How to Scale Your Firm with Kevin Chern

Mar 2, 2023

Patrick Carver

Hi, I’m Patrick Carver / CEO, Constellation Marketing

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Is your law firm stuck in a growth plateau?

Imagine breaking through to unprecedented success and stability.

Kevin Chern has done it, scaling his firm to 178 attorneys before a lucrative acquisition. Now, he’s sharing the blueprint that propelled his firm to the Inc 500 list of fastest-growing companies, not once, but twice.

This isn’t about minor tweaks. It’s about foundational shifts that can dramatically elevate your firm’s trajectory.

Ready to unlock the full potential of your law firm? Dive into the strategies that make scaling not just possible but predictable.

Let’s embark on this transformative journey together.

Welcome to The Optimized Law Firm Podcast, where we chat with legal pros who can help you run a more profitable and enjoyable business.

In this episode of the Optimized Law Firm podcast, we’re interviewing Kevin Chern from Sanguine Strategic Advisors LLC. Tune in for a detailed conversation full of insight on “How to Scale Your Firm.”

What’s in This Episode?

  • The #1 factor holding back your firm’s growth
  • How Kevin scaled his firm to 178 attorneys before being acquired
  • How to avoid critical mistakes on your journey

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Episode 10 |How to Scale Your Firm with Kevin Chern

Patrick: 

All right. Welcome to the latest episode of the Optimized Law Firm podcast. I’m super excited to have Kevin Churn with us today. Kevin is a highly successful entrepreneur in the legal space. His companies have twice been on the Inc 500 list of fastest-growing companies in America. He’s also an inductee to the Chicago area Entrepreneurship Hall of fame. He was the founder and managing partner of one of the largest consumer bankruptcy law firms in the United States that was eventually acquired. I need to take a breath in the middle of this, but then founded a total attorneys pioneer in the lead generation space as well as serving as a strategic advisor to a number of companies. Today his focus is sanguine strategic advisors and biz head law, which helps businesses like mine with tax planning strategies around the ERC credit. So mouthful, but I’m excited to have you. And I think you have a ton of great experience in legal that I’m excited to hear about. So, first, I wanted to kick off with a topic for today. We’re talking about scaling firms, scaling businesses. But first, can you share a little bit about SeLoger? I think it’s a unique business model, and I would like to know how law firms can utilize it.

Kevin: 

Yeah. It’s a pleasure to be here and thanks for having me today, Patrick. Always happy to share the benefit of the many mistakes that I made over the years. I think it’s a little cliché, but they say we learn the most when we actually make mistakes; when everything’s going right, we don’t learn as much at those points. And really, Sanguine Strategic Advisors LLC is really just a product of my experience over the last 30 years, operating businesses primarily in the legal vertical. But I see them as they were primarily legal businesses, but they were businesses nonetheless. And that’s one of the things that a lot of attorneys start to forget sometimes that they’re running a business. It happens to be a law firm, happens to be providing legal services, but at the end of the day, it’s a business. But after 30 years of multiple startups and exits, I really started to think a little bit about, what were the things that I really liked about what I was doing with my life in my prior businesses and what I didn’t like? I would start businesses; I’d have a great idea, and I’d start to execute it. And then a year in, I’d look back, and I’d say, what the hell did I do to myself?

Kevin:

Because I was not thoughtful upfront about what type of business I was creating. I didn’t establish any goalposts in terms of what were the characteristics of the business that I wanted to create that would make me happy as an individual. What I did is I created a business and then I let the business rule my personal life. So, in starting segment strategic advisors, I first created some goalposts, and I asked, what were the things that I liked? Well, I didn’t like having to manage hundreds of people. I didn’t like having a bunch of partners that I had to share decision-making authority with, but then had to live with the product of poor judgment. I started businesses in highly regulated industries where I had to deal with a lot of multi-tier regulatory frameworks. So all of these different characteristics, the things that I didn’t like, I also thought about the things that I did like, bringing people together, introducing people, help mentoring other people. And so Sanguine Strategic Advisors LLC is based on… What we do is we talk to business owners every day. Many of them are law firms. And really, it’s an advisory group based on a single question, which is, what kept you up last night?

Kevin:

What are the challenges that you faced today in your business that kept you up last night? And how can we identify solutions for you that can help ease the pain? The biggest challenge that business owners have as they’re trying to scale their businesses and law firms is vendor selection. We receive a lot of formal training in law school and within our work on how to provide our service, our core legal service, but we don’t receive a lot of training on how to engage in vendor selection. Every business, every law firm probably has five to 10 what I call table stakes product services software that they need just to turn their lights on. They can’t operate without them. But we don’t have a lot of guidance or training on how to go through the process of selecting the right vendors. And so what happens is either we’re paralyzed because we’re so afraid to pick the wrong vendor that we don’t do anything to solve the challenges that we’re facing in our business because we’re scared to make a bad decision, or we do make a decision and we make the wrong decision. And then we have to go through this painful, iterative, time-consuming, frustrating, expensive process of unwinding those business relationships and then having to go back out to the market and choose those vendors again, albeit with less confidence in our ability to make the right decisions.

Kevin:

It’s saying when what we do is we help you with that process, we get a lot of free operational advice, and we also make introductions to what we would call our curated list of vendors, people that we’ve worked with over the years that we know are the best at what they do.

Patrick: 

That’s awesome. And I thought you guys had a really unique beneficial pricing model as well for firms that you would work with. Can you share a little bit about that?

Kevin:

Yeah, we’re free. I mean, it’s pretty bad. We don’t charge law firms any money. We’re here to help them. We understand that law firms want to put their money to work on solving the problems or overcoming the challenges they’re facing in terms of scaling or lowering costs or whatever those are. They don’t want to be paying some advisor or consulting group $5,000 a month because then not only do they have to figure out how to generate a return on investment on whatever challenge they’re trying to solve, but they also have to generate a return on investment on their advisor. So, we provide our advisory services for free. On occasion, where we do make introductions to third-party vendors, and those third-party vendors subsidize the cost of our advisory services on behalf of our clients by paying us a small commission when, in fact, a business relationship is formed. But ultimately, the lawyer in the law firm makes the final decision on whether or not they want to work with one of those vendors. We call those vendors our partners of excellent people who we’ve identified are really great at what they do, and they’re genuine partners to the law firm.

Kevin:

They’re not just there to They focus on the value they bring, not on the paycheck that they receive from bringing that value.

Patrick: 

It’s cool. I think a lot of folks who may be listening can certainly benefit from that as well. But I want to get to the meat of what I feel like today is all about. And for me, that’s helping law firm owners scale their businesses. And not just to a level that some artificial idea of a certain amount of money or anything like that. But I think what you talked about, too, which I liked, is building that business that they do like, they’re happy about and getting used to. So maybe you could share a little bit about the progression from your beginning as a small law firm owner to building a business that eventually was acquired in a law firm that was acquired.

Kevin:

I’d say when I first got out of law school, my first job, like many attorneys, really, was more product of what job I could land. The middle of my class in law school came out, and I wasn’t going to get the job at the big white shoe law firm, making a figure salary. And so, really, just by a stroke of fate, I got a job with a high-volume consumer bankruptcy practitioner in Chicago who was one of the first people to go ahead and advertise on television back in the 70s when really the advertising rules for attorneys loosened up, and attorneys started advertising en masse. And I think one of the smartest things in retrospect, that I did is I really just latched on and took the opportunity to be a sponge and learn everything that I possibly could from the owner of the business. Whenever there was an opportunity for me to learn how the books were done for the law firm, if it meant coming in on a Sunday because I knew my boss was doing the books on Sunday, I would get up and go to the office on a Sunday and sit next to him and watch him how he did the books.

Kevin:

Six months later, he was having me do the books. When he was making decisions about placing, it’d be funny to hear this: phone book advertising. Sorry, I’m looking at it. I would participate. I would observe, I would watch, I would just learn everything that I could when he was developing technology for the law firm in order to create efficiencies in the way that practice is run. I was right there watching the thought process in building the technology. And so it goes on and on and on and on. But every opportunity you have to observe other people who have much more experience in operating a law firm business, not just… I think lawyers spend a lot of time going to CLEs and learning about the core legal service and the substantive areas of the law, but they don’t spend enough time actually learning about what’s involved in operating the business of a law firm. And I think your understanding of those elements of operating a law firm is going to make you enjoy your time operating a law firm a lot more. So, I spent a lot of time just observing and learning. After two and a half, three years, I said, He’s never going to make me a partner in the business.

Kevin:

I can go out and use what I’ve learned to go out and do this better. At scale, I started my first law firm in 1997, three and a half years after graduating from law school. Over the next eight years, I built that to 180 lawyers in 70 markets across 22 states, signing up a couple of thousand consumer bankruptcy clients on a monthly basis. A lot of iteration, right? A lot of taking time just to learn from many mistakes. But I’d say one of the main things that I’d recommend for attorneys is to sit down today and create what I would call your ideality. If you had to look out a year from now or two years from now and say, ideally, this is what I’d like my law firm to look like, or what I’d like my wife to look like as importantly, right? Because those go hand in hand with how you operate your practice, the type of law you decide you want to practice, and the types of clients you want to represent, all of these things will play into your personal satisfaction, how much you enjoy coming to work every single day. If you sit down and you actually put pen to paper and create that ideal of who the clients you want to represent, how many staff members you want to be managing, how many days of vacation you want to take a year, how much time do I want to spend with my family?

Kevin:

How much money do I want to make? If you do that first and create those goalposts, that ideality is going to do a couple of things. The first thing is that it’s great for planning, but what it’s going to do is illustrate the dissonance between your reality today and the ideality that you seek to accomplish. Because the next question you’re going to ask yourself is when you’re done with that piece of paper, that your ideality of what you want your firm to be a year from now, are you going to ask yourself, why am I not there today? What has gotten in my way? I’ve been practicing for 10 years. So why is it that I’m not where I seek to be a year ago. Right now, what are the obstacles? What’s getting in the way? And then it’s a lot of what I do with lawyers every single day is just talk about what is getting in the way? What’s keeping you up at night? Why are you unhappy and doing what you’re doing right now? And by the way, identifying the things that are getting in the way, that’s the first step to starting to change things and figure out what the transformation needs to be.

Patrick: 

It sounds like creating the vision is a big part of it and helps give you that direction. Once you have that, what were some of the steps you took that you think would help other firms grow, that you can look back and that you went to a certain conference or you started adopting a certain day to day methodology? What were some of those steps that you feel were really key in helping you grow from an average bankruptcy lawyer to really growing?

Kevin:

Yeah. I mean, well, first of all, surrounding yourself with people that you believe uniformly are as hard-working or harder-working than you and are as smart or smarter than you. For some reason, people tend to like to hire people who are not as smart as them because I don’t know if it’s ego or whatever. But as they say, there are certain presidents that we can point to who are not like the smartest guys in the entire world, but they’re really good at surrounding themselves with people who are geniuses and a lot smarter than them, and other business owners for that matter. But I think a big part of it is just identifying people who are loyal and hard-working and smart is definitely a key to success. And once you identify those people, treat them really well and keep them around you because they will… I’ve got Anthony Bucks, who works with Sanguine Strategic Advisors LLC right now. This is the third business that he’s been a part of. He was a part of Total Attorneys. He was part of a bright law. He’s part of Sanguine Strategic Advisors LLC. There’s a reason that I keep bringing back to the table because he’s smart hard-working, and loyal.

Kevin:

And when you find people like that in this world, you got to keep him close by. That’s great. But I think being collaborative in your approach, getting people within your organization to buy into your vision. You’re not here to rule with an iron fist. And this applies to organizations that are two or three people as well as 100 people. So this is not just something that… It’s not an enterprise organization issue. It’s also a small organizational issue. In fact, I would maintain that it’s even more important when you’re in part of a small organization to make sure that the people who are involved feel invested in the business, feel that they’re tied to the success of your law firm, and that feel like they’ve participated in making the decisions that are critical to the growth of the business. Because people don’t feel invested. They’ve got nothing at stake. It’s just a job. You want to make them feel like it’s more than just a job.

Patrick: 

People, I think, are very, very important. Learning that more and more in our business by finding those people. One of the things that we’ve been adopting is to help manage that because this is my first time managing a bunch of people and trying to figure out how that works. And so we’ve started using EOS as a system for us. Is there a similar strategy or framework for law firms that you recommend as they scale to deal with some of those people issues, planning issues, and things like that?

Kevin:

There’s definitely a book called Who that you can buy on Amazon. It’s how to go about your hiring process. It’s a great book to just learn how to create a profile of who’s going to be a successful employee and then how to go about asking the questions that are necessary without saying, Are you hard working? You want to create questions that will tend to elicit an answer that will be indicative of someone who is hard-working, has a high level of discretion, is amiable, or whatever the characteristics are. So, you’re identifying the right characteristics that will tend to lead to a successful person in this role. And then you’re trying to identify a person that possesses those characteristics. And there are a number of these books, like the gazelle system is a great system. But I think as a general premise; I like the idea of getting together at least quarterly with your entire organization and doing a planning meeting and figuring out your SWAT analysis, your strengths, weaknesses, opportunities, and threats, and identifying where it is that you can leverage the strengths of your organization the greatest and diminish your weaknesses. Take advantage of opportunities, reduce the threats within the organization, and then set some really aggressive goals.

Kevin:

And don’t set 15 goals, set one or two goals for each quarter and set them really aggressively. Make them almost unattainable, but barely maybe attainable. And then your entire office, you got to create a culture around accomplishing their goals. So for instance, our goal this quarter is to generate 30 referrals for new clients, for instance. So now you start working backward off of that 30; what is the path to getting to 30? Well, every single time you have a conversation with the current client, especially if you’re conveying positive news about their case, right? Or progress that’s been made on their case, that’s an opportunity to go ahead and ask for a referral. Hey, we really appreciate it. If you know other businesses in your area that can benefit from our services if you pass along their information. And then you say, Well, we’re never going to get to 30. Well, let’s create opportunities to have those conversations so that we can get to 30. Okay? So now we’re having a conversation with the client at the beginning of a representation, and then we’re having a conversation with them 90 days later. What opportunities are there to have two more conversations every 30 days with the client to give them some piece of information that shows progress is being made on their case?

Kevin:

And so we can use that opportunity to ask them for a referral of some of their business owner. So, it becomes a branding opportunity. We’re constantly communicating, constantly giving them feedback about the status of their case, showing them the progress is being made, and it’s an opportunity to ask them for a referral. So you set that goal, and then what you do is you work your way backward and you figure out opportunities. You create opportunities within your business to accomplish those goals. Whereas if you have 20 goals, it becomes dizzying. It’s just too much, and you don’t really accomplish anything. You have to be very focused on a smaller set of goals, and you accomplish them every 90 days. And then the books talk about the big, hairy, audacious goal. What do you call the BHAG? That’s like your five year goal is to grow the firm to do $10 million in revenue. It seems almost ridiculous. You can never get there. But you’re working first back from your BHAG, then to your annual goals, then to your quarterly goals, and then what you do every single day. And then I would also say you want to give every single employee the opportunity on a daily basis to understand how they did over the last day, over the last week, over the last 30 days.

Kevin:

You are setting key performance indicators for the firm. You’re also setting key performance indicators for each individual. Then, what you want to do is give feedback and transparency so that every employee knows how they are contributing to the law firm accomplishing its end goals on a daily basis.

Patrick:

It sounds so straightforward and easy, but we’ve been doing this ourselves over the past month or two, and it is so hard, in my opinion, to take these abstract concepts of how do we get to 10 million or 1 million and then break that down into actionable steps. And the best approach I’ve learned with it is to try to break it down so you’re basically explaining it to a five-year-old. I don’t mean that in a negative way, just that if I don’t parcel it out into very specific, actionable steps, then it becomes almost too difficult to fathom, to bring all of these things together. Having that focus on the way we’re targeting it is on a quarterly basis. We’re going through this process now, trying to outline all of the work or most of the work that will be done from now to the end of March. That way, we feel like it gives our team structure. They have a path to go, and then we can go at the end of those three months and think about it. But we’re not trying to change things every single day and every week and all of that. And so, I think that the biggest challenge is staying focused and having a clear direction.

Kevin:

Yeah. And the organization, the foundational steps that you’re putting in right now, it’s challenging. However, once you have those foundational steps put in place, the next time you do it, it will be much easier to go through this process. And the most important word you said there is focus. It’s really breaking things down to bite-sized pieces so that everybody can be focused on that one thing, rather than if you have 100 things, it’s hard to focus on the right thing. You just want to break it down.

Patrick:

How do you typically arrange your day or schedule to ensure that you’re working on the most important things that will have the biggest impact on your business? Because I know for myself there’s such a temptation to go in and go to that inbox and start knocking it down one by one. I don’t know if you’re like an inbox zero guy, but it’s so tempting. Unfortunately, I am. It is so tempting to focus on those things that you feel immediately, giving you that immediate gratification or you just hate the idea that somebody’s waiting on your response or something like that. But how do you do that to ensure that you’re being as focused and productive as possible?

Kevin:

Well, first of all, it’s funny that you pegged me that, Stan, the idea that someone has emailed me or reached out to me and that I haven’t been responsive because I know when I reach out to people, I want people to respond to me. It’s difficult sometimes to fight your nature in that regard. But the way I organize my day is each day I’ve got basically two hours in the middle of the day from basically 11 to 1, which is some of it to some me time. So I actually eat a meal and get some exercise, right? Or it can just take a project that I really need to get to that’s going to advance the business, and I can have some focus time. So I take two hours in the middle of the day, and I take the last hour of the day. And you can do it whatever fits your schedule the best. Not everybody has that flexibility. But I do 11 to 1, and then I do five to six. That allows me to take a breather in the middle of the day and really address some things that need immediate attention.

Kevin:

It allows me to take the last hour of my day and do the same thing and also gets organized and think about my next day so that I can clear my head because otherwise, what I’ll do is I’ll lay in bed at night, and my head will be spinning about the things I need to do. That way I get my list together, I’m organized, I’m ready to go. I knock out some projects that I want to get done by the end of the day. And look, some days are till 10 o’clock at night. And that’s something that I’m trying to address because I don’t want to be working those types of hours at this point in my life. I’m sure many attorneys deal with that same challenge, and it’s a process that you have to solve over time and put in the right types of resources. But sometimes, you have to put in your time and pay your dues before the business is ready to take on the resources that you can do that.

Patrick:

Yeah, absolutely. Last question for you: what are some of the mistakes that you see solo and small law firm owners making most often as they try to scale or as they try to go from 100,000 to 300,000 or 5 to a million? What are some of those main challenges or mistakes that maybe you took on that you would recommend others avoid?

Kevin:

Well, first of all, not going through the process of understanding what it is that you’re building. So skipping the planning process and just going at it, doing it without thinking about what you want your life to be, what you want your practice to be. I also find a lot of attorneys or people just growing law firms tend to engage in that race to the bottom where they will sacrifice their fee lower their fee substantially in order to meet the lowest common denominator in the marketplace. So it’s like a race to the bottom. What I found over the years is it’s usually the clients who negotiate the most and chew you down on the fees that are the most difficult to serve and never make any referrals. And the clients who pay you the most and are the most cooperative with you are the best clients.

Kevin:

Make the most referrals. It’s almost like a psychological phenomenon where people who pay you a lot and work well with you almost have to brag to their friends about how great you are because they’re justifying in their own heads why they paid you so much money for your service. It’s like they got to feel better about the money they spent by going out and bragging about it. So I would generally encourage attorneys to not engage in that race to the bottom and understand that they’re providing value in their services, and the clients that really appreciate the value that they’re bringing are going to be the clients that they want to represent over the long term. I also encourage lawyers to be more entrepreneurial. Think about creative ways to structure their services. Make themselves different in the marketplace than from what every other lawyer is offering. And then also, is there a service that you offer that is a foot-in-the-door type of service? For instance, we talked a little bit about… Again, recently started in another law firm, primarily helping businesses with the employee retention tax credit. Guess what? They’re not paying me anything Upfront. There are no obstacles. They don’t have to come up with a bunch of money to pay me. It gives me an opportunity to offer service, establish value, and establish a relationship with that business. Now, I can go back to the business and say, What other services I can offer? By the way, these services, I don’t do on a contingency basis, but now I’ve taken that opportunity without charging them anything to actually provide value and show them what I’m made of and the type of service that I’m going to provide. Now I can go and offer them something. I’d encourage attorneys to think of something that they can go out to businesses with and offer to them in a way that doesn’t create a bunch of barriers to entry. That gives you an opportunity to establish a business relationship.

Patrick:

Very cool and innovative. I think a lot of people could benefit from that. Absolutely. Well, thank you so much for your time. I thought we covered a lot of really great stuff, and would absolutely like to have you back again because I feel like we could have split out on a couple of different topics there. I really like threads about just overall happiness and job satisfaction because I’m in the exact same way. If I don’t put things down on a list, I’m thinking about them all night, and not healthy for me as well.

Kevin:

If you don’t wake up every day looking forward to going to work and doing what you do, then you should be putting some serious thought about why it is that that’s the case. Because there’s a solution to it. You just have to be dedicated to the process of solving the problem. Even now, when I work with lawyers, because I don’t charge them for my advisory services, really what I say to them is I’m happy to work with you. I just want to make sure that we’re not engaging in the process of complaining about what we don’t like when we’re not dedicated to the process of actually solving it. If you want to just complain, go get a therapist. If you want to solve the problem, I’m happy to help you solve the problem, but I want to make sure that you’re dedicated to actually solving it, and we’re not just going through the process of complaining about what we don’t like because too many people in life spend their time just complaining about what they don’t like, but they never do anything to fix it.

Patrick:

Absolutely. Thanks, Kevin. Hope we can do this again soon.

Kevin:

Yeah, it’d be great. Thanks very much. Appreciate it.

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