Welcome to the next edition of the The Law Firm Blueprint’s #summerseries! In this episode, Seth and Jay are joined by two leading figures in the legal industry, Michael Morse and John Nachazel. A dynamic duo in legal coaching at Fireproof, Morse and Nachazel share their expertise on the critical importance of delegation, the strategic use of data in law firm management, and the keys to scaling a successful legal practice. This discussion offers valuable insights for solo practitioners and those managing large firms alike, providing practical advice on how to grow a business, make informed decisions, and achieve greater success in the legal field. Like, comment, and subscribe for more insights from The Law Firm Blueprint!
In this episode, topics include the challenges that lawyers commonly face with delegation, the essential data points every law firm should track, and the importance of having a strong second-in-command within a firm. The conversation also delves into the personal experiences of Morse and Nachazel, detailing their journey to mastering law firm management and their approach to effective legal coaching. This episode is a must-watch for any legal professional looking to enhance their practice management and client outcomes.
#LawFirm #Consulting #SummerSeries #MikeMorse #JohnNachazel #Fireproof #Coaching
Links Mentioned
Hello, hello, and welcome to this edition of The Law Firm Blueprint. I’m one of your hosts, Jay Ruane, and with me, as always, is my man Seth Price over there, down in the DC, Maryland, Virginia, Delmarva? Can I call it Delmarva? Is that where, is that how you call it down there? But we are joined today by, I don’t want to call them the most dynamic duo in legal coaching, but I mean Abbott and Costello, Larry Bird and Kevin McHale. And then we’ve got John Nachazel and, of course, Michael Morse. Gentlemen, thank you so much for being with us today. All about coaching and you guys are at the heights, for sure. I mean, who are the who are the top duos that you can find out there? They’re not funny like Abott and Costello, I don’t know what you’d call me and Seth, I’m sure you can come up with something.
We’re, the old guys in the Muppets on the balcony, that’s us.
Waldorf and, Stadler and Waldorf, right? That’s who they were.
Yes. I like that.
All right, guys, thanks for being with us today. I really appreciate it. I know Seth appreciates it, and we’ve been talking all summer long about coaching. And there’s nobody better to end this session with than you two. Seth, what do you got for us?
Well, Mike and John. You know, you guys have this great story. You wrote this awesome book. Talk to us in your time now. You’ve been coaching now for a number of years. What are some of the things that you guys see looking under the hood of all these different law firms, large and small, where do you see that you see the most impact that most people can get when they turn to coaching?
Well off the top of my head, I think what I’ve been seeing a lot lately, and we just had literally 10 law firms sign up in the last month, and I’ve talked to most of them. They don’t know how to delegate. They are doing too much, so I’m usually talking to the owners and founders, and I think everybody on this call can relate, because I know I’ve talked to Jay and I’ve talked to Seth, and we’re all, we’re all trying to do too much, and that’s the biggest I mean, and then when I start digging into the numbers, you know, I say, okay, so what’s your average fee? What’s your average time on desk? What’s your this? What’s your that? Well, you know the last time I looked in 1974… so I, you know the numbers and the delegation. And then one thing we can get back to later. But like I’ve been confronted with violating the delegation task me personally, by trying a case last month, this month, two weeks ago. And so people are confronting me. I thought you don’t do this anymore. I thought you’re delegating. So it’s, it’s it’s been really fun to think about and help people by me violating my own rule. It helps understand and explain the process better. So, but those are the two that pop up off top my head. John, what about you?
For me? For sure, of course, it’s data, and when people talk to me, it’s about data. When they talk to you, it’s going to be about delegation. And so what I see is the piece that comes to people, the ability to dream higher actually, instead of the data giving them a dose of reality, and it’s slow down, it’s actually what I’ve seen more of, especially lately, is once they see the data and they feel that there’s some sense of control and some confidence that they know what’s going on, they’re more bullish, and they’re bolder, and they’re braver in making their decisions and taking their action. And I think in, the other thing that I see consistently that makes me so happy is just the idea of intentionality. So it’s some of the pillars of Fireproof are we try to instill, we do instill clarity, alignment and accountability, clarity on who you are, what you do, why you do it, where you’re going, how you’re going to get there, and then aligning the finite time, energy and focus of the resources of the firm against accomplishing those goals, and then layering in an accountability loop to ensure that once you’re clear on who will do what, by when that it actually is happening. And I would say this to Michael, if you want permission from me, not that you need my permission to do anything, I don’t actually think you’ve committed, committed a grievous sin by trying a case and getting $75 million dollars. the point was, it was intentional. It was a thoughtful choice. It wasn’t you didn’t just allow the business to happen to you. You surveyed where you could surgically be inserted, have a high impact. You did it. Thank you for doing that.
John still coaching me after all these years? Do you see that? Thank you, John. And you’re right, and you’re right. I love that point.
And most of, most of the time, Jay and I talk about this. This wasn’t like some guy quit and you had to parachute in because you didn’t have the depth of bench. This was you saying, hey, I see a PR opportunity. I see a needed client. I see an opportunity to do some good. You know, as John was saying, intentional. Let me ask both of you, though you now have enough coaching clients that you’ve seen people that have soared, you’ve seen people plateaued, and you’ve seen some people that’s cratered. What are some of the things that you see that differentiate the people that soar from those that don’t? While working with the coach.
So I just, I have this going on right now with one of our coaching clients. They dropped off after 90 days, and they just signed back up. And I said, Well, what’s going on? He said, I just didn’t make the time. I did not make the time for coaching. I did not take it. He didn’t use the words serious enough, but they didn’t. They didn’t want to slow down. They didn’t want to take the time. That was kind of like my story at the beginning that I waited a year and a half to hire Gino and I kicked myself all these years later. So it’s it’s not taking it seriously, it’s not taking the time. It’s not setting aside the time to work on the business. I love, you know, John and I came up with an analogy in the book. You know, treat your law firm like you would treat your biggest case. I still think that’s a great, is it an analogy or metaphor?
Let’s go with the analogy.
[inaudible]
None of us-
We’re lawyers, our word are our tools!
It’s definitely not an idiom.
Seth is the smart one here.
No, I don’t know, as you said it, then I’m like, I think John’s right. Now that you’re saying it.
So, but, but I love that analogy, because everybody, after I worked on this trial for for a few weeks. I’m like, that’s really hard, but it came to life that people don’t spend that type of energy and time on their own law firm yet on a big case, they will. So people gotta do that. We won’t take on a coaching client if they are, are resistant, reluctant, don’t want to do it. Give us a hard time about scheduling. We don’t need that. We’re just doing. We don’t need that, and we can’t do that. That will be a bad client for us. So they got to be committed.
And so John taking that, assuming somebody is committed, because you, you’re the one who sits there in the living room and the boardroom and sits down with these guys in it and tries to figure out how to get to the next level, of the people that are committed, which, what are some of the things that make the those successful and those that are not? Because there are a lot of well meaning people, Mike, right, that are able to say, I am committed. You know, that’s good, but it’s not the whole game, is it?
I guess then I would say because I was going to lean into it’s the discipline, but let’s just assume that we’ve got a common group. It’s somebody that is bold, so it is someone that is brave. When we have, we’ve grown at different paces over the years, always thoughtful intention and an active choice, but when we have been bolder in our goals to grow. It has caused us to be bolder in the actions that we take. We’ve taken sometimes our best player and moved them into a coaching role. We’ve taken them and said, Please stop being a direct contributor and instead make a bunch of other people better. So if we weren’t growing, if we didn’t aspire to grow so quickly, we would have just kept organically growing and nurturing it along, and it would have been fine, but it was having the audacity to dream large that compels us to, and our clients that are disciplined, it’s their audacity to dream large that drives the bold results.
So my last question before I flip back to Jay, is we’ve done a summer series, and we’ve talked to a lot of coaches, a lot of very good coaches. You guys come with the law firm perspective, there’s some people that come without it. There’s some people that have worked in a law firm but haven’t owned a law firm. Talk just a little bit about how you’ve leveraged, you know, the Mike Morse Law Firm to, you know, help firms in a way that may be different than people that are coaching from a strictly academic or business perspective.
Well, I think, I mean, I think, you know, coaches, coach. And depends on who your coach is and what their background is, whether or not you’re going to connect. And it can be useful. I think one of our differentiators that I think is a benefit. And I think we’ve had clients who’ve told us its benefit is, I mean, putting aside the fact that we’ve done it. We’ve, we’ve lived through every problem imaginable. I’m not sure that there’s been a problem in the last five years of coaching where somebody said something that we haven’t been through it. But you know, when you’re having an accounting problem Seth, or when you’re having a marketing problem or an HR problem or an intake problem, our coach immediately gets my manager on the phone to coach that person. We don’t fake it, like if somebody asked me an intake problem, could I fake the answer and make it sound pretty darn good? Yep, I could, but I’d rather have my intake person get on the phone with him and make it really, really, really special and good, because they’re taking 5,6,7, hundred calls a week. They know all the problems. They know the technology. They know the issues. They know how to sell blah, blah, blah. So if I was out there seeking a coach. I think that’s an extra added bonus of fireproof coaches that they’ve, some of them are lawyers who’ve worked at my firm. Some of them are paralegals who worked at my firm, somebody. Some of them have grown up at my firm through osmosis, like John’s daughter, who’s amazing and smart, who, who gets this business better than anybody at her age I’ve ever met, like people would be lucky to have her as a coach. They would do much better than just having a general business coach who doesn’t know what the heck a law firm is about. Law firms are complicated. Um, the culture is complicated, holding lawyers accountable is super complicated, but like John and my team have figured it out. We have the secret sauce. We’re willing to give it to people. So that’s why I think it’s a little bit different.
And I want to build on that and say that for me, what I’ve noticed a lot of is I’ll just use our compensation plan. The way that we pay our pod leaders is different from most of the industry. We pay based on profit rather than a percentage of revenue. And I’ll go through the formula and explain it to a law firm owner, a leadership team, and the leadership team will challenge it and pick at it, and then at some point, what inevitably happens is the law firm owner says, we’re done talking about it. This works. It’s provable that it works. How are we going to do it? How are we going to tweak it? We’re not going to tweak it at all. We’re going to do it exactly the way Mike does it, because it works, and so it comes with that credibility, that, and there’s no defense to it, and the leadership team puts its guard down, and then there’s buy in. And the whole thing is gaining the buy in. You’ve heard me say many times it’s, it’s, it’s about the execution, and you can’t have the execution until you gain the buy in. And I think when we we have a proven system that works, people accept it.
So I have a question for Michael here, and I want to call back to something that you talked about at the top of the show, and it’s about lawyers not delegating. What? What is it about us lawyers that it’s so hard for us to delegate anything, even stuff that we’re not putting our signature on. It’s not a plea that we’re filing with the courthouse. What is that hurdle? Because I know in my own context, and actually working with Kate, I got out of doing certain things, because I was my, I was getting in my own way, and it was stuff I didn’t want to do, I didn’t like doing, but I was still not delegating out to somebody who would enjoy it and do a better job of it. Why do you think lawyers as a type of person refuse to delegate things because I go to a restaurant, I talk to the owner. He’s not the guy in the kitchen cooking the great food. He knows to delegate that stuff, but me, as a lawyer, I’m like refusing. What do you think it is about our psyche as lawyers, since you know so many and deal with the pushback on delegation, why is it that we can’t do that?
So it’s, it’s either one of two things, ego, or you’re a control freak. And the control freak part may be part of ego. I’m not sure I have to ask John that, but it’s, so for me, it was a lot of ego. And when I go to audiences and speak on stages, and I ask people to raise their hand. You know how many people in this room, and this could be 150-200 lawyers, feel like there’s things at your office, that there’s nobody in the world who could do better than you. You’re the best at that task. Every hand goes up. For me, it was trying cases for me, it was negotiating with adjusters. For me, it was talking to clients. I never thought, like I have this secret knack. I have the secret sauce. And I’m sure Jay, if I asked you two or three or four things, and Seth, and even John, who’s not a lawyer, you all have things that you think at some point in your careers. I’m the best at this. John actually has an interesting story, because he recently hired somebody who he told me recently is it’s just as good at him at doing something. And I’ll let him share it if he wants. But so anyway, Jay, once I realized, through coaching and mentors, mentors of mine, that there were people out there who were better at things than me, and I believed it, and I hired people. I’ll give you an example. I used to talk to 30-40, clients a day. It was exhausting. I was great at it. It was exhausting. I could, I was just like, it sucked the life out of me. My father in law looked at me 20 plus years ago and said, Michael, do you know that there are people out there in the world who love to talk to people on the phone, who are compassionate, who have patience, not one of my strong suits, etc. And I said, bullshit. Who wants that job? He helped me write an ad. This is all very, very true. He helped me write an ad, and Jan Rosenberg was the first person who responded to the ad, who’s been with me for 25 years. Now she’s working at Big auto and stuff, but she was great, and it was true, she would talk to 100 people a day with the most compassion that we have ever met. Clients loved her. Client wanted to fire us. She talked them into staying, client wanted to give us a one star review. She talked her into giving us a five star review, etc, like, on and on and on. That’s one example. I hired trial attorneys better than me. More, more, you know, they just wanted to do it, so it freed me up to do everything else. So ego has to be put aside, and then the control freak part. I’m not an expert on. I’ve never been a control freak, ever, but I know lawyers who won’t let a document go out with them reading, which tells me you don’t have the right person writing right? You gotta hire people, Jay, who you trust, who you know, are going to do good job. Sure you can read a couple things for a month, make sure that they’re good, but once they’re good, leave them alone. Let them do their job. Frees you up to do other things. I know lawyers who still sign their checks. I haven’t signed a check in 15 years, and, I, we write a lot of checks. And I trust my team. Now, if I didn’t trust my accounting team, and I thought they were going to steal from me and do all the bad things that we hear about, I’d have to sign every check. But I haven’t signed a check in 15-20, years. I could go on and on with examples, but that’s, that’s my take.
It’s funny reminds me of the Chad Dudley comments, Jay, if you remember, stuck, one of the best quotes of our thing, which is, with the number of people you employ, Mike, there’s somebody at every moment per day screwing something up. And you know what? He’s okay with it. not that he likes it, but that you wouldn’t have the firm you had if you were signing every check and you micromanaged every decision.
It would, I wouldn’t sleep at night if I knew? You know, if I, if I dug in, and I do dig in, and when I start trying cases and get involved in a case, you don’t think I see things that I would have done differently, but you’re right. Seth, at the end of the day, John helps, you know? He says, Michael, do you know how well this firm’s doing this year? Do you know how well you’re doing this year? And it does help put it in perspective. But for me, it’s not about the money. I do want everything as, as well run as possible. I want the writing to be great, the trials to be great, the clients to be great. But you can’t control everything. You’re right. There’s gonna be lots of mistakes, and you gotta be okay with that. And if you’re not okay with that, you will have five people in your law firm, maybe ten. You’ll never grow, you’ll never scale, you’ll have your hands in every thing in the firm. And that’s not freedom or happiness, in my opinion.
So can I get my hot take on that?
Yeah, please.
The question. So I’ve, I’m not a lawyer, but I’ve observed the species in its natural habitat for a long time, and I have unproven theories. So my theory on why you guys struggle with delegating is you’re super smart. Can’t be a lawyer without being smart. You’ve always been amongst the brightest in your classroom growing up, you are trained very deliberately on critical analysis, so you have the ability to identify problems really fast, and it just feeds. And then you have the ability to argue. You’re trained arguers, and you have justifiable fear. You have fear because your P number, your license is at stake. That provides your livelihood. It’s your name on the building. Anything I screw up makes me feel really bad if it’s screwed up. For Mike, it’s at a different level. It’s his name on the building. It’s not my name. So I think that there’s just some natural forces that are obstacles to delegation. And Michael referenced it, so I will share. So I hired, we hired Kyle recently, and he is our data person, and he’s everything that I could be from a data standpoint, that even, that hurt to say out loud, I didn’t like that. Maybe that’s therapeutic, though, so, but he was my last one, so all of my direct reports on our leadership team are better at their job than I would be, and I’ve had many of their jobs along the way, whether it was head of accounting, head of HR, head of IT, whatever, being the media buyer, I had a variety of those jobs, and then I fired myself. I found somebody better and put them into position to succeed. And I actually extract far more joy watching others succeed than doing a good job myself. It’s just the way I’m wired and this stage in my life I want to see others succeed more than than myself.
Well, so let me take something that we just started, that you touched on, which is, for many people, and I go to masterminds, especially, the number one question, if you crowdsourced all of them, is, how do they find a John? How do they find a COO? May start as an admin, director of ops, call what you want, but one of the things that I’ve struggled with is, once you have that person, how do you leverage that person so that person doesn’t become the bottleneck that you like, Mike, Great. Mike has gotten himself out of the weeds. He’s got you. But how does he make sure that you you just said, hey, I came to this epiphany. Not everybody does that in a timely manner. How do you work with your number two to make sure that that person then sets themselves up for success and just doesn’t become a different bottleneck?
So I thought you were going somewhere else with the question, how do you find that person? Do, you, but you want to know how we train that person?
How do you deal with it? How do you how do you take a person and turn them into the, into John? John probably was in John day one, and-
So, I mean, John and I, we could talk about our unique story, and I don’t know how unique it is. I have not had, I have not helped people train their number two, you know, we talk about it a little bit in our book. Rocket Fuel is a great book to read about the differences. You know, I think it’s a good it’s a really, I’ve never been asked that question Seth. It’s a complicated question. You have to really understand the differences. You have to know yourself. If you’re the visionary, you have to fully understand that. And if you’re the integrator, you really have to understand that. And they don’t. They’re not the same. They’re opposites. So you gotta be really, really clear, and you’re gonna have to let go of, you know, in the, in our, in the book Rocket Fuel, there’s a famous, the list, my list, the Mike Morse list, I don’t know what they call it.
Integrator wish list.
Yeah, there’s 80 some odd things on that list that I couldn’t get to, that I needed to get to, that were really important to my organization. When I interviewed John, I handed him that list. I said, can you do all this stuff? Because I can’t get to it. I need somebody to do it. I’m not good at it. I don’t like to do it. I’m not I don’t want to do it. And he looked at it and he says, yeah. And I said, okay, great. I said, before you start though, I want you to read Traction, and I want you to read Rocket Fuel, and I want you to read Good to Great. I don’t remember I gave him a lot of reading. He says he loves to read, great. I had my team interview John to make sure he was a cultural fit. Because I had 30 employees. That’s not true. I had 26 employees at the time. And you know, my team, my leadership team, Jan and Mark and Lori interviewed John. Loved John, and then John started, and I said, okay, how am I going to get the last 15 years of, of this into his dome? And so we spent a ton of time together. We talked, we had lunch. He moved, he had a little buddy desk in my office for six months. He watched me in meetings, he listened to me on calls. He watched me interact with clients, with employees. We talked about philosophies, we talked about this that and the other thing. And then after that training of six months, he’s still working. He’s getting the building put back together after the fire, and he’s doing a lot of great stuff. But he’s training. He looks at me and he’s you know, he says, Michael, I know you wanted me to do this exactly your way, but I can’t, because I’m not you. I’m going to do it my way. It’s not going to be the same. It’s not going to be, it might be a little bit more prickly. It might be a little bit, um, different than you would do it, but know that I get it. I understand the core values of this law firm, and I’m going to, I’m going to do my best. And it was, it was hard to listen to him do something that was different than me, different than how I would do it. And it took some time. We had some kerfuffles.
You’re looking in the rear view mirror. Now, right? You figured it out.
Say that again Seth?
You’re looking in the rear view mirror. You’ve cracked the code. You’re working with John for all these years, but let’s talk to the people who are right now. They’ve found their their person, right? I wasn’t asking, that’s a great question, but not what I was asking, which is, you have your person in front of you, understanding those kerfuffles. How do you sort of figure that dance out? One is, hey, it’s yours. Good luck. The other is you dance with them for a bit, and you hold some some control, and you give some over time, not everybody gets the star that is John. So like some of its history is written by the victor, you got the right right person. But what do you see when you look at the firms that you’re coaching when they have that dance right, versus the ones that blow up and the second in command ends up circling out, what you know? What are some of the things you see working from, from the CEO’s point of view, and John, what are you seeing when you’re looking at these firms on the firms that are doing things that are destructive, that even if the person is the right person, likely won’t work long term?
So let me jump in. If that’s all right. I’m going to- one of things that I think is important is getting it right, hiring the right person in the first place. So, and you hire for traits, you train for skill. So if you hire somebody with the wrong traits, you’re going to drive yourself mad, training them for the skill, and it ain’t never going to work.
I did that and it bombed out.
There you go. It was maddening. So for me, what are the right traits? As I think about it, because I get asked this question a lot, is there’s a few things that I would say one is it’s somebody that’s versatile. So yes, I’m the data person, and I get that, but I also helped author a best selling book, a really good book, well written book. I am comfortable with managing people. I can do a variety of things, and while every single person on my leadership team is better at their job than I am. I’m the second best in the firm at most of their jobs. So I’m an effective sounding board and able to bridge gaps and get the, and be the glue that the team needs. I’m also, despite me talking about myself and how awesome I am. I’m actually humble. I think humility is the most important trait in any leader. I try to practice servant leadership, and I’m constantly asking my leaders, how can I help you? I’m not directing them, and saying, this is what I need you to do for me today. So I think that’s important. And I think that you know one of the things that I don’t I don’t think Michael even knows, and I’ve never shared it publicly. I’ll just share that everything that I have, other than my wedding ring, is silver. I’m just really comfortable with being number two. I was the second of four boys growing up, and every, you know my watch, my 10th anniversary watch, Shinola watch from Michael, at the firm, is all silver. My belt buckle is silver. It’ll always be silver. I just am really comfortable in that role, being the sidekick, being the number two. And so I think that is important. And I think that last is somebody that can be ready for the burden that they can, they can endure it. We are a very different firm than we were when I started. It was daunting to come in and run a law firm from the outside world, from the automotive industry, but then to have it grow so rapidly the way that we did, even when things are great, there’s just a lot. The burden is heavy, and you need someone that can handle that burden, and someone that’s dedicated to continuous learning. Because one of the things that I told Michael was that as we kept doubling, doubling doubling, along the way, I was challenging myself to reinvent myself, whether it was through reading or other learning opportunities, because I needed to become something I’d never been, and it was more important that I was committed to the continuous learning than that I had the knowledge.
So Mike, do you, I mean, obviously you made a great choice. Do you see that going outside the legal industry just opens up the pool of people to find that appropriate number two that so many of us, present company included, weren’t willing to walk off that plank to and that when you do that, the number of people that you have at your disposal, I find very limited in legal, I’ll conclude with, like in my market, where there’s major law firms, you have plenty of people that hold a number two title, very heavily compensated, but may not have the traits that you want for the plaintiff side practice.
If had a hand pick a number two for another law firm, it would be a non lawyer. When we did it 17 years ago, it was a radical change. I had never heard of a law firm hiring a non lawyer to run it now its more-
And Mike, I was talking beyond that of the person you choose, having that person without law firm experience.
Outside, it could be an accountant, it could be an MBA, it could be anything. And you just, you got to find a really good person with a growth mindset, somebody that, I mean John and I talk a lot of that we’re opposites. Okay, I don’t know if it needs to be your opposite, but you want somebody who can compliment you. If John needed to be number one and needed to be seen and had a big ego and had all this, it wouldn’t have worked. And one of the things that we learned from Gino and from Rocket Fuel was that they’re equal. John and I are equal. John is the tiebreaker at my firm. He runs my firm. We are equal. Do I have, is my name on the building? Do I get the limelight? Yes, but, but John and I look at us as equal. I also look at John as somebody that I can be vulnerable, vulnerable with and tell him I don’t like it when you do this, John. And he could tell me the same. And we do get into those and if you don’t have, and we believe in conflict. We both believe that conflict makes better meetings. Conflict makes better discussions. And I think it’s and we’ve talked about this before, and this discussion is so darn good that you brought up guys like, we don’t want to necessarily write another book, but if we were going to write another book, this is the topic, because so many people struggle with it. And if you could see here, I have 40 more things I could say about our relationship, about the relationships between the number one and the number two, the integrator and the visionary. It, it’s, it’s, it’s, you know, you got to have somebody who could take brutal honesty. You need somebody who’s got some thicker walls, who can, who can hear it and be there for you. You need someone fiercely loyal, because not every day is going to be shiny and blue skies, and he’s not going to shrink away. And the man on the screen right next to you here is fiercely loyal, and all of the issues, all of the problems, all of the things we’ve had. He’s never once said, never once, this is too much. He rolls up his sleeves. He says, let’s fix it. Let’s figure this out. And his ideas are great. And he, he is that comfort to me, and I know that. You know, we’ve been through everything, and if something bad happens. He’s my first call, and he’s never like, shit. What are we going to do here? This is bad. This is a disaster. He never, never. He’s like, okay, let’s fix this. Let’s figure this out. I mean, so when you’re interviewing somebody, you know we were not, you know John and I don’t go out and have drinks all the time. We’ve never been on a double date together in 17 years, but he’s one of my closest friends and allies, and somebody that I trust more than anybody. So like, I don’t know what people are looking for when they’re hiring that person, Seth and Jay, but like, it doesn’t have to be your new best friend that you’re going to spend seven days a week socially. It’s like you want somebody who’s smart, who cares about the business, who fits your core values, who gets it, who you can have open and honest discussions with, who’s humble, who doesn’t need to be number one. And, you know, I don’t know how you interview for that. Yes maybe we got a little lucky. John went through all the personality tests that we preach and talk about he was, didn’t care. He was humble about that. He says, here are my tests. It’s, it’s important. All of these things are important. And it’s, it’s probably the most important hire you have, and you got to get it right. You gotta spend the time, whether it be through a headhunter, whether it be through your networks, don’t just hire somebody because it’s easy, because it’s a lot of work, and this person is going to be the most important person in your firm.
Yeah, because if you do the hard work hiring them, it makes your life easier, whereas if you hire the wrong person because it’s easy, you’re life is going to get more difficult. So John, I got a question for you, because I would be remiss if I didn’t ask this question. You know, our audience here at The Law Firm Blueprint really does span from very large, successful law firms that have dozens of people like your firm, but also have people who are starting out with a cell phone, a legal pad and a pen right? As the master of data. Can you tell me, at any size law firm, at any type of law firm, family, trust and estates, PI, criminal, bankruptcy, whatever, are there two or three data points that you need to know to gage the health of your firm? Or, or you know, because there are people who are listening who they have no idea what their data holds, but maybe after hearing this, they can go back and say, okay, I know one, two and three, so at least I know this, and then next year or next month, I measure it again, and I see if I’m doing better, if I’m doing worse. Are, are there such core, critical data points that you think every law firm owner should at least have the knowledge of these two or three? I don’t want to go more than two or three.
Ok, so since you won’t let me go more than two or three, I’m going to bundle three as one. And I would say, understand how to read a financial statement, or at least know, be able to talk with someone that tells you the important things. So, so you need to know what percentage of revenue your total compensation is. You need to know the percentage of revenue that your marketing efforts are, and then everything else. So in almost every single law firm, compensation is the biggest expense, then marketing, and then all other and then your ability to manage that determines your profit. So I would say, at a minimum, understand is your compensation, 40% of revenue? Is it 33%? is it 65%? So know it. Then the other is, what’s the cost to acquire a case? So what’s the cost that it takes you? How much do you have to spend on the front end in order to get a case? And then, what is your average value of a case? So those are the biggies. If you let me go, I’d give you 80, or 100, or 200 but I’m gonna stick with those.
But that’s perfect. And I think that’s, you know, that’s a starting point for these people who have no idea where they’re going, because we have no financial literacy in law school, many of us were humanities, you know, English and history, those types of majors. So we just don’t have that background. I think it’s important for our listeners to say, okay, if I can understand this, I can be in a good spot. Now, Mike, before I finish this whole thing up, I want to ask you, when you wound up with a John, was there a piece of data that he said, hey, did you know this about your own law firm that had you go, whoa! I’d never thought of tracking that. I’d never thought about that. You know, that’s that, you know that where you get that instant return of, hey, now let’s, let’s, let’s focus on these numbers and and make them better. Was it employee turnover? Like it was there something that sort of blew your mind early on in your relationship, to say, oh man, I got the right guy working with me?
I got a softball for you if you struggle.
Oh, dude I got 30 answers.
Ok, then go.
We don’t have enough time.
Got it.
They only give us an hour here. I’m gonna tell you Jay, too many to mention, but the one that stands out is forecasting.
That’s where I was going. So I’m glad.
See John and I finish each other’s sentences, he completes me. And I’ll tell you why, Jay, it’s not just a cool parlor trick in the book we talk about like early, early on in our relationship. He fixed, first of all, he fixed my, I had a jumbotron, but they were all made up numbers. We literally would say, Well, how many cases do we think we’re going to sign up this year? Well, last year, we signed up 1000. How about 1100? So John took our jumbotron, and he fixed it and made it accurate to the penny, right? Our numbers were, we’re going to do 11 million this year. His number was, you’re going to do 13,248,456 and 23 cents.
True.
But, but within a year or two of him working with us, he said, Michael, you’re going to, we’re going to do this much in revenue this year, and you’re going to take home 38% of that, which equals this. And he says you’re going to make, so in January 4th, he says you’re going to make X dollars at the end of the year. And I said, F you, you have no idea what I’m going to make at the end of the year. You don’t know how many trials we’re going to have. You know how many big cases we’re going to settle? You don’t know shit Mr. Nachazel, and then December 15, 18th came around, and he was within a 10th of 1% on both of those numbers.
Wow.
And he’s now done this 15 years in a row. And so why is that important you may say? Well, I’ll tell you exactly why, because I know in February and June and August and in November, exactly what I’m going to make this year, whether we have a great year or a mediocre year, whether there’s problems, whether there’s verdicts, whether the roof falls in, whether people quit, whether there’s anything that happens, I know what I’m making. Do you know how much stress that takes off of me? If, I mean, I can’t stress it enough. And I know I’m getting animated, but it’s, it’s and we’re now doing this for other firms, and he’s just as accurate with them. And I don’t know if they’ve, you know, its taken me 15 years of this to be not stressed, and that’s one reason I stopped doing some of the stuff I didn’t need to. It’s working with or without me sometimes. And I could go away for two months and it’s still going to work. I’m gonna make the same amount of money. If I’m in the office seven days a week, working 12 hours a day, or I leave for two months and don’t work for two months, I’m gonna make the same amount of money. Most people can’t say that,
Yeah.
But when you get to a point where you’re delegated the stuff you’re supposed to delegate, you work on the stuff you’re supposed to work on. It’s like Nirvana. And that’s where I’m at. And I get to pick and choose what I want to mess with. And sometimes I mess with stuff, and John looks at me and says, stop messing with this stuff. Everything’s going fine. Or I say I want to try a case, or I say I want to get involved in this, and I get to pick and choose, because I, it’s still my name on the building, but I know that I don’t have to, and it’s just a really wonderful place to be. And that’s what we and John, John and I want to give to other law firm owners. Is this peace of mind! Is this Nirvana! We know we can do it, we don’t and, and so it’s super fun for us to see their faces and to share and give all this knowledge, and, and, and it’s just that’s, that’s, that’s what our happiness is, is giving back, both of us. We love teaching.
Well, I gotta tell you, I’ve been a student for a while. I can’t tell you how helpful working with Fireproof was. And I can remember being at your office three years ago now, and you had brought somebody in to talk about how you had your pods set up. And I said, I just don’t think this could work in a criminal type of firm. And we were riffing about it standing in your conference room, and I said, well, what if I just made the paralegal the head of the pod? And then we talked a little bit more about that. And now, you know, we’re seeing tremendous growth from just taking something putting our little spin on it for our practice area. And I wouldn’t have even thought of that if I hadn’t been exposed to some of the Fireproof stuff. So I can’t thank you enough. My whole team can’t thank you enough, because they love how we have it set up now, and it’s, and it’s, it’s really just been amazing. So I really appreciate everything that you’ve done for me and my little firm because it really is, it’s been life changing. So I appreciate it, and I want to thank you both.
I love hearing these stories. I mean, it’s makes our whole day, and it’s like going to a seminar and sitting and listening like, oh, my God, that’s smart. I’m going to take that back. That’s what we want to give over and over weekly to our people. And I think we’re doing it. And it’s, it’s, it’s so gratifying.
And Mike, I said, from our perspective, you know, we’ve really enjoyed it. I got to, you know, I have a new BFF in John, the idea that we can actually implement like, you know, it’s great to be, you know, to learn a lot of things, but the idea that you can get your team doing it, to me, has been the game changer that you guys have have helped us with, because it’s one thing to say, hey, there’s an issue with intake. You referenced this early. What do you do? There’s a lot of academic answers, but there’s also, you know, the woman who’s been doing it for you guys for years, who picks up the phone and sort of kicks your ass, and, more importantly, kicks my team’s ass, because it’s one thing if I say it, but when John and his team tells them to do something, it takes on a whole different level. So very much appreciate that.
Yeah. Guys, I want to thank you so much for being with us today. This is going to do it for us here on The Law Firm Blueprint. Of course you can catch us live, 3pm Eastern, 12pm Pacific every Thursday in our Facebook group The Law Firm Blueprint. And if you want to take us on the go, you can get this anywhere you catch your podcasts. Just be sure to give us a five star rating when you do. That and be sure to subscribe so you get all of our sessions. Of course, you can also check out Seth and my LinkedIn profiles, and we’ll be going live there at 3pm eastern on Thursdays as well. But gentlemen. Michael Morse, John Nachazel, you guys have been phenomenal. I love being in a room with you, even if it’s a Zoom room. So thank you so much for your time today here on The Law Firm Blueprint.
Our pleasure.
Pleasure.
Thanks, guys, that’ll be it for us, for me and Seth Price. Bye for now!
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