William T. Reed IV (49:54)
So we had four equity partners and four associates to start the firm. And it was 70 grand a month to pay those four folks. And we, the equity partners have never made any money unless the firm generates cash. Like, and I think that's kind of probably rare for a lot of law firms of any size because, you know, the way it works, especially if you're a success fee firm and starting out, like, you could go a year without, like, a fee, you know, I mean, like, it takes a while. So you have to calibrate the risk that we took in the, quote, early days relative to, like, what our overhead was versus now. Right? Like, we can afford to take more risk now. And what would seem like an impossible amount of risk today is far more manageable just because we have more regular, like we have a docket it kind of produces. It's a little bit more reliable, let's say. But in our early days, I represented the 14 departments and the national government of Colombia in what was like, at the time, like, the coolest case I'd ever seen. I, like, caught the tiger by the tail. So it was a multi hundred million dollar case against Diageo and Pernod Ricard for basically taking narco profits and money and laundering Colombia, the country, with black market liquor. We had documents that went to like, the board level. It was like, insane. And this like, money laundering expert named John, who's like a crazy but awesome guy that I knew from my prosecutor days, was the expert on it, and he walked me in and I met all the government officials in Columbia, and we spent $500,000 in out of pocket expense over the course of, like, call it 18 months in those early days when our overhead was like, you know, 70 grand a month, not counting what we paid on the Columbia case. And $500,000 expense today wouldn't be a whole lot for our docket, but back then it was like we were paying it ourselves. All right? So you got to imagine that we had 800 custodians because the various departments, which we call states here in Colombia, they actually manufacture this, this liquor. It's like garbage. Like, you and I wouldn't drink it. It's called aguardiente, which literally means firewater in Spanish. And it's fucking terrible shit. It's like, worse than mouthwash. But they had a commercial market for liquor. And. And our argument was selling Johnnie walker black for $20 in the black market was depleting our, like, you know, mouthwash sales, basically. And so it was not the most logical, like, you know, argument, but it was an argument. And the reason why that was important is because foreign governments cannot access our US Courts unless they're engaged in commercial activity. In other words, if you're seeking your lost tax revenue or whatever, there's this, this thing called the revenue rule, which basically draws the line at foreign sovereigns cannot Use our courts to extend their foreign policies, but they can use our courts if they're engaged in, you know, commercial activity. And we have that here. Okay, we get 100. And I don't even remember. 30 million dollar settlement offer on the table, which is pure insanity at the stage we were at in our firm back there. And I make the, make the, you know, rounds and I'm talking to my crappy Spanish to these, like, leaders of, of Colombia, and I'm trying to build a consensus to accept the deal. And I failed. Like, not just failed, failed miserably. I think maybe five or six of the governors were on board. The national government was like, we'll support it if you get, you know, a majority of governors, which I couldn't get. And so I had this, like, contentious meeting with all the clients and by the way, attorney client privilege at a government meeting in Colombia where there's like all these, like, like, it's ridiculous. Like, there is no privilege. Okay, so anyway, I'm like, look, guys, you have 800 custodians, and I've got to gather all of their emails. And many of them don't even use their government email. They use, like, their private email. I've sent whole letters to these people. I have no guarantee they've held anything. I don't think that I can go forward in good faith and represent you in New York federal court without basically drawing sanctioned motion after sanction motion. I can already see the writing on the wall. That's the defense that these big lawyer, big firm lawyers are going to deploy on behalf of these companies. So in other words, take the money, people. And so they're like, nope, not taking the money. So I had $130 million on the table, which my fee would have been substantial, let's just put it that way. And so I literally walked away from it. I've said, look, guys, I'm not going to lose my law license to represent you. I do not believe that I can wither the storm. I cannot basically babysit 800 people in another country, in another language, and have any comfort level that I can honor my obligations to the court. And so I quit. And this opportunistic lawyer from Florida, who is Colombian by nationality, speaks much better Spanish than me, thought that this was an opportunity and took the case. For me, it is 14 years later now or so, and no settlement, no nothing. The case is gone. No way. So I walked away from this deal, which at the time, like, you know, you could get pot committed. You know what I mean? Like, I had $500,000 in this case. Like, I don't know how much time into it we went to Columbia over and over and over again. But here's. Here's the silver lining in it all. Like, the biggest client that I had in the early days of this firm was so impressed by that case and how cool it sounded that he was like, well, you're one crazy. So I'm gonna give you, like, all this cool commercial stuff, which he did give me, and kind of built our firm on that client. But I actually think that what sold him was this case. So it's not like I totally lost on it, but I literally like the 500 grand up in smoke. All the time we spent for two years, gone. And we had to walk away from what would have been a very lucrative settlement and frankly, was in the client's best interest. They just wouldn't listen to me, which is clear.
