Justin Hill, owner and founder of Hill Law Firm, was interviewed by the Lawyer Mastermind podcast about 5 keys to running a profitable firm. You can learn about Justin’s philosophy on running a law firm, interacting with staff, and humbling himself to be successful. After five years of building the Hill Law Firm, Justin can look back on what worked, what was important, and what maybe was not. Learn more about Justin, the Hill Law Firm, and Justin’s thoughts on business in this episode.
Casey Meraz: Hi, I’m Casey Meraz and you’re listening to the Lawyer Mastermind podcast where we help attorneys grow their law firms by interviewing experts who can fast track their success.[music] Hi, everyone. I’m Casey Meraz with the Lawyer Mastermind podcast. Joining us today is Justin Hill. He’s at San Antonio, personal injury lawyer here. Thank you for joining me today.
Justin Hill: Well, thank you for having me.
Casey: Absolutely, Justin. First off, tell us a little bit about your law firm, where you’re located, what types of cases you take, and just give us a little rundown.
Justin: Sure. We’re a San Antonio-based personal injury law firm, a small law firm just me and a couple of staff. We focus on personal injury, but we do some product liability personal injury, we do trucking, we do car wrecks. In Texas, nobody’s really doing that now any more or workers comp, so we don’t do that. We do a little bit of environmental work, but for the most part, general PI.
Casey: Got it. Awesome. How long have you been at the firm?
Justin: I’ve been solo since 2012 or 2013. Before that, I worked for a big plaintiff shop, Michael Watson’s law firm and now he’s well known all over the nation. I’ve been solo for about five or six years now.
Casey: Awesome. Well, that’s a decent amount of time. I think for a lot of attorneys going off on their own, usually, those first couple years start really being that determining factor of how they’re going to do. What did you find? Was that your case as well?
Justin: Yes. I have this conversation with a lot of friends of mine that are thinking of splitting off and starting their own law firm. You really got to humble yourself for one. You’ve got to be willing to go ask people. In our world, the whole ball game, a lot of times, getting the cases because when you go out, you can’t afford advertising and all that. Early on, I went out. I approached some advertising law firms and said, “Hey, can you peel off any work and let me work on some of your cases on a referral basis?” Where I had come from, I was not used to that. You have to humble yourself. You’ve got to live really lean. You’ve got to have an office that’s really lean and then a lot of luck, a lot of things have to line up.
Casey: Sure. Yes. No, definitely. A large percentage of people that go off on their own don’t make it after a couple of years. It’s impressive that you’ve already been doing this for five or six years. What were some of the challenges when you first got started?
Justin: I think the biggest challenge is capital, right? First, you’ve got to be able to fund your operation. I didn’t start off just myself. I did have staff. I did have an office. On the plaintiff side, you’ve got to be able to fund your cases as well. I think one of the biggest hurdles is having sufficient capital to be able to work your cases because we invest our money into a case and that case might not settle and we might not get our expenses back out of it for a year or two years, so there’s a lot of capital outlay at the start.
I think that’s one of the biggest hurdles for somebody opening a personal injury practice.
Casey: Got it. How long would you say it was after you got started until you reached a level of profitability for the firm?
Justin: We got lucky. I had a really good first year. When I say good, we were profitable. It was no bigtime. Like I said, I went and approached people and worked on smaller cases and did a good job and got a good amount on some of the cases, but also at the same time, I kept my overhead insanely low. I paid on a bonus performance, bonus-based system. I had an office that was a small room in another law firm’s office which I think they charged me 200 bucks a month or something. I kept my overhead super low and I had a few things turn right. It’s a lot of luck and it’s a lot of being able to keep your overhead low.
Casey: Got it. We got the luck and the bootstrapping. It sounds like you paid close attention there which is really important. I think everybody that starts a law firm they’re like, “Hey, I want to go out. I want to do this.” Maybe they have dreams to make a ton of money or whatever that is. At the very least, everybody wants to be profitable. Running a business is also completely different than being an attorney. What’s your experience with the differentiation of those two?
Justin: That’s has been the biggest learning curve for me is learning how to run a business. You either have a passion for it or you don’t. I have a passion for being a lawyer and because of that, I have to run a business. I’ve got friends that they love the business side and being a lawyer is secondary. There’s a huge learning curve to being a lawyer that owns their own business because you’re not taught QuickBooks or accounting when you’re in law school. You’re not taught HR or office morale or office culture or how to train employees. There’s all of these things. You just have to learn as you go. That’s been a really big learning lesson for me. I’ve learned how to basically offshore some of that. Literally, some offshore. Literally, some just to handling my books. That’s not in-house anymore. I found a contractor to do it. Lots of mistakes were made. Now, I think we’ve got a system that works for us.
Casey: That’s awesome. Sometimes, unfortunately, mistakes are the best way to learn. I guess it depends. Maybe not the best way. Maybe mentor [crosstalk] but definitely a way to learn for sure. I appreciate you sharing that with us. Today, one of the things I really wanted to touch on are five keys to a profitable law firm. In your opinion, what’s the number one thing you need to be paying attention to if you want to run a profitable law firm?
Justin: Keep your overhead low.
Justin: I can’t overstate that when I started my own law firm, and you said it a second ago, a lot of people start a law firm they want to make a bunch of money. I think in the personal injury game, you have the guys with the jets and all that so you have this attitude or personality that comes with this type of practice where people start their own firm and they want to live large and they want to be flashy and they want to show off and a lot of them open their firm with too much of that on the front end. My first office was an office in another law firm. My second office was a second story and my first story was a lady’s apartment. There was no great shakes at what we were doing in terms of flashy. I told my clients, “I don’t have a nice office, but I’m going to do a really good job on your case. I’m putting my money into your case not into my office or not into this or not into my car.” or anything like that. Overhead low, I just don’t think it can be overstated.
Casey: Got it. Then with that, just talk about like when a case settles and you get that money, I guess also not spending all of that right away too, huh?
Justin: Yes. A buddy of mine here in San Antonio who went a similar path as me, he told me, “Look, invest in yourself.” We were talking about what’s he doing. He was older than me. “Are you buying a property? Are you doing this?” He was like, “Invest in your own business.” That’s been my take on it too. As I’ve made money, I have improved our processes. I’ve hired more employees. I’ve done some marketing to get more cases. The better the cases require more money. We’ve invested in our own law firm. We think that’s been a really successful route and a smart move.
Casey: Awesome. What’s your workweek like, hours wise?
Justin: That’s a funny question because I’m a big believer and it’s not about the hours. There are weeks in which I’ll work 70 or 80 hours. Running up a trial, we were getting real close to a big trial in February, it was not uncommon for me to be in from 5:00 AM to 8:00 PM or 9:00 PM. That is not normal though. If everything’s slow and you’ve got a lull, I’ll probably get in, in an average week, 8:30 to 5:30. We normally try to work normal hours for the staff here. They all loaded. They work 8:30 to 6:00 every day and get off at 3:00 on Friday. I let them pick that.
Casey: Nice. That’s awesome. I’m a huge fan of not overworking, but really just based on outcomes. How much of your time do you think is spent running the firm versus working on cases?
Justin: If you put the marketing side into it and things like that, it’s probably 30% business, and 70% work in a normal week. Look, if we’ve got a lull in the legal work or deadlines hit and deadlines go and so maybe I’ll put more into the business side to get ahead of it. During the shutdown, nothing was moving on the legal side which gave us a lot of time to do a lot of work on the marketing side, on our website, on our social media, getting our books caught up. All those things that we do, but we had extra time and why waste it?
Casey: Exactly. I love that. I’m glad that you took the bull by the horns and kept doing things that are right for the business. That’s awesome. As far as the second most important thing for running a profitable law firm, what comes to mind for that?
Justin: I think you’ve got to surround yourself with really good people. A lawyer cannot do everything on their own. They have to be able to get assistance from their staff or from other council if the case needs it a co-counsel or a local council. I’ve always told people in our profession, “Don’t be so greedy to not involve others where it’s needed. Don’t be greedy so that your employees don’t feel motivated to work. We are a big bonus structure here. Our pay is what our pay is, which I think it’s market but if we have a big year, everybody’s going to benefit from that. I think you surround yourself, whether it’s your own staff, or you bring in co-counsel, you bring in a contract worker. I have a case right now that I know is going to be really legal, briefing heavy, I brought in a briefing lawyer. He’s going to get a piece and that comes out of my chunk of the case, but I know the case will be better for it. I know it will take some time off of my plate. You surround yourself with good people and understand that those good people should be compensated as well. That really changes the ballgame for what you produce in terms of work product.
Casey: Sure. I think surrounding yourself with the right team, obviously, that’s important. I really want to touch a little bit more on your bonus structure there because while not everybody is motivated by money. If people are [chuckles], if they have that hanging in front of them, I feel like that is going to consistently bring a higher quality of work. Is that what you found or?
Justin: You can read the HR magazines and stuff on that, and a lot of them are kind of iffy on whether people are really motivated by money. What I think it does is, it makes sure that you retain talent. I don’t know if people work harder because I don’t really have any way to compare it because I compensate the same way the whole time. I don’t see my employees, going to monster.com and trying to find another job because our success has been good and they’ve been paid well. Now, we’ve had years where it hasn’t been as good and their bonuses have been way less. They understand that we’re taking a ride together, it’s good for me, it’s good for them. If it’s not good for me, it’s not good for them. Really, that comes from my first law firm, where my old boss gave a carve-out piece of a firm’s profitability went to a bonus pool. However big that pool got, that pool got big or it didn’t but I remember one year that firm had a big year and some of the bonuses were insane. I thought that was fantastic and you don’t run into many lawyers that believe that people should be bonused whatever they get bonused. A lot of time well, not more than this, we don’t have that philosophy. If the office does great, everybody should do great.
Casey: That’s awesome and that’s great. That’s going to do wonders for your culture too. I don’t know about you, but one of the hardest parts of running a business that I found is always the people. If you have people that are going to stick around and be productive, you want to keep them and you want them to not be at Monster looking for jobs, because that could throw a wrench in things.
Justin: Yes, that’s right. Another thing that I’ve decided, I prefer, is I prefer people that don’t have a long extensive history with other law firms or in the legal industry. I want people to come in– Look, I’ve dealt with it before where you get the person who comes in, who’s done it at another place, and then you’re always dealing with, “Well, my old boss did this or the old office did that or you should do this.” Sometimes, that’s really productive and effective and it helps us get better processes, but sometimes, you end up swimming upstream against your own practices and your own culture. You have a staff member who’s rigid in the way they want to handle it. My longest-running employee right now, she was working as a night manager at a very nice motel by the airport here in town. She answered an ad for a receptionist, she’s now the head paralegal here. She is fantastic but she’s learned everything she’s learned on the job. She’s still learning, but that desire to learn, I can’t overstate how important that is in employees. I’ve realized that all of the successful ones that I’ve had have all had that desire to learn.
Casey: I think that’s hard to find, honestly.
Justin: Yes, I think so. So many people think their job’s making a widget, that they’re going to come in, they’re going to stamp a box every single day. They don’t really care what it looks like, and they don’t really care what it is. If somebody has the passion to learn, they actually care what they’re doing, and that’s why they want to learn. It just indicates a desire to produce a better product, I think.
Casey: No doubt. That’s awesome. That’s great advice. Okay, let’s talk about number three then for running a profitable law firm.
Justin: It could be number one, it could be number three, but your legal work has to be outstanding. You can have low overhead, and you can have that, there’s a lot of firms that I believe are productive and profitable. I don’t think their legal work is top-notch. They’re a mill. From my perspective, I think number one, two, and three are clumped really tight together but your product in a law firm is your legal work and your results. You can have all the other things in spades and if you don’t have that, it doesn’t matter. Now, you might say profitable for a little bit, but that’s going to catch up with you. The online reviews and the online reputation and just the word of mouth and all of that is so pervasive now, in how you’re able to get and retain new clients. If you don’t produce a good product, you’re going to slowly wither and die.
Casey: Yes, that’s interesting. Do you think that firms that haven’t adapted maybe forward customer service have been or will really suffer now?
Justin: I think they are. You look at some of the old institutional law firms in a city and I think it probably– Every city you go to, you look at some of the ones that were slow to adopt, technology slow to adopt a website or social media or any of that. They’ve never really paid any attention to reputation management. In this city, you have seen some of them slowly just start falling down the line in terms of prominence and probably, that equates to their bottom line as well. I don’t know because I can’t see their books but you look at some of these firms that were well-positioned to just dominate the internet. Dominate reputation management because they were so early on a big mover and player and they just didn’t, and now it’s too late to catch up for a lot of them.
Casey: That’s an interesting perspective. People with the internet now can, like you said, just leave an online review just from a bad phone call or even if they’re not even your clients.
Justin: Yes, some of that’s crazy.
Casey: I have seen a lot of the firms that are thriving these days really focus on that customer first and provide maybe a level of experience that wasn’t typical in law, in general forever, until pretty recently.
Justin: Now, you have to because you’re right. We’ll get a call for a case that we clearly don’t take. If you look at our website, we’re not going to do your divorce. There’s no way you can think we will. You can get a call from a client who asked you to do the divorce, and you’re like, “We don’t do that type of law.” Then, you’ll get a review that said, “They won’t take my case,” and it’s a one-star review and there’s really no way around that. Our take is, hey, even if it’s not the case we do, you listen to them, you treat them wonderfully. You apologize that it’s not the type of work we do, and then you give them some direction. San Antonio has the San Antonio Bar Association, they do referrals. We always try to make sure that even If we can’t do it, we give them direction because today, you do not want an angry person. Especially when you didn’t do anything other than your job which, ethically we can’t take cases that we’re not qualified to take, so, we don’t want to get a bad review for doing what we’re supposed to do.
Casey: For answering your phone. [chuckles]
Justin: That’s right.
Casey: Wow. I think we have time for two more tips here for running a profitable law firm. Really, I guess they don’t have to be in any order, just the next one that comes to mind.
Justin: Sure. Processes, find your processes, whatever those are. That’s been really hard for us to winnow down. We’ve had ones we like, then you start realizing this one, and that one is stepping on the toes of each other or these two are duplicative. We’re constantly trying to figure out how to narrow down our processes so that everybody’s on the same page and so that we’re not doubling up work. Then, at the end, if you want to have a profitable law firm, you have to understand that you personally are building something. You have a lot of lawyers who think the law firm’s their piggy bank, and take and take and take. Then, at some point, if you’ve got a bad year or a bad quarter, all of a sudden you’ve got problems. It’s been important to us to not run on a lot of credit or anything like that. We want to know that we are financially stable, and whenever COVID and the shutdown happened. I told my employees that have been with me longer than three months, I said, “You all aren’t going anywhere. We are positioned for this. We have prepared, we have our own rainy day fund. Unless this goes on a year, you all are safe.” That’s important because I need them when we get out of this. If you’re not positioned or prepared for a rainy day, you might lose all your great talent.
Casey: Absolutely. That’s really good advice and I don’t think we’ve even seen the beginning of what that fallout is going to be. Maybe some firms were able to get PPP Money, but they were cutting it too close. Now, that that’s going to be at an end, it’ll be interesting to see what happens here. [crosstalk]
Justin: The cash is being bloated. If you’re a bloated firm, this isn’t a good time for.
Casey: For sure. Well, that’s good. Then, the last tip, number five.
Justin: Oh, I think I combined the two. Don’t use it as a piggy bank and have processes.
Casey: Okay, got it. That’s right, because I did skip over the processes but I did want to talk about that real quickly, too because process is the thing that I think a lot of firms struggle with. I struggle with it. Do you have somebody that handles that? Do you all work together to create those?
Justin: I have created all of them. Then, we collaboratively keep changing them and fixing them and making them better. Early on, it was checklists, and then it was forms and then those forms became digital. Then, those digital forms got incorporated into a document, File Management System. We’ve got that workflow. I’m not going to say perfect, but it’s getting a lot better every single day and we’ve got it to a point we’re comfortable with it. We actually had a big sit-down two weeks ago on a big portion that we realized was duplicative, and so now we’re combining the two. It’s a never-ending process to make your processes better, but if you’re paying attention, it’s not hard, it just requires a lot of upfront effort and then a lot of commitment to them.
Casey: Got it. I’m assuming that allows you to get consistent results as well.
Justin: Consistency across all things, so not just in your cases, but in the way you handle phone calls, in the way you handle assignments within your own law firm. All of it is affected and all of it should, hopefully, allow for everybody to have more time to work on what they’re hired to do.
Casey: Okay, yes. Now, that’s great. I think that’s, again, just one of the areas that a lot of firms struggle with, creating process and then sticking to it. The successful ones, the ones that figure it out and are around long-term, that becomes a core part of their business. That’s great. What advice would you give to somebody who’s looking to start their own firm right now in today’s climate?
Justin: Man, I’ve just been having these conversations with people too. First of all, the climate’s a terrible time to do it. [chuckles] I told a buddy of mine, “Don’t do it. This is just not the time to do it.” Intake is down. We’re in a world where we represent people who get injured on the job or injured in vehicles. No one’s driving and nobody’s working right now for the most part, so it’s not a good time to do it, save and except for people that are leaving and are bringing a docket of cases with them from an old firm or somebody’s going to provide them with a docket of cases. With all that said, keep your overhead low, borrow office space at first. Your first step should not be, “I’m going to go do advertising.” That should not be your first step. Your first step should be building your firm, building your processes, and having some cash flow available so that you can use that for marketing if you decide to do that. I would say overhead low, choose very wisely on what you need in terms of staffing. If anything, if you’re going out on your own right now, try to do it with one person, and that one person’s going to be doing everything to start. Then, finally, be able to humble yourself, be able to go to people that can help you, and say, “I need help. I’ve never done this before,” or, “Do you have any extra work?” or, “Can you guide me on marketing or preparing for a depot?” Whatever the answer is, but be able to humble yourself and ask for advice. Too few of people are willing to do that, and I just think it’s so much to their detriment.
Casey: No that’s a good point. Having that humility really allows you to learn faster and not make those mistakes, learn the hard way. I think that’s solid. Justin, is there anything else that we didn’t talk about that you wanted to convey to the listeners today?
Justin: No. Right now is a funny time, and if you are not paying attention to all the free wonderful CLEs that are available out there that keep popping up and are free for everybody, you are missing out. That’s my only advice. I’m telling all my friends that too. There are these great CLEs because all these conferences got canceled, so they’ve just, I guess, gone free with it. I have had some of the most productive learning Zoom meetings I would have ever imagined, and people are sharing their documents and sharing their presentations. If you’re on shutdown and you’ve got a little spare time, start digging to see what free CLEs are out there because I’ve run into some just fantastic ones.
Casey: That’s awesome. Well, Justin, thank you so much for joining us today. I really appreciate it, and I look forward to catching up in the future.
Justin: All right, man. Thank you very much for having me on, I appreciate it.
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