#104: Building a Multi-Million Dollar Law Practice, with Greg McEwan

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Speaker 1: Welcome to the Lawyerist podcast, with Sam Glover and Aaron Street. Each week, Lawyerist brings you advice and interviews to help you build a more successful law practice in today’s challenging and constantly changing legal market. Now, here are Sam and Aaron.

Sam Glover: Hi, I’m Sam Glover.

Aaron Street: I’m Aaron Street, and this is episode 104 of the Lawyerist podcast, part of the Legal Talk Network. Today, we’re talking with Greg McEwen about building a multi-million dollar mass tort practice.

Sam Glover: Today’s podcast is sponsored by Ruby Receptionists and its smart, charming receptionists who are perfect for small firms. Visit CallRuby.com/Lawyerist to get a risk free trial with Ruby.

Aaron Street: Today’s podcast is sponsored by Spotlight Branding. Learn how they use the internet to make all of your law firm marketing and business development more profitable by visiting SpotlightBranding.com/Lawyerist.

Sam Glover: Today’s podcast is sponsored by Fresh Books, which is ridiculously easy to use and packed with powerful features. Try it now at FreshBooks.com/Lawyerist, and enter Lawyerist in the how did you hear about us section.

Aaron Street: Sam, today’s episode is a bit different from our normal interviews. Though, Greg McEwen knows a lot about software, and online marketing, and SEO, and all of those things, this interview is not about technology or innovation like most of our episodes are. Greg has built a multi-million dollar plaintiffs firm over decades, and walks us through exactly how he’s done that. He isn’t optimizing new fancy productivity tools, or practice management software to grow his firm. He’s placing big bets on high risk cases, and then working them like mad to win. We’ve both known Greg for a couple of years, and he’s a soft-spoken, humble guy. He’s built an incredibly successful firm, air quotes, the old fashioned way. This episode might feel a little less glitzy than some of our previous ones about robot lawyers and virtual teams, but it’s full of really great substance on how to build a massive practice.

Sam Glover: That said, here is my conversation with Greg.

Greg McEwen: Hi. I’m Greg McEwen from Inver Grove Heights, Minnesota, a lawyer. That’s a suburb of Minneapolis Saint Paul metropolitan area.

Sam Glover: Hi, Greg. Welcome to the Lawyerist podcast. Thanks for being with us. Let’s start out by just telling me a little bit more about your firm. I know that you have a personal injury practice, but tell us so that our listeners can benefit too, what does your firm actually look like? What size is it? What kind of cases do you handle? That sort of thing.

Greg McEwen: We have a very unique niche practice. We do injury work, but primarily large products liability cases. I have three lawyers here, seven paralegal staff, and then I also have a full time CFO financial person. It’s about 11 people total. I have three paralegals relayed to me, and then the other two lawyers have two paralegals a piece.

Sam Glover: When you say, “Big products liability cases,” can you give me an example of one that you handled?

Greg McEwen: Sure. I do a lot of cases related to hydrocarbons, which would be gas, propane gas, anhydrous ammonia. Anything related to fueling homes or fueling torches and stuff. For the last 20 years, I’ve done burn injury cases all over the United States.

Sam Glover: Gotcha. Now I’m curious too, because you said you have three paralegals assigned to you. What are they doing? How do you keep three people busy like that?

Greg McEwen: I have one who is more senior. She’s got 20 years experience, and has worked for two of the larger firms in the Twin Cities, and has heavy litigation background. She keeps the cases on scheduling orders, helps answering discovery, coordinates with defense council when we have depositions. She does a lot of preliminary work for me, so I don’t have to take a lot of calls. She also does a lot of client contact and client control.

Sam Glover: What does that free you up to do? What do you end up spending your days doing?

Greg McEwen: Primarily, I’ll do depositions, work with the experts. I also will … I take a lot of potential client calls sometimes, and then work with doctors, getting prognosis of the client, life care planners. I’d say most of my time’s spent with the experts.

Sam Glover: Are these class action cases, or are these individual plaintiff cases?

Greg McEwen: Individual plaintiff cases.

Sam Glover: Okay.

Greg McEwen: I also do mass-tort cases, which is a specialty. That’s primarily defective pharmaceutical drugs and devices. Those cases are much more administrative in that the cases are filed within a multi-district litigation, what’s called an MDL. Unless you’re on the leadership for the MDL, there isn’t any direct litigation. That would take much less time. Those are paralegal driven in a large way. I do what I would call one-off cases, which is primarily products liability. We’ll also do some large trucking cases. Then also, we do MDL pharmaceutical work.

Sam Glover: Give me an idea, when did you start your firm?

Greg McEwen: 1997.

Sam Glover: As you look back over it, how long did it take for it to really get some traction and become … When did it become a million or a half-million dollar firm as opposed to just a quick start-up? Was it right out of the box? Or, did it take gradual time to build up to that level of success?

Greg McEwen: Surprisingly for me, it was quick in that I got into a couple of pharmaceutical cases that were good cases, moved fairly quickly. I also, when I first started this work, I got everything ready to be tried, and I tried a number of cases very early in my career to the verdict. I had had some good results early on. For me it ended up being a quick start. We had a eight figure recovery five years into my practice, so that was a good start for the practice.

Sam Glover: I mean, how do you do that? For you, maybe that seems like a silly question, but I know so many lawyers who are struggling to make a hundred thousand dollars a year. How do you get that kind of a hot start where less than a decade in, you’ve had one case that has hit over a million dollars?

Greg McEwen: I think what you have to do is take the case, and take let’s say an individual products case. First off, you have to be willing to take a lot of risks. What do I mean by that? I had a case early on in my career that, I think it was maybe two years into me being a lawyer, where it ended up going much longer than I anticipated. I had to get more money for expenses, and contingency fee lawyers have to front the expense of the case. I already had about 50 thousand dollars into the case, and I needed more money, because we were running out of money. I took a second mortgage on the house.

Sam Glover: That’s because you believed in the case?

Greg McEwen: Yep. I knew that if we lost that thing, I’d be getting a new house. I’d be moving out of the house I was in. You’ve got to be willing to take those risks. I used to budget, of course a little more expensive now, but early 2000’s, I would budget about a hundred thousand dollars for every explosion case, just for expenses. If you get a contingency fee, you have to make decision. “Am I going to reinvest in the business and grow the business? Or, am I gonna take that two, three-hundred thousand dollar fee, and get a new house, or a lake home or something?”

Sam Glover: I imagine in the beginning, you’re reinvesting everything you bring in pretty much into the business.

Greg McEwen: Everything.

Sam Glover: Yeah. How do you recognize … When you first talk to a client, how do you decide this client is worth going to the mat for, and worth investing a hundred thousand dollars for? How do you talk to another client and go, “You know, no. It’s not, it’s not you.” How do you value those cases? One of the things that I always struggled with in my own contingent fee case was, “I don’t know. Maybe if I push this thing forever, I can get a ton of money? Or, maybe it really is only worth a few thousand dollars, uh, that they’re willing to offer me?” How do you make that decision that this client is worth making a huge bet on, and they’re going to pay in the end?

Greg McEwen: Couple of things. One is you have to be very selective in case selection. You have to know the area. That’s why I don’t do a lot of crashworthiness anymore. I used to do more of that. Defective autos and trucks. It’s gotten much harder because the vehicles are much more sophisticated. I think it’s safer than it used to be. The companies fight hard because that’s the heart of their business. When you’re in a business, couple of things to answer your question. One is if you’re in a area of litigation where somebody let’s say sells a flammable liquid, they know there’s going to be litigation and claims. You’re suing an industry that would not be surprised that they have claims, because that’s part of their business model whenever they sell a product that’s very flammable and dangerous. They know ultimately something may happen. You have to have an industry, number one, that’s not surprised that they have some litigation exposure.

Sam Glover: I guess what you’re saying, for that piece of it, getting into minor auto accident cases is the wrong business. You can’t make big enough bets to pay off in that in there.

Greg McEwen: Correct.

Sam Glover: Yeah. Okay.

Greg McEwen: The other is that you have to have a defendant that can afford to pay a large judgement or settlement, and understand the value of the case. If you’re asking for … If your demand’s 25 million dollars, they’re not going to say, “Well, that’s just outrageous.” They’re going to understand that historically, they’ve been hit with verdicts, or have resolved cases, between 10 and 20 million dollars. They’ve done that every year for a number of years. They’re not surprised when you come with a number, whereas if you’re in another industry, they’d be very surprised at that kind of a number.

Sam Glover: One of the lawyers I used to work with said that one of the reasons to make big demands is so that you can get your demand on the desk of somebody who writes bigger checks. Which it sounds like is kind of what you’re talking about. He was talking about FDCPA cases where a lot of them get settled for small potatoes, but if you keep insisting on big numbers, they keep passing it up the skyscraper until it gets on somebody’s desk who doesn’t write small checks. Then, that’s where you want to settle it is with that person instead of with the person sitting down in the basement.

Greg McEwen: Yeah, and I would agree with that. I think you’ve got to get to the excess layer. We usually have an underlying first layer, which is a million or two. Then, you’ll have a layer above that, which will be considerably more. You need to get into that excess layer, or you’ve got issues that are continually arising. If you have a big enough case, usually the underlying layer is just tinder to the excess carrier. You have to know a lot about insurance, and you have to have a defendant that’s got a lot of insurance.

Sam Glover: Right.

Greg McEwen: Because you can have a very big case, liability wise, and if you’ve only got a million dollars worth of insurance, that’s all you’re going to get. That wouldn’t be near enough. I have a case in the office now, my partner and I. It’s a truck case. He’s handling it, where our life care plan’s 24 million dollars, but the insurance is much, much less than that. That’s a problem for us because we’ve got somebody that needs lifetime care, but they’re vastly under-insured. The question becomes is there any value in the company itself? It’s a very unique area in that you got to find … When you’re evaluating the case, you got to figure out does that defendant have enough money to make this worth your while.

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We’re back. Greg, this is sort of a theme that I keep coming back to I think. Part of it is because when I started practicing, I thought, “You know, I’m smart as hell, and uh, I can write, and I can argue, and all, all you need to do is put me in a courtroom and I’m gonna win cases.” I very quickly realized that there’s more to it than that. Senior lawyers are just going to laugh you out of court, no matter how good you are in the beginning. I’m wondering how much value you think there is in you being you, and the you that you’ve built up over time gradually, and how much it’s just a matter of showing up, being smart, and being willing to take a huge risk on a case that you believe in? What’s the balance there? Do you get to do more now than you did when you started because you are who you are today rather than then?

Greg McEwen: Yes. I think so. Just to kind of give an idea which reflects that, which I touched on before the break, is that if I’m going to be investing 200 thousand dollars into our explosion case, and the potential recovery on fees for that case is, if everything goes right, 400 thousand dollars, let’s say, that’s a terrible return on your investment. Because you’re going to spend three years working hard and it’s going to be a real fist fight. I always tell people when they say, “I’d like to do products liability,” is that the MVA claims, these insurance company have claims departments and this whole apparatus to settling auto cases.

Sam Glover: Yeah.

Greg McEwen: The people we sue don’t have claims departments. They’re not … They are used to litigation, but they’re not set up to just mill these cases. Each one gets a lot of individual attention from the company, and they’re willing to defend them all. If you’re going to invest 200 thousand and three years of your work time into a case, and the most you can get out of that defendant is 400 thousand, that’s just a two to one return, and it’s a terrible return. If you had cases like that, you wouldn’t have an office very long. You have to get a much larger return on your investment than that.

That’s what you have to look at first. Then, as far as I think reputation or whatever you asked about is there’s two things with that. Number one is you’ve got to be willing to try cases and try them. A lot of people say, “Well, I’m willing to try this thing,” but they don’t try the case. That reputation gets around quickly because there’s only a half a dozen defense firms that defend these across the country. You just have to try the cases. I would say the first six years I was a lawyer, I tried, I don’t have a rate spot on, but at least 15 cases to the verdict. I was trying three cases at least a year. That’s how you get to the point where you can call people up and say, “This is what we need to resolve this case.”

Because they’re going to tell the insurance that they’re willing to try it, and they’re going to try it. It’s not a bluff. They’re going to try this case. If let’s say a retailer has a five million dollar policy, and they know that we’re willing to try that case, and that potential verdict’s going to be over five million dollars, well then the pressure changes, because all of the sudden that defense firm’s got a handicap. Is he going to get a bigger verdict than the settlement? Because if I get … I had this happen one time in Iowa, got a 9.6 million dollar verdict on a policy that didn’t cover that. The defendants all sued their lawyer for … One defendant in particular sued their law firm because they could have settled that case within the policy limits and they refused to. The pressure’s not just on me as far as how much is this case worth and when’s a good time to try it or settle it?

Sam Glover: You have to not just try cases, you have to win them, obviously.

Greg McEwen: You have to win them. That’s right. Even if you lose, and I’ve lost before too, that doesn’t necessarily mean it’s a 100% negative. Obviously, you like to win them all, but when you try a hard case and lose it, that goes to their mind too that they’re willing to try a case that looks very, very tough liability wise. Usually, the hard cases are when somebody has done something that most people wouldn’t do and then they injure themself. The best cases are when people don’t have any liability on their-selves. What I’m trying to share with you today, Sam, is that I would encourage young lawyers if they want to get into high-stakes litigation to just conquer their own fears and try the case to the verdict.

Don’t try to get that case in a settlement mode. You know, “How much will they settle for?” Because I hear from a lot of young lawyers, they’ll say, “Well, this case will settle.” They’ve immediately put their mindset that they want to go for a settlement instead of the verdict. More of my cases now than we try, but when my first five years I would say, 50% of the cases went to trial.

Sam Glover: It sounds like the ingredients are pick an area of law in which the stakes are already high, because if there’s going to be a resolution, it’s going to be high. Then, don’t choke. Try those cases.

Greg McEwen: Exactly. That’s right.

Sam Glover: Maybe even come up with some excuses to try cases if it’s a close call, so that you can build your reputation as somebody who follows through so that it’s going to be expensive even if they win. Then, over time, you’ll build up the coin purse to invest in more and more cases, and it’ll build from there. I think we’re just missing one component, and that’s where do the good clients come from?

Greg McEwen: Well, the good clients come from once you get … That’s part and parcel of what we talked about. Once you get a good verdict, or have had half a dozen good verdicts, and you get that in the news, then people call you, because they want the best lawyer they can get in the country. You’ve got to make a decision. “Am I willing to, to spend a third of a year on the road?” I fly in excess of 125 thousand miles a year. It’s a narrow niche in the litigation, but my geography is wide. I’ve practiced all over the United States. That’s not always so easy. A lot of people couldn’t put up with that kind of travel schedule.

Sam Glover: How do you put up with it?

Greg McEwen: I’ve gotten used to it. I’ve been able, later years now, to use a lot of technology and cut that down somewhat, but it’s a burden. There’s no question. A good example, how do clients come in? We just, firm just settled last week, my partner did most of the work on it, a case for three million dollars, and that was reported. We don’t do confidential very much. This was a settlement, but we settled the case for three million dollars. That was last week. We received two phone calls on those types of cases our office this week.

Sam Glover: I suppose two good phone calls is potentially several million dollars at least?

Greg McEwen: Could be. That’s how the clients come, but you’ve got to be willing … This was a case where they just knew we were going to try it, that’s all. They just decided they’d prefer to resolve it rather than try it. Years ago, even 10 years ago, but more so 15 or more, there was a real active group of people in litigation that tried a lot of cases. Now, with ADR, we’re finding you’ll have people at large defense firms who are partner level and never tried a case to the verdict, because they’ve settled everything. It’s just a different world now.

Sam Glover: Which I suppose is an advantage for you, because-

Greg McEwen: Yeah, when you’re willing to try something-

Sam Glover: They’re terrified.

Greg McEwen: All of a sudden they think, “Wow, I’m gonna get my first trial in here.” That’s how it goes. It’s a lot of fun. I love it, and I’ve done it a long time. I still don’t tire of it. I get up and I enjoy it.

Sam Glover: Greg, thank you so much for that overview of high-stakes litigation. Boy, I learned a lot. Thank you so much.

Greg McEwen: Thank you. Thank you so much.

Aaron Street: Make sure to catch next week’s episode of the Lawyerist podcast. If you’d like more information about today’s show, please visit Lawyerist.com/Podcast, or LegalTalkNetwork.com. You can subscribe via iTunes, or anywhere podcasts are found. Both Lawyerist and the Legal Talk Network can be found on Twitter, Facebook, and LinkedIn, and you can download the free app from Legal Talk Network in Google Play or iTunes.

Sam Glover: The views expressed by the participants of this program are their own, and do not represent the views of, nor are they endorsed by Legal Talk Network. Nothing said during this podcast is legal advice.