#522: The EOS Secret to Mastering Law Firm Challenges, with Mike Paton

Episode Notes

Transcript

Stephanie Everett (00:12): 

Hi, I’m Stephanie Everett. 

  

Jennifer Whigham (00:14): 

And I’m Jennifer Whigham. And this is episode 522 of the Lawyerist Podcast, part of the Legal Talk Network. Today, Stephanie talks with Mike Paton about traction. 

  

Stephanie Everett (00:24): 

And today’s show is brought to you by CosmoLex, so you’ll hear Zacks conversation with them in just a few minutes. 

  

Jennifer Whigham (00:30): 

So you had a pretty good conversation with Mike, I heard. 

  

Stephanie Everett (00:33): 

Yeah, I’m excited. So people who’ve listened to the show for a while will be familiar with the concept of traction and EOS, which is the Entrepreneurs operating system. I mean, we’ve talked about it for years because honestly, the Lawyerist team’s been using it for, I don’t know, at least eight ish years. I can’t even since the dawn 

  

Jennifer Whigham (00:52): 

Of time. Yeah, long time. 

  

Stephanie Everett (00:55): 

And so those concepts, when you become familiar with these concepts, which are based on other Gino Wickman’s book, he brings in a lot of other business authors. And so there’s a lot of basic business concepts tied up into how you think about running your business and how you would use this. And I guess I would just say not only do we use it every day in our business, but it comes through in the way we talk about it with our Lawyerist. We’ve adapted pieces that we think are helpful when you’re running a law firm. And it’s tricky because not all of it lines up exactly with how law firms typically work, but I think we’re able to help people use some of the core concepts and what they do. 

  

Jennifer Whigham (01:38): 

Yeah, for sure. And I think there is, part of what we do in lab is experimentation, and that means we take all the concepts that we learn including EOS and other things, and we experiment and deviate a little bit because there’s never one size fits all. And so that’s kind of the fun in it. And I know we do help our lobsters implement certain concepts. EOS is part of it though. It’s not the official part of it, but we do other things like that too. 

  

Stephanie Everett (02:08): 

Absolutely. There’s all these concepts out there, and I always tell people my job, which I love, is to digest them all, read them all figure out. And because we understand law firms and we understand what works, we can sort of take the best of all of it and say, here’s how you can apply these concepts that are tried and true for every business into your firm and make them, and not just know them, but implement them. This has been, I’ve been thinking about this a lot because we know things, but then doing them is the hard part. And even for me, I sat in a training recently and sometimes I have to remind, I’ve sat through, I’m like, I’ve learned this thing before. Do I really need to go to another training on fill in the blank? Whatever it is. I’m sure we’ve all had this thought, but then sat in on it and I was like, oh, yeah, I knew that, but I’m not doing it every day. I need to REIT to doing this thing. So I’ve been thinking about this a lot because I think there’s value in retraining on some things that we know so that we make sure we’re actually implementing it, not just ignoring it. 

  

Jennifer Whigham (03:19): 

I had a professor in college who said the three stages were learning it, understanding it, and then knowing it. And really that knowing it, you go back to all the time, it is just this loop. Once you hear it, you probably got it. But the understanding and the knowing is something that you have to go back to all the time. And I know that we do that with our lobsters and we offer something like that as well where we can come to them to help them actually understand this. 

  

Stephanie Everett (03:47): 

So fair warning my conversation with Mike went a little long because I was having fun and learning stuff and he was given such great information. So why don’t we head straight to it. I think everybody will find a lot of value to it. But before we do that, here’s Zack’s conversation with CosmoLex. 

  

Zack Glaser (04:03): 

Hey y’all, Zack, the legal tech advisor here at Lawyerist, and once again, I’m here with practice management specialist, Joyce Brafford from CosmoLex, Again, Profitsolv, Timesolv, Rocket Matter, all of those. But today we’re talking CosmoLex. Joyce, thanks for being with me. 

  

Joyce Brafford (04:22): 

Always, Zack, it is always a pleasure to be here. 

  

Zack Glaser (04:25): 

So I want to kind of dig into something that actually got me into the legal tech space, and that’s document management and automation. And I want to differentiate that from document creation necessarily, but document management and automation and streamlining. Yeah, I mean it’s important, right? 

  

Joyce Brafford (04:51): 

No, we don’t create documents in this line of work. What are you talking about? We send smoke signals and that’s it. That’s it. No, of course, of course. It’s incredibly important and it goes beyond, and you and I know this, but for the sake of the listener and the layperson out there, it goes beyond just the typing of a document and putting it somewhere where you have access to it, right? 

  

Zack Glaser (05:13): 

Right. 

  

Joyce Brafford (05:14): 

It’s the larger ecosystem of document management. And that means having an up-to-date template. That means having that template in the right place where everyone in your firm has access to it, you, your partner, your paralegal, your assistant, the junior person that you’re bringing on, whoever it is, it means that your template does not get altered when someone creates a new document from it because you don’t want to go back and check that document for errors every time. I don’t want Mrs. Smith’s information in a document for Mr. Jones, and I want to make sure that every single time I have a document that’s created for a client, it ends up in the client file. When I’m creating work product, I need to be able to associate that work product with that client file. So it’s document creation, it’s document automation, it’s document storage, it’s document management in the terms of updating things, it’s client management and case management. All of these things are part of document management in a law firm. And when you think about what we do on a daily basis, that’s a huge part of what the plurality of Lawyerist are doing on a regular basis, creating documents, creating work product for their clients. 

  

Zack Glaser (06:32): 

Right. Well, and you and I have talked about how when you do this, right, it can be really, really streamlined. 

  

(06:41): 

And again, that’s kind of why I got into legal tech is just the difference between that gap between doing it right and doing it wrong. When you’re doing it, I will say wrong, when you’re doing it wrong, it can feel like you’re just trudging through a marsh as you’re trying to get, you go back into a file and you’re like, why isn’t this here? Why is this file different? Why is this paragraph different? Well, it stems from poor planning because you didn’t take the time to create a.dot file. You didn’t take the time to because you’re going back and you’re saying, well, okay, that Smith case is where I did one of these before. So how can people kind talk to me about, I guess, practice management solutions and how they can help with this? 

  

Joyce Brafford (07:34): 

Yeah, absolutely. Because that’s really where we need to be here. We can talk about doing it wrong all day long, but let’s talk about how we do it. And first of all, I want to acknowledge how challenging it is to move from doing it wrong to doing it, right? You’ve had a system in place and you’ve been doing this, whoever you are out there in podcast land where you’ve been doing this the same way for years probably, and it’s hard. It’s hard to change those habits and it’s hard to change those processes. And that’s where case management comes in. And I specifically want to talk about the tools within CosmoLex, but they’re incredibly standardized tools. So no matter where you are, folks, this is going to be helpful for you. So number one, you need to upload your documents as templates into your practice management system. That is where your template library needs to live. If you want to have it somewhere else also, that’s fine, but because these are documents for your clients, because they are work product for your clients, they need to live within your case management system, right? 

  

(08:28): 

So put them there, and then when it’s time to actually create those documents, you are going to go wherever your particular case management system requires. In the case of CosmoLex, you’re going to go into your matters and you’re going to create the document, almost every case management system out there. It’s going to have a nice organizational structure for you to manage those templates. You’re going to be able to manage that structure by case type, by user, by practice area, by practice group, whatever you need to do. You’re going to be able to put some organization in this in just about any system that you have, use that structure, organize those templates, and then when you go to create that document for that matter, it’s going to create inside the system, it’s going to create in a nice Microsoft Word or PDF document, whatever you’d like, and then you’re going to be able to have it in the file, and then if you’d like to share it with your client for review or for signature from that same system, send it out. 

  

(09:25): 

And then when that signature or review is completed, it also ends up back there in your case management system and anything that you can do where you are creating a document for your client, for your client to review, for your client’s signature, for the benefit of your client. It truly does need to be created from your case management system, stored in your case management system, edited from your case management system, reviewed from your case management system, and put in finalized format in your case management system. This is what you need to be doing to make sure everything lives within a single repository. And one of the things I love about you, Zack, is how much you love project management, right? Yes. And anytime that we can think of these tasks and these workflows as larger projects and the tasks and the completion of them as related to that larger project and having everything live in that one space with deadlines, with reminders, with email notifications, but everything living in that one repository, the smoother your entire office is going to run. 

  

Zack Glaser (10:31): 

Absolutely. And that can save you minutes, dozens of minutes per file. 

  

Joyce Brafford (10:37): 

That’s right. 

  

Zack Glaser (10:38): 

Each time you touch it even. So before we run out of time here, real quick, people that want to do this, what’s the first document or documents that they need to get started with or should templatize if that’s a word initially? 

  

Joyce Brafford (10:51): 

Yeah, great question. I would definitely focus on the documents that you are going to use most widely in your firm. And that’s always going to be your engagement letter, your fee agreement, your scope of representation, right? That’s where I would start. If you are worried about pulling the correct fields in, I would just start with your engagement letter because in most cases it’s going to require fewer fields than things like your scope of representation or your fee agreement. So start with your engagement letter From there, I do fee, and then I do scope of representation in that order just to make sure that you’re pulling in all of your field codes correctly. But definitely get your engagement letter embolized today, 

  

Zack Glaser (11:35): 

Right? Well, and CosmLex, just as a obvious plug has a, you can do as many custom fields as you want out of that, so you can put a ton of stuff for your engagement letter in there. Well, Joyce, once again, I really appreciate you being with me today. I always learn something, learn something about CosmoLex, about practice management, all of that stuff. So thanks for joining me. 

  

Joyce Brafford (11:54): 

Yeah, it’s always my pleasure. Thanks Zack. 

  

Mike Paton (11:57): 

Good morning, Stephanie. Great to be here. I’m Mike Paton. For all your viewers and listeners, I am a professional EOS implementer, for lack of a better term, lifelong entrepreneur ran or helped run five entrepreneurial companies, but about 18 years ago, I discovered this magical thing called EOS, the entrepreneurial operating system. And since then I’ve spent my life helping entrepreneurs get what they want from their business by implementing the simple tools, practical concepts that Gino Wickman created 20 plus years ago. 

  

Stephanie Everett (12:38): 

Alright, well welcome Mike. I am super excited to have you today because a lot of people know I’m a longtime fan. You can see my very worn copy of traction here, which is where Gino Wickman laid out EOSI think originally. Is this the original? 

  

Mike Paton (12:55): 

Yeah, the first version was published in 2007. 

  

Stephanie Everett (13:02): 

And for those that don’t know, I think a lot of people have heard us talk about this book and this concept before on the show. I always say, so you can tell me your version to me, my path in all of this was I read the E-Myth by Michael Gerber and learned this concept that you don’t want to be a technician working in your business. You want to be the entrepreneur working on your business. And I thought he did such a great job of turning me onto that idea. But then I was kind of like, well, what does that mean? What does it mean to work on your business? And then I happened upon this book many years ago and I felt like this kind of picked it up and said, well, here’s what it means to work on your business. 

  

Mike Paton (13:47): 

Yeah. I also was an early reader of Gerber’s work. Believe heavily that if you want to grow and scale a business, you need to create replicable processes that are running independently of your engagement. That’s sort of the E-Myth mantra. And in fact, when my co-author Lisa Gonzalez and I wrote the book process to talk about the process component within eos, we lean pretty heavily on Michael Gerber’s work. And that idea of a franchise operating model that allows you to, I think it’s okay to be a technician in a business you own, but you have to choose between being the business runner or being a technician. It’s very difficult to do both well as a business grows and scales. 

  

Stephanie Everett (14:45): 

Yeah, fair. So for those who haven’t dug into the work, what’s the explanation of what the EOS model is? 

  

Mike Paton (14:55): 

And I think the acronym EOS entrepreneurial operating system sort of belies the meaning, right? It’s a system for running a successful growing business that introduces a little bit of structure, discipline, and accountability without killing the entrepreneurial spirit, the flexibility, the nimbleness that you need when you’re creating your own thing. And it was born out of a desire Gino had and his own family business to be a better leader and manager to help the company execute more consistently. He’s a voracious reader and studier of concepts and tools, and he looked into the world of business thought leadership and saw that there was a void that a lot of the books and other resources available at the time, this is 20 plus years ago, were really oriented towards executives and bigger companies. And they didn’t really address the unique needs of a technician who wakes up one day realizing he or she is signing 22 paychecks and says, holy cow, I’m no longer a lawyer. I’m a business owner and a business operator, and I don’t have any classical training in how to do that. I need some help. And that’s what EOS was created to provide. 

  

Stephanie Everett (16:18): 

Nice. And so what are the core, I guess, tenets if you will? I mean, there’s a system and it’s kind of built around these core concepts, and maybe you could just get us on the same page then I want to go deep into a couple of them. I’ve been dying to ask you some questions. 

  

Mike Paton (16:38): 

Yeah, I’d say it’s actually over my right shoulder here. The EOS model kind of is the right wrapper to answer that question with. And this is based on Gino’s discovery. In the very early days of starting to work with other entrepreneurs, he would invite leadership teams into his conference room and he would say, Hey, what’s holding you back? What’s slowing you down? What’s ticking you off? And he’d build a list of issues. And what he found was of all those 136 issues on the list, all of those issues fell into one of six compartments. We now call them the six key components of a truly great business. And a truly great business is just really strong at six things. The first thing is vision, getting everybody in the organization a hundred percent on the same page with who their organization is at its core and where they want to take that business long term and exactly how they plan to get there. 

  

(17:39): 

The second key component is the people component. You can’t achieve a great vision without great people. And so strengthening the people component is about figuring out what a great person in your unique organization looks and feels like, and then employing a set of tools and disciplines to attract and retain those folks and repel everybody else. The data component is the third key component. That’s the ability to run a business on facts and figures on objective information rather than the subjective feelings, emotions, and egos that so often drive decision-making in an entrepreneurial company. And when you’re good at those three components, what that does is it creates transparency in your organization. It smokes out all the company’s issues, every organization has issues. And so issues are just problems, challenges, obstacles or new ideas or opportunities you want to go pursue that you just haven’t had the time or energy to go pursue. 

  

(18:37): 

And strengthening the issues component just makes a team better at setting up, knocking down and making go away forever, all those issues rather than wrapping duct tape and twine around ’em and just hoping you can get into next week, the process component is the fifth key component, getting the most important things in the business, done the right and best way every time, even when you as the owner or the next level leaders aren’t there to redirect everybody when they’re screwing it up. What if we could build a machine to execute effectively day in and day out without us being essential? That’s what Gerber was talking about when he wrote the E-Myth. And then the six key component is traction, the ability to bring that vision down to the ground and execute on it with real discipline, real accountability, focusing on the right things and obsessing about pushing those right things over the finish line every day so you actually achieve your vision. That’s what the key components of an EOS implementation are all about. 

  

Stephanie Everett (19:40): 

Super helpful. All right, producer, we’re going to take a quick break. I got to grab the dog. She’s just going crazy out of deer. Hold on two seconds. 

  

Mike Paton (19:48): 

That’s funny. 

  

Stephanie Everett (20:06): 

Sorry about that. 

  

Mike Paton (20:07): 

Not at all. What kind of dog 

  

Stephanie Everett (20:10): 

She is a golden, no, what is she? She’s not golden at all. She’s a Brittany Spaniel poodle mix. So a Brittany Doodle is what they call her 

  

Mike Paton (20:19): 

Brittany Doodle. Okay. All right. I’ve never heard of it, but it sounds cute. 

  

Stephanie Everett (20:25): 

I know. She is super cute. It saves her a lot. Cool. Yeah. Well, thanks for that explanation. I think it helps, and I kind of want to go deeper into a couple of those areas because you talk about the issues and I do think EOS does a good job of helping companies identify issues and go through a process that you guys call IDS identify, discuss, and solve. So that’s the process where you use to work through an issue. But I’m curious, I kind of was like, how do I go deeper with this conversation? I feel like too, a lot of businesses might just stay superficial with their issues lists, and so how do you help companies really dig in deeper and maybe get to the heart of what their issues are? I bet they often start in the same place, but 

  

Mike Paton (21:19): 

Yeah, and this is born, I mean, you learn after I’ve been doing this work for 17 years and you learn that it’s really human energy work that we’re doing. It’s not the implementation of a set of tools. EOS is just a framework for helping the humans who are attempting to collaborate to run a business, do it better and get more consistently exceptional results. And so the human issue here is the fear of change almost always trumps the pain of the status quo. So there are lots of meetings in lots of organizations around the world where everybody comes to the meeting knowing what the real issue is, and we fill two hours of time talking about everything outside of the real issue, but we never get right to the root of the real issue, which is the person in charge of blank really isn’t very good at his or her job or our product or service is getting its butt kicked in the marketplace, and if we don’t improve the quality or consistently of our product or service, we are going to fail as a business. 

  

(22:37): 

So what happens in those meetings is everybody’s talking around the real root cause of the issue because talking about the real root cause of the issue is scary, and you might tick somebody off or you might alienate them, or you might create an awkward moment, or maybe the company’s owner, the founding partner of the law firm is the problem. He or she won’t let go of any of the snuggling little details that we all feel we’re supposed to be accountable for with our own cases or our own workload and so on and so forth. Then bringing that up in a meeting that involves the owner and the founder is career limiting. So those are all the things that get in the way of getting to the real root cause of the issue. IDS is just a framework for making that happen and using that framework successfully requires trial and error and courage. 

  

(23:41): 

And what I notice on leadership teams is they come into my session room in varying degrees of comfort with candor. Some won’t say anything they’re thinking and feeling because they’re terrified that bad stuff is going to happen, but others have no filters. But even with those no filter clients, the way they behave the first time they do it and the 10th time they do it is completely different because if you’ve brought up a nervy subject, if you’ve brought something up that people are afraid to talk about and bad stuff doesn’t happen the next time you’re a little more confident and the next time and the next time. And so it’s just trial and error. It’s just like anything. It’s knowing that there’s a framework agreeing, we’re going to use this framework, and then gradually taking more personal risk until you can be brutally open and honest with yourself and one another on your leadership team is the key to really unlocking the true root cause of every issue. 

  

Stephanie Everett (24:50): 

Yeah, that’s some hard stuff because there’s a lot of fear and anxiety coming into those conversations. I mean, I know I see it every day with the clients that we work with. It’s like, you know what you need to do, but getting to a point where you can say it out loud sure is tough. 

  

Mike Paton (25:08): 

Well, what I’ve seen the most transformational thing in that journey can be is when somebody overcomes the shame would be the other negative emotion I would throw into the mix is if I know I’m the root cause of the issue and I can say, Hey, the problem is me and I need your help to fix me. When somebody on a leadership team is willing to be vulnerable and model the behavior they’re hoping for from everybody else, man, can it make a huge difference in the rest of the team’s confidence that, Hey, Peyton threw himself on the issues list. Why should I be afraid to do the same thing? 

  

Stephanie Everett (25:51): 

Yeah, awesome. I love that. One of the core concepts everybody seems to know about traction and EOS is this idea of rocks, right? I mean, I’ve read the rocks chapter so many times, so this is why I’m really excited because what I see time and time again, and I’ll get your definition of rocks, but as I understand it, it’s supposed to be the priorities for the quarter. This is what we have to focus on, what we have to maybe achieve or solve to move the business forward. And I’m curious because I see this trap, I see our team, by the way, if I didn’t say this when we hit record, I told you before our team’s been using the EOS model to run our business for gosh, at least eight years, and we merged with a company last year that had been using it for at least the same amount of time. So we use these concepts every day on our team. And the thing I think we struggle with, which is why I’m bringing it up, is if we get in the quarterly sessions and we think rocks mean projects or rocks mean like we got to build something new or we got to create something new and we get really stuck on that and then we get really stuck on what done looks like. So I’d love to hear your advice and thoughts 

  

Mike Paton (27:09): 

Around that. The first thing we need to do is we need to book two or three more conversation because there’s like 23 issues in what you just said, but I love that because rocks is a very simple concept, comes from I’m a big fan of context, creating clarity. So the context of the term rocks comes from Stephen Covey’s famous glass cylinder exercise where he talked about the tyranny of the urgent that most leaders tend to get overwhelmed by the urgent things that pop up day to day, and they aren’t very good at prioritizing the truly important things. And so the way I teach this now is I write the word rock on the whiteboard and I write the word priority right next to it and I put an equal sign next to it, and then I teach that every leadership team has the capacity every 90 days for three to seven priorities. 

  

(28:12): 

And some of those are projects, but other of those might just be decisions. We need to do some research and make a decision or we need to mind our P’s and Q’s and get back out there from a marketing and sales standpoint because we’re off track to hitting our sales numbers for the year. And so if we don’t get back on track here in Q2, man, we’re going to be hurting at the end of the year. We’re going to need to let some people go and so on and so forth. So rock equals priority is the teaching. So three to seven most important things for the company are company rocks, the three to seven most important things for a member of the leadership team are there individual rocks and there’s always an owner of a company rock. So Stephanie, when your team is setting rocks, my guess is you might own the completion of one or two of the company rocks, the team set together, and then you might set one or two individual rocks in addition to the company rocks you own as additional priorities. 

  

(29:17): 

And then the three to seven most important things for the marketing and sales team or the ops team or the finance team might be departmental rocks and everybody in the organization should have one rock a quarter. Now what you said about projects, the way I like to talk about that is at the top of the organizational structure, the leadership team’s rocks. The more of them can be about growing for the future and building a new tomorrow the better. But some quarters a leadership team doesn’t have the luxury of that kind of work. And so it’s not a hard and fast rule that your rocks should be project based. Sometimes you got to fix some stuff that’s broken as a rock as you migrate into the organization, rocks do get more tactical and more connected to somebody’s day job. So a rock for somebody who just started in your company might be to master the rigors of their job or to cross train on a new skill that they haven’t learned yet, or to train for a more experienced line level contributor. 

  

(30:28): 

A great rock is training in a new colleague that doesn’t know the ropes yet, so they get more tactical and more job related as you migrate into an organization. But again, you go back to the original thing, a rock is just a business priority that’s going to take between a couple of weeks and 90 days to complete. It’s got a specific due date and it’s got an owner that accepts personal responsibility for completing whatever done looks like, which tees up the next thing that you brought up. When we write rocks, we work really hard to write smart rocks specific, measurable, attainable, realistic, and timely. But that acronym can be misinterpreted or viewed differently by different people on the leadership team. So all I do when I’m helping a team set rocks is I just say, when somebody’s done reading the rock, is that smart? And when they say yes, I say, does everybody have the same picture in their head of what done looks like? 

  

(31:36): 

So here’s a great example. Let’s just say somebody takes a rock to make a recommendation on a new software tool we’re going to either agree to take on or not. What I’ll ask is, what’s that recommendation look like? Is it three bullets written on a three by five by seven note card or is it a 27 page executive summary of all the benefits and so on and so forth. And I’ll get the owner of that rock to kind of zone in on what they’re going to go do to complete the rock so that everybody else on their team knows what their intention is and then done looks like they executed on their intention at the end of the quarter. If you don’t know what they intend to do, it’s really difficult to say done or not done at the end of the quarter. 

  

Stephanie Everett (32:27): 

Yeah, absolutely. We’ve mentioned, you’ve mentioned leadership team several times now, and we didn’t really define that. I mean, maybe it’s obvious to some people that it’s the leaders of your organization. I think small firms specifically some of the law firms I work with struggle because they may not have enough people to make up a leadership team. Maybe the lawyer is the managing owner member kind of acting, and here’s a couple of other terms we can throw out the visionary and integrator, they might have a lot of hats on and they may not feel like they have a big enough team to kind of fill out a leadership team and have this whole team supporting them. I guess my question, and if you needed to find some things along the way is what advice do you give to those folks that are in that building stage and in that interim stage for how they can use this process and when they don’t have a full huge company where they have the team members to fill these spots. 

  

Mike Paton (33:36): 

So that is what the first thing I’m going to do is eliminate any anxiety in your audience for that conundrum because that is true of every single entrepreneurial company in the history of entrepreneurial companies that what the person who founded it needs to be good at vastly exceeds their skillsets, passions and time. Okay, when you started your practice, you were in charge of selling and marketing. You were in charge of delivering value to your clients by practicing law, and you were in charge of keeping track of the billings and the invoicing and the flow of money in and out of your organization and everything else. 

  

(34:24): 

As a company grows and scales, successful business owners, successful business leaders learn how to delegate and elevate to their unique ability so that they spend 80 to 90 to 95% of their time doing work they love that they’re passionate about and really good at, and they delegate the work that needs to be done, but they don’t love and they’re not passionate about to other people whose area of specialty aligns with those roles. This is why we take a structure first, people second approach to building out a tool we call the accountability chart, which is kind of a central tool in the strengthening of the people component. And by structure first, people second. I say, I don’t care whose name goes in the seat on your accountability chart. What I care about is what does your firm need to be good at for you to execute well and achieve what you think is possible over the next six to 12 months? 

  

(35:26): 

And when we do it that way, usually the practitioner who founded the business knows the answer to that question right out of the gate because they’ve been doing all those things for somewhere between a year and 10 years and they’re exhausted and frustrated. And so it’s okay to have five seats on your leadership team and one name in all five seats. But then what I get to do is say to the practitioner, Hey, the major functions of your business are visionary, the founder who’s got a vision for what we want to accomplish here and the skills and passions and reputation and connections to go make it happen. The integrator, the person who runs the day-to-Day, and the other major functions of your business, which might be marketing and selling, bringing in case opportunities, delivering value to your clients operations in a manufacturing company, but it probably is practicing the law in a law firm and finance and administration, which is everything else. 

  

(36:29): 

The tracking of money flowing in and out of the organization, the invoicing and chasing clients down when they’re not paying their bills and HR and IT and facilities and all the other sort of detail oriented things that happen in the back office of a building of a business for lack of a better term. And when a single a sole practitioner builds their accountability chart, of course their names in every seat, and then you’ve got to identify the seats you want to get rid of first because you don’t love doing the work and you’re not very good at it. And man, if you could replace yourself with somebody who is affordable and loves to do that thing and is better at it than you, you’re actually going to grow and scale your business a heck of a lot faster than holding onto everything because you don’t want to spend money on that stuff. That’s how we address the leadership team conundrum in a small business. 

  

Stephanie Everett (37:32): 

Love it. Let’s take it to a different place now because another thing that happens a lot in law firms is we’ll have multiple Lawyerist who have become partners, and so they’re owners of the business. And historically law firms have struggled a lot in my opinion, in how to manage a business because there’s an idea of, well, we’re all owners, we should all have a say, we should kind of lead by consensus and all agree on these things. And I mean, we wrote in our book all a whole chapter on why we think that causes all kinds of problems. I mean, I’ve sat in a room with 15 Lawyerist trying to decide what they’re going to spend on next year’s insurance premium. I mean, that’s just a crazy example, but that’s the kind of stuff we see. And yet this idea that, well, I own this business so I should be a part, I should have a say in the direction we’re headed. I see this people struggle with where does that balance lie if I’m an owner, the business we’ve grown beyond the single entrepreneur who sort of founded it and was the visionary. We have a team of people that own this business, but they might not be in leadership team roles because that’s not their skillset. They really are technicians practicing law and where did they fit into the model and how do they participate? 

  

Mike Paton (38:58): 

So ownership and leadership are two different things. So as an owner, you have certain rights and responsibilities in a professional services firm, and as a leader you have certain rights and responsibilities to that professional services firm, and the leadership team arguably serves at the behest of the owners, but delegating ultimate decision-making authority on every issue, big, smaller, everything in between is a mistake because there is no such thing as consensus. I mean even for not Lawyerist, getting 15 people to agree on something is almost impossible, and Lawyerist are highly trained arguers, so it’s got to be impossible in a law firm to make 15 people truly agree that the right thing for us to do is this thing. What’s critical here requires good governance. It requires clarity and alignment, not total agreement, but alignment around what kind of decisions the leadership team is empowered to make and what kind of decisions need to be elevated to the ownership group for either advice and counsel or final decision-making authority, that’s just corporate governance. And so anybody with a business law practice is going to get that completely. What’s critical in any group of people though is that we need to decide which among us, which person among us is empowered to make a decision when we don’t all agree. Because I believe that if you’re an owner or a member of a leadership team, you have the right to be heard, as you say, to have a say in the decision, but you don’t have a right to stop the proceedings when you’re not getting what you want. 

  

(41:05): 

And so as long as you can be comfortable having been heard when an important decision needs to be made by either the owners or the leadership team, once you’ve been heard, if the decider decides to do something different than what you would do as a 5% or 20% or even 55% owner of your firm, then we have a healthy leadership team and a healthy leadership owner dynamic. If you’re going to take your ball and go home when you don’t get your way, we have an unhealthy leadership team or an unhealthy leadership ownership dynamic and bad stuff is going to happen. And so I’ve just found that assigning the people one on the ownership group, when the owners don’t all agree on something, they’re empowered to decide on, and one on the leadership team level, the integrator who can make a decision when we’re trying to execute in the business and everybody else who has been heard says, okay, the integrator made the call. 

  

(42:09): 

We can move on. Hopefully they’re right. If they’re wrong, I know they’re going to come back to the meeting and say, oh, geez, Peyton, you were right all along. I made a mistake. Let’s reopen the conversation and figure out what we’re going to do here. That’s the key to solving that problem. And it’s hard, man. Most people have to learn painfully that it’s better to be effective and forward moving than it is to be right all the time. And even when you believe you’re right, sometimes you need to say, for the greater good of the organization, I’m going to let the person who’s appointed to make this decision make it. I’m going to support it fully, and if it turns out to be wrong, we’ll adjust and move on healthfully rather than me stonewalling things and being a disgruntled member of the ownership group, 

  

Stephanie Everett (43:04): 

Yeah, more tough conversations ahead, I think. 

  

Mike Paton (43:07): 

Yep. Yeah. Again, this is the human stuff again, right? The human stuff gets in the way of the execution stuff all the time. 

  

Stephanie Everett (43:16): 

Yeah. Okay, final, oh, hold on. She’s doing so good. Millie here. There’s no reason. I think I scared her. All right, we’ll cut that. 

  

Mike Paton (43:30): 

She may not have agreed with my thinking on that question Exactly, and I think if her audience members have a choice, they should listen to Millie. That would be my 

  

Stephanie Everett (43:41): 

She is an honoree member of our leadership team from the I. Yeah, 

  

Mike Paton (43:46): 

As she should be. 

  

Stephanie Everett (43:49): 

Okay. We could keep talking forever, obviously. But I have one last question that our integrator insisted that I ask you. So I said, okay, 

  

Mike Paton (44:00): 

Here’s your kids. Yes, everything is Stephanie’s fault. Oh, no, it’s a different question. 

  

Stephanie Everett (44:06): 

Well, I mean, we run a professional services team team. That’s essentially what our company does, and we also are helping professional services teams. I mean law firms, I think we can say fit in that category, and having a scorecard that works and is really effective is something that our teams, I feel like every quarter we just continue to struggle with it. Which numbers should we be thinking about and why? And so would love to just get your quick insight into maybe how we should be thinking about this a little differently. 

  

Mike Paton (44:41): 

Yeah. So I’m going to give a lengthy answer because I want to create the right context here, but stop me if you need me to zig and zag during the thing. So when we touch the scorecarding is one of the tools that we implement when we strengthen the data component. And most companies are already really good at, or at least passively good at reviewing historic performance data to see if we’re on track to achieve our budgeted objectives. Most organizations that have 10 to 20 people in them at a minimum are good at looking at their financials on a monthly or quarterly basis and adjusting when things are on track or growing faster than they anticipated. What we try and add to that discipline is what we call weekly scorecarding, starting at the leadership level of the organization. And the reason I wanted to create that context is great leadership team scorecards include five to 15 leading indicators, activities based numbers that lead to future results, not trailing indicators, because you’re already looking at those trailing indicators in those monthly or quarterly financial reviews. 

  

(46:03): 

So the first key is asking yourself what activities you need to engage it on a weekly basis that lead to future results. If you want to build a new client base, increase your number of new clients, what are the activities you engage in marketing and selling and relationship management and asking for referrals that lead to success in that outcomes based number. So that’s step one is looking at your existing scorecard and asking yourself, which of these numbers is a trailing indicator? We could look at some other place and which are leading indicators and reducing the number of trailing indicators on your weekly scorecard and increasing the number of leading indicators. There’s a secondary benefit to that, by the way, and that is this, you may have experienced this in your firm, and lots of law firms I’m sure experienced this, is that people feel more in control of activities based numbers achievement than they do outcomes based numbers achievement. 

  

(47:17): 

You get a lot more finger pointing and excuse making when you have a bunch of outcomes numbers on a weekly scorecard. Well, the economy’s going to heck in the hand basket. I’ve had a client say, the weather is the reason we’re not hitting our sales goals, or the World Cup is going on and nobody in Europe is buying anything because they’re all busy watching the World Cup. I mean, it’s crazy how our brains work and rationalize consistent failure. And so that’s the advantage of leading indicators. Then the other thing is you have to acknowledge with scorecarding that people are uncomfortable with accountability for things that are outside of their control, and it’s impossible to run a successful business without taking responsibility for hitting numbers that are outside of your total control. And so there’s a lot of emotional baggage. Well, that’s not fair. We can’t put that on the scorecard because I can only do so much. 

  

(48:23): 

And when you get stuck in those emotional conversations, somebody in the room needs to say, Hey guys, we all need to accept personal accountability for hitting all of these numbers. We’re just appointing Stephanie as the logical owner of this thing because when the number is off track, we want to drop it down to our issues list and IDs the root cause and help her get the number back on track. We’re not vilifying Stephanie because her numbers are off track. And then the last thing I want to say is a little facilitation technique that you might want to use with your team. One of the things I like to do when I’m building a scorecard with a leadership team that’s struggling is I hand out a piece of legal paper to everybody and I write two things. I divide it into two columns, and I write two things at the top of each column. 

  

(49:16): 

The first is lousy, the second is great. And I say, okay, guys, in a great week at this organization, what are all the things that happen from an activities based standpoint? Well, I had a successful call with a larger law firm that we rely on to give us referrals, and I got three names of cases that might be a good fit for our firm. Okay? So write that down as a thing that happens in a great week. And then I say, can you remember the last lousy week that happened in the firm? And usually everybody on the leadership team jokes, well, like this week that we’re in right now. And so we do the same thing with the lousy week. A great weekly scorecard is the final arbiter on whether or not we had a great week or a lousy week, and we should take accountability for making sure we’re engaging in the activities necessary to have more great weeks than lousy weeks. And when we have had a lousy week, let’s just drop the reasons for that down to the issues list and take ownership of fixing it. And what that tends to do is it transfers accountability from the owner of each measurable to the team that’s just working together to want to have better weeks. Hopefully that helps. 

  

Stephanie Everett (50:38): 

Yeah. No, I love that. I love that framing because that’s super easy and it really is helpful. This has been so great. I hope that everybody appreciates how valuable this tool is to business owners. I mean, it has been to us. Like I said, we use it for our team. We use it Inevitably, the concepts come up with our clients that we’re working with because they can’t not, right? It’s just things that we do. If people are interested in learning more, is traction a good place to start? Or where do you send people these days? 

  

Mike Paton (51:17): 

For sure. The home base is our website. EO os worldwide.com is a absolute value packed resource center for everything you want to learn about implementing these simple concepts and practical tools in your business. You can find the entire traction library traction, get a grip process that EOS life, all of those rocket fuel, all of those books are available on the EOS worldwide website at a deep discount for orders of more than 20. So anything you want to learn, start there. And then the other thing I always recommend to people who own or run entrepreneurial companies like the law firms who are paying attention today is don’t be afraid to reach out to a local EOS implementer and ask them for help. We have our first core value in our five core values at EOS worldwide is help. First, there’s nothing I love more than sitting down with a founder or the leader of an entrepreneurial company and helping them figure out if and when EOS might help them implement their business. We’re not trying to sell you on anything. We just want to help. And if working with us to implement EOS in your business is a good fit for you, we’ll appreciate that. But we’re going to help you either way. 

  

Stephanie Everett (52:44): 

Love it. Well, we’ll put the links to that in the show notes for sure. Mike. So thank you so much for being with me today. I’ve really enjoyed it, 

  

Mike Paton (52:53): 

As have I. Stephanie, thanks for asking such great questions. This was a fun conversation.
 

 

Continue Reading