How to Avoid Losing Money on Lawyers. Learn how to Pick One and How Law Firms Work with Joe Tiano CEO of Legal Decoder | Ep. 82 | Business Podcast
Summary
As much as we business owners hate it, we need lawyers. And…
As painful as legal bills can be, I’ve learned the hard way…
It’s better to pay for a good attorney to do it right vs. paying one to fix something you screwed up because you were trying to save a few bucks.
Listen in as Joe Tiano, who had a 20 year career as a lawyer before becoming an entrepreneur, lays out what you need to know about lawyers.
We BS for the first few minutes in case you want to forward once you get past the intro.
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Brandon:
Hello, friends. Welcome to the show today. We’re talking about how to pick a lawyer in a law firm as an entrepreneur running your business. At some point in your business, you are going to need legal help, probably at the beginning, to get some advice on how you should structure your company based on your circumstances.
You may need feedback on intellectual property. H R issues, tons of things. A legal advisor is part of running a business, and today we are really lucky to have Joe Tianna, who had a 20 year career working in law firms. He ended his career at a very large law firm in Washington, D. C. As a partner. And then he took the leap and became an entrepreneur and started a company called Legal Decoder, which we’ll talk about a little bit. But in the episode, Joe lays out exactly how you should approach picking a lawyer, a law firm, the questions that you should be asking, and we go into depth and talk about the business model of a law firm.
How does the law firm work if we’re going to do business with anybody?
We absolutely need to understand their business model, and this is something that really isn’t talked about a lot.
We go into depth about how they work and why they do the things they do.
And with this, we can set our expectations and have a really good working relationship with our legal counsel. So let’s not waste another second. Let’s get to it. Joe Tiziano, CEO of legal Decoder, Talking about how to pick a law firm and a lawyer. Welcome to build a business success Secrets. The only podcast that provides straight talk for entrepreneurs. Whether you’re an entrepreneur, starting with an idea or growing your business, this show is for you. We’ll teach you how to build a strong mindset, powerful body and profitable business so you can achieve success. And here’s your host, Brandon. See White. What do you mean two triangles?
Joe:
Well, this is one triangle right here in the upper left hand corner, and there’s another differently sized triangle on the right hand corner, which you need to invert on.
Brandon:
Yeah, um, power point and then pull in a logo.
Brandon:
And there There you go.
Brandon:
And you made that in June.
Brandon:
I I made it in Power Point.
Joe:
It’s now my background.
Brandon:
It’s impressive, man.
Joe:
Yeah, it’s amazing what you could do with a little bit of an industriousness.
Brandon:
I was talking to somebody else today. I don’t think you ever met a farmer, but we’re talking about what CEOs have to CEOs and the glorious life of of doing that.
Joe:
So you’re you’re a lawyer turned entrepreneur turned graphic artist by need.
Joe:
Whatever the need is, you just basically make it happen.
Joe:
What’s going on with you?
Joe:
Um, recording episodes working, then dizzy.
Joe:
I keep getting these mailers for you.
Brandon:
That’s pretty soon I’ll have to sign up and actually pay you, huh?
Brandon:
Well, you know what’s coming?
Joe:
Yeah.
Joe:
This is like a slow toss for me that you just gave me.
Joe:
So we are redoing the newsletter, and it is going to go to an 8 to 12 page edition and it’s going to expand the coverage two more, much more extensive, like and much more.
Brandon:
Uh, you can tell me what you think.
Brandon:
Much more.
Joe:
You know, that was a good beta test for the last.
Joe:
I think I got you.
Joe:
Probably You’ve got him since the beginning, but I probably have almost a year’s worth and It was a good beta test, but I feel like it’s it’s a little bit too much marketing and not enough like, Oh, this is what I would want as an entrepreneur.
Joe:
So I’m gonna start putting things like, new, undiscovered and noteworthy.
Joe:
So, like, I don’t know, Uh, a new restaurant that I ate or new headphones like that you have on that are about 5000 times better than the old ones that you used to use, um, recommendations from people like you in there.
Joe:
And then I’m gonna include things like that.
Joe:
We that entrepreneurs do like investing.
Joe:
What stocks did I buy this month?
Joe:
How did our marketing campaign turnout, You know, what have we found with Facebook ads?
Joe:
Stuff like that.
Joe:
So how’s that sound?
Joe:
That’s good.
Joe:
Keep the recipes coming.
Joe:
You like the recipes?
Joe:
Really?
Joe:
How are you joking?
Joe:
He was gonna kill those.
Brandon:
Are you screwing with me?
Joe:
I know, I know.
Joe:
I like you know, you’re lying.
Brandon:
Just MEREDITH cook that.
Joe:
No, I do.
Brandon:
Okay. All right. I’m gonna tell JIA she can listen to this. Uh, so today I wanted to talk about, but I’ve changed because, as I was thinking about you.
Joe:
You know, we never We never talk about how many.
Joe:
You were a lawyer for 20 years, weren’t you?
Joe:
Just about Yeah, like 20 years practicing law and I wanted to talk about Do you think entrepreneurship can be learned, or does it have innate things which I do want you to comment on, But I’d like to start off talking about like you did 20 years.
Brandon:
You were my first attorney when I did that first deal, my first deal sort of crazy, right?
Joe:
But my first a round, so to speak, was a million bucks back in the day when it cost $80,000 to raise money.
Joe:
That was when you were with Greenberg Traurig and you were an associate.
Joe:
But then you became a partner and a whole bunch of stuff.
Joe:
I’d love for you to share mistakes that you’ve seen entrepreneurs make legally from everything from, I don’t know, corporate documents to raising money deal terms that have sort of changed over the years.
Joe:
Now I know even you used to see documents all the way up to type stuff.
Joe:
So what do you think I’m game?
Joe:
So let’s start.
Joe:
What?
Joe:
What I forgot to turn on my light.
Joe:
What if I were to say, Hey, Joe, what are the top five mistakes that you’ve seen people make or 10 mistakes or legally, Right?
Joe:
Because I think entrepreneurs forget all that.
Brandon:
There’s this whole legal component that doesn’t really get talked about and sometimes gets talked about too late.
Joe:
Um, and you can fix almost anything, but it can be expensive, right?
Joe:
Yeah.
Joe:
So, you know, I I think the first thing you gotta do is an entrepreneur.
Joe:
When you’re thinking about engaging a lawyer is you’ve got to make sure that the lawyer understands your level of sophistication as a business person as an entrepreneur, Right?
Joe:
Because you have entrepreneurs who are serial entrepreneurs like you right now.
Joe:
Heck, you could draft probably, you know, 75% of the documents that you would need to draft right to start your business.
Brandon:
Right?
Brandon:
But there are some, you know, less seasoned entrepreneurs who, you know, think they can pull documents off a zoom and get it done.
Brandon:
Maybe they can Maybe they can.
Brandon:
I don’t know.
Brandon:
It kind of all depends, but the key is when you’re looking for a lawyer is to find a lawyer who understands your level of sophistication.
Brandon:
Are you talking about LegalZoom or like one of these sites that you can pull a template off?
Brandon:
Right?
Brandon:
Look, yeah, legalzoom is certainly a terrific site where you can pull down legal documents, but, I mean, you could find you could find just on the Internet generally, by doing Google searches, you can find legal documents all over the place, and there’s a lot of stuff that go into them that people don’t understand.
Brandon:
There’s a lot of stuff that, frankly, lawyers don’t understand that scares me.
Brandon:
But, uh, but But it’s not applicable to all people, right?
Joe:
Like that’s the point.
Brandon:
I mean, you need to customize them for your thing.
Brandon:
Oh, absolutely, Yeah, and And so you know when when you’re hiring a lawyer, it’s like sometimes there’s this notion that, you know, I want to go out and get the best lawyer that I possibly can get.
Brandon:
Where I want to get the cheapest lawyer.
Joe:
There’s, like 22 variations along a continuum, Um, and and you got to get the lawyer.
Brandon:
I think who is most suitable and understands how you’re a calibrated as a client.
Joe:
Some people need excessive amounts of hand holding and an explanation.
Joe:
Other clients just want Just tell me that one or two things I got to know and let me move on and build my business.
Brandon:
And so you gotta find it’s It’s almost like it’s like finding a soul mate.
Brandon:
It’s like finding a partner.
Brandon:
You gotta under you have to understand how your lawyer operates.
Brandon:
But almost more importantly, your lawyer needs to understand how you operate in sort of the level of care and feeding you need as a as a client, like right now.
Brandon:
And this is a little bit unfair.
Brandon:
But as an entrepreneur, I really didn’t need much care and feeding at all from my lawyer.
Brandon:
I defer to him on 99% of the things and there are certain things.
Brandon:
I’m still unsure if, um so I do that.
Brandon:
But it’s not the level of dependence that people have at at the very outset when they’re starting their companies.
Brandon:
So the first thing I was is make sure you find you align yourself with the lawyer who gets you and what would you do?
Brandon:
Would you like how, what what would.
Brandon:
Would I just How would someone do that?
Brandon:
Should they just tell the lawyer?
Joe:
Hey, I got barely any legal background.
Joe:
I got this idea.
Joe:
You got to tell me what I need.
Joe:
But I think the fear there is is that lawyers run up the bill on entrepreneurs.
Joe:
Right lawyers run up bills on everybody.
Joe:
I mean, it’s not. It’s not just entrepreneurs. It’s The difference is that entrepreneurs often don’t have the money to pay for it.
Brandon:
Um, well, fair point.
Brandon:
There’s a good tip right there. Don’t pay your legal bill until December. Legal firms will always settle with you to get the end of the year. Bonus Http.
Joe:
Anyway, you know that’s true.
Joe:
Well, I mean, it’s it’s partly true, you see, and this is partly what we do at legal decoder.
Brandon:
It’s It’s not about saving money on your legal bills. I mean, the analogy that I use with a lot of people is, if you’re going to get laser eye surgery, are you really going to be the one to run in, tear up, pathological or you’re up ophthalmologist, your surgeon, right?
Brandon:
With a 25% off coupon?
Brandon:
I mean, he’s your eyes right now.
Brandon:
Of course.
Brandon:
I mean, no, you’re not. I mean, it’s the bitterness of poor quality remains long after the sweetness of low prices forgotten.
Joe:
Yeah. So? So the key is to find somebody who will work with you, not someone who’s cheapest.
Brandon:
Somebody who understands the evolution of you as a client.
Brandon:
Use an entrepreneur. Your company as a client, um, and sort of its evolutionary group growth and And is willing to sort of make the investment and grow alongside of you.
Brandon:
Um, and there’s lots of lawyers who are willing to do that.
Brandon:
You know, there are some terrific lawyers, I think the best lawyers out there for, um, yeah, uh, for technology companies and for startups, you know, they sit in the offices of Cooley.
Brandon:
God work, right.
Brandon:
But not everybody needs a coolie God word attorney all the time.
Brandon:
I mean, Cooley brings enormous value to many entrepreneurs, but the question is, when?
Brandon:
When do you need that value?
Brandon:
Yeah, actually, Cooley is been my after you and the gang left GT.
Brandon:
Uh, I met Mike Lincoln, who now is the head of all Cooley all over the country, and he to this stage my attorney.
Brandon:
But to your point, you know, I call Mike when I need mix level of information and need to be charged $1500 an hour.
Joe:
But I don’t always need cooly cooly did do my I p stuff, and they’ve kept me.
Joe:
I wrote my original patent, but, um, they did then fix it, and I got my patent within two years, which is probably pretty fast.
Joe:
So, yeah, I mean, it happens in every consulting service.
Joe:
When you think about it.
Joe:
The billable hour, whether it’s with Accenture or with software consultants or with lawyers or accountants, the billable hour is simply a proxy, and it’s a really bad proxy, But it’s a proxy for value, right?
Joe:
All hours aren’t created equally right.
Joe:
There are certain things that lawyers can do or that accountants can do, or the software consultants could do that are not worth $100 an hour, let alone $700 an hour.
Joe:
There are other things and other value that people who bill by the hour do that may be worth 5 10 $15,000 per hour, right, so all hours aren’t created equal.
Brandon:
It’s just, you know, there’s this rough justice that we’ve put for professionals who built on an hourly basis.
Brandon:
And at the end of the day, the key is what kind of value are you getting at the other side?
Brandon:
And value is a very, um, ethereal concept.
Brandon:
Yeah, it’s weird.
Brandon:
So I think going back to get into advice is tell your lawyer what your experience in er I guess what you’re really saying is interview lawyers Don’t just go to the first one.
Brandon:
Yeah.
Brandon:
I mean, if you think about how you would hire a mechanic or engage in a mechanic or engage a house painter or, you know, a general contractor to put an addition on your house, I mean, you don’t just go to one, you get recommendations.
Brandon:
You know, you talk with your friends who you trust, Um, you talk with your colleagues, you interview a couple of them, and there’s always one or two that you click with.
Brandon:
And then once you figure out whether you click, then you could decide on you know, who do you want to work with?
Brandon:
What do you want to give the business to?
Joe:
Okay, so first thing, interview them and figure one that that jives with you?
Joe:
I was going to ask you a question about the Oh, can you comment on this whole thing?
Joe:
Actually, in the beginning, I’ll be honest.
Brandon:
I thought it was like a complete faux pas that I could have Cooley as my main attorney, but then building on what you said I could call a, uh, Who’s your old partner?
Brandon:
Lou Lou.
Brandon:
I could call Lou on some who is just as qualified attorney who just decided that he’s not going to work at this giant law firm that I could call Lou on some.
Brandon:
I’m doing my terms of service for my, uh, website.
Brandon:
I am doing a contract with the contractor who’s doing, you know, some project for me or some employment law.
Joe:
So is that is that fairly common and okay to do?
Joe:
Because in the beginning, I’ll be honest.
Joe:
I thought I was like, Oh, my God, cool.
Joe:
He’s gonna be mad.
Joe:
Um, you know, and it’s just was confusing.
Joe:
Your lawyer wants to see you succeed, because if you succeed, then she succeeds, right?
Joe:
That’s just the reality.
Joe:
Um, the better your company is, the better her client is.
Joe:
That’s just the way that the world works.
Joe:
Mhm.
Joe:
You bring up Blue Blue is legal decoders.
Joe:
Corporate attorney.
Joe:
He formed our company.
Joe:
He does all the corporate work.
Joe:
He does all the financing work.
Joe:
I, too had to get a patent gun.
Joe:
I didn’t use Lou for a patent.
Joe:
I went to, um, another law firm and another attorney to get the patent done.
Joe:
And I didn’t actually choose the patent lawyer on the basis of the best patent lawyer because there was a business driver that I had behind.
Joe:
I wanted to get a patent on file for our technology because from a commercial perspective, I wanted to go out and be able to pitch large organizations, insurance companies without the fear of them ripping me off.
Brandon:
So all I really wanted was this patent pending thing at the bottom of our pitch deck.
Brandon:
And I wanted an absolute bulldog of a lawyer who would be able to fight for me and would put pull all over the stops out in the event that someone decided to run afoul of our patent.
Brandon:
Or at least the patent applications were filed and tried to rip me off.
Brandon:
I wanted somebody who who knew what we did at the outset in the event I had to go soo as legal decoder.
Brandon:
Who are they?
Brandon:
If I had to go Sue Chub or A I G or Lloyd’s of London, Lou couldn’t have done that right.
Brandon:
And there probably are are more seasoned, more experienced patent attorneys in the area that I needed.
Brandon:
But I hired a guy for the eventuality that nobody ever knew about that was going through the back of my mind.
Brandon:
I’ll give you another example.
Brandon:
This is This is this is I find to be one of the more telling examples.
Brandon:
Yes, I went out, and I pitched as as the CEO of Legal decoder, one of the biggest private equity funds on the planet, to basically have them run their legal spend through our software.
Brandon:
The general counsel at this huge private equity fund.
Brandon:
Basically, I said, Well, so how much did you spend in your law firm?
Brandon:
We spent $150 million over the past year on this particular law firm white shoe law firm, like the best of the best when it comes, comes to litigation, I said.
Brandon:
Don’t remember his name.
Brandon:
I’m making this up.
Brandon:
I said, Brandon, listen, you let me run this data through our software and I guarantee you, I’ll find you at least $30 million worth of savings.
Brandon:
He looked at me and said, I don’t care.
Brandon:
I was like, What do you mean?
Brandon:
You know care.
Brandon:
It’s like I don’t care.
Brandon:
I should explain this to me He said, Listen, work.
Brandon:
This is a securities derivative suit by one of our limited partners.
Brandon:
They brought a securities fraud action against us.
Brandon:
I will fight this all the way through the Cayman Islands.
Brandon:
I will fight this all the way up through losing decision at the Cayman Islands Supreme Court because I need to send the message to all of the other LPs who are going to be doing business with this.
Brandon:
You don’t pick a fight with us.
Brandon:
If you pick a fight with us, we will fight tooth and nail all the way up to a non appealable judgment at the Cayman Islands Supreme Court.
Brandon:
I don’t care if I spent 150 million.
Brandon:
I don’t care if I spent 350 million, it didn’t matter because this was and I’m making yourself.
Brandon:
It wasn’t Black Rock, but this is black rock.
Brandon:
You don’t mess with Black Rock and and all of a sudden it kind of that that conversation opened my eyes where the value that was getting realized from $150 million of spending money on an attorney or a consultant or home renovator It didn’t matter because ultimately the decision was being made on factors that I didn’t see that the lawyers probably didn’t see.
Brandon:
It was a business decision that if they lost, it would run afoul or they didn’t fight or they settled.
Brandon:
It would won’t run afoul of their business model, which is very I open it.
Brandon:
Yeah, it’s also an incredible amount of money, uh, that that they that they’re dealing with that.
Brandon:
And I think your point is well made that, you know, sometimes you’re going to spend money and you’re not going to penny pinch.
Brandon:
I mean, as an entrepreneur, I mean, I think you told me I I was one of the cheapest guys, you know, and I don’t know if cheap was the right word.
Brandon:
Or maybe, um, you know, you extracted values.
Brandon:
You got for every and I know it wasn’t just me.
Brandon:
It was the accountants.
Brandon:
It was bankers.
Brandon:
It was everybody you dealt with.
Brandon:
It was your counter parties.
Brandon:
You got value out of every commercial transaction you engaged in.
Brandon:
Well, mainly because we paid so much for it, right?
Brandon:
Yeah, but you calibrated like like an entrepreneur.
Brandon:
An entrepreneur wants to get maximum value out of whatever they’re paying to anybody.
Brandon:
I mean, any rational business person wants, but particularly entrepreneurs.
Brandon:
And I think particularly entrepreneurs, Because entrepreneurs have the mindset that I want to deliver to my own clients, to my own customers, maximum value.
Brandon:
And if I had an entrepreneur and willing to to deliver maximum value, optimal value to my own clients, I That’s what I deserve.
Joe:
An exchange for the people I engage.
Joe:
What other mistakes have you seen?
Joe:
I mean, 20 years.
Joe:
I know you’ve done everything from start up in the garage, too, you know, you are doing shell companies, but I want to, uh, or reverse mergers into, uh, an OTC.
Joe:
So I’d like to sort of come down a level because most of our listeners probably don’t have 100 and $50 million legal budget yet.
Brandon:
Um, what other mistakes have you seen entrepreneurs make that could have been avoided and ultimately were costly to fix.
Joe:
Um, waiting too long to pick up the phone and actually talk to their lawyer about what the problem is.
Brandon:
It’s sort of the old announce of prevention is worth a pound of cure.
Brandon:
Uh, and that’s why picking a lawyer so important you you need to have the confidence as an entrepreneur that every time you pick up the phone, you’re not necessarily on the clock, so to speak.
Joe:
And the things that people should have picked up the phone on are things that run the gamut from you hired the wrong employee too.
Brandon:
You know, you missed a filing on on on a particular statue of limitations too.
Brandon:
Um, you know, you didn’t document, You know, all of the problems that your employee was causing you in the right way.
Joe:
And had you picked up the phone, you wouldn’t be dealing with, you know, an unhappy employee or former employee lawsuits.
Joe:
So, being comfortable, you could pick up the phone early on in the relationship and not feel like either you’re going to get judged or you’re gonna get charged is super important.
Joe:
I think I think one thing that I learned I’m interested in your thought.
Joe:
And, um, as you’re talking, I was like, Yeah, well, well, I mentioned the actual cities, uh, in my example, but I’ll mention them.
Joe:
So when I first met you got you.
Brandon:
I’m saying you guys really is you fatty salmon and Harry Glaser.
Brandon:
Because, uh, Tom introduced me to you guys.
Brandon:
I think you might, uh, Harry, probably at Mardi Gras or something.
Brandon:
I’m only half joking, but, um, you know, there was a very different a very different approach at GT at that time.
Brandon:
And and for everybody listening, Joe and I are only using the names of these law firms because they’re real examples not to make a commentary on what they are.
Brandon:
GT Greenberg.
Brandon:
Charge still has an early stage practice.
Brandon:
Uh, Cooley does as well as others, but I think one of the things that I found was, and especially even as I as I progressed and started to do angel investing and started to have a bigger circle of, um, you know, support network, if you will.
Brandon:
Was there was a very distinct difference between the lawyers in northern Virginia who were.
Brandon:
And this is the case here in Silicon Valley and Austin and even Scottsdale, where you are in Seattle and Denver and these other places where startups are more prevalent.
Brandon:
But, you know, there was a very stark difference at the time in the approach from Northern Virginia to Baltimore, and the Baltimore attorneys were not as accustomed to working with early stage companies, and they were really relied on older businesses.
Brandon:
And when you picked up the phone, you know you were on the clock and you got surprised.
Joe:
I only learned that from scars on my back from happening and and and steering some people away from that environment, where in Northern Virginia, you know, it wasn’t the case because they understood.
Joe:
And and it’s the case now, 22 years later, 23 years later, that a lot of these firms actually have startup practices and entrepreneurs should really ask that law firm Do you have a startup practice because they discount fees?
Joe:
They understand that when Joe calls up to ask for, you know, hey, advice that they’re not always on the clock, so they’re willing to pay it forward because their bet is And you do have to actually go through an acceptance program.
Joe:
From what I understand now, these days from their beady people.
Joe:
Um um, that you do that you do You think that’s Did you find the same thing?
Joe:
What do you think about that?
Joe:
No, I think you’re spot on.
Joe:
I mean, I think there are certain firms that, um, they they inculcated the notion of entrepreneurship throughout the ranks, particularly for those who are practicing within sort of the emerging growth company sector of the firm.
Joe:
Um, I think they inculcated, but I still think they embraced.
Joe:
I think the best attorneys within that practice embrace it.
Joe:
This is a true story.
Joe:
So So when you first had your your matter come up.
Joe:
But I probably shouldn’t be telling you this now, but I guess 20 years has passed.
Joe:
You know, I had just joined the firm, and I guess it must have been Harry came into my office.
Joe:
He said, you know, do you know anything about the Internet?
Joe:
I’m like, No, not much.
Joe:
He’s like, you know anything about fishing.
Joe:
I’m like, No, not much.
Joe:
You know, anything about venture capital transactions like, No, I don’t know anything about it.
Joe:
He’s like, Well, I need someone to handle the deal.
Joe:
I said, I’m your guy, right?
Joe:
There’s sort of an entrepreneur early, entrepreneurial like ethos that you have to have.
Joe:
It’s like, really, you know what I was doing?
Joe:
Quite frankly, at the front.
Joe:
I mean, there’s always sort of that that that that ramping up, period.
Joe:
But you got to be willing to kind of get out of your comfort zone and learn a little bit about fishing and learn a little bit about the Internet and learn a little bit about venture capital financing transactions is a very junior person, one of the best attorneys that I’ve ever met in my life.
Joe:
You mentioned him earlier as fatty salmon.
Joe:
Remember Fadi Seaman?
Joe:
He and he was at GT very entrepreneurial mind, me minded, very entrepreneurially spirited attorney.
Joe:
He was a junior, maybe 12 months, 18 months, 24 months out of law school, negotiating transactions against partners.
Joe:
And he’s just like, Look, it’s gotta get done.
Brandon:
I’m here, they’re paying me.
Brandon:
I got to learn how to do it One day.
Brandon:
I want to learn how to do it, and and they’re just There are certain firms which inculcated that mentality.
Brandon:
Um uh, in their lawyers from from their earliest days, as as as lawyers, new limited lawyers.
Brandon:
There are certain firms where you know you get stuck in a room to do document review and due diligence for eight years before you could actually pick up the phone and speak with the client.
Brandon:
It’s just it’s a different type of firm.
Brandon:
It’s a different type of practice.
Brandon:
And that’s why I say at the very outset, what’s the best thing you can do is you’ve you’ve gotta, I think, as an entrepreneurial pick up the phone call law firm that aligns with your mentality as an entrepreneur and aligns with your business’s needs.
Brandon:
And you could get a technically proficient lawyer who’s got an encyclopedic knowledge of the law at some of these law firms, where they stick the lawyers in the library for years and years and years before they let them make a decision on their own.
Brandon:
They’re technically probably pretty good lawyers, but they don’t know how to counsel client, and you put that up against somebody like Fatty who kind of dives in rolls his, you know, rolls his sleeves up and says, I’m going to figure this out.
Brandon:
I mean, at the end of the day, it’s not more.
Brandon:
You kind of want the ladder rather than the former.
Brandon:
You know, one thing that I think if you’re willing to to talk about this and really was genesis of legal decoder your company in many ways can you talk about how the business of law firms work?
Brandon:
Because I think what entrepreneurs what happens to entrepreneurs is we are so anxious and such.
Brandon:
We’re just in a hurry to get our solution out to the world that we sometimes forget about doing diligence and understanding business models like venture capital.
Brandon:
These, uh, entrepreneurs always run into VCs asking for money.
Brandon:
They don’t They don’t really take the approach.
Brandon:
Well, I should interview this VC, right?
Brandon:
The V C.
Brandon:
Has the money or the angel investor, whoever it is, um, that they’re looking for, they have the money.
Brandon:
And, you know, my thing here is I got to prove to them that I’m worthy and they give me money instead of looking at it like like you’ve suggested with law firms like I should probably interview you, um, and make sure that we’re a match.
Brandon:
And, um, I think that’s the case with not even understanding how investments work or venture capital or even as an angel investor, how that works, which is a different mechanism than a venture capitalist.
Brandon:
But law firms are actually have their own business model and are driven by metrics, right or goals.
Brandon:
I mean, the sort of prevalent thing out there, Joe, I don’t know if it’s true.
Brandon:
You can tell me is like an associate has to build 2000 hours in their first year and things like this.
Brandon:
So can you talk about that?
Joe:
Because I think that’s a really I never hear anybody talk about it.
Joe:
I think it’s an important peace to understand law firm business models.
Joe:
Yeah, the law firm business models extraordinary, complicated and extraordinarily simple all at the same time.
Joe:
So it’s extraordinarily simple because it’s a cash based organization, right?
Joe:
There’s no incentive to, uh for many firms to, um to invest in R and D or in into long term marketing it or until some sort of long term thinking, because every year what they do is they take the cash and they sweep it at the end of the fiscal year.
Joe:
There’s there’s no there’s really no concept of retained earnings in, um, in law firms.
Joe:
I mean, there is What does that mean?
Joe:
They sweep it.
Joe:
Every dollar that comes in, right?
Joe:
So So the way the model works is for the most part, law firms.
Joe:
For the first, let’s call it 4 to 6 months are unprofitable.
Joe:
So what happens is, is they work?
Joe:
They work, they work, they work.
Joe:
And partners are taking a draw, which is in comparison to their entire comp.
Joe:
It’s a fraction of their entire cop, so partners may take a draw of $15,000 a month.
Joe:
It’s really in advance by the firm when you think about it at the beginning of the year, and so the firm comes in and the firm’s revenue in the in the first in January, you know it essentially, you know dollars come in.
Joe:
But there’s this lag from the previous year because they’ve paid at everything in distributions, so they’re really starting largely in the hole in January.
Joe:
They’re still kind of in the hole, in, in, in February in terms of the expenses are exceeding the revenues.
Joe:
And so, in large measure, a lot of the law firms have to tap into a line of credit, right and then eventually the revenues catch up and start to exceed the expenses in April May June July, depending on how profitable the firm is.
Joe:
And at that point, the partners are still taking their draws.
Brandon:
They’re still, they’re still paying their associates.
Brandon:
They’re still paying all of their vendors.
Brandon:
They’re still paying all of their staff and and so forth.
Brandon:
But there’s a certain point where the law, from all of a sudden, becomes profitable.
Brandon:
It’s usually like halfway through the year, and then at that point, the partners start pulling profits off the table, and as the partner start pulling the profits off the table, they get their draw, plus a profit distribution.
Brandon:
But it’s not everything per month.
Brandon:
There’s still sort of a cushion that that that gets kept in most firms.
Brandon:
Then, at the end of the year, you’ll notice there’s this collection bullet, and in December, if they’re on a calendar or and and everybody’s trying to collect all of the money that they’ve build throughout the course of the year because they make distributions to all of the partners.
Brandon:
At the end of the year.
Brandon:
It’s like it’s not.
Brandon:
It’s not a bonus because it’s a distribution payment.
Brandon:
But it’s almost like an end of year bonus where if there are excessive amounts of profits, they just make all of the distributions to all of all the partners.
Joe:
And they bring basically the bank account back down to zero and Chandler and they start.
Brandon:
They start the cycle all over again.
Brandon:
Yeah, it sounds like a cash flow thing where they’re they’re drawing on that line to get their cash back up and then the cash they can fund themselves.
Brandon:
But But what is the like?
Brandon:
Can you talk about?
Brandon:
So that’s when my partner’s perspective and from an overall firm.
Brandon:
But there’s there’s things that I believe mhm, blinding flash of the obvious.
Brandon:
But sometimes people forget it, I think is all behavior is driven by incentive, right?
Brandon:
So all you need to do is if you want to change the behavior, figure out what the incentive is.
Brandon:
It could be monetary.
Brandon:
It could be emotional.
Brandon:
It could be power.
Brandon:
It could be recognition could be whatever it is, and you’re gonna get the behavior.
Brandon:
So what are the incentives to the administrative person out at the front desk?
Brandon:
The paralegal, the associate, the junior partner like, Are they?
Brandon:
Do they get rated and promoted to get to this partner status, which I assume is a big chunk of the pie by how many hours they bill by the revenue?
Brandon:
Because they could charge at different rates by cases they win or like, How does that generally work?
Brandon:
Yeah, so for better or for worse?
Brandon:
Historically, law firms have been basically a two class system.
Brandon:
You’ve got the lawyers, and then you’ve got everybody else, and it’s very simple.
Joe:
The lawyers are the revenue generators, and everybody else is largely viewed as expense, rightly or wrongly, that’s how they’re largely Pete.
Joe:
Very, very valuable, you know, cost centers.
Joe:
But they’re largely viewed as an expense because they’re not the revenue generators within the firm.
Joe:
Within.
Joe:
Within the partner ranks, there’s again sort of a bifurcation of a class.
Joe:
You’ve got the partners and you’ve got the associates right.
Joe:
So from an economic perspective, for for the administrative, um, personality law firm, they don’t really share in the profitability of the law firm, right?
Joe:
They may get bonus doubt or whatever, but if if the law firm has a has a crummy year, they get paid.
Joe:
If the law firm has a banner year and absolutely dependence here, they get paid roughly the same amount.
Joe:
You know, they’ll get their typical bonuses and support, so their motivations largely are revolved around, you know, job security advancement, Um, job gratification in those types of things from the associate person.
Joe:
And so they work as hard as they’re.
Joe:
They’re asked to work in order to make you know, the bonuses that they want to have the job security they want.
Brandon:
The associates are a tear up, so to speak, in sort of the economic pecking order Aware, um, they are compensated, uh, in in essence, the same way that the non lawyer staff is with the exception that they get bonus doubt when they hit certain hours.
Brandon:
Our metrics.
Brandon:
So 2000 hours has historically been sort of the magic number where if an associate exceeds 2000 billable hours and their bonus starts accumulating, so to speak, So they’re incentivized to charge you.
Brandon:
Yes, Well, they’re incentivized to bell hours.
Brandon:
So are those billable hours.
Brandon:
If they build 2000 but only collect on 1500 do they still get the 2000 billable bonus?
Brandon:
No, no, Now that plays into another.
Brandon:
I said.
Brandon:
It’s a very simple economic model.
Brandon:
It’s very complicated, saying on that plays into what’s called realization, Right?
Brandon:
So, um, from an economic perspective, the firm looks at what they realize in cash collections based on the hours and an associate bills.
Brandon:
So in in your hypothetical, there’s a 75% realization rate.
Brandon:
If the if the associate bills 2000 hours, they collect 50 1500 hours, then you’ve got a 75% realization rate.
Brandon:
And so when you’re modeling that out at the beginning of the year, right, you model at a realization rate at 90%.
Brandon:
So you assume that you’re gonna have a 90% of realization on an associate.
Brandon:
You’re making money, you break even at 90%.
Brandon:
You’re making money on anything that you collect over that 90%.
Brandon:
If you’re at that 75% you’re actually as a law firm based on your economic model.
Brandon:
You’re losing money on that associate because it’s a fixed cost.
Brandon:
The law firms, they have two fixed costs, right?
Brandon:
They got the people and they’ve got the physical overhead.
Brandon:
That’s pretty much it right.
Joe:
You’ve got books in a library and you got paper clips in that type of thing.
Brandon:
But the two big fixed costs at law firms are people in the physical plant, so the partners are sort of at the top of the economic pecking order, and they get their economics on a monthly basis based on draws, which are really basically in advance right against profits.
Joe:
Uh, but they get the big slug of their compensation at the end of the year when these distributions are made.
Joe:
And you know, this is just coming from the perspective of former partner at a law firm.
Brandon:
A lot of a lot of clients are kind of off put by the collections drives at the end of the year that these firms undertake.
Brandon:
But what they fail to realize is that the partners actually left the vast majority of her compensation on the table throughout the course of the year.
Brandon:
The collection drives and why they pick up the phone and send you the pestering emails, so to speak.
Brandon:
It’s to make up for all the money that they haven’t been making throughout the course of the year because they’re paying everybody else throughout the course of the air.
Brandon:
And only at the end of the year are they able to sweep the profits themselves.
Brandon:
Does that make sense?
Brandon:
Yeah, it sounds good.
Brandon:
Um, what I’m thinking here, as I listen to you is, if I’m an entrepreneur, I really don’t want to talk to an associate.
Brandon:
And I just want to talk to a partner because the partner isn’t judged by billable hours as much.
Brandon:
I imagine there’s something in there that they, you know, from a partner tier.
Brandon:
They all compete at some level, but a lot of those partners or business development people to send to their team, which becomes the revenue generators.
Brandon:
So why wouldn’t I just be like, Hey, I don’t wanna talk to Joe.
Brandon:
I want to talk to Harry.
Brandon:
Um, this savvy your clients recognize that.
Brandon:
Well, here’s the sad part.
Brandon:
The sad part is I don’t know.
Brandon:
I am really realize it until you just explained it.
Brandon:
I just always call it the partner because I was like, if I get charged, his 15 minutes is worth three hours an associate time in my mind, because he’s already seen it.
Brandon:
Right.
Brandon:
Uh, so even if I did get charged.
Brandon:
But that is the dirty little secret here, isn’t it?
Brandon:
Yeah.
Brandon:
I mean, the money makers at law firms for the law firms are the associates client value.
Brandon:
And and And this is why you’re seeing a lot of disruption in the legal industry right now.
Brandon:
Um, it’s because from a you know, from LegalZoom perspective from an automation perspective from a technology enabled consultancy perspective, Um, a lot of what associates have done on a day to day basis is getting replaced by technology.
Joe:
And, you know, it really throws a wrench into sort of the historic traditional pyramid economic model.
Joe:
It offers, um, you point out rightly, uh, the real value drivers in terms from a client perspective is really picking up the phone and talking with the partners.
Joe:
Yeah, I I agree with you.
Joe:
So this is interesting, right?
Joe:
Because I think entrepreneurs I don’t think, uh, including myself in this got fed up with this idea that we were gonna get charged $80,000 for a million dollar round of financing, when, for the most part, the documents were pretty similar.
Brandon:
And now they have these Series C documents and you can pull them down.
Brandon:
You Google’s series seed and almost everybody uses them.
Joe:
You might have used and I’ve used them for the last few years.
Joe:
I will say that I have gotten an attorney to look at them and fix a few things that I want to tweak.
Joe:
Um, you know, I like a term in there that I can pay the loan back.
Brandon:
Investors don’t always like that, but, um, I’m willing to pay a high percentage return to be able to have the option to control as an example.
Brandon:
Right.
Joe:
Um, but that’s really going to upend this whole this whole legal deal.
Brandon:
The series see document didn’t displace any partner level work.
Brandon:
No, not the partner level, but the associated right, completely displaced associate level work.
Brandon:
No, I know.
Brandon:
That’s what I’m saying.
Brandon:
Like I’m wondering how that’s working out.
Brandon:
It all depends who you are.
Brandon:
Not firm.
Brandon:
So the other thing that you got me thinking because we’re on this topic of what mistakes do we make uh, one is not understanding how law firm makes I’ll raise my hand because I think we’ve actually known each other 23 years.
Brandon:
When do we meet 1990 nine.
Brandon:
No long time.
Brandon:
It’s been fun.
Brandon:
Uh, is is they don’t ask for a lower rate because law firms do have multiple rates.
Brandon:
That’s the whole really basis of legal decoder as well.
Joe:
Yeah, so this is sort of another.
Joe:
Um, and I’m also a dirty little secret because it’s kind of people know it, right?
Joe:
Well, not everybody knows that Joe entrepreneurs don’t know to ask this, so I mean the the hourly rate again, it’s a proxy for value.
Joe:
That’s that’s all it really is.
Joe:
And when you’re a partner at a law firm, remember that realization that I was talking about?
Joe:
You’re essentially playing a portfolio game right as a partner because you know that for strategic reasons, I will give Brandon’s company a 25% discount because I want his business for strategic reasons.
Joe:
And I know that I could give that 25% discount because I’ve got this other piece of work that is completely price and sensitive, or I could charge a 25% premium.
Joe:
So I wind up playing a portfolio game where I’ll discount fees to one client, because I know that I’m making it up or more than making it up on another client.
Joe:
And that’s one of the things that are legal.
Joe:
Decoder I realized very early on is our Data Analytics software operates not off of the dollars or the monetary of value of what’s getting charged, because you you can game the system you can monkey around with the rates as much as you want.
Joe:
You know, there are necessarily multiple canned in the hours times rate equation, but you can monkey around with the rate, as I just indicated.
Joe:
What you can’t really monkey around with are the hours It either takes you five hours to draft the stock purchase agreement or it doesn’t.
Brandon:
So what we focused on is are the hours.
Joe:
It’s the input time that you have because all things being equal right, you could you could hire Cooley God word in the Bay Area and, you know, to draft a registration rights agreement it may cost, you know, 15 hours and 7500 bucks you could go to somebody in Kansas City.
Brandon:
All things being equal, equal competence, equal complexity, equal everything.
Brandon:
That same level of lawyer, it still should cost 15 hours.
Joe:
The dollar cost will be vastly different because you’re not paying Bay Area overhead.
Brandon:
But the time input should roughly be the same.
Joe:
Equal competence, equal complexity.
Joe:
And so that’s why, from an economic perspective, we’re trying to level the playing field because that’s the commonality as between all of the firms.
Brandon:
Is the time input.
Joe:
Yeah, and for listeners out there.
Joe:
We’ve been talking about it, and I’m sure I did.
Joe:
An intro on this is Joe’s Company has software that will read your legal bill and determine if there was some things off in the legal bill that could provide you savings.
Joe:
Now, let’s just be fair.
Joe:
You need to be doing a decent amount for the software to pay for itself.
Brandon:
But at essence, Joe, is that a good description?
Brandon:
Probably better than I could do myself, and And, um, I’m thinking, Joe, as you’re talking, I don’t know why.
Brandon:
Really.
Joe:
So where can we as entrepreneurs, I’m putting you in this bucket because I may make you responsible for this could we get so even for me at this level, Like a few million dollars in revenue?
Brandon:
Uh, might, you know, I don’t spend enough in legal fees to yet to to make legal Dakota work, but is there a menu that says, hey, for a typical contract?
Brandon:
You just take 15 hours for a stock option plan.
Brandon:
It should take this.
Brandon:
And here’s what I’m thinking, Joe, and tell me what you think about it is this is very similar to what you’ve built to what mechanics have, right, Whether people know it or not.
Brandon:
When you go to a garage and they say, Hey, Joe, you’ve gotta I don’t even know what car you drive anymore.
Brandon:
But probably some fancy car, um, is your on entrepreneur now, my friend Cars anymore.
Brandon:
You don’t have the big lawyer for door like Giant something.
Brandon:
All right, well, you got a big house, but, um, the the, uh you know, they say, Hey, Joe, you’re gonna change your transmission.
Brandon:
Well, the way that that business model works at the dealership is the dealership doesn’t pay that mechanic.
Brandon:
Just some crazy rate.
Brandon:
The mechanic, they have a book.
Brandon:
It’s like it’s a book, it says takes 32 hours to change this transmission.
Brandon:
They pay that mechanic that 32 hours, whether it takes 20 hours or 100 hours, Right.
Brandon:
Unless there’s some crazy thing.
Brandon:
So is there a menu or could we make that or what does it exist that that we could get?
Brandon:
Yeah.
Brandon:
So, um, I don’t know if this is I’m sure we’ve talked in circles around it, but that’s exactly what we’re punching at is we’re going to basically create the book for legal services, right?
Brandon:
Not everything can be quantified and reduced down to the book.
Brandon:
Right.
Brandon:
But 80% of what lawyers do on a day to day basis can actually be reduced to the book and the software that we’ve developed, um, takes the data and basically re transforms the data into insights that we’re using to create the book.
Brandon:
Why couldn’t we?
Brandon:
Why couldn’t you?
Brandon:
So for the most people listening to this, unless they’re in corporate America, which some people are right, they got a side hustle and they’re making it work.
Brandon:
Um, could you publish that in, like charge 29 95 so that smaller SMB businesses could get that because I’d buy it.
Brandon:
Um, push the pause button record brand.
Joe:
This is what we’ve been building towards.
Joe:
It’s the book.
Joe:
It’s I’m a were a day to play my friend like No, I know we’re not.
Joe:
We’re not going to press pause.
Joe:
You know, I don’t press pause, but but but But I know that you’re doing the book.
Brandon:
What I’m trying to say is, you’ve got the book and and the magic in your in what you’ve done it legal decoder, which I think is genius is you’ve used AI machine learning Jo’s magic right in the early days.
Joe:
Just so everyone knows Jo’s magic to to to look behind the curtain was, uh, one day I showed up in Joe’s office in when he lived in Northern Virginia, was in Scottsdale.
Joe:
Now is, um, Joe is like writing all this crap out.
Joe:
I was like, What in god’s name are you doing?
Joe:
You were literally handwriting.
Joe:
The algorithms that you knew in your head to get into the machine.
Joe:
So when everybody wants to know like how things happen, then you train the model, um, and for big for volume people, that’s really it.
Joe:
So your intent is Here’s what I I mean, now that now that I’m like, Oh, I want the book.
Joe:
So, like, what?
Joe:
Do you think you’re going to have this book, Joe?
Joe:
Well, we’re in the process of developing it, right?
Joe:
No, but you have directional numbers right now.
Joe:
You guys have been in business.
Joe:
Like how long?
Joe:
Six years.
Joe:
I mean, we we can tell you how much I make this up right to registration rights agreement at Cooley.
Joe:
God work.
Brandon:
I make up that it costs, you know, 7.7 hours at a 50 year associate level.
Joe:
We have this metric.
Joe:
And so the key is at least the way that we have developed, and you kind of put your finger on it.
Joe:
The key is is to identify essentially those work elements that an attorney works on.
Joe:
It could be a registration rights agreement.
Joe:
It could be environmental due diligence.
Joe:
It could be reviewing a 10-K or an eight k.
Brandon:
It could be taking a deposition.
Brandon:
The key is to review those elements, and we, through our natural language processing capabilities and our machine learning capabilities.
Brandon:
We’ve identified those elements of what a lawyer works on Well, what is somebody listening to this wants to know if they if here’s the real entrepreneurs are in the dark, right?
Brandon:
I mean, unless you’ve got experience and you can ask somebody, which isn’t always the case, you know, for you and me, we may take that for granted.
Brandon:
You know, you call me up and you’re like, Hey, I got I’m like, yeah, what?
Brandon:
Right?
Joe:
And we talk about whatever.
Joe:
I call you up.
Joe:
I’m like, What?
Joe:
I forget I called you up recently about something.
Brandon:
Um and but not everybody has that network.
Brandon:
So I’m just wondering where someone I’m really just pressing news.
Brandon:
You publish that damn book or someone can email you and be like, Hey, Joe, I’m getting this corporation thing done.
Joe:
They want to charge me $50,000.
Joe:
Is it too much?
Joe:
Yeah.
Joe:
I mean, that’s what we’ve been punching at for the past seven years and you know, yes, you’re kind of alluding to something that I think is really important from an entrepreneurial perspective is look, every entrepreneur, if they know what they’re doing, they have domain expertise in what they’re building, right?
Joe:
I happen to have domain expertise in the legal field.
Joe:
You’ve got domain expertise in the privacy and the data security field and in the software development.
Joe:
I mean, you’ve accumulated all of this in the venture capital space and so forth.
Joe:
And and so you know what I think a lot of a lot of entrepreneurs don’t really think about is we live in a barter economy and we call each other up.
Joe:
You call me up and you say, you know, there’s legal advice or I’m thinking about this.
Joe:
I mean, based on what you’ve seen in the past year, legal career, what do you think about this?
Joe:
And you know it’s not.
Joe:
You get what you pay for it because we live in a you and I live in a barter economy, right?
Joe:
Because I know I’m gonna have to call you up and say, Hey, you know, I’ve got this term sheet on the table.
Brandon:
What do you think about this?
Joe:
And you give me the feedback.
Brandon:
So, you know, a lot of people, um, might have the impression that entrepreneurship is, you know, you get what you pay for it.
Brandon:
You’re not paying very much where if you’ve created your own network, of savvy entrepreneurs.
Brandon:
You live in a barter economy.
Brandon:
I mean, that’s what I’ve come to come to realize There’s certain people who I know that I could call upon like you for advice in certain areas.
Brandon:
And you know, there’s a quid pro quo going on.
Brandon:
Um, so it’s It’s not that you’re getting what you pay for, because there’s sort of a there’s a knowledge bridging the knowledge exchange that’s almost more valuable than at times than money changing hands.
Brandon:
So I’m a the my typical pain in the ass with you.
Joe:
I I totally agree 100%.
Joe:
But you know, one of the things that I hear from starting entrepreneurs and look, you’re an angel investor now you hear this, right?
Joe:
I won’t call anybody names anybody’s name here.
Joe:
But, you know, we know people who are just becoming entrepreneurs, and they don’t have that network.
Joe:
They really they need to create it 100%.
Joe:
You know, you’ve got to figure out how to create it, and there’s no like magic other than you just talked to a lot of people and you try a lot of things and some people work out.
Joe:
Be smart and some people aren’t.
Joe:
But, um, I love what you’re doing.
Joe:
And I think that if you can create that that book and somehow provide it, you know, this this is and make it accessible to the to the smaller entrepreneurs What I would say, um, mainly, you know, in my own self interest, because the magic is in your algorithm, right?
Joe:
I mean, if you publish a thing, the big companies aren’t gonna go by by hand, right?
Joe:
Like your software can do it in a minute.
Joe:
So you’re not really cannibalizing your business, but, um, yeah, I think that I think that’s going to be great when you when you get that we got a little bit off topic.
Joe:
But I think this is applicable because it really gives insight into how law firms work.
Joe:
What you’re dealing with when you when you go in a law firm.
Brandon:
And like I said, I just think we as entrepreneurs.
Brandon:
Sometimes we’re so in a hurry.
Brandon:
And we were like, Oh, I need Joe.
Brandon:
He’s the legal guy.
Brandon:
Well, my interview three lawyers, right.
Brandon:
Or get or get three things or three other references, or call their clients, ask them It’s like we’re scared, Joe.
Brandon:
It’s like as Joe for three references are Lou.
Brandon:
Yeah, no, for sure.
Brandon:
And you know the other thing that you’re talking about kind of developing a network.
Brandon:
Um, and how to How do young entrepreneurs do that?
Brandon:
One of and let’s let’s let’s not pick on Mike Lincoln.
Brandon:
But let’s actually applaud Mike Lincoln.
Brandon:
Mike Lincoln is a perfect example.
Brandon:
I mean, people hire Mike Lincoln, not be for his his legal acumen all the time.
Joe:
People hire him because he knows everybody in the space.
Joe:
And if you want to take your your network and put it on steroids, right.
Joe:
Lawyer’s job is to know a little bit about everything and to know lawyers are dealing with the entrepreneurs, and you’re dealing with the investment bankers and are dealing with the accountants.
Joe:
And you’re dealing with, um, uh, the the government entities.
Joe:
And they’re dealing if you want to talk about it, a great way to build a network from sort of the ground up as an entrepreneur so that you can engage and start to develop that quasi barter economy.
Joe:
I’d posit that starting with a lawyer is actually one of the best places to start.
Joe:
You ask, you pick up the phone, you ask a lawyer and say, Hey, do you know somebody who knows how to do this?
Joe:
99 times out of 100?
Joe:
I bet you lawyers say, Yeah, I know about three or four guys something.
Joe:
Make some introductions.
Joe:
No, you’re You’re actually that’s a great point.
Joe:
Uh, and Mike is, and I’m sure that I just don’t know as many senior people at pig law firms at that level.
Joe:
But Mike is incredible.
Joe:
Mike also understands customer service.
Joe:
Like, dude, I don’t think that dude sleeps.
Joe:
Um uh, really?
Joe:
And I remember when he started Cooley God, we’re in Northern Virginia and we went and ate it.
Joe:
The first five guys that was over in Arlington when I was a V.
Joe:
C.
Joe:
Um, there.
Joe:
But I think you make a huge point that, um, lawyers, in fact, one of the best places to raise money.
Joe:
As you said that I was like, Tell Brandon that’s what I used to do, because that’s what I used to do.
Joe:
I was like, Hey, I’m raising money for my company after, you know, I gotten through one.
Joe:
Got to the next one.
Joe:
I was like, Who can I call?
Joe:
Right?
Joe:
And they’ve got that roller, Dex, and and a lot of the big firms if you can get into them, which usually takes a referral, Um, because they don’t take everybody, because your point, they’re discounting their rate and they’re losing money until they make that money back.
Joe:
I think firms like cool, you’re really betting on big exits and and going public candidly, right?
Brandon:
I mean, that’s there like these, these VCs, but to calculate a risk, right, you’re gonna make a relationship based on a calculated risk.
Brandon:
But the one of the things and I’ve been through a whole bunch of these programs, and I take advantage of it every time that I get.
Brandon:
They do have those groups where they get entrepreneurs together in that thing.
Brandon:
You totally.
Brandon:
I totally I don’t know.
Brandon:
I don’t remember that, but I think GT did the same sort of thing, right?
Brandon:
Or your lot?
Brandon:
What was your last law firm before you?
Brandon:
Yeah, Pillsbury.
Brandon:
There’s a group.
Joe:
You know.
Joe:
I’m sure the Bay Area’s got a ton of them.
Joe:
I’m not familiar with them, but you know, there’s this group in Northern Virginia that I got invited to participate in called MindShare and yeah, that was a great program.
Joe:
And it was It was terrific.
Joe:
And there’s there’s there’s there’s a mine chair alumni network um, you could lean into the people who are entrepreneurs.
Joe:
I mean, some of them are on their fifth company because they’ve had four failures and there are some who hit it from the start.
Joe:
And there is a lot like me who are just kind of They got into the program and are chugging along, and eventually they’re going to that are going to make it happen.
Joe:
Um, but you know, there’s there’s financial advisors, there’s accountants, there’s the lawyers who are involved in those types of of organizations and and and they’re terrific.
Joe:
I mean, for for the younger entrepreneur who didn’t necessarily have a profession or a professional career before becoming an entrepreneur in that network already built, you want to go from 0 to 60.
Joe:
Those are the types of organizations and the types of people that you want to get in front of, because mhm the professional services people, they make their mark and they make their living off of referrals and and and that becomes a referral network for them.
Joe:
I mean, that’s the reason why lawyers are so willing to make introductions.
Joe:
Because if I make an introduction to an accountant, I’m expecting accountant one day to make an introduction back to me.
Joe:
Yeah, it’s a and it’s a great point just for everybody listening out there.
Joe:
Mindshare that Joe’s talked about, which I was a member of in the early days.
Joe:
And before that there was called The early makings of that was actually called Net planar.
Joe:
It was when the Internet first started, and, um, it’s effectively sponsored by a law firm, one or many, uh, and accounting firms and a bunch of professional services.
Brandon:
So you’re gonna get a lot of business cards, and a lot of people are going to try to get your business.
Joe:
But here’s the interesting thing.
Joe:
Not only do they put a bunch of entrepreneurs together, um, but they put professional services and maybe, as importantly, actually, there’s a ton of investors because the legal the lawyers are connected to investors because the investors want to have relationships with the lawyers because they want to hear the next hot deal.
Joe:
And let’s be honest.
Brandon:
I mean, the lawyers themselves actually make a lot of money.
Brandon:
And I’ve got a couple of lawyers as angels and modern in my company.
Joe:
Just they understand the space.
Brandon:
They do okay for themselves financially.
Brandon:
Um, you know, and many of these organizations are not just one step removed from the investor.
Brandon:
When you’re talking to a lawyer, you may be actually talking to an investor themselves as an angel.
Brandon:
Yeah, well, I know that you probably need to go eat with the guys and your lady, but I’m not gonna.
Brandon:
And I did want to talk about entrepreneurship.
Brandon:
We’re gonna save that for another time, because I know I can grab you.
Brandon:
Um is can we have three h p t s, um actually ah, three h p t S for entrepreneurs and looking to higher lawyer to avoid mistakes, align yourself with the lawyer who you understand who understands you.
Brandon:
Number one two.
Brandon:
Don’t be afraid of engaging up and coming junior lawyers because they’ll make a big investment in you as an entrepreneur, I think, lastly, have perspective.
Brandon:
There are very few legal and air quotes, mistakes that can be made that can’t be undone.
Brandon:
You could on ring the bell on most things from a legal perspective.
Brandon:
Awesome.
Brandon:
Oh, sorry.
Joe:
Did I stop you from your last point?
Joe:
Well, um, this has been awesome.
Joe:
I want to make a quick shout out to your oldest son for his extraordinary comments to me on my birthday that, um, everybody listening.
Joe:
I had a birthday, and my wife made a video of everybody because it couldn’t be around for covid.
Joe:
And Joe interviewed gave about me who I’ve known since he was really little, And he said something like, Yeah, happy birthday, Mr White.
Joe:
You’re still looking really good.
Joe:
Like I was supposed to look bad or something.
Brandon:
It’s sort of like perspective.
Brandon:
Right?
Brandon:
Um so thank you gave for that incredible Tian.
Brandon:
Oh, compliment.
Brandon:
Well, you know, you’ve been a friend to the t and a family, so it’s the least you could do.
Brandon:
Hey, like, super fun.
Joe:
And for those people out there, like the network developing that network really does, you know, here here’s two guys who got to know each other 23 years ago, um, and I’ve crashed at Joe’s house when I was starting a company um, I don’t know what else I’ve inconvenienced them for, um, but, uh, hung out, done all sorts of stuff and really grateful for that.
Joe:
So thanks a lot, man, for jumping on today, and we’ll talk to you soon.
Joe:
You bet we will.
Joe:
Yeah.
Joe:
Thanks for being generous with your time and joining us for this episode of Build a Business Success Secrets.
Joe:
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Joe:
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Joe:
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Brandon:
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Brandon:
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