Jonathan Hawkins: Welcome to Founding Partner Podcast. I’m your host Jonathan Hawkins. I have a friend of mine on today. He’s a recent law firm founder. I think he’s about four months in or so.
Jonathan Hawkins: Today we’ve got John Martin, John, why don’t you introduce yourself, tell us a little bit about your practice and how it’s going?
John Martin: Yeah, absolutely. I’m excited to be on. I’ve been listening to this podcast ever since it came out. I think I’m a few episodes behind at the moment, but I’ve been listening to every single one of them as they come out.
John Martin: My name is John Martin. I’m with Tree Bank Legal and happy to be on today.
Jonathan Hawkins: So John, your background, we’ll get into a lot of it, but you’ve basically, your legal career at least, my understanding, it’s basically been all big law.
Jonathan Hawkins: You were big law, then bigger law, and then you went from that to about the smallest you can get. It’s just you, right?
John Martin: I do have a couple of contractors so far, but yeah, it’s just me and that’s been a lot different. I started [00:01:00] my legal career in 2016 was with a large regional firm doing national work and then went to our entire practice group picked up and moved to a very large national firm. Yeah, it’s definitely been a transition, but a good one.
Jonathan Hawkins: So tell me about your practice area and really both before like big law and then now, and then maybe how is it different if at all?
John Martin: Yeah. So my practice is corporate, and when I started out, I was doing general M& A for my first firm, and a lot of that was in the tech transactions area, so lots of software, lots of IP, that kind of thing.
John Martin: And then as I got a couple years into that, I started working with a particular partner who did insurance M& A.
John Martin: And a lot of the transactions I’ve done over probably the last six years are more related to the insurance industry, [00:02:00] buying and selling insurance brokerages.
John Martin: But my real passion is with manufacturing. I came out of a family business and I like to call them backbend businesses. They’re the guys that are fixing your air conditioner.
John Martin: You look around your office, things and you’re like, where did that come from? Chances are there’s a U S manufacturer that’s doing it. So that’s where it’s shifted since I’ve left. And then I have a particular focus on family businesses.
John Martin: So having come out of a family business one of my passions is trying to help generational transfers occur between owners and children or relatives, however, that may happen.
John Martin: So it’s a little bit of a different flavor and I’ve done a few of those along the way but I think I’m particularly well suited under this structure to really help those folks out.
Jonathan Hawkins: So I do want to get into your background for sure. But before we get there, like you said, you were at a really big firm. And let’s talk about that just for a minute. Most big firms, you got a big-time hourly annual requirement, you’re working all the time.
Jonathan Hawkins: It’s [00:03:00] just go from that environment to having your own shop. What was that like?
John Martin: Liberating is the first word I come up with. And I’m sure we’ll get into this too, but everything I’m doing now is flat fee. So removing that hourly requirement, it was funny the first month or so that I was out on my own, I would sit down to work on whatever it was for a client and I would immediately be filled with this sense of dread.
John Martin: Because it’s like I can see all these things that I’d like to do to make my life easier in the future and all these things I think would be really good for the client, but they’re not necessarily specific to that task and accomplishing that task for that client.
John Martin: So being able to invest the time to get things right, not only for this client but in case I need to use that work or some of that work in the future.
John Martin: Being able to do that has just been immensely [00:04:00] freeing. And now I sit down and I get excited about working on stuff because I’m not worried about if I do it right or if I take a little bit of extra time to add something to it that isn’t absolutely necessary.
John Martin: It’s not on the client’s time. We’ve already agreed to the price and they’re going to get a very high-quality product without me having to discount time or worry about my own billable requirements.
John Martin: So that’s been nice and I enjoy the management aspect of things not that there’s a lot to manage yet, but I like thinking strategically and the hourly model just doesn’t compensate for that.
John Martin: My last firm I found myself doing what I think a lot of people would call middle management and It took a lot of time, but there wasn’t any payoff for me because I would have to then go find hours to make up for it.
John Martin: So it just extended the work day and now I can blend those two things and not worry about, am I going to get hit my bonus hours? Am I going to get paid? Is it good for the client? Can I build that to the client?
John Martin: So, I think [00:05:00] liberating is really the word that I would say is, comes to mind when you talk about the transition.
Jonathan Hawkins: Yeah. I get it on the client work and, the hours and the service work, but what about, I never worked at a really big firm, but my sense is that you have everything you need if you want it. You need a legal opinion on whatever.
Jonathan Hawkins: You just get on the firm directory and call somebody. They may be three States over wherever you can do that. If you need it, obviously the supply closet’s probably huge. Everything you need is probably right there. And then you go from that to like, all right, man, it’s all on you.
John Martin: I need to run to Office Depot. I’m out of printer ink. Yeah, that’s been a transition. And I think, at least in my experience, you see some firms, none of the ones I would, that I worked at, but you see some firms separate, even Christmas parties, right? You have your staff’s Christmas party, and you have your attorney’s Christmas party.
John Martin: And, it always got under my skin that [00:06:00] people really didn’t appreciate the staff. And, the bottom line is, attorneys at big law could not do what they do without the staff.
John Martin: And, having that bifurcation to me was just odd. To me it was all one team, everybody had their place. And, granted, some of us invested more in our education and have a little bit more particular skill set, which garnered higher wages, but, it’s really all a team and, so I have missed the staff.
John Martin: It’s nice to be able to hand something off to, hey, I need this formatted or hey, send this to so and one of the first things I had to deal with was trying to send documents via certified mail. I was like, I don’t even know where the post office is. Where’s the closest post office? And then asking the person at the counter, like, how do I do this?
John Martin: What do I fill out? What’s the appropriate mail?
John Martin: That definitely.
Jonathan Hawkins: You have figured out you can do that online, right? Certified mail online. Have you figured that out yet?
John Martin: I did not know that.
Jonathan Hawkins: Yeah. You could just upload, [00:07:00] yeah.
John Martin: Did not know that that’s a really good.
Jonathan Hawkins: Yeah. Another sense I have, again, I wasn’t in big law, but it’s like you’re on a tanker and you’ve got committees everywhere manning the tanker versus being on a speed boat that can turn on a dime.
Jonathan Hawkins: So I don’t know if you have any thoughts on that aspect of the change.
John Martin: Oh, yeah the analogy I use is an aircraft carrier. If you got a guy on watch and you say, Hey, there’s a beach 300 miles ahead, the captain’s going to shrug his shoulders and go, we’ll turn eventually.
John Martin: However, if you throw an iceberg out there and you say, Hey, there’s an iceberg 200 yards out, he’s going to take immediate action.
John Martin: And that’s how law firms are. They really don’t change strategy directives. It’s all a very slow change. I wanted to try some new software in my last firm.
John Martin: And I asked him, I was like, hey, what do I need to do this? And they said, put in a budget request. And it was six months out, and then we’ll take a look at it for the following year.
John Martin: And one of the first things I did [00:08:00] on my own is I looked at several pieces of software and said, you know what? This is the one I like.
John Martin: And I hit subscribe, and I had it available within, a couple of days. Yeah, being able to make decisions on things like that is much easier.
John Martin: Just the level of bureaucracy, and you have to have some level of bureaucracy with any organization. But there’s healthy and there’s unhealthy.
John Martin: Unhealthy really hampers growth, hampers innovation. A healthy bureaucracy is going to keep you on target, keep people from straying off, make sure your resources are all going to the place where they’re most valuable.
John Martin: So that’s been a lot easier, especially when it’s a committee of one.
Jonathan Hawkins: Yeah. Okay. So another question, again, my sense is the big firms have really big clients, big corporate clients. I’m wondering, did you take any clients with you? I’m guessing the answer is maybe yes, but probably no.
John Martin: I did. I took everybody that I had brought in. They all came with me. I think I had signed engagement letters. From six or eight clients within a week of leaving.
John Martin: So that was nice. And they were [00:09:00] all, truth be told. Most of my clients were not suited for big firms. The rates, the process for getting things done, they need a little bit more nimble.
John Martin: They still need high-level counsel, but the billable hour model just wasn’t the right one for them. And big firms are set up for institutional clients.
John Martin: The clients are playing with somebody else’s money. And they usually hire big firms because if anything goes wrong, then the CFO or whoever it is that hired the firm can say, look, I hired X, Y, Z firm and they’re the best in the business. And nobody’s going to question that.
John Martin: But if they go hire single shingle and something goes wrong, they might catch some flack for making that decision. The clients I want to serve are really, again, as backbone businesses, middle market one to 50 million in revenue, the guys that need the council, they have some true need for a sophisticated council, but the fee structures just aren’t the right fit for [00:10:00] them.
Jonathan Hawkins: You had what to a lot of people, a lot of lawyers, maybe might seem like a good gig at a big firm, making good money.
Jonathan Hawkins: Why leave to start your own? What was the spark or what was the moment? They said, all right, I got to do this.
John Martin: I think the biggest thing was just one of the partners I work for the reward for eating the most cake is getting more cake.
John Martin: And I watch the partners above me working even harder and putting in more time because it’s just a flywheel. You gotta keep it going.
John Martin: And there’s really not the support you need to scale and get out of what you’re doing. You’re always going to be billing hours. You’re always going to be looking for more hours. You’re going to be looking for a business that is driven by hours.
John Martin: And at the end of the day, we have a very limited set of hours and it’s, how do you want to choose to spend it?
John Martin: So for me it was, all right, I’d rather go do something that I feel like I can build [00:11:00] and scale and offer good service to clients and still feel like I’m winning at the end of the day.
John Martin: And if I do something more efficiently, more effectively for the same price. And I spend less time doing it, that’s a huge win for me.
Jonathan Hawkins: The other interesting thing that I’ve heard over the years from big firm lawyers that have left the reaction from the folks that are leaving behind, so you’ve announced you’re leaving and it’s usually, generally, maybe two camps, there’s the camp that thinks you’re crazy and like, why in the world would you do that? It’s the dumbest thing I’ve ever heard.
Jonathan Hawkins: Then there’s the other camp that’s man, I wish I could do it too. Or something like that. What kind of reaction did you get?
John Martin: In my case, it wasn’t a surprise for them at all. I was probably more vocal than I should have been over my displeasure with systems and bureaucracy and the way things were run.
John Martin: So it wasn’t a surprise to anyone. And it was very well [00:12:00] received. They were very supportive.
John Martin: In fact, I got a referral yesterday from my old firm who said, Hey this guy can help you out with this, he’s better suited to do it than us.
John Martin: So for me, it was a really good transition. Very supportive.
Jonathan Hawkins: That’s good. Let’s go back. So, laws I think maybe a second, maybe even a third career for you. And let’s go way back. So you were in, maybe one of the biggest bureaucracies there is the U S army.
John Martin: Yeah. It definitely tops the cake
Jonathan Hawkins: Yeah, so let’s go back. So you were an army Ranger, right?
John Martin: I was, yeah, was in third and 75th down at Fort Benning.
Jonathan Hawkins: And how long did you do that?
John Martin: I joined straight out of high school in 1996 and I got out in November of 99. So a little over three years.
Jonathan Hawkins: And I guess after that you went into, you went to college, right? For engineering.
John Martin: I did. Yeah. It’s been a very fun six years in college.
Jonathan Hawkins: So take me back, when I was 18, I didn’t really know what the hell I was doing. If you can go back to why army versus going straight to college, was there a reason, or was it just?
John Martin: Yeah, there [00:13:00] was a lot of reasons. And as a tech guy, you may not appreciate this, but I had academic rides to both Clemson and tech and my parents were very encouraging to go to tech. That’s where you need to go. And, my heart was at Clemson, but I eventually committed to go to Georgia Tech.
John Martin: I think I got to July. So I would have started, my parents had paid the housing deposit and I got to thinking about it. I was like, man, I just cannot live in a big city. I can’t go to Atlanta. That’s just not the right place for me. And the only good out I saw at that point was joining up.
John Martin: So that’s what I did. I wrote Georgia Tech from basic training and they returned my parent’s housing deposit.
Jonathan Hawkins: Wow, I never knew you almost went to tech, man.
John Martin: Yeah, that was close, man. We could have been classmates. Cause you started in what, 95, 96?
Jonathan Hawkins: 94, fall of ninety-four
John Martin: Yeah. So we very well could have been classmates.
Jonathan Hawkins: And you ended up in Atlanta anyway.
John Martin: Yeah. funny.
Jonathan Hawkins: Yeah. So you’re an Army ranger for a while that’s an intense experience. I’m sure, I haven’t done it, but, as you look [00:14:00] back on your career, what sorts of lessons do you think, or things that you learned in the Army that maybe have stuck with you, that you use today? If any.
John Martin: Yeah. I mean, that definitely shaped me. I would not be the same person that I am. I think probably the biggest thing for the Army, a lot of guys think of especially Special Operations.
John Martin: People think of those guys and they’re like stack dudes that feel no pain and don’t need to sleep or eat. And that’s really not the case.
John Martin: What they’re looking for is people with mental toughness. If anybody that tries for it can make it if they don’t quit. They will recycle you and recycle you as long as you don’t give up.
John Martin: So, a lot of the entry standards are really designed just to see are you the kind of person that’s not going to quit? And that makes everything else in life a lot easier.
John Martin: You know when you’re listening to your law school classmates complain [00:15:00] or you know a colleague complain and you’re like, at least I didn’t just get thrown out of an airplane and hadn’t spent three days soaking wet and starving without any sleep.
John Martin: Everything else is a little bit easier after that.
Jonathan Hawkins: I guess the Socratic method was like a cakewalk for you, getting yelled at in the army.
John Martin: Yeah, they weren’t cussing and screaming at me and making me do push-ups. The worst that can happen is I might look a little stupid. I’m used to that.
Jonathan Hawkins: It sounds like you’ve always been tech-inclined. So after the army, you ended up going to get an engineering degree, right?
John Martin: That’s correct. Yeah, at Clemson.
Jonathan Hawkins: Okay. And then after that, what did you do?
John Martin: So I went back. At Clemson, I co-opt. So I got some really good corporate experience there. I worked for a very large international corporation.
John Martin: It’s actually Electrolux. We made Frigidaire refrigerators, and that was great. You got to see a different level of corporate bureaucracy. It wasn’t quite the army, but there was still, a lot of structure there, very clear reporting structure.
John Martin: But then after Clemson, I went back to work at the family business.
John Martin: So it was my dad [00:16:00] and a non-family leader and then me. You got to jump in and do whatever’s necessary. And they were very enthusiastic about having someone that was willing to take a look at things and solve problems.
John Martin: So that was a great experience.
Jonathan Hawkins: And what was the family business?
John Martin: They do steel wire for concrete construction primarily, but then also industrial wire.
John Martin: So if you go into Publix, The shopping carts, chances are all the wire in that shopping cart came out of the facility in South Carolina that my family has.
Jonathan Hawkins: Oh, wow. Just raw manufacturing components or wiring, basically that’s it? Just.
John Martin: Yeah. And we were also importing finished goods from China that were competitive with the products we were making in the concrete construction agent or industry.
John Martin: It was a very interesting business from a supply chain perspective because we bought raw materials. Sometimes we sold raw materials cause it’s commodity products.
John Martin: And if we had something we bought low, we’d sell it high. And you bought and sold it every stage of [00:17:00] the process.
John Martin: So, it might be semi-finished at a different stage. It might be a finished good. And then we were also introducing materials at all those levels too.
John Martin: So we might buy semi-finished goods from China and finish them out. We might buy the finished goods. We might buy, anything anywhere.
John Martin: So it was a really interesting supply chain company.
Jonathan Hawkins: So I know we’ve had lots of conversations over the years about your views on law firms and how they’re not really well run, and I agree with you on that.
Jonathan Hawkins: So I’m curious, your experience operating the family business. What sort of influence, good or bad has that had on you in terms of now that you’re inside of a big law firm and seeing how it’s run?
John Martin: The thing that always blew me away about law firms was the focus on revenue. If you want to make more money, you bill more hours or you bill more per hour.
John Martin: And those were the two levers that law firms worked. And in the family business, especially with it being a commodity steel business, [00:18:00] we didn’t have as much of a lever to work on revenue. The lever we had to work was cost.
John Martin: So if you wanted to get more profits, then you had to reduce cost. And I’ve never understood why law firms don’t take more of a focus on that. Obviously increasing revenue is good and you can fix some of those costs, your hourly, your attorney costs, what you’re paying your attorneys, what you’re paying your staff.
John Martin: But there really wasn’t any focus on efficiency. And I honestly don’t see a whole lot of difference in what we do as lawyers in what somebody’s doing in a manufacturing business.
John Martin: At the end of the day, we’re producing a product. How do you get that product to the client in the most efficient manner at the highest quality?
John Martin: And that to me, it always blew me away that there wasn’t more of a focus on that quality control. And the cost of getting it out the door.
Jonathan Hawkins: And we’ve had conversations on this, but to that point on focus on revenue and law firms and [00:19:00] it’s really two pieces that are interesting to me as I think through it.
Jonathan Hawkins: It’s 1 sort of, the overall revenue or overall profit of the firm by reducing costs versus just increasing revenue.
Jonathan Hawkins: But then also the way they comp, most firms comp owners. And it’s all based on, it’s really revenue. It’s never, there are some firms out there that maybe factor in profitability somehow, some way. But, not every practice area is the same.
Jonathan Hawkins: Obviously. If I have lower rates but I have the same overall revenue as somebody down the hall with higher rates, or maybe I need 10 people to generate the same amount of revenue as somebody down the hall that only needs to.
Jonathan Hawkins: Obviously it’s a completely different profit model for the firm, but many times the firms basically pay them the same just because there’s a formula and it’s revenue-based.
Jonathan Hawkins: And it’s, I’m not going to say it’s easy and, lawyers are not easy to deal with sometimes. And they’re.
John Martin: Especially when you got a lot of them in the same room. These are the [00:20:00] other big problems. You got 90 partners or however many hundreds of partners trying to make a decision.
Jonathan Hawkins: Oh yeah that’s a whole other decision-making in a big organization where you don’t have a chief, the managing partner to the non-lawyers out there, they view managing partner as the CEO. That’s really not what it is at all.
John Martin: It’s the head psychologist.
Jonathan Hawkins: Yeah. Exactly.
John Martin: Managing egos and nothing more.
Jonathan Hawkins: So we’ll get into your insights or your I guess you’re just your view on the revenue versus cost.
Jonathan Hawkins: I think that played a lot in your ideas on how to build a firm or what you want to build and we’ll get that in a minute, but let’s go back before we get there real quick.
Jonathan Hawkins: So you were an engineer working at your family business.
Jonathan Hawkins: Why go to law school? What attracts you due to the law?
John Martin: The first thing I’ll say is I never ever imagined being a lawyer. That was probably the last thing on my list of potential careers. And I never even crossed my mind until one of my engineering buddies was leaving college. I was like, what are you gonna do, man? He’s [00:21:00] I’m going to law school.
John Martin: I was like, really? He’s Oh yeah, intellectual property. This is where it’s at. Okay. And so I was like maybe I could in the back of my head, but then as I worked at the family business. I was in charge of the purchasing in China.
John Martin: So I had attorneys in Shanghai. I had been doing contract work. I had attorneys in DC doing trade law. We did some proprietary software at one point, so I had an IP attorney.
John Martin: I felt like I was on the phone with my HR attorney every other day. Because we had, employees that we were dealing with, I had just a general corporate lawyer, and then finally we got into some litigation, and trying to hire a litigator was just overwhelming because everybody’s speaking a language you don’t understand.
John Martin: And you’re trying to judge it on reviews and people and there’s really no objective criteria, just foreign and through all those interactions with lawyers, I would get to the end of whatever project it was, and I’d go, whoa.
John Martin: That seems easy. If I just knew the rules, I could [00:22:00] probably do a lot of this. I went to my dad and in parallel with those experiences, working in a family business is tough. You’re working with family. And we were in a pretty heightened period of conflict among me, my brother, and my dad.
John Martin: And I went to Dad and I said, look, everybody needs a break. How about you cut my salary, cut my duties and I’ll go to law school. That’ll give us some time and space to figure out how we’re gonna work together. And at the end of the day, I can come back and I’ll have a little bit more of a background.
John Martin: I had no illusions of actually being able to do everything that the company needed but at least I would have a basis for.Negotiating with lawyers and communicating with the law.
John Martin: So that’s what drove the decision and then about halfway through we came to a mutual agreement that I would just exit the business and practice law for a few years.
Jonathan Hawkins: Probably didn’t hurt all those really high attorney invoices you were paying out of the business.
John Martin: Yeah, I got sick of [00:23:00] paying a man, that’s always my facetious answer is, you know I just got sick of paying attorneys.
Jonathan Hawkins: I wanted to send those invoices out instead of having to pay them. All so let’s fast forward to your firm now. You had your engineering manufacturing business experience before law school, which, I know a lot of lawyers, a lot of smart lawyers that went straight from undergrad, I took a little time off, but I wasn’t really working in business, I was goofing off and working things here and there.
Jonathan Hawkins: But, the folks that were going to law school as a second career. My classmates always felt like they had some wisdom that the rest of us maybe didn’t have.
Jonathan Hawkins: So you have that background. You’re in law. Then you go work at the big firms. You’ve you’re informed by the limitations of the big platform.
Jonathan Hawkins: So you said, all right, I want to go out because I want to go make a go at it. So I know we’ve talked about this a lot, so why don’t you lay it out?
Jonathan Hawkins: So as you go out to start your firm, what is it that you say? All right, I want to do something differently. What are you thinking?
John Martin: So the biggest thing I want to do is give clients certainty out the door. What is [00:24:00] this going to cost? And a lot of that was driven from my experience of dealing with lawyers.
John Martin: When I went to pick up the phone to call somebody with a problem, I didn’t know if it was going to be a $500 problem, a $5,000 problem, or a $50,000 problem.
John Martin: And even after that conversations, a lot of times you still didn’t know, cause you’re on the clock and you just don’t get a lot of visibility into what’s gonna happen on the lawyer’s side.
John Martin: And it was a frustration of mine at the big firms when I would want to quote somebody something, I’d say it might cost 50,000 to 75,000, but, it might go up to 125, 000. And I just don’t think that’s right.
John Martin: One of the things we counsel clients on as lawyers is risk. And reducing your risk, and yet our engagement letters put every bit of the risk on the client.
John Martin: And, so what I want to do, and what I am doing, is when a client comes to me with a problem, I say, alright, let’s work through it, and I invest a little bit of [00:25:00] time up front, and I say, alright here’s everything I need to happen here’s the analysis.
John Martin: And then here’s what it’s going to cost to get you there. And I’m pretty careful in how I scope or how I draft my scope of work. I make sure that it’s pretty detailed. Here’s the things that I’m going to do.
John Martin: And then I have a disclaimer at the bottom that, if any of these other things that happen, or we need specialized counsel or, the structure changes or any of these things, then we’ll have to come back and talk about the next piece of the puzzle and what that’s going to cost.
John Martin: So everything I do is a flat fee. Everything I do is just fully described in a scope of work and the client knows what they’re getting out the door, and then they can make an informed decision as to how they’re going to proceed and whether it’s worth it or not.
Jonathan Hawkins: I think that’s great. I do some flat fees. I do some hourly. I do a variety of things. I have some sort of monthly retainer type.
Jonathan Hawkins: And I can tell you, it’s an experiment that is ongoing. It never ends. There’s somewhere I’ve just completely lost my shirt on for sure.
Jonathan Hawkins: [00:26:00] But and that’s, so I’m going to put myself in the shoes of all the lawyers out there that bill by the hour that says, you can’t do that.
Jonathan Hawkins: Maybe it works for you, but it’ll never work for me.
Jonathan Hawkins: So I guess the first question is, how what’s your approach and how have you set the flat fees and determined the scope?
Jonathan Hawkins: And then what happens if you get in and the scope increases? How do you deal with that?
John Martin: What I’ve found so far in, right now, as you said, it’s an experiment. Honestly, I think my prices might be too low right now because I haven’t had a whole lot of pushback which tells me that there’s probably some room there and some elasticity.
John Martin: But, I’m thinking about my past experience and I look at something and it’s okay. How many hours? And I don’t even like to say how many hours would it have taken. But come down to it. That’s my only data point. There’s not good data out there for what it costs to do X, Y, or Z. It’s like the opacity of health care. You never know what it’s really going to cost.
John Martin: So I’m trying to just get some things out there and then [00:27:00] being cognizant of, okay, you know that took a lot longer for whatever reason so on the next one, you know I’m gonna do it a little bit differently.
John Martin: But the other thing the flat fees do for me is when I do something once if I put a little bit of extra time Into it and set it up in a way that I can go back and use that again for the next time.
John Martin: Then, my theory is that every time I do something, it’s, I’m probably going to lose my shirt the first time, but then the second, third, fourth, fifth time, that profitability is going to go up. It really is just throwing it out there, seeing what sticks, and then adjusting as you go.
Jonathan Hawkins: That is the mindset. I think that is it. You never know how it’s going to go, but lawyers just almost universally but I might lose. I might lose. Yeah, you might lose. You might.
John Martin: You’re going to lose.
Jonathan Hawkins: You’re going to have to fail at least in the early stages. And you see this in business.
Jonathan Hawkins: They just set a price, and they just go with it. Maybe they end up raising the price, maybe they end up lowering the price. And then once you get out there and you [00:28:00] see enough of it, then you can make adjustments.
Jonathan Hawkins: So how are your clients? Are they receptive to this? Do they like it better?
Jonathan Hawkins: Are they just along for the ride in the experiment with you? What’s been the reception?
John Martin: Everybody that I’ve put it in front of so far is hugely enthusiastic. I haven’t had anybody say I’d rather you just bill me an hourly rate. Usually, the response I get, especially with somebody that’s new is, Oh, okay. I’m all right. Nobody else does it that way, but that seems like a good price. Yeah, let’s do it.
John Martin: I think they really appreciate the certainty in it. This is something else I drew on from my experience in the family business, whether it was consultants, whether it was lawyers.
John Martin: I would always ask them, Hey, what would it cost for a flat fee and one of the things I would tell them is I would rather you quote me high, and I pay that as a flat fee than not knowing what’s gonna happen because then you can budget for it. You can plan for it.
John Martin: You can say okay, you know I know this is expense is gonna hit in this month and you can [00:29:00] adjust things as opposed to the hourly. You don’t know the pace, the lawyer’s working on it, you don’t know who they’re gonna bring in from specialty.
John Martin: That overbills it and they just, they appreciate the certainty and knowing what it’s gonna cost, even if it might be a little bit more than somebody quotes ’em on an hourly basis.
Jonathan Hawkins: So let’s talk about the scope part of it. I know like for me, when I have got gotten upside down it’s because my scope was not clear. It’s the first part, or it was pretty clear, but there was scope creep and I just let it happen.
Jonathan Hawkins: So what are your thoughts on scope and scope creep and how to deal with it?
Jonathan Hawkins: And how to communicate to the client about that?
John Martin: Yeah. And I think and I’ve run into that situation a few times already. And my thing on it is if I got slack in my fee. And somebody texts on an NDA, Hey, I need this NDA. I got a form for that. It’ll probably take me 15 minutes and I’m not going to go [00:30:00] to the trouble of a scope of work, quoting them for that.
John Martin: Especially if it’s a larger engagement. I’m just going to throw that in. Now if it’s something that’s a little bit bigger, like negotiating a new LOI that popped up, then I’m gonna say, Hey, look, and I think the biggest thing is early.
John Martin: As soon as you start talking about it, identify it and say, Hey, this is getting a little out of scope. Do you want me to send you a proposal for what it’s going to cost?
John Martin: And Oh yeah, that’s fine. No problem. I get it. So I think the key thing was scope creep is being able to be willing to eat a little bit, but even then I identify and say, Hey, this was out of scope, but it’s easy. I can knock it out, I’ll throw it in.
John Martin: And that generates some goodwill with the client. And then on the ones where it’s not you can’t just throw it in making sure you communicate it early and get that on the table.
John Martin: Just as soon as it comes up and that way they start thinking about it and it’s not a surprise when you come back to them, you know a week later and go Hey, I thought about this and it’s way out of scope you know always keeping that in the [00:31:00] front of mind is it in scope?
John Martin: Is it not in scope and then identifying it early?
Jonathan Hawkins: Yeah. Cause it comes to mind, you got an M and a deal, let’s say, and you say, all right, I’m going to close this deal for you. X, Y, Z. Then you get in the middle of it and the deal changes three or four different times, and what, or was the original deal is completely different. The third iteration of it.
Jonathan Hawkins: And the client says you said you’re going to close the deal. And you’re like, wait a second no, what I said was I would close that deal. Now we’re on a different deal.
Jonathan Hawkins: So how do you deal with that with the client? What sort of communication or how do you handle the expectations on that?
Jonathan Hawkins: Cause that’s pretty, that can happen a lot certainly in litigation that’s what scares the hell out of the litigators about flat fees.
Jonathan Hawkins: But how would you deal with it on an M& A transaction?
John Martin: So the way I draft my scope of work for an M& A transaction is I say, I put a note in there, it says, assuming that this is going to be a stock purchase or an asset purchase with [00:32:00] standard tax complications, please note that if any kind of reorganization or stock purchase or any of these things could increase the cost and then it’s on me to again, identify those things early and say, Hey, our fee was structured on, these assumptions that are turning out not to be true, I need to add some for this.
John Martin: And then just have the conversation and usually, people get it, they’re like, Hey, I get it. This is a lot more complex. And I had a client come to me the other day where I’m starting to get into some scope creep. And I warned them early.
John Martin: I said, look, this was not part of the original scope. And we kept going on it and they came back to me and said, we understand that this is not in scope. Please let us know what the additional fee is going to be.
John Martin: So I think by and large people get it. They’re in business too, right?
John Martin: And they know that if they’re providing more work or that something changes, they would do the same thing. And I’m sure I’m going to run into people that like no, this is what it was. And okay, you [00:33:00] learn and you move on.
John Martin: But again, some of that is accepting a little bit of risk. And every other business in the world does it, no, no business is as risk-free as law, everybody wins some and loses some.
John Martin: I think the communication is key and then just the willingness to accept the risk that every now and then you’re going to have one that doesn’t work out.
Jonathan Hawkins: You know, it may not be perfect, but pretty close comparison to me is anybody who’s been through a construction project or renovation project or building a house or whatever, it’s like you’re hiring a contractor to build a house.
Jonathan Hawkins: You’ve got your plans and your specs and you’re buying a house and then you get in it halfway through and you’re like, all right, I want to change the windows.
Jonathan Hawkins: We’re going to upgrade, the faucet that I had. I want to, be two times better. And we’re going to put this other thing over here. Oh, and move the counter over here. Different countertops. And then you start getting the change orders, you get the change orders, you upgrading and.
Jonathan Hawkins: That’s what everybody knows that’s just the way it happens.
John Martin: Yeah.
Jonathan Hawkins: And the law is really could be handled the same way. I think lawyers aren’t really trained or experienced in that kind of invoicing and scoping and [00:34:00] billing, but it doesn’t mean you can’t right?
John Martin: Yeah, exactly. And again it’s about, the other half of it along with, clear, communication both upfront and along the way. It’s a willingness to accept the risk. You gotta take a little bit of risk to do it that way.
Jonathan Hawkins: And I’m not to say sit here and say it’s easy.
John Martin: No.
Jonathan Hawkins: It’s a little bit of hard work. You got to put in the work and you got to experiment, but it can be done. I’m with you and I say, keep going for that.
Jonathan Hawkins: So let’s move it on. So I know another big thing to you are systems and processes and automation and that sort of thing.
Jonathan Hawkins: And I suspect that goes back to your engineering and manufacturing days.
John Martin: And army to some degree.
Jonathan Hawkins: Yeah. I know it’s a big thing. A lot of law firms and a lot of consultants are out there. So get your processes, get your SOPs together. But maybe take me through your experience in the big firm versus how you’re seeing yourself do it in your firm.
John Martin: I don’t know what firms you’re thinking about that have processes, but [00:35:00] I haven’t seen them. It always blew me away that if a partner handed out an assignment that there wasn’t a start with this form.
John Martin: Take these steps, do these things because it would have been so much easier, especially as a brand new associate, to have something to refer to.
John Martin: And instead, it was like, go on the system and see what you can find. And then you’re cobbling things together and making it up as you go. And then you talk to somebody else and Oh yeah, I have one of those. It would work perfectly.
John Martin: And a lot of it has to do with capturing data. There’s not a good index, even naming files, you go to search for something on the system and you don’t know what you’re searching for.
John Martin: Somebody might’ve called it in an SBA. Somebody might’ve called it a stock purchase agreement. Somebody might’ve called it a purchase agreement. Somebody might’ve just saved it up as agreement.
John Martin: So you never know what to look for, you never know how to find it. And one of my basic processes that I [00:36:00] actually am implemented in big law within our practice group was the file name.
John Martin: And it’s like, when we name a file, it’s going to be the client’s name, the other party’s name separated by space underscore space.
John Martin: And then whatever it is, and we’re always going to call it an asset purchase agreement. And then we’re going to tack on APA just in case. And then it’s going to be the date in the version every time, that’s what it’s going to be.
John Martin: And that’s just that simple thing right there of making every and granted starting out, it was hard because I had to rename every single document that the partner saves.
John Martin: But as I had people coming up under me, I could mandate that and say, this is the way we’re going to do it. And then I think by the time I got out, even the partners were saving it with the same naming schema because they appreciated the ability to find what they were looking for.
John Martin: Taking processes is something as simple as that just really increases your efficiency and your effectivity.
Jonathan Hawkins: Okay. So let’s dig into that a little bit because change is so [00:37:00] hard to do anywhere, but you’re at a big firm and you’ve got, you know, you have your little team.
Jonathan Hawkins: It took you a long time to implement those file naming systems on your team. Multiply that out by hundreds of partners across dozens of offices.
Jonathan Hawkins: How the hell can you get that done? And then you got all these lawyers that this is the way I do it. You can never tell me to change, it’s just so damn hard.
Jonathan Hawkins: And I think about this a lot, part of what you’re describing the way I call it knowledge management. And it’s, as a firm grows, how do you systematize the knowledge management process?
Jonathan Hawkins: And that’s both from just probably something you, you did in the military, but these, I don’t even know what you call it, but almost like a, an assessment after a deal.
Jonathan Hawkins: So you do a deal, all these provisions change. Good and bad. And then you have a post-deal assessment, and then you figure out how to incorporate that into your knowledge, management system to then use again, but then you’ve got [00:38:00] 20 different teams doing these deals.
Jonathan Hawkins: So how do you manage all the inputs? Do you have any ideas on that?
Jonathan Hawkins: I’m serious because this is something I think about a lot as my firm is growing. How do we put the stuff in place now? So that as we scale, it’s just there and we don’t have to force the change later.
John Martin: Yeah, and I think there’s two obstacles that are really standing in front of getting to any kind of centralized control.
John Martin: One of them is management that we’ve talked about. There, there really is no centralized management. You got 90 partners that do it their way and telling them that they’re going to have to do it your way, they’ll just go somewhere else. They’re not going to stand for it.
John Martin: But then the other one is training. You have to communicate those standards to people and there is no real training in big law. It’s incumbent upon the team that you’re working for to get you to the level they want you to be.
John Martin: And there’s no centralized, I say there’s none, but when there is centralized training in my experience, [00:39:00] generally people will go to it for a couple sessions, and then some big deal will be going on or some big case or whatever it is, and the partner says, I can’t have you wasting your time on that, you got to do this.
John Martin: And so what that does, there’s no real commitment to it. And what that does is you get people just following their team or whoever they’re working with.
John Martin: So you got to solve the training problem and you got to solve the management problem. And for you and me, that’s going to be easy, right?
John Martin: We got to think ahead about how we structure the firm to make sure that anybody coming in is on board with those processes and then you manage them to hold them accountable and say, no, you didn’t do it that way, I’m sorry.
John Martin: And again, that comes to upfront communication with the people you’re hiring. Hey, this is the way we’re going to do it. If you don’t like it, tell me now.
John Martin: And then you can move through that. I think you’ve had a lot of conversations on the show about firing. You got to be willing to do that to get the right people that see the goal and are willing to move toward it.
Jonathan Hawkins: So let’s talk about training. I know it’s [00:40:00] a big sort of passion project of yours really. And it’s funny because the view from most people is, the big firms give you this immense training and you come out like super-trained. It sounds like maybe that’s not always the case.
Jonathan Hawkins: And I get it, like you just said, the pressures to bill hours and get stuff done may be so great that you learn by experience and maybe your direct supervisor quote trains you, but there’s not really any deliberate and systematic training, let’s call it.
Jonathan Hawkins: I know we’ve had conversations about this, as something that would be extremely valuable to big firms, really, training their staff, their younger attorneys.
Jonathan Hawkins: Cause another thing that, we all hear is, partner comes in, and if somebody under them screws something up once they’re like, they suck, get rid of them. When maybe it’s not fair to do that, right?
John Martin: Yeah, exactly. And what I would see is you get a summer or you get a new associate class of 10 people, right?
John Martin: And you maybe had two or three that just got it [00:41:00] and everybody loved working with them because they just got it. You didn’t have to take any extra step to get those people, you know, performing at the level you needed them to, and then you had two or three at the bottom out of ten.
John Martin: Didn’t get it, didn’t want to get it, we’re never going to get it and then you had six to seven in the middle or four to five in the middle, I can’t remember my math here, but four to five in the middle that if you just gave them a little bit of a nudge and a little bit of help, then they would be at the same level as those top two or three.
John Martin: And I think one of the failures in law firms is not and along with that of the 10, they’re just thrown to the wolves. It’s go find a partner, go find work. And the partners are looking for whoever they can.
John Martin: And if you had a training program that would identify the people that were good. And then identify the people that needed a little bit of help, but then also identify the people that just needed to go now.
John Martin: They’re not going to get it. They don’t need to linger for two or three years, just [00:42:00] floating between teams that don’t want them, go ahead and get rid of it. You’re doing a disservice to them by delaying their career. They’re not getting what they need.
John Martin: And chances are they just don’t like it, but they don’t want to leave because the money’s good.
John Martin: So if you had a training program along with management, and again, enforcing this with partners is the hard part, right?
John Martin: But you got two or three that they want to do work with, and those people are getting overworked. They’re just getting slammed. And typically, they’ll leave after a couple years because they’re just burnt out. They can’t handle it.
John Martin: And so you’re stuck with that middle group that kind of moves through and eventually figures it out. But If you could accelerate it for them and then have somebody managing the workflow so that partner says, no, I don’t want to work with that guy because he screwed up whatever, we’ve already identified that we’ve given him remedial training, he should be good now.
John Martin: And the partner right now, and most structures is just going to go now, not working with him. I’m gonna give this work to the other guy because there is no formal allocations. It’s just whoever they want to work with and whoever says yes to what they’re asking.
John Martin: So [00:43:00] I think, it’s a failure in management, failure in training. And I will say about the big firms, you learn a lot just from seeing stuff, doing stuff, and screwing stuff up.
John Martin: The end result is amazing. Like you really have a high caliber of legal knowledge and how to apply it when you get to the end of that period. But it’s not fun. And I think you could accelerate it.
Jonathan Hawkins: So, real quick. They need the training. They need more formalized training. What sorts of ideas have you come up with any ideas about what that would actually look like?
John Martin: Yes. So a lot of or most of your learning in a big firm comes through making mistakes and then having the partner correct it.
John Martin: And I’ll take due diligence as a good example. This is one that’s near and dear to my heart. I never understood why they gave that to first-year associates because they don’t have the experience to know what they’re looking at and how to apply it and why it might matter.
John Martin: But I have built my own training program and I actually have it in the form of a syllabus to [00:44:00] hopefully teach a class at Georgia State and we call it transactions 101, how to add value as a first-year associate and where I think a lot of the failure is it’s real focused on how and not the why.
John Martin: So if you take disclosure schedules, due diligence, and you say, why is this important? I had no idea for probably a year, or two years.
John Martin: And then finally somebody did you look at the reps and warranties in the agreement? I’m like and that due diligence process is designed around those reps and warranties.
John Martin: So if you take the time to explain to a first-year associate, Hey, these reps and warranties, here’s what they mean. Here’s why they’re important. And Oh, by the way, if you held up your diligence request list, you’re going to see a lot of the same stuff on this request list that you’re seeing in the reps and warranties.
John Martin: And then it clicks, Oh, not only do I know how to do it, just reading documents and pulling out, provisions that I think are important or that the [00:45:00] partner asked for it. Oh, I got to think about it in this context, and that adds a layer of critical thinking that you wouldn’t otherwise have.
John Martin: Breaking down the why, I think is extremely important, and giving them the basis for what they’re doing along with the how. Does that make sense?
Jonathan Hawkins: It does. I think that’s a great idea. This is what I would say. It’s great, you want to go teach that at Georgia state law school and you should at some point.
Jonathan Hawkins: But why not just create this course, man? And sell it to associates now. I mean you could do a lot more impact, right?
John Martin: Oh, man, I’ve had some conversations about that two things one of them, you know garnered from your wisdom is a focus, what’s important right now?
John Martin: And that’s getting the legal work done so I can get the money in to support initiatives like this. But then number two, I really want to teach the course to vet it.
Jonathan Hawkins: Yeah.
John Martin: Say, is this working? Is it right? And catch the things that maybe make sense, maybe don’t make sense.
John Martin: So that [00:46:00] when I do it, ultimately go to package it and sell it as a training program for first-year associates. I’ve vetted a lot of those issues and strengthened the whole program.
Jonathan Hawkins: Okay. Hear me out. You could vet it through a beta class that you just you put out there. I’ll tell you know I imagine teaching class is a lot of work. It just does a lot of work.
Jonathan Hawkins: And hell just do it doing a one-hour CLE, getting ready for that is a lot of work. I can’t imagine the whole semester. Yeah, you could get a small cohort of, 10 or 8 or 5 and associates from around, here and do a little course.
Jonathan Hawkins: Man, we should talk about this offline. I think that’s.
John Martin: Yeah. It sounds like a joint venture, man.
Jonathan Hawkins: I’ll cheer from the side, but I’ll be one of you. You can train me. No, I think that’s a great idea though, I really do.
Jonathan Hawkins: I’m serious. Yeah, we definitely, you should explore that, man. Maybe not wait for the Georgia State class.
John Martin: Yeah.
Jonathan Hawkins: But anyway, all right, man. So moving on, I want to talk a little bit.
Jonathan Hawkins: So your firm name, you got tree bank legal. So I do love a trade name for a law firm. Why the [00:47:00] name and what was your thought process behind the trade name?
John Martin: I think it was probably your advice is the reason I went with it. Even deeper than that, ideally, I’m not doing a whole lot of legal work two years from now. I really did this to start a business and to run a business, not necessarily to practice law.
John Martin: I want to take the training, I want to take the processes, I want to take the procedures and build an organization that is independent of me.
John Martin: And I think naming an organization with your name goes cross purposes to that overall intent. I know you’ve had some conversations about being able to sell to third parties.
John Martin: If it’s got my name in it, it makes it a little bit harder. It’s a little bit more, a little less value. So if I can make it more about the brand and more about the product and less about me, then I think that’s going to add value to the company for the long term.
Jonathan Hawkins: Yeah. For those out there that don’t have a trade name, if you get big enough and well-known enough without it, clearly, that’s your brand.
Jonathan Hawkins: But the other [00:48:00] issue that I’ve seen a lot of is it’s the coming and going of the various named partners. And it’s just you’re constantly changing the name and the letterhead and the website URL.
Jonathan Hawkins: And then all of a sudden some youngster says, Hey, I’ve got a bigger book of business, so I should be second, not third in the names.
Jonathan Hawkins: And it’s just a lot of angst and conflict for nothing, if you have no net, nobody’s names in, then it’s just a fight. Nobody’s going to have so it’s.
John Martin: Well for the record, I don’t ever intend to have equity partners.
Jonathan Hawkins: That’s another way to solve it too, yeah.
Jonathan Hawkins: All right, so another question you know I know you’d given a lot of thought about your firm before you started it.
Jonathan Hawkins: I know you had you know, made budgets and, pro formas, and you thought about this and that he talked to a lot of people and that was on the front end.
Jonathan Hawkins: So now that you’re four months in and you’re on the other side of it, is there anything that you can think of that was unexpected or that maybe you hadn’t thought of going into it?
John Martin: Yeah, really one thing and I’m sure there’s gonna be more just [00:49:00] because I hadn’t been at it long enough but the one thing is cash flow.
John Martin: With the flat fees you get a chunk up front and then you get chunks at each milestone and some of that’s dependent on me having the capacity to get the work out and some of that’s dependent on the pace of the client.
John Martin: So I’ve had a couple of situations where I’ve had it right to the finish line, but for whatever reason the client needed some more time or wasn’t quite ready or whatever, and I hadn’t hit that milestone yet.
John Martin: Now granted, most of these clients I could probably go to and say, Hey, we’re there. Can you pay up? I hadn’t had to do that yet and wanted to do that, but with the hourly model, you’re getting paid as you go.
John Martin: So if you work a hundred hours, you get paid for a hundred hours. If you get paid, to work 150 hours, you get paid for 150 hours.
John Martin: And what I didn’t anticipate is the up and down of the flat fee and when those fees are coming in. Luckily I was fairly well padded and, it’s been fine, but it’s not the steady flow that you would get with an hourly model.
John Martin: [00:50:00] So that was something I didn’t fully appreciate when I kicked all this off. And I think that will probably smooth out too, as you get more and more clients paying on regular basis and you’re keeping things flowing, that’ll smooth out.
John Martin: But just that initial kind of influx of cash and then a big gap before the rest of it starts coming in as was a little bit, I don’t even say surprising, but I just didn’t, I was like, Oh wow. Yeah, that, that’s something.
Jonathan Hawkins: It’s not quite the same, but it’s like a contingency practice. You do get some hits upfront where they don’t till the end, but you’re waiting till the end.
Jonathan Hawkins: Now, maybe the timeline’s a little bit shorter compared to most contingency cases.
John Martin: Yeah.
Jonathan Hawkins: But yeah, it’s the importance of line of credit.
John Martin: Yep. Exactly.
Jonathan Hawkins: And it’s the sort of thing where you get it before you leave. You get it while you still have the W2, if you can, get it before you need it.
Jonathan Hawkins: It’s that old saying that Mark Twain saying about banks. Do you remember this one?
Jonathan Hawkins: Give you an umbrella when the sun shining, but take it away when it starts to rain.
Jonathan Hawkins: So get it [00:51:00] when you don’t need it. That’s when they’ll just give you just. They give you more than you need.
Jonathan Hawkins: So yeah we’ve been at this for a little while, but I want to talk, you’ve given us a few hints of where you see the firm going, if you had to get a whiteboard here and I said what’s your long term vision for your firm?
Jonathan Hawkins: What would you say?
John Martin: Man, I want to build this into a hundred million dollar-a-year business.
John Martin: Yeah, I don’t know if it’s gonna take 5, 20, 50, or ever but I really believe there’s something here and I want to do it lean, right?
John Martin: I don’t think we’ve talked about this, you look at lean concepts and manufacturing and a lot of that is about doing things efficiently and doing it, having enough capacity to do what you need to do when you need to do it.
John Martin: So using automation, using AI, using all these technological tools and then along coupled with process and procedure, I think I can drive a lot more revenue per person, and I’m looking at it as [00:52:00] the entire staff, not just lawyers. But revenue per person, by driving some of the work to the lowest cost resource.
John Martin: Just like manufacturing. If you can make it on this machine, but it costs $100 an hour to run that machine, and you can make it on this machine and it only costs $50 an hour to run it, then you’re gonna do it on the lower cost machine.
John Martin: And I think having the processes, the procedures, the automation to push a lot of that down, I can really build some momentum and compete.
John Martin: I don’t want to say I’m competing on cost, but I think cost is going to be a very attractive factor. And I can make a lot more money bottom line by using that model and trying to do it with the lowest value resource that I can, the highest quality work.
John Martin: That’s my vision is building a true business that has people doing it to borrow a phrase from Jim Collins has the right people in the right seats on the bus and get anybody that’s not on the bus off.
John Martin: So you know, one thing we hadn’t talked about is career tracks. [00:53:00] Big firms have career tracks. You’re either a partner, you’re of council or you go in-house.
John Martin: And here, if I find a first or second-year associate that just loves people and wants to sell, I’ll teach them enough to be able to go out and speak intelligently and get them out there selling.
John Martin: Get them doing the right thing and don’t stick them in an office for eight or nine years until they can go make that pay for themselves. If they don’t like doing legal work, great, we’ll find something for them.
John Martin: And same thing with, you got somebody that loves to draft documents, it’s just a document nerd. Fine, I’ll pay you for that, but structuring the firm in a way that people are doing things that they’re best suited for, I think is going to drive revenue, it’s going to drive quality, and it’s going to drive hopefully success.
Jonathan Hawkins: Man, I a 100% agree. I know we’ve had this conversation before, a lot of firms, they try to stick every lawyer into the same box.
Jonathan Hawkins: And oftentimes it’s through their compensation system, it’s weighted to the origination and working your [00:54:00] ass off, blah, blah, blah. When some people can do it all, it’s maybe in sports, somebody who can do offense, defense, all that stuff equally.
Jonathan Hawkins: But there’s some people that are just really good at one thing. Like Dennis Rodman, he could not shoot a basket, but he could defend like crazy.
Jonathan Hawkins: And you get these specialists in the right spots versus trying to push them where they’re not. And it makes them unhappy and they’re not productive. And it probably hurts the overall value of the firm and the production of the firm.
Jonathan Hawkins: And it’s always. Really baffled me a little bit why firms don’t try to especially the big ones when you’re small everybody’s got to do a little bit of everything but the bigger ones.
Jonathan Hawkins: You’ve got somebody that’s really good at business development. Don’t expect them to do anything else And somebody who’s not good at business development, don’t expect them to do that.
Jonathan Hawkins: And don’t comp them.
John Martin: Yeah, there shouldn’t be.
Jonathan Hawkins: You can’t comp them the same either and that could be a challenge, but.
John Martin: Well, and I think there’s such a negative connotation to the term service partner. It’s the reward for paying your dues and doing your time. But everybody’s yeah, it’s just a service partner.
John Martin: That’s one of the reasons I don’t [00:55:00] want equity partners, I don’t want anybody to think, Oh, that’s what I’m working for and that’s the goal. I want people to think I’m really good at selling.
John Martin: They may get comped eventually, just like they would as an equity partner at a firm if they’re performing based on the objectives I set for them.
John Martin: But I don’t want people shooting for a goal that’s really illusory. I want to say, Hey, look, this is what you’re good at. I’m going to pay you the market rate for what you’re good at and I’ll pay you well.
John Martin: But, it’s not going to be tied to you building 2200 hours a year for the last 10 years and, having a partner title, it’s going to be tied to your performance. It’s going to be tied to your what you’re good at.
Jonathan Hawkins: It’s if you look at businesses, nonlaw firm businesses, you’ve got your outbound sales or your sales force, and then you’ve got your client management people and they’re usually different people.
Jonathan Hawkins: Salespeople, a good business development person wants to go whale hunting, that’s what they want. Once they’re in, they don’t want to sit there and have to [00:56:00] manage skillset for keeping the clients happy and really in the pipeline.
Jonathan Hawkins: And then, continuing to keep them as clients and other businesses that figured this out.
John Martin: Yeah. For hundreds of years.
Jonathan Hawkins: Law firms, they just, most of them don’t do that. But yeah, so that’s really cool, man. No, got it, man. I love that.
John Martin: Yeah, so yeah, I think, people and processes, that’s what it comes down to is being able to hire, being able to get rid of the people that don’t work out and then holding people accountable which requires management.
John Martin: And that’s the other thing about law firms, they don’t manage, there is one metric and that’s billable hours That’s it.
John Martin: How many hours did you build? That was the only thing I ever got paid on for bonus, billable hours. Didn’t matter if I was training associates didn’t matter in some context, even if I brought work in as an associate, it didn’t matter one metric.
John Martin: And that’s very easy, it’s very efficient to manage, but you’re doing a disservice to not only those people but the firm as a whole.
John Martin: So I think one of the things I’m going to be really focused on is managing people, setting [00:57:00] objectives that they can control. And that is going to contribute to the well-being of the firm and the success of the business. I hate saying firm. I don’t like calling it a firm.
Jonathan Hawkins: Yeah. And that’s another point. We’ll wrap it up, but there’s a lot of short-termism, it’s this year. Let me pull out as much as I can this year. I don’t care what happens next year or five years from now.
Jonathan Hawkins: And some of that’s generational. You got the generational conflict, the partner that’s going to retire in two years has no desire to invest in the future but really.
John Martin: That’s his retirement check padding. You don’t want to touch that.
Jonathan Hawkins: But, these are challenges. I think they can be addressed now. It may be like a blockbuster Netflix kind of thing where the old firms they’re gonna be hard to change.
Jonathan Hawkins: And maybe it’s gonna take, folks like you starting the new firm and just building it up to pave the way and show everybody how to do it.
John Martin: Yeah. We’ll see.
Jonathan Hawkins: You’ll do it, man, but I love the big vision, man. I love it. I’m a believer in big visions and I know you can do it. So, go for it, man.
John Martin: Thank you. I appreciate it.
Jonathan Hawkins: So anyway, John, so thanks for coming on, man. It’s been fun. [00:58:00] For people out there that want to find you, where’s the best way?
John Martin: JMartin@TreeBankLegal.com. Email me. I will respond. I love, helping people out. If there’s anybody that’s thinking about starting a firm, more than happy to talk to them.
John Martin: Anything I can do to help anybody else thinking about doing it. If anybody’s interested in the concept, I’d love to talk about it.
John Martin: I think you’re the one that tells me always to be hiring. I just got to figure out if the revenue will support it, love to talk to anybody that’s interested
Jonathan Hawkins: This is a little close. Always be recruiting.
John Martin: Always do recruiting. There you go.
Jonathan Hawkins: You’ll get a break pretty quick if you’re always hired. So cool, man. All right. I appreciate it and look forward to seeing what you do.
John Martin: Thank you. Appreciate it.
