Helping a Criminal Defense Firm Scale to $100M

0:00Unternehmer/Gast I've got a criminal defense firm in Wyoming and we have a market size cap because we got half a million people. So, the way to grow in the way that we want to, we've got to go outside of Wyoming um to other states. And two ways that I'm thinking about that are >> Just Wyoming as a state only have 500,000 people? >> Correct. >> state? >> The whole state. >> That's wild. >> Seventh largest state geographically, but least populated. >> It's like 1/6 of Vegas. >> Yeah, it's bonkers. >> Yeah. >> Yeah.

0:26>> Cool. >> Okay. So, this is what we look like. >> Yeah. >> Uh if you've never seen >> Never seen one before. >> Yeah. >> So, we're all bald and mustache. >> Yeah. >> So, um basically two strategies that I'm torn between or maybe both make sense, but one is essentially going into other places where there's soft spots in the market, setting up a GBP, and then growing the business that way cuz that's one of the fastest ways to grow those kinds of businesses online, >> Mhm.

0:52>> or going into other places and finding businesses that are devalued because they're, you know, getting leads, but they're running inefficiently. >> And then and then, yeah, acquiring those. Um so, I'm curious um between those two, what would be um the best priority? And then the second part connected to that is um I was talking to one of the other guys um on your team, and the ideas um that he had shared were between you know, everything is centralized from a management standpoint, right? Like director of, you know, marketing sales, all of the things, or treating each of those as their own um like mini owner, and they essentially have to be profitable, which is great because they bear the risk, but then you lack quality control. And part of the problem is most lawyers are already not great business owners cuz we didn't get that training.

1:39>> Sure. >> So, once we either GBP or um merger and acquire, then do we run it all central or say, "Hey, run with it. Do it right."? >> So, just So, what's the goal? >> Like overall for the for the firm. >> what's the goal? >> To uh 100 >> Impact? >> Yeah. No, money. Yeah, money. I'm just Yeah. >> I'm just playing with it. >> Yeah, in tons of money. Cool. Yes. >> Awesome. Yeah, [ __ ] ton of money that also >> want to sell though or not? >> What's that? >> to sell or not?

2:05Alex >> Yeah, I would like to ultimately, but if it but if we get to a hundred million dollar law firm in multi-states and the because the multiplier for a non-recurring um revenue retention type business doesn't make sense, having that business and continuing to make the profit off of a hundred million dollar law firm is is fine also. And it it it'll also depend on regulation whether you know, what like role private equity has in owning law firms in, you know, five to ten years.

2:34>> So so this I'm going to hit on a larger topic and then I'll I'll answer the question. So um you'll notice that some businesses are are less apt to kind of revenue retention. So revenue retention is still just a proxy just overall of how likely is it that this business will continue to make money. And so it's a strong one, but it's not the only one or required. And so you absolutely can sell a home building business for a gazillion dollars, but there's zero recurring revenue cuz you build homes and then you just build other homes. And so I I I I bring that up to say like for everybody here. Like if you have a recurring revenue business, then you want to retain revenue. But the the zoomed out version of this is that somebody who's going to buy it just wants to know that it's going to keep making money and grow. Like that's all it really is and these are just different metrics that approximate that stuff. So I wouldn't be overly concerned in thinking like, oh, this is now unsellable because if you just say, yeah, well we just know across these markets there's 40,000 collisions every year or whatever it is, right? Like there's there's X amount of issues that occur and so the good thing is they're making new ones every year. And so that's kind of the business you're in.

3:36It's like GymLaunch for example, 1/3 of gyms got out of business every year. And so even if we were 100% like of the market, then we would just expect that a third would drop out and a third would come in and if we were 100% market share owners, which we're not, but if we were, then that would be the argument that like, hey, this is still going to be, you know, relatively recurrent. Okay, so that's thing one. In terms of underneath, like the the ultimate version of this business, now there's execution risks associated with this, which comes down to your skill set, but the ultimate version of this business is that you can go find law firms that are unprofitable and immediately have your centralized marketing and sales and then just turn it on. And this is fundamentally like the private equity play. This is how markets gets consolidated. And so you can go and buy five, consolidate all of them, you turn on your marketing in that area, you have your acquisition system, and then it more or less you just add EBITDA to each of them. And so that would be the fastest path and likely one that would be very valuable because once you have the system of acquiring, basically you you become the platform that you roll all of these other um law firms into. And so that's very valuable because then any other, you know, potential acquirer would be like, "Oh, we're just going to keep running the playbook. That's all we're going to do." But once you have the playbook, you're like, "Well, maybe I'll just keep running the playbook." And so that's like the most valuable version. Um if you wanted to dip your toes in that, you could take one and give it a shot and see how you liked it.

4:57The uh the de novo creation, like new location, like from the ground up, the the debate between the two just comes down to what's my return on capital and effort. And so if you can, so like for example, if we were to enter gym, so Ed was up here earlier, like Ed bought and flipped a gym in like 6 months like this year. And so he bought the gym for zero. And then he just like put the gym watch gym watch model in it and then just flipped it in 6 months. And so there are some businesses that you can buy for basically nothing. There was no point in Ed starting from scratch cuz you can get gyms for free.

5:29Because there are tons of bad gym owners in terms of business. And so you might find that it's easier for you, like if they're if the if the lawyers themselves are proficient and can follow your process, that they just lack marketing and sales, which you can centralize. And so a friend of mine owns an addiction uh business and so this is pretty much all he does is he has his marketing and sales centralized. He just buys underperforming ones, he flips the asset, and then he just turns on his marketing has them booked in a week. And then that's it. That's what he does.

5:57Alex And so, um, that would be the, in my opinion, the best version of this. >> And then run it centralized that way you can quality control it. >> how I mean that's how I would really be That's still like >> congeal. >> If you're business owner and you are not growing as fast as you'd like, I'd like to give you a free gift. So, my team and I put together the $100 scaling roadmap, which is basically 200 hours of us looking over all the portfolio companies we've had and what stages of growth they went through and more importantly where they got stuck and how they got past it.

6:27And so, we broke it in these 10 stages and we made this little kind of quiz thing where if you put in your business information it'll tell you where you're at and the most important part for you, what to do for each of functions of the business across product, marketing, sales, customer success, recruiting, IT, human resources, and finance. And so, no matter what you're struggling with, someone else has already struggled with it and solved it. And so, I'd like to give you this thing absolutely free. You can go to acquisition.com/roadmap, plug in your business information, and if you want us to actually help you deconstruct the business and you're trying to scale, we'd love to help you out. On the thank you page you can book a call with my team and we will look at the business, see if we can help, and if we can, we'll invite you out to Vegas and we'll do this in person live.