Chad Dudley knows a thing or two about making good firms great. CEO of CJ Advertising, for 25 years he has helped personal injury brands dominate their space. Currently, he represents over 45 Personal Injury brands across the country. His guidance is not theoretical. His firm, Dudley DeBosier Injury Attorneys was built from the ground up. Today they employ 60 attorneys and over 220 staff – helping thousands across the state of Louisiana in the process.
Today, Chad explains why the biggest bottleneck at a growing firm is the owner and how to “let go to grow”. Every successful firm is built on the strengths of leadership – not their weaknesses or what they hate doing. He delves into the importance of identifying limiting beliefs surrounding firm growth and the mechanics of delegating with accountability.
- Winning is hard. To be better than the day before, go out and take ownership of your development. Don’t wait for it to happen to you.
- Get your house in order. Not just for profits today but to attract potential buyers down the line.
- Make a choice. By design or by neglect, every firm has a culture. Bring leadership together often to evaluate the direction of the firm.
Maria Monroy, LawRank, and Chad Dudley
If you’re going to do something, go all out.
Maria Monroy (00:05):
If you want to grow, you have to delegate.
And as you grow, you become a bottleneck, and you restrict the flow of information at your firm-
Maria Monroy (00:14):
You have to enjoy what you’re doing. If you don’t enjoy it, what’s the point?
And let’s ask ourselves, would we enthusiastically rehire every single person on this list? Let’s imitate rather than unnecessarily innovate. That uncomfortable space is where you grow as a person, you develop as a person and that’s where the best stuff happens.
Maria Monroy (00:38):
In law school, attorneys are taught to challenge everything, tear things apart, break them down. But the qualities that make lawyers great are some of the worst for running a business. At every stage, running a business and practicing law can be overwhelming. Oh, and what happens when you try to add life and family, it can all feel nearly impossible, but you aren’t in this alone.
Welcome to Tip the Scales, where we get personal about what it really takes to run a law firm from marketing to manifestation. I’m Maria Monroy, co-founder and president of LawRank. A leading SEO agency for ambitious law firms. Each week, we hear from the industry leaders on what it really takes to run a law firm, because success lies in the balance of life and law. We’re here to help you tip the scales.
Today, we get into why law firms break when they grow and what to do about it. Getting past the fear and building a practice that you dream about. How resistance to change holds us back, and why you need to get your house in order today so you can sell your firm in the future. Here to talk with me about all these things is Chad Dudley. He has a resume that is longer than my arm, so I’ll let him tell it.
Hi, I’m Chad Dudley, the managing partner of Dudley DeBosier Injury Lawyers.
Maria Monroy (02:07):
Opened since 2009, his firm has 60 attorneys, 225 employees, and has represented thousands of people in Louisiana.
In addition to that, I’m the CEO of CJ Advertising , we’re an advertising agency that only represents personal injury firms, and we do all of their marketing and advertising through whether it’s TV, online, billboards, print, database marketing, and we represent about 45 brands throughout the country. In addition to that, back in 2009, I started Vista Consulting with Tim McKey for many, many years. Probably, I’ve consulted with over 200 law firms, different planner firms, all different sizes. And in 2018 I got out of Vista Consulting when we purchased CJ Advertising , but still do a little bit of consulting here and there on a project basis. That’s my background. I love talking about personal injury firms. I love talking about how we can help our clients, how we can build better firms, and how we can improve what we do.
Maria Monroy (03:11):
That’s amazing. I did not know until the production research. I didn’t know you had anything to do with Vista.
Back in 2008 or so, I was the COO of a law firm and we were using Needles at the time. My background, I had a little bit of a background in database design management. And I built a dashboard on top of Needles, and some other firms saw it, they liked it, asked for some help to implement it. My first client happened, and then reached out to Tim McKey, who is a friend of mine. He was a business consultant, and asked him if he wanted to work together to deliver consulting to personal injury law firms. Back then in the day, pretty much nobody was doing consulting in the personal injury space, it was crazy. Dashboards weren’t-
Maria Monroy (04:04):
So you started this trend.
I don’t know. I don’t know about-
Maria Monroy (04:07):
You are to blame.
I don’t know about started it or whatever, but back then, there was nobody in the marketplace. It was a totally new concept. Dashboards wasn’t even a thing. People were kind of like, well, what are we looking for? There’s so many different metrics that weren’t even on the radar of the industry. And we just started working with firms and creating a bunch of things, and it really caught fire. We had a blast, it grew like crazy. And Tim McKey’s one of my closest friends, we still talk all the time today. I had just gotten out because we had purchased cj and there was just too much going on. But yeah, so that was, gosh, 2008, 2009. And Vista is going strong as ever, killing it. And it’s just cool to see it. Now, there’s people everywhere in that space.
Maria Monroy (04:56):
There is. Now it’s a trend. It’s definitely a trend right now. But that is awesome, congrats. So tell me, why are you the way that you are? Is there a special sauce for ambition?
I’ve always been competitive. I grew up in Honolulu, Hawaii. I started playing tennis at the age of seven, and started quickly playing competitive tennis shortly thereafter. Started off playing city tournaments, then up to state tournaments, then regional tournaments, then national, then international. And at the age of about 14, I had a scholarship to go to a tennis academy in Florida, it was called Voluntaries back then. Today it’s called IMG Academy. And I did nothing but play competitive tennis.
I wanted to play pro, played some lower level pro tournaments, wasn’t good enough, decided to go to college. I had a scholarship to play tennis for LSU, had a great experience, very strong team. Top 10, top 20 in the country nationally. And then got out. And I carried a lot of those competitive instincts, and discipline, and all the stuff that it takes to play high level college sports and applied it to… I just was used to operating in that mindset. So when I came to practicing law, I just always looked at it like that. If you’re going to do something, do it to the best of your ability. If you’re going to do something, go all out. And that’s how I approach everything that I do.
Maria Monroy (06:27):
I find it fascinating because I’ve never played any sports or anything like that. But it seems like there is a trend where people that played sports, there’s a lot that can be learned from it, even just failing, right? You lose, and then it’s like, oh, time to get back up. What do you think you learned that you can apply?
There’s a discipline to, you get up at a certain hour and you work out before many people started their day. And then you go and you go throughout your day. And then you just, you’re putting in the extra repetitions, the extra effort. You take ownership of your development and going, okay, if I want to be good at this, I’m not going to wait for it to happen to me. I’m going to go find a coach, I’m going to go find someone that knows what they’re doing, and have them coach me, teach me and accelerate my learning process. And that’s a concept that we founded Vista on. And that consulting is the mindset of going, okay, I just work a certain number of hours, I work with a certain level of intensity.
All those things that were part of being a college athlete, you just apply and you learn the stuff. You learn about teamwork, playing on a team, and it’s not about you, it’s about the team and fulfilling your obligations to the team and not letting them down, and picking each other up when one another falls down. And so there’s a ton of different life lessons that you learn from playing sports. And there’s obviously other channels to go get those lessons, but that’s a great healthy space to learn a lot of great stuff about life and about business.
Maria Monroy (08:01):
All I can think of is my children. I’m like okay, I am enrolling them in everything tomorrow. And it’s funny, because you wonder what came first, the chicken or the egg, right? And I have two sons that are two years apart. And one is super into soccer, and all he wants to do is be a goalie and he’s eight, and he’s obsessed. But he also has that more of that personality of that grit, that I’m not going to give up, that teamwork. It’s just interesting because as I’m talking to you now, I’m like, well, but maybe it’s just nature.
Yes and no. And I think that whether it’s we’re bringing new people under our team, you ask yourselves, okay, are they just born a certain way or is there something that you can develop in them? And with kids, I think that absolutely they have natural inclinations, and I think you can facilitate them. I was looking for something to pour that competitive energy into, and had my parents maybe not provided a channel for that to happen, who knows where that goes? It goes somewhere else or maybe it goes to a less healthy space. But I think you can encourage it.
One thing I learned in watching people grow up and play sports, and kids and all this kind of stuff is that, I think this is also true with people you bring on board with your team is like, with kids, you can force them. As a parent, you can almost force them to be good at almost anything up until the age of about 12. You can make them go to practice, you can make them get up early, you can make them eat right, and do all these things.
But at some point, the rubber meets the road. And if they don’t want to do it on their own, if they don’t have this internal thing in them that goes, I want to do this, I love this, I want to be great at this, then it’s going to fail at some point, and it trails off, and they go find their own, hey, look, I don’t want to do this. And you see that so often.
And I think that with our team members, at our firm, we’re looking for people that have that internal drive, or they’re self-driven. They’re self-motivated to be great at what they do and to do good things. And it’s not because, do they want to get paid? Absolutely. Do they want to get treated right at the office? Absolutely. Do they want to feel respected? Absolutely.
But those things are less of the driving force versus their internal motivation just to be great at what they do. And I think that’s a common thing. You see that in athletes because they’re just driven. But we look for that in anyone that we bring on board with our team. Do they push themselves to be the best?
Maria Monroy (10:29):
Yeah, we’re similar. We only keep A players. If you want to work at LawRank, you have to be an A player.
When we were starting the firm in 2009, in the early years, we asked ourselves, look, let’s get every single person that works at our office and let’s ask ourselves, would we enthusiastically rehire every single person on this list? Is our receptionist-
Maria Monroy (10:55):
That’s a great question.
And not like, if you have to think about it, that’s not enthusiastic. Cameron Herold, who wrote the book Double Double, challenged us with that proposition. And the answer was, there’s a bunch of people that we wouldn’t. And we repeated that exercise every single quarter until we got the team that we needed. And it was such a huge deal, because so many times we just put off that conversation. But to this day, we do a different version of it. But I think we all got to ask ourselves… And that doesn’t mean if you say no, you go fire them tomorrow. But you at least initiate the conversation, this isn’t working out, you know what I mean? Yeah.
And so that’s a huge part of building your culture. Because without your team, without a bunch of A players, you can’t pull this cool stuff off. You can’t have great client service, you can’t deliver great product, you can’t deliver great legal services. And that’s not the firm we want to be. So we constantly got to ask ourselves, do we have the right team?
Maria Monroy (11:52):
Tell me, I know you talk a lot about letting go to grow. So if we talk a little bit about delegation, what was the first moment that you realized, if I want to grow, I have to be able to delegate?
Again, so having worked with so many law firms over the years, and some have been one attorney solo practice firms. Other firms, you got three, 400 people and tons of attorneys in multiple states, and then everything in between, you see these patterns. And the first thing I’ve noticed is that, you can probably apply this to most businesses, but I’m going to talk about law firms because I’ve seen it specifically there.
Things break every time you double. So when you have 10 employees, the systems and processes, and things, how you run the firm, how you keep track of what everyone’s doing, a lot of that stuff breaks when you go to 20 people. And then it breaks again when you go to 40 people, and then it breaks again when you go to 80, and then it breaks again at 160 and then 320.
And so, the other thing that I’ve learned is the solo owner can almost keep track of everything up until about that 40 person mark. They can kind of know everything that’s going on in the firm. They can kind of keep their hand in everything. I’m not saying well, but they can kind of still barely hold on. And if you have multiple partners, that number might be a little bit higher. But at some point around that 40 mark, you got to start letting go.
Look, it’s natural. In a startup, you wear a bunch of hats, you’re the lead attorney, you’re the operations guy, you’re the marketing guy. You deal with the finance guy on how to handle the money, you make all these decisions, everything comes through you. You might even make coffee, fix a printer, plug in the lap, whatever. You have to do everything. And as you grow, you got to let go of the stuff because you become a bottleneck, and you restrict the flow of information at your firm, and so you got to start letting go.
When I’m working with owners and leadership, I go, okay, there’s four things that it takes to run a firm. You got to get cases in the door, you got to manage your money right. Then you got to provide great legal services, call that legal ops, and then you got to support the delivery of those legal services, I call that operations. Now, most owners will look at those four things and there’s one that they go, I love doing that. I want to handle cases, I want to do the marketing. They’ll pick one and they feel energized by it, they’re excited by it. And then they’ll look at other ones and go, if I have to do that again, I want to jump off a high building.
And I say, well, outsource. Find someone who’s really good at the things that you dread doing. That’s the first stage of starting to let go, and walk them through that. And go, okay, don’t. This firm, any firm that I’ve seen that’s been great, it is not built on the weaknesses of the owners, it’s not built on the weaknesses of the leadership. It’s not built on the things that they hate doing and don’t do well. It’s built on the things that they love doing, that they dive into and just get fired up about doing.
And so for my partners and I, they love trying cases. So we try to create an environment where they could focus on just trying cases. I like running law firms. They created an environment for me where I can spend my time running a law firm. I see so many firms that are stuck in these various stages of growth because you have an owner that’s gone like, I hate operations, but they keep themselves in it and won’t let go of it. And it’s not fun for them, it’s not fun for their team, it’s not great for their firm. Their clients suffer, but they’re just afraid to let go.
Maria Monroy (15:18):
And you hit the nail on the head though, you just said it, they’re afraid. So what can they do to get past that fear? And where do you think that fear stems from? Is it a control thing, some limiting beliefs? What do you think it is?
There’s absolutely some limiting beliefs. I’ll speak at conferences and I’ll talk, and I’ll have people come up to me and go, “Hey, look, that’s great that you guys have 200 plus employees and 60 attorneys, but I don’t want that firm. I don’t want to build my firm.” And I’m like, maybe that might be an answer, but is it just because you’re like, you want to… Is that your restriction because you have an impression of what that firm looks like? Or is it because you know what that firm looks like and you just don’t want that?
And I’ve seen both, but you really got to ask yourself, do I have some misperceptions about what a big firm looks like? And you have to be comfortable in saying, okay, I used to do these 10 things. I used to be the person, you have to come to me for everything, and I’m so important to this firm. And get over that, and be like… no. Focus on this one thing that you do well, and trust that you work with a bunch of smart people who care about your clients, and care about the firm, and they’re going to do awesome. And you’re going to build something better, just get over your ego.
Sometimes it’s a little bit of just not knowing. What if I let go and I can’t get it back? What if they run it into the ground? And there’s responsible ways to go about this exercise. I’m in Hawaii right now with my boys, and there’s all of these different cliffs and bridges you can jump off of and go into the water. And when you pull up to one, and there’s nobody there, you’re like, this looks like a good place to jump. But you don’t know, are there rocks in there? Is it shallow over there? Am I going to kill myself over here? And you go through all these mental exercises. And sometimes you might just walk away and go, hey, look, I don’t know enough about this, I’m just going to forget it.
Versus, you walk up to a spot and there’s a bunch of people jumping in, and they’re like, hey, jump in that spot right there. That’s where the water meets, it’s 30 feet deep, you’ll be fine. You see people jump, and you’re like, I got this, I’m no longer afraid. I’ll just go do it because I see other people doing it, they’re coaching me how to do it. And that’s kind of what you run into with letting go of your law firm. People are just afraid. They’re just wondering. They think there’s rocks in the water, they don’t know how deep it is. They don’t know if they jump they’re going to break a leg, and so they just walk away and don’t do it, and miss out on a pretty cool experience.
Maria Monroy (17:46):
Any water analogy automatically gives me anxiety, just so you know. Sat through that anxiety right there. I’m super afraid of water, but I mean I’ll go in but I’m still afraid. I think if you want to grow, you have to delegate. It’s just like common sense.
A 100%. That can go a couple of different ways. When I’ll work with firms, you got delegation at the macro level and you got it at the micro level. At the micro level, it’s like, hey, can you do this? Hey, can you do that? Hey, get back to me on that, et cetera, et cetera. Get it. That’s more mechanical. Then there’s delegation at the macro level going, okay, for us to be the firm that we want to be, we have to get these four projects right in the next quarter. And being able to turn that over.
Now, to do that, what we’ll typically do is, look, make sure we all understand why are we doing this? What do we think that is going to happen if we get this right? Are we all in agreement that this is the way to do it? The second will be like, what is a win? Are we clear on what a win is for the next three months? Where are we trying to get to, is it super objective? Will we be able to say at the end of this month, yes or no that we got to these things?
We’ll get clarity on who owns it, there’s only one person that owns it. Even though there might be multiple people that work on it, we got one person that approves it. The person that’s going to sign off and say this is done in a way that it needs to be done. And then the last thing is making sure that we follow up strong, meaning, so many firms I work with go, this next quarter we’re going to do this thing. And then maybe it’s a system or a process. They get it up and running, it runs for maybe a few months, and then it dies off because they don’t find a way to integrate it into their ongoing life of the firm.
And what I mean by that is, call it partner visibility. How is the partner going to know that this system, or process, or thing is still living and breathing? Are they going to get an update each week, each month, each quarter? What is the time span or frequency with which they want to know it’s still alive? Who’s going to make sure? And so there’s some techniques there that are the difference between executing at a sort of mediocre level, versus executing in a way that you don’t have to come back three months from now, and breathe life into something that you finished the prior quarter.
And so those are important things. The other thing that I think in terms of delegation is, I recommend that firms have what I would call a roles and responsibility document. It’s actually a spreadsheet. It lists, okay, for every core system, process, metric at the firm, who owns it, why is it important, what is the expectation? Is there a standard that we’re trying to implement for this thing? And then you pick the way that they’re going to report on. Is it a daily, weekly, monthly, quarterly thing? And there’s clarity on who owns what and there’s no…
Or it could be something as simple as, who makes the real estate decisions at the office? We have three partners. Well, we designate James, James is the one here, we knows that he owns it. Here’s the expectation of what that looks like. There’s a person on the executive team that reports to him that really handles it. But there’s a flow for all these things so that there’s clarity on ownership and expectations. And at the macro level, I think that’s important for delegation.
Maria Monroy (20:48):
What was the hardest thing for you to let go of, to have delegated?
Originally, it was handling cases. Because I actually enjoyed handling cases, and I got to a crossroads in my career where I was like, okay, do I want to continue handling cases and representing clients, or do I focus on the management side? And it felt weird to let go of the handling of files. Probably more recently as we’ve got to a certain size, letting go of I guess running the executive team where we have a CEO, awesome, super great guy, Merten Rice, and we have an incredible executive team. They’re all superstars.
And letting go on a sort of weekly basis like [inaudible 00:21:33]. We meet once a quarter, and we go, hey, here’s the objectives for the quarter, here’s what we’re trying to do. I’m always available to talk, hash through things, find solutions. But for the most part, giving them the freedom to go take some swings, try some things and succeed, run into obstacles, figure it out, but with coaching.
And you want to get in and just… but then, you can’t at a certain size of a firm, you can’t have your hands in everything. And so that’s been probably the most recent challenge. But it’s an ongoing thing. You’re constantly trying to grow with your business if your business is growing. If we ever get to a size where we’re 500 people or a 1,000, I’ll have to evolve as well. And I’ll have to challenge myself to keep learning on how to operate at an effective level at that size of a firm. And so it’s ongoing, two years from now, who knows what it’ll be? I’m sure it’ll be something-
Maria Monroy (22:20):
Does it get easier over time?
Yeah, I think it’s got easier because you trust the process. You’ve jumped off the bridge before. And the thing that we always ask ourselves is going, whatever it is that we’re trying to do, we’re trying to grow the firm, we’re trying to double the size of the firm. We’re trying to get better results for our clients. Whatever it is that we’re doing, we ask ourselves, has this ever been done in the history of the world before? And if so, can we go to that person and ask them how they did it, and at least start there.
Let’s imitate rather than unnecessarily innovate. I know that it’s not a plug and play, but we’ll go learn from somebody that’s done something we’re trying to do. Whether it’s another firm, whether it’s a consultant, whether it’s a coach, whether it’s a conference. Let’s start there, and then adapt our thing to it.
And that’s accelerated our learning curve. Even as a consultant, we’ve always had third parties come in and help us get to where we want to go. And so to answer your question, does it get easier? It gets easier in the sense when you just trust the process. A good consultant will come in and say, hey, tell you some things that you should do that is counterintuitive. It might feel a little uncomfortable because if it were intuitive or comfortable, you would’ve done it on your own already.
And so to answer your question, does it get easier? No, it’s always a little challenging, but you trust the process. You’re like, all right, I picked the right person that knows what they’re doing. For the love of God, be careful in the selection. Because if you pick the wrong person and you trust them, that sends you down a whole bad path. But if you pick the right person that knows what they’re doing and knows their craft, and they tell you to do something, it should be a little bit uncomfortable. And you trust that uncomfortableness knowing that they’re telling you to do something that is going to get you there. And so we trust that process, and you get used to trusting that process.
Maria Monroy (24:06):
You mentioned doing things that are uncomfortable. I’m a big fan of doing things that are uncomfortable or that you’re afraid of. And we can go back to sports because I mean, it’s like, I go to the gym every morning and it’s sometimes uncomfortable. You’re lifting weights, it’s difficult, it hurts. Do you also think that tennis helped you there?
When you’re practicing, you think about, I’m going to eventually have a match where I could play my best and I may or may not win, and that’s scary. You walk in the court, it’s a big match, it’s an important match, and you’re nervous. Usually, nervous up until the first ball is hit. And then all of a sudden the nerves would always go. And there’s a fearful component of going into that situation. There’s a fearful component in doing a lot of things.
When I was in my second year of law school, for whatever crazy reason, I said, “You know what? Let me go do an exchange program.” I went and I did a semester of law school in France. I took all my law school courses in French. I thought I spoke French. I got there and realized I spoke conversational French. I did not speak law school French.
And I didn’t understand anything for two months. And it was scary, and it was fearful, but I just cranked through it. I learned the language and I passed my courses, and that was scary. But I look back, and that was a crazy awesome experience, and it was uncomfortable. And you go through these things and you get confidence. I think about my first case as a first year attorney, they put me on this toxic tort case up in North Louisiana, and we had 4,000 plaintiffs. And I was in charge of helping complete the proof of claim forms, and meeting with all these individuals. And it was scary, it was uncomfortable, but you power through it and you learn all these crazy awesome skills that help you for the next gig. And so yeah, I think that uncomfortable space is where you grow as a person. That’s where the best stuff happens. So yes, get out of your comfort zone.
Maria Monroy (25:56):
Lean into your fear, right? It’s telling you something, and it’s okay to be uncomfortable. As a business owner, I learned this the hard way. You said that when you want to accomplish something, you see if it’s been done before, and then you want to learn from whoever’s done that. And I’ve learned that the hard way, where one day I realized, wow, was I arrogant? There’s so much information, I didn’t have to try to figure this thing out. And there are also so many people that are willing to help, and there’s such a community in the legal space. And I think a lot of people are not taking advantage of that.
You are so crazily right. I mean, I can tell you, I try to have the spirit of a continual learner, and I’m always trying to learn. And I can tell you I’ve worked with firms that are kick-ass and incredible, and you’re drinking from a fire hose. There’s so many good things I’m learning as I am teaching. There’s other firms that are not as well run at that moment, I still learn from those guys because I believe I have a spirit of I’m going to learn.
I can learn from everybody in every situation. There’s times when I’ve spoken at conferences or I’ve worked with firms, and I’m trying to tell them, hey, look, here’s what I’m seeing. Here’s what I’ve seen work at other firms. Here’s what works here in my opinion. And they’re so caught up in, we’re doing that, we’re doing that, we’re already doing it. I’m like, “No, you’re not quite doing it.” They’re so adverse to saying you know what, yes, I think I can do it differently, that they miss the opportunity. And I think it’s so easy for any of us to go through that going, hey, I’m doing it. I got this. I know what you’re telling me, but you don’t understand our situation, that they miss the opportunity to learn.
Maria Monroy (27:46):
It’s ridiculous. Every single time I talk to a law firm, and I bring them intake, they’re like, “Oh no, we’re great at intake.” And I’m like, “Okay.” So I told this client once, “All right, well, I’m going to secret shop you.” And he was so [inaudible 00:28:00], “Go for it.” Okay, 30 minutes later I get an email, abort mission was the title. And it said, “Do not secret shop us. There is room for improvement. I stand corrected. Thank you very much. I’ll let you know when you can secret shop.” And I’m like, of course, it’s not a set and forget, intake is so important. It literally drives me insane, and it probably drives you insane.
Oh, a 100%. Intake is the signature or area where this happens so much, because when you go… If someone were to say, hey… When I go work with firms or try and get them really kicking, there’s two spots. We’ll look at intake, and then we’ll look at where are the best cases in the building? That’s a whole nother conversation. But on the intake side, will go… They all say it. Everyone says we’re great, we got it covered. It’s not that bad. Then you start breaking it down from the mechanics of it. A few years ago, two good friends of mine, separate firms, they both said, “Hey, look, intake’s great.” And I said, “Look, I will look at it for free, just give me a percentage of whatever I find.” They’re like, “Ah, we’re joking.” But they didn’t. But on one firm, they had a gap in… Just basically, there’s a gap in the data of how they’re tracking a certain category of cases. We were able to get them an additional 80 cases per month.
Maria Monroy (29:16):
So you took 80 cases times, say you have a 75% closing fee rate.
Maria Monroy (29:21):
Did they send you a really nice gift? I would’ve sent you a really nice gift.
They gave me a… Yes, they were a very, very good friend. But you think about that, so 80 cases, say 75% of them closed with a fee, that’s 60 cases. Even at low $10,000 average closed fee. You’re talking about a chunk of money over a one-year span. Other firm, different firms, similar result. They didn’t have as many cases coming through, so it was a little bit… But still, really well run firms, really great firms. Just you see a gap in the data, or a few things, a few corrections here and there. And it’s a big, big deal. Now that’s intake. There’s so many different parts of a firm that these little tweaks can just result in better client service, better results for your clients, people happier. And yeah, they’re all over the place.
Maria Monroy (30:10):
Why do you think people or some people are not open to, I guess change? And people get very defensive, so I…
Okay, this is going to possibly be a controversial answer, but this is the truth. They’re just making too much money. In most industry, the general rule is that if an industry has more than 15% net profit, it attracts competition, then it will beat it down until it gets to a 15% net profit or lower. And then it kind of settles, right? And in our profession, people are able to hit much higher net profit ranges because we’re basically in a protected environment. You have to be an attorney to own a law firm, and it keeps a lot of potential competitors out.
You can have some nice healthy net profit numbers, and not fix a lot of this stuff. And you can get by, you can do pretty good and not fix this stuff, and not grow. Now, there’s going to be a reckoning because that’s all about to change once you get into the public ownership of law firms. And you have these new competitors coming in, that if you are inefficient, if you’re doing these things haphazardly, if you’re not paying attention, it’s going to be much, much tougher.
And so now’s the time to get these things right. Now’s the time to get your house in order for a variety of reasons. If you want to compete, you got to get your house in order. Are you considering selling your firm in this maybe potentially new marketplace that’s going to appear in the next five to 10 years? Guess what, they’re going to want to buy firms that are doing this stuff correctly, they don’t want to buy a firm that is just poorly run. And so whatever your strategy is, now is the time to get this stuff, get your house in order.
Maria Monroy (31:52):
Absolutely. And you’ve bought a business before. I’ve never bought a business, but if I were to buy a business, I would rather buy a business that didn’t have great marketing, but had great results and great processes, that I can just go and build an awesome marketing or sales department than the other way around, any day.
Oh yeah. I mean, you look at Warren Buffett, Charlie Munger. Charlie Munger who’s his right hand man, wrote some really crazy awesome books. But one of the things, they go, “Well, do you think that it makes more sense to buy a very low performing business and then turn it around and make this big profit?” And they’re like, “Absolutely not. We want to buy the best performing business with great people, great systems, great processes, and we’re going to make it better, but we have a chance of making it better with those things present. We have no chance if we buy a low performing business at a discount price, no way. We’ve done that in the past, we’ll never do it again.” And I agree. I said, the firms that are the best run will be the most attractive if you do want to sell your firm.
Maria Monroy (33:00):
Absolutely. What are some tools that you think are awesome for setting up processes for law firms? What would you recommend a firm have in place?
There’s some core things like, okay, intake is just a whole animal in and of its own. It’s got to be from… there’s so much in that category. Then you got your executive team. How good is your firm at creating a culture, hiring great people, retaining great people, training great people? How good is that team at working together and setting objectives, and executing on them in a way that is effective?
There’s a general rule that I would say 8% of your team should know everything about your firm. And what I mean by that is, if you have a 100 people, there should be eight people, I’ll include the partners in it, that have access to every number, have access to who’s getting hired, fired, what everyone makes. They know your budgets, nothing is off limits. And the reason I say that is because we expect our team to make decisions as good as us with less information than us. And that’s not cool, right?
That’s not, hey, go make great decisions, but I’m going to give you half the information I have at my disposal. Now, when you’re a smaller firm, back to when you’re a 10-person firm and you’re the owner, you’re 10% of the culture, you’re 10% of the knowledge, you’re 10% of the… And you can get away with that. When you go to 20, now you’re 5% of the team, you get diluted and you need these key people.
And the number is about 8% is what I’ve seen with working with firms. And they need to be culture ambassadors. They need to know all the information. They need to be the same mindset. So that’s a core piece with the executive team. Then you got the case management side. And when I’m working with a firm, there’s a whole nother podcast about, okay, what do you do on the case management side to make sure you have your core systems and processes together?
I’m a big proponent of starting the concept of going, okay, take an inventory of your attorneys. Can we all sit in a room and go, let’s assess the skill sets of our attorneys? We have this attorney over here that has been successfully first chair at a bunch of multimillion-dollar jury trials. And we got this attorney here that just got out of law school, and it’s his first job, and it’s first time working at personal injury. Can we just talk about, these are two different skill sets and they should get different type of cases?
And as simple as that concept sounds, there’s so many firms that don’t want to have that conversation. They just want to kind of want to wink and nod, and hope everyone understands. There’s that piece of it. There’s how you rank your cases, possibly one of the most important things that a firm does. It sounds simplistic. It is the, you said intake. Everyone says, I got this, I got this. We have no problems.
Maria Monroy (35:51):
You don’t got it. Sorry.
The other hidden killer at firms is how they rank cases. Every firm goes, I know how to rank cases. Our case ranking systems are airtight, they all suck. You can make so many mistakes, there’s a way to do it right, and it’s so critically important. And then you can go on and on. But those are some of the key elements that we start off with when, again, working with a firm. And again, that roles and responsibility document. As you create a system, as you create a process, there should be an owner that’s in writing. Expectation set. This process that we created, who owns intake, who owns your chase calls? Who owns making sure that the first 90 days are handled right with a client? And all these things can kind of break it down, but that’s the start. And then you get to more elaborate and complex systems and processes.
Maria Monroy (36:42):
To me, some of the stuff is crazy because I’ve spoken to firms that don’t have a case management software. I’ve spoken to firms that different lawyers are using different things, and I’m just like, “Wait, you’re not all on the same system?” And they’re like, “No.” I’ve spoken to firms that no one owns intake, no one. And then we have one client that’s like, “Oh, my managing partner owns intake.” And I was like, “You’re amazing, that’s great. Someone owns it.” And oh, and that’s his only job. Only job. And this is a lawyer, one of the partners is to own intake. And I’m just like, okay, this is the perfect client.
Yeah. No, it’s great. That’s great. That’s what we’re talking about. And you go through each of these things, and just making sure that someone owns it, and that there’s clarity on that. None of this stuff happens overnight. This stuff takes time and it-
Maria Monroy (37:30):
It’s hard, and it’s a bunch of… It’s being consistently disciplined over a period of time, and you just chip away, chip away, chip away. Now, it’s funny because we talk about, gosh, 13 years ago we started the firm, and it took us… There’s things that it took us two years to get right, that we can coach a firm on how to do it in three months now, because we’re like, we know all the traps, here’s how you do it.
And that’s back to if you’re trying to do something, go talk to somebody that knows what they’re doing and you can save so much time, effort, and energy in applying it to your firm. And that’s good. It makes us happy. We have firms that we talk to, share information with that knock out stuff that, again, took us years and years and they knock out in one year or six months. And that’s awesome.
Maria Monroy (38:14):
That is awesome. Now, you mentioned culture. How do you make sure that as a law firm owner, you have a major impact on your firm’s culture?
It gets tricky as you get bigger. Because I talked about, you’re diluted, right? As you have multiple offices in it, as you have… And back to that 8% number, do you have 8% of your team that is all-in on culture, all-in on the firm at a minimum? And at least, that they’re spreading the word. They’re impacting people, they’re sharing what the firm is about. And so to answer your question, yes, we’re trying to impact that group, and that group’s trying to impact the different corners and places of the firm. That’s one part of it.
The other part of it is, when a firm, my good friend who we bought cj from, Arnie Malham, wrote a book on culture and he would say, “Culture is like if you ever walk into somebody’s house, everyone’s house has a smell. There’s a smell that is, right? And for some houses it’s by design. They have candles, and they have scented stuff, and they got potpourri and all this kind of stuff, it’s by design. And then other houses, it’s by neglect. They just left some chili out on the stove for too long, and the whole house smells like chili.” And he said, “Look, your culture at your firm is the same way, you got firms that have it, you have a culture.”
Maria Monroy (39:36):
But how do you establish that culture, and how do you maintain it?
There’s a couple of things. One, I think the partners sit down and go, what do we want this firm to be about? Now, it’s got to be in line with how the partners are, don’t try to be something that you’re not, be honest. And you ask yourselves, what is the firm that we’re trying to build? And then we talk to our key people. Who are the people at our office that we believe in, and they get it? They live and breathe what we’re about. And we talk to them and we ask, and we think to ourselves, what qualities do they have that make us say that? And for us, we narrowed it down to, there’s six core things.
We go, okay, we’re going to take care of our team. Taking care of our team is an absolute core component of what we are. We’re going to take care of our clients. We’re going to make sure that we do everything we can to get them the best results that they deserve. Number three, we’re going to do great work. We’re going to take pride, we don’t want to be half-ass lawyers. We want to take pride in our craft, continually learn, continually improve what we do for our clients. And so we’re going to be great at what we do.
We want to give back to the places in the community, to our firm, to the people around us, to our clients. We want to give back to other law firms and share, and just have a spirit of open, share, give back. We want to have fun. It’s not worth it if the… If the journey’s not fun, it’s not worth it to us. And so we ask ourselves, are we enjoying the ride? Are we having a good time? And then the last thing is, do what’s right, not what’s easy. There’s so many times that it would be easier to just, hey, let’s wrap this case up. It’s pretty good. It’s okay, but no, let’s push it and do full justice, get the best result we can. If that means trying the case, we’re going to try the case. If that means getting an excess judgment, and then going down that path and collecting on that. That’s what we’ll do.
And so those things are what we came up with from talking amongst ourselves as partners, talking to the key people that we believe exemplify what we’re about. Once you write those things down, then you’ve got to ask yourselves, what are examples of this in real time? What does it mean to take care of your team? Well, it means assume the best going into an interaction with the person, being responsive to your team members, we articulate what each one of those things mean.
And then you have to celebrate and tell stories about it, in the sense of, at our weekly huddles, we have a weekly huddle. When we say and brag on somebody in the huddle, do we tie it to one of those core values? And are we actively telling the stories about people who have done stuff that exemplified those core values, right? We had an attorney, awesome attorney, he gets some great results. And he just went and just pretrial, spent a weekend with one of his clients at their house. Learning about just looking at how they live their life day-to-day, and how they interact. And spending that time just because he cared so much about representing them correctly. And passionate about their claim. That story exemplifies the firm that we want to be, and being great at what we do, taking care of our clients.
We’d highlight what core values that reflects. And so you got to talk about them, you got to celebrate them. And then on the other side of that, you have to actively protect them. Where you may have someone that is an amazing attorney, an amazing legal assist, amazing whatever. And they don’t buy into your core values, they have to go, they got to get out of there because they can do so much damage to your culture. We always say if someone’s not good at their job and they are against your culture, no one really listens to people that aren’t good at what they do. They kind of blow them off.
Now, if someone’s really good at what they do and they’re getting great results, and were also bad mouthing and bashing your culture, people will listen. People are like, maybe they know something. Maybe they’re on to something here. And they can do so much damage. And so you’re actively asking yourself, would I enthusiastically rehire this person? And sometimes it’s just purely because of culture. That’s how we try to protect our culture. That’s how we try to create our culture. And again, working with firms, that’s how we go about it.
Maria Monroy (43:37):
It seems like you’re very passionate about what you do, everything that you do from-
Maria Monroy (43:41):
Yeah, it comes across. And I think that like you said, you have to enjoy what you’re doing. I mean, it’s what we do every day. If you don’t enjoy it, what’s the point?
I love what we do as an industry. I think we help a lot of people that are in desperate need of help. I don’t think we should ever lose sight of that. There’s a lot of other firms that are doing the exact same thing in that spirit going, hey, we want to take care of our clients, we want to take care of our team, we want to do great work. And I love talking to like-minded people in our industry and helping each other be better.
And on the other way you look at it, we’re in a highly competitive industry, and there’s always a space in a marketplace for someone who’s great at what they do. But we’re not a zero-sum competitive firm. We believe that we can be successful and other firms can be successful. And our success does not mean someone else’s loss and vice versa.
Maria Monroy (44:39):
Oh, I totally agree with that. What’s next for you?
Right now, and one of the things that we’re doing is that we’ve had law firms reach out to us, and this is really, really interesting is that. I’ve had so many people reach out and go, hey, look, I want to sell my firm. I’m like, well, there’s not really much of a market for it. You can, and you try, but what are you selling, and that kind of thing. And most recently, we’ve given people an alternative to selling their firm. If you can hold off till there’s public ownership of the law firm which is coming down the pipe, I think that might be the best time to sell your firm.
But between now and then, there’s a lot of guys that go, hey, look, I want to quasi-retire, or I want to do less but still keep my firm going for the people that work with me. And what we’ve been doing is, we’ve been actually managing firms for a percentage of the firm, and entering in those type of relationships. And those have been very successful. We will come in-
Maria Monroy (45:37):
I’m sorry, wait, when you say we, are you talking about your law firm?
Dudley DeBosier. Me and my partners will use our team to go in and manage a firm for a percentage of the growth. So if a firm is doing X and we take them to Y, we only participate from X to Y, not from zero to X. And so if we don’t grow the firm, we don’t get paid. And almost like the model that all of us are very familiar with, a contingency fee model, but based on growth. We did our first deal like that probably about three or four years ago, it was very successful. Since then, there’d been about four or five other firms that have asked us to do the same. We’re in the process of getting those guys on board, and I see us doing more and more of those type of interactions.
Because in that situation, the firms, they have a local presence, they’re keeping their brand, they’re keeping their equity, and it’s a way to really, for very little risk to them, get more discretionary free time, possibly grow their firm, and get a lot of good things without having to sell the firm completely and totally be out. And there’s a lot of people where that’s interested in them. And so we’ve been bombarded with inquiries about that topic.
Maria Monroy (46:50):
I mean, I think that’s amazing. And congrats. I mean, you’re helping law firms grow in a different way. What about if you have a brand new lawyer? Meaning they want to start their own firm. Is this something you would do with them, or you’re only working with established firms?
Our preference is to work with established firms. I’ve not come across a deal yet where there’s a brand new attorney that says, hey, look, I want to go start from scratch. The established firms, they have a brand, they have an infrastructure, they have something to work with. And we can fine tune it, and get them to an optimized space much quicker than starting from scratch. Going, all right, no brand, let’s get you out there, let’s start getting the phone to ring, et cetera. No building, no phone system, no computer system, no… Like scratch, scratch can be tough.
And so what we’ve seen with these firms is, they have attorneys, they have infrastructure, they have a lot of the setup, and we’re coming in and optimizing what they’re doing and seeing growth, seeing results, seeing improvement. It works for them, they’re making more money, they’re doing less. And for us, because we’re in a unique position to do this, it’s a win for us.
Maria Monroy (48:05):
So you go in and you look at everything, from intake, to systems, to culture. You help them with everything?
So typically what happens is I’ll get a call and they’ll say, “Hey, look, I heard what you’re doing, can we talk about it more?” And then we start talking about it more. We’ll do an assessment of the firm where we’ll basically look at, hey, what’s the current state of the union for this particular firm? Okay, they’re doing this. This looks good, this can use some improvement. And we’ll very candidly go, can we help this firm? Do we think we could double them in three years or two years? Or do we think that we can get them to where they want to go with this?
We’ll have a conversation with the owner. Some owners are like, hey, look, I want to have at least 50% more discretionary free time. Other owners are like, look, I want to work in the firm still. I want to try cases, I don’t want to do marketing and management. And we’ll have that conversation. It’s a little bit unique to each owner. We’ll figure out what that looks like. We’ll set the parameters of, hey, look, our intent is to add value. Your firm is making X up in this point. All right, we’re only going to participate if we get you past X, and we only profit share if we get you past X.
And there’s a lot of guys like, hey, that’s cool. The firm maintains the name, I maintain my equity. There’s an exit clause. If for whatever reason it doesn’t work out on either end, there’s a way for either party to get out. And it’s worked out well. And more and more people are looking at it as an alternative to a full on sale. Because the numbers or the valuations that I’ve seen, at least within our industry for a sale of a law firm. If you’re a firm, it’s not great, in terms of what is outside our industry, right?
Maria Monroy (49:41):
Absolutely. What do you wish you had learned in law school?
I wish law school had been more practical. Everything you do, if you’re in a room, you’re writing a brief. Yes, you can go do moot court or something like that, but I wish they had some type of… Some people go get a law clerk position, that’s great. I think there should be a more formalized process for apprenticeship, or residency, or whatever you want to call it, where you go in. I think that part is so haphazard in law school, the practical application of the skills you’re learning. And you get out and you’re kind of like…
That’s one component. The other component of it is so much of what you do is managing your time, managing people. Even if you’re an attorney at a firm, you have a legal assistant, paralegal or maybe many, and there’s zero time spent on… Well, how do you be good at that so that life isn’t miserable for you and for them, because you’re a bad manager? And I wish there had been some time spent on that in law school, or again, the practical. What are you actually going to run into when you get out there, and prepare you better for that.
Maria Monroy (50:48):
Thank you so much for taking the time. Tell me how can people get a hold of you?
They can reach me at [email protected]. Best way to reach me. Yeah, if I can be of any help, let me know.
Maria Monroy (51:03):
No one can do it all. Identify what you love to do, what lights you up, and delegate the rest. Identify the macro from the micro. Make goals clear and objective, list the roles and responsibilities for ownership and accountability. Letting go maybe hard, but it is the only way to grow. No matter what your vision, we both want your practice to grow, to get to that next level and become the best version of yourself in the process. Thank you so much to Chad Dudley for everything he shared today, and thank you for tuning in.
If this conversation moved or inspired you, subscribe so you never miss an episode. And please leave a five star review. Catch us next week on Tip the Scales with me, Maria Monroy, president of LawRank. Hear how the best in the business broke out of limiting beliefs, overcame adversity, and built a thriving, purpose-driven business in the process.