Profit First for Law Firms: A Simple Starting Guide

Running a law firm isn’t just about winning cases — it’s also about running a profitable business. Yet, many firm owners struggle with unpredictable cash flow, financial stress, and the constant worry of covering expenses. The good news? There’s a simple system that can help: Profit First.

If you’ve heard about Profit First but aren’t sure how to apply it in your firm, this guide will help you get started.

What Is Profit First?

Profit First is a cash management system created by Mike Michalowicz that flips the traditional accounting formula:

Traditional Formula:
Sales – Expenses = Profit

Profit First Formula:
Sales – Profit = Expenses

This simple shift ensures that profit isn’t an afterthought — it’s built into your business from the start.

Why Profit First Works for Law Firms

Law firm owners often deal with:

• Irregular cash flow from case settlements and billing cycles
• Rising operating expenses
• Delayed or inconsistent owner’s pay

By using Profit First, you create a structure that ensures:

• You pay yourself first
• You always know what’s available for expenses
• Profit is a non-negotiable priority

How to Start Profit First in Your Law Firm

Here’s a simple step-by-step to start today:

1. Open Multiple Bank Accounts
   • Income
   • Profit
   • Owner’s Pay
   • Taxes
   • Operating Expenses
2. Allocate Percentages
   Start with small percentages based on your current cash flow. For example:
   • 5% to Profit
   • 10% to Owner’s Pay
   • 15% to Taxes
   • 70% to Operating Expenses
3. Stick to the Allocations
   Transfer funds twice a month based on revenue. This creates financial discipline and keeps you from overspending.
4. Adjust Over Time
   As your firm grows, adjust percentages to increase profitability and sustainability.

Dig Deeper Into Profit First

Want to explore Profit First in more detail? Check out our related post: Breaking Down the Profit First Method for Law Firms

Take the Next Step: Profit Boost Assessment

Implementing Profit First is a game changer, but every firm’s numbers are different. That’s why we created the Profit First Assessment — a personalized review of your firm’s financials with tailored recommendations to boost profit and reduce money stress.

📊 Ready to stop worrying about cash flow and start paying yourself first?
➡️ Book your Profit Boost Assessment today.