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How to Sell Your Law Firm: Valuation, Digital Rainmakers, & MSOs with Jeremy Poock · Legal Late Night

• Jared Correia (00:00:00): Hello everybody. We've got a show that promises to be at least mildly interesting for your listening and watching enjoyment. I'm your host, Jared Correia. I'm the CEO of Red Cave Law Firm Consulting. From The Monologue, I'm talking about the new season of the fourth iteration of the television show, Dexter. In the interview, it's time for Jeremy Poock, the founder and principal of Senior Attorney Match. In the counter program, it's time for unlikely Pookies with Jeremy Poock, where we talk about strange bedfellows throughout history. Now let's talk about a fictional serial killer who's got a real thing for cling rap. (00:00:44): Dexter was a television show that ran on Showtime for eight seasons from 2006 to 2013 when Showtime was actually on television. Red Shoe Diaries, that type of shit, remember? Well, I do. I certainly do. Dexter was based on a series of books, eight written between 2004 and 2015 by author Jeff Lindsay. I've never read any of these books and I probably won't, but it's certainly a quick pickup to move from book to television show within the span of two years. That's probably because the Dexter books have an amazing premise. Okay, ready? Here's a 30,000 foot overview. Dexter is a serial killer who only kills other serial killers. Excellent. Fucking 12 of 10, seriously, no notes. Dexter is the "good serial killer" people can root for. Of course, he can still have a great premise and the television series can suck, even during the complicated man era of television that was raging during the 2000s. (00:01:52): Now I've watched every iteration of every version of Dexter on television. I've seen literally every episode and that first Showtime series was mostly pretty good. Dexter had a lot going for it too. First of all, the titular Dexter is played by Michael C. Hall and he's just perfect for that part. He plays an exceptional psychopath, but he also seems to care about people in his own way. Just instead of helping an old lady across the street, he avenges her death by killing her murderer with a requisite amount of bloodlist. One of the really nice touches of Dexter, the television show and the book is that he works for the Miami Police Department as a blood spatter analyst, which not only allows him to acquire inside information on investigations into his crimes, but also means he's particularly well suited to getting away with whatever he does because he knows how to clean up after himself as well as what the police will be and are looking for. (00:02:47): Helping him along in his journey as his late father, Harry, who serves as a moral guide for him. He's kind of the Al Calavici to Dexter's Samuel Beckett, though the personality is reversed in this instance. Now it's a long story and I don't want to spoil anything because it's relevant to later iterations of the series, but high level, Harry the detective determined that Dexter was a psychopath and likely serial killer when Dexter was a little boy. So he created Harry's code to make sure that Dexter wouldn't kill any innocent people. It mostly works out, though there is some collateral damage from time to time. The original series, the Miami version was quite good as I've mentioned, and they had some banger seasons, frankly. Each season, Dexter would essentially be tracking down a different serial killer. So part of how good a season could be was largely based on who the antagonist was, although the supporting actors did not change very much otherwise. (00:03:47): Original Dexter probably peaked in season four in which Dexter got married, had a kid and faced off against John Lithgow's Trinity killer. After that, it was kind of a long slide and Dexter over the last four seasons got kind of stupider and stupider. At one point, Dexter had a pseudo-ancestral affair with his adopted sister, which was a choice, and the show famously ended with Dexter leaving Miami and going off to become a lumberjack. No, I'm not making that up and people fucking hated it. Old Dexter is worth watching. You just got to grind through to the end for the lore. Dexter also was dealt a difficult hand in that it was squarely situated in the peak TV era alongside amazing shows like Breaking Bad and Mad Men and Sopranos, which really didn't have bad seasons. The fact that Dexter was maybe 60% of what those shows were makes it look worse than it actually was. (00:04:47): When Dexter ended in 2013, everybody was sort of like, "Yeah, that's probably run its course." Had a nice run, probably best for it to end now. But then something crazy happened. Dexter came roaring back as a legacy quel to the old TV show and it's fucking awesome now. New Dexter is actually amazing in all its iterations and there have been several. It hit that extra gear to get to the 40% it was missing before to reach that peak TV level, which it has now done belatedly. The show doesn't do any more stupid bullshit plot lines. It's not goofy. Rather it's kind of sardonic. The dialogue is crisp as fuck. The casting is mostly excellent. The last season featured Peter Dinklage and Uma Thurman in supporting roles. They cast a young actor named Jack Alcott as Dexter's son, Harrison, and bro is just knocking it out of the park. (00:05:38): He's really good in that role. Plus since Dexter and his onscreen dad played by actor James Remar are not that far apart in age in real life, his dad is back too and remains excellent. He's still throwing his fastball. They're bringing back old Miami Dexter characters, but one by one rather than in an overwhelming fashion. But the producers have positioned a show more like an anthology now where Dexter's the main character and new people move in and out of the scene each season, including new supporting cast. There's not really a core cast yet in new Dexter, outside of Dexter and Harrison, which keeps things fresh. Finally, in the original series, Dexter was always pissing and moaning about how his nature caused him to kill. But they've really leaned into Dexter's acceptance of who he is and the show's better because he's all right with being the avenging angel now and has become even more zealous about his work. (00:06:37): I'm not sure what that says about me personally, but I do enjoy the change. So if you watched the first iteration of Dexter and liked it, you'll love the new stuff, but the new stuff is independent enough that you needn't have watched the original Dexter to be able to get into it. Okay, now that I've said that this is for everyone, let's talk about what's happening in Dexter since the end of the first series. Light spoilers to follow, as light as I can possibly make them. Dexter in New Blood was the series official reboot in 2021 and almost insanely followed through on the Dexter Faked His Own Death, changed his name. It became a lumberjack thing by just leaning into it pretty much entirely. Dexter Morgan, now known as Jim Lindsay, remember the author of the book series is named Jeff Lindsay, now lives in upstate New York and works as a sporting goods store. (00:07:34): They do a nice job here of totally changing the Miami environment, making Dexter a fish out of water who is laying dormant as a serial killer for a while. Clancy Brown, he was a prison guard from Shawshank Redemption, is the antagonist of this series and he's really good. Probably Dexter's best nemesis since the Trinity Killer. Of course, Dexter's new life becomes unraveled when his son Harrison shows up. This iteration is more like True Detective than original Dexter, and it was tremendous as a launching pad for the new Dexter universe. Next up is a prequel series called Dexter Original Sin. This version of the show covers Dexter's early years as he gets in his first kills. Kind of a heat check to do a prequel right after resetting your series and crushing it and only doing one season. But honestly, pretty much every decision the Dexter showrunners have made in rebooting the franchise, it's been right on the money. (00:08:31): I almost didn't watch the show because I didn't think it was going to be very good, but it was actually great. The actor, they got to play young Dexter. Patrick Gibson is pretty uncanny in the role and the producer smartly used Michael C. Hall to continue to provide Dexter's inner monologue, a staple of the series, which was especially important here because his dad, Harry, usually his verbal conscience is still alive in this series. So Harry, his dad, is played by Christian Slater, who I thought was Ethan Hawk pretty much all the way through because those dudes do be alike. The actress playing Dexter's sister, Deborah, is really good and they also have a good supporting cast and includes Sarah Michelle Geller, Buffy as Dexter's boss and Patrick Dempsey as Harry's boss. Many of the Miami season characters return here and the actors who play them are pretty close sound and lookalikes to the original cast. (00:09:25): But even though the series returns to Miami, it's not as cheese ball as old Dexter could get. It retains the new vibe while also adding a little more fun into the mix, which is appropriate for a 20-something version of the Dexter character. This series was not renewed, but I thought it was a hit. At least it was in my book. That brings us to the latest and ongoing iteration of Dexter, which is called Dexter: Resurrection. This version of the series continues the theme of dropping present day Dexter into a new environment, this time New York City. After a falling out at the end of Dexter New Blood, Dexter has tracked his son to New York City where Harrison is working as a bellhop. Dexter wants to be in close proximity so he can look after his son, but wouldn't you know it? Dexter gets into some shit. (00:10:12): He always does, it seems. He decides to become a rideshare driver. So of course there's a serial killer targeting rideshare drivers, ravaging Manhattan. Plus his past is starting to catch up to him, that old trope, as one of his old Miami cop buddies is in town looking for him because he believes Dexter is still alive and was Miami's Bay Harbor Butcher serial killer, which of course Dexter was. He just framed someone else for the crimes. Muddying the waters further, Dexter joins a serial killer club started by Peter Dinklage's character, which is just more fresh meat for Dexter, like Chum for Shark. Unlike New Blood and Original Sin, Dexter Resurrection has been renewed for a second season, which commences October 30th right before Halloween, and it looks kind of awesome. The introduction of the Serial Killer Club allows Dexter to attract several of his potential victims at the same time, which is promising for a rip roaring season two of Resurrection that is also introducing a new antagonist played by Brian Cox, not the former Miami Dolphins linebacker, but Logan Roy from Succession himself, another great actor in the Dexter franchise. (00:11:27): And Dexter's even wearing glasses now as he ages as a serial killer. Yes, on television we're now doing what is it like to hit middle age as a serial killer? So if you've been out of the Dexter space for a while, it might be time to reboot your fandom. The show is better than it's ever been and it's getting better with each new season and each new version. You should definitely take a stab at it. (00:11:53): Let's slice into our next segment. It's the guest interview and I have Jeremy Poock of Senior Attorney Match on my table as we wrap things up here in the monologue. That's right. It's time to get your Poock on. It's all next. Invite your best Pookies. While I've effectively run out of things to say, which is awkward because this is a podcast, so I'm simply going to crush some Benadryl and pass out. Damn, I'm out of Benadryl. Okay, let's just talk to our next guest instead. It's the Legal Late Night Podcast and our guest today is Jeremy Poock, who is the founder and principal of Senior Attorney Match. Jeremy, welcome to the show. How are you? Jeremy Poock (00:12:38): Doing okay, Jared. Always great to see you. Thanks for the invite. Jared Correia (00:12:43): Same. So we've done this tango before, but not on this particular show. You've been on prior podcasts of mine. Jeremy Poock (00:12:52): I have. I know the late night vibe is a little different. I didn't know how to dress, so I dressed normal. Jared Correia (00:13:00): You're a little formal. Jeremy Poock (00:13:02): Yeah, I know. It's tough. I was going to put on a hat or something, but sorry, you got just sort of regular formal Jeremy here. Jared Correia (00:13:11): You're a real lawyer. I've been in meetings with you, podcasts with you. This is your thing. Suitco, button down shirt, you're a classy guy. Jeremy Poock (00:13:21): I don't know. I'll tell you, my maternal grandmother just told me you can't overdress for something enough. So it's always been like, okay, dress this way. And I'll tell you, I buck this trend now with my dad. My dad, when we were growing up, would always say you have to dress up to go on an airplane. You think about now - That was a big thing back in the day. Most dressing down probably event. But my dad would... Amazing. Kudos to my dad. He would put a suit to get on an airplane. I think that wearing a suit on an airplane is probably pretty miserable for most people. Jared Correia (00:13:57): I feel like that would be so uncomfortable, but it's funny, like DB Cooper, right? The famous hijacker, he's got a three piece suit on and he's jumping out of the plane with a parachute on. It was crazy. I've never asked you this before, but I don't think I have, but I'm interested to know you do law firm sales acquisitions. We'll talk more about that. How did you get into that when you started out as, I'm assuming a regular garden variety lawyer, right? How does one move to that career? Jeremy Poock (00:14:35): Yeah, so I'm in that category of like, wow, I went to law school because if we think of it like multiple choice, this was like choice E for me. And then kids just didn't know what the hell else I was going to a history major, came back to my father, my father's a lawyer, paternal grandfather's a lawyer. I'm like, "All right, choice E, let's go to law school." But really internally entrepreneur. And then just struggled as a lawyer, not doing terrible work. It just was not all that interesting to me the work and gravitated towards working with business brokers and helping them to paper their deals. And it was really fascinating to me to just see someone that had developed their business, developed value in the business, sold the business, and then I'd help paper the deal and saw in the early 2000s that business brokers at that point were laser focused on baby boomers, even then. (00:15:36): The boomers at that point were in their early 50s. Jared Correia (00:15:39): Oh, that's interesting. Jeremy Poock (00:15:40): But they were laser focused on that group. And so the light bulb just went off one day of, wow, there are plenty of baby boomer attorneys and who's brokering the sales of their firms? My business broker colleagues were not focusing on that. I, at the time, was working with an attorney in his mid to late 60s at the time that really wanted me to take over his practice. I didn't have interest in that, but I certainly had interest to be like, "Wow, we could broker the sale of that firm in another firm." So that's really the genesis of it, of like, "Hey, practicing law sucks for me." Jared Correia (00:16:16): And for me. I'm right there with you. Jeremy Poock (00:16:20): I understand lawyers. I like business. I like the business of law. Lawyers have a lot of value in their practices, and if I can help them broker the sales of their firms, that'd be a lot of fun. And so that's the genesis. Jared Correia (00:16:34): So you just launched it. You're like, "I'm starting a business." You have partners when you begin? Jeremy Poock (00:16:38): Yeah. Literally, first client was a lawyer on the other side of a deal where he was helping his client to sell his financial services practice to a client of mine that was also a financial planner. It's late night, so I still won't fill in the blank of built up the... Okay, fill in the blank late night. I guess other guests would say that, but I figured let me call this lawyer up. He's in his 70s. Hey, if you'd ever consider selling your law firm, just like you helped your client sell his financial services firm, I would love to broker that. And he actually said yes. My first client. Jared Correia (00:17:17): Oh, that's interesting. Jeremy Poock (00:17:19): Yeah. Jared Correia (00:17:19): That's cool. So I think that most lawyers are head down on their businesses, and I think even if you asked attorneys, they would be like, "Hey, there's not that many sales and acquisitions that happen at the small firm level." But I don't find that to be true. I feel like there's a lot of movement across the board for all kinds of different firms. I mean, obviously you've built a business out of this. You see that too, right? Jeremy Poock (00:17:45): Yeah. So we're seeing it and we're going to only see more and more of it. It's really interesting, the stage that we're at. I think about sometimes that, and it's only been 14 years is going to be in January of senior attorney match, but I look at it, I started representing my grandfather, this lawyer in his 70s. That's progressed to representing my father, somebody when they're in their 60s or 70s. Now it's more like uncle, brother, college buddy. I mention that because the types of sales are changing so much. The former practices of law, many practices still are so much based on your book of business. But when you have more to sell than just a book of business, and that's what's happening now in the marketplace, is that we're going to see more sales. We're going to see more value put on sales. And I'm sure you will talk about the entry of MSOs, private equity, the alternative business structure in Arizona, what that did and what that continues to do to the marketplace. (00:18:59): And before we started recording, you and I were talking about is the advent and the impact of digital marketing. We are often saying that modern law firms are digital Wainmaker law firms, right? That just wasn't the way it was pre-Google and even pre - 2020. Jared Correia (00:19:23): I mean, you're making this real easy for me, just basically interviewing yourself. Let's unpack that, shall we? Book of business is mostly how law firms sold forever. Jeremy Poock (00:19:35): Correct. Jared Correia (00:19:35): I don't know that lawyers really thought about the firm having value beyond that. I don't know. Lawyers reach out to me sometimes and they're like, "I want to sell my practice." And what they always say is like, "But it's not worth anything because I'm not going to bother." That's untrue. And then to your mind, where is law firm value beyond the book of business? Jeremy Poock (00:19:58): Sure. So we differentiate between law firm sales 1.0 and law firm sales 2.0. Okay? So 1.0 is that lawyer or law firm that'll call you back, "We want to sell, but it's not really worth anything because people just call me Attorney Jones. I'm Attorney Jones. I'm this kick ass trust and estates attorney. I know everything about my state law and the state of state tax and federal estate tax. People come to Attorney Jones. I don't have any value." Well, the Attorney Jones does have value. It's in Law Firm Sales 1.0, which is an earnout. Say, "Okay, Attorney Jones, people are looking for you. If you sell your law firm to the ABC law firm that also does sophisticated estate planning work, all you need to do Attorney Jones is transfer the trust of your clients to attorneys at ABC Law Firm." Those clients will say, "Wow, we trust Attorney Jones. (00:20:57): Attorney Jones trusts Denise at the ABC firm, and we, the clients, are going to hire Denise and other colleagues. ABC Firm pays Attorney Jones a percentage of the revenues and Attorney Jones monetizes the practice via an earnout." And that's still how many law firm sales happen. On an earnout - Jared Correia (00:21:18): When you say earnout, just so people understand, they get paid over time basically based on - Jeremy Poock (00:21:22): Get paid out over time, something in the neighborhood of, let's say, 20% of the revenues come from the book of business over a five-year period because lawyers generally are very risk averse, that is buying firms. Buying firms always assume, "Okay, Jones, you have a $2 million book of business, clients come year in, year out, but shit, if you leave and move to Florida, the phone's never going to ring again." Jared Correia (00:21:46): We're boned. It's over. Yeah. Jeremy Poock (00:21:48): Right, exactly. So in law firm sales 1.0, trust transfer, it absolutely works. The phone rings, text messages come in, emails come in, Zoom meetings happen, and all that is transferred to lawyers. Jared Correia (00:22:01): If someone's out there thinking about this and they're an attorney who wants to exit, part of this is making that trust transfer happen and hanging out. Huge. Even if you're not doing as much of the legal work, just making the clients feel comfortable, right? Jeremy Poock (00:22:16): All you have to do. We actually call it in law firm sales 1.0, and I'll miss this phrase as 2.0 really becomes the norm, which it will in the next five to 10 years, is we call trust transfer the flex capacitor. We think about time travel. Jared Correia (00:22:34): Oh shit. Back to the future. All right. Jeremy Poock (00:22:36): It's big. Jared Correia (00:22:37): It's beautiful. Jeremy Poock (00:22:38): It's as big as hitting eight per hour. Jared Correia (00:22:39): Thank God someone on the show knows about Back to the Future. I have to tell you, I had a guest recently who've never seen Back to the Future. I'm never going to let that dude live it down. Jeremy Poock (00:22:50): We cut the cord on cable, I don't know, three or four years ago, but if you still have cable and Back to the Future isn't on at least once a week, you have to really be trying hard. Jared Correia (00:23:02): Just got to throw it out. Check it out. Jeremy Poock (00:23:05): And that's of course one of those movies where you got to get through a few of the scenes. But the flex capacity part here is that to make law firm sales 1.0 happen, you need to transfer the trust. I get to 88 miles per hour. It is super simple. It's just really a matter of being using this attorney Jones as the example. I trust Denise, you're in good hands with Denise. And lawyers do it all the time with their associates. And when you sell your firm to another firm, and your associates often join another firm, by the way, because most associates, and we can talk about this later, but most associates at firms, they only want a reliable, predictable, and safe job. They don't want to buy their boss's law firm. We see that across the board. Jared Correia (00:23:48): That's true. I mean, the acquiring thing is interesting because I think some people do have that expectation, but then I've also seen situations where owners of law firms just string along the associates and they're like, "Yeah, I'm going to be out." But they never know when they're going to be out. There's never a plan. Jeremy Poock (00:24:05): Yeah. No, you're right. And that's where we have developed another phrase, the flux of passenger, not our phrase, this one is though, is a random Tuesday. Is on a random Tuesday, that lawyer that you've been stringing along because you're making great profits off of her or him, someday that lawyer's going to wake up and smell the coffee and they're going to be like, "Wow, I want a reliable, predictable, and safe job. My boss," let's go back to Jones. "My boss, Mr. Jones, he just celebrated his 72nd birthday. I don't know how much longer he's going to be cutting me checks every two weeks for my salary, so I'm going to accept a job at some other law firm, walk down the hall and say to Jones, Hey, look, I'm giving you my two weeks notice or four weeks notice. That's a huge WTF for Mr. (00:24:59): Jones, but he should have and could have seen it coming. And now that is, we call it a random Tuesday because it happens on a random Tuesday. It's a sucker punch to Jones, and it really hurts the value of the practice as well. Jared Correia (00:25:12): And it hurts even more if they decide, because sometimes people come to me and they're like, "Hey, I'm in this situation. I'm going to start my own practice," and now you're competing for clients.That's almost a bigger issue. Jeremy Poock (00:25:23): Oh yeah, absolutely. Jared Correia (00:25:26): So you also talked about this notion of law firm sales 2.0, which seems to me to be this program of adding additional value to the traditional law firm value. And I can only hope that there are more back to the future references to come, but go ahead, please talk about law firm 2.0. Jeremy Poock (00:25:47): So in 2.0, hopefully we'll come up with something that can match the flux capacitor. Jared Correia (00:25:55): I'll throw something out your way. Jeremy Poock (00:25:57): Yeah, maybe we'll develop it right here and now. But here it is. If we think about 1.0, the characteristics of 1.0, the value of a law firm is the client list and the referral source list. That's your book of business. The additional what we call value chips for 2.0 is what we're adding is brand value and digital value. Let's go to the extreme, like Morgan & Morgan. Tremendous brand value, digital value. I mean, anybody in most major markets is typing into Google, asking any of their AI agents like, "Who do you recommend for this personal injury type matter?" Morgan & Morgan is bound to come up or other personal injury law firms that are investing significantly in multichannel digital marketing. When a law firm can show that we are not dependent anymore on traditional Rainmaker attorneys and we can show that our clients are coming from such and such channels and we have analytics that are backing up how clients are retaining our firm, then we have a different type of value that a bank can lend upon. (00:27:23): And as now we're seeing in the marketplace that private equity can invest in, albeit at least at this point via management services organization, it's getting a lot of playtime, the MSO. I'm actually thinking that the MSO, it's playtime. I won't necessarily call it an opening act, but I think it's going to show more traditional banks that law firms aren't as risky as they had been in the past when it comes to investing in the growth of a law firm because like you just mentioned before about when people come to you and they're like, "Hey Jared, I'm thinking of leaving my boss and take clients and all this kind of stuff." Okay, well, what's a bank going to think about that, about the risk of funding to a law firm when a bank is like, "Shit, lawyers can leave a firm and there's no non-competition restrictions on them. (00:28:17): They can steal clients, they can just send out client choice letters." That's a really risky finance proposition. But on the other hand, if a law firm is saying to its lawyers, "Hey, look, you don't have to do any business development here. You don't need to be a rainmaker. We developed the business because of our brand. We developed business because of our digital marketing. All we need you to do is the work here." And then law firms are building real enterprise value as a result. And in law firm sales 2.0, when we can show analytics, and here I'll use some of the phraseology from the private equity types, is that when law firms can show predictable and repetitive business, that is a totally different type of value. Jared Correia (00:29:01): It's just like selling a software company where you've got sticky subscriptions and law firms generally don't operate that way. That's why their valuation is so much higher. Okay. Lots of good stuff here. I want to put a pin in the MSOs for the time being, but I do want to talk about those. So the digital marketing thing is one piece of it. It's like turnkey marketing operations backed up by analytics is how TLDR described that. You said there was another component of law firm 2.0 sales, right? Jeremy Poock (00:29:36): What's Jared Correia (00:29:37): That? Jeremy Poock (00:29:37): It's when we can develop brand, brand value. Also hard to measure, right? Hard to measure brand. Certainly going back to Morgan has developed brand, but we think about brand. We think about brand in terms of five-star Google reviews and other types of metrics that can... Show that there are real - Jared Correia (00:30:04): Yeah, it's not entirely intangible. I get your point. Jeremy Poock (00:30:07): Right. Jared Correia (00:30:10): But go ahead, continue. Jeremy Poock (00:30:12): And when firms can show that there is brand value with the firm, it only adds to its value. Now, I have a colleague in the personal injury law field, and personal injury is different than other areas of law, but he'll just say, "Look, there is no brand because someone is just going to go to their phone at whatever point and they're just going to type in best fill in the blank type of attorney for this reason at this given time." And okay, is that actually going to play out to, "Okay, when I have this need, I'm just going to such and such a firm because at that moment on that search, such and such three firms came up as compared to if we think about brands, whether it's airlines, hotels, restaurants. Will law firms get to that level? Not sure. But certainly there are firms out there that are developing brand value. Jared Correia (00:31:07): Yeah. I mean, I don't entirely agree with that statement from that attorney though, because if I'm in Massachusetts, we're both in Massachusetts. If I'm driving down Route one, which is the most commercial area in Massachusetts, I see all the law firm billboards. My daughter can recite all the attorney jingles. So I'm not just being like," Oh, I'm going to Google and see what happens. "I have some relationship with a lawyer brand and they may not be on a billboard. They may also be part of the community. But what I want to ask you as an extension to this is what about trade names? How does that help attorneys develop a brand? Does it? Because hardly any law firms use trade names. They shouldn't. Jeremy Poock (00:31:52): You're totally right. Jared Correia (00:31:53): They should, but they don't. Yeah. Jeremy Poock (00:31:56): It's still relatively new, Jared. It Jared Correia (00:31:58): Is. Jeremy Poock (00:31:59): Literally up until 2020, certain states, and let's get a little granular on this, under the rules of professional responsibility, under rule seven for advertising, lawyer firm names in multiple states prohibited trade names. And there was a lawsuit that was circulating around the country. And finally, and one of the big ones was actually New York that was a holdout for a long time. It wasn't until 2020 that New York allowed trade names for law firms. And I don't think it has percolated through the system well enough yet that trade names are permissible. I think they're brilliant because - I agree. First of all, what a pain in the ass to have to pronounce people's names, let alone look at our two names. I mean, good luck to me growing up with the name Poock. Jared Correia (00:32:57): If we started a law firm together, it'd be a fucking disaster. Jeremy Poock (00:33:01): Exactly. Versus the Park Avenue IP attorneys. It doesn't have to be Park. But the fact that we can do that. And so what are the benefits to that? Of course there's a benefit. So how do we build brand around that, getting back to that? Also, the fact that we're not making this firm dependent upon those Rainmaker attorneys who will become less relevant anyhow, because when it is associated with a name, we almost think to ourselves, "Hey, I'd like to meet with attorney so-and-so. Oh, well attorney so-and-so passed away 40 years ago." Jared Correia (00:33:37): He's dead. Jeremy Poock (00:33:39): It happens. But to have a trade name and then a trade name can be also utilized in multiple states. We're working with an estate planning firm right now. Great trade name. And talked with an MSO leader of last week and was like, "Wow, that's pretty interesting because we could introduce that trade name now that we can pump some money into investing behind this. We could circulate that trade name in multiple states." Jared Correia (00:34:12): I'm a huge believer in trade names for a law firm. I think you're right. A lot of lawyers don't even know that they could do it. This rule, the bonafide office rule, those all went down during the pandemic, but it's a relatively new thing. So if you're listening, you should consider a trade name if you don't have one. Okay. We danced around the MSO thing a little bit, managed services organization. Do you want to talk a little bit about what that is and how it plays into law firm sales? Jeremy Poock (00:34:37): Yeah, sure. So it's really continuing to develop. It gets a lot of playtime and there's a lot of interest in it. So let's go 30,000 feet for a second and sort of connect dots to how we got to MSOs in the late 2020s heading towards 2030. So starts with the professional rules of conduct for lawyers, which prohibit non-lawyers from having an ownership interest in law firms. So you can't have a non-lawyer invest in a law firm and expect to receive profits from the law firm. Jared Correia (00:35:19): Because you also can't share fees if you're a non-lawyer. Jeremy Poock (00:35:22): And can't share fees, you can't share profits. And the rationale behind it, for the business people listening as WTF on that, the rationale is you don't want non-lawyers influencing how lawyers will advise their clients based upon financial reasoning in and of itself. So keep the finance away from the lawyers being able to give legal advice to their clients. So it's always been very difficult to have any type of outside money invested in law firms. Yes, there is lending that's happened in litigation and that is almost like usurous type of interest rates. It's been basically a backend into ownership and investing in law firms and very high stakes litigation where lending happens, the payment comes back with very high interest paid when a lawsuit, whether that's mass torts or other types of lawsuits that pay off when there's a victory. Fast-forward to... It's fine. I don't remember when Arizona introduced the alternative business structure, so that's probably - Jared Correia (00:36:41): Neither do I, but it's Jeremy Poock (00:36:43): Within the last 10 years. So I'd say 2019 - ish. Jared Correia (00:36:48): Probably right. Yeah. Jeremy Poock (00:36:50): So 2019 - ish, Arizona literally deletes its rule on the prohibition of non-lawyers having ownership interests in law firms. So plenty of money. Jared Correia (00:37:09): 2021, by the way, January 21 became effective, but go ahead. Jeremy Poock (00:37:16): So Arizona introduces this alternative business structure and as a result, law firms can have non-lawyers have ownership interest, plenty of firms start and won't go into all that much detail, but it shows that there's a marketplace. There is a marketplace for investment in the legal space and it has to still play out about how profitable those ABS law firms are. And then I think that's when there probably was chatter pre - ABS, but certainly post ABS, alternative business structures, chatter continued of, okay, if this ABS thing, the deletion of the prohibition on non-lawyers having ownership interest in law firms, if that does not take off on a national level, other states adopting what Arizona did, is there some other way that money can come into law firms? Well then let's look at analogies. And management services organizations have come into the medical field, they've come into the accounting field and they've come into other industries, but I'm picking here on in particular professional fields. (00:38:30): So as other states did not adopt the ABS model that Arizona did, okay? Jared Correia (00:38:38): And some rejected it. Jeremy Poock (00:38:40): Rejected, didn't adopt it. Jared Correia (00:38:42): Utah's shutting down their sandbox. So the trend is going in the opposite direction. Jeremy Poock (00:38:47): Absolutely. Absolutely. But the marketplace is there, hence the development of, okay, then what does a management services organization do? Essentially, management services organization, it takes away all of the ownership and management of the non-lawyers in a law firm, provides those services like the paralegals or the employees of the MSO, the legal assistants are the employees of the MSO. MSO is investing in legal tech. MSO is investing in digital marketing in consideration for what? A management fee. How do you determine the management fee? What is the management fee? For those that aren't watching on video, you can see Jared smirking, right? Jared Correia (00:39:40): How do we construct this management fee? Is it like shared fees with a law firm? Jeremy Poock (00:39:45): Yeah. And that's a huge $64 question that will play itself out in a court at some point. Okay? Jared Correia (00:39:53): Yes, definitely. Jeremy Poock (00:39:53): But right now, the way that the MSOs are structuring it so that they cannot... These are not alternative business structures. The MSO does not own the law firm. The MSO is providing services to the law firm in consideration for a management fee, and that management fee cannot be sharing in legal fees by the lawyers that continue to own the given law firm. So it's a very interesting idea. There will be litigation on it. I'm not aware of litigation at this point. Jared Correia (00:40:28): Me neither. Jeremy Poock (00:40:30): But yet it has taken off like wildfire. And when I say wildfire, it's interesting. It's gotten the attention of many people in the legal industry. There have been sales involving MSOs and in our context, the sales of the sales of law firms, just to introduce some of these terminology that people who are in the PE field understand these terms, know these terms, but there are platforms now that are being developed, meaning larger law firms in certain parts of the country that an MSO has invested in the management side, that the lawyers continue lawyering, where there's going to be very interesting opportunity for the listenership of this podcast is not so much in the platform. That's not necessarily the needle in the haystack, but we're not going to have oodles and oodles of platforms. What we are going to have is roll-ups, is that the platform law firm is going to need talented lawyers. (00:41:38): They're going to need clients that a firm already has. Bring the talented lawyers, bring the clients to the platform and what's called a roll-up or a tuck-in. That's going to be the next phase of the MSO model rolling out nationwide. And for law firms to be ready as they're thinking about sales and getting back to this 1.0 and 2.0, being organized and here I could turn this mic really back over to you, Jared, about how to prepare because so many law firms, we have no idea what EBITDA is. We have no idea what quality of earnings are. Jared Correia (00:42:19): Very true. Jeremy Poock (00:42:19): These are two terms that law firms need to become cognizant of because the marketplace for roll-ups and tuck-ins is here and it's only going to continue to expand. Jared Correia (00:42:30): Yeah, it's funny. Lawyers only focus on revenue if that. If I can get a lawyer to look at a P&L every month, I'm ecstatic about that and a concept like EBITDA, which is how transactions are structured in other industries, it's tough for them to even understand that. So hey everybody, look that up. All right, this is such an interesting conversation in terms of... So I have had some clients that are high growth law firms, and I know you have too, who've been approached by private equity. What do you tell people? Because on the one hand, it seems like a cool opportunity. Lawyers are probably out there being like, "I don't have to do anything but lawyer anymore. That was my dream." But on the other hand, it's like you're outsourcing all this other functionality and without this omnibus vendor that does all that for you, how much value does your business have anymore? (00:43:25): What do you tell people when they're thinking about this? Jeremy Poock (00:43:28): It's interesting. So me, you and I are different. I'm the broker, you're more the consultant. So on my side, on the brokerage side, I say to people that are running... So this is a fun term that I think is going to continue to also play out, which is the startup law firm. We're seeing startup law firms. You would never see that before. It's like if you and I were in law school to turn the clock back, Jared, we're going to be partners in a law firm. We're going to bust our asses. We're going to go to networking events all the time. You're the drinker Jared Correia (00:44:03): Or whatever. Yeah. What's that? Yeah. We're not getting investment from a third party that's not a lawyer. Jeremy Poock (00:44:09): That's right. But I think that that is here today of a startup law firm when you're talking about law firms that are growing well and be like, "Okay, if you're going to pick the industry that you want to focus on, practice area that you really want to focus on and really do the GEO and SEO and focus on EBITDA, focus on quality of earnings. Focus on how can we..." And we didn't even talk about yet your CAC, which most lawyers also have no idea about. I didn't either until several years ago, but your Jared Correia (00:44:44): Client acquisition costs for those interested. Yeah. Jeremy Poock (00:44:48): Exactly. So you could be building up that value in a relatively short period of time, and then you could very well be in your late 30s, 40s, early 50s. And if you could actually sell that firm for some multiple people probably thinking themselves already or asking, what's the multiple? What's the multiple people ask? It depends on the practice. Jared Correia (00:45:12): It's better than 1X, right? Jeremy Poock (00:45:15): Yeah, it's better than 1X. Exactly. And I have these conversations with startup law firm owners of like, "All right, well, should you wait? Could you make this much more money if you held out?" Or you're being offered something now in a marketplace where the digital marketing is only going to become even more attractive to the attention of clients. So I hear your point like, okay, we're giving up control of running the office and should I sell now? Me as the broker, I just say to myself, "Wow, there are opportunities here that we hear in the e-commerce world that have never been available in law firms." And I'm not saying sell, sell, sell, but certainly give it some real thought because the market is here that it has never been here before and where it's going to go, don't necessarily know. And by the way, for the listeners to know, and we haven't done significant MSO work yet in terms of my own work and you're just having ear to the ground. Jared Correia (00:46:27): It's a relatively new thing in legal. Jeremy Poock (00:46:29): Yeah, absolutely. You're not getting full consideration at a closing table. There's typically, and I shouldn't even say typically, but I'll share an example of a structure, is a certain amount that's paid up front can be as much as 75%. Certain amount's paid upfront, certain amount that is old school earnout. And then another amount that you're getting shares in the MSO because the owner of the MSO is saying, "Hey, look, we're going to have multiple law firms that are participating in the MSO. We're building up our own value of this. We're going to resell it to a bigger player." And then you'll cash out on a second bite of the apple. A lot of attorneys are very wary of the second bite of the apple and are like, "Wow, what if that doesn't happen? Do I really want to be part of this?" Jared Correia (00:47:21): Yeah, you're at the roulette table, but if it hits, you can hit real big. Jeremy Poock (00:47:25): Yeah. Jared Correia (00:47:26): Just like any other business vector. Jeremy, this was good stuff, man. We went pretty deep here. I love a good metric. Jeremy Poock (00:47:36): Always fun. Always fun. Jared Correia (00:47:38): Will you hang around for one last segment, which is going to be very stupid compared to the conversation we just had? Jeremy Poock (00:47:45): Yes. Yeah. I recall my last appearance here, so I'm a little nervous about the next segment, but yeah, ready for it. Jared Correia (00:47:51): You'll be great. We'll be right back. Welcome back, everybody. It's The Counter Program. It's a podcast within a podcast. This is a conversational space where we can address usually unrelated topics that I want to explore at a greater depth with my guests, expect no rhyme and very little reason. Jeremy, welcome back. How are you? Jeremy Poock (00:48:16): I'm okay. Like I said, at the end of our last segment, a little nervous, but excited about this next round. Jared Correia (00:48:23): I built a game just for you. I'm calling it Unlikely Pookies with Jeremy Poock. Jeremy, are you familiar with the term Poocky? Jeremy Poock (00:48:33): Pookie? No, not yet. At least maybe not in this context. Jared Correia (00:48:39): You will become familiar with the term shortly. So the word experienced a massive resurgence on platforms like TikTok and Instagram, popularized by viral influencer videos where users casually call significant others, friends, or even pets their Poocky, Poocky bear or use it playfully in memes. On social media, the term is expanded to act as an adjective, as in you're so Poocky, or a verb as too Poocky. This is something I was not aware of until recently when my daughter started calling everyone Poocky around her. So look, this is good for you, I feel like. It's kind of a version of your name. You're making a comeback here. Jeremy Poock (00:49:25): Yeah, that's awesome. I'm looking forward to the contacts coming in through the website with these different adjectives and verbs and whatnot. At least now I'll know where it's coming from. Jared Correia (00:49:36): For the unlikely Pookies segment, I will describe unlikely friends and you just have to guess who they are. I'll offer three answers, only one of which will be correct. Are you ready, Jeremy? Jeremy Poock (00:49:48): Ready. Jared Correia (00:49:49): All right. I just want people to know, can you just confirm that we did not talk about this ahead of time? Jeremy Poock (00:49:55): No, nothing. I had no idea. I didn't even know what a Poocky was until 39 seconds ago. Jared Correia (00:50:04): All right. This is actually my first question. A manic elderly inventor known for his chaotic experiments forms an unbreakable, time-defying bond with an ordinary skateboard riding high school teenager. Who are these unlikely Pookies? I don't even think you need multiple choice for this. Jeremy Poock (00:50:24): Oh boy. All right. Well, I'm hoping Einstein is on the front side of that Pookie relationship. The skateboarder one, there I've just drawn an absolute blank. Jared Correia (00:50:38): Oh, all right. Let me just do the Q&A. You'll get it. Choice one, Sherlock Holmes and John Watson. Choice two, Emmett Brown and Marty McFly from the movie Back to the Future. Choice three, Rick Sanchez and Morty Smith. Who are these unlikely Pookies? Jeremy Poock (00:51:00): I don't know if Dr. Holmes and Watson, if Watson is a skateboarder, but I'm hoping he is, and I'm going with choice A. By the way, I think I scored terribly in the last game that we did. Jared Correia (00:51:14): This is not going well because it's Emmett Brown and Marty McFly from Back to the Future. Jeremy Poock (00:51:18): Okay, got it. Jared Correia (00:51:20): Marty rides around on the skateboard. Jeremy Poock (00:51:23): Oh, you know what's funny? I was thinking about Marty's dad there. Shoot. Okay. Jared Correia (00:51:27): Oh, George? Jeremy Poock (00:51:28): Yeah. Jared Correia (00:51:28): Yeah. They only get harder from here, Jeremy. Jeremy Poock (00:51:32): Oh boy. Jared Correia (00:51:34): This might get ugly. Okay. Question two. But you have the ability to guess here because I've got choices for you for every question. Jeremy Poock (00:51:41): Great. Jared Correia (00:51:41): Question two. A towering silver-furred mountain gorilla and a tiny tailless kitten formed a viral friendship when the gorilla used American sign language to request a pet. Who are these unlikely Pookies? Was it Coco the gorilla and all ball the kitten? Choice A, Cecil the gorilla and wag the kitten? Choice B? Or choice C, roll over the gorilla and Wendy the kitten. Coco and All Ball, Cecil and Wag, or Rollover and Wendy? Which grouping of Pookies is this? Jeremy Poock (00:52:22): I'll just make it simple because I have zero idea. So I'm going with A. Jared Correia (00:52:26): Ah, correct. Jeremy Poock (00:52:29): You never know. Jared Correia (00:52:30): Well played. Well played. There we go. Coco the gorilla was kind of internet famous for a while and she asked for this pet and so they gave her a kitten. Tragically, the kitten was run over by her car several weeks later. So maybe we should just move on. All right. Question number three. A famously eccentric surrealist artist known for having a pet ocelot began a brief iconic transatlantic friendship with a wild rock musician. Artist with a pet ocelot, wild rock musician. Was it Salvador Dolly and Alice Cooper, Andy Warhol and Keith Richards, or Pablo Picasso and Gene Simmons? Dolly and Cooper, Warhol and Richards or Picasso and Simmons? Jeremy Poock (00:53:24): Oh my goodness. Wow. Jared Correia (00:53:27): The key I think is the pet ocelot, which may be an internet fact you've run across in your time. Jeremy Poock (00:53:32): Yeah, which isn't. But all right, here I'm going with B. Jared Correia (00:53:38): B, good guess. But it's actually A, Salvador Dolly and Alice Cooper. Yeah. So in 1973, Salvador Dolly did this holographic art project, which was supposed to be a map of Alice Cooper's brain. And you can still see it in a museum in St. Petersburg, Florida. Wow. Jeremy Poock (00:53:59): Wow. Jared Correia (00:54:01): We try to educate here on legal aid and not just about MSOs. Jeremy Poock (00:54:04): These are very diverse questions. Jared Correia (00:54:08): All right. Here's another one. Question four. A brilliant reclusive American chess prodigy and a charismatic worldly chess grand master from the Soviet Union formed a highly publicized intellectual friendship amidst Cold War tensions. So we have an American and a Russian chess player. Was it Bobby Fisher and Boris Spasky, Paul Morphy and Gary Kasparov, or Harry Nelson, Pillsbury and Mikhail Tal? Fisher and Spasky, Morphy and Kasparov or Pillsbury and Tal? AB or what do you think? Jeremy Poock (00:54:51): All right. Yeah, I do speak Russian. Jared Correia (00:54:55): Do you really? Jeremy Poock (00:54:57): I do. I do. Jared Correia (00:54:58): Can you say something Russian? Jeremy Poock (00:54:59): And Russian. Meaning - What does that mean? It's a very hard question. Jared Correia (00:55:08): I though you were going to call me an asshole in Russian. Jeremy Poock (00:55:10): No, I'm calling you a joke. Jared Correia (00:55:11): I appreciate that. You could have. It would've been fair. Jeremy Poock (00:55:17): No, no. We went straight up on that. All right. Jared Correia (00:55:21): Who do you like? Jeremy Poock (00:55:21): I'm between Kasparov and B, and then the Fisher one, but I just don't know who the other Russian, the Soviet person was on A. So I'm teetering between A and B. I'll go gut feeling here and go with A. Jared Correia (00:55:42): Oh, correct. Go with your gut. That's your second correct answer. There it is. Bobby Fisher and Boris Spasky. There you go. They were friends for a really long time, actually. Jeremy Poock (00:55:51): Wow. Jared Correia (00:55:52): And Spasky actually defended Fisher when George W. Bush threatened to imprison him and he said he would go to prison on his behalf. Jeremy Poock (00:56:04): Wow. You know what I learned about chess is that chess masters peak almost like peak athletes in their early... The brain actually slows down. You would think that the best chess players would be in their 60s or 70s, got all this great experience. Jared Correia (00:56:24): Late 20s prime, like an NBA player or something. Jeremy Poock (00:56:27): Something like that. Yeah. Jared Correia (00:56:29): Huh. That's super interesting. Thank you for bringing the facts, Jeremy. This has been a sterling podcast. Jeremy Poock (00:56:35): Still doing really poorly here. All right. Jared Correia (00:56:37): No, no, you're two for four and we got two left. So you have a chance to stay right around 500 or even go above it. Question five. An avant-garde literary playwright who won a Nobel Prize regularly drove a future professional wrestler to school in a modified truck while growing up in France. Was it Samuel Beckett and Andre the Giant, Elbert Kamu and Sergeant Slaughter, or George Bernard Shaw and Maurice Tillett? Beckett and Andre the Giant, Kamu and Sergeant Slaughter, or George Bernard Shaw and Maurice Tillett? Jeremy Poock (00:57:15): Andre the Giant strikes me as being in France. Sergeant Slaughter, no. Okay? Jared Correia (00:57:26): Yeah. I don't think Sergeant Slaughter was kicking in Paris. Jeremy Poock (00:57:30): Now, tell me the last one again and see who's my wrestling person that I can... Jared Correia (00:57:37): Maurice Tillett was the wrestling person. Jeremy Poock (00:57:40): So Maurice - Jared Correia (00:57:41): Actual wrestler. Jeremy Poock (00:57:42): And Maurice certainly sounds French. That's tough. I'm going Maurice. Jared Correia (00:57:52): A good guess, but it is actually Samuel Beckett and Andre the Giant. Jeremy Poock (00:57:56): Ah, damn it. Jared Correia (00:57:58): Apparently they only talked about cricket because they both love cricket. Very Jeremy Poock (00:58:06): Good. Jared Correia (00:58:06): So Maurice Tillett, he had the... I forget what it... Giganticism or something like that, whatever the growth diseases that Andre the Giant has where he grow really tall, really quickly. He was actually the inspiration for the movie character Shrek. You can see images of him online. Jeremy Poock (00:58:26): Yeah. Jared Correia (00:58:28): Question six, our last question. We're doing literature. So here it is. A lazy, eccentric, medieval philosophy obsessed flob living in New Orleans and a fiercely radical progressive college student from New York communicate via letters in the novel, A Confederacy of Dunces. Is it Charles Nelson Riley and Melanie Misgiving? A, Ignatius J. Riley and Myrna Minkoff? B? Or Riley C. Nelson and Marina Melatonia? C. Riley and Misgiving, Riley and Minkoff or Nelson and Melatonia? Which one of these answers is actually correct? Jeremy Poock (00:59:20): You've seen Johnny Dangerously before? Great movie. Jared Correia (00:59:23): I have, yes. Jeremy Poock (00:59:24): Right. This reminds me of Roman Maroney when he's on trial and he said, "It's a fartigant trick question." Jared Correia (00:59:36): This is a very devious question. I almost feel bad, but I'll tell you why, once you guess why I included this. Jeremy Poock (00:59:43): So here again, zero clue. Okay. So I'm just going with C. Jared Correia (00:59:48): Oh, a good guess. It's actually B. But you acquitted yourself very well in a really difficult trivia. This is one of the tougher ones I've had in a while. So have you ever read the book, A Confederacy of Dunsis? Jeremy Poock (01:00:03): No. No, I have not. Jared Correia (01:00:06): I want to include it because super interesting story. The guy who wrote it was named John Kennedy Tool, and he was a professor like LSU. And it's a really good novel. And so he pitched it to Houghton Mifflin or something like that, and they wanted to make all kinds of changes to it. And so he thought he was a failure and he actually committed suicide. And a friend of his continued to push the book for publication, and it was published 17 years after he died, and it won the Nobel Prize. Jeremy Poock (01:00:43): Wow. Jared Correia (01:00:43): So really, really interesting guy, really interesting novel. And it takes its title from a famous line from a Jonathan Swift essay, also one of my favorite authors. It's kind of like got a Southern vibe to it, like Faulkner. If you've never had a chance to read it, you should check it out. And I'm saying that to everybody who's listening or watching. Good book. Jeremy, you did it. Jeremy Poock (01:01:09): I failed. Jared Correia (01:01:14): You were successful on two of your answers, which I think is pretty good because this was a hard ass quiz and I almost feel bad for giving it to you. Jeremy Poock (01:01:23): That's okay. I can't believe here I was raising Back to the Future and did not put the clues together on Marty and Doc. That was very embarrassing. Jared Correia (01:01:32): That's right. We're going to have you back and we'll do another one. I think I owe you an easier trivia segment when you come back. Not a problem. But people want to know about selling law firms, acquiring law firms, you're the fucking guy. Jeremy Poock (01:01:44): Well, that's very kind. And I think there's a growing marketplace out there for lawyers to sell and to buy. Absolutely. Jared Correia (01:01:54): Awesome. Thank you, Jeremy. Come back sometime. Seriously. It was fun. Jeremy Poock (01:01:56): Real appreciate it, Jared. All the best. Jared Correia (01:01:58): Good to Jeremy Poock (01:01:58): See you. Jared Correia (01:02:00): Thanks for our guest today, Jeremy Poock, the founder and principal of Senior Attorney Match. To learn more about Jeremy and his work, visit srattorneymatch.com, sr attorneymatch.com. Now, because I'll always be a '90s kid who broke off the tab so he could rerecord over a VHS tape, but his true passion is Burning CDs for anyone who would listen. I'm now just doing the modern version of that, which is creating Spotify playlists for every podcast episode that I record where the songs are tangentially related to an episode topic. For this week's playlist, it's finally time for the Pookies playlist. That's right. It's the best duets. This playlist is brought to you by the Build a Bear Workshop where you can acquire your very own Pookie, even if you're a hellacious loser yourself. Actually, I don't think they're going to like that language and maybe they'll pull their non-existent sponsorship to. (01:02:54): Join us next time when I make my bed and then immediately lie in it.