Profit First
Better financial clarity and control for law firms through a simple, disciplined Profit First system.
Growth starts with what you EARN. Sustainability comes from what you KEEP.
What is Profit First Methodology?
Profit First is a practical, simple cash flow approach for law firms. Instead of the general Revenue – Expenses = Profit equation, it encourages firms to keep a set percentage of profit and taxes, and then allocate the rest to all other costs. This approach was created by Mike Michalowicz and challenges the traditional GAAP (Generally Accepted Accounting Principles) mindset that often feels complex or disconnected from the daily financial needs of smaller firms.
Profit First approach helps reduce cash-flow stress, improves spending discipline, and creates a clearer picture of the firm’s financial health. At Firm Balance, we apply the Profit First methodology within law firm bookkeeping workflows to support better financial habits and more confident decision-making.
Meet Connie Kaplan
Connie Kaplan is the founder of Firm Balance, where she leads specialized bookkeeping and professional financial services focused exclusively on the unique financial needs of law firms. Her Profit First perspective comes from hands-on experience as an attorney running her own law firm, and through her training and association with Profit First™. She earned her business degree, summa cum laude, from the State University of New York, and later completed her law degree at Nova Southeastern University. She received the AV Preeminent Attorney Rating by Martindale-Hubbell and frequently educates her peers on law firm financial literacy, business planning, and profitability as a process.
Why the Profit First Approach Makes Sense for Law Firms?
Law firms experience wide swings in income: one month you may collect large retainers, the next you may struggle to cover payroll. Profit First bookkeeping allows you to systematically allocate your revenue in a way that your profit becomes the priority, and other costs are paid from whatever is left.
Firm Balance’s Profit First Approach
- We tailor allocations that fit legal revenue patterns (retainers, billable hours, settlements).
- We map your cash flow cycles to effective bank allocations.
- We implement systems that make bookkeeping more predictable and less reactive.
- We help you see where your money goes before expenses overwhelm your practice.
This is not about checklists; it’s about shaping your financial habits, so you have clarity and discipline over your law firm’s spending.
Ready to Bring Financial Clarity to Your Law Firm?
Schedule a call to discuss how we can build confidence in your financial position, keep cash flow stable, and reduce stress around money with a Profit First approach.
FAQs
What is a good profit margin for a law firm?
For law firms, 30-35% is considered a good profit margin. However, this number can vary depending upon the size, practice area, and location of your law firm.
How many accounts do I need for Profit First?
To adapt the Profit First methodology, you’ll need 5 foundational accounts including Income, Profit, Owner’s Compensation, Tax, and Operating Expenses.
What is the Profit First 10 25 rule?
According to the 10/25 rule of Profit First, every firm should allocate its full income every two weeks on the 10th and 25th dates to bank accounts, profit, bills, and other costs.
Is a 50% profit margin too much?
A 50% net margin is unusually high for a professional law firm. In most cases, a 25–35% margin is already considered strong, and anything above that often points to very tight cost control or a model where a significant share of the work is delivered by the owner.
