Value Creator v. Lifestyle Owner: Which Are You? (Ep. 77)

Is your law firm growing in value, or are you just treading water? As law firm owners, it’s essential to understand the distinction between being a “Lifestyle Owner” and a “Value Creator.” Recognizing these two types can be the key to unlocking both financial freedom and long-term success in your legal practice.

On this episode of The Lawyer Millionaire Podcast, we’ll dive into the concepts of value creation and lifestyle ownership, and how adopting the right mindset can transform your law practice into a powerful, profitable asset.

Are You a Lifestyle Owner or a Value Creator?

What is a Lifestyle Owner?

A Lifestyle Owner focuses on generating steady income and maintaining a work-life balance—often at the expense of growth and future value. Their goal is to sustain a comfortable income, and their business supports their lifestyle. These firms are typically small and very owner-dependent.

Key Characteristics of Lifestyle Owners:

Focused on steady income
Strong work-life balance
Maintains status quo without scaling
Business dependent on the owner

While there’s nothing inherently wrong with being a lifestyle owner, such owners often find themselves with less time and money than they anticipated. Running a law firm is more complex than it appears, leading to potential burnout and financial constraints.

What is a Value Creator?

Value Creators, on the other hand, build their practices with the intention of increasing market value, scalability, and long-term profitability. These law firm owners think in terms of building economic value and maximizing the asset value of their enterprise.

Key Characteristics of Value Creators:

Focused on innovation and market expansion
Builds practices meant to scale and grow
Creates an income-producing asset that operates independently
Plans for a profitable exit

Value creators aim to build a business that lasts far beyond them. While this approach can involve higher risk and stress, it often leads to significantly greater wealth, flexibility, and the ultimate reward of a lucrative exit.

Why You Should Adopt a Value Creation Mindset?

1. Resilience During Downturns

Every business faces economic cycles, and law firms are no exception. Lifestyle owners are particularly vulnerable during downturns. Value creators, however, mitigate this risk through strategic planning and contingency measures.

2. Attracting Top Talent

A compelling vision and innovative mindset attract top talent. Value creators build a culture that excites and motivates team members, leading to higher productivity and satisfaction. Employees are drawn to firms where they feel they are part of something bigger.

3. Lucrative Exit Planning

Thinking like a value creator positions you for a significant and lucrative exit. Building a business with long-term value and scalability offers numerous retirement options and the opportunity to harvest the value you’ve created.

Strategies to Become a Value Creator

1. Create a Compelling Vision

Have a clear vision of what your business should look like in ten years. Think about the organization’s impact on clients, employees, and the legal industry. A compelling vision drives motivation and direction.

2. Involve Your Team

Get your team involved in creating and buying into the vision. This shared goal fosters a strong, collaborative culture and encourages delegation, enabling growth and scalability.

3. Shift Your Mindset

Think in terms of the organization rather than yourself. Embrace innovation, take calculated risks, and consider reinvesting in your firm for the highest ROI.

4. Execute Relentlessly

Successful firms execute their plans relentlessly. Revisit your business plan regularly and ensure consistent progress towards your goals. Execution separates successful businesses from the rest.

5. Seek Expertise and Training

Recognize that every business owner faces challenges. Invest in acquiring the skills needed to overcome these obstacles. Consider enlisting experts or consultants to guide your growth journey.

Take Action Today

To begin your transformation, start with creating a compelling vision for your law firm. Discuss with your team and set ambitious goals. Evaluate your current standing—are you set up for long-term growth or merely coasting along?

For in-depth resources, visit our Business Planning Page. Take our Free Business Health Assessment to identify key areas for improvement. Additionally, download our free Business Planning e-Book packed with strategies to help you build a more valuable, scalable law firm.

Conclusion

Shifting from a lifestyle owner to a value creator can unlock unprecedented growth and profitability for your law firm. By adopting this mindset, you can build a practice that not only supports your current lifestyle but also secures your financial future.

Resources:

Transcript:

Darren Wurz [00:00:00]:
Is your law firm growing in value or just treading water? Welcome to the lawyer Millionaire, where we deliver financial and business insights for ambitious law firm owners so you can enjoy more time, more abundance and less stress, even if you’re still growing your law practice, what if your law firm could be worth double, triple or even more? Too many law firm owners are stuck in the cycle of working hard just to maintain the status quo. In today’s episode, we’re diving into how adopting a value creation mindset can transform your practice into a powerful, profitable asset that continues to grow without burning you out in the process.

Darren Wurz [00:00:59]:
Are you running a law firm or just paying the bills? If your firm isn’t growing in value, you might be limiting your future potential. What if I told you that thinking like a value creator might be the key to unlocking both financial freedom and long term success in your legal practice? What type of law firm owner are you? Are you a lifestyle owner or a value creator? There are two kinds of business owners, and we can apply the same concept to law firm ownership as well to law firms. There are two really two kinds of business owners and two kinds of law firm owners, lifestyle owners and value creators. So let’s talk about what value creation is. What is a value creator, and what makes value creation? Well, first, let’s think about a lifestyle model. Let’s start there, right? What is a lifestyle owner? A lifestyle owner is someone who is focused on generating steady income and maintaining a work life balance, but often at the expense of growth and future value. If you’re a lifestyle owner, your goal is to sustain a comfortable income. Right? Your business is there to support your lifestyle.

Darren Wurz [00:02:15]:
Now, there’s nothing wrong with being a lifestyle owner, but there are some things you need to be aware of, and a lot of people are lifestyle owners, okay? These kinds of owners are not interested in growing or scaling their practice. They just want to have their practice run and want to have a good income, right? These are usually small, owner operated law firms, and these kinds of law firms are very owner dependent and very owner reliant. Now, a lot of law firm owners, I think, get into the business of owning a practice, of owning their own business, because they’re looking for more time and more money. They want to have flexibility and they want to make more, right? Ironically, lifestyle owners often find themselves in the exact opposite position. Running and owning a business ends up being a lot more difficult than they maybe anticipated. And as a result, they often find themselves with less time and less money instead of more. Now, value creation, on the other hand, in the context of a law firm, means building a practice with the intention of increasing its market value, scalability and long term profitability. Think of startups or high growth ventures, right? These are companies that are started with the intention of growing massively.

Darren Wurz [00:03:39]:
Think Facebook, right? Or Microsoft, started in a garage, ended up being a trillion dollar company. Now, your sites may not be that high, but maybe they are, right? That’d be great, right? But these types of owners, value creators, think in terms of economic value. They think in terms of building the asset value of their enterprise. Value creators are focused on innovation and market expansion. I’ve met a lot of very innovative law firm owners. We just talked with Gwen Griggs not too long ago. She’s a value creator. She has an innovative way of billing her clients.

Darren Wurz [00:04:22]:
Value creators think this way. They think of solving problems that other law firms have. What are problems that you see in the legal landscape the clients face? And how could you solve those problems differently? Innovation in the corporate world. Value creators think in terms of maximizing shareholder value. Corporations, their main objective is to maximize shareholder value. That’s what value creators do. They maximize the value of the company and most of the time, the end game. The end goal of a value creator is a significant exit, right? A profitable exit, exiting from the business in a way that they can harvest the value that they have created.

Darren Wurz [00:05:09]:
The key difference here between lifestyle owners and value creators is job versus asset. Lifestyle owners have a job when they’re not running their business, their business doesn’t run. That’s a job. Value creators have an asset, an income producing asset that will last far beyond them, that operates when they’re not there, and an asset that they can one day sell. Now, there are some drawbacks. It’s not all great, right? Being a value creator can mean higher risk, right? You’re taking on a risk to grow, taking on risks to scale, right? That’s not risk free. And it could mean higher stress. Actually, it’s not easy to build and grow a business.

Darren Wurz [00:05:57]:
But at the same time, you might achieve that one thing that lifestyle owners set out to get, which is more time and more money. Here’s the real thing. And that’s the thing, right? You will get the thing that lifestyle owners often set out to achieve. Having that value creation mindset can lead to significantly greater wealth. But there are some other reasons why, you know, obviously we all want to have more wealth. We want to have more financial resources to do the things we want to do in life, and to have more time, freedom, and flexibility. But there are some even more important reasons why you might want to start thinking in terms of value creation. First of all, risks.

Darren Wurz [00:06:45]:
One of the biggest risks to any business is an economic downturn. And every law firm is subject to ups and downs in either the economy or their specific niche. No business is immune. We saw that with COVID right law firm types, practice areas that we thought would be immune from the cycles of the market and the economy. That idea got thrown out of the window. But if you are a lifestyle owner, economic downturns can represent a huge risk, potentially to you. Right? If the business depends on you, you’re it. Right? You’re deeply involved in the business.

Darren Wurz [00:07:31]:
You don’t have the infrastructure in place to withstand those economic downturns. If you’re a value creator, you’ve already thought this through. And why? Because the first step to value creation is de risking thinking about all the things that can go wrong and creating contingency plans for how you can deal with those. Okay. Another reason that you might want to think in terms of value creation. Attracting talent. It’s hard to find top talent. Well, it is unless you are a value creator.

Darren Wurz [00:08:07]:
Because you know what? Value creators attracted talent. They don’t necessarily have to go out and find it. It comes to them. If you want to have really great superstars in your law firm that you can rely on in order to grow and scale your business, you need to start thinking and communicating like a value creator. And how do you do that? By having a compelling vision. Value creators have a compelling vision, and people are attracted magnetically to that. You know, I talked with a law firm owner a few weeks ago, and he was talking about the difficulties of scaling and growing and potentially selling his business. He said, no one wants to come work for me just so that they can cut me a check and I can go out and play golf.

Darren Wurz [00:08:53]:
You know what? He’s absolutely correct. But what he’s describing is a lifestyle owner mentality. No one wants to come work for you just to support your retirement dream. Who’s going to want to do that? That’s not inspiring. I don’t want to come work for you just to, you know, work, work with your clients and then cut you a check so that you can be off doing your thing. Right. You build a business, but, you know, the owner is off vacationing in Europe. You know, that can happen.

Darren Wurz [00:09:24]:
But the only way that happens is if you have thought higher and bigger than yourself and you’ve actually built a company and built a business that has a vision and that people are excited about. When I hired my lead planner, Jim Coford, the reason I hired him was because of his excitement. I had three candidates, three really top notch candidates that I was looking at. But the key differentiator was that Jim was super, super excited about what we were building, what we were creating here at the lawyer millionaire, creating this really unique, fresh way of doing financial planning just for law firm owners. This innovation and this vision of creating this business, this organization that would really speak to the specific needs and challenges of law firm owners and be effective in helping them build and scale wealth successfully. He was excited about that. He was excited about the vision. He was excited about where the organization was going.

Darren Wurz [00:10:36]:
So that’s, you know, and then if you’re a value creator, you have that compelling vision. You are going to attract top talent. And finally, one really, really big reason why you may want to start adopting a value creation mindset is positioning yourself for a lucrative exit. We just talked about that on the last episode. Exit. Exit planning is good business planning, right? You’re going to have a better business. You’re going to enjoy more flexibility, more time. Ultimately, at the end of the day, you’re going to have more wealth because you’re going to be creating value in an asset that you can one day harvest.

Darren Wurz [00:11:15]:
Are you a lifestyle owner or are you a value creator? There are some consequences to sticking with the lifestyle approach. Like I said, there’s nothing inherently wrong with it. I just want you to know what you could be missing out on. Right. I’ve seen so many law firm owners that live this lifestyle owner approach where all they really had was a glorified job versus having a business. And what ends up happening is there’s nothing left. At the end of the day, when it comes time to retire, you wrap up the remaining work, refer out work to colleagues, turn out the lights, and it’s done. There’s nothing that goes on beyond you.

Darren Wurz [00:12:01]:
You have limited retirement options. There’s only one thing you can do, accrue money. When you’re a value creator and you think in terms of the business, you have many retirement options because you’re building value in a business. The other thing is just missing out on the opportunities, the opportunity to expand, the opportunity to greatly, significantly grow your revenue, grow your profits, and exponentially grow your wealth. That’s what can happen when you think like a value creator. I’ve seen so many examples of where this has gone wrong, where people have not thought early on in terms of value creation and building an asset. So I challenge you today to start thinking and behaving and communicating like a value creator. How do you do that? Okay, let me give you some strategies.

Darren Wurz [00:12:55]:
Number one, you need a compelling vision. That’s key. Okay? Ten years from now, where do you want the business to be now? As lifestyle owners, we’ve often thought about this in terms of ourselves. Okay. Take yourself out of it. Right? You are not a part of the equation. Ten years from now, what do you want this business to look like as an organization? What do you want it to be doing? What do you want it to evolve to? What do you want? What do you want? What kind of impact do you want it to have in your clients lives, in your employees lives? What kind of culture do you want to have? What kind of organization could it look like? Right. And how do you want that to be different from bad examples? We’ve all seen bad examples.

Darren Wurz [00:13:47]:
Law firms that have toxic cultures, how do you want it to look different from that? You’re going to need that compelling vision because everything’s going to flow from that. Get your team involved. This is really big. You’ve got to get the team involved and you’ve got to delegate in order to scale and grow. So many law firm owners like, well, I can’t. I can’t delegate. No one does it like I do. No one can do it as fast as I do it.

Darren Wurz [00:14:13]:
When I try to delegate, they make mistakes. You’ve got to delegate. You’re going to have to figure out how to do it successfully. One of the key things to do, you want your team to be successful, you want your team to be effective. You want your team to do really great work, get them involved in creating the vision and get their buy in to the vision. You’ve got to get their buy in. Two employees can have the same salary, the same job. One can be twice as effective and twice or three times or four times as effective and productive as the other.

Darren Wurz [00:14:55]:
The key thing, the key differentiator oftentimes is motivation. A lot of us have worked for bad bosses. Have you ever worked for a bad boss? Right. Someone who is just horrible boss. It’s demotivating. You end up being not very efficient, not very productive. But when you work for someone who’s truly great and you can buy into their vision and they support you, you go that extra mile, you end up telling them, you know, I did a whole bunch more work than I needed to, just because I knew that this client was really important. You know, I build for my normal billing amount, but I actually put in more time just on my own time because I really wanted this to be great.

Darren Wurz [00:15:47]:
That is how, you know, somebody is, has bought into the vision because they’re, you know, it’s more than compensation for them. As long as they’re being compensated fairly. They’re like, hey, I want to go above and beyond just because I want this to be successful. So that’s, that’s, number two, have a compelling vision. Get the team involved. Number three, shift your mindset. You’re going to have to think a little differently. Think in terms of the organization.

Darren Wurz [00:16:15]:
How can you get people in the organization talking and communicating with each other? How can you build the team? Think in terms of innovation. How can you innovate? How can you be different? Differentiate your business, and you’re going to have to take on more risk, which might require a little bit different attitude. It might require investing in your own business instead of investing in the stock market. What? That’s heresy for a financial advisor to say, well, not for us, because our clients pay us a flat monthly fee, so we’re investment agnostic. I want you to put your dollars where it’s going to be the highest roi for you. And sometimes that is your own business. In your own business, your RoI could be ten, 100 times more than it could be in the stock market. The risk is also higher, but the opportunity is definitely much greater.

Darren Wurz [00:17:11]:
You need to have a plan and you need to execute. That’s the key difference. It’s the e word, execute. You have your compelling vision, you’ve got your team involved, you’re thinking innovatively, you’re reinvesting in the firm. You’ve got your plan together. Now, execute. The difference between successful businesses and unsuccessful businesses, really, is simply that the successful businesses execute on their plans relentlessly. They have a business plan.

Darren Wurz [00:17:40]:
They revisit that business plan on a regular cycle, monthly or quarterly. They know exactly where they’re going and they execute on that vision. That’s going to be the difference. Now, I want to challenge you to go a little bit deeper here, and I want to mention this. I really, really want to point this out. Guess what? You are not unique. Yes, you’re unique. Yes, as a human being, you’re unique.

Darren Wurz [00:18:11]:
But as a law firm owner, you are not unique. And let me explain why, because I can already. I can bet that there are perhaps some excuses that are flowing through your head or some challenges flowing through your head, or for why you can’t do this for, why you can’t think in terms of value creation, why your business can’t scale and can’t grow. Because I’ve heard it. I’ve heard all the excuses, and I’ve heard them a million times. And I’ve also seen law firm owners who have overcome those challenges. I was talking with a law firm owner last week, and he’s like, well, you, you know, my business is different. My law firm is different from everybody’s.

Darren Wurz [00:18:56]:
I can’t really scale and grow. You know, my clients are very unique. They’re very wealthy. They only want to work with me. I’ve tried to have other attorneys come in and take over the work, and when they did, they messed it up totally. And then the client came to me and said, you know, just let us know if you’re going to offload us to somebody else, because we’re going to leave. We only want to work with you. I can’t delegate.

Darren Wurz [00:19:20]:
I can’t find good employees. I can’t scale. My clients need me. Guess what? Everybody faces those same problems, and not just law firms, but businesses in general. Every small business has some form of those same problems. And I guarantee you there is somebody who has a very, very similar law firm or business who has managed and figured out how to overcome those issues. The clients I delegate and the attorney messes up. Well, did you check in regularly? Did you set benchmarks and goals? Did you have an effective strategy? Or did you just offload and say, here, do this? That’s never going to be effective.

Darren Wurz [00:20:07]:
Did you communicate? Did you teach? There is a way to do this, and there are so many people who have done it very successfully. But I’ve heard it all, yada, yada, yada. I’ve heard it before a thousand times from a thousand people, excuses for why people can’t grow and can’t delegate and can’t scale. But I’m telling you, there’s a way to do it. And maybe you didn’t. Maybe it’s not that your firm is unique. Maybe it’s that you need to acquire some new skills, some new training, right? You’re new at this. We’re all new at this, right? As a business owner, we’re all doing this for the first time.

Darren Wurz [00:20:52]:
No one expects you to be an expert. Enlist the help of other people to help you. And there’s a great episode. You can go back and listen to Brian Lebovik’s episode. We interviewed him, Lebovic law group. He’s a tremendous example of successful scaling, he took his firm and slowly grew with it in terms of being a lawyer, to being a manager, to being a CEO, and then finally, now shifting more into ownership role and having a CEO in place that manages things. I mean, fantastic. His type of practice, you wouldn’t think that that would be easily doable.

Darren Wurz [00:21:34]:
But the key thing is culture. I know this because I’ve talked to Brian multiple times and I have seen, like, what he has done. He has developed this amazing team culture. It’s strong, it’s palpable, it’s powerful, and it’s a place where people want to work. And so as a result, clients see that, too. Clients experience that, too. And so it’s not just about Brian, but it’s about the firm. It’s about what he’s created.

Darren Wurz [00:22:05]:
And you can do the same exact thing. So how do you get started? Well, here’s what you can do today. Create a compelling vision. That’s where you can start. Start with the vision. The vision is going to drive everything. And remember, it’s not about you, it’s about the organization. So one way you can really be effective in making it not about you is get your team involved.

Darren Wurz [00:22:29]:
Where does the team want the organization to go? And you’ve got to be open. You’ve got to be open to hearing what they’re saying. You’ve got to be open to feedback. That’s critical. You got to be open to new ways of doing things. Set some big goals. That vision is going to be an inspiration for you. Think big.

Darren Wurz [00:22:49]:
Set biggest, big goals for your future. Start with that vision, though. That’s where you can start today. Go back to when you’re back at your law office, back at your desk. You know, dig out your old vision, if you have one. Get it up to date. Change it. Reflect on it.

Darren Wurz [00:23:02]:
Get the team together. Have a team meeting. Say, let’s talk. We want to talk about where we want this business to be ten years from now. Do that today. So I want to challenge you to take a hard look at your law firm. Right. In addition to working on your vision.

Darren Wurz [00:23:18]:
Just take a very honest look at your law firm today and ask yourself this question. Are you setting yourself up for long term growth and success, or are you just coasting along? Now is the time to shift your mindset. Start thinking like a value creator, and take your firm to the next level. Now, we have some resources to help you get started. You can visit our business planning page on our website. I’m going to put the link. The link is down there. In the show notes go right down right now in the show notes and you can click the link to our business planning page.

Darren Wurz [00:23:53]:
On our website we have a free business health assessment. You take that assessment and it’s going to tell you the key areas that you can work on to start moving forward as a value creator. You can also download our free business planning e-book, packed with strategies to help you build a more valuable, scalable law firm. Well, this has been the Lawyer millionaire podcast. I’m your host, Darren Wurz, here to help you expand your business, maximize your profits, and grow your wealth. Thank you so much for listening. Come back and join me next time.