Michael J. Swanson – CEO Of Advocate Capital Inc. Shares The Benefits Of Financing Case Expenses For Contingent-Fee Attorneys on Business Innovators Radio

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MS: So our typical clients have been self-funding. They truly don’t need the money. It’s not that they’re in trouble. And it’s hard to get their attention, right? So they’re not going to be perusing the internet, looking for funding for their cases, because it’s always worked well for them this way. You know, they don’t really realize how much better they could be doing. So what we do is, come alongside them. We attempt to make contact with them, and build a relationship, and build trust over, usually, several years before they become a client. And that’s where we do a lot of other education to help with that.

MS: So in our Nashville studio, we do quite a few different types of videos. One type of video highlights some of the important casework that’s being done by our clients and other lawyers around the country. I wrote a book, as you mentioned in the introduction, called How David Beats Goliath. And the name of that book was suggested to me by my business partner and friend, Dan Taussig, because it really is kind of a David versus Goliath thing. Even if you’re a very successful law firm, you’re going up against State Farm, or you know, Nationwide, and this kind of thing. So it’s a David versus Goliath thing. So in that book, I put it together to help plaintiff lawyers generally, because we think a rising tide lifts all boats. We’re trying to educate future customers to run their law firm financially well enough to become a customer eventually. It’s the only book ever written to help plaintiff lawyers understand finance, and much of the book is actually, a lot of it’s kind of the inverse of what we’ve seen done wrong out there. We try to help folks avoid those pitfalls.

MS: So we do video content based upon the book. I speak around the country based upon the book content to help plaintiff lawyers. We also do webinars to help them in various business topics, like HR issues, or maybe IT, or insurance. So we’re trying to give them all the tools that we can. I think that when a prospective client starts to look at us, I think they see that we’re engaged, we’re involved. We’re really trying to help all plaintiff lawyers, and I think that goes a long way to landing clients for us. But it took a long time to figure out how to do that. How do you sell funding to a law firm that doesn’t need it?

BIR: Right. That seems to be a big problem. I mean, speaking of that, what kind of fears or apprehension do some of these plaintiff lawyers have when they come across your message?

MS: Well, I think there are several fears. One is a fear of doing something new, right? That’s always scary, especially if things are going pretty well. You know, you get kind of comfortable, and you don’t necessarily want to change. I think it’s a fear of the unknown. What will their clients say now that they’re going to pass interest through? Well, we know they’re not going to complain because we wouldn’t be where we were if all the plaintiffs were complaining about it. So there’s some fear of that. Sometimes, they’re fearful it will make them less competitive in their marketplace. It doesn’t. It actually makes them better. Better lawyers get better results, and they get more clients and a better reputation.

MS: So I think those are the main fears. And of course, you know, a lot of folks are debt-averse, and that’s a good thing. I mean, debt is a huge problem right now. It has been for a long time. The student debt in this country, for example, eclipsed credit card debt several years ago. So everybody reads about that. Debt can be a bad thing. However, debt used in a strategic, controlled way for a business, if they can use that leverage to help them grow and get better results, it can be a very effective way; especially because, as I mentioned before, you know, raising equity is not an option for them. So they’re going to have to use some kind of, if they’re going to go outside, use some kind of outside financing of some sort.

MS: Then they also hear about some of the stories out there, of lawyers who get in trouble and borrow too much money. And those are the folks that we turn down. And they go to other, very high-price lenders, and they dig a hole. So I think, you know, they’ve heard those stories and seen a few movies actually based upon that.

BIR: Right. Well, let’s talk about some of the success stories, Michael. Who springs to mind, a company that was coming to you for a little bit of help? How were you able to help them? And what was the outcome for that company?

MS: Sure. Well, I mentioned Lance Cooper as a specific case. But our clients, on average, grow with us when they come aboard, for the reasons I mentioned previously. Thinking about a particular client, I have one in mind who, I’m not going to mention the name of this particular client. It was two lawyers that came to us. They had no employees, younger fellows in a major metropolitan area. And they wanted to start with us. Well, they weren’t our typical client at that point, because they didn’t have much of a track record. They had a little bit of net worth built up. They had saved some money up, which was a good thing.

MS: And you know, I mentioned before, we have no lawyers on staff, so we couldn’t evaluate their cases because that’s not how we operate. But over the years, we’ve become experts at picking the right law firms and lawyers to work with. We’ve been reading the financial statements, business plans, tax returns of plaintiff lawyers every day for the past 18 years. And so when you do something like that all day long, you kind of know how to spot the right ones, right?

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Neil Howe

Neil Howe is a 3-time #1 Best Selling Author, Online Media Strategist and business radio talk show host. He covers the most Innovative Business Leaders in Small and Local Business helping them share their stories with the world.