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96 – Malorie Peacock – Building Your Profitable Law Firm

By Michael Cowen — 1 year ago

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In this episode of the Trial Lawyer Nation podcast, Michael sits down with one of his favorite guests, his law partner Malorie Peacock, for an episode about the decisions they’ve made over the years to build and run a profitable law firm.

“It’s a podcast about actually making money from practicing law.” – Michael Cowen

Michael and Malorie begin the episode with a look at where they started in 2014. Back then, the practice was general personal injury with a lot of small car wreck cases. That year was the first time they decided to stop taking non-commercial cases without a large insurance policy – a scary decision at first but has since proven to be very successful in branding Michael as a “big case lawyer” with referral partners. And because of this scary decision, Michael began meticulously tracking specific numbers to make sure the new strategy was working.

Michael shares the main numbers he tracks and analyzes with his leadership team annually – the average case fee and the median case fee. He then breaks it down further by case type, referral source, lawyer assigned to, and more.

Tracking each of these has shown that even though the firm is only accepting 1/3 of the cases they did before, the firm has grown significantly since 2014. This has helped fuel decisions from what kinds of cases they accept, to marketing, and when to hire more staff.

“I didn’t dare to dream that we’d end up with the median or average fees we’re at now.” – Michael Cowen

Michael then reminds listeners that he’s been doing this for 20 years and being this picky about what cases he accepts is NOT something he could have done successfully when he first started.

“If it doesn’t work, you can make other decisions. You don’t have to die on this hill.” – Malorie Peacock

He and Malorie then dive further into their “counterintuitive” approach to growth – to accept LESS cases but make MORE money – and the big and small decisions that were made to get them where they are today.

The first big decision was that they would not accept any car crash case that did not involve a commercial vehicle or 18-wheeler, unless there was a “large” insurance policy, adding that the definition of “large” has been re-evaluated and changed many times since the decision was first made.

Malorie then digs deeper into why re-evaluating your rules for case acceptance every year is so vital. Michael explains that you need to see if it’s working, and if it is working, decide if you should lean further in that direction or not.

Another decision made was if it “doesn’t have wheels” and isn’t worth at least $1 million, they usually won’t take it. Michael shares why this one has been hard to stick to, but he and Malorie discuss why they need to be this picky, citing the lack of systems in place for these cases as well as the amount of research and work that needs to be put in to get the maximum value for the case.

Malorie and Michael continue discussing some of the changes they’ve made, and some changes they decided not to make, and how they evaluate each item up for discussion. For example, they frequently discuss eliminating cases with low property damage, but for now have settled that they’ll take a low property damage case if it meets other criteria. This insightful and holistic approach is a must-hear for any listener who is looking to re-evaluate their approach to case acceptance.

“You can’t fight a war on 3 fronts…If you have to fight on all 3 of those issues, it’s really tough to get a jury to go along with you on all 3 and still give you a lot of money.” – Michael Cowen

This leads Michael and Malorie to discuss the sunk cost fallacy once again, where you hesitate to pull out of a case once you’ve put money into it. Michael shares how he used to spend most of his time working on cases that didn’t make him any money, and how learning to let those cases go and withdraw when necessary has made him a much happier person and has actually caused his firm to make MORE money in the long run. These include cases where the client lied to you, or even cases where the facts just aren’t what you’d hoped they would be.

Michael then shares a heartfelt story about his uncle, and how his death made Michael realize the importance of enjoying your life while you’re still here. Malorie adds that at the end of the day, a personal injury law firm is not a non-profit, and if you’re not making money, then you’re not doing it right.

“We get one ride on this earth, and I want to choose to be happy and enjoy my time.” – Michael Cowen

They continue to discuss some of the smaller decisions made along the way, including the implementation of in-depth systems. Not only does this help the case resolve faster, but it also helps the lawyer focus less on meeting deadlines and more on in-depth research and complex legal work that can really maximize the value of the case.

“Cases are not wine. They do not age well.” – Michael Cowen

Michael and Malorie begin to wrap up the episode with a look at docket size, which has lowered dramatically at their firm in the last 7 years. This has allowed them the time to implement those in-depth systems and end up getting 150-200% of the money they received 7 years ago on the same wreck with the same injuries.

If you don’t have control over your docket, but you do have control over what you work on, Malorie recommends utilizing the 5-star case system. This system ranks your cases based on your projected fee and your win probability, and the goal should be to spend as much time as possible on the 5-star cases and as little time as possible on the 1-star cases.

“Limiting docket size at the firm… counterintuitively… has made everybody happier, but also has made everybody more money.” – Malorie Peacock

The pair concludes the episode by emphasizing that the criteria and decisions discussed in this episode need to be discussed at least once every year, which they will be doing the week this podcast airs, and that the decisions you make need to work for your firm and your life.

This podcast episode also covers saying “no” to cases, the Pareto principle, why Michael still accepts other personal injury cases, getting out of cases with “toxic” clients, the logic behind “from crash to cash in 12 months”, why you need to be ready for trial the first time you’re called, and so much more.

37 -Sonia Rodriguez – Caseloads: Quality vs. Quantity

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In this Trial Lawyer Nation podcast, Michael Cowen sits down with Cowen | Rodriguez | Peacock partner, Sonia Rodriguez, for another installment of TLN Table Talk to answer the questions of our listeners. This show focuses mainly on questions revolving around caseloads and determining the best approach for your practice.

The first question from our listeners is about the number of cases an attorney should take on at any given time. Sonia discusses the balancing act, especially for younger lawyers, of quality vs. quantity. Attorneys may want to trim down their docket of cases, but need to make sure these are quality cases that will help keep the lights on and not arbitrarily setting a number for maximum cases. She also reviews some of the dangers of trimming a docket and how it can be a very dangerous economic decision. And she notes that each case should be thoughtfully selected to match the goals for the practice.

Sonia came from a practice with partners with duel loads. (IE: One partner that handles big cases and more complex cases, and the other might carry a larger volume case load to help pay the bills and keep the lights on.) This was a consensus among the partners about how the practice would operate. She points out that her practice has never been based on a very small docket and personally finds this to be a scary prospect. Michael, on the other hand, has operated in the full spectrum of caseloads. He recalls early on having 200 car wreck cases at one time with average case values being fairly low, some of which in hindsight were never economically viable. He even breaks down the impact some of those low value cases can have on a practice. And he also points out it is nearly impossible to be a high-volume lawyer while also trying to be a boutique, high-quality on one case, lawyer. The systems for handling each are very different as well as the tradeoffs which need to be made regarding one type of practice versus the other, both from a personal and professional perspective. Sonia adds there are many lawyers out there building a heavy case load practice and becoming very successful, which ties directly into Michael’s assertion that the type of practice you choose to run must also match your personal preferences, personality type, and aspirations. Michael also describes this as knowing where you are in the marketplace and his explanation on how you figure this out is phenomenal for both young and seasoned lawyers to take note of. He also gives some direct advice for our younger attorney listeners to understand the path to getting bigger cases when you work in someone else’s firm and don’t have the final say in certain matters such as case load.

The next question comes in a few parts. The first being, do firms making the transition into reducing their caseloads spend less on marketing and instead spend more time focusing on referrals? Michael explains why he made a conscious decision to stop marketing to the public when he decided to raise the threshold on the size of cases he wanted to take on. He goes on to reveal the reasons behind this decision which may or may not be what you think. Sonia also brings up a great point about the type of practice you run being largely based on your own risk tolerance and how it relates to the demands of different types of practices.

Secondly, when a firm makes the transition to a smaller caseload, do they end up reducing staff as well? Michael has definitely seen this model work both ways, but discloses why he personally has more staff now, working even fewer cases. He has found when your average fee goes up, you can increase the amount of man/woman-power you can put into the case and so you can pay better, which in turn helps you attract more and better team members to work on cases. Sonia also adds, from her own experience, the more time you have to focus on a case for an extended period of time the more ways she thinks of how to really make a big impact on a case. In other words, the luxury of being able to focus your time and energy on one case, actually creates much more work than she previously appreciated. Michael also explains how it is important to make sure you have the right people in your firm based on the practice model you want to run with since not everyone will be the right fit.

And third, the listeners concern is that like many firms, there are highs and lows and the only way to neutralize this is by taking on a higher number of cases. Michael debunks this right off the bat from his own experience, by explaining how the lower his case volume is, the steadier his revenue has become. Sonia also lays out a great way to analyze the true value of a case when looking at a high-volume practice where cases can sometimes be prolonged with continuance requests (Hint – cases that you carry for a shorter amount of time tend to use less office resources).

Another listener asks: Are you ever embarrassed to have a damages number that is too high? Michael starts right out in stating if you don’t believe this is the right number to get justice for your client, or you are embarrassed about the number, then you definitely shouldn’t present it to a jury. Sonia also asserts that such embarrassment felt by a lawyer is likely to be attributed to the lack of understanding of what their client’s pain or damages truly is. Furthermore, she goes on to say any lawyer using a formula to come up with a number, such as 3X damages, isn’t doing what they’ve been retained to do. You really have to believe what you are fighting for, which sometimes requires you to work through some of your own thoughts which may be holding you back. Michael also points out when you’re trying a case, you want to be 100% dedicated to doing everything you can to win a case, but you cannot be attached to the result.

The conversation concludes with Michael and Sonia reviewing, by listeners request, some of the books they’ve read and would recommend to help run a better practice. And Michael shares his obsessive behavior to really dig into his reading when he finds resources that really click with him. This not only includes his reading of books pertaining to being a great trial lawyer, but also books about becoming a successful business owner.

These Table Talk podcasts could not happen without the interaction and questions submitted by our listeners. We are incredibly thankful for your feedback. We encourage you to continue to send us your thoughts, ideas, and questions as we love sharing our experiences.

“Please note the TLN19 discount code mentioned in this show has now expired.”

RESOURCES

The Five Dysfunctions of a Team: A Leadership Fable by Patrick Lencioni

The Truth about Employee Engagement: A Fable about Addressing the Three Root Causes of Job Misery by Patrick Lencioni

The Advantage: Why Organizational Health Trumps Everything Else in Business by Patrick Lencioni