What's your exit strategy?

(upbeat music) - Welcome to Bar Review, a space where we talk honestly about life and the legal profession. I'm Carrie, and I'm Anika. Welcome to the conversation. Just a quick note before we get started. We are not your lawyers, and this is not legal advice. - And to the extent either of us are employed by the time this airs, this is where we share our personal opinions and not the opinions of anyone else, especially those kind enough to employ us. - And one more time for the people in the back. - We are not your lawyers. - This is not legal advice. - Thank you for listening. - Hi, Cody Blades. - Hi, you guys doing? - About a year ago, you opened your own law firm. - Yeah, I did. I just celebrated my one year anniversary, but it's the name of your law firm. - It own Blades Law. - And what kind of law do you practice? - I help business owners who are navigating legal disputes that they have been unable to resolve other own, whether that's legal disputes with other owners, or vendors, so fiduciary legal disputes, contract disputes. I also help employees who are separating from employment under less than a legal circumstances, separate from employment with dignity, whether that be helping them negotiate a sovereign's package or if we have to sue. - So is it fair to say that you help people navigate an exit strategy? - Yeah, it is fair to say that. Actually, that's a way better to have land than I came up with. When I first started the firm, yeah, I help people navigate an exit strategy. I would say very often the clients that come to me are clients who never had an attorney before, never had a legal issue before, and are basically calling me to say, "Is this anything? Like, this isn't feel right, is this something?" I would say for business owners, a lot of times it's an owner of a closely held corporation who has a minority ownership interest, who all of the sudden gets their equity taken away from them without being paid for it, or all of the sudden gets terminated from their position with the closed corporation, and now all of the owners are saying that they have to sell, you know, based on whatever language and the operating agreement. And then on the employee side, it's usually people who feel really wronged by the way that their employer has handled the termination. And in some cases, it's a legal conduct, but has happened, and in some cases it's not a legal conduct, but they still want a lawyer's help to negotiate about our severance package. What's the first thing that you say to a new client that needs help putting an exit strategy? That's an interesting question. Normally, after they tell me their story, because usually I just let them tell me whatever they need to tell me, and then the first thing that I say after they're done telling me their story is, "Okay, well, what's your goal? What would you like to see happen here? What do you mean me for?" And sometimes they know exactly what they need me for, and then sometimes they can just tell me their goal, and then I can tell them, "Okay, well, this is how I can help you." If that's your goal, this is how I can help you. But I always start from what do you want to see happen? Do you think everybody always needs an exit strategy? No, I don't think you always need an exit. Well, first of all, sometimes you're not given the chance to have an exit strategy, sometimes you're locked out the door, and then you have to figure out what's going to happen next. That happened a lot in my world, dealing with employees, but I don't think it's a bad plan. I mean, I've had several exits in my career, so many so that I can always have an exit strategy. Even now, only my own firm, I feel like I have an exit strategy. People both in business and in their careers feel like losing their job or losing their business is existential. And sometimes it is, but I would say the vast majority of people who call me forget that they have autonomy and that they have power in the situation. I think that's true of a lot of people everywhere. So my hope is to show them the day of options, even if they have a plan to their exit strategy, preemptively, my goal is to help them figure out, okay, well, what does this look like? Now that you are being exited or ador is closing, let's look to the future and figure out how to bridge the gap between where you are now and where you're going to be in the future. It's interesting the way that you say that a conversation that we have a lot on this podcast is being in toxic environments and the impact that that can have on you and disproportionately the impact it tends to have on women and the workplace. So when you say that somebody's forgotten they have autonomy, a lot of times it's because they've been in a situation that encouraged them to help them forget that they have a tendency of. So in many ways, you're helping people rebuild, refine their voice. I think that's right. I like to think that I do that. That's usually my goal because a lot of the people that come to me really feel powerless and it's funny. Some of the people come to me that feel powerless. Their reaction is anger. They feel angry about that and they want to fight the power and fight their employer, fight their company for wronging them. And then there's a lot of sadness sometimes too, despondency. And I hope that by the end of the representation they feel like, okay, I can handle this. I have two feet under me. I can move forward. But is there ever a time that you experienced needing to get your own exit strategy together? That's me, you an ex-funny you should ask. I call my career to Goldilocks career. People ask me where I was before I started my firm and sometimes I'll just say everywhere. I was everywhere. Name a firm. I worked there. But and I really have been a lot of different firms. And I was bouncing around to try to find the just right fit. I think ultimately only my own firm is the closest I've ever been to having a just right fit. When I left my last firm and you I was going to start my own firm, I knew that I wanted to keep serving some of the clients that I was serving. So if you leave your firm and you have no intention of keeping clients because you're pivoting or because you just want to start fresh and you just don't want to take me clients with you, the exit strategy and that situation is a lot easier, right? You just put in your two weeks and you move on and you start from scratch and that's a fine way to start a firm too. I started my firm with a full caseload. So while I had money coming in from day one, there was some just, you know, like I couldn't get a social media campaign started. There was a lot of stuff that I've been visioned myself doing when I own my own business that I just simply didn't have time to do because I had a full caseload. And whereas you start clean, you start fresh, you get to define what your day-to-day looks like and you get to make really strategic decisions about how to build your book if you start fresh. So in that situation, I don't think you'd be as much of an exit strategy because I just don't think you're going to get pushed back. But yeah, when you're quitting and you know that you're going to want to give clients an opportunity to come with you, you have to have an exit strategy because even the most well-intentioned firm with the best bosses, they want the clients to stay with them. They want the clients to choose them. And if you have a firm or if you have people that own the firm who don't really want to risk the clients choosing you, then they're going to try to find a way to make sure that you hand over the control in that situation to them so that the clients don't even have a choice. - So something that I think is important just to clarify if people that aren't familiar with firm business and politics is that it sounds somewhat, potentially like shady, to be leaving an employer and want to take clients with. But I think an important piece of this is that clients belong in a sense to the attorneys that bring them to the firm, not the firm itself. Like we've talked about generating business, you talk about a book of business, even in a massive firm, that business belongs to that individual. So it's not really a controversial, I don't even problematic move for someone to leave a firm and want to take their own clients with them. That's such a normal part of practice, but can be incredibly controversial because firms are other people in your practice, fuel a sense of ownership over that client because maybe they worked on it or it's an important economic client to the firm. But at the end of the day, like attorneys as people have clients, firms don't have clients, really. So I think that's important. - I'll add one thing to that because I think to be fair, some of the clients that came with me were not clients that I originated. But they were clients that I was the attorney appointed to the case and I built relationships with the clients and I knew that it'd given the choice they would want to come with me. What's really important to remember is that the clients don't really belong to anybody. They don't belong to me, they don't belong to my previous firm. They do get to choose who their lawyer is. And it's not my job and it's not the firm's job to take that choice away from them. They get the choice of staying with me, staying with my old firm or going somewhere else. If the attorney that they like at the firm leaves, they don't have to stay with the firm by default. They can say, okay, well, maybe we'll look into finding a different firm at this point. There was a total option there where they could have said, we want a firm with a bigger team than you, Cody Solo, but we don't really know anybody at this firm. So we're gonna go find a different firm. That's their choice too, you know? It's easy to make a client believe that they don't have a choice. So it's easy to just to say Cody Blades has left the law firm, let me introduce you to whoever. This will be your new point of contact here at this firm. It's easy to say that and most clients don't even realize, we've got, when I think that's through like throughout legal practice is that attorneys often forget that their authority comes from their client in all aspects. Attorneys can strategize and write and argue in court like the authority to make decisions comes from the client not the attorney. [BLANK_AUDIO] authority to make the decisions and also we are dealing with human beings. We are dealing with the problems of human beings. You don't own their problems. This remains to be a human beings life. Let's back up a little bit. I don't think that we've done a good job of talking about how to build a book of business. Can you talk about how you built your book of business? Um, worked, how you moved from places with your book of businesses. Yeah, that's a good question. I'm still very much building my book of business. My journey with book of business has been really long and maybe too long, right? Because when I came out of clerking, I was like, OK, work, they find these clients. Let me start signing people up. I want to be their attorney. I was always interested in business development. So when I was a baby attorney, I was trying to find any way to get connected to other lawyers, any way to get my name out there, any way to have people come find me. I was a plaintiff's appointment lawyer exclusively in those days. I moved to consumer class action work and then I moved to a really big law firm doing product flyability defense work for huge multinational public corporations. And then in the past, probably six years, I've done more of what I'm doing now, which is representing employees, advising employers sometimes and then representing small businesses, closely held corporations. So for the past six years, I've really tried to focus on being strategic around book building because some bad advice. I was just listening to a podcast actually the other day, not your podcast. This guy was on talking about how all you have to do is have 20 friends who refer you up to $10,000 case once a year. And then you've got a million dollars. You've got a great practice. Yeah. And that all you have also you've been in this game for 35 years. What are you talking about? Of course, that's not all you have to do. And he was really talking about these are your best friends. These 20 people are your best friends. No, they're not. Talking about these are business contacts. So for me, I think really bad advice is, well, just go to coffee and chat about, like, you know, your knitting club, but that's fine. That's great. That's a really good outlet. You need people that you can do that with. I do that with YouTube, you know, we just go out for a drink. So we talk about whatever. But I don't expect to get business from you guys because we go out to drink and talk about whatever, but it's not the expectation of a meeting like that. When I go and I'm actually developing business, I want people to know what I do. And I try to end business that working events or whatever by saying, here's what you can look for for me. Here's a good referral for me. What can I do for you? What's a good referral for you? And I try to make it a really intentional part of the business development coffee or a lunch or whatever. Of course, you want to connect on a deeper level too. But I think especially women are told you don't have to talk about business in order to build a book and have bad advice. You have to get used to talking about business rather than personal things. You have to get used to asking for business and you're just never going to get used to that. If you don't practice, especially on good friends, you know, and if you actually do have good friends who can actually refer you business, start with them because they're going to be way easier to do the pitch with than somebody who you know tangentially. So one thing I've been really focused on the past five years is building a strategic referral network. I think about my clients journey, right? Where is my client going to go before they find me? Well, they might go to their CPA. They might go to their financial advisor, especially the minority shareholder who all of a sudden isn't getting their K ones. They're going to go to their tax plan. It would be like, hey, I didn't get any K ones this year. Tax plan is going to be like, oh, that's strange. They're going to start talking about it. And then I want that tax advisor to be like, you know, I think it's going to be calling it turning. I think something's really strange here. And then I want to be that attorney, right? So I try to think about my clients journey to me. Who do they talk to before they talk to me? And then those are the people I want to network with. So I've been working with a lot of exit strategists like private equity. There are people tangentially related to private equity who are exit planners. Like how do you build scale your business in order to sell talking to those people, financial planners? You know, so I try to think about it strategically. And then I try to meet people in those strategic categories and just keep up with them from there. In the past, how did you move with your central really been an issue before those last move? Because I just didn't have a big enough book. And I thought that's kind of my design. Building a book with in a law firm is really hard because it's fundamentally at odds with the goal of the law firm for the associate. If you are an associate at a law firm, the law firm wants you to bill because if you are billing, you are making that money. And so any time that you spend away from billing, doing something like building a book of business is at odds with their goal. In your favor, but at odds with their goal, while Burns will tell you that they want entrepreneurial attorneys, I've found that that's by a large not true by a large firms just want you to bill because that's what makes the firm money. I get that. But if, for example, I worked for a firm that said that they wanted an entrepreneurial attorney and the interview we hit it off really well because I am entrepreneurial and they were really into the fact that I wanted to build a book. But then they didn't give me an origination fee and they didn't give me any marketing budget. So you say you want this entrepreneur, you say you want this person that wants to build a book, but you don't give me any incentive to build a book and you don't give me any of the tools I need to build a book. So what did messages that sending to me, you know what I mean. And I've been at other firms where the billable requirements were just too excessive for me to be able to do any book building at all. So I do think it's really hard to build a book as an associate and I am not a good example of how to do it because I didn't. I just started building a book at my last firm and I made it my number one priority and I didn't listen to all the noise about whether or not I was making my billable hours. I just shut that out of my mind. I was like, I don't really care if I'm hitting my billables because for me building a book is existential. So really the last three years, I was laser focused on building that book that all costs. I think you are a great example of that in both. So to summarize it, what are the things that people need to build a book of business? I heard you say time to do it. So if you're in a situation where there's an excessive billable hour cap money to do it so that you can take people to the kinds of social things. And I heard you say. What do you want to do? For example, my very first job when I was a new new lawyer had an origination fee of 10% I think. So I wasn't billing by the hour in that firm because it was a contingency practice. So anything that we got in a settlement or from a jury award, if I brought the client and the client came to the firm from me, I got 10% of whatever money, the firm earned from that client being a client. I've also had a firm where I got 25% for every client I brought in and that was a billable firm. So that was 25% for every billable hour build and recovered. Right. So it's not just about billing. It's also about getting paid. So every hour that got paid, I got 25% up to a certain amount. So they capped it at a certain amount. And then I've also had origination fees of 10% are common too. And so basically it's just a percentage of the money that's being brought in. And origination fees are extremely important, I think. So every time I hear of somebody who's trying to build a book and they don't have an origination fee, I press on them about it a little bit. Because if they're not giving an origination fee, your employer isn't supporting you building a book. So let's talk about that. Do you actually want to build a book? Is this actually a goal? Then maybe we should talk about what that conversation looks like with your employer. To get them to get you an origination fee. That to me is bare minimum. You need an origination fee if you actually want your associates to build a book if you're serious about it. So how did you approach the last three years differently? Then you had approached your career previously in this effort to build your book. I think the big difference was that I had this realization that nobody's going to tap me on the shoulder and say, "It is your turn now." It is your turn now to go out and build a book. I think I was waiting for some sort of sign from the universe that like, "Okay, now you're ready." And I just realized that was not coming. First of all, I realized that me building a book was actually at odds with what my firm wanted, which was billable hours. And then the second thing I realized is I don't actually have to wait for anybody's permission. I can just do this. And that's one big difference. And then another big difference is it became existential for me. If I don't build a book, I will never have any autonomy in this profession. And some people don't want that. For some people, that's not as important. They're okay. Not having autonomy. They're okay being a W2 worker, not owner. Great for them. For me, it was never going to be enough. I knew that I wanted to be autonomous. I wanted to have control over my day to day. I wanted to have control over my future. I didn't want somebody else to tell me what that looked like. And I knew the only way that I was going to get there was by having clients who originated business, who paid. And the only way I was going to get that is if I built a book. So it just became my sole focus. It was still doing the work because you can't keep your job if you're not doing the work. But if I didn't have to do the thing, then I wasn't doing the thing I was focused on building the book. Also spending my own money. I just started spending more money on marketing. I just started doing things without asking for permission. That's going to work at some firms. It's not going to work at others. For me, it was like, okay, fire me. But this is what has to happen in order for me to have a fulfilling career. So I threw caution to the wind in the last several years. So you threw caution to the wind and you built your book of business over those couple years. How did you make sure you got to bring your book that you built through all this hard effort with you when you decided to pivot to your own practice? I want to make sure that I'm clear not all of the clients that I brought with me, I originated. But they were clients that I built a good enough relationship with that when they were presented the choice they wanted to come with me. And that's good lawyer writing a good brief or knowing the law well. It's about having a relationship with the clients where the clients actually trust you and rely on you and trust and want to continue to partner with you. So when I left my last firm, I knew that I had probably about this team, I can't remember the exact number, but it was like a team to 18 matters that I was pretty much the only attorney working on. And for maybe half of them, I was working in conjunction with maybe one other person. But I was really the one talking to the client, running the case, making the decisions. And then the clients that I originated, obviously I was the only attorney on the file for all of those. And I knew I was going to start my own firm and I knew I was going to start it whether the clients were going to choose me or not. But I wanted to give them the opportunity if they wanted to do it. But I also didn't want to be unfair to my firm that I was leaving because if the clients wanted to stay, I wanted the clients to be wherever the clients wanted to be, basically. So I came up with a strategy, first of all, I took basically an audit of all the cases I was working on. I think the ABA's language for it is the attorney with the responsibility for the case. I felt like there was 15 to 18 that that was the case. I was the attorney that the client knew. I was the person that they were calling with their questions. I was making the strategic decisions on about 15 to 18 cases. There were two cases where I was not that where I was working on the matter, but a no 10 general role doing research here and there, helping draft things here and there. But the clients didn't really know me. They didn't really have a relationship with me. And then I think there were two clients, one that I had brought in and another one that I had done the intake for, but had no relation to the client. So I did that audit first. I wrote down all the names of all the clients and then I wrote a draft email that I envisioned my firm would send out to each client that basically said, Cody Blades is leading the law firm. She's starting her own firm blades law. You have the option of remaining with this firm or going with blades law. And really there should have been a third choice, which is or finding a new attorney, but I looked up a B bottle language to write that email and just missed that part. But really in your email, that part should be there. You can stay, you can go or you can find a new attorney. And my thought was, I will send this email out to all these clients and then we'll wait for their elections to come in. They can elect to stay with the firm. They can elect to come with me or they can tell the firm and me, hey, we decided to go a different direction and plan B. I didn't talk to any of the clients before I quit. But once I quit, now I can talk to the clients and tell them that I'm starting my own firm. And I did what those conversations to be convincing the client of anything. I just wanted to make sure the client knew that they could if they wanted to. And so I drafted this email to all the clients that envisioned me having a phone conversation with them first. So it said thanks to the call early today. I know this probably comes as a shock to you. Take your time to think about it. If you want to come with blades law, the engagement agreement and the authorization to transfer your file is attached. And I had that draft email in my new law firms email inbox ready to go in case plan A didn't work out. So plan B was just very simply calling every client letting them know I was leaving, telling them they had a choice to stay to stay with the firm or to come with me. I was very diplomatic. If you choose to stay with the firm, I will make sure everything is transitioned smoothly. I will make sure that the new attorney at the firm has complete access to me so that nothing gets dropped and that the transition is very smooth. This firm has excellent attorneys. I had no doubt you'll be taking care of. I said a lot of that while I was talking to these clients on the phone. And I said, if you want to come with me, then you'll have to fill out an engagement form and you'll have to fill out this authorization to transfer file. And then I can keep being the attorney on your case. And then after I would hang up the phone, I would send that email draft I'd prepared prior to having the phone call. And so it was pretty much clockwork. Have this conversation with the client, send out the email and let them make the decision. And you know, for a couple of clients, they initially said that they wanted to come with me. But then they called me the next day and said, hey, can we have another conversation? And when we had that next conversation, they were asking me questions, you know, what are we losing by going with you? You're a solo. Are you going to be able to actually handle this? So they have questions about my technical capabilities, about filing. Because a lot of attorneys don't have experience filing. I just do. So I had to, for some of these clients, tell them, hey, I'm very confident I can take your case and here's why. And I had to lay out my credentials. I didn't skimp on the technology from my firm and I did that for a reason because I wanted to make sure you were taking care of them. This is what I can guarantee you. Just make sure the clients knew that they were going to be taking care of if they came with me. So it's not like everybody was just like, yep, let's go with Cody. Some clients had legitimate questions about whether they were going to be taking care of it if they wouldn't be. A lot of it is just really focused on customer service, right? What's going to be the thing that makes the clients feel like they haven't been abandoned in the middle of a really hard thing that they're going through? And then the second is client choice. How do we make sure the client knows that this is in their hands? And empower them, right? That's the goal throughout all the representation. That's awesome. How is solo practice good? I feel like I never know how to answer that question. I mean, I really like working for myself. I have a really good group of attorneys around the tone cities that I can ask questions too. So that's important. I got a virtual assistant, which was necessary and she's been helpful. And then I actually am using an intake person too. So this person that calls back leads and that's been amazingly helpful. So that's going really well. I feel like I spent money on good technology and it's paid off. I paid for the Cadillac version of Lexus. I have Clio, which has been really great. I made some good technology decisions that have made things a lot easier for me as a solo is really free. What books did you recommend? My favorite business book that I read was the E-Mess we're visited, which is about entrepreneurship. And it's what's people up in the categories and it tells you once you become a business owner, you can't just be a technician, which is a person who just likes to do the work. You also have to be a visionary. So I liked that. There was one book by a lawyer named Dev Sutterer called After Hello about building a book and developing business. I liked that book. Those are good. I read Traction, but it was for a 10 person law firm, not for a little me. So by design is a good one. The lawyer is put out a book. I think it's called The Small For Roadbound. That was a really good one too. You run something called Rainmaker. What is Rainmakers? Why is it important to you? And what are the things that you're hoping people get out of Rainmakers? And who do you think should join Rainmaker? I've been on the board of Minnesota women lawyers for two years now. I think I'm in my third year. But I might be in my fourth year. Anyway, I've just been really involved with Minnesota women lawyers. I think what Minnesota women lawyers is where I had some of my early business development success. The referrals I was getting were from people I knew at Minnesota women lawyers. And so for me, it was like, let's put more eggs into this basket because the ROI seemed obvious to me on being more involved with Minnesota women lawyers. And so I was on a committee for a while and then I became part of the board. And I felt like something that was missing from Minnesota women lawyers was that there was a real focus on equity as far as the pay equity goes. They wanted to make sure that women were making the same amount as men for the same job, which is great. That's really important. But if a piece that's missing in that is if you are in private practice, most of your pay does not come from your salary. It comes from the bonuses from your origination fee or the bonuses that you get because you've originated work. Or at the partner level, it's profit sharing based on a percentage of what you bring in or whatever. So we can look at if my colleague is making 50 grand a year and I'm making 50 grand a year, that's great. But if I'm making 50 grand a year and my colleague is making 50 grand a year and he's bringing in $100,000 of origination and I'm bringing in $20,000 of origination, there's still inequity there. And it's not necessarily a systemic inequity, but it's inequity because women are learning in the same way that men are how to business develop. And so I felt in order for there to be true equity in the profession, women in private practice had to take more control and ownership over their wealth and over creating wealth. So that's where rain makers comes in. It's called an affinity group. Affinity groups are run by members. Affinity groups are usually groups that don't apply to all of our members. They only apply to a certain segment of the members. So this group is not good for a government attorney, right? Government attorneys don't have to reinmake. But I thought there should be a place within Minnesota women lawyers for women to focus on building skills related to business development, talking about challenges they have with business development, asking questions, group learning module, right? Because I'm not an expert. So I can't be the teacher. There's no pedagogy, but it's through all of our collective experiences figure out how to do this thing called business development. And so for the past two years, I've been running that group and basically the group is for anybody who has to who wants to take more control over their wealth by building a book of business. And we have people who are private practice attorneys, but we also have recruiters, women who have joined recruiting law firms. They could be for somebody who owns a business related to law too. So court reporting business. If you're part of Minnesota women lawyers and part of your business requires you to meet new clients and to bring in new clients, brain makers can be for you. So we talked about things like defining your ideal client, coming up with a business plan on strategic referral networks. And we have form conversations too, where we just ask some open-ended questions and we have really good conversations. The cool thing with those sessions is you asking open-ended conversation and somebody talks about a challenge or having with business development. And then everybody around the table is helping that person to solve the challenge. So it's been really rewarding. And I hope that it's helpful. And my hope for the group is that women have time once a month, at least for an hour, to be completely focused on business development and nothing else. And then hopefully that inspires them to do more business development stuff throughout the rest. - That's awesome. I'm in ring makers and I love being a part of it. And I think that the in-person conversations, especially when we're all sitting around the table helping each other had just been awesome. - Nope, my last question for you is, Cody Blades, who is your ideal client? Who should call you if they're listening to this right now? Or who should be referred to you if you have somebody who is in your choir listening to that? - If you are an owner of the business and you feel like you're not being treated by the other owners of the business and you just wanna chat about what your options are, you can call me and we can chat. Just because you call me doesn't mean you're signed up. We could just go over your options. If you're a small business owner is getting sued 'cause you haven't been billed or a deliverable would wrong or you have to sue somebody for those reasons, you can call me. And then if you're an employee who feels like you were discriminated against or retaliated against or who's separating from employment and you have the severance agreement and you don't know what to do with it, call me. - Awesome, thanks for joining us on Bar Review Cody. - Thanks for joining the conversation. You can find Bar Review wherever you get your podcasts. Please subscribe and share. Wanna keep the conversation going? Follow us on social at Bar Review LLC. Onnickable see you there and she'll tell me all about it. Got a question you want us to tackle in a future episode? Send it our way. We try to read every email. And just a reminder, we are not your lawyer. This is not legal advice and these opinions are just our own. Cheers.