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:Â 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?
MS: So we recognized that these two lawyers had a lot going for them, both from a legal standpoint, but also from a business standpoint. They had a real business understanding. We liked their business model, their business plan. We could tell that they weren’t just your typical plaintiff lawyer. You know, your typical plaintiff lawyer has an undergrad in history, or psychology, or sociology, or English; nothing wrong with those degrees, but they don’t teach you how to run a business. Then they go to law school. You don’t learn business there, so they’re kind of thrown into it. But these two, we really, we thought, “You know, they’re going places.” So we set up a line of credit for them, I think around $75,000, which is our minimum, right around there. And this is probably 10, 12 years ago.
MS: Well, they got on board, and they just ran with it. And they’ve done such a wonderful job. They’re dominating their market now. They have significantly added to the number of people they’re helping in their community. They’ve diversified the law firm into other types of cases. And they’ve grown their revenue and net worth, such that we’ve been able to recently renew them at their renewal time. And we’ve finally now increased their line of credit. It’s at $6 million. So they went from $75,000 of case expense needs to $6 million. And you know, their profits and their net worth have grown in a similar way, and so has the couple thousand people that they’re helping in their community; now are getting the kind of legal representation they deserve.
MS: And that’s just one example. And there are many, many others because that is typical; although it’s not usually from $75,000 to $6 million. That’s a pretty meteoric rise.
