In this insightful video, Seth Price and Jay Ruane discuss what to do when the systems you have in place fail to prevent disaster. From streamlining your procedures to training your staff properly, these legal experts share valuable insights and tips for success when scaling your firm. They use an example from Jay’s firm this week where a lawyer was assigned to a case outside of his expertise, resulting in disaster. Because of this situation, they delve into the importance of building a strong foundation for your firm so that you can step back as a CEO/firm owner.
Seth talks about hiring new attorneys and the debate between bringing on first year attorneys, training them well, and giving them time to develop, versus hiring third through tenth year lawyers who have appropriate experience, but may be more set in their ways and less of a fit for the culture of your firm. Whether you’re a solo practitioner or managing a team of attorneys, this discussion is packed with actionable advice to help you take your law firm to the next level. For more valuable content on law firm growth and success, be sure to subscribe to our channel and stay tuned for future videos.
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Hello, hello and welcome to this edition of- wow, I am speeding today. This edition of The Law Firm Blueprint. I am Jay Ruane one of your hosts and with me as always my man over there, Seth Price. Seth, how’s your week going this week?
Going pretty well, there are moments where I think I got it all together, and moment where I think I’m kidding myself.
Well, you know, it’s funny, you know, you know me I’m Mr. Systems, I started posting some systems back in our Law Firm Blueprint Facebook group yesterday, got a bunch of engagement, I got a bunch more coming, I actually have somebody who’s going to be helping me in about two weeks, going to come in, we’re going to have a whole series that I’ve been working on, that’s gonna be cleaned up and sanitized. So a lot of good stuff coming in the Facebook group. But here’s the issue I got today. Systems are phenomenal. If the people follow the systems, we had a flame out today in court, where a lawyer went to go cover something. And the the pod didn’t follow the systems, sent, a lawyer to court who should not have been handling a particular type of case, basically, because of mindset and how they approach the world. They’re great on certain things, but bad on this type of case. And instead, and the client was insisting that, no, we can’t move the court date, we got to be here. So they passed off the file to this lawyer who proceeded to walk into the courthouse and have a nuclear explosion against a young prosecutor, who now, you know, we’re the persona non grata in this courthouse, we have gotta go mend fences, and we will mend fences. But, you know, it’s one of these things where we found, hey, I got the system, we know what works. And yet people are like, well, we’re gonna make an exception in this situation. And the exception blew things up. So how do you keep people other than having examples of this to talk about? And we’re gonna talk about it for sure. In our weekly meetin, in leadership meeting, at our quarterly meeting. How do you keep people to follow the systems? Because, look, we built these systems over decades. And just because you’re here for six months, and you think, oh, I got this, like, like, trust me, man, I’ve been doing this for a while.
Well, look, and I believe me, I get it. I think that this, this, this topic comes up, especially as we start to put people overseas, where systems are essential if you’re going to make those those employees work. Let me ask you a question here. Was this a question where they knew the right answer, but didn’t follow it? Or did they not look at what to do? Like, how did the system break down? So you had a written out system that was not followed?
We have, we have a lawyer who is is handling certain types of cases.
But is it, like is there a checklist?
Oh yeah, this is like this lawyer handles these types of cases. And literally, they were like, we need a body. But I can tell you from the personality type of this lawyer, they cannot go to this courthouse.
But let me, let me, I’ll challenge you on this. Take an Andrew Finkelstein. Right? His his philosophy, I just did a recording with him, a seven part interview, seven different topics, sort of a masterclass because I mean, he’s, you know, his mind, business mind. And his attitude is that if you empower people, and they, they are looking at a situation and they use their best knowledge, this is something I’ve always believed, if somebody thinks about it, and makes a decision based on everything in front of them, they see a system, they see a crisis, they see what they need to do, that, that you need to empower people to make those decisions. And as long as it’s thought through and not like, I didn’t think about it, I ignored it. Rather than there were no good choices, I took the best possible choice. Are there times where yes, the result was disastrous, understood. But if somebody was sitting there looking at it, did they not follow the system? Or did they feel that they were in a situation the system didn’t cover, and they had to make a call in order to get to make sure our client was covered in court?
So here’s, here’s the way I view the situation, I have no problem if you are empowered, and you say I made a judgment call, if you can logically explain to me the steps you made in making that judgment call. But what I think happened in this situation is there wasn’t any thought process it was just, oh, we’re just gonna do this. And because if they had thought through it, they would have said this lawyer really only handles this stuff.
Could they have gotten somebody else?
Yeah, they could have said okay, we’re gonna have the lawyer who’s normally in this courthouse show up at 11 for the second call, rather than 9 for the first call.
And was that and look, I’m asking ignorant questions. Is that something that’s well known that that is an option?
Yes.
So, you know, the question is did somebody goof? You know, maybe, to me there are systems. And I think you’re moving beyond that to there are like ru- like, rules more that, because they’re sy- I mean, semantics. But there are systems where we file this, we do this, we do this, versus is it, because it’s not that they’re following a checklist, a situation comes up. And the question is either know the information or they have to go back, but they weren’t following best practices more than a system.
Yeah, that’s what-
I’m splitting hairs. But it’s it’s not like Mr. Systems is like dead. Somebody is sitting there. And they made a bad call.
Yeah, they-
You know, and let’s say, there, there are different situations, right? There’s brain fart, where they’re like, oh, man, I knew that but didn’t do it. There’s I didn’t think, which is painful, but happens. You know, there’s all of those. But if it’s didn’t think, then it’s not a system, because unless there’s a laminated thing, like the football coach in front of them, they have to go and figure out where to get that information from, which isn’t really the system, it’s just that’s they violated best practices more than a system. And again, I bring this back because I don’t want to deflate Mr. Systems, who’s sitting here, it’s not like, you know, Jay failed. Like, we had our buddy Gerber on here a number of months back, and he’s like, if you follow his rule, you wouldn’t have any people that make these decisions in the first place. It would all be a SaaS based decision making tree. But part of what allows you to make a living is that SaaS hasn’t come in because other guys would kick our ass and wipe us out. And you know, had this lawyer not blown up a situation in court, I mean he’s a barred human being.
Right, and can handle high level stuff. In a different- so in one sense, its just-
Yes, but for that, but at the end of the day, are you, I mean again, listen, is this like, why can’t a lawyer go to court without causing nuclear blow up? Like,
It’s just they don’t have the personality for the interpersonal dynamic of-
There’s personality, and there’s don’t, don’t, don’t blow something up. There’s a big difference. Like, I mean-
I mean, I’ll push back a little in that, you know, what we do, as criminal defense lawyers, you know, is a lot of picking up on the nuance of the conversation. And that type of thing. And an appellate lawyer doesn’t have that skill set.
Understood.
They’re looking black and white.
But hold on. But if you had said, hey, red flag, do not send this person, and that’s there. It’s like, you know, part of your warning sign, right? Don’t drink the propane, and don’t send this, look great. But if this is one of a gazillion things, it’s going through, it’s not a system, it’s a best practice. It’s a rule, then, you know, yes. Did they, did they do something they shouldn’t have done or whatever. But the question is, you know, is that you know, there should be a backup, which is the appellate lawyer goes, and doesn’t cause World War Three.
Right, what I think I need in that situation is appellate lawyer, here is the black and white playbook for when you go to court, you show up and you say, hi, I’m so and so from Ruane Attorneys, the other lawyer is unavailable. I don’t know anything about the file, I’m here to request a continuance to such and such a date. And then you get out of there. And it’s fixed, and that can be the system. And the best practices is to send the right lawyer the first time. And if you can’t, you have a playbook for the lawyer who doesn’t understand the nuance of interpersonal communication.
Right, but I, you know, I feel like you’re, this is, to a certain extent, an HR issue , like HR as far as like the, you know, the which, which lawyers go. And I know that we, look, this is my law partner always says, whenever it’s a one off, that’s when we get into trouble all the time. Every issue we have is the one off. Stuff that repeats, we generally get right. But when something is out of the box, like hey, this is, oh, we can’t do this. People’s brains start zooming, how do I fill that hole? And when that happens-
Well, let me ask you though, that and this this will go again, off topic from what we had discussed pre-show, do you say, hey, we’re a law firm, and we get excited about the one off things and it allows creative legal maneuvering and and it allows us to scratch that itch, or do you become the Michael Gerber, we don’t do other things we do, you know, two or three or four things? We do them exceptionally well, we do them over and over again, knowing full well that, you know, you may lose some lawyers who say yeah, I love doing this, but I’d like to try something else every now and then, try something new.
No, no, I’m already there. Like our lawyers, with one exception, do one thing over and over again, one area of practice.
Right.
I have one lawyer that goes over between criminal and family. But other than that everybody’s in their lane doing their thing. So I, like, to me, that’s a business decision. And I’ll give you an example. We’ve, civil litigation that’s not personal injury, like, fee for service fee disputes. I had a guy he was with me and didn’t make that much money, moved on, nice guy. I’ve never made that area lucrative. And I’ve actually made a decision, a buddy of mine does it I, I dish him all of that work, does a great job, makes a buck, would I love to get a piece of it, maybe? But it’s, it’s better to let our people stay in the lane. Because if every time somebody called and said, I need local counsel, run to court. Or I need, you know, I need to do a matter. And in the personal injury space, there’s a cadence, right the case comes in, there’s prelit, you do your, you know, you find your, you get your demand out then you do discovery, versus when somebody brings you an active dispute in litigation, you’re immediately, and that becomes much more of a one off, my machine is not good at dealing with that. And I have punted, and now over and over again, local council situations, just got one from Mink, if you know him, guy does some cool, defamation work in the Midwest. And I get these calls. And I’m like, You know what, I could make a buck, but you know what the right answer is not to break the system, not to do a one off now, multimillion dollar case, maybe, but for the average case, stay in your lane.
So, so then this leads me to another question about this. And this is a conversation I had probably in the last 10 days, 11 days ago with the guy who pumps my septic. Okay, so we’ve got our scheduled appointment, he comes in, and he pumps the septic out and I’m talking to him, he’s a nice guy. He’s been in the business for 43 years. And he is he’s like, look, I’m ready to be done. He’s like I’m, you know, I’ve got it, I’ve got my truck, I’ve got my pump, you know, he’s like, I can’t find anybody to buy my business. He’s like, I’ve got you know, I’ve got a book of clients that constantly will need, will need work. He’s like, my business generates, you know, you know, low mid six figures a year. He’s like, it’s, it’s, he’s like, I’ve made a very good living off of this money, I put all my kids through graduate school, I’m making money. He’s like, I can’t find anybody to buy my business number one, because kids nowadays and he, you know, this is this is him saying he’s like, nobody wants to pump shit for a living. And I get that, right. And he’s like, and I can’t find somebody to buy the business. He’s like, I’m at a point now where I just want somebody to buy the truck from me, I’ll give them the clientele, because I want my clients to have somebody who can service them. And he’s like, I can’t find anybody. And I’m thinking to myself, how does that translate to law? And so I so I had a conversation with a couple of the lawyers, he said, you know, there are discrete areas of law, that some boomer lawyers that are 60-70 have really sort of cornered the market for years. One thing in my, in my county, there’s really one lawyer who does all the liquor applications. He’s 73. And for years, everyone just sent him the stuff because he has a system, he knows the players, he you know, he can show up at the bar, the restaurant, be like, you gotta get that fixed, you gotta get that fixed, they’re gonna come in, they’re gonna approve you, blah, blah, blah, that type of thing. And I’m thinking, you know, there are opportunities in law to take over certain niches, not necessarily hold verticals, I’m not saying go into PI, and try to be, but there are, you know, certain verticals, where you can identify, maybe align with that person who wants to leave, take over some of the business and everything. But you have to be paying attention to those things. And it can be lucrative, I if I wanted to, I can spend $150,000, buy this septic truck and the stuff, and I can have a business that’s generating $400,000 a year, if I just found somebody who wanted to pump shit tanks for a living. Why should, why shouldn’t I do it?
Well, why it becomes an HR play. So like, the question is, and they talk about law firm sales, I’m a little cynical, I know they’re sales. I know, some of the big firms sell, there are people who are trying to get these things to an over under a 3x EBITA, which essentially may mean one year of gross revenue. But at the end of the day, the odds of those things happening and closing. There’s a guy that we both know, from one of the masterminds he runs a like a Spanish PI practice, and he’s always telling me, my associate’s gonna buy this and I’m like, I listen to it. I’m like, that’s never happening at the economics you’re giving me. Just not, they’re not going to close that deal. And you’re gonna sit there, and there’s nothing wrong with it. But would you be better off saying, hey, I have somebody who really likes this. Let me continue to sort of like, be the silent partner, pull the strings get, make sure the media is right. And let them do it and take a percentage because if you did a percentage for, if you have 50% of the profits hypothetically, for a couple years, are you the at same place than if you’ve got that miracle sale that may or may not go, doesn’t close, you know? And so for this guy to me, the better answer is you bring somebody in to be an employee, if they’re making that much money, and it’s a one man operation, you’re telling me that if you offered somebody $75,000 a year, they wouldn’t run that operation for you. I don’t buy that that can’t be found. So it’s an HR question, put that person in play, right? After a year, you can make a decision, do I want to sit there and make my $300,000 profit instead of 400? Whatever it was, you know, you know, if you can find the talent, and
I mean, think about it, if you take out $200,000 a year for 10 years doing that, you sold your firm for 2 million dollars.
Exactly. So and I look, I’ll also pivot back to the question you talked before, which is I think that in our b2c world of micro firms it is harder to find those people with those niche practices, because some of those people, at least in my world, are inside of larger firms, doing that. And so that I saw, give you a great story, a guy went to law school with this, this awesome guy, African American guy, was sort of you know, rock star, you know, junior associate, and the guy he was working for, working for a major, like very interesting trade association, left, I don’t think he went to the trade association. And he was what, you know, I don’t know, let’s say a third year associate. And he went to the trade ass- and said, hey, he’s left. I’ve been doing your work for the last three years, will you give me the book, and he, that became his niche. And he ended up running that book of business for his career. So you know, it’s right place right time. But the reason he was able to do that was he was already doing some of it, rather than because there’s so many shiny objects out there, that we see, you and I get these offers all the time, you should do this, you should do that. I had a cousin who had this deal, very lucrative, dealing with unclaimed monies. And he had found a way to make a really, really nice living. I mean, beyond nice, you know, a, and, you know, it was one of those deals that like could I have pivoted to that, and stopped my law firm and made a nice- I could have. But I actually instead built my firm to what it was. Had I been distracted with that, what would that have done differently? So how often do you get those? And I think that it’s figuring out what your opportunity costs are, for you, would you be better off with somebody running traffic, slash DUI, slash criminal in another part of the state? Versus, you know, picking up a niche practice like that, where at the end of the day, it’s his noggin its not some junior person, who’s done one thing his whole career and knows it, you know? Are you going to stop what you’re doing and do that? No, you’re trying to get out of this.
So, and that’s part of the that’s part of the challenge. And like, if you are going to bring in a niche vertical, like, you gotta learn it enough so that you can create the systems for it, because I guarantee you, homeboy doesn’t have any written systems after X number of years of doing this. So you know, that’s, that’s one of the things that you need to do.
You know, interesting you say that, so I was, one of the things I feel like I’ve failed at over time. I don’t know what’s going on-
I know, it’s kind of cool. I just put up my hand and things are like blowing up. It’s kind of cool.
You know, one of the things that I feel like I failed at, right, we built out criminal, we built out PI. Family has huge opportunity. And I’ve seen some people around the nation do a really nice job with it. And part of it’s I’m not a family lawyer, I don’t have the systems in place. And the people that really do make a very, very nice living there. Generally, their model besides you know, some people do rock star stuff that’s different. Some people do elite stuff, and they do it. But it’s the training of junior people goes back to the Jay Ruane, first year, versus third year, they the only way they can get enough talent is to bring people in this as first years, train them up internally, and turn them into viable lawyers. If you do that, you will have a not, you’ll have a consistent stream of lawyers. If you try to retrofit the dru, the dredge that’s on the market, it is brutal, and what’s available, I’ve been looking for three years, for third to eighth year, third to tenth year associates, the ones that are good are given a piece of action. And the only way in my estimation to really scale when I look at the firms in my market that have done this is to have a program where people come in get trained, there’s some of them are going to leave, you’re not going to retain them all. But if you pay the right ones enough and stay ahead of the curve, and so I look at that, that goes back to Mr. Systems, which is it is the areas that you have the systems that work, it’s the areas that you want something but don’t have the systems in place, and it may circle back to your original point which is, you know, you have a lot of systems. But how granular do you get your systems? And is it is it a system? Or is it just something that, you know, is a known rule, but isn’t really a system, you want to call it a system. But is it? Is it on a checklist that before somebody goes to court, only this person goes to court, and if not, Jay needs to be asked? Is there an if then, that allows you to prevent that?
Yeah, and that’s, I mean, I think that’s part of the conversation that you need to have, as a law firm owner, as you are scaling things out, you know, you need to identify A) your core systems that are, this is the way we do it, we don’t do anything else. And then also, this is when you need to, this, these are best practices. And if you’re going to divert from those, I think you need to loop in people who have more institutional knowledge, you know, more more experience, necessarily, and, and quite frankly, we can have best practices for intake, I may no longer be the pers- the best person to talk about best practices for intake. Yeah, we have intake systems, but then there are best practices, and I probably am not the person to give you what best practices would be, at this point, because I have been, you know, out of that day to day, for so long, that I would not know, you know, the nature of the callers in, in today’s world. I mean, you know, I haven’t done regular intake since, I mean, at least six years. You know, and that’s, and that’s just something that, I mean, maybe it’s even more than that, I’m trying to think, but like, you know that those are the types of things that you need to, and that’s the tra- that’s the that’s the inflection point, right? That is the transition from being, you know, lawyer, to law firm owner, to being CEO, or whatever you want to call it, where you can say, hey, look, I am not the best person to answer this question. We have people on it, and you go get those answers and bring them to your team, and put them into place. Because a lot of people at our level, are involved in, almost too much in their firm, they’re getting into the weeds, they’re saying, let me set up the Google stuff, or the Facebook ads, or let me sit in on every first round of interviews, and they’re being busy. But they’re not necessarily being productive.
No, and look, there’s a lot , so much there. I mean, we can, we could, and I, I get it, and it, we’re guilty of it, we do what we like, but the sooner that you can have a team, whether internal or external, that that is able to sift out- great example. And that you’re only brought in like once somebody who knows what your firm needs, allowing them to do all of the vetting. Again, that’s easier said than done, because they’re gonna be periods in your firm keeping it real, for many of our, who either don’t have anybody, or the person they have doesn’t have that judgment, and you get stuck between those two worlds.
Yeah. And that’s, and the question is, you know, I know a lot of us, you know, we’ve gotten overseas labor to fill some contract positions. And some of those have been, just crushed it for us, here at our firm, and I know of crush it for you and that type of thing. But when you are hiring, when you are scaling, I think you need to take some of that, you know, intangible into consideration.
But, it’s also not as, it’s a free lunch. And you know, if you’re, if we’ve kept this real, how many meltdowns at your intake have before you sort of got it close to getting it right. How many times you called me said oh, everything’s great. In the next week, you’re like, oh, shit,
Right? And that’s what I’m saying. Like, like, you know, you’re like, hey, you know, I can offshore this and I can, I can save, you know, $10 an hour, and what I’m finding now my kick ass, you know, remote intake people that work nights and weekends. And, you know, they’re not necessarily on a schedule, but they’re picking up those after hours calls and stuff. These people are rocks, they’re getting paid the equivalent of what, you know, almost the equivalent. than what they’d be making here, US, 10 years ago, you know, and, you know, they’re like, you know, 10 years ago, a college student coming out, we pay him 50,000. Some these remote people are making really good money. 40 grand a year, American, if you’re living in, you know, the hills of San Juan Capistrano. That’s, that’s really good money.
You know, it’s funny, and I know we gotta land the plane in the next few minutes. But I was, you know, one thing that I saw, a life moment, we have one practice group. And that practice group is the least profitable in our firm. It’s excellent, excellent representation, too good almost for what we’re charging, but the markets not allowing movement north. And in doing so, I recognize, I sort of spoke to myself, hey, this group is approximately a seven figure practice group. It’s a single lawyer running it. Why is this person so not profitable compared to other areas and partly its the area of law. But partially I looked, I was like, there was no international labor layered in, they weren’t following the best practice that the rest of our firm did where, if there’s a rockstar, if there’s a Jay knowledge in DUI, while you like to go to court, your best there as a figurehead, whether it be selling, whether it be closing, I mean, whatever pieces that you want to do, but the idea that somebody is practicing, you know, all day on fixed fee cases, clearly, if you don’t change the makeup of lawyer hours, to let’s say drafters, or paralegal time, if you don’t get that mix right, on a flat fee case, you’re just not going to. And so it’s sort of it brings a lot of this together, which is when you have something that and for many of our listeners, they haven’t either use anybody internationally or for a division that they’re not using somebody there. It’s until, you have the systems. And it’s a question of which comes first and I have become an advocate for hiring somebody not knowing how they’ll fit in, knowing that there’s going to be lost time, but that with time you’ll figure those systems out, and then put them in place. Not that you don’t want systems to begin. But talk to me a little bit about your thought because your Mr. Systems, do you think that there’s ever places where you have systems, but you’re going to hire somebody without really understanding how they’re going to fit in, at a relatively nominal hourly rate, and then fill their dance card and then build the systems backwards?
Yeah, actually, we’re doing that right now with a new role that we’ve developed in the office, of discovery clerk and you know, we, we’ve never really, we’ve never really had somebody focusing on that area. So you know, one of the things that I did yesterday was I met with her and we talked a little bit about where we see the role going, she’s only been here for three weeks. And she’s still learning the interpersonal dynamics and how to use technology that we have and that type of thing. But the whole thing is to empower her to develop those systems for us and build that out and then train everybody else in the office on how we are now going to do things. And so we set waypoints. And I think we’re on the right track, but it was it was really a hire for we know we need this role. We’re not going to create the role until we have somebody in it, and then we’re going to task them with helping us to define it, and create all the systems for it. Because that’s really the best way to identify the problems because coming from you know, 1000 foot view down, I can’t see the problems that are gonna pop up in this position. And so let’s try to make it work. And I think that’s really worked for us so far. It seems like it’s on the right path. And I’ll report more as we go.
Awesome. Look, well let’s get you out of here. I know you got, you got a call to make.
Yeah, I got, a 12:30 it’s just, it’s one of those days. So thank you guys so much for being with me. Thank you for being with us here in The Law Firm Blueprint. I’m sorry this is such a short episode. But if you want to catch us, you can take us on the go anywhere you get your podcasts, just look up The Law Firm Blueprint, of course, jump on into the Facebook group, Law Firm Blueprint Facebook group where you can get all the systems that I’ve posted and there’ll be more coming soon. That’s going to do it for me. I’m Jay Ruane. He is Seth Price. Thank you so much for being with us. Bye for now.
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