James Hansen: [00:00:00] everything that you do as the leader, you have to really talk about the why. Because if you miss the why, we don't want order takers We want people who can figure the solution out for themselves and by teaching the why they really start to understand slowly but surely why you're making the decisions that you make.
MPS: Hey, law firm owner. Welcome to the Your Practice Master Podcast. We're your hosts. I'm MPS
Introduction and Welcome
Richard James: And I'm Richard James.
Revisiting Key Topics with James
Richard James: And Michael, house, you know, fortunate are we, that today, we get to have a second conversation with somebody that just dropped so many value bombs the first time we talked to him. James is with us again today. James, welcome to show or welcome back to the show. We had such a great conversation.
We so much interaction and comments and feedback from people who saw that first interview that we thought we'd have you back and unpack some of the ideas we talked about back then a little deeper. Sound good?
James Hansen: I'm happy to be here. Happy to help. Just so everybody knows, this is October of 2024. So, I dressed up as Mr. Clean today.
Richard James: [00:01:00] Ha ha ha ha ha.
Yeah, yeah.
MPS: He's preparing for Halloween and I appreciate that. We gotta get ready, ready to go. We're the countdown's on. We're down to, uh, less than two weeks away, so, James. Like Rich said, we had such a fun conversation last time and everyone else loved it too. we talked a little bit about non attorney ownership in Arizona and then client experience. and then we were talking a little bit pre show today. And, so the value bombs are not going to stop. I know that for a fact, because we just got a little bit more insight on things.
Innovative Review Strategy
MPS: one of the things you threw out pre show was, this review strategy you started implementing with the team and there's even nuggets within that, that you mentioned that I think are powerful in themselves.
So talk to us a little bit about how that came to be.
James Hansen: So, I think, everybody struggles with getting reviews consistently. And as we try to add more practice areas to the firm, that was a big struggle of ours of getting legitimate reviews. You have marketing companies soliciting you, Oh, I can get you so many reviews. And I just a long time ago, [00:02:00] I, opted out for that strategy.
I just don't think that, it's not worth it to me to put that on the line. I've been strategizing a lot with team. One thing we did that really worked pretty good to get consistent reviews every day, a few every day, was, we get pay consultations for family law. So, if the potential client comes in and they don't retain at time of consult, what we do is we offer to refund their consultation fee for the review. So, essentially, we're paying for the review in that way, but it's, they leave a genuine review. And so, the front desk, the receptions up front, they're all on top of that and they get paid a little bit for doing it.
So, they're incentivized to do it. So, that's what we started doing but what I realized is, the more locations that you need to feed reviews for, especially, as I was saying with new practice areas, it's challenging. So, I had a thought, I'm sure it was someone else's the idea that I stole. I don't know, I'm not very original.
Of having a challenge, a competition, and creating milestones. So, like, milestone is if you get 10 reviews, you get 20 reviews, so on and so forth.
Quarterly Events and Team Building
James Hansen: And so, we [00:03:00] do quarterly events where we take the team off site, and we feed them lunch, and we have a awards presentation, and then a motivational keynote at the end.
And then we go have fun, whether it's golf or whether it's go karts or something like that. So, We rolled out this review challenge, which was for the month of August and September. And within that period of time, we got 462 verified Google reviews to various locations. So, we, we have, I don't know, 16 or 17 different Google business profile locations.
And so, we said, there's five that count for this review challenge, if you get reviews and the other ones, you get the standard compensation bonus for that. But these ones, if you hit these milestones, so milestone one was like 10 like the house highest milestone was 80 reviews, and we don't count filter reviews.
So, it's reviews that stick, and then we gave it a 30 day buffer. So, the review challenge was from August and September, but the payout isn't whatever standing by November 1st, that's when you get the payout. So, we try to create a little bit of an insurance [00:04:00] policy in there to help us with that. And the top, if you got the 80 reviews, it was $5,000 that you got paid.
And I think, we had four people that are a little over 80. So, my recommendation was, Hey, have a couple of insurance reviews in there in case they get filtered, you don't want to be 79, you don't want to just miss it by one review. So, that was phenomenal. Since we started doing that, our injury Google Business Profiles, we're getting 5 to 6 new consults and you a hundred percent of those.
to new clients a month, which before, we weren't getting anything but for internal referrals. And so, it was a phenomenal thing, It will cost us some money, but so far it's been good.
Richard James: There is so much, Oh my gosh, we could do an entire masterclass on just that, like, two minute statement that you just gave us. So, Wow. If you're listening to this, if you're that law firm owner, that is, 2 A.M. Facebook, just found us and it's Saturday night, and you're wondering, what did I get myself into?
Why am I doing this? Why am I working 80 hours a week and banging my head against the wall? There's got to be a [00:05:00] better way. Life's got to be better than this. You're hearing some value bombs right now. And, by the way, I want to speak to you if you are that person, and you're listening to James, you're thinking, Oh, but yeah, he can do this cause he's so far along, and he's doing so much business, and I'm having a hard time relating to him.
These value propositions are, very in the thinking. And so, James, let me come back to you real quick. How many team members do you have right now?
James Hansen: We had just over 60 team members.
Richard James: perfect. So 60 team members, and of those 60 team members, do a quarterly event. So, that in and of itself, like, so the idea of doing a quarterly event for your team members, where did that inspiration come from?
Did you learn that in another industry you're in, when you had your agency? Did you read about it? How were you inspired to do that? And how does that work out for you? What's the biggest benefit there?
James Hansen: I don't know if it came from one thing. I know, back in my early career days, professional days, I sold insurance. So, we would have those type of events, and I was one that I wanted to get those. I wanted to prove to everyone else that I was an A [00:06:00] player. And We started getting some feedback from the team of, like, all you guys care about is the money.
All you guys care about is numbers. And so, we wanted to create that culture of rewarding people. And so, we have various awards that we give out. Like, we have, like, obviously, the highest bill or the highest collector. So, highest collection rate. And then we have the client experience award.
Every quarter you get a client experience award. And that's based off of the client experience surveys that every active client gets Google reviews and video testimonials. So, those all go into the equation and someone that. And then we have a core value, we've got one every quarter.
We take one of our core values, and one of the team members get that core value award. And then, for every one of our offices, we have an impact player award, and that impact player award, everyone in that office votes. For one of their team members to get that impact player award, and they have to say why, and then that comes to management.
We see all the people who get voted on, and we see why their team thinks that they were an impact player? And then from there, we have an impact player award. So, it's been really good because we get them off site. So, we go off site, we have [00:07:00] launched, we get talk, and we just to build relationships with other people.
Which I think, in the grind of, especially family law, we don't take time to, actually especially attorneys to open the door and go have a conversation with someone, how you doing? And so, it really provides, it really, it really cultivates the relationship that you really need to take your mind to something other than work so that you can not go crazy.
Richard James: So, again, for anybody who's thinking, Oh, well, I don't have 60 team members, so it won't work for me. I too learned about this in the insurance business in 1988. Yes, I'm dating myself. So, 1988 learned about this in the insurance business, two things, one quarterly events.
And so, when I bought my first funeral home in 1995. I only had 8 employees, most of them were part time, average median age was, like, 72 years old. The other thing that I learned in the funeral business was or pardon me, the insurance business was that, they loved giving T-shirts or awards and I didn't have a lot of money.
You know, When I was first starting out at 25 old. [00:08:00] But I could T-shirts. So, I found a local company. This is '95 trying to figure out somebody had a screen T-shirts for me, it wasn't like I can go to the internet and order them. So, I found T-shirts, had like rookie of year made up or most improved player made up.
And these are guys that get up at 2 o'clock in the morning, help me pick a dead body up off the floor. Right. And so, this, I'm giving out T-shirts to 70 year old men, and I'm thinking, I don't know if they're going to like it. And these guys would wear them to the grocery store. So They would wear them cutting their lawn. They love these T-shirts and we only 6 or 7 or 8 people and it worked. And so, plus one on what you just said, giving your team the ability get together, celebrate those people that have done a good job in a small way, not a big way, it doesn't have to be about money, and letting them be humans together is, you know, what a blessing you're doing for your team. So, congratulations to you for taking that inspiration and running with it.
James Hansen: Yeah. Two other things on that, just that might be helpful for some other law firm owners is, we haven't done this all the time, but we really try to do a [00:09:00] video, a very emotionally impactful video from a client, that talks about how somebody on the team changed their life?
Internally, Like I think, we go get video testimonials for the marketing, right? Which is great. Let's do that. But talking about the impact that what you do has on society is a game changer, because it is not all about the grind of these cases. Cause Listen, I'm not an attorney, but I've been a practitioner in the weeds, and when you do that, you lose sight of the impact that you have.
And so, to the extent that we as owners and leaders within the firm can help them see the impact they have, is by far one of the most important things that we've been able do. So, every single team meeting that we have, we talk about wins, and we talk about core values, not just our core values externally, but our core values internally.
And then other nugget, thought I had as you were speaking is, we use these quarterly events as a recruiting tool. So, the people in our pipeline, we invite them to come because they come and they see that we are different. [00:10:00] They see that. how much we love on our team, but also how we hold our team accountable.
And A players want to be held accountable. A players don't want to work with B or C players. And so, to the extent that you can demonstrate that, you don't have to pay them what they're making before, because they don't like where they're at. So, those are two other things that we have found be really beneficial as it relates to these, quarterly events.
Richard James: Dave Ramsey put it like this, thoroughbreds don't like hanging around with donkeys. And I've learned that and remember that my whole career. MPS, the, we experienced this too right, in our world. We'll get an email from somebody that says, Oh, that script is bunch of crap, that's not a good idea.
I can't see it working in my practice area, my town. in the team could get really down and out about bang that you get every now and then from a negative response. But then, you get that email from that company that says, man, we just celebrated our We're up 22% this year. The team's on fire. really want to hear from you. Can you make a video for [00:11:00] us? And we do it, and we share that with the team, and it just raises everybody's spirits. You agree,
MPS: I do goes back to the thoroughbreds and the donkeys. There will be victors and there will be victims. You get to choose. so that said, on that note, James, one of the other things too, because you literally took the recruiting topic right out of my mind, which was great, because I was going to ask you if that helps in the recruiting of staff members.
The Importance of Accountability and Numbers
MPS: It does. We were also talking about just the importance of attorney's favorite topic, numbers. so we were talking pre show about numbers. So talk me through that a little bit. How has you, and the management team reviewing numbers impacted just the trajectory and growth of the firm?
James Hansen: Yeah. I think, as getting back to accountability, me and my business partner are pretty nice people, and I say, we're recovering people pleasers, because, like, we're, you're never healed, right? Like, you're always going to be a people pleaser. And as much as I have a you know, RBF face, I like [00:12:00] genuinely care about people.
But what I've learned is that, your team needs someone to push them, because they're not going to push themselves. And if they're not being pushed and they're not progressing in their life, they're not going to be happy. so, they need someone who loves them enough have difficult conversations with them. so, that is about their performance. And so, we've created this culture of everybody knows what success looks like, and everybody knows there's this cadence of meetings that There's this cadence of reports that come out, and if you're not there, there's a conversation is going to happen. And it's not like top down conversation, it's, Hey, what's going on? Like, How can we help you? Is like, Are you not getting the support you need? And so, for numbers, as it relates to like our current team, that's one thing that we have found that, listen, some of the people on our team don't like it, right?
That's not an A player. Like, If you don't like being held accountable, and like, no one really likes being held accountable, right? Like, I would love to sit on my couch and eat ice cream every day, but like, I don't feel good about it. And so, like, I don't do it, but [00:13:00] we all want to be comfortable to heal.
Like, it's natural to want comfort. But it's how do you react when you be pushed? And there's some people who get super negative. And so, like we're to work through that with people, but understanding that they may not be here long term because they are a negative person. So, the other, the other big thing is that we learn is with compensation and that maybe this is where you're going with that, I'm not sure.
Cause we talked about it pre-show is, knowing your numbers, what your profitability numbers are is so important. And I'm so grateful and appreciate that you guys educate law firm owners on this, because there's not a lot of education that goes out this topic.
But essentially, what we do is we sit down with our team and this is something super fresh and super new. And we asked him, what do you want to make? Like, I got so tired of the of, Hey, it's been a year and I haven't gotten a raise, like what's going on? And so, what we did is we have a cadence of when we sit down with people with our team.
And the question is they actually get some homework that they go do ahead of time, and they come to the meeting prepared, and it is how much do you want to make? Oh, you want to make $8,000 more? Cool, let's figure out a way for you to get that. [00:14:00] And we have the formula because of what you guys teach of, here's what we need to get.
If they're generating this much revenue, this is what we can pay them. And so, we have to find a way to educate them of how to increase profitability, so that they can make more money. And it was really interesting, so I sat down with a legal assistant, and I thought he had a really good job explaining this.
And she comes in my office a of of days later, and she's like, Hey, can you help me understand this? And it's like, How am I less profitable the more money I make? And I'm like, Oh, maybe I didn't talk about that because I just thought, that was common sense.
And so It's like, I had to take the time to really explain to her, like, listen, the more you make all things being equal, you don't produce more, we, the firm makes less money, or less profitable. And I saw on my whiteboard, she's like, Oh, thank you much for sharing that with me. And that got me taking a step back, like, how many people on our team don't understand that they get raises and their profit and the revenue they make needs to increase in [00:15:00] at least, direct proportion with what they got in a raise? and so like Those are just some breakthroughs that we've had this year that have really been awesome. But what it does, it empowers your team to really be able to see that you are not the bad guy in the situation. It's not you saying you can't get a raise. It's them, it's their ability to produce. and if you're super transparent about what those numbers are that they need to do, they get it, and they feel empowered, and it's, been phenomenal. It's been really awesome.
Richard James: So, the message, the takeaway here, again, Oh my gosh, value bomb city. But the takeaway here is, if you're a law firm owner listening to this, you need to not take for granted the fact that your team members likely need to be educated in how this works. Now, we have a, a bit of an advantage in our company because Michael and I are educators by trade, I mean, this is what we do, right?
So, we tend to educate our team quite a bit. Just take the example, coming back [00:16:00] to our conversation and anybody who was listening, take the example of the pay for referral model, right? So, if you ran the quick math, it ran somewhere around $60 per uh, review, right?
Okay, based on your top tier mark of 80 reviews and five grand, right? All right. So, you go, well, is that a lot or is that a little? If you say, Hey, because of our efforts, we are now seeing, coming from our Google, my business page from those review, because those reviews got put up and Google gave us better rankings and we had more credibility.
With the people that we're seeing it, we're now seeing approximately five new PI cases come in a month from that. Well, If a PI case in your firm is worth on average, you're just getting started. So, I'm going to give you 5 to $6,000 gross case value to the firm. So, app net, you know, after you get your share of the settlement.
well, okay. So, if we run that math and you go, well, how much did it cost [00:17:00] us per case? The answer is it costs you, like, a diminishing amount with every new case you get, because the reviews will probably stay there forever. And the credibility that you have will likely continue to grow, cause you'll add more reviews.
So, like, that work that you did to add those reviews is not only going to get you a case this month, it's going to get you a case next month, it's going to get you a case the month after. And if you continually do it, and you continually put a machine to it, and you keep growing your reviews, not only from your in house team, but But also from your clients and your referral partners, it just starts to compound on itself.
So, the $60 you paid per review, while it might feel like a lot of money in the beginning, over time, it's going to have a ridiculous return on investment. Now, in this particular case, the P. I. cases, gonna have to wait until you reap the value of those cases, but that's true anywhere. And if we know that if I was to run pay-per-click campaign, because we happen to know this, on a P. I. case, and you wanted to just run blunt force pay for advertising that was going to get you a PI [00:18:00] case, we know it's somewhere between $1500 and $2,500 per case on average to acquire that case.
Which means, am I paying $1,500 to $2,500 in spend to acquire those cases I acquired? Heck no! Because we did it through the use of reviews that bolstered our Google My Business page. So, I say all that, okay? so Great, let's assume I didn't just lose everybody that's listening Cause I just did this public math. And so what does this mean? Well, This means that, James, your job now is to realize, if you haven't already, you probably have your bright guy. That your team likely doesn't understand how you were able to calculate this 5, $5,000 for the 80 reviews. If we don't take the time to educate them, we run the risk that either the person that received the money, or the people that watch them receive the money, thinks that, Oh, our company's just made of money.
Look, they're $5,000 reviews. What's a review? And [00:19:00] so, the CEO of the company has a responsibility to educate their team so they understand, why we're doing what it is we're doing. MPS, did I do a reasonable job of explaining that, or did I confuse
MPS: I'm well, you did a reasonable job of explaining it, but know, you know, public math sometimes people. but think it was pretty spot on. and geez, the episode probably could have been cut 10 minutes ago, and there would have been so much value produced already that you could break this into several episodes in of itself. But I want to hear from you, James. just because I know you guys have a lot of exciting stuff happening. you know, what's got you excited? What's got the team fired up? What's on the horizon for you guys?
James Hansen: Yeah. Just before I answer that question, just to kind of go back to something that Rich was talking about is, everything that you do as the leader you have to really talk about the why. Because if you miss the why, we don't want order takers, we want people who can figure the solution out for themselves, and by teaching the why, they really start to [00:20:00] understand slowly but surely why you're making the decisions that you make.
And they can start thinking for themselves, and they don't continue to ask you me like questions that are, like, why are you asking? So, teaching the why and everything you do and then showing them once they accomplish it, Hey, yeah, you were in alignment with that, you did a great job. But really what it is, this review stuff and actually business building in general, is the Law of Diminishing Returns.
Well, It's a lot of increasing returns. So, in the world, we're so used to the Law of Diminishing Returns, which is you do it one, so you cut your grass, right? You cut your grass one way and you see an immediate result from it. Now, I go cut my grass the other way and shave a little bit off of it, but the amount of return that I get for putting in the exact same amount of work is like not worth doing it again.
But the law of increasing returns is, you do it, nothing happens, very little happens, you do it, you do it. And then slowly, but surely it just compounds. It's the opposite of mowing your lawn It's the opposite of the diminishing returns. And many people aren't willing to [00:21:00] sacrifice today for a better tomorrow for themselves.
And I'm blessed because I started with auto and home insurance. Like, I got paid nothing. I got paid 50 bucks commission for a new policy. And I had to build a book, big book of business before my life was great. For the most part, if, business owners and law firm owners could really just understand this is the law of increasing returns, and it's a true law, and it will apply, if you apply the law.
So, what's got me excited? In the pregame where we were talking about, you have different problems that solve for based on where you're at in the law, where you're at with growth. So, this year, we'll do 11 million dollars in revenue. and We're solving for different problems than we were this time last year. and a lot of those are outsourcing, how can we continue to stay profitable under the current circumstances with inflation and people needing to make more money, I want them to make more money.
And it can just be challenging. It can be challenging to pay a legal assistant what they need to live on and still be profitable with her labor, his or her labor.
Leveraging Global Talent
James Hansen: And so, what's got me really excited is that is understanding how I can [00:22:00] leverage and be a blessing for people overseas and actually pay them well for doing the job. That I can't do profitably here, because if I can't hire for a position and do it profitably here, I'm doing everyone on the team a disservice. I really am. And if I have that mindset going overseas and being a blessing to someone else's life, who's making $5 an hour, let's say, when they were making a dollar an hour.
That's a great thing for them, but ultimately, it's a great thing for the business so that I can continue to support the team that I have, and they don't jeopardize their future or the firm's future, because we're making an unprofitable decision to hire someone here for a role that I just can't make money on based on what we're charging the client for.
Richard James: love that you said that, and thank you because it feels like sometimes we have to dance this or walk this tightrope or this line that, oh my gosh, we're taking food out of the mouth of the American worker. And I understand that, and I would like to hire the American worker [00:23:00] first and foremost. Sometimes, we just can't fight macroeconomics, and that there is a price ceiling that people will pay.
And more importantly, in law, a lot of courts will allow you to charge depending on practice area. And so, I'm all about charging as much as you can, but you can only go so far at some point. And when labor costs start to get out of whack with the profit and loss statement, which is where it should be.
So, just for everybody listening, your labor costs should not exceed all in 401Ks, insurance, taxes, everything, everything you do for labor should not exceed, including the owner's based wage, 45% of gross revenues. And so, if it starts to get out of whack on that, firm has a really hard time surviving, and continuing to grow, and serve people. And coming back to the why, you know, a long time ago, I didn't know why I was going to work with lawyers.
And I didn't know I was going to work with lawyers. I fell into it, And. and then I saw, like, the good work that law firms do. And I call it doing God's work, I really do [00:24:00] think so. They make a difference in people's lives or meeting them in some of their deepest, darkest moments. And so, it's a wonderful, rewarding business at times.
It's also challenges at times, but it's a wonderful, rewarding business. And we should be able to help as many people as we possibly can. But we have to make sure the firm is profitable. And if that means we have to look to certain positions where we have to take advantage or leverage global pay scales, so that we can do that, then that's our responsibility as the CEO.
because if we get caught up in the emotional perspective of this, and we don't pay attention to the data that's telling us, we've maxed out our fee that we can charge, and now we're exceeding our labor costs. The firm can get upside down very quickly, and the number 1 thing I have seen ruin law firms throughout my years of doing this is when their labor costs get upside down and they start losing money every month. And it's sad to watch because, [00:25:00] the emotional component that's connected with the youth and the person that you hired.
And now you brought them in and you hire them, the difficulty many small business owners, not just lawyers, but many small business owners have with downsizing, forgive me, but the shit hits the fan is challenging for them. And so, when PnL gets upside down because they didn't pay attention to the numbers and they didn't look at global solutions.
You mix the negative financial component with the emotional glue and things start to spiral out of hand very quickly. Which is why, and this isn't a commercial, but we're, we are in agreement with you. My partner, 9 years ago, Bertiner, he was a guest on this show, launched his first employee in Puerto Varta, Mexico, today, there's 350 agents down there that our clients employ. And we see the value of that because there were just certain roles that in the legal space in the United States, the financial macroeconomics don't [00:26:00] support US labor for it any longer. It's sad, but but it is true.
James Hansen: Yeah. And I think, the one thing that's really been helpful for me to really keep all that in check and perspective is, the law firm, the entity itself, I serve it. It's not here for me. And so, if you can have the mindset of, I need to do what's in the best interest of my firm, not what's in my best interest, it's a lot easier to make those decisions.
It's a lot easier to not die on a hill for an employee. Because, like, you are serving law firm and if you're not making the best decision, you have an employee who's you're not profitable with, She's a can't hear she's a cancer, or they're negative. And And you're, like, I need to be loyal because they've been here for 20 years.
That is self centered, like, you're making that decision for you, not for the law firm. And if can really think of it as with that it's a lot easier to make those decisions. And I agree with you, like, we are doing God's work and it is by serving our clients, we're keeping the second great commandment.
And to the extent that we can really help people. [00:27:00] And one of the things we're talking about in the pregame is, talking about the impact that you have on your client's lives. What does that outcome mean? What does that legal outcome mean for the kids, and the generations to come? And if you can really focus on that, you can really start to have a mindset of, I am a servant, and I'm helping people, and you want to know what? I can make a great living, and I can support my family great, we can be comfortable, and I'm doing something that has an impact on the world.
And it's not just settling cases. not just going to court. And so, I think, as a leader, as the CEO, you need to really be doing that. You really need to be talking about the impact that you're having on your client's life, but also the impact that you're having on your team members lives. I love coming to work and a new employee gets a new car.
To be honest, I drive one of the oldest cars in the firm. I really do. Like, I drive a 10 year old Chevy Silverado, and I don't park the covered parking, I let everybody else park in the covered parking. And I love it when they have new cars because it's, like, they have a better life today by working [00:28:00] here than they had before they got here.
I love seeing the impact that we have on our clients and on our team members. And for me, that drives me. It's not the revenue that we're making. It's not the amount of offices we have, it's the impact we have on those two categories of people.
Concluding Thoughts and Farewell
Richard James: And P. S. it doesn't get much better than that.
MPS: we'll toss this up, James, as, another top performing episode before it even airs, because I can guarantee you it will be. so thank you for investing your time again to be on the show. This was awesome. I really appreciate it. And obviously the law firm owner is listening to this.
You probably have a laundry list right now of notes to take from ideas to start to implement. but if you enjoyed this, make sure you hit that subscribe or follow button depending on where you're listening or watching, turn those bell notifications on and show James some love down in the comments below.
Let us know if you have any questions, James. Thank you. Thank you again.
James Hansen: Thanks guys. Appreciate it.
Richard James: James, it's a real pleasure to watch you grow your firm [00:29:00] and to hear your message. It's a pleasure to know you and I'm honored that you came on our show again. Thanks so much.
Appreciate
James Hansen: Thanks guys.
Appreciate it.