Becoming a Law Firm Owner as a Second-Career Success with Bill Gshwind

Watch the YouTube version of this episode HERE

Are you someone who is looking to transition into law? In this engaging podcast episode, Jim and Tyson sit down with Bill Gshwind of Minnesota Construction Law, who shares his unique journey into law after a 25-year tenure in business.

Bill shares lessons learned from a business failure which led to a transition into the legal field. After spending over 5 years owning a business where many financial mistakes were made, Bill decided to take a chance and sell the business after realizing he had lost control. Transitioning into the legal field came from working with a lawyer who did not understand him as a small business owner. From that point on, Bill dedicates his time working with clients in which he understands what their needs are as business owners.

Bill provides insight in his decision making processes and how it structures his firm. One thing Bill has implemented is strategic planning, which involves long term planning and mapping out how you will get to your goals. This can ultimately lead to certain decisions being made to ensure that goal is reached. Bill also shares the importance of ensuring the responsibility for the performance of work is not put on a client. It is important that lawyers are doing what they are hired to do and have clients leave feeling satisfied.

Take a listen to learn more!

Jim's Hack: Tell clients that: Just because you can doesn't mean you should.Tyson's Tip: Get your blood tested.

Episode Highlights:

• 12:16 The impact of the business failure on the decision-making process
• 18:38 The challenges of the billable hour system 
• 19:24 The importance of delivering value to clients 
• 22:27 Using tools to solve client problems

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Transcripts: Becoming a Law Firm Owner as a Second-Career Success with Bill Gshwind 

Jim (00:07.25)
Oh, sorry. Welcome back to the Maximum Warrior Podcast. I'm Jim Hacking.

Tyson (00:13.412)
And I'm Tyson Mutrix. What's up, Jimmy?

Jim (00:16.322)
I was a little distracted when the show was supposed to start because I was looking at what I'm going to use for my hack of the week. And so I was a little distracted and Tyson started pointing at me because I was sort of spaced out.

Tyson (00:28.985)
You missed the countdown and I was like, just give me the finger, the good finger, not the bad finger. What's up dude, how you doing?

Jim (00:32.383)
I'm sorry.

Jim (00:37.342)
I'm great. It's Friday. We had a good day of recording yesterday. This is take two of our Attempt to interview our good friend bill gush wind bill. How are you?

Bill Gschwind (00:47.609)
Um, I'm here again. Yeah. Apologize for yesterday. You know, the, uh, technology is a great thing when it works, but man, it can sure get in the way when it doesn't.

Tyson (00:57.3)
Yeah, but you know what, we're, trust me, Jim and I have gone through several technical difficulties over the years, so that was nothing. But let's do a, I'll do a quick little bio of you. I've had the good fortune of sitting next to Bill at dinner and having a good conversation with Bill, but let me give you a little bit of his background, we can talk more about it in a little bit. But Bill Gishwind decided to practice law after more than 25 years in the business world,

Bill Gschwind (01:05.315)
I'm sure.

Tyson (01:27.854)
as owner of an equipment rental company, which is a pretty interesting story in and of itself. The decision was triggered when the rental franchise he joined after 10 years as an independent business began to fail. Bill felt business clients needed a lawyer who understood the heart of a small business owner through good times and bad, lawyer who understood business enough to really know how to integrate legal advice with business practices. And we'll get to that in a little bit, but Bill, welcome to the show.

Bill Gschwind (01:55.133)
Thanks much for having me. I really look forward to spending some time with you. My first experience with the Guild was down in Scottsdale. I wasn't exactly sure what to expect but I'll tell you it has been very pivotal for me and I think it was a great experience. I really look forward to this time with you and continuing to work with the Guild.

Jim (02:15.394)
Bill, yesterday I mentioned that I had taken two years off between law school and college, and that when I showed up in law school and the other law students who had come straight through from college were telling me how hard it is, I sort of giggled to myself and just kept going. What was it like, I think you said yesterday that you were 48 when you started law school, what was it like?

going back after that big of a gap. I know you'd gotten your MBA, but what was it like just being there and what was your sort of mindset going through law school?

Bill Gschwind (02:47.533)
Yeah, I think, you know, I was going into it really understanding, first of all, I knew why I was there. I knew what I wanted to do with it. I still didn't really understand what it meant to be a lawyer. I didn't really understand what it meant to practice law or what law really was. I'm not sure that I really figured that out until a couple of years, probably after I got out of law school. But…

But there was a focus and there was sort of an understanding. I wasn't in law school for the idealistic reasons of being there to help people and go after mean, nasty businesses. I was there to really learn how to help other people and give myself the tools to be able to help other business owners not have to go through what I went through. There was just a maturity level.

I think between myself and a lot of the other students. I was, I went to, I lived here in Minneapolis, St. Paul area, the Twin Cities. We had four law schools at the time, we're down to three. The school that I went to, William Mitchell College of Law was at the time, known mostly for its nights.

program, kind of a part-time program. So most of the people that were in that program were second career individuals. And they did have a day school at the same time, and there were a couple of courses I needed to take that were only offered during the day. And I'll tell you, when I went and took those classes, that's where the more the traditional student was. It was just night and day, the difference between a student who had…

who was there as a second career and the people who were going through sort of the more traditional undergrad right into law school and just the approach that they had. So it was a wonderful experience. It really was. It was also kind of a reality check in many ways. I was a 48-year-old guy and now I'm in school with a bunch of 22-year-old people.

Bill Gschwind (04:40.025)
And, you know, the view of the world was very different and the reasons for being there was different, but it was fun. It was, I enjoyed the studying. For me, business, my day job, I was doing business coaching and consulting. So my day job, my eight to five job was doing the coaching and consulting. And then my second job was the law school and that was my 5pm to 8am job. So it was a bit, you know, it was busy. But.

We got through it just fine.

Tyson (05:12.616)
I want to go backwards from there. We usually will go in chronological order in most episodes, but I want to go backwards. I want to go to probably a pretty painful time for you whenever you've had some business failure. Tell me how, maybe give a little bit of background about that and then how has that shaped the way you've run your firm?

Bill Gschwind (05:21.671)
Yeah.

Bill Gschwind (05:29.499)
Yeah.

Bill Gschwind (05:40.937)
Yeah, that's you're right. It was a very painful experience to go through. Um, you know, looking back on it, um, it was a, it was a, it was an educational experience. I learned a lot about myself. I had to, um, step back and ask how much of what happened was, was preventable, was foreseeable. Um, and what kinds of lessons did I take from it? So.

I had started my rental business on my own. It was a Greenfield start. I started in 1994. I ran it through to about roughly 2000, 2001 or so. And the business was beginning to change quite a bit. The rental business was beginning to change. It was moving more from a homeowner to more of a construction commercial side. And in order for me to be able to stay in the business, if I wanted to stay, I was gonna have to invest a lot of money, which I…

wasn't really interested in investing. And along came a franchise opportunity where they were making an awful lot of money available. So I ended up going into several million dollars of debt in order to buy equipment to make this transition from a homeowner store to an equipment, a contractor-oriented store, much larger equipment, entirely new location. But after a few years, the franchisers program, they sort of had a franchising program that was set aside next to their,

new equipment manufacturing and selling program and the two divisions within the company didn't really agree. They battled. It caused the rental program to just, it didn't work well. The program didn't work well. So after probably a year, year and a half of fighting, meeting with a lot of other franchise owners trying to figure out what we were doing, my head was beginning to get just all foggy. I mean, I couldn't make decisions. I couldn't move forward. I didn't.

This was my presence in our community, the people that knew me because I was the guy that owned the rental store. So, it's an awful difficult thing to walk out and yesterday my store was open and tomorrow it isn't. I had two kids in college at the time, I had another two in high school. So to close that store was really tough. What changed though, and it was interesting…

Bill Gschwind (07:59.169)
I felt very lost and I felt very confused, but what I mostly felt was out of control. And I just ended up waking up one morning and said, you know what, this is BS. I can't function if I can't control things. And while I'm going to lose the business, I'm trying desperately to save it. But in trying to save it, I'm preventing myself from being able to move forward. So when I woke up that morning and said, I'm done with this, I'm not going to play this game anymore.

I am going to move forward at shutting this down and moving on. And that was, the worst of the pain was done. Now it was a process of working through the process of winding out of the debt. I engaged a law firm in town, it was really one of the first times I spent a tremendous amount of time working with a law firm. I think the attorney did a decent job, so far as I could tell, seemed to understand what's going on. But I felt like I was battling my attorney quite a bit. And a lot of that,

came from, as it turned out at the end, when I asked when we were all done, when we finished, it came out okay. I ended up not filing bankruptcy. The debt got wiped out, the equipment got taken back. I still left with a bunch of cash. I was left with a building. I couldn't practice, I couldn't run that business anymore. We had a non-compete, so I couldn't go in and do that rental business anymore. But…

I wasn't crushed by it and I sat down with my attorney when it was all done and asked him, why was this so difficult for us to get to this place? Why was it so difficult for you to get to this place with me? And he said, you know, I've never been in a situation where with the amount of debt you had, we ended up anything above zero. Typically we, you know, the hope was to get you zero, you could walk away without a bankruptcy, but most often it's a bankruptcy and then you walk away with nothing.

And that was for me, that was the click was he didn't really understand the heart of a small business owner. He didn't understand how much we invest in our businesses, how much of ourselves goes into that thing that we build. We, it's like birthing a child and raising it and to have it yanked away from you is a very painful, difficult experience. And so what I think I came away with as much as anything Tyson is when I

Bill Gschwind (10:14.189)
work with my clients, I work with people who I understand have everything that they have invested in their business. It's more than just the thing they do, it's more than just their job, it is their identity, it's who they are, it matters to them more than it matters to most anybody else that works with them or most anybody else that they typically interact with who don't own businesses. And so, you know, one of the things that I, and the way that I incorporate that really into the way that we've…

we practice and what I try to work with my team on is understanding that, and we do represent all businesses. Our clients, it's a very narrow niche. We're business attorneys, but our clients are all owner-operated construction companies. So it's a very, very narrow niche, which helps quite a bit. It also, it's obviously for a lot of reasons, like with your businesses, the sort of case intake and all the things that are dealt with in more of a consumer-oriented is a very different scenario. But I look at it,

As one of the tools that I have in my box when I work with my clients is the golden ticket, the lawyer license. And I can do things that lawyers can do. But the old saying, if all you have is a hammer, everything looks like a nail, right? Can be real problematic if you don't understand the heart, you know, the bottom line of what the business is. If all you do is go in and approach the problem as a lawyer, then you tend to look at the lawyer solutions.

and figure out which one of those are the ones that should be applied to the problem as opposed to looking at the problem and figuring out is it a legal solution that is going to be best or is it a business solution that's going to be best and which one of those do we incorporate. I find that I, peeling, most of the people, one of the sayings that I use quite a bit Tyson is that, and Jim, is that people come to us out of desperation, we want to keep them out of inspiration, right?

They come to us with what they perceive as being legal problems. We need to peel back enough of the onion to find out why is there a legal issue that we're dealing with. And more often than not, it's a business issue, not a legal issue. So we, by, and then we have to figure out what is their goal? What is the objective? What are they trying to accomplish? And then we have to figure out is the business solution the best one that's going to get them to their ultimate goal? Or is the legal solution going to be there? Or what combination of the two is going to get us there?

Tyson (12:45.032)
Jim, you're on mute.

Jim (12:50.142)
Thanks for sharing that story Bill and I'm sure that was a very tough time One of my very good friends got laid off from a big company yesterday and it just reminded me you know why one reason why I do this which is that I Can have a little more control over my own destiny and I'm wondering that experience of being sort of beholden to the Franchise or and having to get out of all that stuff. How has that impacted your decision-making and how you want to structure your law firm?

Thank you.

Bill Gschwind (13:22.469)
I think it's…

Bill Gschwind (13:27.725)
It's made me more thoughtful about what I do. It's, yeah, it's an interesting question. How has the, you're thinking, Jim, the beholden piece of it, the beholden to the franchise piece, is that what you're referring to?

Bill Gschwind (13:51.673)
You know, it's interesting. I've come to learn that I think franchises work best for mid-level corporate management people. They are not good places for entrepreneurial people. Entrepreneurs are people who are always looking for a different, better way of doing something. And franchisees need to follow the plan that somebody else developed for them, right? I mean, if you own a, you know, let's take a…

If you own a McDonald's franchise, you don't get to go buy your napkins at the local Costco store. It's not part of the franchise model and part of what makes the consistency, part of what makes it, you know, the customer goes to the McDonald's in Minneapolis and then goes to the McDonald's in Atlanta, they get the exact same experience or very similar experience because that's what the franchise model is designed to do.

So I don't know that going through what I went through changed me so much in the sense that, I guess what I learned was that I'm not good in an environment in which other people are telling me how to run my business. I have to sit back and think very clearly what is it that I wanna do? When I was doing my business coaching and consulting, one of the things that I learned part of the learning back business and figuring out how to do that is,

is really the understanding of strategic planning. And I think strategic planning, and I apply that in my law firm, and I think it's probably the most important thing that I could probably share with anybody that's listening to the podcast, is strategic planning is different than business planning. A strategic plan is different than a business plan. A strategic plan is a long-term vision of where you wanna go and what you wanna do. And a business plan is a one-year implementation process. And so, to me,

In order for you to be able to build and grow a successful business, you have to have a really good, clear picture of what you want that thing to look like when it grows up. I always try to look at a three to five year horizon, and I ask clients the same question. Same thing that I ask my clients, I ask myself. If everything works out exactly the way you want it to work out, what does your business look like five years from now? And the more clear, solid, that you can paint that picture in your head.

Bill Gschwind (16:14.829)
If you can see a brick building, if you can see what the door looks like, if you can see when you walk in what they're sitting at, you can see what the services are that you're offering. The more concrete that you can make that vision of where you want to be in five years, the more able you're going to be able to work backwards and build the plan that gives you the step-by-step piece to arrive at that destination. I refer to it as my two o'clock on Space Mountain on Tuesday.

and share a little story with you. This is sort of the analogy that I would use. Two families are leaving on a vacation on a Friday afternoon, two neighbors. And the one neighbor, when you ask them, where are you going? They say, I'm going to be on Space Mountain at 2 o'clock on Tuesday. And the other neighbor says, I'm going to Disney World. And so they both take off and they head down the road. And as they're going down the freeway, they hit a detour in the road. And they both get off on the detour, get off the exit. And at the top of the exit, there's a sign that says, Corn Palace. And.

The one family says, corn palace man, we've never been there. That would be awesome. We're going this way. We were on vacation. We've got some time. Let's go check out the corn palace. And the other family says, we got to be on space mountain at two o'clock on Tuesday. So they keep heading down, followed the tour, get back on the road. The other family goes up to corn palace has a wonderful time. It really wonderful experience. Get back in the car, start heading again. They get down a little ways and they get to the next place.

and they see a sign wall drug. Son of a gun, we've never been to wall drug. What a great experience, it's vacation. Let's go check that out, right? So now we're about three or four days down the road. The second family's made it to about Denver. The first family, it's Tuesday at two o'clock and they're on Space Mountain. And the family in Denver says, we've run out of time. We're gonna have to turn around and go home.

And the purpose of the story is if you don't know what your two o'clock on Tuesday in Space Mountain is, you don't know whether the opportunity that's presenting itself is an opportunity or a distraction. And the only way you can know that is to have a really good idea of where you want your business to be, to be able to make that decision. And so for me, the way that I run my firm is I've always put together a strategic plan. And I know where I want to go and I know what I want to build. And so the things that come along are not going to distract me.

Bill Gschwind (18:34.465)
And the very, you know, when I'm looking at hiring people, I know exactly why I'm hiring them and what role. Doesn't mean we don't make mistakes. And it doesn't mean we don't, you know, do things in ways we shouldn't have done them. But it's easier to see that we're on the wrong path because we know where we wanna go and we can see that the path isn't taking us where we wanna go. It's easier to evaluate the opportunities and whether they truly are. If we know where we're trying to go and we have it in our head. You know, one of my other, and I think this ties in real tight is,

You know, the old saying I use is, when you're up to your ass in alligators, it's really difficult to remember your job was to drain the swamp. And you know, so much of what we do when we're running a business every day is we get so caught up in the cases, we get so caught up in the little things that go on every day, the problems that come up every single day. And if you just get yourself wrapped up in solving those and forget the big picture, then five years from now, you're exactly where you were five years ago and you haven't grown and done anything with your business.

Tyson (19:35.7)
You know, you were making the wall drug family and the corn castle or whatever it was called, sounds pretty appealing to be honest with you. But, so you've got opinions on the billable hour. And so, and I think it's interesting because I actually am of the opinion, I'm sure people are gonna hate this. I think that the billable hour is a beautiful model for business owners. I think it's great. It also, I think it's also, it's very equitable for the business owner. I know it's removed some predictability for the clients,

Bill Gschwind (19:44.067)
Yeah.

Bill Gschwind (19:48.388)
I do.

Tyson (20:05.934)
I think it also helps harness clients. This is also coming from someone that's never billed, but I just viewing it from the outside looking in looks like a beautiful model. So what are your thoughts and what are the alternatives?

Bill Gschwind (20:20.741)
Yeah, I think the challenge with the billable hour, and again, remember I work with contractors, right? So I work with people who, before they start building a football stadium, have to give a reasonably predictable dollar amount for what that project is gonna cost them. And everybody knows in the middle, no construction project ends in the exact same way that it was expected to start. There's always gonna be changes.

There's going to be things that pop up that weren't controllable. And so a part of the reason why I have the perspective I have or the discomfort I have with the billable hour is because it is designed to shift all the responsibility for the performance of the work onto the customer essentially. It says I don't know what's going to happen.

I can't tell what, you know, how this case is going to go. I don't know what opposing counsel is going to be like. I don't know what the scope of discovery is going to be like. And because I can't control any of those things, I can't give you a price. So I'm just going to do it on an hourly basis. And I understand that. I understand that it feels that way. But if you're a professional doing the work that you do as a professional, you ought to be able to understand what some of those things are that are going to come up. You ought to be able to predict some of those.

and much more than your customer can, right? Much more than the client can. So the other reason that I find it challenging is that…

We don't sell time. People don't come to us purchasing time. They come to us to get solutions to their problems. They come to us for the value that they need to receive from the services that we provide. And you know, customers have to make a profit too. We don't always understand that. Our clients have to see a profit too. When you go in and you buy a hamburger, let's pick out McDonald's again, if you end up paying six bucks for a hamburger that you felt was worth three,

Bill Gschwind (22:27.429)
you've had a loss and you're not going to go back and buy that hamburger again. But if you pay three dollars for a hamburger you thought it was a six dollar experience, you've now made a profit. As a customer, you've received more value than what you thought you had to pay to get it. You've made a profit and you want to go back and do that again and again. I think the billable hour removes the concept of delivering value to our clients.

And that's one of the big issues. The other concern I have, and I think that this is sort of a problem with the industry and I think it's one we're gonna be wrestling with, especially with AI coming in, is how do you justify as a law firm, how do you justify spending money on things that will make your firm more efficient, reduce the amount of time it takes to provide services to your client?

if the end result is you generate less revenue for yourself. It's a loser, right? It's hard to justify investing in efficiency in your firm if it's gonna mean the billable hours go down. What we should be looking at is how, is like any other business looks at their services, how can we provide our service at a lower and lower cost with an increased value so that the price that I can charge for it creates profitability for my business?

And when you start thinking about how you deliver services to your clients that way, then you can begin to find ways to increase the value of your firm vis-a-vis other firms. I have, I don't have it now, it's being updated, but we do a profit and loss. We do a P&L on every one of our litigation cases. And so we know, you know, we know what the attorneys cost, we know what the staff costs, we know what our overhead is, we know what our billing rate is.

Now, a lot of our litigation, we're still working on coming up with a good way to flat fee that. We do flat fee conciliation court matters, but we do the same thing. We have to figure out what the value is, what the client will pay for it, what they're comfortable with. And I'm a big, you know, I really believe that price drives cost more than cost drives price. So, if you know what the price of the services is you're going to sell and what your clients can afford.

Bill Gschwind (24:51.033)
You've got to figure out a way to produce that within the price that you have and the profitability margin that you have. The other piece I think that's important is we as lawyers have a lot of tools available to us to help solve our clients' problems. If under the billable hour concept, I'm going to pull out every one of those tools and in fact in law school, one of the things that they teach us is you know when you're done researching when you keep coming up with the same things you found before.

Is there a reason why you needed to keep searching that long to get to that point before you knew you had enough information to move forward with the case? Well, in the bill of blower, yeah, you're going to keep doing the research. You're going to keep spending the time until you know you've uncovered and turned over every one of the rocks, because that's what we were taught to do. And the only way to do that, the bill of blower rewards you for doing that. But if under a under a price value profit model.

you have to make a decision. And of course you do that in conjunction with your client and what their ability is, but it gives your client the ability to help and set a budget. I don't have, as a client, I don't have unlimited funds. I've got so much money that I have available that is reasonable for me to move forward with my case. And being able to make the decision on whether I'm gonna settle or not settle is gonna have an awful lot to do with where I am in my budget. I have to help my clients be able to make those kinds of decisions.

So I think a significant amount of the work that we do is flat fee work. A lot of the transactional work is all flat fee. We've got to fix prices. And I know a lot of the, a lot of firms, I mean, I've seen that one when I was in Scottsdale. It sounds like a lot of the criminal defense firms, some of the state planning firms are moving more to a flat fee model. Some of the other cases that have a little bit more litigation involved them are

are billable. But I think we're going to see that as AI comes in and as more technology comes in, we've got to wrestle with that. The other side of it is I have a real problem with giving my staff a billable hour goal. We don't have billable hour objectives. We don't have, we don't use the billable hour as a measurement tool in any way, shape or form because I don't want my staff to be motivated to find ways to spend more time doing stuff.

Bill Gschwind (27:19.606)
to not find the most efficient way to resolve a case. One of the things.

Tyson (30:03.328)
I think there's a lot of great advice in there and a lot of wisdom in that as well. So I think time will tell. But we are up against the times, Bill. So we are gonna start to wrap things up. Before I do, I wanna remind everyone to join us.

in the big Facebook group if you've not already. There's over 6,500 people in the group, so we'd love to have you there. If you wanna have more high-level conversations with people like Bill, who clearly has got the experience, and you can just tell he's got some expertise that he brings from many years of running businesses, we'd love to have you in the guil

If you've gotten something from this episode or from any of the other episodes, we'd love it if you gave us a five-star review and it helps us spread the love to other attorneys all over the country, really all over the world. Jimmy, what's your heck of the week?

Tyson (30:57.192)
You are on mute again, sir.

Jim (31:04.566)
So I have a lot of clients who sometimes want to do dumb things or take a chance. And so what I've done with that, you know, one of my favorite things to tell clients is just because you can doesn't mean you should. And so I sent off for a set of Dungeons and Dragons dice. So I have a four sided die.

An eight sided die a ten sided die I don't know how many this one has twelve and this one has twenty and so depending on the percentage of Stupidity that I think they're exhibiting I tell them to pick a die and then I roll the die and say Can you afford for this die not to come up in your favor and it usually makes the point pretty clearly? So that's my hack of the week get yourself some die so you can explain to your clients how dumb they're being

Tyson (31:52.677)
You know, I'm not surprised by this hack at all, not one bit. Coming from you Jim Boat, so this is good. That's fun. No worries, I do too. So we'll wrap this up Bill. Bill, so we always ask our guests to give a tip or hack of the week. What you got for us?

Jim (31:58.986)
I gotta go guys, I'm sorry, I gotta call, I gotta go.

Tyson (33:15.016)
I would agree with that. I think that's one of my favorite books. It's a fantastic book, so highly, highly recommend it. My tip is drastically different from anyone's, yours or Jim's. Mine is to get your blood tested. Go to the doctor, get your blood tested, and have the doctor go through the results with you. It's something that I do regularly. I was having a conversation with Chris Nicolason fairly recently and we talked about it. It's a highly valuable tool.

to adjust many things you're doing, your diet, exercise, all that kind of stuff. So something I highly recommend that you do. But Bill, thank you so much for coming on. Really appreciate it. I got a lot from this episode. So thanks for sharing your story.

Tyson (34:03.188)
bit.