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Greg Garman

Greg Garman is the CEO of Law Clerk and a partner at Garman Turner Gordon. Mr. Garman is a...

Your Host
Christopher T. Anderson

Christopher T. Anderson has authored numerous articles and speaks on a wide range of topics, including law firm management,...

Episode Notes

In the previous edition of The Un-Billable Hour, Christopher Anderson and Greg Garman discussed the challenges and problems in current small firm business models. How can legal professionals overcome these issues? Christopher and Greg continue their conversation and offer hope for a brighter future for small law firms. With 50-80 percent of legal needs going unmet in the marketplace, there are huge opportunities for lawyers to adapt and serve more clients. Greg highlights tools for building efficiencies into the practice of law and offers guidance for bringing small firm business models into the future.

If you missed it, be sure to check out part one of Christopher and Greg’s conversation from earlier this month!

Greg Garman is the CEO of LAWCLERK and a partner at Garman Turner Gordon.

Special thanks to our sponsors, NexaSolo Practice UniversityScorpion, and Lawclerk.

Transcript

The Un-Billable Hour

Change Waves in Small Law Surf or Drown – Part 2

11/26/2019

 

[Music]

 

Intro: Managing your law practice can be challenging. Marketing, time management, attracting clients, and all the things besides the cases that you need to do that aren’t billable. Welcome to this edition of The Un-Billable Hour, the Law Practice Advisory Podcast. This is where you will get the information you need from expert guests and host Christopher Anderson, here on Legal Talk Network.

 

[Music]

 

Christopher T. Anderson: Welcome to The Un-Billable Hour, the Law Practice Advisory Podcast helping attorneys achieve more success. We are glad you can listen today on the Legal Talk Network.

 

And today’s episode is, about everything, and you know it’s about everything because when we started talking about this in the last episode. So if you haven’t heard that one, I would recommend that you go ahead, listen to that one too, you can listen to that one after this one or before this one, and one of the cool things is that one is like the first episode we talked about kind of the challenges and the problems and the way the business model for small law firms is really in a difficult place.

 

And in this episode, we get to talk about the opportunities. We’re taking a step back and look at the opportunities that we can all seize on as business owners, as law firm business owners that will really put us in great stead as the legal market changes.

 

Of course, I am your host, Christopher Anderson, and I am an attorney with a singular passion for helping other lawyers achieve success with their law firm businesses.

 

In the Un-Billable Hour each month, we explore an area important to help you be a more profitable lawyer through growing your revenues, getting back more of your time and/or getting more professional satisfaction from your business.

 

The Un-Billable Hour is dedicated to bringing you guests each month to help you learn more about how to make your law firm business work for you instead of the other way around.

 

Before we get started, I do want to say a thank you to our sponsors, Nexa, Solo Practice University, Scorpion and LAWCLERK.

 

Nexa, formerly known as Answer1 is a leading virtual receptionist and answering service provider for law firms. Learn more by giving them a call at 1800-267-9371 or online at www.nexa.com.

 

Solo Practice University is a great resource for solos, no matter how long you have been practicing. Make sure you check out solopracticeuniversity.com and learn how to run your practice better.

 

Scorpion crushes the standard for law firm online marketing with proven campaign strategies to get attorneys better cases from the Internet. Partner with Scorpion to get an award-winning website and ROI-positive marketing programs today. Visit scorpionlegal.com/podcast.

 

LAWCLERK, where attorneys go to hire freelance lawyers. Visit lawclerk.legal to learn how to increase your productivity and your profits by working with talented freelance lawyers.

 

Today’s episode of The Un-Billable Hour is Change Waves in Small Law: Surf or Drown? – Part 2. And my guest again is Greg Garman and he’s the CEO of LAWCLERK, and we’re going to drop right back into the conversation with Greg to talk about the future of the business model for small law firms and how that future is bright.

 

Greg Garman: The Old ways of measuring value, particularly through time, are no longer applicable in this world of leverage, and that same form of leverage can be brought to legal. So, let’s think about it. We now have ways of measuring time, of measuring productivity.

 

The best example of this equating to your car mechanic analogy, Chris, is if you look at the world of insurance defense, the insurance companies say your summary judgment motion can’t take more than I’m making up a number here like 5.7 hours based upon data, that’s because they figured out a better proxy for value and they determined, yeah, the amount of time is going to equal this many dollars and that’s sort of what it takes to produce at the end of the day.

 

And so, to me this is the evolution of acknowledging that what we do as lawyers, well, it’s really, really important is — has been turned into much of a commodity. There’s clearly going to be bet the company litigation that Disney and others engage in and Apple and Samsung in which price is no object and the arguments are novel and cutting-edge.

 

But that’s not 99% of legal. 99% of legal what we do has been done before. It’s been done well before. We should learn from the work product that others and we have created, and we as lawyers, we stick with the billable hour among other reasons because we have a bit of an inflated belief that what we do is like custom and bespoke made for our client.

 

(00:05:03)

 

And we forget that the largest fortunes in history, modern history have all been commodities. If you think about it, we’ve got vast fortunes that were created in oil. We’ve got vast fortunes that were created in commodities of all form. If you think about it today, smartphones have small differentiations between them but they’re a commodity product.

 

Some are a little more luxury based than others but it’s all the same product and they are built at scale and we in legal have the ability to do that but it’s going to require us to think about how we deliver our services, find ever more efficient ways to deliver our services, but at the end of the day, selling a commodity over-and-over again into a bigger market is actually much more profitable than it is to sell a custom bespoke document one time.

 

And this is sort of I think the beginning of how do we make the world better. We can expand our markets, lower the cost of the goods that we deliver by employing tools and strategies and technologies that allow us to leverage the knowledge that we have, leverage the work that we’ve done and be able to distribute it in a way that is more than just one on one, but in a way in which modern media, and even to a certain extent modern medicine are able to leverage their knowledge base and their products to become a bigger piece of the economy in a way that fits with the evolution from a labor-based economy to a knowledge-based economy.

 

Christopher T. Anderson: I think it’s interesting that you bring up that commodities are probably more profitable. I mean, it’s axiomatic, you can’t deny that these most successful companies in the world ever from Standard Oil to the railroads to like you said Apple with iPhones and Samsung with some of their products have at the end of the day delivered commoditized products to the world.

 

Thinking about that comment and then thinking about it since the first time you and I talked about it, one of the things that came to my mind was that hand-in-hand with that has been consolidation. There’s not 20 companies — well, you know what, there might be, but there’s really only a handful that I can think of providing smartphones which have been a commoditized product but that still commands a premium, and the reason that they are continued to be profitable is that the consolidation allows the companies to still command a premium. How can that experience be translated into what’s going to happen in law?

 

Greg Garman: Yeah, so let’s talk about the upside and the downside of that, and I really think that we’re at a favorable position on that point. So, doctors are an example, candidly of an industry in which it didn’t work. In the 80s and the early 90s, if you were a general practitioner, doctor friends of mine and their parents they always said if you had an x-ray machine you would have sent your kid to private school.

 

And general practitioners with their own business models, doctors with their own businesses, I think much like lawyers are today, that industry saw immense consolidation in these mega health companies, and now, there are a subset of doctors who have made vast fortunes, more than they ever could have imagined, but they tend to be the people, men and women, who’ve created intellectual property or they’ve been the men and women who created businesses that hired other doctors and they became business owners more than they did the medical providers.

 

The good news for lawyers is that under the current rules that really can’t happen in our industry. The ethical rules and the conflict rules in particular are the very reason why a 2,000 lawyer firm, a Kirkland & Ellis with 2,500 lawyers, that’s an immense collection of lawyers, but 2,500 lawyers in a market of 1.36 million practicing lawyers is nothing.

 

Those rules are going to in some ways stop what happened in medicine to happening in our industry, but we need to learn from it, from the rest of what medicine did right. Medicine built efficiencies into the system. Medicine built a cost structure that’s — I don’t think it does a great job, but it’s more closely aligned with output, with the value given to the patient, then the billable hour for lawyers has been.

 

And so, like, are there people out there who need custom wills and trusts, yeah, of course, there are, but can 99% of the world be based on a well-produced set of documents that need some but limited customization based upon circumstances? The answer is yes.

 

(00:10:01)

 

And if we can turn to a world in which — the real win-win for lawyers is if we can cut the cost of legal services but at the same time leverage what we’re producing, so like, at LAWCLERK, what we talk about all the time is that if it takes a — if it’s going to take a general practitioner 10 hours to learn a subject, but they can go hire a freelance lawyer, pay them, a couple, whatever the amount of money would be, the posting attorneys can actually deliver services faster with less time invested with a better quality product, and at the end of the day it’s a lot better to bill two hours at 500 bucks an hour than it is 10 hours at a $100 an hour.

 

And so getting smarter is the way to go, and look, at the end of the day for our profession the goal is keep the profit margins for lawyers or even expand them, cut the cost of legal services, but by doing that we can grow the market, because again, most legal needs don’t get met, and that’s what other industries do and the tools are being developed now for us to do that.

 

Christopher T. Anderson: Yeah, and let’s talk about that, because I think that — I think we’re kind of getting to the brighter side of this conversation, and I really — I’m happy to get there, because it’s been there the whole time.

 

One of the dark sides of the conversation, one of the I think threats I think of it as a threat to society, to the success of this experiment in our kind of government and in the freedoms that we have, one of the keys to that is a general belief that disputes can be resolved on a leveled playing field where justice can be attained, and I think we’re at a place at this moment as we sit where that belief is in serious jeopardy.

 

I forgot what — I think you threw out a number of how much legal service need is out there being unserved, but how can this what we’re talking about here about changing the business model turn that around?

 

Greg Garman: Yeah, so it kind of an anecdotal story. No matter how sophisticated my client and how big the company I’m representing is, I always tell them upfront, let’s just remember taking this case to trial no matter how much — how good our victory is, you’re never going to walk away with a sense that justice was done, that just doesn’t exist in our system.

 

People spend — businesspeople who were involved in litigation spend, vast amounts of time for all practical purposes playing defense time taken away from productive things that they could do with their business to grow and evolve, it’s incredibly expensive process and the reality is, is that most people have lost faith that justice gets served at the end of the day including a lot of lawyers.

 

Christopher T. Anderson: Yeah.

 

Greg Garman: I don’t have a feeling that — I think the system is inherently fair. I think that, that I’ve certainly never had worries that the rule of law isn’t amongst the most valuable and important things that the United States has, but the cost structure is where I think that people lose confidence in the system, I don’t think they believe that judges are on the take, I think they believe that it’s a world in which the rules have been exploited to allow one side to drive up the cost and to fundamentally alter the cost-benefit analysis of pursuing legal services, because you’re not in your own control.

 

The most common thing — when a client comes in the door they asked the lawyer how much it’s going to cost, the most common thing that said is I don’t know because I don’t know what the other side is going to do.

 

Christopher T. Anderson: Right.

 

Greg Garman: And so I’ve always believed that this — this growing lack of confidence we’ve had in the system is premised upon the broken economics of legal, and not so much that the system itself is broken, and I think that if we fix some of the broken economics, some of these value equals time conversations we’ve been having we can actually restore some of the faith that the people have in legal.

 

Christopher T. Anderson: Yeah, and by restoring the faith and — I think it’s the cost structure you said, it also can bring, because I mean I think one of the reasons that’s so much again — I thought didn’t you say something like half of legal service demand is not met?

 

Greg Garman: Somewhere between half and 80% depending upon kind of the source you read, but it’s a huge number.

 

Christopher T. Anderson: A huge part of that. I don’t think a huge part of that unmet need is because people don’t think justice is available. I think it’s because they think justice is unaffordable.

 

(00:14:58)

 

And they just think that we — that the legal — that’s not for them, they can’t afford that. That structure is too expensive and which is kind of ironic when you turn back around and look at what we just talked about a minute ago with that — with the median income of 49 or less than $50,000. It’s like we’ve got — you want to talk about a recipe that’s ripe for disruption. You got an unmet need on one hand and a bunch of lawyers on the other hand who aren’t even really making ends meet.

 

Something is going to give and that’s what we’re talking about. We are going to take a break here. This is Greg Garman, he’s the CEO of LAWCLERK, and we are talking about basically the business model of law and how it is changing and whether you want to be catching that wave and surfing it to the future or drowning in the change? And when we hear a word from our sponsors and we’ll come back with Greg.

 

[Music]

 

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[Music]

 

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[Music]

 

Christopher T. Anderson: And we are back with Greg Garman. He is the CEO of LAWCLERK and we’re talking about the business model of law, and we’re kind of getting into the crux of really what gets my juices flowing, which is the fact that 50% to 80% of the demand for legal services out there is going unmet and that the current state of the business model is to blame for it, but the bright side is holy moly, we talked about being able to double the amount of demand, the double amount of output that we can make, it’s laying there waiting for lawyers to pick that up.

 

So, Greg, what can change about the business model to really bring those consumers back into the fold?

 

Greg Garman: Chris, before I answer that question I just want to reiterate how positive I am on legal, because as we talked about earlier, a million-and-a-half of us in this profession under-serving the market by a factor of half, produce the same output as the economy of 00:17:59 like this is an incredibly good place to be at the end of the day, we just have to get out of the 70s and 80s from our business model.

 

And so to sort of get where you are going and the question you ask me, I really think that we need to — and I don’t mean this — everybody says we need to embrace technology, but there is a couple of things we need to do. There are technologies that make us more efficient and those are important. Those are the things like how to get your bills out faster, those are the things like how to manage the documents in the cloud, those are really important things.

 

But there are two things that are critical. It is how do we fundamentally look at our business models, what technologies can help us fundamentally look at our business models and what categories of costs, not nuanced costs, I can lower this cost by 2% or 3%. What categories of costs can we do away with, and the great news is that it’s only been in the last four or five or six years that companies have been focused on this sort of thing.

 

I asked lawyers this all the time, when was the last time you started with a blank Word document on your screen, you created something for a client, and the answer is like nobody — nobody ever remembers even doing it one time.

 

Christopher T. Anderson: Yeah.

 

Greg Garman: We work from a knowledge-base, but we work from our own knowledge-base in ways that are incredibly inefficient. It’s the — if you’re in a firm it’s like the email that goes around everybody every day, hey, does somebody have a forum for X? You kind of scratch your head and you go back into your own cases and figure out what you’ve done before.

 

We have not embraced technology for a collective knowledge-base the way that we could have. I think that AI is beginning to do that, I think that contract automation is beginning to do that, and I think that the tools are there for lawyers to create niches for themselves, rely upon the intellectual capital that they’ve accumulated over time.

 

(00:20:01)

 

But the business model — the business model that’s thriving in this world is specialization and its specialization I think because lawyers can produce a better product faster with a better profit margin because they know what they’re doing and general practitioners, they are a critical part of the profession that we have, but it’s becoming increasingly difficult to be able to go out and learn on your clients’ dime what it needs to be to produce a particular document for them.

 

And so technologies in which we can deliver services and the documents that we produce faster with the use of the commodity, in forms that we’ve created with customization I really think that’s probably the most important thing that we can do and then a fundamental reevaluation of the cost structure I think is critical for this discussion too.

 

Christopher T. Anderson: Yeah, and I think what you’re talking about makes me think of Seth Godin and I can’t remember what book, and obviously, he’s talking about business in general, not about law specifically at all, but even he says that in most businesses 85%, I think is the number he uses is this commodity work that we must drum out of the cost structure in every way we can so that we have the opportunity to deliver that 15% of what we do, which is art, which is really that art, and I think what you’re talking about is even take that a step further which is that everybody should find out what their art is and when a given problem or solution is outside your area of art is bring the art in.

 

Greg Garman: Yeah, I didn’t come on the show to plug LAWCLERK, Chris, but that that is exactly what we’re attempting to teach people how to do, which is, if you’re a general practitioner, having an associate that’s also a general practitioner doesn’t give you the ability to find kind of the right cost structure to deliver all legal services.

 

And so, the solos and smalls who most successfully build entire business models upon the LAWCLERK marketplace, what they do is they find five or six lawyers that they work with on a regular basis. They have a young lawyer to do their memos, they have a mid-level litigator to do the discovery.

 

They have somebody that they outsource the real estate work to because specialization leads to producing better product faster and then the whole key is you can’t pay to have these people work for you full-time and so you share them amongst the rest of the marketplace, and you pay them only when you need them.

 

And the most exciting thing we ever hear is when lawyers come up to us and they say, you made me a better lawyer because I produce a better work product, I get it out faster and at the end of the day either I was able to make more money myself or lower the cost of services to my clients. And that’s really what kind of drives us and that’s why we’re so on this bandwagon of trying to help lawyers improve their business models is because we’ve seen it firsthand how it’s like a win-win-win for the freelance lawyers for the attorneys who post the projects of the clients and for the clients.

 

I was shooting a testimonial yesterday. I went down to Phoenix to visit with one of our users and on the way out, he introduced me to one of his clients and his client said to me, he said, oh, this is the CEO of LAWCLERK and the client said, oh, I just love what you are doing, if you ever need me to be a sponsor or do a testimonial, I would encourage all the attorneys who work for medias but not on the other side.

 

He commented that work gets done faster, which is solos and smalls are always struggling with that, it gets done better, it gets done more economically, but at the end of the day, none of that matters unless we can find a way for attorneys to make as much as they do today or to make more, and that really is where we’re headed.

 

Christopher T. Anderson: Yeah, so I think, I mean, you’ve put your finger on it like technology is going to be or is being a huge transformer and the ability to get the commodity work done efficiently and to bring like you said, to bring that precedent work to bear without the cost of thinking about where it is and finding in all those costs that really could be eliminated by great knowledge management, by good AI, by good automation, that’s one.

 

Two, the resort, kind of like a general contractor but it’s sort of the real — honestly are physicians, you go to a general practitioner, my elbow hurts, general practitioner looks, it goes like, yeah, we need to see an orthopedic with about this.

 

(00:24:53)

 

Except with law we’re keeping it all in the fail like instead of sending someone away to another lawyer, we’re actually being able to leverage resources like LAWCLERK but it doesn’t have to be LAWCLERK to find those kind of people and bring them in through the auspices of the law firm.

 

So, those are two of the things but what about you mentioned before that you love what Bar Associations do, what’s their role in helping this transformation to take place?

 

Greg Garman: Yeah, so let’s not forget that Bar Association’s primary purpose is to make sure that clients get what they expect and they aren’t mistreated or ripped off or whatever the case may be by unscrupulous lawyers.

 

And so, the greatest thing about this profession in my opinion is that we’ve really left all the fiduciary obligations intact. Our primary goal always has to be in the clients’ best interest, that doesn’t exist with stockbrokers, doesn’t exist with a lot of things.

 

So I think that Bar Associations have really done an admirable job of making sure that we keep professionalism in the profession, but unintended consequences are everything in life and the unintended consequences are they’ve made it harder or they’ve sort of given us the rope to hang ourselves in our precedent-based world for failing to evolve our business model.

 

Very worst outcome that could come to be is if professionals, the lawyers, the licensed lawyers get replaced by direct-to-consumer technology, that’s the worst outcome and we’re going to have to pick up the pace so that those technologies don’t beat us to the punch.

 

What do you do if you have a company that’s selling directly to consumers and they’re based in India? Where does the New York Bar, where does the Texas Bar, how do they stop that. And so Bar Associations and I think they’re doing it. I think if you just look over the last three months, you’ve seen California kind of aggressively look at alternatives in the committee’s they’ve put together.

 

You have Utah last week talking about creating sandboxes to allow new technology companies to come in and ethically provide services. I think they’re there, I think they move just as slowly as we as lawyers do. But I think our interests are aligned at the end of the day, but I do think that Bar Associations are going to have to be a little less focused on kind of the anti-competitive things that they do like enforcing pro hac applications and making sure that unlicensed lawyers don’t cross State boundaries too often and be a little more focused on giving us the ethical flexibility to fight off what I think is a much worse outcome, which is unregulated technology that doesn’t have a fiduciary interest in mind at the end of the day.

 

Christopher T. Anderson: Yeah, and I think that’s a really significant role for the Bar Associations. We’re going to take a break here. We’re talking with Greg Garman, the CEO of LAWCLERK about some of the solutions to help evolve the practice of law particularly amongst small law firms to better serve the un-served demand that’s out there.

 

We’ve talked about Bar Associations, we talked about technology. When we come back, we’re going to talk a little bit about law schools and I’m going to ask Greg to kind of just say, what’s the future business model look like, to talk about that? But first a word from our sponsors and then we’ll talk with Greg about the future.

 

[Music]

 

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[Music]

 

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Christopher T. Anderson: And we’re back with Greg Garman, the CEO of LAWCLERK. We were going to be talking now about the role — we talked about Bar Associations, we talked about the role of technology, we talked about how lawyers need to change the way they think about delivering service.

 

I want to talk just a little bit about I think the law schools have a role to play and I want to hear from Greg about that and then really do a little future casting. What does this all look like 5-10 years from now, let’s start with law schools, Greg. What do you believe the role of law schools is in helping the legal community and helping graduates and people have been in the marketplace for a while transition to this way of doing business that serves more people more profitably for the clients and more profitably for the law firms?

 

(00:30:12)

 

Greg Garman: Yes, so I have friends who are the Deans of law schools and they all quietly whisper the same thing under their breath, which is, there are about 22 million schools and I think that first and foremost law needs to continue to get the best and the brightest and we’ve really done that for generation after generation, but there are schools on the bubble that need to close. I think that it’s at least a dozen, maybe a few more schools need to close and we need to make sure that schools sort of aren’t artificially sustained simply because people don’t want to see the academic institution in their backyard closed.

 

I really think that’s the most important thing is to let market dynamics take a play there. But then again, what I really think from a curriculum perspective is that law schools and they really are starting to do this but it needs to happen a little bit faster. Professors at law schools, we talked about this, they tend to come from a big firm background, they tend to come from an academic background, they really need to expand into sort of meaningfully preparing people to run a business because you can’t serve your clients unless you’re serving your own business, that’s your mission and motto, Chris.

 

Christopher T. Anderson: Yeah.

 

Greg Garman: And fundamentally, I think that us either an apprentice program instead of sort of those last classes you take in your third year that are interesting electives but don’t sort of propel us towards sustainable businesses at the end of the day or really putting in, finding a replacement for the informal system it used to exist because it used to be that 90-plus percent of the lawyers who graduated went to work for another lawyer and they learn those skills on the job and that well has dried up for a meaningful piece of our brethren and we have to find a replacement. And either law schools have to build it into their curriculum or I think they’ve been to find a way to allow lawyers to go spend a semester or even a year working for someone in the practice to learn those skills as part of their education.

 

Christopher T. Anderson: Yeah, no doubt, I mean, because yeah, it’s been part of the aspect that’s going on too. They end up with a blind leading the blind. If they are not hanging out their own shingle they’re going to work with a one or two-person shop and where that education has been lacking and it’s just that the lack of education has passed on. So, I think those are great suggestions.

 

So, let’s go just turn we’ve got law schools, we’ve got the Bar Associations helping, we’ve talked about technology and AI knowledge management. So, let’s put it all together, what’s the future business model? What is this all trending toward? What do you see?

 

Greg Garman: This is the most exciting part, because I really think the future business model is going to be everybody is going to have their own business model. This isn’t a profession in which there is a one-size-fits-all answer, there are cases that are best driven on a contingency basis. There will always be cases that will be best driven on an hourly fee basis, we’re seeing lawyers experiment with portfolio pricing particularly in kind of the intellectual property arenas of the world.

 

I think that one of the areas of law we should look to leadership from is kind of what these firms who are engaged in employment law have done, they’ve put together very large firms of very specialized lawyers who leverage their own knowledge-base to do employers side work.

 

I really think that if I’m not critical, but if there were one place and I would ask that the rules be expanded a little bit, is to permit lawyers to experiment with more unique types of business models, and I think that we’re going to see — I think that we should see businesses that if you’re representing startup companies, I think it would be great if they could take an interest in the startup in exchange for the legal services they provide in and aligning economic interests.

 

I think the beauty of where we should be going is that we can’t even think of all the ways that business models could iterate for the benefit of clients, and I really do think that in ten years from now if we’ve succeeded at this, there won’t be a business model that took over and shifted away from the billable hour. I hope that success is measured by this broad number of business models that fill in and fill different segments of legal and that’s what we’re trying to do with our company and that’s what we’re trying to provide are some tools to allow lawyers to go do it exactly as they see fit whether it be on a fixed fee basis, a flat fee, a success fees, I think ought to become a more important piece of what this business is doing.

 

(00:35:10)

 

And I do think that legal’s best days are ahead; but, the warning to lawyers is that we’ve got to make sure that if we do follow the path of what happened to doctors in the 80s and 90s that you’re thinking entrepreneurial and that you’re thinking of how you’re going to build a business, not just a practice, but build a business in this economic world such that you don’t just become an employee of kind of a legal roll-up system of a conglomerate, because you want to be on the right side of that equation.

 

Christopher T. Anderson: Yeah, I mean, it sounds like what you’re saying is that I love the theme, it’s like there is no singular business model, but it does sound like this sort of a singular solution if you can define it that way is that you’re suggesting that lawyers be empowered law firm owners — solo small firm owners be empowered to be entrepreneurs and to be able to experiment without the fear of failure other than the fear that all business owners have a failure but without the Bar coming in or they’re having some sort of existential threat because they tried something new.

 

Greg Garman: Yeah, the rules are really, really important and 90% of the ethical rules are designed to protect the client and I think that they are of critical importance. And I’m in no way suggesting that we water them down, but I do think that we need to build in flexibility for experimentation because at the end of the day it might not be obvious to us right now how we do improve the access to justice problem and we do expand the market to people who can’t afford or scared of hiring a lawyer and we’re going to have to let market conditions play out a little. We’re going to have to let free markets have a little more daylight in the table and in the conversation, but I think that if we manage that and we do it as a profession with our fiduciary obligations, not only are we going to sort of fix the problems that we have. I think our best days lie ahead of us for entrepreneurial spirited lawyers. I think it’s a great day to be a lawyer, but the world is going to be unrecognizable in five years.

 

Christopher T. Anderson: Not to put you on the spot, but you did mention, we’ve mentioned at every break, you’re the CEO of LAWCLERK, but you did mention in the beginning that you actually are also running your own law firm.

 

Greg Garman: I am.

 

Christopher T. Anderson: What are you putting your mouth where your — or your money where your mouth is in how you run your own business?

 

Greg Garman: I do. So, I’m not going to pretend that the bulk of our work doesn’t come from kind of traditional hourly paying clients. It’s still more than 50% but I had a case just this week that we resolved for a substantial success fee, where we tried to align our economics without our client. We’ve concluded — we’re a very busy law firm that we’ve concluded that there is a maximum size of headcount that we’re going to be at this firm because being bigger doesn’t make us better.

 

It doesn’t make us deliver better to legal services and it doesn’t make us more profitable. But that rule and that idea is exactly where LAWCLERK came to be and so we’re the heaviest — no, we’re not the heaviest but we’re one of the heaviest users of our own product at LAWCLERK is that we outsource to freelance lawyers an immense amount of work because it’s not only good business for the firm, it’s actually a good outcome for the clients, and so, we experiment. We’ve experimented with kind of fixed fee and flat fee pricing of litigation on both a successful basis and an unsuccessful basis in certain instances and the reality is we’re figuring out the tricks. The tricks are the scope of services, what happens in phase one, what happens in phase two, and I think that’s what lawyers are going to have to do is kind of do the same thing we did, which is, with our skill-sets with the practice areas that we have what’s best for us and our clients and then what technologies can we lean upon, and we wouldn’t build one.

 

Christopher T. Anderson: Yeah.

 

Greg Garman: We thought the market needed LAWCLERK to function the business model that we created, but the reality is, is that it works for us, it makes us more profitable, it makes us deliver services faster and we see that it works for literally thousands and thousands, and thousands of lawyers who are building entire business models on that outsourcing business and virtual associate business, that really is where I think much of the future and the cost side is going to be is hiring virtual associates either from us or from similar services like us.

 

(00:40:06)

 

Christopher T. Anderson: Yeah, indeed. So I think we’ve done a good job here, Greg, of — we set it up with darkness and gloom, but not really, we just described — what we did is we described a problem, and like you said, it’s just amazing that law has managed to resist disruption for as long as it has, and then I think we’ve set up really the things that can change and should change and what it’s going to look like.

 

And so I think we said — we end this really with a lot of good news for our profession about how the opportunity is huge. Do you have any last words that you would like to say about what do you see is the good news or the opportunity for our profession that the listeners of this show can go like, yeah, that’s what I want to grab on to, that’s how I’m going to surf this wave and not get buried by it?

 

Greg Garman: Yeah, so I think we are in the most ideal situation that any profession can be in, and that I am very proud to be a lawyer. The work that lawyers do is immensely important and valuable. On a daily basis we help our clients, if you’re a family lawyer, we help families. If you’re a corporation, we help with restructurings or litigation, whatever the case may be, the work that lawyers do is really, really good.

 

The great news is that we’re this incredibly big piece of the economy but we have the potential to double it in size, and I can’t think of another industry or another profession that has such a potential for future growth, they really does important work the way that we do. So I’m proud to be a lawyer, I think it’s an exciting time to be a lawyer. It’s always scary when things are changing. I’m an optimist but it’s been my experience that when you look at other places of the economy that have been forced to change at the end of the day they turn out to be better than the place that they came from and I think that’s what we’re faced with.

 

Christopher T. Anderson: Fantastic. Thank you, Greg. I think that’s a great place to wrap this up. Our guest today and for the previous episode has been Greg Garman. He’s the CEO of LAWCLERK, and you can find out more about him at his website or on Twitter, and Greg will be reading to you the manner in which you can get that from him and ask more questions about the future of law or about LAWCLERK or whatever you want to ask him.

 

Greg Garman: It’s easy to reach us as a company at lawclerk.legal, but I love to hear from people. My email address is [email protected], and then you can reach me on Twitter @greg_garman.

 

Christopher T. Anderson: And of course, this is Christopher Anderson and I look forward to seeing you next month with another great guest as we learn more about topics that help us build the law firm business that works for you.

 

And remember, you can subscribe to all the editions of this podcast at legaltalknetwork.com or on iTunes. Thanks for joining us and we will see you again soon.

 

[Music]

 

Outro: 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, its officers, directors, employees, agents, representatives, shareholders and subsidiaries. None of the content should be considered legal advice. As always, consult a lawyer.

 

[Music]

 

Thanks for listening to The Un-Billable Hour, the Law Practice Advisory Podcast. Join us again for the next edition, right here with Legal Talk Network.

 

[Music]

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Episode Details
Published: November 26, 2019
Podcast: Un-Billable Hour
Category: Practice Management
Podcast
Un-Billable Hour
Un-Billable Hour

Best practices regarding your marketing, time management, and all the things outside of your client responsibilities.

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