happened to be a plaintiff law firm. And we dug in and really looked at every one of their systems and processes from outside marketing, but marketing a very specific sense, from intake to case resolution, and how it should work, and what were the best ways. And we helped them implement best practices.
And lo and behold, Vista was born. That was then around 2002 or 2003. But Vista itself, Vista proper, didn’t start for several years later when we helped that particular firm hire a COO, a guy named Chad Dudley who formed Vista with me. Chad since left the firm. He had a couple of his partners bought out an advertising agency and, when that happened, we had a real optics problem. They needed to be market exclusive. Vista was not market exclusive, so ended up buying my friend out, who’s still my friend, and we still do consulting work for his firm. So, that’s probably a long-winded answer to how Vista got started but that’s how it got started.
Tyson: So, Tim, why law firms though? What about law firms really interested you? Because it sounds like you were working with a lot of different companies. I mean, specifically, one about plaintiff’s law firms interested you?
Tim: Well, and that’s where, you know, my friend, Chad, came in. We were working, as I said, with an array of different type businesses. We had the small restaurant chains. As I mentioned, we had an automobile repair shop. We had a computer consulting firm and this plaintiff’s law firm as clients. And we were gathering these operational metrics, really, in a very manual way with Excel spreadsheets and things like that.
And, you know, this firm that we were working with, this particular law firm, they started getting real traction and growth to the point that they needed a chief operating officer. And we helped them hire Chad Dudley as that officer, not the least of which was because he was a very technical, data-driven lawyer. And he helped take those operational metrics that we were working with and helped us automate a lot of those processes. And we got even more traction with them.
And Chad actually gave a talk, at a conference, about how we looked at intake, and what the statistics were, and what our scripts were, and that kind of thing. And one of the lawyers at the conference said, “Hey, can you come take a look at my firm?” And Chad called me and said, “Hey, do you want to go?” And I said, “Chad, you know the deal. You can go.” And he said, “Yeah but you know how to run a consulting business.” He was a step ahead of me. And that started just through word of mouth through the plaintiff law firm community across the country. And the more and more work we did with them, the more narrow and our bandwidth became. So, we eventually just totally narrowed it to plaintiff law firms. And now that’s Vista today. That’s who we work with, so.
Jim: Tim, what were the signs that the firm that you were talking about, that Chad went to, what were the signs that they had arrived at a point where they needed a chief financial officer?
Tim: Well, as the Chief Operating Officer, really, not necessarily, just financial. It was that they needed someone in-house on a day-to-day basis to monitor data. We call it macro data – data across all cases. Case management systems usually do a pretty good job of doing just what they say they are in helping you manage cases, but our experience has been that, a lot of times, they’re not as good. Some are better than others in helping you with a practice management system. And that firm had grown to a point that they needed someone, on a daily basis, looking at systems and processes, making sure that there was an accountability system there. And that was not our job as a consultant. And it’s still not our job as a consultant. You know, we’re not subcontractors. We don’t come in and do all the work. Our job is to consult, and teach, and help you get the right people in the firm with the right systems and processes to serve your clients.
So, you know, the mission at Vista is very simple. It’s we want to help our clients serve their clients most efficiently and effectively.
Tyson: Tim, I imagine, whenever you come in to consult, you’re dealing with some firms that got some issues going on. I’m sure you probably go into some where the things are fine with the firm. But what are the things that people are doing that are just wrong? Like, when you go in and like, “You need to fix this right away.” Like, what are those things?
Tim: Oh, gosh. You know, it varies from firm to firm, let me say that. But a lot of times, we see that people are not tracking data in a good way. And I’ll give you an example. You know, we are fanatical about looking at intake and how intake works. And intake works lots of different ways for lots of different firms. But for firms with any size and the firms that want to grow, you want to – when someone calls your firm or you have a lead from one– you know, whether it’s from the internet, from a phone call, from whatever, you want to sign up that client if they meet your criteria of the firm. And then, that has a case.
And what we’ve found that a lots of firms did not do that. They didn’t have a very good script to be able to– we call it convert, convert that potential client to a client. And make sure that you’re getting your fair share or more of the leads that come in that meet your criteria. You know, we’ve been over 150 firms across the country and in Canada. I say that because I like to say we’re International but, in any event, you know, tracking that data and knowing that you’re getting 93% or more of the of the clients that you want, that actually reach out to you or, if you’re buying leads, you reach out to them. That is a metric that we see lots of firms do not track. And if they do, they don’t track it well and they’re not fanatical.
So, you know, we believe there’s only two ways to grow a law firm. One is get more clients. Two, is increase the average case value. There’s a couple of subsets of that but those are really the only two – more cases, better value. And sometimes firms are not concentrating on those two things that allow their firm to grow. So, again, a long-winded answer but I hope that kind of hits it.
Jim: So, Tim, at our firm, we’ve been monitoring sort of the number of leads that come in, the number of leads that we consider to be qualified, the number of those leads that are vetted by a lawyer and hopefully signed up, and then those that actually sign up. And I’m an immigration law firm, so people actually have to pay me money. It’s not a contingency fee thing. So, the people that sign the contract and pay.
What kind of things do you tell people to look for in that sort of shrinking of the funnel?
Tim: First of all, making sure that everyone that’s going to talk to a potential new client knows your firm’s criteria for the case. You would be surprised at the firm’s would go into that that’s a little bit wishy washy. And you mentioned attorneys taking the call. Most of the time – and, again, this is not– you know, I don’t usually talk in broad brush language but, most of the time, we generally don’t like attorneys taking those new client calls unless there’s ethical reasons in the State. And the reason for that is that lawyer is probably handling cases and, if his docket is full, his criteria changes. We’ve noticed that. And we want to make sure that it is someone’s job to be an intake person and to sign the cases that have the appropriate criteria.
Same thing, if you’re using paralegals, legal assistants, case managers, or whatever, to handle those intake or potential new client leads, let’s call them, because they can come from lots of different places, right? If they’re busy, it can be not intentional, but subconscious, that their criteria tightens up and you can lose lots of potential clients that way. So, again–
And then, you know, having the script and having that person be empathetic, knowing what you’re really looking for, what are the key touches. Actually, those are sales positions, really, if you think about it. You know, what’s the criteria? And can we serve them? And how do we get them into our firm because we feel that your firm’s the best. They called you for a reason. But a lot of times you don’t sink that hook and you don’t get them in.
So, there’s a lot of details that go into that, Jim. So, I hope that helps a little bit.
Tyson: So, Tim, let’s get into some details because I want to talk about KPIs a little bit because I know that you’re a pro in KPIs. So, let’s talk about that. What are the things that law firms should be tracking when it comes to KPIs?
Tim: Oh, gosh, we could look at– I’ve doing an hour and a half presentation on just KPIs. And a couple of ones that we feel are the absolute most important are those intake statistics, just like we talked about. And, again, I think Jim did a good job in explaining what they track which is, you know, how many leads do we get and from what sources? And then, of those, how many do we want? And of those that we want– and I say want, that’s the ones that meets our criteria. And of those that meet our criteria, how many do we actually convert to a client? You know, looking at that, and knowing at a high level that that we’re doing a very good job on conversion is very, very important. And we call that a scoreboard type report, “Hey, we’re at 93% or above.”
But if you have more than one person talking to potential new clients, we then want to look at what we call a diagnostic report. So, what’s the individual ratios? You know, if Billy is getting, you know, 98%, and Suzy is getting 75%, you know, what is the difference? Because if they’re getting representative calls, they’re not, you know, screened or anything like that, they should be closed, right? And a lot of times we found that they’re not. And then, we want to know what Billy’s doing to get 98% versus what Suzy maybe is not doing that’s getting 75%. That’s something that’s very, very important.
But I also want to take one moment here and talk about numbers and being careful about just looking through a tunnel at those particular statistics because you should also be tracking the cases that close without a fee because if your conversion rate is really, really, really good but you notice that you’re closing out, you know, 40% of the cases that you sign up without a fee, then we need to go back and really revisit what the firm’s criteria is. And those are the things that we look at at a macro level.
You know, people say numbers don’t lie. Numbers can lie, if you look at them. You can look at them from a skewed place. But I want to go on to one other thing, since you asked for just a couple, is client contact, especially in the plaintiff world, having a system that the paralegal and the attorney or legal assistant, whatever the terminology use, contact proactively their clients periodically and consistently. That is the one thing, one of our consultants who works, she says, that’s the drop the mic on case management because so many good things happen when you communicate consistently with your client.
Number one, what we hear get pushback from paralegals, they say, “Hey, I don’t have time to call all these people.” And, you know, when we dig into it, you know, the reason they don’t have time because they’re fielding calls from them coming in. You know, what’s the status of my case? Well, we want to get on the other side of that and play offense instead of defense. And we have some systems and ways to do that, using case management systems, using dashboard-type reports who’s contacting and being able to hold your team accountable. And holding them accountable, not with a hammer that, “Hey, you’re not doing well”, but “Hey, your numbers, your stats on the clients that you have and the contacts that you have not made, why is it not happening? What can we do to help you?” Not, again, using those stats as a hammer.
So again, those are two big ones, the intake statistics, the client contact in the case management area. But we could go on and on in KPIs. There’s a lot of financial KPIs we looked at too.
Tyson: Tim, before you go, I want to say something really quick. So, Tim, we’ve been tracking our numbers pretty religiously. And I actually have a meeting with Mark Carlin and Nathan Harris in a couple of days. We’re going to talk about how we have increased our case values. And the number one thing– because we’ve almost doubled them over the last couple of years–
Tyson: And it’s been incredible. The number one factor is client communication. So, we have it where we set up, where we’ve got to be in touch with our clients every two weeks. Like that’s our magic number that we found is two weeks. More than that, it doesn’t really matter. But every two weeks, if we’re touching with them, it’s like it could be an email. It could be a phone call. It could be a text message. It could be a letter. Whatever it may be. But that has been a huge factor. So, I’m glad you pointed that out.
So, for those of you that do PI, the number one thing you can do for your firm is create a mechanism for staying in touch with your clients, just one of–
And, look, that doesn’t have to be a long call. We’ve kind of narrowed it down to five bullet points of what you should get. And don’t ask me what they are right now but there’s four or five little things that that you need to get from that client, you know, “Are you continuing to treat? Do you have a new doctor?” There are certain things like that.
And if you can get those and that client knows you’re going to contact them, then you can also do something else which is marketing. You know, my attorney calls me. My attorney is there. And you can get very good Google reviews, very good things like that. But those– the things that I’m talking about, if you can see, making these things a system. This happens automatically within your firm. you can get lots of yardage with these things – lots and lots so.
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Jim: All right.
So, Tim, let’s talk a little bit about those financial KPIs. Talk to us about cash flow, profit and loss. What are the things that a law firm should be looking at in context?
Tim: I’m happy to. I’m happy to.
Really, two things that I’ll hit on – maybe three, is we like to see firms actually prepare a budget. Then, compare budget to actual. And what I mean by budget is not that you sit down at the end of the year, in November. This time of the year, we have lots of clients going through budgeting process or getting ready to.
We’re not saying that, “Hey, we’re not going to spend more than, pick a number, $12,000 on office supplies” or some number like that. That’s not what we’re saying. What we’re saying is we want you to project what you really think your expenses are going to be for the upcoming year, based on prior year and what you think is going to happen. And, obviously, we’ve got some hiccups here going on with the COVID situation but that doesn’t mean we shouldn’t budget, we shouldn’t attempt to project these expenses.
Then, once you get the expenses, then what’s revenue? What revenue did we have last year? Why do we think we’re going to have that or more this year? What are our marketing expenses? Putting those things down on paper and getting them into your accounting system where, every month, you can look at this as what we thought was going to happen, this is what did happen, and here’s the delta. And when you can look at that and you can see that there are material differences between what you thought and what happened, especially on the expense side, you can learn a lot about your firm.
Those things, we think, are extremely important. If there’s a material difference and you know why– for example, “Hey, we decided to put some more money in advertising.” Totally understand, we’re not trying to say, because you have a difference, things are bad. But if there’s a material difference and you don’t know why, I say that’s management 101. You’ve got to dig in and say, “What happened? Why did we think this, then this happened?”
And, over time, when you budget year after year, there’s so much learning that goes on. So many targets that you can set because you simply– it’s like anything else, you get better at it, right? So, budgeting is huge. It also helps with internal controls within your accounting department. If things get out of whack, you don’t know why. And, you know, maybe we’re not suggesting that your accounting people can be doing anything nefarious but this is another check on it.
The other thing I’ll touch on for just a second is we take every firm we work with and we crunch their numbers into what we call a mini P&L, a mini profit and loss statement, because with plaintiff firms, really, there’s always three major expenses on the plaintiff side which is attorney compensation, non-attorney compensation, and I’ll call it case acquisition costs. You can make, say, marketing, advertising. If you’re a referral firm, maybe it’s referral fees. But those three areas compose usually 70% to 80%, sometimes even 90%, of a firm’s expenses. All the other stuff – rent, electricity, all that, we throw into another category.
And we get a baseline with each firm as what these expenses are, from a numerical standpoint but also as a ratio of their revenue. And we have some internal numbers within Vista that we’d like to see firms hit depending on where they are in their life cycle. Are they a startup entity? Are they a turn around? We’re trying to help them turn around? Are we simply realigning a few things? Are they sustaining success? So, those mini P&L’s, and based on where the firms are in their lifecycle, can really help us decide what levers to push or pull to be able to affect the bottom line profitability.
But I’ll also stop here and say, none of this takes precedence over client service. We’re about serving the client. And if you don’t serve that client, I propose to you that profitability will not happen. So, we try to not necessarily always look at just bottom line profit, but are we doing the right things for our clients because we believe that profitability and cash flow is a result of delivering high quality products and services to your clients. So, we don’t want to ever get that mixed up and just say, “Hey, we just want to make as much money as we can.” Well, yeah, we do but we cannot sacrifice quality services to our clients. We just can’t do that.
Tyson: I love that message, Tim. That’s great.
Unfortunately, we are running out of time. We’re going to have to start to wrap. Before we do, will you tell people how to get in touch with you if they want to work with you?
Tim: Certainly. Again, my name is Tim McKey, M-C-K-E-Y. My email address is firstname.lastname@example.org, T-M-C-K-E-Y-@vista-C-T as in cat tom.com. CT is consulting team. So, Vista consulting team or vistact.com. Again, last thing is the website www.vistact.com.
Tyson: Very good stuff.
All right, we do need to wrap things up. I do want to remind everyone to go to the Facebook group, get involved there. Join us in the Guild, maxlawguild.com. A lot of great high-level stuff going on in the Guild. And if you don’t mind just taking a couple minutes, while you’re listening to the rest of this episode, to give us a five-star review, we would greatly appreciate it.
Jimbo, what is your hack of the week?
Jim: My hack of the week is for lawyers to stop telling themselves that they’re not good with math and they’re not good with numbers. I mean, if you get the people that help you set up the KPIs, you can really notice some trends. I noticed some trends because we’ve been tracking those categories that I mentioned to Tim earlier about. And I noticed that there was a problem in that the attorneys were not evaluating the cases quickly enough. And so, if you’re not looking at your numbers, you’re just letting all this information and all this data just pass you by and you’re really just shooting in the dark.
And I was one of the greatest offenders in saying, “Oh, I went to law school so I didn’t have to do algebra.” Right? So, you don’t have to know rocket science in order to make numbers effective for you.
Tyson: No, but if you do know rocket science I’m sure it does help you quite a bit in knowing your numbers.
All right, Tim. So, we always ask our guests to give a tip or a hack of the week. Do you have a tip or a hack for us?
Tim: Yeah, yeah.
Man, I’m going to squeeze into real quick, a very short one is on intake. What we’ve noticed, across the country, the highest conversion rates are happening when you’re using electronic signups as opposed to waiting for someone to come in, or mailing them a package, or even sending an investigator out. You know, if you can have a potential client on the phone and text them a contract or a retainer agreement – don’t get tangled up with all the other things they have to sign, the HIPAA agreement – all those kind of things, just get their signature because what we’re trying to do is stop them from shopping. And once they have that first signature, and you can get it electronically, they stop shopping. So, that’s number one.
Number two is a Vista mantra that we strongly believe in. And if you’re around as much, you’ll hear it. It’s something that we call T, T and E which is tools, training, and expectations. If you have an employee or a team member that you think may not be performing well, before you go and talk to them, ask yourself, “Have we given them the tools to do their job? Have we trained them on those tools? And have we very clearly explained expectations to them?”
I propose to you, if you haven’t done those things, you have a management problem not a people problem. And if you if you can get yourself comfortable that you have given them the tools, you’ve trained them, you’ve explained expectations, and you’re still not getting good performance that that person, that team member, is either unwilling or unable to do the job. It can’t be anything else. So, what do you need to do with that? Once you go through that process, you can then make a well-informed decision on what steps to take for the improvement plan.
Tyson: I love it. I always like to tell the story when it comes to tools. We had an employee, her numbers were just awful because we were tracking everything. We still track everything through Domo and the amount of activity that she was doing, through Filevine, was awful compared to other people. And then, we started asking questions. Instead of, you know, saying like she’s just a bad employee, we asked questions, came to find out she only had one screen. Everyone else had two screens. And two screens makes a significant difference over one screen.
Tim: It’s like crack cocaine. Once you get two, you want three.
Tyson: That’s right. I have three in my office. You’re absolutely right.
But, yeah, you’re right. I mean, and it usually does come down to a management problem so that’s– I love that. It’s really, really good advice there, Tim.
So, my tip of the week is an app and you can also do it on your computer, too. It’s Zazzle. If you’ve never used Zazzle. it’s a funny name, but we got these– you can’t see it because you’re on the podcast, we’ve got these iPhone cases that we got for all of our employees and we got some other custom stuff. And it is super, super cheap. Like, I think the phone cases were like seven bucks each, branded, where like a lot of places, it’s like 30 or 50 bucks, something like that. So, really easy way to get branded stuff for you and your team or for clients, whatever it may be. Isn’t the highest quality, not always, but usually it’s good enough. So, check it out. Zazzle very, very good.
Tim, thank you so much for coming on. This was fantastic. I could talk to you for hours just about numbers and everything. So, really, really–
Tim: Thank you for asking me to be on. It was a pleasure.
Tyson: Absolutely. And I want you to send me your five things that you need to ask about because–
Tim: I’ll talk to the real brains of my operation, which are my rock star consultant group, and I’ll get them enumerated for you, and get them to you.
Tyson: I love it. I guessed, but I don’t think I got them right. So, I want to see–
Tim: You’re pretty close. I saw your guesses.
Tyson: Thanks so much, Tim. Appreciate it.
Tim: Take care.
Tyson: You, too. See ya.
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