In this episode, Steve Fretzin and Jonathan Hawkins discuss:
- Having a destination in mind for your career and business.
- Shared vision for building a multi-attorney law firm.
- Having a written agreement in a partnership.
- The right way to build a partnership in a law firm.
Key Takeaways:
- When building a partnership, you want to have different skill sets for the best opportunities for success.
- Partnering with your best friend may not be the best idea – if the partnership falls apart, your friendship might follow.
- In a partnership, you cannot always win – it requires giving, communication, and compromise.
- There are many reasons why a partnership might fall apart – having an exit plan and written agreements can prevent a lot of disagreement and potential stress in the future.
“You can’t forget, both of you and the firm have an obligation to the clients. That is the paramount in responsibility of everybody – to make sure the client’s interests come first.” — Jonathan Hawkins
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Episode References:
- How I Built This – https://www.npr.org/series/490248027/how-i-built-this
About Jonathan Hawkins: Jonathan Hawkins is a business lawyer for lawyers. He serves as Outside General Counsel to law firms and helps attorneys and law firm owners in starting law firms, law firm structuring, partnership agreements, lateral moves, breakups and dissolutions, and succession planning.
Connect with Jonathan Hawkins:
Website: https://www.yourlawfirmgc.com/
Email: jhawkins@yourlawfirmgc.com
LinkedIn: https://www.linkedin.com/in/jonathan-hawkins-135147/
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LinkedIn: Steve Fretzin
Twitter: @stevefretzin
Instagram: @fretzinsteve
Facebook: Fretzin, Inc.
Website: Fretzin.com
Email: Steve@Fretzin.com
Book: Legal Business Development Isn’t Rocket Science and more!
YouTube: Steve Fretzin
Call Steve directly at 847-602-6911
Show notes by Podcastologist Chelsea Taylor-Sturkie
Audio production by Turnkey Podcast Productions. You’re the expert. Your podcast will prove it.
FULL TRANSCRIPT
[00:00:00] Steve Fretzin: Hey everyone, before we begin the show, we have an event coming up that I know will interest you. We have a Be That Lawyer business development workshop coming up on October 19th. This is a one hour Zoom event to learn everything they never taught you in law school on how to grow business in a sales free way.
[00:00:17] Steve Fretzin: Please go to Fretzin. com to sign up today.
[00:00:24] Narrator: You’re listening to Be That Lawyer, life changing strategies and resources for growing a successful law practice. Each episode, your host, author and lawyer coach, Steve Fretzin, will take a deeper dive helping you grow your law practice in less time with… To results. Now, here’s your host, Steve Fretzin.
[00:00:46] Steve Fretzin: Well, hey everybody, welcome to be that lawyer.
[00:00:48] Steve Fretzin: I am Steve Fretzin, your host, and I’m just so happy that you’re with us today. Uh, another opportunity for you to be that lawyer, someone who’s confident, organized in a skilled rainmaker. Let’s get off the, on the right foot today with my guest. Jonathan, how you doing, Jonathan? I’m great. How you doing?
[00:01:02] Steve Fretzin: Alright, man. Where are you hail from? You’re down south. Uh, Atlanta, Georgia. Atlanta, Georgia. All right. What’s going on in Atlanta these days? Heat. It’s hot.
[00:01:10] Jonathan Hawkins: Last week was kind of cool, but next week’s going to be close to a hundred again. So, yeah,
[00:01:16] Steve Fretzin: I talked to my, uh, I talked to my aunt this morning. She’s down in New Orleans and it’s like 115 every day.
[00:01:21] Steve Fretzin: And they’re just like, it’s just air, air conditioning to air conditioning. It’s like, you know. The way we are in Chicago with the winters. We just go from heat to heat to heat, you know, whatever we can find, but listen, man, I’d love to get started with the show and get on the, um, the quote of the show. I was asking a lawyer about changes I should make to the show and anything.
[00:01:40] Steve Fretzin: He says, just don’t get rid of the quotes. He goes, I’m a quote addict. I love quotes. I said, all right, I got quotes. So, uh, here’s one. And this is by the, the, the very famous Yogi Berra. If you don’t know where you’re going, you’ll end up someplace else. And so that’s always a fun one. So talk about why you submitted that and, and, uh, and what that means to
[00:01:58] Jonathan Hawkins: you.
[00:01:59] Jonathan Hawkins: Sure. You know, I applied to my own life, but just talking to other folks, both lawyers and non lawyers, a lot of folks are just sort of walking through their life with no really destination in mind. And, you know, a big part of what I do is, is secession planning for lawyers. And, you know, in my view, the earlier you start, the easier that gets.
[00:02:18] Jonathan Hawkins: And so if you don’t have a destination or a place you think you want to go, then you have nothing to work towards and you’ll just sort of end up wherever.
[00:02:27] Steve Fretzin: And I kind of take my own spin on it in the sense of. You know failure to plan is a is a plan to fail and there’s most people again. They’re not really writing down their plans.
[00:02:39] Steve Fretzin: They’re not really thinking about how they’re going to run their day and their week to hit a goal to to get into better habits. And so I think, you know, then you end up, you know, 10 years.
[00:02:51] Steve Fretzin: Um, I’m just billing hours and, and feeling unfulfilled. Well, okay. You got to change something for change to happen. I think that’s, that’s where you’re going with this. Jonathan Hawkins, you are the business lawyer for lawyers and law firms, and I’m just excited to talk to you because it’s not that often that I have, uh, A lawyer that works with lawyers, you know, I work with lawyers and I don’t, you know, feel like I have anybody to commiserate with.
[00:03:13] Steve Fretzin: No one wants to listen to my, my stories of working with lawyers, but we can talk, right? We can, we can, we can commiserate on that and, and cry on each other’s arms, whatever we want to do. Talk a little bit about your background and your be that lawyer tipping point and all the things that kind of give people a good feeling about what you’re up to.
[00:03:30] Steve Fretzin: Sure. So I,
[00:03:31] Jonathan Hawkins: you know, started out really as a business litigator and represented sort of closely held businesses and owners and a lot of business breakups. And that led me down the path and I started representing lawyers when they started breaking apart. And, you know, if they had written agreements, a lot of times they didn’t, but if they did, they weren’t really built.
[00:03:53] Jonathan Hawkins: Uh, with the law firm issues, uh, when they break apart. So then I sort of became an ethics expert and then I started drafting the agreements to try to avoid all the fights that we were having on the back end. So that’s sort of how I got into this practice. And the way I describe it is, yeah, I represent law firms from formation to disillusion and everything in between.
[00:04:12] Jonathan Hawkins: And so, you know, again, forming firms, forming partnerships, breaking apart, but also just general business advice, ethic, ethics, advice, just. That comes up from running a law practice.
[00:04:23] Steve Fretzin: Gotcha. And was there, was that sort of, I mean, have you always worked with attorneys or was there a time where you just like flipped, like something happened where it became a bigger part of your business or how did you get into, into that specific niche?
[00:04:35] Jonathan Hawkins: So you know, I bootstrapped it completely. So I was at a firm, nobody did it. I didn’t do it. I sort of got the idea from my dad, who’s a lawyer. He sort of gave me the idea and I sort of, I looked around and I, I just. Dove in and started learning it, talking about it. And it took me probably, you know, it’s probably started maybe 12, 13 years ago and sort of in parallel.
[00:04:58] Jonathan Hawkins: So I kept doing the business litigation, but then slowly started building this other practice. But then about a little over five years ago, I left the firm I was at to start my own firm and I basically cut away all the business litigation and to focus solely on my law firm practice. Um, and that’s, you know, that’s when I really started to focus on this.
[00:05:19] Jonathan Hawkins: And I’d say, you know, yes, what’s the tipping point for me, you know, starting the firm obviously was one tipping point, but, you know, I had, I’ll call it a lifestyle firm for five years, but about a year ago. I sort of made decision. You know what? I’m going to try to grow this thing, try to scale it. So that’s been what I’ve been working on the last year or so.
[00:05:39] Jonathan Hawkins: And it’s a completely different set of challenges,
[00:05:42] Steve Fretzin: but it’s challenges. It’s a different set of skills. I mean, that the nice thing is like, I’m, I’m not a scaling coach, right? I’m a business development coach. I can help people develop more business. So they have the money. To scale and hire and do all that, but I’m not the guy who’s going to, like, give you all I can help be helpful in that space, but there’s a lot of really great coaches for helping lawyers scale law firms and think about how do you get out of the.
[00:06:06] Steve Fretzin: You know, just the, the, the job of running the firm or the, the, the bill will hour and like, actually think of it like you’re a CEO and take on a role of, of building out an actual business or real business around it. But, so that’s a whole industry just, you know, coaches doing that. So let’s talk a little bit about your experience in.
[00:06:24] Steve Fretzin: Working with lawyers that want to get into partnerships, obviously the old days was, hey, let’s shake hands, you know, you’re a nice guy. I’m a nice guy. I think, or you’re a great lawyer. I’m a great lawyer. Hey, let’s let, we could do great things together. And then things happen, right? Life happens, things happen.
[00:06:40] Steve Fretzin: So what are the biggest mistakes that lawyers make prior to getting into a partnership or actually getting into a partnership? The biggest mistakes You know, the first
[00:06:50] Jonathan Hawkins: thing I’ll say is, I think lawyers get enamored with the idea of, of what the partnership will be, but they don’t take a step back and actually have the hard conversations on the front end, you know, I tell people that come to me, you know, have you talked about what your visions are?
[00:07:07] Jonathan Hawkins: Make sure you have sort of a similar vision. Now, if you don’t have the same vision now. Five years from now, you’re probably not going to have one and it may be worse. So you know, you at least want to start off on the same page. So shared vision for where you want to go. Shared values. Another big issue, you know, I’m a big believer in partnerships, uh, or partners should have different skill sets.
[00:07:31] Jonathan Hawkins: If you have two of the same type of. Partner or a partner with the same skill sets, probably not going to work. You need, you need somebody that can compliment what you have. And a lot of folks just, they don’t, they don’t really do the deep work on the front end before they rush into it. You know, they, they wait a couple of years before, wait a second, what did we get ourselves into?
[00:07:51] Jonathan Hawkins: Yeah. Certainly the first thing.
[00:07:54] Steve Fretzin: Yeah. I was going to add, I was going to add. And then there’s another problem that they don’t come to you. Like they don’t actually have a written agreement. They just started like working together. Huge problem.
[00:08:04] Jonathan Hawkins: Yeah. Huge problem. And you know, lawyers think they can do everything and, and, and there are a lot of good lawyers, a lot of lawyers better than I am, but you know, litigating and, and going to trial over law firm breakups, there’s a lot of things that are not in the agreements that I’ve seen that need to be there.
[00:08:22] Jonathan Hawkins: Um, you know, the way I, I, I discuss it is you need to have exit ramps, uh, and you need to think through all of them and what happens and the type of practice. Um, may depend, you may have different exit ramps, depending on the type of practice. So if you have a contingency practice, it’s going to be a little bit different than if you have an hourly practice.
[00:08:39] Jonathan Hawkins: And most folks just don’t think through that on the front end and put it in writing. That’s, that’s key. Put it in writing.
[00:08:45] Steve Fretzin: Yes. You said shared vision. What was the second one? Was it shared values? Shared values. Shared values. I mean, that’s also really important, right? Because if you, if you have someone that is a different value system.
[00:08:56] Steve Fretzin: And, you know, I could just see the fights happening before they even, before they even, I could sniff them out a mile away, uh, when someone doesn’t have the, yeah, both of those are really, that’s really insightful and important. How, how important is it for you to know somebody a long time? Like if you know somebody 10 years versus someone you’ve been, you know, you met three times.
[00:09:15] Steve Fretzin: You know, I think
[00:09:16] Jonathan Hawkins: that could go both ways. Okay.
[00:09:19] Steve Fretzin: That’s why I asked. You know, I’m open to it. Whatever. Like, you
[00:09:22] Jonathan Hawkins: know, it’s like, uh, you know, I haven’t had a roommate at a long time, but you know, growing up, I had a lot of roommates and you go in with your best friend and then you realize, Hey man, we are not meant to be roommates and hopefully the friendship remains on the other side of it.
[00:09:35] Jonathan Hawkins: But. Partnerships are similar to that, you know, it’s, you know, going in with your best friend may not be the best idea because if the partnership falls apart, the friendship might also. Uh, and that happens more often than, than, you
[00:09:49] Steve Fretzin: know, it should. Yeah. My college roommate, uh, and I were best friends for like, I don’t know, maybe seven years before we went to them.
[00:09:55] Steve Fretzin: We went to school together and I didn’t realize this, but when he went, but he never did his laundry and our room really smelled bad. And I was like, this is not, this is not a workable situation. And I, and he got to have those tough conversations, but it just like, it was like talking to a wall. So anyway, um, it did not work out and we’re not, not that friendly anymore.
[00:10:13] Steve Fretzin: So. I think that there are mistakes that are made. One of them is not having any kind of written agreement. And the second is not having that shared vision and values. Anything else that you want to throw out that you see as a, as kind of a warning sign or something that people should look out for? I mean,
[00:10:28] Jonathan Hawkins: you know, the other piece I see a lot of is, and this may fall in into the vision and the values piece too, but you know, sometimes you have one partner that wants to go conquer the world and have the biggest firm ever.
[00:10:39] Jonathan Hawkins: And then the other partner wants to. Go home at five o’clock every night and coach little league team and do all that. And both of those are fine, but they probably are going to cause a lot of friction if they’re together. Um, and so those are the sorts of conversations that I think you should have now and plans change.
[00:10:57] Jonathan Hawkins: I mean, thing life changes, you know, things happen. And so just because you’re on the same page now doesn’t mean you’re going to forever. But in my mind, those are some of the big ones. And also, you know. What type of firm do you want to have? You know, do you want to grow into different practice areas or keep this, you know, all sorts of things that most people they’re just rushing to get in to the partnership without thinking, Hey, where are we going to be 5, 10, 15 years from now?
[00:11:23] Steve Fretzin: Let me ask you this question. Is there an issue with one partner brings in a million, 2 million? The other partner is a really good worker. And they get into a partnership together. Is there going to be some problem there?
[00:11:36] Jonathan Hawkins: Not necessarily. I’ve seen those partnerships work. Okay. I’ve seen those work. But yes, that could be a problem.
[00:11:44] Jonathan Hawkins: I mean, you know, you ask, you know, what causes the problems? You know, oftentimes it’s, it’s sort of these resentments that build up where one thinks they’re doing all the work or one thinks they’re bringing all the business. And the other one says, Hey, I’m, I’m doing more than you. And no one ever agrees as to who’s working the hardest or who deserves the most.
[00:12:02] Steve Fretzin: Yeah. Um, it’s really, it’s really amazing how little people can see and I, and this is the, I know I’m taking like stuff from my life, but like, this is like my teenager, right? Like he has no ability. I love the kid, but he has no ability to like, put himself in other people’s shoes. Like the fact that I just ran around, you know, buying and doing and like all this stuff for him.
[00:12:22] Steve Fretzin: And like, he doesn’t like get that. It took a lot of effort to do this for him and then be, you know, appreciative. It’s like, what? But that’s, that’s just how some people are, or they just can’t, they just can’t see the other side and people’s, their
[00:12:34] Jonathan Hawkins: memory is not very long. So it’s the, you know, you have four years of struggle and then all of a sudden, boom, you get the best year ever.
[00:12:42] Jonathan Hawkins: And you’re like, I deserve way more for the last four years. I’ve been sort of supporting you. And now all of a sudden, um, that happens a lot too.
[00:12:51] Steve Fretzin: Yeah. So then what’s the, let’s flip the switch. Then what’s the right way. For, uh, so there’s a lawyer, so I play golf with two lawyer clients of mine this weekend and one of them is in a new partnership and one of them was kind of just thinking about it and was interested.
[00:13:07] Steve Fretzin: It’s just like, let me know what this is like. Like I’ve, I’ve been at this, you know, firm and I don’t know like what that’s like. And I would love to hear your take on this is the right way to do it from what you’ve experienced.
[00:13:20] Jonathan Hawkins: Well, you know, you’ve got sort of the legal aspect, but then just from a interpersonal aspect, you know, my view is.
[00:13:27] Jonathan Hawkins: You got to trust each other. It’s like a marriage. You got to have trust. You got to be fair with each other. I think there are going to be times where you’re just not going to win and you need to be okay with that. If, you know, as lawyers, we always want to win, but in a partnership, it’s a different approach.
[00:13:44] Jonathan Hawkins: You’ve got to give and sometimes you got to give maybe more than you think is fair or that’s right, but it’s for the betterment of the partnership. Um, and I think a lot of it, you know, you’ve got legal issues and, and vision issues and growth issues. But at the end of the day, I think it’s gotta be a person that.
[00:14:01] Jonathan Hawkins: You know, you like as a person, but that you can trust and, you know, a lot of partners, I see a lot of partners, they’re not hanging out after work and on the weekends, they have completely separate lives, but in their partnership, it works because it’s just a really good relationship. As you all
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[00:16:07] Steve Fretzin: Okay, so trust, relationship, obviously liking each other, and then there’s the legal side.
[00:16:13] Steve Fretzin: And so like, what are like two or three of the main points that need, that need to be discussed and hashed out in an actual agreement that you would put together, for example, That would really protect the partnership. So
[00:16:25] Jonathan Hawkins: you know, the big one, compensation, you gotta, you gotta figure out how you’re going to get compensated.
[00:16:30] Jonathan Hawkins: And, you know, there’s no perfect compensation system, but it needs to be something that everybody think is, thinks is fair. And it doesn’t mean that once you set it, it’s going to be that way forever. You know, it probably will get tweaked over the years. So compensation is a big one. I think voting and governance, you know, who gets to decide what, who does what, what are the different roles going to be?
[00:16:51] Jonathan Hawkins: I sort of put that in one category. And then the last thing I mentioned earlier is. Is exit ramps, you know, what happens if somebody dies, what happens if they become disabled, what happens if they just don’t want to do it anymore or want to leave and you need to deal with on the front end, why you’re still friends and why you’re still friendly and nothing bad is ever going to happen.
[00:17:13] Jonathan Hawkins: You say, this is, this is how we’re going to deal with it because then you have at least have this written agreement to fall back on. Yeah, where if you have nothing, then it’s just gonna be a mess,
[00:17:22] Steve Fretzin: right? Right. And I think our and our people getting smarter, like in the sense of the handshake from the nineties, the eighties in the nineties and early two thousands that people start to realize, no, that’s not the way partnerships are done.
[00:17:35] Steve Fretzin: Now we’ve, we’ve got to have an actual written agreement to make sure that this is. That this is
[00:17:39] Jonathan Hawkins: solid. Yes and no. I’d say most people, especially the sort of the younger lawyers, yes. But yeah, some of the older folks, I mean, I know some, I know some very successful partnerships that lasted over 30 years, handshake, there’s no agreement, nothing.
[00:17:57] Jonathan Hawkins: And it’s crazy to me, but it works
[00:17:59] Steve Fretzin: for them. Okay. But then it may, it may not work at the end. I mean, ultimately when someone, you know, does die or, or, you know, now it’s a, it’s a, it’s a money grab or it’s a, you know, business grab, a client grab, whatever, right? That can happen.
[00:18:13] Jonathan Hawkins: You know, I have this theory, my pet theory about the lifespan of a law firm and it’s, you know, it’s basically 35 years or within five years of the last founding partner.
[00:18:26] Jonathan Hawkins: Leaving the firm. Um, and so that’s really where you need. I think you need a written agreement and really a transition plan is what the founders who maybe kept it together once they sort of start to ride off into the sunset is the next generation or two that really need, need some structure and some writing
[00:18:46] Steve Fretzin: in place.
[00:18:47] Steve Fretzin: And, and without giving away too much like free advice, I mean, I’m just curious what, when you mentioned compensation and coming to agreement on that, if, you know, you’ve got someone who’s the rainmaker and you’ve got someone who’s the organizer, the manager, the, the person that can kind of deal with the people, uh, better, is there, is there some kind of standard cuts that you’re seeing and things that you’re seeing that you can make generalizations about?
[00:19:09] Jonathan Hawkins: You know, it runs the gamut, you know, some firms have just a purely eat what you kill kind of model based on production, origination, working, all that kind of stuff. And then there’s some partnerships that are just, we split everything or the percentage ownership. I like something that’s sort of in between, um, I, I like the rising tie lifts all boats concept where everybody’s working together.
[00:19:32] Jonathan Hawkins: And so I think at least a portion of an equity partners comp should be based on ownership in the firm. But then also you want to incentivize people to do stuff and work and bring in cases and all that. So there should be a portion that’s based on some sort of formula or production numbers. And then I also like reserving some amount.
[00:19:52] Jonathan Hawkins: Or just discretionary what happened this year, where you can push the money around to sort of make it more equitable for the year. You know what, what that looks like exactly really is going to depend on the firm and, and sort of their history, their, their culture and all that. But those are sort of the big concepts that I, at this point that I preach.
[00:20:12] Steve Fretzin: One of the things that bothers me about law firms and small law firms in particular, let’s say under 50 members is when the managing partner isn’t compensated to be the managing partner. I mean, this individual is taking on a role of leadership and in the direction of the firm and. And dealing with all the, the ins and outs and, and difficulties that happen.
[00:20:31] Steve Fretzin: And they’re also losing potential momentum in some ways, maybe on their business development efforts. So that bothered you see that happening pretty often, or is that something that go into an agreement to ensure that doesn’t happen? So I’ve seen it,
[00:20:44] Jonathan Hawkins: you know, I’d say more so than not managing partners are not getting paid something extra, but definitely I’ve seen it and I agree with you.
[00:20:52] Jonathan Hawkins: I think there should be some compensation because it’s going to take away from their other ability to generate income, but even bigger picture. You know, depending on the size of the firm, some of the responsibilities that historically have been on a managing partner, you know, I would consider putting it on a non lawyer.
[00:21:12] Jonathan Hawkins: A high level executive type person.
[00:21:14] Steve Fretzin: Yeah. Is that, is that where people are leaning is more, Hey, let’s bring a, you know, once we get the, the, the firm to a certain point, right. Bring in a CEO, bring in a COO, someone that can actually, you know, steer and run the ship as a business and let the lawyers lawyer.
[00:21:28] Jonathan Hawkins: I’m seeing that more and more now, obviously, you know, you got to get to a certain size. I mean, uh, a three person shop’s not going to have that typically, but, but yeah. Uh, the bigger they get, I think it makes sense and it, it, you know, you bring in a business person to help with the business stuff.
[00:21:44] Steve Fretzin: Well, that may change with some of the states that are the non lawyer run firms, right?
[00:21:50] Steve Fretzin: Where you were, you know, Nevada and I think Arizona and there’s one or two others, right? I think, um, that allow non lawyers to, you know, partner in a firm and that may be a role someone would want to take on and, and then, uh, build it up from there as a company. I mean, that’s kind of a no brainer. Yeah.
[00:22:08] Jonathan Hawkins: That, that is, that’s a, a whole different topic, but that’s going to be the non lawyer ownership. That is, that is something to watch. Yeah. You said Arizona is the big leader right now, DC has done it forever, there’s some other states, but yeah, it’s, it’s coming. Yeah. A lot of people are not happy with it, but I think it’s, it’s coming.
[00:22:26] Steve Fretzin: Yeah. Well, let’s let’s sort of then. All right. So we’ve covered, you know, the, the birth and the life and now we need to move to the death. So, all right. So someone got into a partnership, they’ve run it for a number of years and. There’s a, you know, what are the main like reasons that people break up and then let’s talk about that.
[00:22:44] Steve Fretzin: And then how, what the best ways are to break things up in a way that’s going to maybe benefit all parties or maybe not totally just destroy, you know, everyone around you. Yeah. So, you know,
[00:22:55] Jonathan Hawkins: the big one is, is. Money. I’ll just call it. Yeah. And it, and you know, that’s sort of a proxy for some other things, but it’s, you know, resentments that have built up for all sorts of reasons, but it comes down to money, you know, and no longer have the shared vision.
[00:23:12] Jonathan Hawkins: You know, somebody wants to go, you know, open offices in every state. Somebody doesn’t, they want the lifestyle firm. That can be a big one. You know, another one is, uh, this is a funny one is, um, the end of a lease is a huge driver of a law firm breaking apart and everybody can be completely friendly, friends, work well together, but they’re just getting to the point where do they want to sign up for another five to seven years on a lease and they usually like You know, they say, you know what, let’s just ride this one out.
[00:23:46] Jonathan Hawkins: We’ll go our separate ways. Yeah. Um, those are usual, usually a little bit easier to deal with. But yeah, there’s all sorts of reasons, but those are some of the big
[00:23:54] Steve Fretzin: ones. But aren’t, and I think there are some people that do a partnership that isn’t. Maybe is in, in, in depth is what you’re dealing with in the sense of, Hey, let’s, let’s have our names on the door.
[00:24:05] Steve Fretzin: We’ll sign a lease together. We’ll, you know, we’ll cover the, the, the bills together, but you eat what you kill. I eat what I kill, we use each other, you know, and that way, is that a safer play for some people than a, than a more definitive, uh, partnership?
[00:24:21] Jonathan Hawkins: Well, those are definitely, I think, easier to separate from because you’re basically separated anyway.
[00:24:25] Steve Fretzin: Yeah. You’re just sharing some expenses. Just separating bills. Yeah. Yeah. Okay.
[00:24:30] Jonathan Hawkins: You know, I, I don’t think it’s easy to grow a firm that way, but, but it’s easy to sort of come together and share expenses that way and, and it’s like you said, it’s real easy to separate then.
[00:24:40] Steve Fretzin: Right. Right. All right. So the end of a lease money and resentment, you know, there’s a saying, and some people may have heard me say this when I met with, uh, with, I talked to this, a similar topic with Jason cement number a month and a half ago was, uh, no ship sinks quite like a partnership.
[00:24:57] Steve Fretzin: Right. So that, that’s a, you know, that you can steal that if you haven’t used that before. But, uh, but, you know, I’ve had a number of partnerships and none of them ended badly, uh, one of them, we just kind of decided, yeah, similar, the lease is ending and let’s just part ways. Another one, the guy just like basically just bailed on me, said, I don’t want to do this business with you, you know, and after we’d worked together for only about six months and so I took it over and built it and ran it.
[00:25:22] Steve Fretzin: But. You know, there was no, it was just like, goodbye, you know, he just walked away. So that was okay. What other, what other reasons that people, people break up and then, you know, let’s wrap it up with like, what, you know, what are the best ways to break up?
[00:25:36] Jonathan Hawkins: You know, hopefully you have a written agreement that sort of says, this is what happens.
[00:25:39] Jonathan Hawkins: You know, the big issues that I see, you know, particularly with a contingency practice, you’ve got the big, valuable cases and the dogs. Everybody wants the good cases and they want the other person to take the docs. And so that’s, that’s a big issue, you know, an hourly practice is usually a little bit easier to sort of divvy up, at least on a going forward basis.
[00:26:01] Jonathan Hawkins: You may have some old AR and that kind of stuff. You need to, to break apart money in the bank. That’s fairly easy. But then you’ve got obligations, you know, if there’s a, a multi-year lease, who’s on the hook for that? That can be a big issue. But, you know, the, the thing that lawyers need to remember, um, you know, they’re, they may be mad at their partner or soon to be former partner.
[00:26:23] Jonathan Hawkins: They may think they need to win, but you got, you can’t forget, both of you and the firm have an obligation to the clients. You know, that is the paramount. You know, responsibility of everybody is to make sure the client’s interests come first. And you don’t want the clients to get, you know, put sideways because of a fight you’re having.
[00:26:45] Jonathan Hawkins: So, and that’s the thing I tell a lot of folks is, you know, I know you’re mad, you may be mad, but we got to make sure the client’s interests are taken care of first. The clients get to choose where they go. You can’t decide, hey, this is mine, this is yours. I mean, typically you have an idea of where the clients are going to go.
[00:27:03] Jonathan Hawkins: But that, you know, in my view, is the first thing that anybody needs to think about. And if they can put that first, it should help, at least put them in the mind, uh, the mind space to get to a place where they can resolve it. Luckily, most of the ones I get involved with, we get into mediation fairly early and sort of hash out these, these, these issues.
[00:27:24] Jonathan Hawkins: Not always. Sometimes it does get into the courtroom, but that’s just the worst for everybody.
[00:27:30] Steve Fretzin: Hey, and the last kind of question I have for you is just to, just to give a flavor of what’s happening from your perspective in the legal space. I mean, are, are people leaving big law and mid market law firms to start their own practices like more at a record pace than you’ve seen before?
[00:27:46] Steve Fretzin: You know,
[00:27:47] Jonathan Hawkins: I’m not sure if it’s really any different. I mean, I can tell you that the big firms, you know, there’ve been some, I call it stealth layoffs the last year or so, but you know, they were paying such big money that everybody, they were just sucking everybody up. Right. Um, and so it’s, it’s hard to walk away from a big, big paycheck to go take a risk and start your own thing.
[00:28:09] Jonathan Hawkins: Yeah. So there really are sort of two groups. There’s sort of the big firm folks. Now, if, if at some point they’re asked to leave, then, you know, they go figure it out pretty quickly. But, you know, more, the people that I see more that are starting their firms or have coming out of sort of smaller shops, so they’re already a little more entrepreneurial.
[00:28:27] Jonathan Hawkins: They see it, they know how to go get clients, or at least they think they do, and they’re chasing clients that are a little bit easier to get than the Fortune 500, you know, general counsels, um,
[00:28:38] Steve Fretzin: so. Gotcha. Well, really, really interesting stuff, Jonathan, and we’ve kind of, again, covered like, you know, cradle to grave with, with partnerships, and I so appreciate your sharing your wisdom.
[00:28:49] Steve Fretzin: Let’s talk about your game changing podcast, uh, the one that you’re recommending is How I Built This.
[00:28:55] Jonathan Hawkins: Yes, you know, I’ve always been an entrepreneur at heart and it’s, it’s a great podcast. I’m sure you’ve heard it. I’m sure someone’s probably recommended before, but it’s just great to hear all these different folks create all sorts of different businesses.
[00:29:09] Jonathan Hawkins: You get to see the journey, uh, the, the, the trials and tribulations and the triumphs.
[00:29:15] Steve Fretzin: Yeah, really good stuff, man. I appreciate that. And as we wrap up, I want to thank our sponsors, of course, get visible. Uh, working with folks on their marketing and digital marketing and social media and everything in between.
[00:29:26] Steve Fretzin: We’ve got overture. law, which is a wonderful way to ethically fee share nationally and make sure that when you send out work, you’re in, get it back that you’re getting those, those fees shared. And I think they take care of the whole thing for you. You don’t have to really deal with, with the details.
[00:29:39] Steve Fretzin: They take care of it. uh. Crushing it on the, uh, the full time VA front. If you need a full time admin, marketing, stuff like that, uh, um, uh, get staffed up is the way to go. That’s my guy, Sergio. Hey, Sergio, uh, doing all my, uh, all my marketing from Bogota, Columbia. I just had a huge earthquake. It probably a number of weeks ago, but anyway, Jonathan Hawkins, thank you so much.
[00:30:02] Steve Fretzin: If people want to reach out to you, they want to ask you more questions about their partnership. They’re getting into partnership. They’re thinking about a partnership. They want to exit a partnership. What’s the best way for them to reach and get you? I’d say
[00:30:13] Jonathan Hawkins: I’m pretty active on LinkedIn. Come find me there.
[00:30:15] Jonathan Hawkins: Reach out. Send me a connection request. I’m happy, uh, to, uh, if they want to send me an email, it’s jhawkins at yourlawfirmgc. com. Uh, but yeah, LinkedIn’s pretty, pretty good spot to find me.
[00:30:27] Steve Fretzin: Yeah. Awesome stuff, man. Well, I appreciate you, you know, sharing all this great insight because I think there’s a lot of attorneys that.
[00:30:33] Steve Fretzin: Uh, really are, you know, interested in partnerships. They don’t know what the, what the process is, the ins and outs of, of actually, you know, getting into it and what they need to be thinking about, like values, like vision, like a written agreement, you know, why people exit, why they stay in. So I think it’s really insightful.
[00:30:48] Steve Fretzin: So thanks again for, uh, being on the show. Thanks for having me. It’s been fun. Yeah. And thank you everybody for spending some time with Jonathan. I today helping you to be that lawyer as a partner if you want, uh, or not, or get out of it. Uh, helping you be that lawyer who is organized, confident, and a skilled rainmaker.
[00:31:06] Steve Fretzin: Take care everybody. Be safe. Be well. We will talk again very soon.
[00:31:13] Narrator: Thanks for listening to Be That Lawyer, life changing strategies and resources for growing a successful law practice. Visit Steve’s website Fretzin. com for additional information and to stay up to date on the latest legal business development and marketing trends. For more information and important links about today’s episode, check out today’s show notes.
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