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- [00:01]
A
Are you tired of the marketing guessing game? Does your website feel more like a digital billboard than a client magnet? If you're nodding along, you're not alone. And it's time to stop the uncertainty and start getting real results. Let's talk about your marketing spend. Are you just shelling out money every month and crossing your fingers? Do you ever wonder what impact your marketing is really having on your revenue? Well, it's time to take the guesswork out of the equation with Rise Up Media. We've been working with them for over a year and, and the feedback from our fellow members has been fantastic. Rise Up Media is here to take your marketing to the next level. They'll even perform a full audit of your online presence, giving you the good, the bad, and even let you in on what your competition is up to that you're missing out on. And the best part, there's no obligation, no catch, no pressure. If you decide to work with them, their contracts are month to month. That's right. No long term commitments tying you down.
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B
So what are you waiting for?
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A
To learn more about how Rise Up Media can transform your firms, visit riseupmedia.com max law and rise is spelled with a Z. Riseupmedia.com max law
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B
this is Maximum Lawyer with your host, Tyson Mutrix.
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C
Foreign.
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B
Brook. So if a law firm owner wants a gut check this week and they want to look at two or three numbers to see if their firm is healthy, what do you think they should look at?
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C
What kind of law firm?
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B
Oh, question with a question. Let's say I'll go with a criminal defense firm.
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C
Criminal defense firm. All right, so to see if we're healthy, I'm going to want to know how much cash is in the bank. And not just how much cash, but how many weeks of operating expenses do I have? So is $100,000 enough? I don't know if our operating expenses are $10,000 a month. Yeah, our operating expenses are, you know, half a million dollars a month. No.
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B
Right.
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C
So how many weeks of operating cash? I'm going to want to look at how much of the capacity we're using. So look at the cases, look at the amount of work we can do and is that matched? And then if we're talking about criminal defense, you know, the thing about criminal defense is so often you get paid up front and then you got to do work that you've been paid for.
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B
Sure.
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C
And then you turn into. Do you remember that? I don't know. I think it was probably from the 30s or 40s. The cartoon guy. That said, if you will give me, I'll be happy to pay you on Tuesday for a burger today.
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B
Okay. Yeah.
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C
Yeah. Well, it's really easy to get into that kind of Ponzi scheme thing.
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B
Sure.
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C
So how much do you either have out on the street that you basically loaned out in payment plans or how much have you been paid for that you've already spent but you haven't done the work for it?
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B
Okay. So interesting. That's an interesting little dimension you've added to it because that is a real thing. And even though there you can put. At least in some states, you can put in certain things in your contract with your client where the fee is earned at this point, earned upon receipt. That doesn't mean you did the work yet though. Right. So you. Yeah, sure, you might have gotten the money. So how was. How would you advise them to track that? Because that is a very key distinction.
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C
It is. And it's big in criminal defense, it's big in bankruptcy. Depending upon how efficient your immigration firm is, it can be an issue in immigration. You have to understand your process. How long does it take you on average to work a case? And there are a lot of clients that I say you need to have a pseudo trust account.
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B
Okay.
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C
Where you deposit it into the pseudo trust account and then you move it over. You're like, okay, I'm about a third of the way through the work. I'm going to move a third of the money over.
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B
Similar to the way like Profit first would divide up the money.
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C
Yeah. It's interesting idea because you're basically putting yourself on a budget because it is so easy I to. The money's in there.
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B
Sure.
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C
I mean, we've all done that. We've looked at our bank account and been like, woohoo, we're rich.
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B
Right.
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C
Let's go buy that new piece of software. Let's do that. Really cool marketing opportunity.
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B
Yeah. It's. To me, I see a lot of times where people will just drain their. They like if he comes in, they just drain their bank account. It is wild to me. We don't have. We don't have any money because you drained all the money out. You just suck. You just, you took a big straw stuck in your bank account, just sucked it all out.
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C
Sucked it out. Yeah. Whether it's for business expenses or sometimes it's, oh, I got a lot of money in there, let's go take a big trip.
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B
Right.
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C
And what you don't want to do is end up in a situation. I was talking to a potential client one day, I think he might have become a client. And we had to dig him out of this, where he's like, okay, let me go sell some more bankruptcy cases. I have to go sell those because I have other bankruptcy cases that I need to file and I don't have the filing fee.
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B
Oh, my gosh.
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C
Yeah, so that was actually a violation of bar rules. But that's.
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B
I mean, that's just like. I mean, not smart, but like that. You're like, you got ethical issues there. I mean, that's a. That's a big, major problem. Well, then make it. Let's make it a contingency. Contingency fee firm. Then let's switch it from criminal to PI or like employment, something like that.
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C
All right, so in that one, I would look at how many weeks of operating cash do we have? Because in those firms, you don't have that steady revenue that comes in all the time. So how long can we go without a big settlement coming in? I would look at how many things. What is the pipeline look like that has been settled but hadn't paid?
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B
Okay.
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C
You know that 30 to 45 day what's coming in. And again, I would look at capacity. Are we using all of our capacity? Are we. You can tell in almost every contingency practice, you know about how much a case is worth, you know about how long it's going to take. And the thing that people don't think about a lot is how much pressure it's going to put on your team, how many resources it's going to take, how many hours, how, you know, you can predict all of that on day one, for the most part, for about 80% of your cases, they're going to be the 10% that, like, suck you dry, and they're going to be the 10% that settle. And you're like, wow, how'd that happen? But, you know, the bulk. And so it's really looking at that and predicting it. And are we going to have the people we need when the work hits that stage?
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B
I think a lot of people, they overlook the number of snowballs, too, where if you don't do this one thing here, it's going to snowball into the next thing and the next thing and next thing. Whereas if you had enough resources, you could have solved that issue at the beginning. And you don't. You don't create all these snowballs. And that's like, if you can do, like one thing, it's like, reduce the number of snowballs and you. You'll solve a lot of your problems.
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C
You really will. I was so, you know, I do a lot of work with EOS now, and I was in a session with a client, and we talk about solving problems at the root. Don't solve the symptom. Don't put a band aid on it. And they had an employee, awesome employee, but they kept kind of doing stuff that was outside of their normal job. And, I mean, really nice. They were trying really hard, but they were kind of stepping on some people's toes and they weren't being very efficient. And so we were idsing it and they were like, okay, the problem is we haven't ever told him what his job is. I'm like, that's not the problem. They're like, yeah, yeah, that's the problem. So we just need to tell him what his job is and he'll stop doing all the other stuff. I'm like, guys, that's not the root problem. Like, what do you mean? I'm like, him doing that is a symptom of the root problem. Because you may fix that symptom, but then Jane over here is going to do the same thing. Because you know what? You never told Jane what her job is either. And you've never told Robert, and you've never told Mary, and you've never told Bob. The root problem isn't that this one guy didn't know what his job was. The problem is, is that you don't have a process to tell people what their jobs are and manage them, to keep them within their. Their responsibilities. And they were like, oh, so when you talk about that snowball, things snowball because you're treating those symptoms.
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B
Sure.
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C
You're just slapping a band aid on it and it's going to show up again in a couple of weeks with a different name on it.
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B
Did they even have like an org chart or anything like that?
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C
Well, hello. They were working with me. Yes.
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B
Okay. By the time they go, okay, good.
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C
They did. We hadn't fully rolled. We hadn't rolled out EOs.
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B
Sure.
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C
To the rest of the team. So that was. And I kept saying, we need to roll out EOs. We need to roll out EOs. And they're like, yeah, that could wait. I'm like, no, it really can't.
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B
Well, speaking of Eos, you have a book coming out, and I don't know how much you can talk about it or can't talk about it, but let's. Let's talk about the book. Tell me about it.
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C
So it's called Scaling Law. And I am. So, you know, I have the CFO company.
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B
Yep.
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C
And that's great. And what we discovered, we looked at our clients at one point, and we could kind of divide them into three buckets. There was one bucket of clients. They started working with us, and they just had amazing results. Like, if you looked at a. At a graph or a chart, it was high end of the. Right. Think hockey stick.
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B
Like, I was a hockey stick. Yep, hockey stick.
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C
So we're like, huh, okay, great. And then there was, you know, bucket B or bucket number two, where they were making good progress. Wasn't a hockey stick, but it was nice. And then there was bucket C. And you could hardly tell they were working with us. And we're like, okay, what are we doing with the Bucket A clients that we're not doing with the Bucket C clients? Like, oh, my God, we're totally falling down on the job here. Right. So we dug in, and it turns out we were using the same strategies, giving them the same, you know, worksheets and the same tools. Bucket A was executing, and Bucket C just didn't seem able to execute. We're like, okay, so what's enabling Bucket A to execute so well? And what we finally figured out was every single firm except for one in bucket A was running on eos.
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B
Interesting.
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C
Isn't that fascinating?
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B
It's fascinating.
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C
So EOS became our number one outgoing referral. And we'd say, go find an EOS implementer. They would come back and say, well, of two things, I can't find an implementer that is willing to work with an attorney. I'm like, I don't know why I don't want to work with lawyers. I love lawyers. And then the second thing is, I found an implementer, but they don't understand the legal industry.
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B
Okay.
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C
So when that CFO company became really efficient and my COO started running it, and I didn't really have anything left to do. She's like, I think you should go be an EOS implementer for law firms. So I am the only EOS implementer that only works with law firms.
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B
Interesting.
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C
Yeah. And as I've been doing this for the past couple of years, I keep running into attorneys that are like, oh, yeah, my clients love eos, but it doesn't work for law firms.
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B
So I've had. I've had the opposite experience where I think that sometimes law firms are too drawn to us. Like, they're so. And here's my theory.
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C
Okay, let's hear it.
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B
And I, Like, I've I think EOS is fantastic. I think I like scaling up too. Like, I've followed more like the scaling up model for our firm. EOS works for a lot of firms. My theory is that people are drawn to the whole integrator and visionary because kind of makes them the center of the firm in a way. Especially people are, they're overly drawn to the visionary one. They want to be the visionary because it sounds cool and it's, it's not maybe the best thing for them. So you want to talk about that a little bit? That's just my theory.
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C
Yeah, I'll talk about myself as a visionary. It's sucked. I mean, let me tell you, those two jobs are not what you think they are. So when Pam took the integrator job, she spent the first year and she was very upfront about it. She's like, this is going to be the year of no good for her. And that was pretty much all she said year was. No, I'm like, Pam. And she's like, no, no, no. And a lot of times the integrator is the disciplinarian. They're kind of a hard ass. That's, that's cracking the whip. And then you've got the visionary, which sounds like this fabulous, sexy job of I just get to run around and make friends with people and promote our culture and, and go speak and do all this great creative stuff. I don't have to manage anybody. And I had a visionary on Monday say, I'm having a really hard time because the visionary role is a thinking, not doing. I don't have anything to do. And all of a sudden when you stop doing, you, you sometimes feel a little disconnected from your team because they're all doing. And you're so used to going in and saving the day. You're like, I can fix that. I can do that. I can. And all of a sudden now your integrator is doing that and you're like, but what about me?
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B
So that's, that's the. I think you just hit the nail, the head as to why I, I get a little frustrated with it. I think it sounds like you are doing things the right way. I get frustrated when I see some of these firms that they adopt it because they think that that's what the visionary is. And it's kind of like this like hero complex in a way where like, I got to be the hero. I'm the visionary. I'm the one. It sounds beautiful, sounds great, but it's being misused. And, and I would say Even there's lots of times that the integrator is actually the one that should be the one on the YouTube videos, not the one that is actually the one that's on the YouTube videos.
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C
Have you seen any of the calf cap stuff for the past couple of years?
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B
I have. I try to not watch. I've deleted Tick tock. I don't watch a bunch of shorts, so, no, I've not. So tell me about that. Let's hear.
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C
Pam's all over it.
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B
Freaking fantastic.
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C
Okay, I'm not there. Yeah, you know, I still do some stuff. I do this. But yeah, it's. It is Pam. She is in there. She's the nitty gritty. People will call me and say, okay, I've got to talk to you. I need to hire Cathcap for blah, blah, blah. I'm like, and you need to be talking to Pam. And they're like, well, why? Well, first of all, because I tend to sell things that we don't actually do, so let's get in trouble for that. And, you know, she's got the parameters. She's got her finger on the pulse, on the nitty gritty daily stuff that I don't.
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B
Then how do you harness those visionaries that are stepping into too many buckets?
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C
It is hard. And I mean, it is really hard. I will never forget sitting. So my parents have a place in North Carolina in the mountains. And I had gone up there and I was planting flowers and Pam and I had gotten into it and I called my EOS implementer and I'm planting the pansies and sobbing, sitting in this gravel driveway. I'm like, and Pam did this. And Justin said, that's her job. Whoa. And then she did this. Huh? And that's her job. And then she did this. Also her job. I'm like, but. But he's like, so you're mad at her for doing her job? And so I just sat there and cried a little more and had a real pity party because, yeah, I was not this the center of the universe. And it's hard. And you're gonna have some times like that where you realize, yeah, you can go off and be creative, but you've got this counterbalance. It really is much more of a partnership than people realize. And it's. It is a hard relationship.
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B
Do you think in a law firm it's better for the founder to be more of a visionary or an integrator? Does that matter?
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C
I think at 100% depends upon the person.
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B
Okay. So it doesn't have to be one or the other.
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C
No, it doesn't have to be one or the other. There are people who are great integrators, who are great operators, and they need to be in that position. There are people who cannot operate. Operate their way out of a paper bag.
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B
True.
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C
So let's get them out of the freaking paper bag.
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B
Yeah.
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C
So it really is what. What your skill set is, what your personality is. And here's the thing. Every firm doesn't need a visionary.
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B
Oh, you just. I think you are going to make so many people mad at going to
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C
come after me with whips and chairs.
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B
Yes. And you know what? I think you're right. I do. I think you're 100% right. But I think you're. You hurt some people by saying that. You just hurt their feelings, I'm sure. Talk more about that because that is. That's going to hurt some people. I'm sure.
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C
It. It probably does. Visionaries are made out to be. I mean, you said it earlier. These heroes, these fabulous people. All right, first of all, they're human and they're fallible.
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B
It's 100. Yeah.
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C
And they come up with a thousand ideas, one or two or. Which may be good. The other ones are just awful. So let's, let's get that straight.
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B
And you're saying this as a visionary, too.
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C
I am saying this as a raging visionary because, I mean, there are even times when I wake up and I'm like, why did I think that was a good idea yesterday? And. So you can live without someone chasing every rainbow, every dream, every squirrel, every shiny object. You cannot live without somebody absolutely enforcing the 20 mile march every day.
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B
Yeah. It's true. The, it's the, it's the boring stuff that gets. Gets the job done. And the boring stuff is, let's admit, it's done by the integrator. That's. That's what happens.
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C
It is.
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B
Yeah.
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C
It is probably the crappiest job in the firm.
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B
And it's interesting you said, what you said about. You didn't use the word bad guy, but it's kind of like they are kind of like the bad guy where you. Because they haven't enforced things. They're. They're this insulation between them or the, the team and the visionary. So the visionary doesn't get the.
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C
To call it a filter.
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B
Filter. Okay. It's filter versus insulation. But yes, it is. Either way, it insulates you.
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C
Yeah, they're protecting, they're, they're totally protecting the team from the visionary who is like jumping to Every shiny object that's ever existed.
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B
Which it's interesting because then the integrator, though, I think that they're immensely undervalued because they are also the ones that are taking a lot of the heat.
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C
My integrator makes more than I do.
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B
Yeah. I mean, I don't think that's. It's not always appropriate. I think sometimes the vision.
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C
I mean, let's say she's also really running the company and I. Not that involved anymore. But yeah, it is a hard job. And when you find someone that. That is a true integrator, that really can do it, well, you have found a very precious thing.
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B
So. Have you seen the movie Office Space?
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C
I have not.
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B
Oh, my gosh. Okay. Okay. So there is this. Do you know the premise of the movie?
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C
No.
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B
Okay. It's just. It's this, like, tech IT company that they're. They're bringing these outside people to downsize the company. Right. And there's these two guys in these white shirts just sitting at this conference room table. Have you seen the movie up in the Air with George Clooney?
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C
Yeah.
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B
Very similar type of thing, but they do. Yeah. Well, they're coming in, and it's very dry humor and all that kind of stuff. And there's this. This one guy is kind of a funny guy, but they're like, what do you do here? Right. That's like the, like one of the main lines. So when it comes to the visionary, like, what. What is it that the visionary does if they're going to be doing? Thinking is. I get the whole idea of thinking, but what does that look like practically?
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C
They need to be out really developing major relationships. They need to be out looking at the cutting edge of everything. What's going on in AI? How can we incorporate that? What does that look like? Are there ways? Here's the frustrating thing. You know, the visionary goes out, finds this great idea, brings it back, and the integrator goes, yeah, that's not going to work. The integrator vets it. And you're like, but, but, but. Great idea, great idea. That's not going to work. So it's. It's really a lot of going out and bringing things back. Like, what's out there? What do we not know about? Who are the people that we need to pull into our circle? What have we not thought about?
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B
It's funny you say that. I think if. If you were going to divide Max Law into, like, integrator and. And visionary, I'm probably. Even though I'm doing, like, the show and stuff. I'm definitely more of the visionary with things I will take.
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C
I don't think anyone doubted that.
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B
Well, I. Probably not. But with Becca, she's definitely the integrator. But I will. The whole day, the whole thing with the ideas. I can't tell you how many hair brain ideas I've had. And it's funny because I'll. I'll know whenever she does not think it's a good idea either. She will not respond. I can't tell you how many text messages I've seen sent to her with ideas. And like, I just will not get her crickets. There's nothing. Okay, we'll just let that one stew for a little bit and see. So I definitely feel that. That's something I completely feel.
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C
Yeah. And I'm like, Pam, whatever happened to. She's like, huh? Yeah, it's. It's on a list somewhere.
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B
That's how you know if it's a good idea or a bad idea.
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C
On a list in her trash can.
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B
Yeah. Well, theme. How many ideas you had that you've forgotten about that you didn't. It probably wasn't a good idea then.
- [26:03]
C
Yeah. But frankly, Tyson, how many ideas I've had that I've forgotten about, that they've implemented? Because I know there are times when I've been like, oh, my God, this is really cool. And they're like, hello, you. You're the one that brought that to us.
- [26:18]
B
Those are cool experiences. You're like, oh, yeah, I've had that too. That's kind of a nice feeling.
- [26:22]
C
Yeah.
- [26:23]
B
Okay, so help solve another problem for me. All right.
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C
What are we solving?
- [26:27]
B
It's. Well, it's really about eos. I think you're the perfect person to talk about this.
- [26:31]
C
I am the one.
- [26:32]
B
Okay. I need help justifying because, like, like I said, I've been like, more of like the scaling up the Vern Harnish type.
- [26:39]
C
And I love Fern.
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B
Like, it's like no one. I mean, it's like, he's great. Vern's great.
- [26:45]
C
He's awesome.
- [26:46]
B
It's the. It's about the implementer. So you're the perfect person because you do this. Right? I. When I look at a company like, like Apple or a big company, like, you don't typically have. They don't have like an implementer that helps them run the business. Right. Why is it that, like, what is it that the implementer does that makes it where helps the EOS firms be successful, I guess is a good way of putting it.
- [27:11]
C
I do two things. Well, I probably. I do three things. The first thing is I teach the tools. This is how you use them. The second thing is I create accountability because they've got to look at me every quarter and say, done or not done.
- [27:31]
B
Sure.
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C
And the third thing is, IV bring a different perspective. I don't have a dog in the fight. So, you know, I don't care. I don't have any pet projects. I don't have any, you know, I can look at it and say, are you really fighting over whether the cake at the Christmas party is going to be red or green? Is this worth do how many attorneys do we have around this table? Do you know how much money we are burning, how much billable time we're burning on this issue? And it's funny because I'm an implementer. We still have our implementer for Cathcap, for the E Up, for the CFO company, and he has tried to fire us so many times.
- [28:32]
B
And he's like, funny.
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C
You can do everything that I do. Why. Why do you keep bringing me back? I'm like, because I can't facilitate and participate at the same time.
- [28:44]
B
Is it. Is it similar to marriage counseling in a way?
- [28:51]
C
A little bit. But, you know, doing the CFO work is a little bit of marriage counseling.
- [28:55]
B
Yeah. I've never been to marriage counseling. But, like, what my thoughts, like, what my assume it's like, is like, they can't call balls and strikes, but they're like, more like doing with what you're talking about. Like, like the Christmas cake example. Like, that's kind of like what I envision. It's like, I don't know.
- [29:10]
C
Pam and I went to marriage counseling.
- [29:13]
B
Yeah. Was it beneficial?
- [29:14]
C
Oh, my God, it was the best thing we ever did.
- [29:16]
B
Was it similar to what. What you do with eos?
- [29:19]
C
No, we actually. We went through a period of time where we were not getting along. Trust had broken down. Nothing works if you don't have trust. And our EOS implementer was like, I think you all need to go see somebody interesting. And so we did, and. Best thing we ever did.
- [29:48]
B
Interesting.
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C
He was amazing. Of course, after the first one, Pam's like, of course you liked me. Took your side on everything. But then there were other times when I'm like, oh, no, he's all about you today. And more than anything, he just helped us understand how different the other one was.
- [30:07]
B
Right.
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C
And. And helped us learn how to respect that. And I would say, do it in a heartbeat.
- [30:17]
B
Do you think that law firm owners should Have a similar type of like a quote, unquote, marriage counselor? Like, do you think. Do you think that would be effective?
- [30:29]
C
Do I think every attorney probably needs to be in therapy? Is that the question?
- [30:36]
B
I'm specifically talking about law firm owners, but maybe, maybe it is. Maybe, maybe we do. I mean, I don't know. Yeah, but what, like, what about, like, with, like, law firm owners, though? I mean, if they have partners. If you have, like a law partner.
- [30:47]
C
Yeah.
- [30:48]
B
Like, do you think that that would make sense?
- [30:50]
C
I don't think it. I don't think it's right for every firm. I was talking to one of our clients this morning. I've got some clients who are so in such lockstep that it is amazing, you know, I can give them a quiz about what's going on in the business and they will all give me the exact same answers independently. I've got another team right now where one of the. One of the partners is not feeling valued and he is creating all kinds of issues and it's his insecurity because the other two partners don't want him to go anywhere and they really value him.
- [31:54]
B
How do you solve for that? That's. That's a tough one to get over.
- [31:57]
C
It is a really tough one to get over. And there's part of me. So my team doesn't like me to talk to partnerships where they're not getting along really, really well because I kind of have a reputation for just busting them up and moving on.
- [32:12]
B
Yeah.
- [32:13]
C
Because very often there's one partner who's really carrying everything and the other partner isn't appreciative of all that work. Like, yeah, get on board or get out.
- [32:28]
B
Okay. In those situations.
- [32:30]
C
But I can't get rid of this guy because they love him.
- [32:34]
B
Yeah.
- [32:34]
C
And I'm like, I don't know what we're going to do because we've been struggling with this for about six months. And frankly. Yeah. I think it's.
- [32:44]
B
It.
- [32:46]
C
Therapy's probably the next discussion.
- [32:48]
B
Yeah. How whenever those times come up, whenever you're like, you've got a couple partners that aren't quite getting along, is it usually that the. The. I wouldn't call them the under producer. Let's just call them the under producer over producer. Just to differentiate the two. So you have the overproducer that's producing a bunch, and then you have the under producer that's not producing as much. And maybe just because the roles are different, is it usually that the over producer is underappreciating the under under producer, or it's that the under producer is underappreciating the over producer.
- [33:19]
C
It really depends. So there's a forum, a firm in Fort Worth that I worked with, and there was one person who was generating a lot more revenue, bringing in more cases than the other one. And he's like, you're not bringing in as much as I am, so you shouldn't be getting as much of the profit as I do.
- [33:47]
B
Sure.
- [33:48]
C
I'm like, dude, you don't do anything administratively. She does all the hiring, the firing, the managing. She is the reason your bills go out every month. She is the reason you get paid. She is the reason you have lights, phones, computers, and your Xerox machine works. You owe her. He was like, wait, what? Like, let me tell you how much time she spends operating this firm. And his eyes were really open. I think you owe her a salary for that. He was like, whoa.
- [34:29]
B
So that's why I asked the question. That's because that was my assumption as to what it is, because I usually see it's where you've got this one person that's generating a bunch of business, and they're not thinking about the fact that they've got this other person that's their partner that's doing all the other
- [34:45]
C
stuff, making it happen.
- [34:47]
B
That's allowing them to be able to go out and have those business meetings. And. And it's easy. I can. It's easy to see how that dynamic. How it happens.
- [34:55]
C
Yeah.
- [34:56]
B
But it's also because, like, you see this person bring. Oh, I'm bringing all the businesses. But it's like, you also got to understand, like, if you weren't. If you didn't have this other person running the payroll and doing job interviews and all this kind of stuff, you. You're doing that teaching and training. Yes, yes.
- [35:14]
C
And making sure that the work is actually getting done. Because you're just, you know, I make jokes about, you know, the finder. The minder in the grinder.
- [35:23]
B
Yep.
- [35:23]
C
And. And I always think about a finder as someone who's going out and clubbing clients over the head and dragging them back by the hair and, like, depositing them at the front desk of the firm and walking out again. Well, yeah, great. You brought it back to the firm. But what do you think happened to that client after.
- [35:45]
B
Sure. Something's going to happen with it.
- [35:49]
C
Yeah.
- [35:50]
B
So what's the grinder?
- [35:52]
C
Oh, the grinder. Is that that young attorney that really, if we could chain them to a desk in a windowless room and say, Bill, baby. Bill. You're not allowed to have any coffee because that would mean you'd have to take a bathroom break. Yeah. No, we're gonna put you in a room, have you, Bill, for 14 or 16 hours a day. Totally dehydrated, no food.
- [36:14]
B
What about minders? What are they?
- [36:17]
C
They are the ones who are in the office making it happen. They are teaching and training. They are really developing the relationships with the clients and keeping the clients happy. They're minding the store.
- [36:34]
B
Have you ever heard, like, the model. Like the fee split model where, let's say you have a partner that's kind of like the rainmaker and they get a cut?
- [36:41]
C
Going to be complicated.
- [36:43]
B
It's not. I don't think so. I. I'll try to make it as simple as possible. So let's say that you are. You. You're the rainmaker. Right. So you get a cut of whatever the fee is on that client.
- [36:54]
C
Yep.
- [36:54]
B
And then the person that's doing the work. So the minder.
- [36:57]
C
Right.
- [36:57]
B
So I guess we'll use the finder. The minor finder brings in the 10%. 10%. It's usually. It's usually. Here's what. Here's why I'm asking this question. You. You know where I'm headed? Kind of, but I'm going to flip it on you. So let's say finder gets 10%. Minder gets what? What would you say?
- [37:17]
C
All right. Well, it depends.
- [37:19]
B
Okay. But let's say. Let's just give me. And give me. You gave me 10%. Give me a number for this 20%. And then the rest goes back to the firm. Right? Is that.
- [37:26]
C
Yeah.
- [37:26]
B
Okay. So what's interesting is usually when you hear about this model, finder gets like 35, 40%, minder gets 20, 25%, and the rest goes back to the firm. And so you put the value on the minder, and most people put the value on the finder, which I think is really interesting.
- [37:46]
C
So here's why we should run law firms on the rule of thirds.
- [37:51]
B
Okay.
- [37:53]
C
One third of the fee should go to the people doing the work. One third of the fee should go to overhead, which includes marketing. One third of the fee should be profit.
- [38:08]
B
Okay?
- [38:10]
C
This is a starting point. If you are a PI firm and you tell me that your Profit margin is 33%, I'm gonna be like, dude, we got work to do, because you should be in the high 40s, low 50s. But that's neither here nor there. We're gonna go with the rule of thirds. That finder is marketing. You really shouldn't spend more than 10% on marketing.
- [38:39]
B
You know, people, you're, you're making so many friends in this, in this interview. You really are.
- [38:44]
C
I'm making friends with you. I'm probably alienating everybody else.
- [38:47]
B
Yes, I do. It's funny to. I, I guarantee I want to hear, I want to hear the comments about. Because here's the thing, I agree with you. So I'm going to get some of this hate too. So leave, leave me some comments. I. Because I do think that there is an overvalue of those because let's be honest, the finders usually doing kind of like the fun job and it's usually the easier job is usually what it is.
- [39:10]
C
It depends on your personality.
- [39:12]
B
Also true. That is also true too because some of it could be based on reputation. A lot of things I'm talking about just the strictly the ones that are just going out trying to generate and they're just kind of, they're going to, having the, the drinks after work kind of a thing and all that.
- [39:24]
C
So. I dated a Supreme Court clerk at one point, a former Supreme Court clerk, great guy, really smart. I mean one would expect.
- [39:35]
B
You should be.
- [39:36]
C
Yeah, you should be. You took him out in public and he was such an introvert, he like cratered into himself. He was great one on one. But you took him to a party and he would like find the furthest corner and back himself into it and become as small as possible. He was never going to be a great finder. It just goes against every part of his being. His reputation might attract people, but he was never going to be the one that went to a party and shook hands and came back with clients.
- [40:13]
B
And I will say this, I'll be the first to admit I'm somewhat contradicting myself. And whenever I'm asked like what's the most important part of running a law firm, I always say bring in clients. That is the most that you have to bring in clients.
- [40:24]
C
You don't have clients. You don't have a business.
- [40:27]
B
But I think once, if you have a, an established firm that is operating at its optimal level, then it should be run the way you're talking about where. Because if you do, let's say you're giving that, that larger percentage to that finder, you are cutting off your head as a law firm owner. You are just siphoning money right off the top that you need to operate the law firm. That's. And that's the difference. And that's. Even though it may Sound like I'm contradict myself at the beginning. Sure. The most important part is going to be bringing those clients really throughout. But once you are established and you have got your systems in place and your marketing is all established, you've got to level those numbers out. Otherwise you are just going to just crush your ability to have any profit.
- [41:13]
C
Absolutely. So two things. One, there was a law firm in Fort Worth, 150 year old law firm that went belly up, I don't know, like six or eight years ago. And I'm like, what happened? And basically they had too many finders and no minders or grinders. So these people were going out and getting work, they were being totally overpaid for it and they didn't have anybody back at home to get it done. So they had unhappy clients because the work wasn't getting done. There wasn't a lot of billing and any billing that was getting anything that was getting collected was going to the people that had brought it in and they went bankrupt.
- [42:04]
B
I call that gridlock. I have a neighbor that my name for that's gridlock. Because in its gridlock is, is extremely dangerous because, because of what you just talked about. We mentioned snowballs. All right, what happens whenever you're still bringing in a bunch of cases but no one's doing the work? Okay. So you're getting a bunch of phone calls, you're getting emails, you're having people try to put out fires all day, okay, so you get bar complaints getting killed.
- [42:30]
C
Exactly.
- [42:30]
B
Your reputation's getting killed. So. And this is where it gets dangerous, right? And you know this. So you get, you're getting bad reviews, you're getting. So the marketing, the reputation, what starts to shut down, all the leads coming through, starting to shut down. You have all of this work but no one to do it. So you are in a massive, massive, like it's gonna be the struggle of your life and if you don't pull it off, you're done.
- [42:56]
C
Look, I don't care. Every firm, every business has to have three departments and they all have to operate. You need sales and marketing.
- [43:09]
B
That works, okay?
- [43:11]
C
You got to go out, find clients. You get, you have to go out and find prospects and make them clients. You have to have some kind of production, okay? Got to get the work done, whether it is manufacturing bicycles or doing legal work. And you've got to have a finance department because you have got to send out bills, you've got to collect money and you've got to pay off your own debts.
- [43:40]
B
True.
- [43:42]
C
If you, if Any one of those three is not working, you're going to get what you're talking about. If production isn't working, finance isn't going to have any money to pay anything. So all your anybody might still have is going to quit because they're not getting paid. And it's going to hurt your reputation. And the leads are going to stop coming in because you have cruddy work. If you have no leads coming in, if marketing and sales can't bring in clients, well, no work is going to get done because there's no work to do. Finance doesn't have anyone to bill. The whole thing craters. If you're bringing in a whole bunch of clients and there's a whole bunch of work getting done, but nobody's billing or collecting or paying your bills, you're still going belly up.
- [44:36]
B
Totally.
- [44:37]
C
You've got to have all three.
- [44:39]
B
It's worse if it's PI firm too, because if you're not, at least with that, like criminal defense or immigration, you're getting money up front. So you're actually still have. You have some oil to lubricate the machine and try to get out of it. But if it's PI and you're not settling cases, you're bringing them in. So you're spending the money on the cases and the staff buy cases in PI. I mean, I think, I think that's. I think that's the right way of putting it. Yeah. You. Like, that's why we look at like our acquisition costs. Like, that's one of the things where we're, we focus on is what's our cost per acquisition. And, and 100%, like you are buying cases is what you're doing. Whether you are literally buying them or you're actually just getting them in other ways. You are.
- [45:19]
C
I don't care how you get them, you're buying them. If you're getting a referral from another attorney that's costing you 33%, that's really expensive. It better be a damn good case.
- [45:28]
B
So let me ask you about this. I get this question a lot.
- [45:31]
C
Yeah.
- [45:31]
B
Referral fees. Do you consider those a marketing cost?
- [45:34]
C
Yes.
- [45:35]
B
So, like, when you're looking at, like you're looking at your financial statements, you're like, is that something a marketing fee?
- [45:41]
C
Okay, Absolutely.
- [45:42]
B
Interesting.
- [45:43]
C
And you really shouldn't be spending 33% on marketing.
- [45:49]
B
Yep. I actually, I've said the same thing. I view it as a marketing expense, too. And I highly value our referrals. I definitely do. But it's, it's a Very expensive marketing cost.
- [46:00]
C
It is very expensive. So if you are taking in cases that way, you need to make sure that the cases you're taking in are really worth it.
- [46:11]
B
Totally.
- [46:12]
C
That they're. That they're really good ones. You're not just taking anything that walks through the door.
- [46:16]
B
No.
- [46:16]
C
That those cases are getting graded and evaluated. And, you know. Yeah.
- [46:25]
B
The Steve Meyer court. He's. He owned the law firm or the office that I rented from early on, and he always said, the most valuable cases are the ones you don't take. Or, you know, he said. And he said that he'd also say, you're gonna make more money from the cases you don't take than the cases that you do take. And it did take me a little bit time to understand what he was talking about, but I get it.
- [46:49]
C
Because they're not gonna drain your coffers 100%.
- [46:52]
B
Yeah.
- [46:53]
C
And it's. PI is hard because case acquisition cost keeps going up. I mean, since the pandemic. Talk about a hockey stick.
- [47:08]
B
Yep.
- [47:09]
C
And so you really do have to. You have to buy those cases, and they're getting more expensive every day. Then you have to work them, and then you have to pay all the. The costs on them. And I have so many attorneys that are like, I don't have any debt. I'm like, you're a moron. And they're like, what do you mean? I'm like, you've got two and a half million dollars out on the street. And they're like, what do you mean? I'm like, you've loaned out two and a half million dollars at zero percent interest.
- [47:50]
B
Exactly right.
- [47:51]
C
They're like, no, I haven't. I'm like, right there on your balance sheet, two and a half million dollars of advanced client costs. They're like, yeah, but we're gonna get paid back.
- [48:02]
B
No, not always.
- [48:04]
C
But if you were using somebody else's money, if you were using the bank's money, that two and a half million could be sitting in the market. And think about what it could have done in the past five years. It might have doubled almost, and you could have been passing the interest expense through to your clients.
- [48:30]
B
So that leads me to. To believe that you probably. You were a proponent of using these companies to help finance cases.
- [48:40]
C
That's hard. Yes and no.
- [48:43]
B
Okay.
- [48:47]
C
I hate to see attorneys with $2 million of their own money on the street unsecured.
- [48:52]
B
True.
- [48:54]
C
But some of those companies, the effective interest rate is up around, if not over 30%. And it doesn't look like it, because the interest rate that's charged is, I don't know, 15, 19%. Okay, high. But I mean, we're not totally hyperventilating. But then every time you draw down on the line of credit, there's a charge, you know, it's, it's 5% to draw down. There's, you know, this charge here, there's that charge there. And then at some point you get into a situation where, you know, a waterfall provision kicks in. And that means that if you've got a 20% waterfall provision, 20% of everything that comes in the door every month goes straight to them.
- [49:53]
B
Really?
- [49:54]
C
Yeah. And you have to send them your financials every month so that they can see it or they're going to call your line of credit.
- [50:06]
B
Oh my God.
- [50:07]
C
And you've got to come up with the $2 million that you've now gotten from them, put out on the street.
- [50:12]
B
I didn't know that. That's the first I heard that. That's wild.
- [50:14]
C
And I know people that have had 50% waterfall provisions.
- [50:18]
B
So you're taking 50% of everything that comes through the door. I mean, you can't operate. I couldn't operate if I, if I had to take 50% of everything came through, I couldn't operate.
- [50:27]
C
So I had a client that, he was a great guy. This was not intentional, but his father in law was like, I gotta get out of this law firm. Walked into his office, said, you want to buy the firm? He was like, yeah, sure. When he was like, by the end of this month, he was like, okay. So they came up with this thing where he gave his father in law like one third of everything that came in for the next however long. Okay, that's a lot.
- [51:05]
B
That's a ton of money.
- [51:07]
C
Especially since 100% of his cases came from referrals. So now he's got 2/3 going out, which leaves him with 1/3 to run the firm and keep his family afloat.
- [51:25]
B
See, people don't think about this stuff. They just, they just come up with numbers and they just start saying things,
- [51:30]
C
yeah, we'll do this. So he realized really quickly that the only way it was going to work for him was if he really maximized every case. So he went out and he taught himself how to be a better lawyer and he, his cases tripled or quadrupled in value and that was how he made it work. Well, that, and we helped him. But his father in law got paid ton of money.
- [52:05]
B
Oh, I bet he did.
- [52:06]
C
For a firm that was worth virtually
- [52:08]
B
nothing that is an interesting thing, because law firms, unless they've got the right components, aren't worth anything. Like, you've got. You've got a bunch of clients, sure. But, like, the reality is, like, all those clients could fire you in a heartbeat and go somewhere else. And, like, unless you have, like, the whole package, like, you've got people that are running the firm without you, it's really not. Your firm is worth very little.
- [52:30]
C
So, you know, I wrote a whole book on that, and people are amazed. A law Firm is worth 2.4 to 4x what you take home at the end of the year. Your total owner compensation. It's called ste Sellers Discretionary earnings. Think about that. People are like, I'm going to sell my firm and retire.
- [52:53]
B
Mm.
- [52:54]
C
You're going to sell your firm. And if you do, you know, like most people, you're going to get three years to pay for it. For that firm that you have worked 25 years in, if you've got a rockin firm, you're gonna get four years worth.
- [53:13]
B
And, like, it's funny because, like, I could look at what's in our inventory of cases, and it's worth way more than that. And so people want to be like, oh, my case is worth the. Or my. My firm's worth this. No, it's not. You don't multiply all your cases times your average case value, or you don't figure out, okay, that case is worth $10 million. It's just not how that works.
- [53:34]
C
Yeah, and we've had that discussion internally because, you know, we value firms. We'll come in and we'll value your firm, and we'll tell you what you should sell it for. And that was a discussion. I'm like, it's a PI Firm. Should we be looking? Because we can go in and we can truly understand and we can tell you exactly how much your firm is going to make over the next three years. So I can tell you what your inventory is worth, practically down to the penny.
- [54:01]
B
What are some creative ways of buying firms?
- [54:05]
C
Well, there's the bonk you on the head with the magic wand.
- [54:11]
B
Okay. Is that just giving you money? What does that mean?
- [54:14]
C
That is just giving you equity. Earned equity.
- [54:17]
B
Oh, okay.
- [54:18]
C
Harder to do than it used to be.
- [54:21]
B
How so?
- [54:22]
C
Government's watching more now than it used to. They are starting to track, and I can't ever remember where they ended up on this. And if they're not doing it, they're going to start doing it again. They're tracking private ownership of companies okay, so you can't go from owning 2% to the next year, owning 50% without the IRS going. If you give equity to someone, you actually need to file paperwork that says that. And there. And the receiver needs to pay income tax on the value of what has been transferred.
- [55:09]
B
So I, I am familiar with this. This is something we've, We've looked into. And I. That is. It was one of those things that was very, like, shocking to me to. Even I hadn't thought about it. It's like I just wouldn't even. It hadn't even crossed my mind, which made it. Some of the things we wanted to do made it. It just made it prohibitive. Like we're saying not. Not going to do it. It's not going to make sense, though.
- [55:29]
C
Yeah, I mean, it's. And it used to be that everybody got bonked on the head with the magic wand. Boom. You own 10. Like just magically. And, and no one took it as income. No one. Like none of that happened.
- [55:44]
B
But.
- [55:45]
C
But the world is changing.
- [55:47]
B
Well, to me, it makes sense to do it like it's a. Not tax because what if the. What if it loses money? Like, what if, okay, you got the equity, but like, what if, next thing you know they're. You're not making.
- [55:57]
C
What if you buy Enron and it goes bankrupt?
- [56:00]
B
Right. You paid the tax and all, you get nothing. Like that makes no sense.
- [56:04]
C
That's the risk of ownership. So I think a creative way to do it is to do shadow stock or ghost stock.
- [56:14]
B
Is this like silent partnership kind of a thing?
- [56:17]
C
This is. They don't have equity, but you say you've got. We're going to create shadow stock so it will exist only on paper.
- [56:30]
B
See, I've never heard this term. This is interesting. Is this a term you came up with or is this actual legit term? I don't know this term. Okay,
- [56:39]
C
so we have actual stock and then we have shadow stock. And it's. It's a contractual obligation that says if we sell it will. The. The transaction will happen as if you owned 20% of the company.
- [56:59]
B
Okay, got it.
- [57:01]
C
So it functions the same way. Profits will be distributed as if you owned 20% of the company, but they won't actually own it.
- [57:15]
B
Okay. And I guess that's not where the shadow is. Okay. And that's not flagged. Okay.
- [57:22]
C
So that's how you can bonk them on the head and give it. However, they can't sell it back, they can't sell it on. So, you know, if you think about the traditional firms that have been out there for a gajillion and a half years. You know, he would practice for seven, eight, ten years. You'd buy in. You'd kind of rape and pillage your way through your career, collect as much money as you could, and then you would sell your. Your shares to some younger person and recoup, you know, your initial investment. Maybe.
- [58:02]
B
How can we make this doesn't work that way. No, how can we make our friends more like dental practices? Which. Like dental practices.
- [58:08]
C
Oh, dude, that's happened.
- [58:10]
B
I mean, how do we do it? Like, what's, like, what's the formula?
- [58:12]
C
Private equity's here.
- [58:14]
B
Okay, but like Norman, mso. Oh, that's so funny. I was talking to Chad Burton about Chad. I've mentioned now Chad Burton in every single episode today. So Chad was talking about MSOs. They're not a thing in the legal space.
- [58:29]
C
Yes, they are.
- [58:30]
B
Well, they are now, but they like, historically have not been like. Not like in the medical field.
- [58:36]
C
Yeah, I mean, I did one like 10 years ago and people were like, what are you doing?
- [58:40]
B
Like, no one's doing it. Like, it's so rare. It's the fact that. Yeah, it exists. It's so rare. So talk about MSOs from your perspective and how, how we could make it work for law firms.
- [58:51]
C
All right, so first of all, what is an mso? And at the moment, I can't remember what it even stands for. Master something.
- [58:58]
B
It is a service organization. It is a master service organization.
- [59:04]
C
Right.
- [59:05]
B
It's funny you said that the M. The M is different, I think.
- [59:08]
C
Anyway, it's a service organization. Basically, you take. You take a service based company and you cleave it into parts. One part contains the licensed part of the practice. The doctor, the dentist, the veterinary, the veterinarian. The person that could only own that kind of thing. The rest of it goes into what's called an mso. So that is for a law firm. The MSO would hold the lease.
- [59:52]
B
Managing service organization manager. There you go. Drive me crazy.
- [59:57]
C
They would have the lease. They would own the phone number. They would own the. The website. They do all the marketing. They hire all the employees except for the attorneys. They, including the paralegals. They. They do all the billing, all the finance, marketing, sales, everything, except for what the attorneys do. And the attorneys pay a fee every month to the MSO to basically run their lives for them.
- [60:37]
B
Okay, we. When it comes to the fees or who actually, who. Who handles the money. So when it comes to the, the marketing and all that kind of stuff. And like, the. The. As the fees are coming in and everything is. Is. Are the fees going into the mso and the MSO is distributing it back to the attorney. Is that how you would set it up? Huh?
- [61:05]
C
Yes, because the MSO has finance.
- [61:09]
B
That's wild to me. And to me, that means, like, the majority of the money would have to go to the mso.
- [61:14]
C
Yes, the majority of the money goes to the mso.
- [61:16]
B
And so is it paid out to the. I guess it's gonna. It wouldn't be paid out as a salary then, right? To the attorney. Be paid out as like, I guess just a distribution, I guess. How would that be? Like, what would that be classified?
- [61:28]
C
The MSO probably keeps a separate set of books. And it comes into. It's part of the management fee. Right. I mean, they're being paid to bill and collect for this law firm that consists of nothing but three attorneys.
- [61:45]
B
Because otherwise, if you don't set it up right, you're. What's happening is they're just having income with no expenses, and that could be really problematic for. For the attorney. So they'd have to set up.
- [61:55]
C
Oh, no, the expense is the management fee to the Ms.
- [61:59]
B
Okay, so then it's all categorized properly so you're not getting hit with a massive tax bill. At the end of the end of
- [62:05]
C
the day every month, you pay a management fee.
- [62:10]
B
If you were to start a law firm, would you. Is that how you would operate it, or would you operate as an actual. Its own separate entity?
- [62:18]
C
You know, I don't know. For a while, I was dying for an abs. Out of Arizona? Yeah, out of here. We're in Arizona.
- [62:26]
B
Yeah.
- [62:27]
C
I really wanted one, and then I was like, I don't know. Do I really want to deal with legal work? I could run one heck of an mso.
- [62:36]
B
I bet you don't need to have an ABS if it's in an mso, right?
- [62:42]
C
You don't need an ABS if you're an mso.
- [62:45]
B
That is.
- [62:45]
C
How many more initials can we throw around?
- [62:47]
B
I don't know. Alternative. Alternative business structure. For anyone that doesn't know what that means at this point, we have EOs. I didn't. I don't know if we've defined EOs. I think most people know. Know what it is, but. Entrepreneurial Operating System.
- [63:01]
C
Yeah.
- [63:02]
B
Right. Which I guess leads me back to the book.
- [63:06]
C
Oh, yeah, the book.
- [63:07]
B
Yes. What parts of the book? I think the whole story, but I don't know how much we can talk about this. The. The. Your. The copy of it that I'm going to see. I don't know how much I can talk about that, but you talk about anything you want. It's kind of interesting how you printed a special copy for this weekend that's kind of fun. We talk about that just so people have an idea what the hell I'm talking about.
- [63:27]
C
Yeah. So I'm writing. I'm writing the first ever book on what it's like to implement EOS in a law firm. And it's being published by EOS Worldwide.
- [63:43]
B
I didn't know that part. That's cool.
- [63:44]
C
Oh, yeah, Nice. So, you know, EOS wants to weigh in on what's in the book. And I kept saying, guys, y' all need to read this. You need to read this. I don't want to get right up to publication and have you have a problem with what's in there? Yep. Two and a half weeks before publication. Yeah, we've got a problem with what's in here.
- [64:08]
B
That's gotta be wonderful.
- [64:09]
C
I'm pretty sure I predicted this ten and a half months ago, but, you know, we're gonna roll with it. So one of the things when I came out here, when you guys asked me to come out here, I was like, I will just publish my book. I'll bring the book. And you guys were like, that's great. Our people.
- [64:29]
B
I was gonna have a copy right here.
- [64:30]
C
I know right here. It would be great. You all be like the first people that see the book. Well, there is no book because we've now pushed the book out six weeks. And I told the publisher, Andy Os, I'm like, I cannot show up in Arizona without a book. So the publisher printed 25 books for me. Love it that I'm going to say this publicly. If EOS saw what is in this book, I'm sure they would die because I saw what the publisher had printed, and I'm like, I don't think we can do that. So, yeah. So all the people that came to the Mastermind this weekend are getting a book that there will Only ever be 25 copies of this book, and no one will ever be able to see this particular book again.
- [65:23]
B
It's a banned book.
- [65:24]
C
It is a banned book. EOS is going to ban this book.
- [65:27]
B
I love it. Let's ban. Okay, so what are some of the things that are getting removed from the book that I don't want to get you in trouble, but I'm curious, what are some of these that people are not able to see? I'm so curious.
- [65:43]
C
So this book is written as a companion to traction.
- [65:49]
B
Okay, nice.
- [65:51]
C
So you really need to retraction to understand how the tools work. And then Scaling Law, which is my book, shows you what happens in a law firm when they're implemented.
- [66:06]
B
Very cool.
- [66:07]
C
The addition your people are getting
- [66:12]
B
is
- [66:13]
C
kind of everything rolled up into one.
- [66:15]
B
Love it.
- [66:16]
C
There's a lot of teaching of the tools.
- [66:18]
B
I love it.
- [66:19]
C
This is how you go through and think about it. Don't over lawyer this. Think of it this way. Say this, do that. So it's a little more.
- [66:27]
B
This is one of the many reasons why people join the association because they could have little fun. Accidents happen like this. I had a fun accident happen yesterday. Happy accident, where the person we had got some pizza yesterday and she entered it in wrong. Instead of a half and half, she entered two different pizzas. So we had a free pizza. Two pizzas instead of one. Couldn't eat all of it, but.
- [66:47]
C
All right. Well, that's better than the waymo that, like, left you on the side of the street.
- [66:50]
B
It's exactly, exactly right. Last time we were. But that. I. I can't wait to read it. So I know it's gonna. It's gonna get here tomorrow, so that's. That's pretty exciting. Does it get here today or tomorrow?
- [67:00]
C
It's supposed to get here today.
- [67:01]
B
Okay. Very cool. I can't wait. That's. It's gonna be awesome. Maybe whenever. The updated version.
- [67:08]
C
Send the official version also to everybody.
- [67:11]
B
We can have you on again to talk about that one because that'd be kind of fun. But okay. So talk about the different books that currently exist with EOS and where this one fits in, because you have traction and then you have grit. Is that what's called Get a Grip? Get a Grip? I don't know. I thought it was great. Yeah, Get a Grip eos. And isn't there another one there?
- [67:33]
C
There are a lot. There is. The original books were Traction and Get a Grip, and then what the Heck is eos? Came along.
- [67:43]
B
That's the other one, which is great
- [67:45]
C
to give your employees. If you're rolling out eos, every one of your employees should read what the Heck is eos? It's short, it's easy, and it tells them what the heck EOS is.
- [67:56]
B
Sure.
- [67:58]
C
There is one called Rocket Fuel that is all about the relationship between the visionary and the integrator. And then EOS has started creating books that are about the six key components. So the six key components are vision, people, data issues, process, and traction. So there is now A people book. There is a book on data. There is a book on. Let's see, do we have the. Yes. The process book is out. I'm trying to think of which ones have come.
- [68:42]
B
All separate books.
- [68:43]
C
All separate books. A whole book on just how to strengthen your process component. My book is really focused on law firms, and it's what it looks like if you strengthen those six components. It also talks about what makes it hard as an attorney to implement eos. Like, what are the things you're going to have to overcome?
- [69:09]
B
Can you give me one? I don't want to give too much.
- [69:12]
C
Yeah, you guys do not like to let go of anything.
- [69:17]
B
Really. Shocker.
- [69:18]
C
I know. In your defense, you've got a great reason. I mean, you use it all the time. I could lose my law license.
- [69:30]
B
Yeah.
- [69:31]
C
And it's a valid reason. But you don't have the processes set up to ensure that things get done the right way, the first way, every time.
- [69:43]
B
Yeah.
- [69:44]
C
So you give something to someone, you delegate. Well, really, you dump something on someone and they don't do the. Do it the way you want. Shocker. You just dumped it on them. And so now you've got confirmation bias that you can't delegate anything. So I talk about that. I talk about how to overcome that. I talk about what it's like. I talk about the pitfalls. I talk about the wins. I talk about the tears. I talk. You know, I've got maybe almost 10 firms that were really open and honest with me, and they told me everything about what it was like for them to implement eos. They told me the hard things, they told me the great things.
- [70:35]
B
But.
- [70:36]
C
But they were really. They were really honest.
- [70:39]
B
Do you tell it like a story like in Rocket Fuel? No. Interesting. And that the one isn't rocket fuel, the one where it's like a story kind of.
- [70:47]
C
That is Get a grip.
- [70:48]
B
That is Get a grip. So is it written like Get a grip? Nope. Okay.
- [70:52]
C
It is written. It is written more like rocket fuel or Traction.
- [70:56]
B
Very cool.
- [70:57]
C
Where I go through and I talk about different things, and then I bring these different firms in. So you can see, you know, I'll tell you something, and then I'll tell you a story using their words.
- [71:08]
B
So it's not just like one practice type. It's like you're. You're focusing on multiple ones.
- [71:12]
C
I brought in all different kinds of practice types.
- [71:15]
B
Yeah.
- [71:18]
C
And then I've given examples. Like there's certain things I've got a whole section on. You know what your scorecard should look like, and I've said, all right, if you're an hourly practice, just like we started today, be so valuable.
- [71:32]
B
That's gonna be really good.
- [71:33]
C
What are the, you know, what are the three things you need to be looking at? So I've got a list. If you're an hourly practice, these are the types of things you need to be looking at. If you are a flat fee practice, these are the things that are going to really like enable you you to put your finger on the pulse of your firm. If your contingency, it's this, you know, look at these types of things.
- [71:57]
B
People are gonna buy for that reason alone.
- [71:59]
C
There you go.
- [72:00]
B
That's a really good. That is what people ask all the time about. Like what should the scorecards look like? And all that. And so, and what I was. You can give them examples but ultimately they have to come up with their own to fit their. Yeah.
- [72:13]
C
And, and I talk about that. I talk about, you know, don't be lazy because so many people are like, oh, they've got a scorecard, I'll just use theirs.
- [72:23]
B
Right.
- [72:23]
C
Well that's built for their firm.
- [72:26]
B
It's exactly right.
- [72:27]
C
Like not built for yours.
- [72:28]
B
Their KPIs are completely different. Like, like everything, the entire structure is different. It doesn't make sense to use mine unless it makes sense completely. It's got to make sense based on your firm.
- [72:38]
C
Exactly. The other thing is, you know, when we talk about don't be lazy is don't just go for the hot thing that everybody's talking about. That happens all the time because so often it's something I'm like, really? That doesn't really tell us anything.
- [72:54]
B
No.
- [72:54]
C
Or it tells us something that happened and frankly I can cuss on here, right?
- [73:00]
B
Oh yeah, yeah.
- [73:01]
C
I don't give a flying what happened. I only care about what's going to happen because I can't change that. I can impact what's ahead. So I want to, I want numbers that are forward looking so that I can say, okay, this is happening here. Which means that in six weeks this is going to happen. In 12 weeks that's going to happen. So I need to get ready, I need to fix this and I need to defend against that.
- [73:36]
B
What's the thing that you fight against most whenever you're working with a law firm?
- [73:47]
C
A body at rest stays at rest.
- [73:49]
B
Okay, say more.
- [73:51]
C
Getting people to move, taking action.
- [73:56]
B
Is it usually the law firm owner or is it usually the team?
- [74:00]
C
It's usually the law firm owner and it's paralysis by analysis. Well, do we need some more information on that? No, you really don't. You don't. You need a decision and you need an action. And if it turns out that it's the wrong decision and the wrong action, we'll make another decision and another action and correct it. But making a bad decision followed by a second decision is always better than not making a decision.
- [74:38]
B
If you read that study about that, talks about how the faster you make the decisions, the more successful you'll be. I don't. I don't remember what it came out, but.
- [74:45]
C
Yeah.
- [74:46]
B
So do you believe in that? That's.
- [74:47]
C
Okay. So think about it this way. Two teams are playing basketball. One team sinks 100% of the shots that they take. The other team sinks 50% of the shots that they take.
- [75:02]
B
Okay.
- [75:05]
C
One team, the hundred percent sinkers, take 20 shots, they get 20 points.
- [75:12]
B
Okay.
- [75:13]
C
The other team takes a hundred shots, who wins the game.
- [75:21]
B
Oh, so 100. And then what was the percentage on the second one?
- [75:24]
C
50. I mean, I really made them kind of suck.
- [75:27]
B
Yeah. So they're the, the, the second one. They're the one.
- [75:30]
C
They're two and a half times more successful.
- [75:32]
B
Yeah. It's so, so funny to use that. I use that a very similar analogy with. Actually, I'm with my team. That's. It's really funny you say that. I'm talking about the, the. My son's basketball team. I coach them. I was using that example because I was talking about like getting shots up because they kept turning the ball over in practice and not getting a shot up. And I.
- [75:54]
C
Because they were waiting for the perfect shot.
- [75:56]
B
It's like. So I was using this example. There's so funny that used. It was almost like you were listening to me. I was like, holy hell, I gave you. I gave almost the exact same example, by the way. That's so funny you say that, but. No, it's totally, it's totally true. And it was like. The whole idea of it was like, it doesn't matter if the, if the decision's wrong. It's. It was just the half. The fact that they made so many decisions and they were. What was happening was, is that you will eventually correct it because you're making so many of them. And I think that that's fascinating.
- [76:26]
C
Well, and it goes back to the study they did in World War II on the ODA loop. So they studied fighter pilots and what made a good fighter pilot. And it was ooda. Observe. Correct. Take act. I don't know. And basically what they found was the really Good fighter pilots took action, evaluated, corrected, took another action, evaluated, corrected. Took another action, evaluated, corrected. And the faster they could go through that loop, the more successful they were. So they started training them to go through that loop. It's the same thing as a business owner. The faster we can go through that loop, through the make the decision, evaluate the effect, make a correction and make a new decision. The better we're going to do.
- [77:26]
B
It's just another way of doing feedback loops. Like feedback loops are so important and like, the more you can build into your firm, the better. I don't know if you talk about that in the book at all, but like feedback loops are so important. I mean like, it can be done in simple ways too. Like, like part of, it's like the quarterly meetings and the huddles and all that. It's, it's, it's just having those opportunities to get that information and be able to do something with it. It's, it gives a lot of times what, what is like the typical firm. Typical firm, they show up to the office, people do their jobs, they leave for the day. You show up to the office, you do your jobs and you're. By doing the jobs, I'll put that in quotes. Doing your jobs, there's like no growth. There's nothing that's changing. You have like, you know, people that are, you know, not fully doing their jobs, but no one really knows. And so no, they could be watching
- [78:11]
C
Friends reruns, could be.
- [78:12]
B
But you have no, you have no feedback loops. You don't have any idea or, or another one is like we have this thing where we, we have Kristen, our office administrator. She does this regular check in with our people. Like it's, it's all scheduled. So she has a scheduled and it's just a check to see. Hey, how you doing? Hey, Brooke. I have just checking in on you and like, just to get some like feedback. Oh, Such and Such is really struggling at home. Let's kind of give her some grace, you know, like so getting things like that, but you don't know that unless you do it. You have no idea.
- [78:41]
C
We do a little bit of that. We also do that electronically.
- [78:44]
B
Okay.
- [78:45]
C
We have every, I can't remember how many weeks. Every employee at Cathcap basically gets an NPS.
- [78:55]
B
Oh, interesting.
- [78:57]
C
So it's, it takes them less than 15 seconds and they answer two multiple choice questions and then they have the ability to but comments in if they want. So we've got this constant feedback loop of how happy the team is. Yeah, no one Person has to do it every week, so it's not onerous.
- [79:22]
B
Yeah.
- [79:23]
C
And it just shows up in their email box and they click, click, click. And if they want to leave a comment, they do. If they don't, no big deal. And so, yeah, so we know how they're feeling, and we can watch the trend go up and down.
- [79:39]
B
So is one of them, like, how likely are you to refer a family member or friend to join the company?
- [79:45]
C
Similar.
- [79:45]
B
Something like that. Yeah, something like that. Interesting. I never thought about doing that.
- [79:49]
C
Yeah. And. And we've got it automated. It's a. Like a. Basically a Microsoft form that goes out every hour or often.
- [80:02]
B
Real quick time out. I had to check the time. Do you realize how long we've gone? No, it's almost hour and a half. Has it really been almost an hour and a half?
- [80:12]
C
Wow.
- [80:14]
B
Excited? I was like, I was wondering how we were doing on time, and I thought we'd have, like, another 30 minutes. Holy crap. Okay, so I'm gonna start to wrap things up because.
- [80:21]
C
All right.
- [80:21]
B
I did not realize what time it was.
- [80:23]
C
Can we talk about one other thing?
- [80:24]
B
Absolutely. What should I ask you about?
- [80:26]
C
So.
- [80:27]
B
Because then I'll come back in with it. Which way? What should I ask?
- [80:29]
C
Scaling Law is not only the book, but it's a community.
- [80:33]
B
Okay.
- [80:34]
C
Where people who are running on EOS can come connect with other law firms on EOs.
- [80:40]
B
Scaling law. Okay. So Scaling Law is not just a book, though. So talk about the community that you've got.
- [80:47]
C
So, yeah, that's the other thing that. That EOS is letting me do that they've never done before.
- [80:52]
B
Yeah. Because they're very restrictive with, like, software and groups and all that. Yeah, they are.
- [80:57]
C
Yes. They keep a tight leash on their ip, and so I'm the first person they have ever let create an affinity group.
- [81:07]
B
That's cool. That's really good.
- [81:08]
C
So I've created a community of lawyers who are or want to run on EOs, and I'm so excited about it because there's a learning component to it. You can come in, you can brush up on your skills. You know, if IDS isn't going well, Sure. I have a whole section where you can come in and watch videos and get downloads and. And things to help you IDS better. I also have some people who have contributed to that. Titus Talent is creating all this stuff about how to hire, using questionnaires, how to retain people better. So it's not just EOS content. There's Cathcap financial content on there. There's all kinds of stuff that you can go into.
- [82:03]
B
What a great idea. Like the synergy of the two.
- [82:05]
C
Yeah.
- [82:06]
B
Excellent.
- [82:08]
C
And then you get to connect with people who are solving similar problems in a similar way.
- [82:14]
B
Yeah.
- [82:14]
C
So there are other law firms doing the same thing.
- [82:17]
B
What a cool idea. I love that. Yeah, we'll put that in the show notes along with the link for the pre buy for the book for whenever it comes out. If people want to reach out to you, they've got questions about either cath cap or about the book. Like, how do they reach out to you?
- [82:31]
C
I'm just going to say go to scalinglaw.com.
- [82:34]
B
perfect. That's easy.
- [82:35]
C
Yeah.
- [82:36]
B
Okay, so last question. Okay.
- [82:39]
C
You've got that look on your face.
- [82:41]
B
It's nothing. Nothing too difficult. If you were going to advise a law firm on. On starting their firm now, how would you recommend that they start?
- [82:50]
C
Oh, wow. Like, firm in a box. Like, what do we.
- [82:55]
B
Well, and it like the most important thing. Like. Well, like you've got. I think if I were to answer this question 10 years ago, it'd probably be a way different answer. So I just wonder if, like, with the. In the current environment, how do you think that they would start?
- [83:08]
C
I think, you know, we've talked a lot about taking action. I think it is about taking action. I think there's some prep that goes into it. I think be intentional about your software.
- [83:20]
B
Okay. That's a really good advice.
- [83:24]
C
Know where you're going to get your clients. Start building that and just do it. I think that you need to do it now. I think that the legal industry is going to become more competitive. I think that we're going to see more consolidation. I think we're going to see more MSOs. I think we're going to see people like in the PI world, you've got John. Oh, my gosh.
- [83:58]
B
John Morgan.
- [83:58]
C
John Morgan, who's going in and he's buying a ton of firms. Alex Shannara has bought firms all over the US I've got a guy down in Puerto Rico that I know that has bought 26 firms in the past two years.
- [84:17]
B
That's growth mode right there.
- [84:18]
C
That is growth mode. What that does, though, is people like Alex Schnara and John Morgan have so much marketing power that it becomes hard to compete against them. So you're gonna have to be really niched down and really special to be able to compete. So I would say make hay while the sun shines.
- [84:42]
B
I like it. Brooke, thanks for doing this. Really appreciate it. I had a lot of fun.
- [84:46]
C
Thanks for having me on.
- [84:47]
B
Absolutely. And thanks for flying in. I really appreciate it. This is great. I can't wait for the book to come out.
- [84:51]
C
All right. You can read a version tomorrow.
- [84:53]
B
I can't wait.
- [84:54]
C
Thank you. Foreign.
- [85:09]
D
Is this October in Atlanta? And Early Bird tickets are live right now. If you've ever wondered what we actually cover at this event, it's nearly everything that goes into the business of running a law firm. Because at this level, it's about putting all the pieces together the right way. If you've got a vision for your firm that's bigger or just better, better systems, more organized, more profitable, or more self sufficient, this is the room that helps you make those shifts and build moment in the right direction. Go to maxlockcon.com and grab your ticket today.