Andrew Haugen practices family law in Chaska and Shakopee, MN. Andy’s goal is to get his clients to the...
Just when Andrew Haugen was planning to leave law practice for good, an offer came along that made him reconsider. A couple of years later, he has acquired two family law practices. In today’s episode he explains why, and talks about the challenges of integrating several law practices into one functioning business.
Andrew practices family law in Chaska and Shakopee, MN. Andy’s goal is to get his clients to the other side of their issues with a result that creates resolution and allows them to move on.
Voiceover: 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. And now here are Sam and Aaron.
Sam Glover: Hi I’m Sam Glover.
Aaron Street: And I’m Aaron Street and this is Episode 109 of the Lawyerist podcast, part of the Legal Talk Network. Today we’re talking with Andy Hogan who went from planning to quit law practice to acquiring two other law firms.
Sam Glover: If you have questions or comments about today’s show or any of our shows, send them to us at [email protected] We love to hear from you.
Aaron Street: What if we told you that having a new website designed for your law firm doesn’t have to suck. Spotlight branding prides itself on great communication, on meeting deadlines, and on getting results for their clients. Learn more at spotlightbranding.com/lawyerist.
Sam Glover: Today’s podcast is also 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: Today’s podcast is also 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.
Sam Glover: Aaron, on today’s podcast as you’ll hear, Andy was bringing together several firms and as part of that he was combining some law practice management software and systems and wound up getting a server. I’m not meaning to start out by criticizing Andy but it made me think of that process that a lot of lawyers go through when they’re trying to figure out how to upgrade their technology or get new technology and you go to an IT consultant and they start recommending things like hey getting a new server.
What I think is kind of interesting about that is that’s probably not the best advice for most lawyers, although it is good advice for some lawyers, but I was sort of thinking about it as the analogy of if you go to a used car dealership, or if you go to a car dealership, they’re going to sell you a car even if a bicycle is what you need, and in the similar way IT consultants are really set up to sell you things that they can make money off of, like a server and like software licenses when they can’t really make a whole lot of money by selling you cloud based practice management software because they don’t really get any kind of a resell or setup out of that.
Aaron Street: Yeah, I guess rather than an analogy to cars I think maybe a more useful way of thinking about this is more like an insurance sales person or even more a financial advisor, wealth manager, where you are engaging them for the purpose of giving you advice and it turns out that their business model, though it involves giving advice, also includes things like selling you product and this isn’t to denigrate law firm IT consultants, or tech consultants in general, it’s just to make sure that people are aware of how their business model works and then to make sure that you’re using them in a way that acknowledges that.
Most IT consultant vendors make their money in at least three different ways, one is for the time or project fee in advising you on the technology that you’ve hired them to advise you on. The second is that most of them have arrangements with some software vendors or hardware vendors and get a sales commission on making referrals to particular pieces of software. Then the third is that they make money on kind of ongoing services, whether that’s hosting your server or your website or on ongoing training and maintenance for things.
The reality is that some products don’t make them money, either because those vendors don’t have commissions set up with IT consultants or because their cloud based software and once you are in, you don’t need the third party person to do any hosting or support because that’s build into the cloud software agreement, and so there are plenty of IT consultants who will recommend what’s best for you and essentially act as your fiduciary and there are some IT consultants who are essentially dedicated independent sales rep for particular pieces of software, and most of them are somewhere in between and most of them do a good job, but the reality is unless you have an explicit conversation with them about how they are incentivized to make recommendations to you, you can potentially get into a position where you’ve engaged a vendor who’s making recommendations that aren’t based on your needs but are instead based on their financial incentives.
Sam Glover: Well and let’s be clear, like most law firms needs can be met in a variety of ways and at a variety of price points and so there’s nothing unethical about saying, “Hey you should use this on premise server based system that’s going to cost a certain amount of money and make that IT consultant a lot of money,” and we’re going to try to steer you away from this cloud based practice management software that doesn’t make us any money, because they’ll both meet your needs just fine.
Aaron Street: Yeah, and so, again, I have no interest in denigrating people who are in IT consultant roles. I think they provide a great service. I think to some degree those reputations can be damaged by a few bad apples but that’s beside the point. I think the lesson here is lawyers and law firms should make a point of having a conversation on the front end when they’re vetting IT consultants to have a frank conversation about how those consultants make money and which products in particular they are representatives for or have commission relationships for and to make sure that you can still get the advice you want or the recommendations you want in light of that. Some of them will still be open to recommending stuff to you that doesn’t make them as much money, especially if you’ve had that frank conversation. Some of them aren’t going to, and you should know that as you’re deciding between them. Just so you can have the information about why you’re getting the recommendations you are, not to say that they will give you bad recommendations necessarily.
Sam Glover: Yeah, I think you need to go in as an informed consumer. In the same way that you would not walk into a car dealership with no idea of what kind of car you want I think, you probably would not walk into the doctors office without having at least some idea of what is wrong with you and you wouldn’t walk into your lawyers office hopefully without understanding a little bit about the legal problem you face. On the flip side, all of those things, we all know you can go in with too much information and too much idea of what you need and then you’re just trying to tell somebody what to do and none of us like that when our clients do that.
Doctors hate it when people walk in with a sheaf of Web MD pages printed out and IT consultants are kind of the same. There’s no point if you already know what you want them to do, you’re not really taking advantage of their skills, but going in as an informed consumer, understanding a little bit about how their business works so that you can ask about things like reseller agreements and incentives so that you can feel better that you’re getting an unbiased opinion. Having some idea about what you want. I don’t think your IT consultant is the first person you should be learning about practice management software from. I think you should have an idea of what it is and what it can do for you before you walk in there. Those sorts of things will help you be a better consumer when it comes time to buy practice management software, or any software for your firm. Hopefully that helps and now we’re going to hear my conversation with Andy.
Andy Hogan: My name is Andy Hogan, and I’m a family law attorney in Minneapolis.
Sam Glover: Hi Andy, thanks for being with us today.
Andy Hogan: Absolutely.
Sam Glover: You and I had a little bit of back and forth and you told me a little bit about your background and you were planning to quit being a lawyer is my understand and you were even taking courses to be a realtor or a real estate agent?
Andy Hogan: Yeah. That’s correct.
Sam Glover: Then you just decided to take over someone else’s firm and dive all in with being a lawyer and double down with it instead?
Andy Hogan: That’s frankly probably the perfect description for it Sam.
Sam Glover: I mean, tell me about that. What was the deal?
Andy Hogan: I think the deal was, I haven’t been at this as long as maybe some of my experiences would suggest if people knew me or are practicing against me. I’ve been a practicing attorney for a little under five years now. I walked out of law school in January of 2012 after interning actually at the ultimate fighting championship out in Las Vegas because I’m a huge MMA enthusiast, so I did that my last semester of law school and I landed in family law and it was the first opportunity that presented itself to me that really fit what I wanted out of a practice style, a fit for my family more than anything.
That started in about March of 2012. I started my own firm in December of 2013, right after my first child was born and I did that for about 10 months and I was at a point where I was completely solo. Everything from writing the briefs and appearing in court to licking the stamp and making sure that the envelope got down to the mailbox.
Sam Glover: And that’s really hard when you’ve got a new kid and you’re trying to actually be a dad too.
Andy Hogan: It really was. I was really fortunate to do it at the time I did because it allowed me some flexibility to spend a lot of time with my daughter right after she was born, like I didn’t work for most of the day on Monday’s and just spent time with my daughter and it was great. But at the time I really went this isn’t where I want to go. Anyone who’s been particularly completely solo, no staff support, anything, knows how much of a grind that is and it can be really really lonely in the legal business and then family law in particular, which is what I practice, so custody and divorce, it’s dealing with peoples emotions all day long and their crappy situations all day long and doing that as a solo wasn’t very fulfilling.
Sam Glover: No I can imagine.
Andy Hogan: So I started to look for, I’m someone who really is wired. I like to build things. I like to partner with people, I like to come up with ideas and say, why can’t we do that? Let’s go to work on that and let’s see what we can do around that and make it successful and actually my legal assistant has made me very aware that about every 18 months I need a project to embark on because I get really restless and she knew me prior to even when I hired her as my legal assistant. So I started looking at real estate and real estate’s been a longterm area of interest of mine.
I had a friend who was a broker, said it’d be really nice to build something with him, maybe there are some niches here and there and everywhere and started to kind of map this out and lo and behold in September 2014 as I was in the midst of taking my courses, I got a call from an attorney named Eric Brockton here in Chaska, which is a western suburb of Minneapolis, and he said, “You know, I don’t know if you’ve heard but I got appointed to a judge position. I take the bench in late October, do you want to buy my firm? 10 days later I bought his firm and I took over and that was that.
Sam Glover: So tell me about that. Like how do you go about taking another practice? It sounds like you bought it first of all, so how do you decide what it’s worth?
Andy Hogan: So I did. I did buy it. I’m going to couch this with because he is on the bench in basically my home jurisdiction, there might be some details I leave out, but he had an idea based on his receivables and some other things what he wanted to do, what he felt was fair, and he was really above board with me. We sat down in the span of two afternoons, maybe an hour and a half a piece, and looked at his receivables, looked at the history of the firm, what it typically did in a year, he was more or less a solo. He had an office manager, who’s my office manager now, but other than that it was more or less just him, and took a look at it and one of the things he said is, “I’m going to back out and take the bench. We don’t need to figure out what my receivables are longterm,” so the things he already billed, he built into what he felt was fair to say, “I’m just going to let you collect them.”
Sam Glover: Which is basically like these bills are just going to come in and you get to keep the checks.
Andy Hogan: Right. Exactly. I think that was a big part of it frankly, but the other thing is I can’t say that here I really had anything scientific about how we valued the firm. He had a number in mind, I felt it was fair based on what he was offering and the numbers we looked at, both historic performance, what the current receivables were, but the invaluable thing for me was you said earlier, you used the term just doubled down on being an attorney, that’s really where I stepped back and said, “Is this something I can commit to and be two feet in on?” My wife said, “You need to give me seven to 10 years. Whatever your next venture is, give me seven to 10 years of your focus on it.” I felt like having a structure around me and having support and stepping into what was a healthy practice was really a chance I had to give myself. I mean you know it as well as I do, you spend three, three and a half years in law school, you don’t just want to turn and walk away from that.
Sam Glover: I’m curious, I know you probably don’t want to give numbers but are we talking about a years annual revenue is roughly what you value it at or do you imply a multiplier or is it less than that? Where did you ultimately land on that?
Andy Hogan: We didn’t do a multiplier. He and I discussed maybe he could, maybe he couldn’t, but the other thing is, like any transaction, you have two sides to it. He had to take the bench in five weeks and he wanted to have a way out and be done. He didn’t want a long drawn out evaluation process or something that kept him tied to it for the next six, nine, 12 months after he took the bench where he’s still in negotiations about how things go. He just wanted it clean and done.
Sam Glover: So what did you settle on? I don’t want to know the number, but did you settle on six months or three months? How did you figure the receivables, obviously the invoiced bills plus what?
Andy Hogan: I mean in total it was about a years income at the time based on the performance of the firm. I won’t see receipts but I’ll say income as a pass through entity so that the revenue you’re reporting as your income on your taxes, so we’re right around that number and then we built a structure that he and I both thought was fair in terms of a timeline to satisfy that.
Sam Glover: Gotcha, and are you done now? You paid it off?
Andy Hogan: I am.
Sam Glover: Cool, and then do you just move into his office and start calling his clients or how do you functionally take over someone else’s firm?
Andy Hogan: Well that was the invaluable piece with Eric at least and taking over here is because he did have a little bit of time he had two or three weeks before he really wanted to be out of the office so he could relax for a week or two before he took the bench. He actually reached out to all his current clients and encouraged them to come in and meet with me and he personally did the handoff with his clients. The vast majority, I can think of maybe only two that he actually returned his phone call that chose to go elsewhere, and I can’t think of anyone who took the time to come in and sit down and meet with me at his suggestion that chose to go elsewhere immediately. You obviously have some attrition with clients just along the way as their case plays out, but there was very little of that, even with in the months after I took over. I basically, this practice, when I took over for him was basically he got up out of his chair, I sat in his chair and took over.
Sam Glover: I mean these are litigation matters basically, right?
Andy Hogan: Mm-hmm (affirmative).
Sam Glover: Not indefinite, so you’re potentially not buying future clients, right? You’re really just buying what exists at the time?
Andy Hogan: Yeah. Maybe we’ll talk about it a little bit later but the other thing is is that being a suburban law firm that’s built in a community, my wife and I have since moved our family to the community. I mean ideally if I do a good enough job, I’m buying a referral source within the community too from these clients who are plugged in and live here and work here, right? But obviously that’s no guarantee. It’s not like a business client who is going to keep coming back to me for ongoing litigation and contract issues. Once somebody resolves their custody dispute with me, unless they walk back in my doors with another issue or talk about me to a friend or family member or colleague, that revenue streams off.
Sam Glover: So you kind of stumbled into that first acquisition but then last year it sounds like you took on another firm, and tell me was that one more deliberate than the first time around or was it an opportunity that just fell into your lap again?
Andy Hogan: A little bit of both. I think the timing of it was much more deliberate but the opportunity itself, we expanded to a second office in Shakopee, which is a neighboring suburb in November of 2016, so we’re on month three or four of that expansion now. That came about because an attorney in Shakopee named Ann Tuttle, who’s a longtime family attorney in the area, she simply, I used her for a lot of mediations. She does a lot of third party work as a neutral in family law matters here in the suburbs. I was with her for a mediation, she’s someone who I always BS with after mediations and we were just talking and I said something about that my practice was busy, I was exploring ideas for how to expand, when to expand, because I was on that edge of I clearly had more work than just I could handle but I really didn’t have enough work to bring on a second staff person, or a second attorney, so there’s that gray area in small practices.
She just mentioned that she might be looking to wind down her litigation practice and just focus on mediation and that was, I would say maybe that was March of 2016, just to grab a ballpark, and it evolved from there. She and I kept talking about it and talking about it and decided how we were going to do things and this was, I would say because I’m sure you’re going to ask me the question, I bought Judge Brockton’s practice. I would describe what I did with Ann’s practice as I absorbed her practice, so I absorbed her litigation operations, I kept her paralegal, she had another attorney who was working with her, she joined our firm, and then I hired Ann’s longtime law clerk who just graduated and passed the bar, I hired her as a second attorney in that office so now we have two attorney’s in Shakopee.
Sam Glover: So there was an expense to it but it wasn’t in the form of payment?
Andy Hogan: Right. Exactly. That’s a perfect way to put it. The expense was taking care of people important to Ann, not paying Ann a sum of money.
Sam Glover: She got some piece of mind out of it, you got clients and some staff.
Andy Hogan: Right. Exactly.
Sam Glover: Again though, you went from thinking I don’t really have enough work to hire another person to I’m going to take on a whole bunch of staff. That’s a big jump too.
Andy Hogan: Yeah, and the thing we jumped over in that is actually in June of 2016 in preparation for this, there was an attorney that I had been talking to with years of experience with some more well known family law attorney’s in Minneapolis that was considering hanging his own shingle and he was kind of on the fence of whether he wanted to really be out on his own, whether maybe he wanted to office share and he and I got to know each other. His names Jim Williamson and so Jim joined our firm here in Chaska June 1, 2016, both because Jim was looking for an opportunity to be out on his own, we had overflow work that I think for a period of a couple of months, every consult that came in the door went on Jim’s calendar instead of mine and I knew this thing with Ann was progressing so it kind of all came to a head at once and a bit of a perfect storm and shockingly it was about 18 months after I took over Judge Brockton’s practice that this all started to happen.
Sam Glover: We need to take about two minutes, three minutes to hear from our sponsors and when we come back I want to talk about the mechanics of integrating firms, so we’ll be right back.
Most solo and small firm lawyers have had at least one truly miserable experience with a web designer or internet marketing company so if the idea of launching a new website for your law firm makes you queasy, our friends at spotlight branding get it. At spotlight branding they pride themselves in excellent communication with their clients, they are responsible, professional, respectful and deliver what they tell you they are going to deliver. Spotlight branding works exclusively with solo and small law firms. Services include law firm website design, email newsletter management, social media marketing and more. All designed to make your law practice more profitable. Visit spotlightbranding.com/lawyerist to see how they can help your firm stand out from the crowd without the headaches.
Your racing against the clock to wrap up three client projects, prepping for a meeting later in the afternoon, all while trying to tackle a mountain of paperwork. Welcome to modern life as a small firm lawyer. The working world has changed. With the growth of the internet there’s never been more opportunities for the self-employed. To meet this need, fresh books is excited to announce the launch of an all new version of their cloud accounting software. It’s been redesigned from the ground up and custom built for exactly the way you work. Get ready for the simplest way to be more productive, organized, and most importantly get paid quickly.
The all new fresh books is not only ridiculously easy to use, it’s also packed full of powerful features. Create and send professional looking invoices in less than 30 seconds, set up online payments with just a couple of clicks and get paid up to four days faster, see when your client has seen your invoice and put an end to the guessing games. Fresh book is offering a 30 day, unrestricted free trial to our listeners. To claim it just go to freshbooks.com/lawyerist and enter lawyerist in the how did you hear about us section.
This podcast is supported by Ruby Receptionists. As a matter of fact Ruby answers our phones at Lawyerist and my firm was a paying Ruby customer before that. Here’s what I love about Ruby. When I’m in the middle of something I hate to be interrupted so when the phone rings it annoys me and that often carries over into the conversation I have after I pick up the phone, which is why I’m better off not answering my own phone. Instead, Ruby answers the phone and if the person on the other end asks for me, a friendly cheerful receptionist from Ruby calls me and asks if I want them to put the call through. It’s a buffer that gives me a minute to let go of my annoyance and be a better human being during the call.
If you want to be a better human being on the phone, give Ruby a try. Go to callruby.com/lawyerist to sign up and Ruby will waive the $95 setup fee. If you aren’t happy with Ruby for any reason, you can get your money back during your first three weeks. I’m pretty sure you’ll stick around, but since there is no risk, you might as well try.
We’re back, and Andy I really get into sort of the nitty gritty details of how business and technology and things work and so I’m curious about how you go about integrating filing systems and phone numbers and all that kind of stuff when you’re trying to bring practices together, so maybe it didn’t apply as much when you took over Eric Brockton’s practice but the second time around you’re integrating two sort of going firms. What’s all involved in that and how complicated does it get and how do you resolve that stuff and decide what you need?
Andy Hogan: Oh man, that’s a million dollar question frankly. Talk about what half my days seems consumed by right now, only a couple months into this latest expansion. My number one rule as a business owner, I don’t know if it’s other peoples number one rule, but mine, is when I don’t know how to do it, and on the technology side I’m 34 so I’m young enough to understand technology but I haven’t immersed myself in technology, I would by no means call myself a technology expert, so when you’re talking about systems and coordination and merging things, my number one rule is find someone I like, find someone I trust, and do whatever they tell me to do frankly.
That’s what I’ve done. I found a really good IT support firm that’s a small firm that works with a lot of small businesses. They’re really, I think they’re flexible, they’re creative, he really listens to how I want the practice longterm and what I need and then he makes suggestions based on that, so he’s not someone who just says, “Well here’s our standard suggestion.” In that process, simple things like a voiceover IP phone system. We have that now connecting our offices.
Sam Glover: So you can have all of the phone numbers from your old firm, from Eric’s firm, from Ann’s firm, all going to one place.
Andy Hogan: Right, because people in the Chaska community, I mean the firm in Chaska that I took over, has a 50 year history in the Chaska community. People know this phone number.
Sam Glover: That’s a phone number that you want to hold on to.
Andy Hogan: Absolutely and the same thing with Ann Tuttle in Shakopee. She practice in Shakopee for 25 years, people know that number. Her former clients know that number. There’s value in that. So simple things like that. Email and technology and installing servers and upgrading firewalls and everything else, that was all stuff we had to do.
Sam Glover: Were any of these firms using practice management software?
Andy Hogan: No and that’s something we’re still exploring. My IT guy, Aaron, he would probably tell you that they were barely even using secure servers in his world, so that was the first big step is do we have servers in both offices that are talking in real time and allowing us to have a shared drive where we’re not emailing things back and forth and downloading things on zip drives and everything else.
Sam Glover: But you actually have physical servers?
Andy Hogan: We do right now.
Sam Glover: Yeah, okay.
Andy Hogan: Then longterm the idea is more practice management, but I’m trying not to … This raises an entire question of what type of firm do I want to be and what type of business do I want to build?
Sam Glover: Yeah, well let’s go there because that’s an interesting conversation to have.
Andy Hogan: Yeah.
Sam Glover: Whether you want to or not you now have a business as well as a practice and you can’t just let the practice run itself.
Andy Hogan: Right, and my goal is to on the business side, run a lean data driven and where beneficial technology forward practice. We’re not a big firm so there’s some technology that may not make sense for us but that is, step one was simply getting these two offices to communicate and talk to each other in a way that’s efficient and doesn’t disrupt work flow. Longterm it’s practice management software, what becomes necessary for us to do our jobs, what can we leverage that would make our jobs easier or frankly more automatic. What processes can we have in place that instead of us sending emails to clients, checklists are generated and go out to clients automatically, or automated is the word I was looking for by the way, on an automated basis.
How can we leverage practice management so that we don’t have to add staff as ideally our volume goes up but it’s the whole idea of working smarter, not harder. Not to use a cliché but that’s really what it is and so that’s the next phase that I expect to really tackle as we find stability in this latest expansion is where can we implement those processes and procedures through practice management software to eliminate person hours on our client files.
Sam Glover: What are you reading or who are you listening to or consulting with to try and help you figure out where to go or is that mostly just your working it out on your own?
Andy Hogan: It’s a little bit of both but right now frankly I don’t do a lot of it because I just know I’m not there yet, so I’m trying not to inundate myself with too much information and get too far ahead of myself. It became readily apparent, for example, it’s easy to go online and sign up for the tutorials for the practice management software that’s out there or to go on lawyerist and read what’s out there or to talk to people in the industry who are up on technology and see what they recommend. It’s easy to do that, but is our firm really ready for it? With our current staff and our current structure it got very clear that too much too soon could present a problem for our staff and our structure.
Sam Glover: Well and ultimately deciding which practice management software to use really only comes after you’ve answered the question what problems do we need to solve?
Andy Hogan: Right.
Sam Glover: And so it might be premature in a couple of different ways. I imagine, you’ve integrated two firms into your, well not anymore solo practice, and getting everybody on the same page and getting bought into the direction that you want to take the firm is more important than selecting software.
Andy Hogan: Absolutely. I mean it’s a really easy example, but a very real example, people need to be comfortable even if they’re not the person I deal with on a daily basis. People need to be comfortable scheduling me an appointment on my calendar without checking with me first. Once we get comfortable with that, we’ll talk about what processes and procedures and systems we can leverage longterm.
Sam Glover: Right. How much of your time do you spend lawyering versus managing and marketing?
Andy Hogan: I’d say right now I’m still probably about 70/30 lawyering versus managing. Maybe that’s high, maybe it’s more 60/40, but I think it’s that way because the volume still demands it and ultimately because of the way our firms set up because we have a blend of attorney’s who are independent contractors versus W2 employees so the way our firm is setup, the firm still currently relies on me to be a significant revenue generator for the firm and if I step back where I was doing more marketing and managing than attorney work, we would see I think a significant impact on the financial end without me continuing to be a revenue generator, and that’s something I’d love to tackle longterm because frankly the best advice I got in this process when I was considering expanding was do you want to be an attorney or do you want to be a business owner?
I’ve long wanted to be a successful business owner and really know the ins and outs of my business and what levers to pull and buttons to push to make it run, to make it succeed. Not that I don’t enjoy practicing law by any means, but that is, if you ask me, I’m much more interested in building successful businesses throughout the course of my life whatever those look like and right now happens to be a law firm working in family law and, like I said, I enjoy it, but at the end of the day, I’d love to not have the revenue generation rely on me so I can do more of that other, but until we see those scales tip, the majority of my work will still be on the client side and the billing side.
Sam Glover: As you mentioned earlier when you’re small, you don’t really get to take advantage of efficiencies of scale. Like one person can’t do the work of two, so when you’re by yourself you’re never going to get to the point where it makes sense to just hire somebody on what you’re already bringing in. You have to hire somebody and then work even harder to make sure that you’re bringing in enough for two people. There’s some, I know Legal Zoom has some data that if I’m recalling it correctly says that law firms actually don’t actually get more efficient until between 10 and 15 people and that there’s sort of a jump in efficiency at two or three people and then they get less efficient until you get to 10 or 15 and then you can start taking advantage of some scale, which is interesting and you’re sitting right in the middle of there where you can decide do you really want to move it forward and have a business or do you want to keep going and just serving clients without a bigger strategy in mind.
So it sounds like you’re having exactly the kinds of conversations that the data would predict you need to be having right now.
Andy Hogan: We are and in one of the challenges that I think any small firm faces when they bring on new attorneys, the attorney I mentioned named Laura Wilkins who we hired and she was longtime law clerk, legal assistant, she had been with Ann Tuttle for six years over in our Shakopee office and she just came out of law school, Laura is invested in family law, she’s invested in the local community. Her husband works on a school district within 10 miles of our Shakopee office. They live in Shakopee. They intend to stay in the area.
Part of that too is building a practice around her takes time. I’ve been there. I’m still there in many respects being just shy of five years in practice, but that first year, two, three years, regardless of the opportunities that frankly fell in my lap in terms of taking over here in Chaska, it still was building a firm and I’m currently in that and I know what she’s going through as well and that takes a good easily 18 months to three years to feel like you have a client base that you can draw from and you might actually have worked with files and clients long enough that they become referral sources for you, so that’s a space that we’re really in with Laura right now is how do we do that? How do we accelerate that growth? How do I, as a business owner and someone who’s ultimately responsible for her, how do I foster that growth for her and also make it worth her while on the backend?
Because I’m not interested in growing an attorney to have them jump ship. I’m really interested in building a firm ultimately for the people that work here, where they get to draw value from working with our firm and for our firm in a way that also works for them on a greater scale. The impact they want to make, the financial success they want to have, the family life that they’re seeking, if they have kids or husbands or wives, so on and so forth, that’s really what I’m looking at so that’s kind of a big dynamic for me longterm is to stay true to that no matter how we move.
Sam Glover: You talk as if you took naturally to management and managing people and fostering employees. I’m curious did that come naturally to you or is it something that you’ve had to study on and work hard at or does it turn out to just be one of those things where you start doing it and you realize hey I’m actually pretty good at this?
Andy Hogan: All of the above. Is that a fair answer?
Sam Glover: Yeah it is.
Andy Hogan: My dad’s a small business owner in Prior Lake, where I grew up here in Minnesota and he was also the mayor for eight years in the early 2000’s and I feel like from the age of four I was taught how to have a good handshake and that relationships are the most important things. As I got older people would tell me I’m just like my father, I’ve taken that more and more as a compliment and less and less as an insult, which I see as a good sign. It’s all of the above. It’s something that I enjoy being in those roles, whether it was athletics growing up or whether it was college experiences when I was working on the college newspaper or hosting radio shows or doing radio broadcasting in college or moving out of college into the legal world.
Like I said, I wanted to be a business owner for a long time, so I think I’ve gravitated toward it. I’ve also taken some opportunities to take leadership and development courses and things like that to understand myself, understand my strengths and weaknesses, also just the inner personal dynamics of relating to people and ultimately it’s a day in, day out process that I’m aware of and frankly I’m interested in and that’s what really helps in trying to take the business where I want to is that’s what I’m really interested in is building something that works for the people involved in it and not just myself.
Sam Glover: By way of closing, the last question I’d like to ask is how would somebody else in a similar situation to where you were, this isn’t working for me I need to go try something else, law is not my thing, how might somebody identify nope you know what I should do is double down and go back and really be a lawyer and try to do it in a bigger way than I was doing it. How would somebody know if they should be thinking about doubling down instead of bailing?
Andy Hogan: Two things come to mind right away. One is anytime that I am struggling, anytime that the proverbial you are struggling, it’s easy to have the conversation with yourself and talk to yourself over and over again, like somehow you are just going to figure it out within the square foot of real estate between your ears, but the two things for me are A, I need to open my mouth and talk to people I trust when I’m going through that and B, I need to actually listen to what they tell me in response. What I heard going through that was that I had people around me in my inner circle, my wife, my parents, good friends, believing that regardless of the direction I went, it wasn’t an issue of ability.
I also had their support in figuring it out for myself and being okay with whatever I figured out, so it really took the edge off of feeling like I had to get it right because frankly that is something that I’ve dealt with for as long as I can remember, and I think a lot of people deal with, is you have to get the next decision right. I wasn’t sure what the right answer was so knowing that I had that support was a big deal and then ultimately an opportunity presented itself when Judge Brockton called me and I had to step back and look and say, why is it that I’m looking to get out of law? Is it the practice of law that I’m looking to leave? Do I not enjoy practicing or is it something about the structure that I have around me and the way I practice?
As soon as I answered that question, it was very very clear the reason I was struggling so much is because I was working in an emotional area of law and family law, I was completely solo, and there was no outlet or support around me on a day to day basis and I felt I really owed it to myself, considering that the opportunity was a good one, if Judge Brockton would have wanted to do something that didn’t work for me and my family I probably would have said no but at the end of the day the opportunity was a solid opportunity and I was able to say look that’s something that, as my wife asked me, can you give it seven to 10 years? Can you be both feet in for seven to 10 years? You don’t have to do it for the rest of your life, but I need you to commit to it for more than just the next two because I don’t want to have this conversation again two years from now. That’s what she told me.
At that point I could step back and say, there would be structure around me, there’s a flow to the practice, there’s clients to actually tend to and be able to support and help and advise, and that’s something I can take advantage of for a minium of seven to 10 years and see what I can make of it and frankly I felt I owed it to myself after three and a half years of law school to not walk away from the practice without a real fight and without an attempt to be two feet in trying to build something. So I think you have to look at all of those dynamics.
Sam Glover: I often think one of the hardest parts about life is recognizing opportunities when they present themselves and then taking advantage of them and it sounds like as much as anything, that’s what it was. You saw an opportunity, you considered it, and reconsidered what you were thinking and jumped on it.
Andy Hogan: I really like saying yes to things Sam. I don’t like saying no to things. I like finding reasons to say yes, I really do but you have to know what the yes brings and if the yes works for you and those people closest to you and I’ve been fortunate enough that now through a few iterations of expansion that the yes’s have made sense for me, what I want to build, and for ultimately my wife and my two daughters.
Sam Glover: Thanks so much for being with us today. That’s a good place to end I think.
Andy Hogan: Absolutely. I really appreciate it Sam.
Sam Glover: Make sure to catch next weeks 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.
The views expressed by the participants of this program are their own and do not represent the views, nor are they endorsed by Legal Talk Network. Nothing said during this podcast is legal advice.
The Lawyerist Podcast is a weekly show about lawyering and law practice hosted by Sam Glover and Aaron Street.
Lee Holcomb talks about her career path, her new book Lawyer Lifestyle, and how, with technology, women lawyers can find a voice and position...
John Strohmeyer talks about his time working at The Four Seasons Hotel, and how he is using his experience working there with his law...
Annie Duke talks about decision making, how poker is similar to the decision-making process in business, and some of the decision-making traps we fall...
Shannon Montgomery talks about the differences between building a business around a brand versus building a brand around your business.
Nic Kusmich talks about how to advertise on Facebook.
Nathana Sharma talks about what blockchain is, what it does, why it is so interesting, and what it has to do with the legal...