Community Table: Troublesome Employees, Offshoring, and Atypical Marketing

Episode Notes

Transcript

Announcer:

The Unbillable hour community table where real lawyers from all around the country with real issues they’re dealing with right now meet together virtually to present their questions to Christopher, T, Anderson lawyer and law firm management consultant. New questions every episode and none of it scripted. The real conversations happen here in our first segment. An attorney is dealing with culture issues that are stemming from the firm, being understaffed.

Listener:

I know I have a culture problem, I don’t quite know how to fix it. We’re staffed currently. There are members of my team who take advantage of the fact that we’re short staffed in their behavior, violate policy, blatant policies of the firm.

Christopher T. Anderson:

How many lawyers?

Listener:

Two.

Christopher T. Anderson:

Yeah, two lawyers plus yourself. So because we’re short staffed, they know we can’t risk losing another person. Is that what you’re saying?

Listener:

Right.

Christopher T. Anderson:

And so they act out knowing that they’re kind of immune from being held accountable in this environment.

Listener:

Right. And I don’t know how to handle that in the interim while we get staffed up.

Christopher T. Anderson:

Yeah. Joey ever been shorthanded to have people feel their oats?

Joey Seeber:

That is a really tough one. I had a similar situation in a different type of business where I had a manager in a business who was really kind of toxic and hard to manage. I guess I’ve learned a lot since then, but it’s still a tough situation. I think you have to guard up your armor. Ultimately, there has to be accountability because it’s going to continue to weigh on you and weigh on the culture of your small firm there and everybody that works there, it’s going to keep you up at night. And all of those things were me. I would try to make alternate plans for what happens when this person is not here and try to have a bit of a safety net. Also, no, you’re going to work more and you’re going to have to fill in the gaps and then have a plan for a conversation. Kind of state what you see the problem as and the effect, but very briefly, and then listen, say, where am I off track here? What am I missing? And then if you seek to understand first, then there’s the opportunity to have a dialogue about it. And ultimately dialogue is, well, these things that I’m seeing, it is damaging to the culture, to the vibe, to what we’re doing, and it’s hard for us all to move forward.

Christopher T. Anderson:

I think that’s tremendous help, Joey. I’m going to put a little bit finer point on it. I think you need to sit, you got to pick who’s the worst culprit. And what you’ve got to understand is that if you don’t do something, you said if you have a culture problem, you don’t have a culture problem, nobody a culture problem. You just might have culture that you don’t want and that’s a problem. But how do you get the culture you do want? Well, by a articulating it and once it’s communicated by holding people accountable to it, including yourself, because if you don’t, then you’re actually just enabling the culture. You don’t want whatever, the breaking of policy, whatever that is. And then to what Joey said, but this is where I wanted to put a finer point on that, and I do this, I do this with myself regularly because managing out of fear is bad for business.

So I sit with myself and sometimes with my partner, but usually with myself and in my mind, Tom just quit. He just quit. Now I’ve got, am I going to hang it up? Is my business over or are we going to go forward? I can’t get him back. He quit. He went work somewhere else. So what am I going to do? And I work the whole thing in real. I make it very real for myself and I also ask myself, alright, how do I feel? How do I feel right now sitting with that fact? Do I feel scared? Do I feel relieved? Do I feel excited? What are my emotions? And then I work the plan. Then I have the conversation. Now I’m not afraid because what we’re afraid of the most beyond anything else is the unknown. It’s in our amygdala. It’s our lizard brain.

We fear the unknown. We won’t leave the fuselage, right? We fear the unknown, so make it known, make it familiar. Understand what you would do because you can’t know that this person won’t quit tomorrow. You don’t know that if they’re acting out, chances are they’ve already felt the water anyway. They’ve got a toe out and then you have the joey conversation. If you’re trying to cement culture, I would just twist the conversation a little bit. I think everything he said is exactly right, but I would just say, Hey, listen, love the way you started. Love working. I have loved working with you here. I think you’ve been a real asset to the team and I think one of the things that you probably came here for and really enjoy about this place is the culture that we’re trying to build. And I’ve noticed over the past couple of weeks, months, whatever that policy one, policy two, really, you’re kind of flagrantly going against that.

That’s what it seems to me. What’s going on with that? Am I misperceiving something? Then like there said, ask questions. Ask questions, and then the ultimate question is, how do you think other people in the firm are going to be affected by this and is that the culture that we want? This will put them on your side. Or they’ll say, well, the truth is I don’t give a shit about your stupid policy about, I don’t know what policy is being violated here, so I can’t speak to it, but one of one that’s violated here from time to time is I don’t care about your stupid policy about having to select my elective holidays by the end of January. I didn’t know which ones I wanted, so I’m doing it in March. It’s a dumb policy and then you have to take a beat and not get defensive and go like, that’s interesting.

That has been the policy, and this is so because we could have this innovative holiday schedule that seems to work really well for everybody, but are you telling me that January is too soon to require it? Tell me more about that. Again, bringing them onto my side. Eventually I’m going to make a decision and I’m going to expect compliance with that decision, but sometimes my policies are stupid, and then at the end, if I agree that the policy is stupid, I then get an agreement and a commitment. I say, Joey, I really appreciate the feedback and we’re going to make a little bit of a change here. Your feedback was valuable, but can you and I agree from now on that if you’ve got a problem with one of our policies, you come to me and now that I’ll listen, but that until then I need you to back me up because we’re building something here and it’s flexible and we’ll change, but it can’t change with everybody running in whatever direction they want. Can I get that commitment from you? We’re on the same team and if you have to fire somebody, sometimes you have to fire somebody, but I know you’re not afraid to do that. You just might be afraid to do that right now.

Listener:

No, not really. Just so up and tired of firing people.

Joey Seeber:

One of the things I really liked what you said about living, being with yourself a minute, I’m glad you said it because I was going to say something similar, I just forgot, and that is I’ve got a business coach. We meet every once in a while, and of course you’re always talking about the same problems as people, right? That’s 80% of the issues you deal with the business or law firm or whatever, and oftentimes he runs through the exercise with me. He says, okay, but Joey, tell me, so you’ve got this person, this problem with this person. What are you going to feel like when it’s resolved? When you write it down, how am I going to feel when it’s resolved? Because most times you’re putting off what you know need to do because it’s painful, but when your viding feeling is pain, you sometimes get stuck.

So you have to visualize your future self. What’s it going to be like when I deal with this issue? Well, oftentimes the biggest feeling is relief. You mentioned that Chris, okay, well, I’m going to feel like I’m going to sleep better. I’m not going to worry as much, much about coworkers, or we’re going to have a better feeling all day long around here, whatever it is. Then if you can visualize that a moment, you go, okay, you know what? I’d rather be there than here, but I got to take the steps to do it than sometimes, at least for me, it gets me off that center.

Christopher T. Anderson:

Your comment that you’re tired of firing people. What’s going on with your hiring and onboarding process that we’re having to fire people who’s doing your screening and interviewing?

Listener:

Now, our firm administrator

Christopher T. Anderson:

Is the person that you’re going to have to let go tomorrow, somebody who hired and onboarded that person. You don’t have to say your name. It’s either you or someone else.

Listener:

Someone else. My former managing attorney.

Christopher T. Anderson:

Got it. So that was just a bad batch caused by a bad leader.

Listener:

Yeah,

Christopher T. Anderson:

There’s no turning it around,

Listener:

No

Christopher T. Anderson:

Bad hires cost a lot. I spend a lot on the hiring and onboarding process, mostly in terms of human resources and capital because I understand how, I think most business leaders, most business owners don’t really understand how ungodly expensive a bad hire is. So the thought of spending two weeks of FTE’s, time for each onboarding, 80 hours for an onboarding is just unfathomable. Like, well, that’s a lot of time. I mean, if I’m adding two people a month, that means that I’ve got one person whose full-time dedicated job it is to be onboarding them. That’s a huge investment, but it’s like a teensy investment compared to the bad hire and especially if that onboarding flushes people out. One of the things I’m proud of and I would set as a goal for you is people either last less than 90 days or they’re here forever. It’s one or the other. And I don’t consider the less than 90 days failures because hiring is a dark art and sometimes you get one in that just doesn’t work out, but you get an onboarding process that flushes that out really fast because that mitigates the expense of the bad hire. Then the bad hire is really only worth a couple months salary as opposed to a year’s worth, which is what a general bad hire usually is, or more so who’s in charge of screening and hiring. Now

Listener:

I make final decisions on hiring, but my firm admin does the initial screening in the first interviews,

Christopher T. Anderson:

Even with lawyers.

Listener:

Even with lawyers,

Christopher T. Anderson:

Your do you have a playbook when you go in when you’re making that final decision? You have a playbook of things you’re looking for that are consistent every time so that you can make predictions.

Listener:

Yes, I am still fine tuning it because I thought my last associate hire was good based on that, and we’ve added to it since then. I’m trying to learn from all of the bad hires.

Christopher T. Anderson:

I’ve got a set of three questions that I’ll be glad to share with you. I’m not going to share ’em on the show. People who are listening, you want to know what they are. It’s [email protected]. Send me an email, we’ll talk, and you don’t have to use my three, but it tells me so much about these who people are, and they’re not tough. They’re easy for people to answer, but it tells me a lot about who they’re, and I ask them all the time because I’ve shifted them from time to time, but it’s like I like the consistency so that I can get feedback that tells me, yeah, you’re on track, what you think is happening and these answers is or isn’t, and that’s that consistency across the board. And the other thing I do is I have everybody interview with a peer level person in the business.

So if you’ve got an interview, if you’re an attorney, you interview with an attorney. If you’re a paralegal, you interview with a paralegal. If you’re admin assistant, you interview with an admin assistant and then I bring them in and I ask that person, and I don’t tell ’em how to interview, it’s just I say, talk to this person for 20 minutes, and then I bring ’em in and I ask ’em two questions. On a scale of one to five, how is this person a match for our business culture and how is this person a fit for the role in skills? So culture fit, skills fit one to five, that’s it. If they come back with, if a peer comes back with fives, it’s almost a solid hire for sure. If a peer comes back with twos or ones or even threes, it’s almost certainly not a hire. And four is my gray area. They know better than I do a lot of the time. Okay, because they’re going to have to work with them right now. Obviously you don’t put them with somebody that is on your shortlist of people who are going to need to go,

Listener:

Or maybe you do do the inverse.

Christopher T. Anderson:

Yeah, two birds and one stone. Thank you for that. Awesome. Is that helpful?

Listener:

That was helpful.

Announcer:

Next, Christopher and an attorney discuss the merits of remote versus onsite staffing.

Listener:

Are you working much with these virtual assistants in your law firm or are you sticking to people in-house? Just kind of curious.

Christopher T. Anderson:

It’s a fair curiosity. I’m going to ask Joey to speak to that too because I think different people do it different ways. Currently in my business, I have to answer it two ways. My business is about 90% virtual, but close sourced. So my team is virtual, but 80% of them live within an hour’s drive, so I’m close source so I can pull them in. We have a very close culture, and that’s how I’m choosing to grow my business right now. I find offshoring, we have tried it. I’m not giving up on it, but right now at the speed which we’re growing, I find I churn offshore a lot worse than I churn people here. I have less control, and so I love having my very remote, very close team. Joey, you’ve been building your business. How are you with virtual?

Joey Seeber:

Well, when I heard the question, I was envisioning the virtual assistant, which is a third party instead of virtual in terms of location of their,

Christopher T. Anderson:

Well, maybe we should clarify what he meant.

Listener:

Well, for example, we have five of our, we do a lot of Spanish speaking clients, so five of our staff, some of are in Columbia, some are in Mexico, we found. But what I’ve done is I’ve taken a level, anybody that’s a paralegal level that should be at that level. I like to have them in-house for client contact, client coming in, et cetera. I’m using the legal assistance as a virtual from that. I’m not really talking about remote per se, but no, I was just talking using some offshore people. We use Legal Soft, which has been a really good company for us. They actually find people, they do a lot of work with betting them before they even bring ’em into us and they’ll do the training for us even to a certain degree.

Christopher T. Anderson:

I think using a company like the one that you mentioned who’s going to vet people, hire them, train them is good and bad. They won’t train ’em my way. They’ll train ’em their way and they’ll probably allow it’s, I get bigger with them, they’ll probably allow my systems to be used for training my team and whatever. And I imagine there will come a time where I will find the roles that I want to offshore and just to drive up the profit margin and also because hiring is still a headache. But what I’ve also found, which is actually been a surprise for me, is by close sourcing and near sourcing, my cost of acquiring new team is going down because I’ve got team that know people refer people that people, I can put them together in a room and have them talk to each other, and it’s snowballing in a way that I don’t think it ever would have if I were relying on offshore. But there’s a lot of good companies out there that do great job with offshoring, and I don’t want to pour warm beer on their cornflakes. I don’t know about this analogy, but it’s just not my way and because of frustration in growing fast and the churn, I hate churn.

Announcer:

Next up is an attorney who is considering borrowing to facilitate growth of his firm.

Listener:

Question, what are your thoughts on if you have a real competitive market and funding your growth through borrowing such as for personal injury, I guess our costs per lead are considerably higher than maybe divorced clients and things like that, but I’m finding I’m kind of hitting a point where to continue any growth requires a higher percentage of spend on the growth that you have come in just to kind of continue to build and to just naturally build that from your 401k can be kind of complicated. So I was just kind of curious what your thoughts were on using borrowing as a basis for your growth. Maybe you’ve done it all without the need for borrowing and that’s great.

Christopher T. Anderson:

I mean, we definitely have been willing to lose money. The source of the money to lose is not as important as whether you’re willing to do it. Obviously money has a cost and the question is, are you willing to lose money to grow? I think the answer has to be that you need to have a very good handle on your operational profitability in a contingent fee practice such as yours, the cost of acquisition should not be the thing you’re borrowing for because you should build that in to your revenue stream. What you’re borrowing for is your cost of carry. I don’t know what your carry time is, but I have was part of my business. I have a contingent fee practice that has a nine and a half month roughly carry, and if you actually add in the marketing and sales time, it’s probably more 11 months.

So 11 months after I spend marketing dollars for 11 months, I’m just spending, I’ve spent marketing dollars, I spend sales dollars, I spend onboarding dollars, I spend investigation dollars, I spend discovery dollars, I spend legal team dollars all with the hope of a return in 11 months time. And if you’re going steady state, that’s fine. You fund the new ones with the old ones and you take some profit off the top, everything’s happy. But if you grow to use Vern hard’s words, you grow broke and the faster you grow, the more money you hear getting sucked out of the business. I think that’s just really a matter of personal tolerance. I think it’s always okay to use other people’s money, but you have to understand what, same thing with Mark, you have to have a hypothesis of what the return is going to be and how you pay that back and measure it month after month, week after week. And if it starts to depart from the hypothesis change, it’s too easy when you’re borrowing to just see that as free money and forget that it all has to be paid back. And so you have to have the mechanism for how you’re going to pay it back baked into the business model and then it’s okay.

Listener:

Alright, great.

Christopher T. Anderson:

All right. And of course that one, I could spend two days with you just modeling that. I mean, that’s a very short answer to a very complex build. Business modeling is essential if you’re going to borrow and use other people’s money or your own.

Announcer:

For our last segment, an attorney wants to know how to evaluate the success of an upcoming alternative marketing plan.

Listener:

My question for you is, as it relates to your experience with attorneys using affinity, like building brand affinity for marketing where it doesn’t directly link to, Hey, I’m marketing this thing, click this link and sign up for my law firm or sign up for a call. What are some things that maybe you’ve seen work and not work working on a brand affinity play?

Christopher T. Anderson:

You don’t have to tell me exactly what you’re going to do, so nobody steals it from you, but I want to make sure I understand what you mean by brand affinity play. Give me an example of something that is like what you’re wanting to do.

Listener:

A bad example would be I sponsor local events so that my local community just affiliates a good feeling with my brand. Got it. And I do do some of that, but I’m doing something, I’m going to try something more in a digital way in the near future, and it’s just one minute videos, bite-sized educational things about legal stuff for kids with the idea that parents, teachers, grandparents will show their kids, Hey, let’s learn about negligence or easement or things that you don’t learn unless you go to first year of law school. That’s the idea. Anyway, okay, so I’ve already produced a handful of episodes, but I’m also thinking like, is this worth my time to keep doing this affinity play?

Christopher T. Anderson:

So let’s get to that second question in just a second because that’s the actual key question for me. That’s not an affinity play. This is an education play. An affinity play would be if you got on somebody else’s podcast as a regular host or if you sponsored as the lead sponsor, that’s an affinity play. This is you. This is a marketing campaign. It’s no different than blogging or vlogging or doing tiktoks or something like that. So I think it’s great. First of all, I think this kind of stuff is gold. You’re putting out a message, you’re giving free content ostensibly to help people, but you’re establishing yourself as an authority. It’s authority marketing too in this topic or in the various topics that I’m sure you select to kind of align with where your expertise is. Good. So the question though that you really should be asking that you did ask, is it worth my time? And for that, I always direct people back to the five commandments of marketing. What’s your hypothesis? You should already know the answer to the question. You just don’t know if it’s true, but so tell me, how do we know if it’s worth it for you? What is going to happen, what it’s worth it for you?

Listener:

It is so hard to figure that out. But the hypothesis is, and it’s a really long play, and I was thinking more in terms of affinity of people will affiliate with my name. Oh, this guy does good, the community for the kids. But I agree with you that when you think of affinity sometimes it’s like you’re affiliating yourself with some other entity or something. So that’s good for me to know. That’s a good takeaway. But the hypothesis is people will share it, which increases my face. And so long term, the hypothesis is as it gets shared, there’s good will that I’m generating in the communities that share it. And over time, that may lead either to me bringing in a lot of cases I have to refer because I’m only licensed in Illinois or bringing in clients that are in Illinois or transacting in Illinois, and I can help them, but it’s going to things like that take time. I know it takes one to two years sometimes for consistent podcasts and other things to actually get any traction, and that’s a big investment. So I don’t know. I guess I would say if a lot of people like it and share it and I see the numbers go up, I mean, I don’t want to just be numbers go up. That’s good thing. I know there’s those guys out there, but if it gets a lot of views in the beginning, I think that’s a good indicator that I may get some clients from it.

Christopher T. Anderson:

Right. Well, because let’s be clear,

Listener:

Getting a client is the number one indicator that it worked. It’s

Christopher T. Anderson:

The only indicator.

It’s the only indicator. Listen, you’re not in this for, unless I’m wrong. You’re not trying to become an influencer. You’re not in this to host ads that provide you with compensation, direct compensation for becoming viral in doing this. That’s not an invalid game. That’s a perfectly good game. Ask some people who make tons of money doing it. That’s not your game. Your game is new clients. So you need to sit down with yourself and do this. How much is it costing you? Give yourself not your billable rate, but if you want to be pulling $150,000 from your firm and rate yourself at 75 bucks an hour, if that’s what you want to be taking home from your firm, then say, okay, well I’m worth 75 bucks an hour. Good. So how many hours am I going to put into this thing? It takes me two hours a week to do. So I am just making numbers up. So it’s going to be a hundred hours, so it’s going to cost me $7,500 in my time. And then whatever else to spend is going to be to get it out there. Let’s say it’s going to be $10,000 spend for the first year. What’s your average case value per year? I need a per year, 3000, 4,000 per year?

Listener:

Probably something like that.

Christopher T. Anderson:

Yeah, let’s call it per client. Let’s call

Listener:

It 4,000 a year.

Christopher T. Anderson:

4,000 a year. Great. So we’re putting 10,000 into this. We want a 10 x return. That’s a hundred thousand dollars for this to be worth your time. So it needs to generate 25 new clients, two a month, not this year, but next year going to, like you said, it takes a year for this thing to get going, but if by the middle of next year it’s not generating two clients a month, then it’s not meeting your hypothesis. Yeah,

Listener:

I like that.

Christopher T. Anderson:

There you go. That’s how you do it. That’s it. But if in the beginning you say it won’t generate 25 a year, it won’t generate two a month. I know it won’t. Then he’s got to either say, you know what? It’s a vanity project. Nothing wrong with that.

Listener:

I think that metric is doable next year if I do this consistently.

Christopher T. Anderson:

But then you commit to measure it, and then if it’s not doing it, you change something. Start, stop, continue. And don’t forget if it’s doing more than the hypothesis, you also change something. One of the things you could change is do less of it. That’s not what I recommend. But the other thing you could change is spend more on it, right? Oh, it’s generating five clients a month. You know what I can do? I can get a producer and I can up the production value, or now I can have secondary marketing where I’m marketing the podcast and put some money behind that to grow it faster. So no matter, whatever the hypothesis says, if it’s worse, learn and do if it’s better, learn and do. Great question. I liked that.

Announcer:

Thank you for listening. This has been the Unbillable Hour Community table on the Legal Talk Network.

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