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- [00:00]
Will Smith
You've been served. Ever wonder about the business of process serving and what they pay those mysterious strangers who show up, say your name, hand you a vanilla envelope and then disappear? Well, today's guest did wonder, and it was actually right as he himself was getting served. Our hero Raj Khankaria was out of work and going through a divorce, hence the papers, when he decided to become a process server himself. Flash forward to June 1, 2025 and he acquired the process serving business he'd gone to work for. Lone Star Attorney services serves about 10,000 papers per year, generating 1.3 million 250,000 in SDE. While that is small, especially for a guy who could be earning upwards of half a million in corporate, Raj believes this business and the industry overall holds a ton of promise. Mom and pop, highly fragmented, reoccurring revenue lagging in tech. I strongly believe that legal services and litigation services is going to be the next target for private equity and consolidation, raj says. See what you think and see what you think of Raj's journey. He was at a personal low when a door presented itself, an unlikely one, and Raj has been rewarded for his initiative, for his spirit of adventure in turning the knob and walking through. Here is Raj Concaria, owner of Lone Star Attorney Services. SBA loan broker Heather Anderson returns for an Office hours today on Working Capital in SMB Acquisitions. Regular listeners of Acquiring Minds know that working capital is such a pitfall for business buyers, even for entrepreneurs who know to be paying close attention to it. So come get a tutorial on this invaluable topic. Heather will be joined by Chris Williamson of Cane Crossing, a leading financial due diligence provider in our space. So you're going to learn from two pros with deep expertise in working capital and how it can make or break your acquisition. That webinar is today, Thursday, July 24, noon Eastern. The webinar is Working Capital in SMB Acquisitions. Link to register for the webinar is right at the top of this episode's show notes or on the Acquiring Minds homepage. Acquiring Minds co. See you there. Welcome to Acquiring Minds, a podcast about buying businesses. My name is Will Smith. Acquiring an existing business is an awesome opportunity for many entrepreneurs, and on this podcast I talk to the people who do it. Running payroll, paying your bills, closing your books, and producing financials. These are critical tasks every business owner must do or oversee, but spending time on them distracts you from the leadership in growth work you want to do. So let system 6 do it for you. Owned and led by a former Searcher Chris Williams System 6 is a leading outsourced finance team for hundreds of SMBs, including over 50 searcher acquired businesses. Chris, Tim and the System 6 team understand firsthand the challenges, the opportunities of jumping into a business as its new owner. So whether you own your business already or have one under LOI, talk to System 6 about how they can give you time back and improve your financial operations. Mention Acquiring Minds and they'll provide a free review of your books and Financial Ops, a $500 value. Check out system6.com, link in the show notes or email helloystem6.com.
- [04:21]
Raj Khankaria
Raj Khankaria welcome to Acquiring Minds.
- [04:24]
Chris Williamson
Hi. Wonderful, wonderful to be here.
- [04:27]
Raj Khankaria
Raj, you are very recently into ownership of the business you bought. We're recording on June 30th. You closed 29 days ago on June 1st.
- [04:39]
Will Smith
It's something of an unusual story of entrepreneurship through acquisition of eta. How you ended up as owner.
- [04:47]
Raj Khankaria
Let's get into it.
- [04:48]
Will Smith
Start us off with some quick background on you, please.
- [04:50]
Raj Khankaria
Raj.
- [04:51]
Chris Williamson
Yeah, I, I started my career in the Army. I was an army engineering officer for, for five years. Moved back to Houston, Texas after I finished my time with the army, got an MBA down here, worked as an investment banker for about three years. After that, moved over to a LNG company, helped sell that company and found myself out of a job as a result. And now I'm the owner of Lone Star Attorney Service.
- [05:20]
Raj Khankaria
Well, and I feel like the DOT between the LNG company and where you are now, that there was, that there's, that's really the meat of the story. So how did you go from helping that business sell itself to being out of a job to turning your attention to buying a business?
- [05:36]
Chris Williamson
Yeah. So in 2023, I was working in a strategy role for this LNG company, worked on all the investor presentations the company sold. They didn't need any of the staff in Houston Foundation. Found myself out of a job and really had to think about what I needed to do next. At the same time, my wife had filed divorce upon me. And there's a guy that came to my door and he handed me a document and I needed to figure out a way to make money quickly to pay all my bills and just kind of maintain the same quality of life. And I asked the guy how much he charged to serve each paper and he told me a number that was a lot higher than what I was anticipating. And so I started serving papers, got myself a process server certification and was going door to door serving papers for various lawsuits, divorce, personal injury cases. And I got really close with the owner of Lone Star Attorney Service.
- [06:34]
Raj Khankaria
Raj, let me pause you there, because that really is the most unusual pivot point of the whole story. So you're served papers, divorce papers, by your wife, and you ask the guy.
- [06:49]
Will Smith
Hey, how much do you get paid.
- [06:50]
Raj Khankaria
By the way, to do this? Probably the first time he's been asked that. Not, not the, not the typical question or the typical response they're expecting. We're going to get into what it looks like to be a process server because it can be colorful, even dangerous at times to be in that business. Why were you looking around for how to make a buck? If you had come from investment banking, we assume you were very employable in other ways. Why weren't you going back to the same track?
- [07:24]
Chris Williamson
Well, that was the original plan. I was interviewing at various places. I was figuring out what I wanted to do next, whether I wanted to be entrepreneur, whether I wanted to go back to a corporate job. And in the interim period is sort of when I was serving papers, just, just as kind of a side thing. It was also, I had a. I have a keen sense of adventure. It was also something different for me. And it was just an easy way to get through that interim period between unemployment and reemployment. And so instead of driving Ubers. Instead of driving Uber serving papers. Yeah, because I did the math on it. Uber was like five or ten bucks a trip. Serving papers was over 100. And I could easily knock out, you know, five or ten of those a day. So just a quick, quick way to get by in that interim period. At that time, I wasn't anticipating buying a process service company, nor was I anticipating that I'd be the owner of a business less than two years later.
- [08:20]
Raj Khankaria
And that guy who served your papers answered, you what? Over 100 bucks over?
- [08:26]
Chris Williamson
I think it was 120 something or 115. I don't quite remember exactly what he said, but my, my mental math was stuck on $100 a job.
- [08:35]
Raj Khankaria
Okay, so pick us back up. So you. How do you then proceed to try to do this on your own?
- [08:42]
Chris Williamson
So I was serving papers. I was contracting with various process service companies in Houston. The next step for me was going to be to find some clients that were actual legal firms and lawyers. And, you know, it was never supposed to be a long term thing. It was just supposed to be something that gets me through whatever the next step would be for me. At the same time, I was interviewing at, you know, large, large corporations, I was interviewing at other investment banks. And my heart just wasn't in any of those interviews. Maybe it was because the emotional, you know, the, the emotional rollercoaster I was going through as a result of divorce, maybe it was just because I didn't want to go back to that because it had eroded my previous relationship and I just wanted to do something different for myself. And so while I was interviewing it, all these different companies also, I was also introduced to the concept of ETA and buying a business and entrepreneurship. And so I was kind of torn between whether I wanted to grow this process service business that I'd started, if I wanted to acquire a company that was in a completely different space, or if, or if I, you know, I was just kind of going through a transition at that moment. So there's a lot of different options presented to me. And you know, I was not expecting to buy the company that I was contracting with.
- [09:56]
Raj Khankaria
And so to be clear how this worked, Raj, at this stage is you said this, this serving company that you'd spun up, and by that you essentially just mean, you know, a single person llc. It was you contracting your services to companies that farm this out, essentially.
- [10:13]
Chris Williamson
Yeah, exactly, exactly. Larger, larger national process service companies and regional ones as well.
- [10:20]
Raj Khankaria
And so they'd call you or email you or maybe there's some sort of, you know, a website where there's a queue and you pick off jobs, something. And so you were doing that on a one off basis, getting paid, you know, 100 bucks a pop plus. So the option there was to continue, well, the W2 that you just explained to us, but if you were going to go the entrepreneurial route, you could have continued growing this zero to one enterprise as you, as you said, or as it turned out, you could also buy an existing one of these businesses. Why did you. So did you end up pursuing the buy this business because you'd learned about.
- [10:56]
Chris Williamson
Eta, so buying this business. So I learned about eta, but separately I started developing a relationship with the owner of Lone Star Attorney Service, a gentleman named Patrick Yoder. He had also bought this company as a searcher. He didn't call himself a searcher and wasn't really involved in eta, but what he did was essentially a traditional search. He had also grown tired of working his corporate job. He didn't get the results that he wanted. He'd previously worked for a, a medical device company, which IPO. So he scaled it from I think it was 30 million all the way to 300 million. IPod it. And the end result of that was, was just not, not what he was expecting. So he got out of that, was very interested in entrepreneurship, and he had found Lone Star Attorney Service back in 2022 and bought it from a guy that had started it back in 1996. And so his exit plan was three to five years, and he had a. And while I was serving papers for Lone Star, me and him got really close. I'd helped him with business development, with growing revenue, with finding new clients. He'd asked my opinion on various things. Every now and then, I knew he wanted to sell, he wanted to exit, but he wanted to grow a little bit more, and he didn't anticipate exiting at the stage where I bought the company.
- [12:18]
Raj Khankaria
And why did he want to exit? Just because it was according to his plan of how long he intended to hold it at the outset, or was there some other reason?
- [12:28]
Chris Williamson
So he got involved with another company, a litigation finance company. He spun up and founded a company called Osage Capital, which basically pre funds existing lawsuits. And so he got super involved in that, more involved than he was anticipating, and just didn't have the time to really focus on Lone Star. And it was kind of getting at the end of his timeframe of how long he wanted to hold it anyways. But the scale of the company just wasn't where it needed to be for the exit that he. That he wanted.
- [13:02]
Raj Khankaria
Great. And so how did your conversation with him evolve?
- [13:07]
Chris Williamson
So at first, it was just, you know, let me help you get some more clients. You know, you pay me a little bit more per serve, and I'll increase your revenues. Then it turned into, hey, Raj, can you come in today? I need your thoughts on something. Then it, you know, grew. Our relationship grew more and more. We started hanging out, getting lunch. He'd toss a couple of ideas to me, and I'd give him my feedback. And none of this was paid, really, other than just the extra amount of money he was paying me per serve. And we developed a really, really, really close relationship. And then he was kind of doing his thing, I was kind of doing mine. He was about to merge with another company, another regional process service company, and sell the combined entity. And he had told me that. And so we kind of just stayed out of touch for about three months, from December 2024 to, I'd say, March 2025. And he calls me up one day in March, and he says, hey, I've gotten really busy with this other company. My sale fell through because the company that I was trying to merge with had some unfavorable tax implications that. Under which the owner of that company just would not have gotten the payout that he wanted. And he asked me to actually run his company as the president and scale it to where he wanted it to be in order for it to achieve an exit. And instead of just taking that offer as it was, I offered to. To buy it from him and wrote him loi. And he was very happy to. To exit at that point.
- [14:39]
Raj Khankaria
So you, the theme here is that the two of you had de risked each other. You'd become kind of thought partners. You had actually done the end. The end work that delivered the very service that he sells. You'd helped him grow and optimize his business. And so you, you knew the business intimately. So from your perspective, it's very de risked. And then of course, he's seen the way your mind works. He's seen that you can do the job well, the, the, again, the service delivery well. But not only that, you're entrepreneurial, you're strategic, you've provided ideas that have moved the needle. It really does seem like quite a good fit. Of course, it's all, it's all hunky dory until, you know, comes down to what you paid. So, so how, once you guys agreed that you should explore him selling to you, how did you negotiate? What did that look like?
- [15:35]
Chris Williamson
So I asked him for. So I kind of knew how the company was performing financially. I asked him for more detailed financials and he was more than happy to provide them to me. We came to an agreement on valuation rather than looking at historical financials. I went ahead and looked at the projected financials for 20, 25. They were about 250, a little bit over. 250,000.
- [16:01]
Raj Khankaria
Of what?
- [16:02]
Chris Williamson
Of EBITDA. Of EBITDA. It was about 1.3 million in revenue, 250 to 300,000 of EBITDA. And typically companies of this scale don't sell at more than 3.3x. But there was another deal that was pending for him for which they had come to a. They'd kind of had verbal agreements, not really, not really under loi yet, but he showed me some emails that they'd been sending back and forth and what they were offering him was a 5x multiple with a little bit of it in earn out and a little bit of it of upfront cash. But they expected him to stay with the business. I offered him a 4x multiple, structured favorably and de risked for both of us at 1 million. At $1 million. And I just got him the LOI first and. And he. He accepted.
- [16:56]
Raj Khankaria
Okay, great. Is There a the other company that was interested in purchasing in acquiring this business.
- [17:04]
Will Smith
Should I read into that?
- [17:05]
Raj Khankaria
Is there, is there, is this a market where there's activity that people are interested in buying these types of businesses or was it purely a strategic or a company, you know, just a one off company that happened to want his buy his company at the same time?
- [17:19]
Chris Williamson
So we're, we're currently in a place I think very early on where there's an increased amount of activity in the private equity and strategic space for some of these smaller private service or process companies. I think that that interest is just now heating up. I strongly believe honestly that legal services and litigation services is going to be the next target for roll ups and private equity and consolidation. Because it's a highly fragmented industry. Most of it is just mom and pop shops. There's really not a lot of big players in the space. I mean you have proof, you have proserve, you have ABC Legal that are some of the big names. But I'd say 90% of the industry is just mom and pops running around serving papers.
- [18:09]
Will Smith
What do the following acquiring minds guests all have in common? Doug Johns, Morley Desai, Tim Erickson, Chirag Shah, Shane Ursam. They all went through the Acquisition Lab, the accelerator and community for people serious about buying a business. But they represent just a sliver of the Lab's success stories. The number of deals across the Lab's cohorts now stands at over 120 with over $300 million in aggregate transaction value. The Acquisition Lab was founded by Walker Deibel, author of Buy Then Build, the book that introduced so many of you to the very idea of buying a business. The Lab offers a month long, intensive almost daily Q and A sessions with advisors, live deal reviews with Walker, Deal team introductions and in an active community of serious searchers. Check out acquisition lab.com link in the notes or email the lab's co founder, Chelsea Wood. Chelsea atbuy then build.com.
- [19:15]
Raj Khankaria
Well, give us more of a picture Raj. What is and just use the business that you bought as the example. What does it look like? How you know how many jobs a week generates 1.3 million in revenue? How many employees? Where do they find businesses? Who do they work for? Is it always basically legal firms? How does this tell us more about this business?
- [19:41]
Chris Williamson
Yeah, so Lone Star Attorney Service is a large regional name. It's the largest legal services service or process company in Harris County. We currently have four employees in Houston and two in the Philippines. Our job volume is about a little over 10,000 a year. 10,000 papers a year. Most of our clients are legal firms. We have a large portion of clients that are also national process service companies. I actually just signed an agreement with our tech service provider to become a preferred vendor for them. Sorry, a preferred partner for them where they'll start kicking us jobs as well. And so basically, our business is split between law firms and larger national service and process companies that contract with us. We then farm the jobs out to a large network of mom and pop shops or just people that do service of process. And so what we're seeing now is consolidation of all of these smaller shops that are even smaller in scale than ours into larger ones that are bigger than ours by some of the large national companies. And they're interested in companies about double the size of Lone Star Attorney Service. So they want 2 million of revenue and up.
- [21:05]
Raj Khankaria
And what are the mechanics of the contractors that work with Lone Star? Do you just have them in a Rolodex, or is there some tech here where, you know, you have some Uber like, app where they just log in and pluck off jobs that they want to do that day or what?
- [21:23]
Chris Williamson
So it's something in the middle. It's not quite as on demand as Uber is, but it's not as primitive as a Rolodex where we just call people. There's a software solution called Serve Manager that's owned by another company called InfoTrack and ServeManager allows us to both receive jobs and farm jobs out. Whenever we have new people come on board, we have them install this software platform called Serve Manager, and that's what allows us to track their service or process through that app. They're able to download and print their documents. They're able to take pictures every time they serve papers. They're able to leave a description of what exactly they did and what the result of it was. So if they go and knock on a door and there's no answer, they just write a description in there and says, we knocked on this door. There was no answer. Or if they serve the paper, it allows them to put in a description of the defendant and who they served it to. It also allows them to sign e. Sign the affidavits. And so it's not quite on demand, but it's not as primitive as a Rolodex that you referred to either. It's a tech solution. And we're also at the forefront of technology right now in the industry. There's not really much that's been done. All the technology that's come out for Service to process has been in the last five years. Before that it was literally offices like ours, printing out papers, the process servers coming in and picking up those papers and then coming back to the office, signing the affidavits, getting it notarized by the staff in the office, and then the office staff filing it through Texas E file.
- [23:03]
Raj Khankaria
And now all of that can be done digitally home. They, they can do it all from home?
- [23:08]
Chris Williamson
Yep, exactly.
- [23:10]
Raj Khankaria
And these folks need to be certified in some way to become, sorry, what's the term of art? A process server.
- [23:16]
Chris Williamson
A process server, Yep. They have to be certified to become process servers. Yeah. So the certification process for that is an eight hour course they have to take. There's a lot of different providers of this course. They then take that certificate and submit it to their states, like licensing agency. For Texas, it was Texas dps. Texas DPS will then mail them a process server certificate after they complete their background check and fingerprinting. It's about a six week long process.
- [23:45]
Raj Khankaria
And these folks, how much money do they make a year? How many jobs do they do a day? Two or three.
- [23:51]
Chris Williamson
So it just, it just depends on the quality of the server. It depends on how many we have in that area. It's a bit cyclical where we'll find certain areas picking up more than others. I mean these guys can make anywhere from 50,000 on upwards, just depending on how much they want to work too. And we don't limit them from working with other companies like ours. So some of these guys have full time jobs making anywhere from 50,000 to 100,000 a year. And then if they have their own clients that are law firms, then that's a very reasonable range for them.
- [24:26]
Raj Khankaria
Let's talk about the nature of the work. Raj, we're speaking very clinically about this, but as anybody who has been in the unfortunate position of being served or who's ever seen, you know, a movie or tv, you know, some stranger approaches you somehow confirms your name somewhat, you know, what would be the word deceptively gets you to confirm your identity and then says here you've been served. We imagine that the recipients of these papers are having about or about to have a very bad day. This is never happy news. As yourself experienced. What's the day to day look like for process servers? I imagine it could get actually pretty hairy at times.
- [25:13]
Chris Williamson
So there's a wide range of emotions. It's not nearly as dramatic as what they show in movies. We never say you got served for one. You just kind of have to really control your Emotions and be able to de escalate these, these types of situations. A number of people are actually expecting, expecting these documents to arrive, and it's not always necessarily bad news. So, for example, if there's a child support case that's happening and they need to get child support readjusted, the spouse will typically know. But the office of the Attorney General has to serve both parties. And so it's not necessarily always bad news. In many cases it is. But the art of being a good process server is presenting this news to someone without necessarily ruining their day. So you just kind of go in, knock on their door. I never ask what their name is. I just say, hey, Eric, Hey, Will, how's it going? They say, oh, good. And that's kind of how they identify themselves. To me, it's never, hey, are you Will, are you Eric? Or, you know, whatever the person's name is. And as soon as I get that positive affirmation that it's that person, I tell them, hey, look, I'm really sorry, have some documents to deliver to you. Sorry you're going through this, then you immediately turn around and walk away before there's even a reaction.
- [26:35]
Raj Khankaria
And de escalation is the term I heard you just use. Have you been in situations where that was necessary or, you know, you didn't turn around and walk away quickly enough?
- [26:47]
Chris Williamson
Yeah, so when I was a new process server, I would kind of stand there and listen to them for a bit, and they would always try to ask me the merits of their case. And, you know, they, they'd get upset about getting served and tell me, oh, it wasn't my fault, this is what happened. And I just say, hey, look, I'm, I'm really sorry this is happening to you. I'm just delivering the documents. I'd recommend you hire a lawyer and, and, and, and approach this in the, in the manner in which it's supposed to be approached rather than like, I can't, I just, I just can't really do anything about it.
- [27:20]
Raj Khankaria
Yeah.
- [27:21]
Chris Williamson
Yeah.
- [27:21]
Raj Khankaria
So this is a don't, don't shoot the messenger.
- [27:24]
Chris Williamson
Yeah.
- [27:25]
Raj Khankaria
Situation.
- [27:26]
Chris Williamson
And the most important thing is to, to not be aggressive. I mean, there's a number of people that don't want to accept the papers and, and it's perfectly fine to just leave the documents there. Whenever I've done that, they just say, hey, I'm not taking these. They get aggressive. They say, I'm not taking these. I say, okay, fine, I'm just going to leave them here. It's up to you. What you want to do with them. And I annotate that and serve manager, whatever description I want to provide that I left the documents in plain view of the defendant. They identified themselves and affirmed that they were the person that was supposed to get served. And documents were left there, and it's considered good service.
- [28:05]
Raj Khankaria
Raj, I heard you use the word adventure earlier. Is that what would draw somebody to do this work? This seems like unpleasant, hard work on its face, but I could see it being, you know, no two. No two jobs are alike, sort of. So, so what. What's the appeal here? How does somebody get into this work? Why did you. Why were you drawn to this work? Other than that, how. How well it paid?
- [28:30]
Chris Williamson
Yeah. So the idea of driving around Houston, getting to see places that I'd never seen before, I got to see people live in areas that I'd never even been to. I mean, I think on New Year's this year, I wasn't. I was told to go to a party that a rapper was hosting and serve that rapper. Yeah.
- [28:53]
Raj Khankaria
Wow.
- [28:54]
Chris Williamson
Yeah. So there's there. I mean, it gets super interesting. I've.
- [28:59]
Raj Khankaria
So did you do that?
- [29:00]
Chris Williamson
Yeah, I did it. I did it.
- [29:02]
Raj Khankaria
And was it a party?
- [29:03]
Chris Williamson
And I mean, it was a full on party with. With. With some rapper. I don't know who it was. I don't think it was anybody super famous, but they're famous enough to have a pretty amazing party. And so I served him there. I actually got more CEO exposure doing service of process with all the companies, with all the oil and gas companies that are getting sued. You have to serve the CEO and all the officers of that company sometimes. So there are. There was a merger and acquisition that I worked on while I was a banker whose CEO I had been on zoom calls with. I then had to go to his house and serve him papers from a lawsuit that resulted from that merger.
- [29:43]
Raj Khankaria
Oh, wow.
- [29:44]
Chris Williamson
Yeah. So in that sense, that's where the adventure piece of it comes in. And so, yeah, every. Every job is different. I got to see places I didn't even know existed within my own city. I got exposure to the way, you know, people of all different strata live. And it's. It's just been a blast.
- [30:07]
Raj Khankaria
And is it we. I've heard you say rapper throwing a big party probably has money. I've heard you CEO has money. But as most are, most of the jobs concentrated in, you know, lower middle class to poor areas or people.
- [30:24]
Chris Williamson
I'd say it's a. It's a pretty. It's. It's a Pretty good mix. So divorce papers can, can get served to anybody.
- [30:32]
Raj Khankaria
Sure.
- [30:32]
Chris Williamson
You know, everybody gets divorced. Debt collection is almost always more run down areas.
- [30:38]
Raj Khankaria
Yeah.
- [30:39]
Chris Williamson
You know, more disadvantaged areas. Then you have car crashes. Those happen to anybody. It could be anybody from, you know, from, from, it could be anybody living in a poor area or rich area. Anybody can get into a car crash and get sued for that. So it's, it's, it's a pretty, it's a pretty good mix. But you can kind of tell the direction the economy is going in based on how many debt collection papers are, are outstanding.
- [31:05]
Raj Khankaria
Yeah.
- [31:06]
Chris Williamson
And so when debt collection picks up, that's when we see more jobs going to the disadvantaged areas.
- [31:13]
Raj Khankaria
Yeah. Is there any, is there any ethical consideration with this business? I mean, I know, I know the answer is going to be, look, this just has to be done. This is how our legal system works. Somebody's got to do this work. There's nothing if you have some ethical quandary with it or ethical issue with it, you know, take it up with the, the American legal system and how the whole thing works. But, but system being what it is, these papers need to be served. And so some, some, some firms are going to occupy that or deliver that service to the economy. But maybe you see what I'm driving at again, maybe going to the, creating a bad day for somebody question. Did any of that hang you up or, or not at all.
- [31:57]
Chris Williamson
I think that I see service of process as an integral part of the justice system. The alternative of that is telling somebody on the phone that they're getting sued or sending them an email. And our judicial process was set up such that people have to be personally notified that a lawsuit is pending. So I don't think I see the service of process component as having any kind of ethical quandary. Maybe like how easy it is to sue someone or how easy is it for debt collection companies to harass people that just don't have money. Maybe, that, maybe there might be ethical quandary there. But I think service of process is actually a service to society because you're, you're, you're, you're telling people in person that this legal action is pending and they need to respond to it, otherwise things can get even worse.
- [32:50]
Raj Khankaria
Yeah. And to your point about the, you know, as this business grows, when, for example, debt collection is on the rise, why is this a growthy business or is this a growing business?
- [33:07]
Chris Williamson
It's definitely a grow.
- [33:09]
Raj Khankaria
Excuse me, Roger. Why is this a growing industry or is it a growing industry beyond its Own cycles.
- [33:16]
Chris Williamson
I don't necessarily know that the industry itself is growing. I think individual companies are growing as they as. As the industry consolidates and, and we start seeing bigger and bigger service of process firms come up. Yeah, I think that there's a market for consolidation. I think that there's a market for both organic and inorganic growth. I don't necessarily think that there's any more or less paper. I mean, as the population grows, there's obviously going to be more lawsuits happening. As the economy grows, there's going to be more lawsuits happening. But along with the economy, you know, grows a number of papers outstanding. But I think that there's opportunity for an individual company to grow just based on how much market share they capture and what efforts they put forth to help consolidate the industry in the direction in which it's going.
- [34:08]
Raj Khankaria
Great. Well, we're going to turn our attention to that in just a sec. But before we do that, just a little bit more on the business itself. So 10,000 servings, processes served a year is 30. It's an average of 30 a day. You know, this is one of the. And you guys are by your own kind of description, kind of mom and pop or maybe just a little bit above a mom and pop. And that's all in the Houston metro area. Or does. Is that further afield?
- [34:37]
Chris Williamson
I wouldn't necessarily consider Lone Star Attorney Service a mom and pop. I'd consider us a, a regional process service company. And okay, it is one of the largest, if not the largest company in Harris county. And our service or process extends nationwide. So we have clients asking us to serve papers in, you know, Florida, New York. Yes. And so we contract with providers out there and in exchange they give us business that needs to get served in Harris county. And everyone kind of splits that pie accordingly.
- [35:08]
Raj Khankaria
But just that 10,000 number. So, so that is. Are all the jobs that you guys sell in a year and what percentage of those would be in your own market? I'm really just trying to kind of get, you know, a finger in the air sense of like how many of these are actually going out into metro Houston?
- [35:27]
Chris Williamson
Yeah, so I'd say about 75%. 7,500 papers of the 10,000 would be going out in the Houston metro area. The rest of them are in Texas outside of Harris County. And you know, a small portion of those are also nationwide. So out. Out of state.
- [35:46]
Raj Khankaria
Yeah, so. So 22, 22 to 23 a day are going to Harris County. That, that's just, I mean, obviously Houston's an enormous City. But, you know, the. What I'm kind of also driving at is that these markets we always see are just so much bigger than we think they are. And the idea that you can build a business around just this very niche service in just a single region is, you know, kind of mind blowing to me.
- [36:13]
Chris Williamson
Yeah, there's way more papers going out in Harris county than, than what we serve. I mean, sure, we generate, you know, right now about 30, 40, sometimes even 50 jobs a day. And, you know, you're right, 2025 to know 2025, those are. Are Harris County. But if you just think about all the lawsuits happening, all the divorces, all the personal injury suits, all the debt collection, I mean, there, there's probably thousands of them on a, on a. On a daily, weekly basis.
- [36:43]
Raj Khankaria
Wow.
- [36:43]
Chris Williamson
So we're just a small piece of that.
- [36:47]
Raj Khankaria
Wow. Okay, Raj, so quality of revenue here. This is classic, a classic reoccurring revenue business. You establish these relationships with law firms or whomever, and they just send you regular business. It's not contracted, but it's. It's very consistent and somewhat reliable. So short of being recurring revenue, it's pretty high. You would say high quality of reoccurring revenue?
- [37:18]
Chris Williamson
I'd say the quality is pretty high. Once a. You know, law firms don't really care about who serves their papers. It's not something they really even think about. Once they find a company that they like that's easy to work with, they like the owner, they like the customer service they receive, they'll typically stick with that company just because it's something that they have to have to do. And yeah, all of our. All if most, if not all of our revenue is recurring from the same clients. So, yeah, to answer your question, the revenue is very high quality.
- [37:54]
Raj Khankaria
Now the. But to the point that you just made that once a law firm has the. The firm that they like to work with here, they are just likely to just kind of keep it on autopilot, keep that relationship on autopilot and keep turning back to the same firm. How is it that you grow market share? What. What were some of your strategies to grow in. In. In an industry that's not itself growing? This is a classic case, as so many cases are, in acquiring minds of you needing to compete in and eat somebody else's lunch, basically.
- [38:28]
Chris Williamson
So a prime example of this is right now I'm working on a contract with a tax protest company to work on their collections cases. And the key to winning that contract was just networking, being able to build trust that we were going to be doing a better job than whoever they were using previously and also matching and beating the price that they were paying currently. So I found that company through someone got connected to the CEO of that company, kind of made our pitch to them, offered them a technology solution with our tech provider that we work with that will allow them to file, serve and file the proof with significantly less clicks than they're currently doing and just pitch the whole package to them for the same price that they were paying currently to print out documents and have a process server come and pick them up and file them, download documents, file them to Texas E file, reprint them out, give to the process server, basically gave them a proposal to streamline their process for the same price that they're currently paying. And so I think that the growth and convincing people to work with us versus someone else is just going to be. It's just going to come with how well we can integrate technology, how well we can streamline their processes and offer the same quality of service at a similar or lower price.
- [39:58]
Raj Khankaria
Well, it also seems like there's a window of opportunity here where some of your clients are still doing this, the old school, manual, inefficient way and you through this tech provider, so that's a strategic relationship for you can offer a super streamlined process for the same price as you just described. And so if that's the case for client A, that's probably the case for client B, C, D and E as well.
- [40:24]
Chris Williamson
Right, Right. There's also opportunity for integrated growth as well. I mean, they're just. There's so little barrier to entry in this industry and it's just so unsophisticated at the moment that there's plenty of opportunity to just grow in or, you know, grow through acquisition. I haven't really looked at it yet because I'm still working on refining operations and processes within this company. Being a new owner, I don't want to rush into that at the moment, but there is definitely opportunity out there to grow that way as well.
- [40:57]
Raj Khankaria
And what were some of the things that you helped, what was your seller's name?
- [41:02]
Chris Williamson
Patrick.
- [41:03]
Raj Khankaria
What were some of the, some of the things that you helped Patrick with? Any of it marketing and growth related?
- [41:10]
Chris Williamson
It was mostly marketing and growth related. Just getting word out that Lone Star Attorney Services out there, I'd hand out brochures to law firms that I would go serve. Whenever I'd meet a lawyer, just through friends or my own network, I'd inform them that, you know, if, if you need service a Process. Lone Star Attorney Service is really good. Not sure who you guys are currently using, but if you need a backup, go here. And so it was, it was mostly on that effort.
- [41:41]
Raj Khankaria
And you'd seen results?
- [41:43]
Chris Williamson
We'd seen results, yeah.
- [41:46]
Raj Khankaria
Well, let's now return to the. To Patrick and the plot. Tell us about the deal that you struck with him to buy this business.
- [41:56]
Chris Williamson
I offered him a $1 million valuation.
- [42:00]
Raj Khankaria
That was the 4x he'd had that 5x offer. You came in at 4x but you, the 5x folks were going to want him to stay in it. They were an unknown quantity. You offered him less, but he was able to step away.
- [42:15]
Chris Williamson
Exactly. And so I offered him a million in valuation. I was originally going to do SBA deal where he'd provide 10% of seller financing. He wanted to retain some equity and upside as well. That all would have been good. But there was a significant rule change that occurred on June 1, which almost actually blew up my deal. But I met this other gentleman named Clayton Smith through an organization called Entrepreneurs Organization. He owns a company called Osprey Companies, which is a real estate firm. And I had a quick 20 minute chat with him. He had done a number of deals where he was the seller and he seller financed pretty much the entire thing. And so he gave me the tools needed to pitch that to Patrick. Points like how he can defer all his capital gains taxes over a period of seven years. All the interest payments that he'd receive will end up making him almost double the amount of money as just taking the deal now, paying a bunch of tax on it and walking away. Patrick got to keep a little bit of equity, which would have significant upside because the business is inherently poised to grow given that we're the preferred provider for this new tech company, Infotrack. And he just gave me the tools to pitch that idea in a very, very, very beneficial way to the seller.
- [43:47]
Will Smith
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- [44:55]
Raj Khankaria
That all makes sense in theory, Raj. Of course, devil's in the details and devil's in the seller psychology. One big question is how long that payback schedule is. If the seller note is over seven or eight years, and you're basically pitching Patrick that he's not going to get his, all of his money until, you know, beyond 2030, even if it's more money, it might not sound as good. So, so how did he react to just not getting the lump sum upfront? And in fact, what were the details here?
- [45:28]
Chris Williamson
Yeah, I'll start, I'll start with just the terms of the deal. Patrick kept 30% of equity. We seller financed mostly the rest of it. So 600,000 of the deal was seller finance. Patrick kept 30% equity, and myself and another partner brought to the table 100,000. So 50,000 each. And I believe the reason why, or I know the reason why Patrick was amenable to this deal is because he'd worked with me for almost 18 months previous to us inking the deal. And I think that this type of deal requires a lot of trust between buyer and seller. The seller has to trust the buyer's not going to sink their company, and the buyer has to trust that the seller isn't screwing them over. And so that was, that was the terms that we came to.
- [46:24]
Raj Khankaria
And, and what, and what was the length of time of this seller note that 600,000 was going to be paid?
- [46:32]
Chris Williamson
600,000 is paid over seven years, one year of which is interest only with an option for a two year interest only period, and then after that, either a five or six year amortization period.
- [46:45]
Raj Khankaria
Okay. I have to believe I, I agree with everything you say about his level of trust in you and yours in him. But I also have to believe that he was willing to accept this deal because he was eager to get on to his next thing. He was. He was. So if this had been a retiring seller and all they're doing is facing down the golf course and, you know, open a totally open calendar, they might not have been as amenable, but he's got something else lined up. In fact, that's why he's trying to move on. So in other words, you found an eager seller.
- [47:22]
Chris Williamson
Yeah, yeah, I would totally agree with that statement, I found an eager seller. And perhaps this deal would not be. Would not be amenable to someone that, yeah, just wants to cash out and, And. And retire. But he's. He's younger. He's doing something else. He's not. Not hurting for money at the moment, and he wants to be along for the ride, and he sees upside as well. And so for those reasons, I believe the deal worked as compared to a seller that just wants to get out.
- [47:55]
Raj Khankaria
Yeah.
- [47:56]
Chris Williamson
And there's also the piece of. The fact that one of the biggest points that I pitched to him was, look, Patrick, if something goes wrong with this business, if the economy tanks, if there's just some huge disruption to service or process because of some regulatory change, would you prefer the bank taking it back or just me giving it back to you? And that. That kind of brought a bit of comfort to him as well. And the fact that if something did go wrong, it wasn't a third party taking the business. It was just me. It was just between me and him.
- [48:38]
Raj Khankaria
So in the other scenario, right, if you'd gotten an SBA loan, the bank would go. Would go after the business?
- [48:45]
Chris Williamson
Yes.
- [48:46]
Raj Khankaria
If you fell into crisis in this. In this situation, no bank involved, the business just reverts to him. And of course, that's. That's written into the legal documents.
- [48:55]
Chris Williamson
That's correct, yeah.
- [48:58]
Raj Khankaria
And what about the. Of course, the personal guarantee, big feature of this world, and loans and these types of loans.
- [49:06]
Chris Williamson
There. There is a personal guarantee, and I was very comfortable signing it because if Patrick was comfortable enough to hand over his business to me for the down payment that I made to him, the. The least I could do is personally guarantee it.
- [49:20]
Raj Khankaria
And do you feel like you would have. You felt more comfortable doing a personal guarantee in the, in the deal structure as it was, versus had you gone with an SBA loan and personally guaranteed that?
- [49:30]
Chris Williamson
Absolutely, absolutely. Without a doubt.
- [49:35]
Raj Khankaria
Yeah. It's great alignment between the two of you. I mean, and especially because he's rolling so much equity. I mean, a 30% roll is significant. Yeah, it is significant. You'll occasionally see that in kind of private equity, larger deals. But this is a, this is. But. But also typically, the rolled equity is when the seller is staying on and the buyer is incentivizing, wants the seller to be just as motivated to continue growing the business. So I think, I think a chunk of seller equity, rolled equity, by the seller being this large, where the seller is actually no longer involved in the business. I think that is pretty. Pretty rare.
- [50:14]
Chris Williamson
Yeah. And the reason why he was okay with that is because the business he was starting was still in the litigation services space, categorized as litigation finance. So his current business is very synergistic with our business. So in a way, he is kind of involved by kicking us work from the other companies that he works with.
- [50:37]
Will Smith
Great.
- [50:38]
Raj Khankaria
Okay.
- [50:38]
Chris Williamson
Not in a direct conflict of interest kind of way, but just like a. Hey, I also am a part owner in this process service company. If you guys have any service or process that's outbound, happy to help out.
- [50:54]
Raj Khankaria
Sure. You had said, Raj, that you. You found a way to de risk the deal for the both of you. Which elements of this were. Were the DE risking.
- [51:05]
Chris Williamson
So him retaining 30% seller equity was de risking the due diligence portion of it for me. Because, you know, if. If there was anything uncovered after the fact, that he'd just kind of be screwing himself over. I think structuring the deal as an asset purchase also de risked it. De risked it quite a bit because you're not really buying any liabilities, just buying the assets of the business. So it was set up under a completely different legal entity. And then for him, the d. I think for him, it was de risked by me signing a personal guarantee and having enough trust in the business and, and myself to say, hey, if anything goes south, you can have all my stuff.
- [51:49]
Raj Khankaria
Yeah, well, I will say a lot of those. Those features that you just described are, Are common in SBA deals. Personal guarantee, asset purchase. So, so that. I don't think that that differentiates your deal. I think a lot of the de risking on both sides had happened before the deal even you sat down to pencil the deal, which was that you knew each other so well, you knew the business that. That was really the. The. The mother load of the de risking.
- [52:17]
Chris Williamson
I think, and I think. I think his exposure to my background also was a huge factor in this deal as well. Because.
- [52:25]
Raj Khankaria
You know, what about, what about your background?
- [52:28]
Chris Williamson
Just the fact that I had a business degree, my new finance. I could bring to the table skills that maybe he wasn't as good at. But I'd also had real world, real world experience with what the business does, so I wasn't afraid of going door to. Of knocking on doors and, you know, facing those situations, so I can work with process servers and refine the processes based on challenges I'd faced myself.
- [52:52]
Raj Khankaria
Yeah, absolutely. It's great. Just, I wanted to summarize something you'd said earlier, which is. Which is so valuable. Clayton Smith, that you talked to in your EO group said to pitch seller financing. The value to the seller of a seller financing deal, I think you said you named two things. First, that they'll get more money over time, which is the whole point of lending. You get that interest payment on top. So the final sum to you while it's amortized over years is a larger sum to the seller. And then also the. The deferring that payment over years or spreading that payment out over years means that the tax burden is not as high because they're not reporting effectively, you know, all of it in a single year.
- [53:48]
Chris Williamson
Right. And there's. You have to take into consideration the time value of that money as well. So I did a full analysis for Patrick that showed him how much money he would be getting out of this as a sum of the amortization plus interest payments and also the time value of the deferred tax payments that he was making. So in this case, I just put a 7% discount rate on it, because that's the interest rate I got in the seller financing and showed him that. Look, the value of these deferred tax payments and the interest that you're getting is way higher than you would even get from this other deal that's on the table for you. And the. The million dollars that I'd be giving you after your taxes if you take.
- [54:32]
Raj Khankaria
Walk. Walk us through that a little bit slower, Raj.
- [54:35]
Will Smith
So you're.
- [54:35]
Raj Khankaria
You're giving him $600,000 over seven years. Let's take away the interest. Only piece of that for the moment to simplify. $600,000 over, let's actually say six years to make it super round $100,000 a year. Walk us through what you walked.
- [54:54]
Chris Williamson
I mean, I'd have to pull up an Excel sheet to do all the math again, but essentially, if he's getting 7% interest at the end of the deal, he'd be walking away with, I think it was 7 to $800,000 after all the interest payments. There's also a tax component to it. If he got paid 600,000, a third of it would go into. A third of it would go to taxes. So he'd be out $200,000. And so what I showed him was rather than paying that $200,000 up front, you'd be splitting that over six years. And I did a time value analysis of him being able to keep that money over six years and then applied a discount rate to it to show him that there's time value in that money as well, because he gets to hold onto it and put it Elsewhere.
- [55:47]
Raj Khankaria
Yeah.
- [55:47]
Chris Williamson
And in this case, it was lending it to me. That's why I did that analysis with a 7% discount rate.
- [55:54]
Raj Khankaria
Great. Yeah. So not only does he have to, does he not have to pay that money? It's coming back. It's generating income for him in the interest payments from you.
- [56:03]
Chris Williamson
Yes, exactly, exactly. So there's opportunity cost to him accepting an upfront payment versus deferring it over time.
- [56:12]
Raj Khankaria
Right.
- [56:12]
Chris Williamson
Um, and that's just the point that I was trying to make, is that I outlined that opportunity cost to him.
- [56:18]
Raj Khankaria
Great. Raj. The 250,000 in EBITDA. So that was EBITDA, not ste. So that, that, that included his. Or that didn't include what he was taking for himself as salary.
- [56:32]
Chris Williamson
No, that. It is SD. I just use the terms interchangeably. But the 250,000 is, is, is essentially seller discretionary earnings included his salary plus any money the company was making on top of that.
- [56:44]
Raj Khankaria
Okay. All right. And so you're now going to have to service this, this seller note out of the. That 250 of profit, which is going to bring it down to, I, I don't know what, maybe call it half, just for easy math, that leaving 125, 150 in SDE a year, which is a decent salary for you, but for a former finance guy, for a former banker, probably a quite low salary. And by the way, we also want to carve out some money to reinvest in the business.
- [57:23]
Will Smith
So if you would, how much are.
- [57:25]
Raj Khankaria
You paying yourself and how do you think about opportunity costs now in buying this small business versus going back into industry where you could probably make two, three times, maybe more of what you're earning now.
- [57:38]
Chris Williamson
Yeah. So I am trading salary for two things. One is time. And I don't mean time as in the business is something that I can just leave alone and go do other things. But I mean, time in the sense that I can do stuff like this in the middle of a workday, I have the flexibility to meet with, meet with others during business hours. I have the flexibility to shape my schedule the way that I want it without the, without like a boss or a supervisor telling me when and when I can't do, you know, when, when I can and can't do something. Yeah. So I'm, I'm trading salary for that. The second thing I'm trading salary for is the opportunity to build something of my own, which I am very confident is, is going to grow. And so what I'm trading in salary, I'm gaining in equity. I Think. Yeah, go ahead.
- [58:34]
Raj Khankaria
And how much are you paying yourself now, understanding that this is, you know, only month one and you will grow this business?
- [58:41]
Chris Williamson
I'm paying myself 120,000 at the moment of the 150,000. I mean, I'm confident enough in the growth of the company to be comfortable with that amount. And if I need to, I can adjust that up or down over time as needed as well.
- [58:58]
Raj Khankaria
And just for sport, what do you think the salary that you could be earning in industry would be?
- [59:07]
Chris Williamson
I mean, I, I've been out of the W2 job market for so long, but I can just give you insight in what I was making at, at Citi and what I was making at the LNG company. I was at, I was Citi at Citi when I started. My first year was about 300. When I left it was 4 or 500,000. Then I went to this LNG company where my all incomp, which included all the bonuses and the deferred bonuses and the FID bonuses was close to, I think 8 or $900,000 a year. But there was also a lot of risk associated with that company. And I mean it eventually sold. So I think they were just paying to offset the risky nature of that company.
- [59:53]
Raj Khankaria
So it wasn't going to be 800 reliably year after year after year. But it probably is a fair benchmark to say you could go back and earn if you really worked at it and finally landed a job after having been out for so long, three, $400,000 a year, maybe more.
- [60:10]
Chris Williamson
Yeah, yeah, yeah, I could.
- [60:13]
Raj Khankaria
Great.
- [60:13]
Chris Williamson
But I'd be losing the opportunity to build something.
- [60:18]
Raj Khankaria
Absolutely.
- [60:20]
Chris Williamson
I'd be losing the flexibility to draft my own schedule. I'd be completely at the mercy of another entity and I just don't want that for myself.
- [60:31]
Raj Khankaria
Absolutely. And I'm only pressing you on this to be illustrative to the audience and what the psychological or emotional or life calculation of being an entrepreneur is. The listeners and so many people have already gone down the path, understand that you take home less money in the early years. That said, I do think most like you do hope to build a tidy, for a tidy fortune for themselves eventually. So it's not, it's not all forever and ever the trade of money for flexibility, but it is in the, in the, in the early years. And so speaking of the, the medium term and longer term for this business, do you have any vision for where you'd like to get it in terms of hard numbers like revenue? Could this be a 5 million, 10 million dollar business.
- [61:24]
Chris Williamson
I think it could be a $5 million business. That's what I'm setting my first goal at. By the end of next year, I'd like to do. By the end of this year, I'd like to do 2 million in. In revenue, which is the direction that we're trending in. By the end of next year.
- [61:40]
Raj Khankaria
2 million. 2 million in total or run rate of 2 million. Like you'll end the year having generated fully 2 million or as of January 1st.
- [61:51]
Chris Williamson
Run rate. Run rate, exactly. So but that's where I want to be by the end of this year is a. Is run rate 2 million EBITDA. And then I'd like to grow at about 30% every year thereafter because that's what the company was growing at when Patrick took it over. So I know that there's potential for that. Then I also have plans to grow through acquisition as well. The industry is just so fragmented and there's so much opportunity out there. And deals can be structured the same way that I structured Patrick's deal that I mean, there's just so much. There's just so much that can be done in the space. And there's also opportunities for horizontal growth, there's opportunity for vertical growth. There's all kinds of other litigation services that can be added on. And we're just now, in the last two to three years, seeing private equity take interest in the space. And I strongly believe that this is the next. I mean, you know, we've seen healthcare come and go. We've seen home services come and go. I think litigation services next. Just because it fits the criteria.
- [63:02]
Raj Khankaria
Those criteria being an essential, non cyclical. Although it does have some cyclical. It actually has countercyclicality when the. When the economy is suffering. This industry does well because of the. The aforementioned debt collection dynamic.
- [63:16]
Chris Williamson
Yep.
- [63:16]
Raj Khankaria
Countercyclical cyclicality. Pretty cons, but. But pretty consistent revenue year over year. Wouldn't call it an essential service, but kind of quasi essential. I mean, it's. It's a.
- [63:28]
Chris Williamson
It's a thing that has life and death, but it has to happen. Yeah.
- [63:31]
Raj Khankaria
Right, right. And then of course, the hyper fragmentation, the. The lack of technology.
- [63:38]
Chris Williamson
Yep.
- [63:39]
Raj Khankaria
In the industry. Am I missing anything?
- [63:42]
Chris Williamson
I don't think so. I think that about covers it.
- [63:45]
Raj Khankaria
Oh, I guess. Are these owned by boomers that are retiring? Because by the way, Patrick was not that interesting.
- [63:53]
Chris Williamson
Yes, yes, yes. A lot of them are. And a lot of process servers are also elder folks. It is owned by older people. I went to a convention recently. This was Last September, Texas Process Server association convention.
- [64:09]
Raj Khankaria
And of course there's, of course there's a conference. Even for this industry, I shouldn't be surprised anymore. There is a conference for every possible industry. There's probably even a, a women in Process serving conference. Just like they're like Marcy was talking about the women in pest control. Anyway, I digress.
- [64:27]
Chris Williamson
But yeah, and I, I want to say that I was one of the youngest people there. So a lot of, a lot of retirees that, that are looking to leave hyper fragmented almost essential and just plenty of room for consolidation. And also the other litigation services that can be added on are the exact same super fragmented like sonography court reporting are just people that go there with a, go to depositions with a sonography machine and they're not really large companies.
- [65:08]
Raj Khankaria
Fascinating. Yeah, I'm sure there are all kinds of kind of third party services that serve the judicial process. Yeah, Yep.
- [65:17]
Will Smith
Actually.
- [65:17]
Raj Khankaria
And you've reminded me of one thing that we didn't say that would be appealing in terms of the enduring nature of this business. Not susceptible to AI. Because, because, because the ver that is, this is by its nature the in person delivery of these services. So it's almost like it, it, it can never be automated away.
- [65:42]
Chris Williamson
So the AI is actually helping our business not in the service or process part, but on the office backend part. It's making. AI is actually helping. It's, it's not, it's not taking over anything and it's not replacing anything, but it's just augmenting our current processes. So for example, our data entry clerk, rather than going through each of the petitions and manually inputting all the data, she now just sends it to a AI email address which then comes back to her with all the fields pre filled. Yeah. So AI is actually helping our internal processes and not, not really a threat.
- [66:22]
Raj Khankaria
Great. Raj, before I let you go, I did want to hear you say a little bit about how the transition has gone and how you came in hot trying to change things and how that's, and how that has gone.
- [66:35]
Chris Williamson
Yeah, so. So I came in with a, with a vision to grow. You know, I wasn't going to have to do much with the business itself. I just wanted to get lunch with lawyers and you know, get, get Lone Star Attorney Services name out there and try to find an acquisition target as quickly as possible. But then when I got to the organization, I found that there were, there were a lot of processes that weren't being done in the most efficient way possible. And the owner having been absentee, left a culture that didn't really hold people accountable to client complaints and to delays. And so I had to go in and implement a few changes and a few policies that were swift and also had an emotional impact on, on the employees themselves because they weren't used to that type of work environment. And I think looking back, one of the toughest challenges for me would be how to emotionally deal with how your employees are going to react to change. Like, growth is great, acquisition is great, but dealing with the emotions that come with, with implementing it or have been challenging.
- [67:56]
Raj Khankaria
Can you give us more color in terms of actually what happened here?
- [68:01]
Chris Williamson
Yeah. So, you know, one of the, There was no policy. So just a quick example without, you know, exposing too much is there was no policy in place for when the employees were supposed to come into work and leave. And so we had them coming in anywhere between 6am to 9am the business hours are 9 to 5. There was a lot of overtime abuse. You know, people were coming. There was, you know, people coming in at 6am, leaving at 2pm and then there's no one to answer the calls for the rest of the day. And so coming in and just completely changing when someone comes into work and how much overtime they're allotted can have an emotional impact because it directly affects their paycheck and their daily routine as well. And so.
- [69:01]
Raj Khankaria
Yeah, do you think that, do you think you moved too swiftly or do you think that this was just pain that you were, that was going to be necessary to go through, be it on day one or day 366?
- [69:13]
Chris Williamson
So I talked to a, I talked to another entrepreneur and he said that as soon as there's a change in ownership, the best time to come in with changes are within the first 30 to 60 days. Because everyone has a positive bias towards change at that point. They're anticipating, you know, maybe even losing their job. So if you just tell them, you know, rather than coming at six, you have to come in at eight or nine o'. Clock. It's better than not having a job anymore. You know, if you take away overtime versus taking away their job completely, that's still a better outcome than what, you know, the worst case that they could be anticipating. And over time, if you wait too long, they get comfortable into what they were doing previously. And so the best thing to do is just come in and make all the changes you want up front rather than waiting.
- [70:03]
Raj Khankaria
And do you feel like that is, I mean, you're, again, as we said, you're only 30 days in but do you feel like that is playing out?
- [70:12]
Chris Williamson
Yeah, it is. It is, because everyone has adjusted to these changes. The worst case is not as bad as what they would have been anticipating. And there's definitely been a shift in the office culture that has promoted a culture of excellence versus being okay with mediocrity.
- [70:29]
Raj Khankaria
It's just. You're just dealing with the discomfort of having to make these changes, essentially.
- [70:35]
Chris Williamson
Yeah. Yeah. So the discomfort came pretty much the first couple of days after the changes were made. But the best way to handle it for me was to just, rather than, you know, pushing responsibility onto me, articulating it in a way that made them feel that these were the best changes for the organization, not necessarily what I wanted. And I actually sought professional help for how to articulate the messaging and how to deal with the emotions of this as well. And what I was recommended to do is whenever there's any pushback toward the policies, just always refer back to the organization and how the changes are best for organization and how we're all. While we're all facing the same challenges as a team together.
- [71:24]
Raj Khankaria
So I say to you, Raj, I don't want to come in. I want to keep coming in at 6am because I got to go home at 2pm and that allows me to beat rush hour on both ends.
- [71:35]
Chris Williamson
And that was exactly what happened.
- [71:37]
Raj Khankaria
And then you say.
- [71:39]
Chris Williamson
I say, hey, I'm really sorry, but that's how the organization is going to move forward. And I can see that you're bothered and this is challenging for you, but that's just how we're gonna. That's just how we're gonna do it.
- [71:51]
Raj Khankaria
Moving forward because it's good for the organization, because it's organization. I feel like you forgot the key, the punchline, because that's what's tied back for our clients.
- [72:01]
Chris Williamson
Organization. Yeah.
- [72:02]
Raj Khankaria
Yeah, okay.
- [72:05]
Chris Williamson
Yeah. That's essentially what my answer was, is. Hey, hey, look, I understand that this change is bothersome to you, but we're all facing the same challenges here as we. As we implement these changes. And we just have to do what's best for our. Our clients and for the organization, is what I said.
- [72:26]
Raj Khankaria
All right, Raj. Well, a final question. You had said to me in the pre call you'd made a more philosophical point about when opportunity can arise in one's life. Say that for us again, please.
- [72:43]
Chris Williamson
Yeah, so I'm a. I'm a strong believer in the idea that when one door closes, another door opens and that everyone's time is. Is coming. This was an opportunity that arose for me, when I was pretty much at, at the worst point in my life and had I, Had I overlooked. Had I overlooked it, had I not have a conversation with that process server, had I treated them like garbage and just, you know, completely dismissed him, I would not be where I am today. So I think that it's important to kind of seek opportunity whenever you can and just be under the mindset that good times are going to come back, even though the current time is challenging.
- [73:27]
Raj Khankaria
Yeah, those moments where you're literally being served divorce papers and you still have the wherewithal to be curious and to just engage this stranger on your doorstep to say, hey, by the way, how much you making to do this? And then even to get. To continue to pull that thread, to look into it, to actually become certified to take the job, I mean, there were, there were a lot of. There were a lot of gates that you. That could have just stalled. You could have stalled out at it or throwing up your hands or whatever, but you just kept pushing through them. And, um, that. That probably is pretty unusual for somebody to do. So. Congratulations.
- [74:09]
Chris Williamson
And, and another, another point that I would make is, is to, to not be ashamed of making a buck. Um, here I was, a guy with like an engineering degree and a. An MBA going door to door serving papers, and there, there's no shame in making a buck. There's no shame in, in work, and you never know what opportunities would arise from it if you, if you just do a good job.
- [74:32]
Raj Khankaria
And when you say there's no shame in making a buck, are you referring to head scratching and eyebrow raising that you got from friends and family and previous colleagues sort of thing? How have people reacted to this? Life choice by Raj.
- [74:46]
Chris Williamson
So, I mean, yeah, there, there was just confusion. There's this confusion. There's even confusion from Patrick. Like, it. I've never seen someone disqualified serving papers. And yeah, just a lot of confusion there.
- [75:04]
Raj Khankaria
And did it ever cause you doubt?
- [75:07]
Chris Williamson
No, no, it didn't. It didn't because I just loved what I was doing.
- [75:13]
Raj Khankaria
Great, great answer.
- [75:15]
Chris Williamson
Yeah. So just. No. Shouldn't have any shame.
- [75:21]
Raj Khankaria
Well, I like to refer to, when I can, the X factor, as I call it, uncreatively in buying businesses where we spend so much time analyzing the kind of inherent strengths of a business according to certain metrics, recurring revenue margins, et cetera, fragmentation, all the things that we talked about in this very conversation. But the one thing that can't be quantified and that is worth a whole lot is, is the entrepreneur's enthusiasm for the business. And that is hard to put your finger on where, why that comes from, why it turns you on to be in this industry. But something about it did turn you on, does turn you on. It is just kind of exciting for you. It's an adventure, whatever it is. And that is worth a ton. And that has nothing to do with.
- [76:11]
Will Smith
Anything inherent to the business.
- [76:13]
Raj Khankaria
It has to do with, um, we talk about business buyer fit. Let's call this business buyer chemistry. And you have this, you know, this X factor, this chemistry with this business. And, and so it hard for an outsider to, to understand that, but very powerful when you can get it.
- [76:30]
Chris Williamson
Yep, I completely agree with that.
- [76:33]
Raj Khankaria
Great, Raj. The name of the business one more time. Lone Star Attorney Service.
- [76:37]
Chris Williamson
Lone Star Attorney Service.
- [76:39]
Raj Khankaria
Great. Raj Concara. We will put your LinkedIn link in the show notes. Can people reach out with questions?
- [76:48]
Chris Williamson
Absolutely, absolutely. Always open to have a good chat.
- [76:51]
Raj Khankaria
Super. Well, thank you for sharing the story and for so much transparency. Raj Kankaria.
- [76:56]
Chris Williamson
Yeah, it was a pleasure. Thanks Will.
- [76:59]
Will Smith
Hope you enjoyed that interview. Don't forget to subscribe to the Acquiring Minds newsletter. We send an email for every every episode with an introduction to the interview, a link to the video version on YouTube and soon, key takeaways, numbers and more essentials from the interview. For those of you who don't have time to listen or watch it, subscribe at Acquiringminds. Co. You'll also find all our webinars there on the website. Both those we have coming up and recordings of past webinar webinars. At this point, There are over 30 webinar recordings. A wealth of information on all the technical nitty gritty of buying a business. Acquiring Minds Co.