S5:E32: When to Hire a Vendor vs. Hire In-House

Blushark Digital LLC

On this episode, Seth Price and Jay Ruane discuss when to utilize outside vendors vs. hiring in-house employees for services needed to run your firm such as bookkeeping, intake, marketing, videography, and more!

Jay hates it when Seth says “it depends,” to answer questions like these, but as is the case with many entrepreneurial endeavors, it truly does depend. The duo agree that there are different circumstances that would cause a firm owner to hire vs outsource, such as finances, quality of work, and dependability. Seth believes that hiring someone in-house can be the answer if you can be sure that person is stable and reliable, but outsourcing to a vendor or forming a small team in house could work best to ensure redundancy.

Check out the podcast on The Law Firm Blueprint Facebook group, the BluShark Digital website, or stream it wherever you get your podcasts!

 

Transcript

Jay Ruane 0:07

Hello, hello, and welcome to this edition of The Law Firm Blueprint. I’m one of your hosts, Jay Ruane. And over there is my man, Seth Price. I’d go through all the different things that Seth’s involved with, but if you follow him on Facebook, he’s constantly traveling, constantly doing a million things. Me, I’m just a lowly schmuck who stays at home. But I did do something this weekend Seth!

Seth Price 0:26

I saw, I saw, one of these days, I gotta join you.

Jay Ruane 0:29

Yes, so, this weekend, I got to march in the St. Patrick’s Day parade in New York City, with my father, very lucky. My aunt volunteers on the committee, my father has always wanted to march in the parade. He’s done it a few times. But he’s wanted to march with his family. I didn’t think I was going to be making it because my kids had a ton of commitments. But we made the decision, pull the kids from their weekend sporting commitments. We surprised my father as we were at the marshaling point, and we got to walk together, which was really cool. My, my younger kids loved it. My family’s from Mayo, we got to walk from the Mayo, with the Mayo contusion at the front, you know. So we were, as, we started at 10:30, we were done by, by noon, which was kind of nice. And then, and my daughter loved it. She was waving to all the people thinking that the parade was for her. But it was a really special thing. And it was one of these things that you know, you just got to sort of take the opportunities when they come. That’s one of the benefits of running your own practice is that you can structure things so that you can make time to dip out but, walking the parade was a lot of fun. A lot of fun.

Seth Price 1:32

That’s awesome. You know, I grew up in New York. And I remember Ed Koch leading, you know, being front and center. And it was like the one day where everybody felt like they were Irish.

Jay Ruane 1:41

Yes, absolutely. It’s a lot of fun. I didn’t get to go to some of the other festivities that I normally did. There were days in my younger years where I was very much an inebriated around St. Patrick’s Day, but not this year. But it was still a lot of fun. And I liked it.

Seth Price 1:55

Similarly, doesn’t really I gotta tell you, tell you, on the road, but you know, I had a great experience. Last week, I was invited by the Clio team to come up and speak to their staff. So it was not a public conference. It was basically they have 1000 people now, at Clio, 200 on their sales team. And they, they asked me to come up and basically, you know, give them a lawyer perspective, because they, you know, they sit in their own bubble, figuring out how to sell the lawyers. I was like, okay, you know, so they flew me up, and I said, hey, if I’m gonna go to Toronto, I took my son out of school for a day, and we flew up Thursday night, had dinner with them. And it was awesome, an old college buddy of mine, got us tickets, to the Raptors on Friday night, we biked toured all over Saturday. But it was, it was cool, not only to have the fun tourist time with your son, but he sat in a couple of business meetings. And, you know, here you are on stage, you know, with all these people who are like, you know, taking in everything you say as if it’s gospel, and this is your kid who doesn’t listen to you at all?

Jay Ruane 2:56

Yeah, doesn’t listen at all. Like that-

Seth Price 2:59

Like, who are you? And he’s a very shy kid. But it was very clear that there’s a certain power to connecting with people. He’s a kid who has his core group of 10 kids, five of whom he actually spends most of his time with. But like, there’s a power to actually connecting and meeting new people. And there was a college buddy who’s very connected in town who threw us the tickets like, thing- good things happen when you spend time with people that you like, and I’m hoping some of that rubs, rubs off.

Jay Ruane 3:28

Yeah, I mean, that’s, that’s, the, those are the lessons that we can teach our kids that don’t come from books, but they allow us to sort of impart you know, the things that we have learned. And I want to talk about something that you’ve learned because you’re further along in the process than I am. And I thought it’d be a good topic for us to discuss today. And it’s really something that, you know, we’re starting to identify areas in our firm where we have traditionally outsourced I mean, for a while I outsourced, for example, my bookkeeping was over in India. And that was very popular in our group for a while, and then I outsourced it, but I stayed in the United States. And now I’m at a point where I’m thinking maybe I should just have somebody in the office full time doing our bookkeeping, even though it’s very, working with our vendor. But you know, with the vendor costs have gone to a place where I think I can get somebody in house for the same price. And if I have somebody here in the next office, it makes it a lot easier than not. Same thing when it comes to marketing, and, and obviously, you’ve got an interest in it, because, you know, people do outsource their marketing to BluShark, but not all of their marketing. There’s other stuff that they do internally.

Seth Price 4:00

And so, look, occasionally, clients who love it, who are me, they go on and do it themselves. Some do it, and then throw their hands up and come back, and some are like yeah, I love it. And I do it and it goes, it goes both ways. So I know-

Jay Ruane 4:50

You know me, I love doing the marketing. I love you know, you know testing things out and trying things out and I think being a smaller shop but having a core group of people, I mean for us, you know, we brought in a videographer two years ago, it’s been one of the best things that we’ve ever done. I just came from a lunch meeting with my whole office, he was there filming it, and creating, you know, assets that we can have down the line. I mean, we’re producing anywhere between five and ten videos a week in our office.

Seth Price 5:17

Speaking of that, we had a great day. So the day that I left for Toronto, was Pi Day. And Price Benowitz’s, core values, which I’m very excited about. You know, for years, I’ve seen a lot of people in our extended circle have core values on their wall. And I’m like, what relevance this has to their operation, these are people that might have turnover every six months, they may have maniacal owners, but we settled on passion, integrity, and excellence, PIE. And really have gone deep, and our executive team has done a great job of integrating, we interview with it, we hire with it, we fire with it, we live it, and for Pi Day, they went all out. Right?

Jay Ruane 5:54

Ok, so I got to ask a question now to make a little bit of a joke. How do you fire somebody excellently? Because I want to know that script!

Seth Price 6:01

Meaning-

Jay Ruane 6:02

You’re fir- do you do the whole Trump, “you’re fired!” Do you say we’re not, you know?

Seth Price 6:05

No, no it’s, it’s a little bit of a sore, sore subject, because you know, nobody likes to do that. But when you do it, it is clear to everybody why you are doing it. So yes, you aren’t, you, it is not a fun process, it is not a good thing. But if somebody is not hitting your core values, they will do swell somewhere else, but they may not do well in your shop.

Jay Ruane 6:27

Right, right.

Seth Price 6:28

And so if you have somebody who is not passionate, or does not display integrity, or is not excellent, those are things that everybody sees. And so when there’s a lack of integrity, or if somebody really isn’t very expert at what they’re doing, it makes for a much more clear case, because not only when somebody leaves the team, and I try to stay, I don’t love the anal- the family analogy, I like the team analogy better, you want to make sure that people, very often because of the litigious world we live in. We don’t talk a lot about why somebody is not there. And I think that people very much more clearly can see and know that if they believe that you’re doing it based on that, that their job is not in jeopardy, which is very often the issue when you let somebody go.

Jay Ruane 7:14

Yeah, I mean, that’s, that’s, I think, if you are going to be letting people go, I think you need to somewhat have an open dialogue and be able to express to the people, this is why they are no longer with us.

Seth Price 7:27

You know, but if you, if you speak to a Dan Schwartz or other excellent people, there’s a risk to it. There’s a cost to everything.

Jay Ruane 7:32

Well, there’s a, there’s a way to do that. And I’ll say, this person failed in this aspect. But there’s, you know, you have a meeting, you know, you normally what we do we have a meeting after we dismiss somebody from a particular pod, we have a meeting saying that this, you know, this obviously was a decision for the betterment of the pod, here are the things that we value. This is why we want to work on these things going forward. And it sort of sets the tone that, hey, this person didn’t live up to the things that we value as, as, as a team, as an office. And so, you know, the writing’s on the wall without you having to say, they failed this that the other thing.

Seth Price 8:08

Look in every case, I very rarely, you know, I wish that we were a fire fast. We are not, when you know, you know, I know, I know, people will respectfully disagree. But when we finally let somebody go, they might be like, why am I not on a PIP, it’s because we kicked the can for a year, when we shouldn’t have.

Jay Ruane 8:25

Right, and I mean, I’ll be honest with you, I’ve never found anybody who’s ever had a successful PIP.

Seth Price 8:30

Right, and that it is a double ed-, right. So again, it may not be a formal written PIP, although we’ve done those in the past, it is very often, you know, if you know what I am finding, in general, and I’ve never, I always get into trouble when I’m talk about these types of things here is that when the time to manage, takes longer than the time, time to do the job, there’s an intersection. And those things when they when there’s a cost and an expense at the management level. We talk a lot about mid level managers and managers, you know, the reason you have them there is to scale your business. But if their time is being focused on a single person, that can, you know, that to me, and I wish there’s some people who have amazing talent sets. And I- you know, there are some people that need their own business. And there are some people that would be great freelancers and just freelance. But the question is, when you want to work within another organization, it’s like joining any group, we’ve seen them, there have been groups in the legal greater community that work for us, and you find a new home. Like you, either, you either make it your own, but if it turns out that the people who are holding the cards, your employer or in the case, somebody who’s running an organization, don’t align with what you believe, or your core values or whatever it is. You have a choice and it’s, life’s a lot easier when you’re not hanging out and butting heads, but rather, finding a place that is right for you.

Jay Ruane 9:56

I mean, we cut our teeth early on in dealing with, meeting at national DUI college events. And there came a point where another organization was created out from under that, because they were not allowing people to assume some positions of leadership. And they said, you know, it’s the same topics over and over. We want new topics. And so this splinter group started up, and it’s had successes-

Seth Price 10:21

[inaudible] groups actually.

Jay Ruane 10:23

Yeah, and this is to be honest, you know, there’s a little bit of value in both. I mean, I aligned myself with the new group, because those were the people that I were friendly with from the conferences. But I still show up every, you know, every, every couple of years to one of those other older groups, because I still friends-

Seth Price 10:39

To your credit, I think you’re the only person that sort of, has done that. That’s not an easy thing for most people. But I’ll leave you, there was a joke about this, this guy, a Jewish guy is stranded on a desert island. And he’s there for 25 years. And he’s finally rescued. And they come to rescue him. And he says, I want to show you around, I want to show you where I lived for 25 years. And he said, here’s where I live. And here’s my synagogue, and they’re like, what’s that over there? He’s like oh, that’s the other synagogue, but I’d never go there. So, you know, it’s, it is always, you know, I think that even was in any organization, church, business clubs, there’s always a certain amount of that. But when it gets too much, that’s when it’s time to do things your own way. And eventually, you’ll become so big that somebody says, This isn’t right for me, and they’ll move on.

Jay Ruane 11:23

Exactly. I’ve had plenty of people leave my firm thinking it’s not right for them. And, you know, that’s just the way it is. But let’s, let’s go full circle back to back to the topic that I wanted to talk about. And that’s, at what point, or what factors do you start to think about when you say, I’m going to bring this in house rather than use a vendor? Because I think a lot of people in our audience, a lot of people are like, hey, you know, I started out, I hung a shingle it was me and a cell phone, then I brought in an assistant, and maybe it was a virtual assistant. And then it mes- maybe an in house assistant. But there are other things like accounting, like bookkeeping, like marketing, like, operational things like running your office, at what point do you go from having an assistant who does it, but does other things, to saying, okay, this is your role. This is your lane, we’re going to hire you in the office to do this one thing for us? And, like, is it possible to scale to be you know, a mid seven figure law firm without a full time dedicated in office bookkeeper? Yeah, because I’m doing it. But now I’m thinking to myself, shit, you know, I could have a bookkeeper here who’s, you know, seetting up the credit card payments and, and I’ve got people who chase fees that, when credit cards bounce and stuff like that. But maybe I need to have somebody here every day instead of just relying on somebody who works out of her house, so I don’t have to give her benefits. You know-

Seth Price 12:51

You know, you’re gonna hate me, it depends.

Jay Ruane 12:53

Oh here we go again with the depends.

Seth Price 12:55

But let’s, let’s start, I’m a big believer that, that I will take generally, once you have critical mass of any sort, I say a critical mass like, you know, the, the sooner you’re not playing the part time game, it’s not the vendor concept, the better, the more time, the part time, rarely, there are exceptions, is not as stable. If you want, something’s going to last for 3,5,7, 10 years, that the stability, generally is for somebody where they get their income from you. And it’s not a situational thing, kids coming home from school, then the summers off, and the kids are home. Like those are things that are fine. And there’s places we get amazing value. But I think the sooner you get to a full time, person the better. Are there exceptions to, full time equivalents? Maybe. But when you’re talking about I think is when there’s a niche need. And bookkeeping is a great one, we ended up you know, at this point, with the scale of our firm, I think we have nine people in the department, we have now I think five or six are overseas, paying three people top dollar, and leveraging it, I could never make the India world work. I tried what everybody else was doing, even the same groups, I couldn’t get the quality that we could live with, just didn’t work for us. Or I didn’t have the checks and balances to oversee what they were doing. But I would say that there are two different ways to evaluate it. One is when the cost of that vendor becomes the same as the full time labor it would take to do this. So that if you’re a small firm, and you could get away with a Ruby, or a Lex or any of those other groups where there, for a few hundred dollars, you can save a person, fine. When it comes to certain things, bookkeeping, if you can get away with 2, 3, 500 dollars a month, that’s a deal, you can’t get anything else. But when your bookkeeping number starts to get to the point where it’s close, and you could hire a full time person.

Jay Ruane 14:56

Yeah, I mean, my bookkeeping ranges anywhere from 5- $7,500 a month because the number of transactions, and I’m thinking, you know, shit for $75,000 a year, I should have somebody in house doing it.

Seth Price 15:08

Well let me ask you a blunt question, what are they billing you at?

Jay Ruane 15:12

Well, right now I’ve negotiated a flat fee as a large firm-

Seth Price 15:15

I understand. They have a number. And that’s what I’d be curious to know. Because when you were doing it, was there a billable rate that you were getting from them?

Jay Ruane 15:23

They were charging us per transaction, like, you know, like $1 per transaction or something-

Seth Price 15:28

So it’s hard to reverse engineer that. Right?

Jay Ruane 15:30

Right.

Seth Price 15:30

But what I would say, look, bookkeeping is another thing that’s really, really hard. So this is, you know, people listening to this want easy answers. I think it is particularly tough, because what does a bookkeeper go for in your in your world these days, I haven’t looked at it for a while..

Jay Ruane 15:44

55 to 65,000. If they’re QuickBooks certified, and

Seth Price 15:48

Right, and this is the problem, I have found. And again, years ago was like 40 to 60. Now it’s 50 to 70, let’s say. I think you’re going to be sadly disappointed what you see what you get for 60. That anybody worth their salt, rather than working for 60? Right? So 60, means What if you had, you know, if you could go out there and get 15 people to pay you $400 a month. I haven’t done the math, but I assume that’s decent money. Right? So that right, all of a sudden, you control your own destiny, and your’re not deal, you know, and granted, you have to keep, you have to get the people. But it doesn’t take that much if you’re good, to fractionalize it. And so the number of people that are going to come now, the good only good thing about this world is that it can be remote now. But I have been through this game, I have tried fractional people. You know, over the years both when I started Price Benowitz, got out of that game pretty quickly when I started BluShark. And what I found, it’s not for the faint of heart. It’s, it is a very specific piece. One piece I’d say is that person can almost negotiate no, things for you. If a bill comes in, and you want to pay less, you better do it. It’s not in the skill set of 95% of bookkeepers, and that it is really hit or miss. So these are the things I hate about having an in house bookkeeper is that if that one person is to leave, you’re devastated. Versus when you service, it’s somebody else’s problem to sort of stack the people back into your place. That’s not nothing.

Jay Ruane 15:48

That’s huge especially in the modern economy.

Seth Price 16:07

One of the worst calls I got, we lost, I was heading on vacation, we lost our bookkeeper. And Dave is sitting there. And he is interviewing somebody who has a felony record for armed robbery. They were the getaway car, like 10-15 years before. That’s what we were about to hire. I mean, there was a bunch of other reasons, we wouldn’t have wanted to do it. But my point is, that’s not, if that blew up, and I told the story to you, you’d be like, what did you do? Right? So my point is, like, we ended up with a woman who’s now with us over 10 years, who’s amazing and is now our controller, and we’re having a great run. But it is, so, I would argue that is one of those places that if you’re really a five to seven, which means let’s take an average of six, you’re at 72,000, no payroll tax, no benefits, no nothing. And you’re going to hire a full time person, you may be better off the way you are.

Jay Ruane 18:20

Thats, and that’s and that’s the conversation I wanted to have. Because, you know, these are the types of things that you need to think about as you grow and you scale. What are you going to in house first? Where are you going to? I mean, is it going to, yeah there is some convenience factor to having a person sitting in the next room. But a lot of these roles, you know, bookkeeping can be something that’s done remotely.

Seth Price 18:40

And if you get the right person-

Jay Ruane 18:41

Do you really needed them?

Seth Price 18:42

Can you get that because, the right person full time, that’s a lot of hours, you can do a lot of damage with that. Right? But, and it depends what your deal is. I mean, there are a lot of fractional groups that, to charge, want to charge you like $80 an hour for the bookkeeping. So there is an intersection, that’s a buck 60 If it was full time, you know, so even when you’re half-time, when you’re at 80, then you’re like, okay, I can have a full time person, I get that argument, you want the 40 hours a week, but is, you know, your deal I get it, why do people still use answering services rather than, you know, we have relatively inexpensive overseas labor. But there’s a point where you don’t want to manage beyond a certain hour. At the volume that we have, I think we have like seven till nine RR hours Monday through Friday, and that’s, you know, with weekend- plus weekends, and we made a decision, I’d rather fractionalize even though it’s a slightly lesser quality, that that middle of the night stuff. I don’t want to deal with that extra person. So marketing, similarly, there are things that I think are, you know, knowing what I know about digital marketing between content building, link building tech, it’s very hard to find a person to do all that. But if you’re paying $30,000 a month for SEO, it’s a lot easier to potentially deal with all that.

Jay Ruane 18:42

Sure.

Seth Price 19:59

But I think the videographer is a great example. It’s, you know, whether you have it full time or whether it’s fractional, whatever works. Could you get a, do you really need a full-full time videographer? Probably not. But this guy works. And the truth is, with what you’re paying him per year, if you had somebody halftime at a contractor rate, it’s probably about a break even.

Jay Ruane 20:19

Exactly. And that’s, and that’s really the start of the conversation and the sort of the, the decision making matrix that you have to go through is that, you know, the other thing is for things like videographer, not necessarily for bookkeeping, because you’re gonna need bookkeeping every week, you’re gonna need someone paying attention to your marketing every week, they may not necessarily be executing things, depending on where you’re having them do things if it’s referral marketing, or whatever. But for someone like videographer, photographer, you know, the fact that we have him means that stuff gets done that would otherwise be okay, let’s wait till we have enough that we can bring somebody in and it can get done.

Seth Price 20:58

I’m living that right now, I go back and forth, I hired the wrong videographer a number of years ago, it was bring the right guy and he does some shoots, but then it languishes. And you have to think this is, I think that the benefit for most things, if it’s self executing, like if you had a guy who was going to come in like clockwork, every week, every two weeks, whatever it was, and you knew it was going to happen. But when you have to pick up the phone to have them come in and schedule it, that’s when it all falls apart. And you might as well, that its the, it is the impetus, because once it’s out of sight out of mind, you have other things to deal with. So that if your bookkeeper is not only doing the job of coming to you with issues, great, but if the answer is they’re doing the job they give you, and you have to go and prod them for stuff, and you forget to prod them for stuff, that’s where real issues happen.

Jay Ruane 21:48

I think, I think you know, in that, in those situations, it’s incumbent upon you, as the business owner, to identify that and maybe you add somebody as your assistant whose job it is to wrangle all your vendors and make sure that they’re doing stuff and-

Seth Price 22:02

Right, but that junior person is the one most likely to turn over, so you look like a rockstar for five months, and then that person leaves and, you know, again, it’s if it stays consistent, but it goes back to a point you talked about last week. And ironically, when I was in Toronto, had lunch with a client and a really awesome lawyer there who was struggling with the same stuff you were talking about, which is the redundancy factor. He lost a lawyer. And because of that, he ended up having to jump in himself, a-la- Jay, right. And so that is some of, one of, when you look at the benefit of the contractor thing, whether it be digital, whether it be bookkeeping. Theoretically, I mean, there’s issues of quality with a person there leaves, I’ve seen that with some of our bookkeeping contractors over the years, somebody leaves, the next person may not be equal. And you have to police that to a certain extent. But I think that the idea that you’re not dealing with that one issue that theoretically, it is being handled means you’re you’re now, if your bookkeeper quit tomorrow, it was full of, let’s say your contractor went out of business, you’re diving in, much less likely that’s going to happen. But a W2 bookkeeper, if you’re paying them 60, the odds of them being there in two years is negligible, one year is not even that great. And so the idea that you’re able to for a modest premium, look, I’m making this up 60, which is not much with taxes and benefits, if you can get what you need fully, for essentially 72 in and out plus you get miles if they take credit cards, that if all of that can be done, it’s one less thing that Jay may be parachuting into.

Jay Ruane 23:40

Right, and I’ll tell you right now, if I had to deal with the books, it would be a just a terrible thing, because it’s one of the things that I got rid of first because I hate that part of the business part of this thing. And that’s another thing that you you need to identify, I think what it is that you don’t mind jumping into, like I don’t mind jumping into cover some stuff at the courthouse, I, you know, I get out there, I get seen, I see some old friends, you know, that type of thing. Maybe it doesn’t turn into business this week, but people still see me, see out and about. And so that could turn into something like, you know, longterm. That’s just who I am. Right? So I don’t mind jumping into those situations, but I would hate jumping into having to balance the books and you know, and issue the checks and pay the bills. You know, to be honest, if it’s not on AutoPay, with me, it’s not getting done. It’s not the last thing. I’m terrible at stuff like that. It always gets pushed to the corner of my desk. And so that’s one of the things that I think you need to look at when you are deciding what vendors to in house, is, you know, how active do you want to be in this? Like I’ll meet, I have a standing meeting with my marketing team. I don’t think I’ve missed one in two years, right? Even when I travel, I show up for that meeting because I love that stuff. And I love the new ideas and I like, trade, changing things, right? So that I’m going to get there. I don’t think I’ve made a single meeting with my bookkeeper and the, the team that she has. Because I don’t care for that stuff. I have somebody else from the leadership who goes to that, that type of thing. So it really comes down to you know, what Jazz’s you up, and what are you going to get involved in? Because, look, the truth is, is that as a law entrepreneur, we get pulled in a million directions, and you will put up less resistance to the directions of things that you love, or at least like, and so I’d rather get pulled towards the things that I like than getting forced to stay with the stuff that I dislike. It’s just for our quality of life perspective, that’s the way I seem to approach it. So, you know, for stuff like accounting, yes, it may be right that I can outsource it, or I can bring it in house for about the same costs, and some convenience factor. Certainly having somebody in the next room would be there. But let’s face facts, they probably wouldn’t be there every day. And they probably wouldn’t be there when I had questions at two o’clock in the morning, because that’s when I slack out the craziest questions to my team. Marketing, I started early bringing somebody from marketing, I’ve had her now for a decade plus, and, you know, we’ve grown that department, and I love being able to be nimble in that respect. So

Seth Price 26:24

And look, and I think, so the answer is, you hate the depends answer. But it’s, it has to do with who the person is, where they’re at. And if you have that potential Rockstar, because when that when the employee works is great, it’s awesome. And if somebody is flaky, you’re like hitting, beating yourself up. But I would also say that managing, you know, just because you call it quote unquote, a vendor is no different that you’re still figuring out the idiosyncrasies of that when somebody within the vendor group leaves, are you getting what you need, and keeping your eyes open? To me? It is, it is a tool, I like it in a way, better than the part time, assuming that the vendor, and, but there are vendors that, and I am I’m taking out of the marketing space I see in the financial accounting space, where it’s a flat fee with layered, and that theory is awesome. But I think that it can, it like, I want somebody who’s solving my problem. I know they have to have a viable business model to stay in business, but I don’t like it where it is your’re, you’re doing a formula, because it’s their business model, not necessarily the best way to deliver you services, meaning, if you don’t need a lot of time, should you be paying a flat fee for certain things. And, you know, some stuff comes out in the wash, and some stuff is just, not gonna be anybody’s, worth their while. But like, you’re, my CPA, he bills me by the hour. And when I have more work, it’s more when I have less work, it’s less. There are people that have tried the flat fee model, they’re just making me very nervous. Because at the end of the day, it generally never benefits. Like when you negotiate something, and you cap it, like on a criminal defense case. If it goes over it, you’re screwed. And it rarely goes under, make it as an example. And knowing that you, you almost have to understand what their business model is. And what is the Hamburger Helper, so you get the relationship person to talk for an hour, but who’s actually doing the work, because that’s going to drive the quality of what happens.

Jay Ruane 28:37

So let me ask you this. Okay, so let’s talk about some of the stuff that gets most commonly outsourced to a vendor in our industry. So you’ve got reception, and answering services, right, that gets that gets done a lot. You’ve got-

Seth Price 28:53

And it’s a curve, I apoligize, it’s a curve, right? You start, it’s cheap, cheap, cheap, gets more expensive, you’re like, okay, full time person, but you still need the overflow. So then your bill comes down. And that it, and that’s sort of vendor management, when, when is the right time, and you may never get rid of it. But you may go down to that, flu, smaller piece as you bring on talent. Sorry.

Jay Ruane 29:12

So you’ve got reception and intake, I guess we can put them into one-

Seth Price 29:17

Intake is the one, where-

Jay Ruane 29:19

But I’m talking about people who have one, you know, that are solo-

Seth Price 29:23

I understand, but there is a distinction. And I think it’s important. Intake, me, and I’ve sort of developed it myself recently, which is you need somebody for instant gratification, can pre sell the firm. who’s going to close? And that’s what I was sort of making the distinction on, right? Because if some people are gonna say, oh, I’m outsourcing the person’s, no, they’re getting a message to you. And I wanted to be clear that this is not a closer because the odds of a third party closing for you are very, very low. Y

Jay Ruane 29:54

Yeah, I mean, I would not put the close, I would, I would assume for the most part of the people in our audience, the lawyer is still doing the closing.

Seth Price 30:01

So let’s, let’s just confirming that. Because there are groups like alert and others that will theoretically sign people overnight, I think it’s a pipe dream for most people here.

Jay Ruane 30:09

I really do. And I mean, I know in the criminal space, people want to talk to the lawyer that you know, or a lawyer in their market. So we’ve got reception, intake, we’ve got bookkeeping, which is traditionally outsourced. And we’re talking, you know, maybe, maybe, you know, paying even slightly above salary at market is still worthwhile to have a vendor, you’ve got what else do we have? We have marketing, right? You know, a lot of people outsource their marketing, I think there’s a problem-

Seth Price 30:38

And the pieces of marketing, right, because we, let’s, let’s talk about it, there are pieces that I’m a big fan of outsourcing, right, I built BluShark becsuse I didn’t see somebody doing it. But the odds of a person keeping and maintaining the skill sets needed for advanced stuff, not that high. But let’s, let’s talk about social for a second, you’ve danced around that space, you can check the box with a vendor, right? But if you really, you know, there are pieces where if you want it to pop, generally Jay Ruane has to be center stage in some form or fashion. And then it’s really, really hard to write a check and get great social. Would you agree with that?

Jay Ruane 31:19

I would agree with that. And I think part of the problem is, is that a lot of the people who I have run into and this is one of the challenges facing you know, our, our business Firm Flex was that what we found was lawyers that we would meet would say, well, I’m gonna have you talk to my marketing director. And it was their receptionist, who also was in charge of their marketing, whose job it was to post something on social media every day. And I was like, this is not a strategy, just haphazardly doing it. You know, you need to put some money behind social just like anything else. You know, organic posting is not going to do it. But there are strategies for your posting on social with paid social, that can really escalate the game. You know, it’s funny, I had somebody recently reached out to me, who started doing what we call in Firm Flex, the hometown hack. And they said that now that they’ve been running it for three years, they’re seeing people mention that in their intakes that, and I’m like, yeah, and you were and they’re like, dude, we’re running it for $1 a day. You know, we are now $1,000 into this campaign. And we can now say that we’ve gotten five or six clients since January one who’ve mentioned that. He’s like, so it just took us two years to get to that point, I’m like, yeah, because it’s a long term play, where you’re constantly branding yourself and getting, and social is not where people go for, to fill immediate need, you know, it’s just it’s your the white noise, but you just got to be, stay relevant to them over and over and over again. And that’s part of the problem is that people sort of approach things with a misunderstanding of how it’s going to work. But what are the things can you think of that you can outsource? We used to outsource private investigation for the longest time, and we brought one in house, up until COVID, and that was great.

Seth Price 33:08

That was one thing we started, we actually did that in house early, early on, started first part time and then full a full time. As a criminal defense firm. I think it really sets you apart. And you could actually tell how good a firm is, based on what their resources are. On the PI side, there’s medical records, become popular. And historically, it’s been a back and forth, you do it in house, you get fed up, you do it outsource, they suck, you do it in house, I think the vendors are getting better and more sophisticated, especially with electronic record collections, and the integrations into the case management softwares. So I think that is an area that’s, that’s ripe. The lien resolution is another that’s there.

Jay Ruane 33:46

Quadros, in the family law practice people outsource their qualified domestic relations orders for their, for their-

Seth Price 33:53

On the PI side, you have demands, that, that is the sexy area right now. I’m curious where it shakes out. Some people are hitting hard with AI generated demands. And I’m curious to see how that plays out. Because, you know, AI is used for a lot of things that isn’t always AI. There may be some guy in India writing stuff and then somebody else is editing it. Like, you know, how much is AI? How much is not? I got to tell you though, what I see on the short social snippets, the AI is getting better and better. I posted something on LinkedIn and like, do you want us to rewrite it for you, I’m like sure and it’s so I’m seeing those things. So what else do we got? We got demands we got, med, liens, we have met records. There are like other firms that don’t do a lot of investigations using an investigator for those things. You know, things that you wouldn’t even think about doing in the house like process serving.

Jay Ruane 34:49

You know, it, speaking to something that you just brought up, I wonder where AI, will, how AI will impact you know, the reception space because we have call trees, right. But call trees are so impersonal. And people hate them. That being able to have a dialogue with an AI bot, I think might-

Seth Price 35:15

We’ll you’re seeing like, Falkowitz has gotten a beta there. And he’s done, he’s done, seems to be doing nicely. I’d say Intaker, I just spoke at their conference the other day online, a virtual one it was in the middle of Pi Day. And, you know, I think what they have done is said, hey, you know, a US based receptionist, I’d still put up against AI, when they’re, when there’s somebody around. But what I see on, what I saw on chat, is that the international chat centers, you know, being run by the major chat outfits, were all being run out of the Philippines, nobody was dealing with somebody domestically. In fact, when you when you spoke to the big boys who did it, and I said, where are your people? Oh, it’s the US and the Philippines. What’s your split? Oh, two people in the US. 36 in the Philippines. So nobody in the US was answering a chat. It was all, matta- my point is like just being clear. I would at this point. I mean, I hope this doesn’t come off as bad. I would rather have AI, a good AI chat. Where it’s pre scripted. This isn’t like, you know, Chat GPT, where you’re making it up. But you know, I would rather force people and answer the questions we need. It is infuriating when it’s an outside the box question, but that shouldn’t be on chat necessarily. Like, you know, I see, Hyatt, for example, has a really good chat function, where you can get questions, the front desk, you need a bottle of water, whatever you need. It’s really done an excellent, excellent job, but it’s being done by the person at the front desk, rather than picking up the phone. That’s awesome. But if you’re not doing that, the idea that you’re gonna get 90% done. Oh, you got us, you got a ticket, Mr. Ticket can help you. Like, where is it? They can ask basic questions, get all that information and cue you up. But do you, do I really trust the person overseas? I haven’t seen it at scale, continuous, because those companies pay the lease, the person who doesn’t remain in the job, you’re constantly retraining. And at that point, rather than worry about somebody’s gonna say something wrong, at least it’s coming off of a decision tree that’s finite.

Jay Ruane 37:20

Yeah, it’s really interesting. I mean, you got to also remember that we are really only 14 months into this AI thing. I mean, we are so still new at what is going to happen, that I think there’s going to be a lot of progress on a number of these fronts. I am sure at some point, someone’s going to develop a tool to take your, you know, take your bank account, and insert it into QuickBooks, and it will reconcile everything and say, These are the four things that we needed to have a person look at. And that will be an AI, I’m sure QuickBooks AI will come out with that. Because they’d rather keep people in their ecosphere, just you know, just like Google got rid of, is trying to get rid of SEO by having local service ads and Google business profile pages, you know.

Seth Price 38:06

What kills me now is the LSAS for your name. To me, that’s just fucked up. Can I say that on our podcast? I mean, I just-

Jay Ruane 38:13

Yeah.

Seth Price 38:14

Like the idea. Like, I always thought that the branded search, where you have to protect your own name, is just a bit much. And you could see how powerful a company is where they just turn it off, and you go straight to it. But the idea that we have to pay for our own name and search that, you know, Google does a lot of evil things. That’s just one step too far.

Jay Ruane 38:35

Well, I mean, but think about it. I mean, 20 years ago, in pay per click. I know you probably were the victim of this. I guarantee I was because I saw it. Were other lawyers that were trying to compete would bid on my own name.

Seth Price 38:48

They still do it. What do you try? Used to? It’s still there all over the place. I like, I haven’t, I got burnt early on, by a vendor way, way early on. This is like maybe 17 years ago, a guy did something. Where, you used to be able to do dynamic generated replacement.

Jay Ruane 39:03

Dynamic, dynamic, keyword insertion, right? You us the open, the brackets? I love that.

Seth Price 39:11

Right, and someone did it for the competitors name. So it was pretending to be the competitor, and they wigged out. We were the new kids on the block. And we got cease and desist letters. It like was a quick check. We screwed up, right. The vendor screwed up and did it, all this awful. So I think probably still some people that hate me from this from 17 years ago. And, you know, my point is that, you know, it is powerful stuff. But yeah, that, that is still a game. And the worst part is Google plays it. So if I wanted to compete with Jay Ruane, let’s say I’m a Connecticut DUI lawyer and I’m in your town. They’re gonna take my budget and put it when somebody searches Jay Ruane, because Jay Ruane means like DUI. In very often people get upset the only way to prevent it is if you’re going to put a negative keyword in your own listing, there, but I had people recently, a few years ago screaming at me like I promise you I’m not buying your name, you know? And it wasn’t till we had to go and put the negative keyword in place. But, uh frustrating.

Jay Ruane 40:13

Yeah, there’s there’s a tip to end the show.

Seth Price 40:15

Let’s land this plane.

Jay Ruane 40:16

Yeah, you may want to have your negative keywords of your competitors if you don’t want to be paying for them especially if they’re paying more per click for their name than you’re willing to spend.

Seth Price 40:25

But it’s generally a red, that’s what the worst part, you mean. It’s not cheap to get your competitors names, but they are valuable clicks. People make a lot of money doing it.

Jay Ruane 40:33

They certainly do. Alright, well that’s gonna do it for us this week here on The Law Firm Blueprint. Of course if you want to catch us every week, you can travel along with us on your podcast player of choice just search up The Law Firm Blueprint podcast and be sure to give us a five star review. Of course you can check us live not only in our Facebook group, The Law Firm Blueprint, but you can also catch us live on LinkedIn, Seth’s got the team working on getting that going Thursdays at 3pm Eastern, 12pm Pacific but that’s gonna do it for us, for no. I am Jay Ruane. He is Seth Price, we are the The Law Firm Blueprint. Bye for now.

Transcribed by https://otter.ai

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