Watch the YouTube version of this episode HERE

What is your law firm actually worth? And would someone want to buy it? In this episode of the Maximum Lawyer Podcast, Tyson Mutrux sits down with Victoria Collier, founder of Quid Pro Quo, to uncover what really determines a law firm's value. After building a seven-figure estate planning practice and realizing she couldn't simply walk away, Victoria transformed her business into something she could sell. Now she helps other law firm owners navigate valuations, acquisitions, and successful exits.

Victoria shares why a firm generating $6 million in revenue was valued at less than $500,000, how owner dependence can dramatically reduce a firm's value, and what buyers are actually looking for. Tyson and Victoria also explore the growing influence of private equity, why recurring revenue matters, and the steps lawyers should take today to build a firm they can eventually leave. Whether you're planning to sell or simply want to build a stronger business, this conversation will change how you think about your firm's value.

What You'll Learn

• Why revenue and profitability tell very different stories about your firm's value.
• How owner dependence can make a profitable law firm difficult to sell.
• What buyers look for beyond financial statements.
• Why clean financial records and succession planning matter.
• How private equity and law firm acquisitions are changing the legal industry.
• Different ways to purchase or sell a law firm, including seller financing and earnouts.

Timestamps

• 00:00 – Meet Victoria Collier and discover what makes a law firm valuable.
• 04:53 – Why Victoria realized she couldn't simply walk away from her firm.
• 14:28 – How law firms are actually valued.
• 17:42 – The $6 million law firm valued at less than $500,000.
• 24:41 – Cleaning up your financials before selling.
• 30:02 – The biggest factor affecting your firm's value.
• 35:06 – Private equity, legal technology, and the future of law firm ownership.
• 1:05:27 – Creative ways to buy a law firm, including seller financing and earnouts.

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Full Transcript: 

00:00  |  Tyson Mutrux  Today's guest is Victoria Collier, founder of Quid Pro Quo. Victoria spent 18 years running her own estate planning firm before reaching a point where she knew she wanted out. I'm sure there's lots of people that are in that same experience. That's probably why they're listening to this episode today. There was just one problem. She hadn't built the firm, thinking about eventually selling it, and she couldn't afford to simply close the doors and walk away. So she had to figure out how to get the business into shape, make it valuable to somebody other than herself, and ultimately sell it. Which I'm sure a lot of people are thinking about these days. Today, that's what Victoria does for other law firm owners. She values and sells law firms, which means she gets to see exactly what makes one firm worth buying and another one really difficult to sell. So we're going to get into the numbers today, how law firms are actually valued, what buyers care about, what makes your firm worth less than you probably think it is, and what you should do, be doing. And now, now even if selling your firm isn't remotely on your radar yet. Victoria, welcome to the show.

00:59  |  Victoria Collier  Tyson.

01:00  |  Tyson Mutrux  All right, so Victoria, what are people going to learn by listening to the episode today?

01:06  |  Victoria Collier  I hope if there's one thing that they can take away is that there's a big difference in mindset between bringing home a certain amount of money called income versus cashing out at the end of the day for two or three times that income. And what does that mean when they're ready to walk away or they think they're ready to walk away?

01:32  |  Tyson Mutrux  Excellent. That's that's if they listen to that and that's what the takeaway, then I think it's worth listening to the episode, so perfect. You owned your estate planning firm for eighteen years, which is not a short amount of time. But you said you didn't really think about selling until you hit an emotional wall. Right. Take me back there. What was happening in your life at that time?

01:54  |  Victoria Collier  So what was happening was that I had built my firm up to seven figures. I'd been there for a few year a couple years, and I didn't feel like I could go further. I had tried to get like someone else to come in and manage the firm so I could be the visionary. And a person who I thought would be great at that just kind of ghosted. Not me, but the entire legal industry got out of it. And I was kind of disheartened and I was like, okay, well just roll your sleeves up like you always have and just keep doing it. And that was fine. But then I stepped on stage to give a presentation on Veterans Day, and I'm a veteran, and what I'm known for nationally at the time was incorporating veterans' benefits into estate planning law firms. And so here I am on our big day. About to give a presentation to an assisted living facility. And even before it started, this woman on the front row started heckling me. And I was like, you know, what is up? Although that's the cleaned up version that as to what went through my head. And it was very clear to me that if that's my initial response in front of my perfect type of clients. That I just didn't need to be there anymore. And so and I don't mean on stage. I definitely need to be on stage. Sure. But practicing law in that same way and trying to build a practice. I just wasn't in me anymore to do that, to serve the clients in the way they needed to be served.

03:36  |  Tyson Mutrux  What did she say that hits hit home so hard?

03:40  |  Victoria Collier  gosh, this was back in two thousand and like seventeen or eighteen. And I think essentially she was just upset that she thought that the veterans and the widows were just gonna be honored on that day and not have to sit through a presentation on VA benefits. And so I think she was just saying, We don't wanna hear from her. We just want, you know, our, you know, our medals and our cake. And so I just like, you know, you know. That's what she was wanting.

04:10  |  Tyson Mutrux  Yeah. And you p you probably at this point you've you spent eighteen years of your career sort of dedicated to these people and then you're kinda I don't know. It probably kinda felt like, like this hurts a little bit, stings a little bit.

04:21  |  Victoria Collier  I was actually more upset with the facility who brought me in to do it because they did not position me properly and they did not set it up. And I thought, you know, when you do presentations like this, you're not in control of the room. You're not in control of the message. And really that should have been my takeaway. But when you're an elder law attorney, oftentimes you are not in control of that when you are trying to get in front of your perfect client. So I was just done with all of it.

04:53  |  Tyson Mutrux  So you're like, okay, I'm done. I want to get out. At what point did you realize, oh shit, I can't just close this thing and take the money out of it?

05:01  |  Victoria Collier  Well, that moment, that night, I went home and talked to my spouse and I was just like, you know, I need to be out. And she's like, well, we don't have the money for that. So she was a stay at home mom. I was, you know, providing for the family. My kids at that time were seven, eight years old. And I ended up selling it when they were ten. And so I had to figure out a plan of how can I still make money and Not do this to do it.

05:33  |  Tyson Mutrux  It's a pretty it's a pretty tough situation to be in where you're like, I want out, but I can't get out. And so you gotta start looking at it through the lens of someone that actually wants to buy it. So what were you looking at that point? What did you figure out? You're like, Okay, this is what makes it valuable, this w this is what it makes it makes it n worth nothing.

05:49  |  Victoria Collier  Well, at the time, I mean, people just weren't buying law firms back in two thousand twenty in the way that we see and hear it happening now. And you certainly didn't have private equity coming in or anything like that. And so I didn't even know you could sell it necessarily. I just knew that was the only option I had to figure out. And certainly there wasn't education like this back then either. And so First thing I did was I knew that my books just weren't as good as they needed to be. Sure. As clean as they needed to be. My profit margin wasn't where it needed to be. I had a great team. I had great reputation. We had good cat we had good revenues, let's say. But all the other stuff behind the scenes was messy. And so I hired a professional legal administrator to come in who also had a law degree. So I didn't initially think this is my succession plan. But when I did the personality test for that person, it came back and said basically, she's gonna want to take over your firm. And, you know, the personality tester essentially said it like it was a negative thing. And my first question was, Oh, like you mean Yeah, exactly. Three months from now or three years from now. And he's like, yeah, that's the thing, I don't know. And I said, Okay.

07:14  |  Tyson Mutrux  How'd you find the professional legal administrator? How did you know to hire that person too?

07:19  |  Victoria Collier  So I had been in other legal groups and once you hit a certain revenue level, it's recommended that you start looking at office managers and that's one classification of employee. And then there's professional legal administrators, which is another type. And so, so you know, in the community you just hear things. And so I started looking for that type of professional. And I actually hired a community, a legal organization to help me find somebody.

07:48  |  Tyson Mutrux  Now that you've been doing this a while, do you do you agree with those thresholds, whatever those are?

07:52  |  Victoria Collier  I do agree with the thresholds, but not at the revenue levels that I was at. Got it. I don't know that you necessarily need a C suite professional legal administrator at the one point five million level, which is where I was at. I think an outstanding office manager would do. But it worked out for me because I literally was able to walk away from the business a year and a half before I sold the business, meaning You know, there's l lots of different exits, right? I exit this task where I delegated it to someone else. I don't do that anymore. I exit this role. I no longer do the consultations, for example. I've now put that on somebody else. I exit being the lawyer. Now this other person's being the lawyer. And then ultimately you exit your firm. You don't even own it anymore. So hiring that person, she definitely came in and cleaned up the books. She definitely came in and saved us money and profit went up. And because she was a lawyer. I was able to sell to her. So for me it worked out. But if your question is, would you go out and hire a professional legal administrator if you're planning on keeping the firm at that revenue level? No, I would not have. I would have hired a an outstanding office manager.

09:07  |  Tyson Mutrux  At what level do you think people need to get to hire that whenever it comes to revenue, le that legal prof or professional legal administrator?

09:15  |  Victoria Collier  for me it's about three million dollars. Yeah. I think a great office manager is should be when you're, you know, on the cusp of that million because prior to that, you're still wearing a lot of hats. You might have one or two other staff members that are you're all doing everything, you know, to include, you know, we need a new copy machine or, you know, what phone system and maybe all that's irrelevant now. I mean, I haven't owned my firm in six years. I don't even know that people use those kind of things anymore. But that's the kind of thing that one central person should be doing and I shouldn't be looking at that as the owner of the firm anymore. I shouldn't be, you know, and neither should my parlegal. No. You know? But yet that's what firms do.

09:56  |  Tyson Mutrux  They hire paralegal and they w they want them to do everything.

09:59  |  Victoria Collier  Yeah. Right, right, right. So I think once you're in the seven fifty to a million dollars, it's time to start really looking at office manager. Three million PLA.

10:09  |  Tyson Mutrux  Was there anything that you spent those eighteen years like really focusing on with your firm that you thought was gonna add a bunch of value that didn't really mean anything?

10:18  |  Victoria Collier  Yes, there's one thing in particular that there was at one point I hired an outside marketing person to go out in the community and do a lot of marketing, which I had been doing. I also had another internal marketing person. She went in and out. But I hired him specifically to just go out and generate business in the elder care world and He brought in essentially what his salary was and nothing else. And he was a great guy. He was good, you know, at what he did. What I realized in my market was that there were other lawyers who were doing things that I would never do and that I think, you know, let's just say I hired an ethics lawyer to determine you know, if that's workable. But what I determined too is that sometimes you know, it's not about spending more money on getting out there and bringing it in. It's it's it's servicing your intake and your sales and then your follow-up from there that's gonna actually bring in the most revenue.

11:34  |  Tyson Mutrux  Did you not realize the numbers until after the fact? Until you after you'd kinda hit this breaking point where you're starting to analyze the business more?

11:45  |  Victoria Collier  It's

11:49  |  Tyson Mutrux  More like the marketing, like the marketing or ROI. Yeah.

11:53  |  Victoria Collier  Right. I mean, I wasn't tracking that. When I first started my business in two thousand and three, I had a mentor, Bill Hammond, who is now deceased, but he was incredible. And the first thing I did before I even really had any real clients is I was charting how many calls was I getting, how many of those turned into, you know, consultations, how many of those turned into sales from the beginning. And I was doing it on, you know, a yellow pad of paper like we all did back then. But somewhere along the way you get busy. And somewhere along the way, I did not have like a CRM. I had Microsoft and all my clients were just little folders with their own little names, you know. And so then you get busy and then you're like, hey, things are great. I don't need to chart this anymore. And then I was into it for probably 10 years and I realized other people were systematizing things. Like in my world, Dave Zampano had Medicaid practice systems. And we, you know, I wanted those kind of same systems as he had, but in the VA world, the veterans benefits world. And so he and I actually teamed up together, along with a third partner, Molly, to create Lawyers with Purpose, where we systematized the whole VA stuff. That's when I really started learning. Look, Victoria. You need more than just a system. You need a CRM. You need to s actually start tracking all this stuff again, the way you used to. And so yeah, I was like midway into more than midway into my practice before I really started what I would say, getting my shit back together, you know? Absolutely. I had it together, then I saw success and then I lost it.

13:42  |  Tyson Mutrux  Such a common story. Everyone does it. I remember like starting out it was it was Google Sheets. I had a bunch of Google Sheets and tracking everything. You're just yeah, every single thing you're you're tracking, then you get busy. That's what

13:52  |  Victoria Collier  And now I do law firm valuations and I see all the various things from nothing to the best of the best. And when I say nothing, I mean people that don't even have like an accounting system like QuickBooks where they're literally sending me their bank registry. I'm like, You still write in that? What

14:10  |  Tyson Mutrux  What?

14:12  |  Victoria Collier  I'm like, d and you think you're gonna be able to sell your law firm with that? But anyway, I see the gamut now and the beautiful thing about being in this position is I can see the opportunity for the firms that aren't there yet. So and that's that's positive.

14:28  |  Tyson Mutrux  I like I like the way you're looking at that. Very good. All right. So let's put some actual numbers around this. I'm gonna try to give some people to conceptual have them conceptualize this. So let's say you've got a firm that's doing a million dollars in revenue. And I come to you, I say, hey, listen, I want you to take a look at this firm. Like what's this firm worth? Like what are you actually looking at? What numbers are you gonna be looking at? And that way you can look at your and come to some sort of eventual valuation of it.

14:56  |  Victoria Collier  So it's interesting and not at all surprising that you would say what numbers are you looking at?

15:01  |  Tyson Mutrux  I intentionally asked that question.

15:03  |  Victoria Collier  Yeah, because that's what everybody thinks. It's just a number, right? What's confusing is well which number, first of all. Yeah. And that's the question we get is which number? Is it the gross revenue? Is it the net profit? Is it the EBITDA? Is it the SDE? What is all that? And most people don't even know that there's a difference between any of them. Right. And so and I would say it's all of them. We look at every single one of those. And also we look at your reviews online. We look at your team. And not only do you have one, but how long have they been with you and what do they do for you? We look at the owner. How many hours are you still working? And What are you still doing in those hours? Are you working as lawyer? Are you what are you doing? I'm literally looking at a firm right now. And the owner who's looking to sell, everything looks great on paper as far as profit, as far as team, as far as all the things. And then I get to the question of what do you do? And the owner still works sixty hours a week. Sixty hours a week. That's not full time. That's like one and a half lawyers. So that makes it go down in value, right? Because who wants to step in and be that person? No. Nobody. Nobody. So we look at that. We look at we also look at comparables. This is the real number. It's the comparables of law firms who have actually sold and what was their SDE, what was their EBITDA, what was their gross, and what did they sell it for so we can get the multiples. And so that's the number at the end of the day is the multiple of all of these things. The financials gives you the base number. And then all those other things I list it off either bump you up or bump you down from that. So your multiple goes up or your multiple goes down. So it's both art and science, but it's never just one number.

17:11  |  Tyson Mutrux  No. That's and I'm glad you I'm glad you mentioned that because I knew it wasn't gonna be just one number. I've I've known you long enough and I've seen you've presented at MaxLaw for you've done some trainings before. And there's some other things you're gonna get into as well, I think. But we'll we'll talk about that in a little bit. What do you can you think of the time where like there was the biggest gap? I w I'm I'm asking for a story here, right? Yes. Without revealing any confidences, but who like Give me the story of like the biggest gap between what someone thought their firm was worth and what it was actually worth.

17:42  |  Victoria Collier  So I did a valuation on a great solid estate planning firm and lots of lawyers, lots of paralegal staff, outstanding use of marketing, multiple locations, already using AI. And so we did the valuation and it was in the low eight figures. Okay. But they thought it should be, you know, like at least eight figures more than what we had. Let's say let's say we were around, just to keep it simple, ten million, and they thought it should be closer to twenty, twenty five million. Okay. So double. And primarily because of IP that they had created, but was only using in one area. Right. When you like their own firm. And so, you know, it wasn't tested anywhere else and things like that. And so that's a pretty big gap. Yeah. But I also have, you know, smaller firms that we have valued where so there was this firm and it shocked me. People ask me all the time, Well, can you just tell me off the cuff what you think it is? Well, you would think based on my experience, yes, I could and would. And maybe I could in that range of whatever people call the rule of thumb. But it's dangerous to do so. You know, that's just kinda like going That's

19:13  |  Tyson Mutrux  gonna hold you to it. Yeah.

19:14  |  Victoria Collier  right. And then, you know, it's like going to the doctor saying, Can you just look at me and tell me what I have? You know? So well, I probably could, but no. And so anyway, this firm was making about six million dollars gross revenue. The profit margin was like literally three percent. Wow. And this is with the SDE included. Whoa. Okay. Yeah. And so We came back and the value was less than five hundred thousand dollars. And they were like shocked and I was shocked when I got to the end of it. I'm like, Really? This is not gonna be a great phone call that I have to make

19:55  |  Tyson Mutrux  Were they mad at you? So I wonder.

19:59  |  Victoria Collier  I think they did not trust the result. I can't say they were mad. I don't think they trusted the result. And so.

20:08  |  Tyson Mutrux  What'd they think it was worth, do you know?

20:10  |  Victoria Collier  I think that people get in their head, and I see this very commonly, is it's worth what the gross revenue is coming in the door. But why would a buyer buy something of gross revenue when there's nothing that's gonna be put in their pocket at the end of the day? You know?

20:29  |  Tyson Mutrux  If you think about that example, let's use let's stay with that one. What would you have done and maybe you gave them this advice, I don't know, but what advice would you give them to help fix the numbers so that the valuation was more in their favor?

20:41  |  Victoria Collier  So in that particular firm it was a litigation firm. Mm-hmm. And so they needed to fix their compensation plan to their attorneys. It was just never sustainable to where they would ever profit based on their compensation to their lawyers.

20:57  |  Tyson Mutrux  Now that's interesting. I'm assuming I'm gonna make some assumptions about this firm. This is the type of firm that they like to pride themselves in paying their attorneys well. So they kind of say, hey, we're gonna give we're gonna pay them a bunch of money or they're gonna have they're gonna get some sort of k a portion of every single case kind of a thing. And so they kind of pride themselves in that way. So breaking them away from that model is probably pretty tough.

21:18  |  Victoria Collier  Is extremely tough because then they think that, well, first of all, everyone's gonna leave if we change the model. And we need those people. So they are handcuffed to the people, which makes them handcuffed to the erroneous figure that makes them not profitable. So, you know, so the only people they can sell it to then are the people who work for them.

21:43  |  Tyson Mutrux  True, that's a good point.

21:44  |  Victoria Collier  Right. And Even then it's a challenge. You've got to be able to show that people that work for you, if they're going to buy it, is that not only will you continue to make what you currently make, but that there's something here that you're going to make on top of that. So whatever might be going in the owner's pocket. And in a situation like that, let's just assume there's still the 3% profit, right? They are not going to be able to get a conventional or an SBA loan. So the owner's gonna have to be holding the note for a period of time, generally five to ten years, so that the buyers, the associates, can continue to make what they're making, make a little bit of profit, and service the note to the seller. Mm-hmm. Otherwise it's never gonna work. And so then the seller either stays or just walks away, you know.

22:36  |  Tyson Mutrux  With a note like that though, wouldn't it just be at some point the associates that are the buyers, couldn't they just be like, We're not paying you? Like could like because at that point they've already been running the firm, right? So couldn't they just go like we're taking the clients with us and just not pay the note? I mean, le from a legal standpoint, sure they could probably sue them, but like there's not gonna I mean, they could just take the clients with them, right? Like it's it'd be pretty har hard to enforce a note like that, right? From a practical standpoint.

23:02  |  Victoria Collier  It is if they have the note, then I think that it's certainly legally binding and enforceable and all of the things. And not worth not paying and s and being sued over. I think the answer to your question comes before the actual sale and that is why go through the sale at all? Why don't you just take the clients? Yeah.

23:31  |  Tyson Mutrux  That's right.

23:32  |  Victoria Collier  aah And then the logistics of, well, the seller hasn't sold yet. There may be still some reputation that needs to be maintained. And there's a whole staff, are they coming with you or not? Because they don't know what's going on behind the scenes. So now you've got all your children trying to decide between which parents, because if that happens, the seller probably isn't gonna just close the doors and walk away. They're gonna try to keep at least one or two. Two of the lawyers and maintain what's going on, and then paint the other people as bad people, and then get them blacklisted in the community. You know what I'm saying? So there's a whole lot of can of worms right there that I just wouldn't want people to ever walk into from either. I think what associates generally see, and I'm hopeful that this is what they see, is there's a whole lot of value, if not that profit margin. There's still a whole lot of value to maintaining a firm that is well known, operating, has the referral sources, has the good team. All of that in itself is valuable. It's just what price do you put on it?

24:41  |  Tyson Mutrux  Yeah. Interesting. You just you mentioned the profit margins. I wanted to ask you about that too. So you tell owners to clean up their PNLs and maximize the profit before selling. What does a dirty, quote unquote, dirty law firm P&L actually look like, roughly?

24:59  |  Victoria Collier  So dirty law firm. So P&Ls will have a lot of personal expenses running through. And things that, I mean, we all know the phones, the cars. Sometimes when we go on vis business trips, we take the whole family and we extend it, and yet somehow it's all on the PL. And that's all expected to some extent. But then you've got housekeepers, you've got Airplanes, you've got you know, coaching expenses like I had, like 150,000 in one year, you know. Whoa. Another business owner is not gonna come in and do that. And so all those are ad backs, which all makes sense. But when you start having a lot of ad backs like that, it puts into question the SBA lenders and the conventional loan lenders. Can we trust anything in here? Yeah. You know, I mean, is there really a separation between you and the business? So there's things like that. And then I'm literally, you know, was meeting with a client who wanted to sell the business. And, you know, you hear this where it's like, you know, well, there's so much more except that it came in cash. So it's not on the P&Ls. So now we're not just talking messy. Now we're talking, you know, like bigger problem. Exactly. Yeah. And I'm like, you know, that's between you and the IRS. What I can tell you is this, the valuation is going to be based off of what's in the P and L's period the end. And when it's positioned to sell, that's what it's going to be positioned as. And people don't buy opportunity. People don't buy cash under the mattress. They buy what they can verify.

26:41  |  Tyson Mutrux  Mm-hmm. So let's say you've got a firm that's running, let's say the coaching, $150,000 in coaching through all the other things you mentioned. To me, the cleanup job is fairly simple in that situation then. So you let's say you give a couple more years of not running those things through. And now you got a clean looking business. So it's a it's an easy fix. It's just like quote unquote easy fix, but it's just so it's just you're gonna have to give it some time, I guess.

27:08  |  Victoria Collier  Well, and that's the issue is people it's almost as if people do wake up one morning and say, I'm ready to sell yesterday. And so they don't want to put in that time. You know? Or they hear messages out there that say it's gonna take ten years. Well, nobody can see ten years from now. I mean, it's hard pressed to get anyone to do one, three, five year goals. Right. Right

27:31  |  Tyson Mutrux  Especially nowadays.

27:32  |  Victoria Collier  Right. So yes, it is a timing thing. And so that's one of the things that I tell people all the time is, you know, have clean books for three years, if and when possible. Now some buyers are gonna want to go back five years, but here recently, and when I say recently in the last three years, I've just seen them going back three years. But when I started this, people were asking for five years worth of stuff. But since COVID, people aren't going back that far.

28:01  |  Tyson Mutrux  What's what's easier to sell a partnership or like a sole proprietorship?

28:08  |  Victoria Collier  that's a hard question. I don't think th that it's easy to answer that. I can say that when there are more than one chiefs in the kitchen, is that I'm like mixing up

28:26  |  Tyson Mutrux  Totally mixing them up, but I get everyone knows what you're talking about, yeah.

28:29  |  Victoria Collier  It's harder to sell when you've got to get two people on the same page to sell at the same time than it is a solo person. And they don't even have to be both lawyers. Oftentimes you've got a lawyer and their spouse who's been a big part of the business for a long time. And often it's the non attorney spouse that is the problem. Interesting. As far as selling it. 'cause the lawyer's ready to go. The spouse is like, but we should get more. We should get more. Because they've been monitoring the books the whole, you know, and so they really feel like it's valued more than what they might be able to get. And people forget that also what goes into not just the value, but what you're able to get, those are two different things. And part of what you're able to get is how burned out are you? How ready are you? And I mean psychologically, financially, emotionally. And, you know, how long are you willing to stay? And not like a transition to hand off referral sources in cases, but are you still willing to stay and do any kind of work? You know? Those things, while if I'm willing to stay for a year or two or three and work, I'm gonna be compensated for that. But also the value that someone's willing to pay for the actual firm is more too than somebody who's not willing to stay at all. Not only are you not getting compensation, but the value goes down to not the value, but what they're willing to pay. Okay.

30:02  |  Tyson Mutrux  Is there one like any like one thing you can see like is there like a common thread among all these sales where doing one thing will increase the value of a firm more than others?

30:21  |  Victoria Collier  I'm going to say yes. And the reason I hesitate, is because I want to say one thing, and it should be the one thing. It's not yet. Yes. Yes

30:31  |  Tyson Mutrux  I love this answer. Oh

30:33  |  Victoria Collier  but it's not yet. So I'll give you the answer you asked, and that is what's the one thing? The one thing is the lawyer cannot be everything. We do have to. Have the firm not so dependent on the lawyer. Period, the end. The owner is what I should say. Not so dependent on the owner, where everyone is still coming to the owner to ask questions about this and that and the other. People are still calling and making referrals to the owner and not the law firm. That really is the number one thing. But I don't want that to be the number one thing. I think as you start getting into ah you know, law firms acting as businesses, actually being businesses, being pursued by private equity. The things that are going to matter the most is your leads. Where are they coming from? How many of them convert into clients? Well, into consultations and then into clients. So what's the conversion rate? It's all about the numbers at that point, which is where it should be. But We can't even get there if all the numbers depend on the owner.

31:49  |  Tyson Mutrux  Okay, so the for the firm that is like the lawyer that is the firm, right? So like what would you recommend that they start transferring away first? Like what can they start offloading off their plate first if they're gonna start this process?

32:06  |  Victoria Collier  Stop answering your own phone. That'd be a good start. Yeah.

32:10  |  Tyson Mutrux  Yeah, that's that definitely is a good stuff.

32:14  |  Victoria Collier  Secondarily bookkeeping. Okay. Yeah. I mean, I still talk to so many law firm owners that still do the books on Sundays, you know, or their spouse does. Because they don't trust anyone else. I get not having someone in your firm do it, but hire a company out there to do it. I'm literally working with a firm right now, solo practitioner, has some staff, but I asked about some of the financial records or something. And she gave me a response and what my response to her response was is, Well, aren't they doing a reconciliation every month? And she's like, Well, I don't know what you mean by that. No. Right. And so someone who does their own books and just gives the person a stack of stuff for tax time, right? And so if your books aren't being reconciled, Conciliated, is that a word? Close enough. Reconciled. You know, have somebody else do your books. So that's number two. So stop answering the phone for yourself and have somebody else do your books. That's number two. Number three, I would say, you know, we can talk about things like answering the emails and all the administrative things, really the administrative things, because you're looking at what's the lowest value of what takes my time, right? And so, and now if you train AI well enough, they can actually do your emails for you as well, if you train them well enough. And so I'd say admin stuff. And then after that, I would say for me personally, it's the lawyer stuff. I would keep the owner still doing the sales if we're building from little to bigger, right? I would then have at least one other person who comes in and does the lawyer stuff, but they don't learn how to do sales.

34:17  |  Tyson Mutrux  Mm-hmm.

34:19  |  Victoria Collier  they're a small piece in the pie. So someone else would be doing sales, someone else I always the way I built my practice anyway, was that the paralegal had the relationship with the clients, not the lawyer. So when you said earlier, or can't they just take all the clients and run away? Not in the way I would be able to firm because they wouldn't have the relationship with the clients. So

34:41  |  Tyson Mutrux  So our case managers are specifically there to build a rapport with the clients. That's they their entire job is calling clients and talking to clients and emailing and texting clients. That's yeah. I that is so true. And you also have a d need to have some ironclad agreements too. But

34:57  |  Victoria Collier  Absolutely. Absolutely. Yeah

34:59  |  Tyson Mutrux  Topic for another day.

35:00  |  Victoria Collier  yeah. So then after that then I would say sales, but not the lawyers doing it, but non lawyers doing Love it.

35:06  |  Tyson Mutrux  All right, I'm gonna be very unfair to private equity for a second. Sure. I kind of picture private equity right now as like all these lawyers were in this big castle, right? And we're like, We've we're ready to w go to battle, right? We're we've got our bow and arrows ready to shoot out everything and they're at the gates. They're at the gates. They've already breached in Utah and Arizona, they've sort breached a couple of the walls. But we're like fighting Okay, Puerto Rico down too, right? So they've They've ki breached a little bit. We're like holding, we're we're kind of holding back, ready to fight. But at some point they're gonna get over those walls, right? Like how far, how many years away are we from private equity just flooding into all the markets? Because we've gotta be getting close.

35:51  |  Victoria Collier  I think that they would already be flooding the markets if we had law firms that were ready for them. Meaning it's the law firms that aren't prepared. The private equity's here and they are knocking on everybody's doors. I mean, you can't talk to a lawyer without saying that they've gotten twenty emails just today from private equity. Now let's keep in mind, just like all law firms are not the same, n all private equity is not the same either. There's a lot of resistance from lawyers. As you can well imagine. And that's the one thing that's keeping the water from coming in is still the uncertainty from lawyers, the non-trust from lawyers, all of that. However, I am doing a thirteen series educational webinar starting tomorrow, actually, all the way through the end of the year. And when I put out the topics on my private Facebook group, at least I think three or four people said, talk to me about MSOs. Will you be talking about MSOs, managed service organizations? So I know it's on the mind of lawyers. They're starting to think, hey, what does this look like for me? Not in a bad way, meaning that was not the concept. And so to answer your question directly, I think that it's gonna be three years where it is completely flooded. It's been happening for a long time. It's just been happening at the mega firms. Sure. And now it's happening on the, you know, middle to low market firms.

37:28  |  Tyson Mutrux  I so I've I've I've got a theory. Okay. So let's see what you think about those. I think they're already here. And I'll tell you how I think that they're already here in a way that most people aren't thinking about. So I've been wondering for a couple of years now, why is so much money flooded into legal tech? Like there's still to this day a ton of now they back there's been some backing off a little bit, but there's been a lot of money flooding into legal tech. Yeah. I think the play has been the whole time you flood into legal tech. Legal tech is integrated into the entire system. Then once the walls come down when it comes to private equity, they're already here. So they're already into the system. They've got all the data. They have all they have all the data. The data is here. They've got it. They're they own the data, right? They don't really own the data, I guess, but they're controlling the data at least. So they're already here. So it's just gonna be a really easy transition. They're already in all the case management systems. They're all in all the legal tech. They're just going to easily just transition over and it's going to be, I think it might be kind of bad for us. I don't know. But

38:27  |  Victoria Collier  Let me ask you, am I and what I'm hearing is are you saying that it's the private equity that is getting in through the legal tech? Exactly. And so it's the same companies that are doing the legal tech that you think are then going to be buying the firm.

38:42  |  Tyson Mutrux  I think that was the Trojan horse.

38:43  |  Victoria Collier  Yeah. I think that's a great philosophy, especially, you know, with the movie outfits right now. Putting that on the one with what's it called? The one with Matt Damon in it, that

39:02  |  Tyson Mutrux  Archie, what movie is it? With Matt Damon. You know?

39:06  |  Victoria Collier  I just took my son to see it. I just took my son to see it. It's about the Greek gods and the Trojan horrors.

39:11  |  Tyson Mutrux  I did show my

39:13  |  Victoria Collier  Yes, yes, yes. I mean, it's resurfacing. But I think that your mind is actually more advanced than what private equity is doing right now. I think. Not that you're wrong, I think it's brilliant. They should be thinking of that. But I think that it's the legal tech companies coming in to do this that then they want to sell their legal tech companies for twenty, thirty time Ibita, which you can't get from a law firm. Right. Okay. So I think they're wanting to sell their own companies after they get in and do this. I think it'd be brilliant if they did both. What I'm seeing are private equity firms that want to come in. They're entering the legal space from the beginning. They're used to doing HVAC and, you know, all your blue collar stuff, medical, maybe. And they're testing the waters and they're bringing in their own tech and that's how they think they're gonna slim it down to the law firms. I have not seen the ones I've been involved with yet that are the way you've described it, but I think it's brilliant.

40:20  |  Tyson Mutrux  I saw what made me think about the 'cause I've been thinking about this a long time. I was like, it didn't make sense why so much money was flooding in into legal tech because of AI. I was like, this doesn't make sense because AI is going to gobble up most of these different software companies that have come out with new things. Cause like a company would come up with something like a week later it's gobbled up by another company. So it just didn't make any sense. But like I saw this it was this morning or yesterday. It was like Alpha something CRM or Alpha Something. Giving their CRM away for free, or it was a case management system, not a CRM. So they were like, you can have this for free. And I was like, wait a second. And I didn't have chance to like, I'm gonna look into this and see like what it is. There's gotta be a catch. Right. Like because we've like, so we built our the reason why I know there's a catch, we built our own case management system for our own firm. And I've I've talked about this in the show before. It is the if it were on the market, it'd be the best case management system on the market. I have zero, zero doubt about that because it is really good. There are costs associated with that though. And I couldn't give that away for pe because we here's like we Beck and I talked about with Maxim Lawyer. Should we give this away to members for free? But there's a c there's a cost associated with it, which each new account, there's a cost associated with that. And it wouldn't make sense financially to do that. So why would these why would some company give away their case management system for free? There's gotta be a catch.

41:41  |  Victoria Collier  Of course, somewhere. You know, it's just like when apps first came out and apps were free and then eventually you had to start paying for something. Exactly. From somewhere. But then you're tied to it and you don't want to move all your stuff to something else, so then you start paying for it. You know, I mean I feel beholden to Zoom, you know, and they can raise my rate as the high as they want to, and I still feel like I'm tied to them. Absolutely. So

42:04  |  Tyson Mutrux  We just swit we just switched to phone the you're talking about the phone system. We just switched to Zoom phone.

42:08  |  Victoria Collier  Yeah, I'm on.

42:10  |  Tyson Mutrux  But we really like That's we've s we've we think they're better than Ring Central. I think that they're pretty good.

42:15  |  Victoria Collier  Yeah. Yeah, that's what we've been using for like four years. So

42:18  |  Tyson Mutrux  all right. So you had talked about, not today, but you've talked about before about a lawyer in her seventies who wanted to sell two areas of her practice. You know what I'm talking about? I'll give you some more details in a second.

42:28  |  Victoria Collier  More details.

42:30  |  Tyson Mutrux  it's where she had waited too long, couldn't find the right

42:32  |  Victoria Collier  Yes. I remember.

42:33  |  Tyson Mutrux  and then ultimately she closed the doors. I guess what could she have done five or ten years earlier that would have prevented that from happening?

42:42  |  Victoria Collier  Well, she could have started five to ten years earlier because she contacted me and literally six months was her runway. And I was like, you one area of practice was like estate planning, but not sophisticated estate planning, like the lowest level meaning wills and revocable living trust. Period, the end. And these were for young families that really needed them based on her other type of law, which was like adoption and pretty much adoption. Yeah. So very, very niche, right? And so she in her case, would have done best to hire an associate to then become her successor, which she tried to do. So I wanna give her credit where credit is due. She did try to do that. But it didn't work out, for various reasons. And so then it was like, well, I'll just, you know, I don't want to hire another associate and have this same experience. People spend too much mental energy, I feel, believing that any decision they make for the future is going to turn out exactly the way actions occurred in the past. And I think they limit themselves because of that a lot. And but we do it. And so she's like, Well, I don't wanna hire another associate because you know, it's just not gonna work out. So then she waited until she was six months of I'm ready to leave. The other thing too was that the only other staff member was part-time and it was a family member. So they're gonna leave at the same time. And so what are you actually buying? You know, and so when I approached people in the area that did similar stuff, on you know, pretty much on the adoption side, they're like, Why would we buy that? You know, they gotta go somewhere, they'll just come to us. You know, and that's a philosophy that people hear. I found somebody on the estate planning side that said, I'm willing to learn the adoption side, I want the estate planning side. But then just it didn't happen. Let's let's just say it didn't happen. And then when we're talking, you know, about the options and bringing people in. Tyson, it's emotional for a seller. And, you know, they get all excited when there's a person who could be interested. And then if the interest wanes or they can't qualify for financing because the seller, and I'm not saying the seller required this, but if the seller requires all money up front, you know, then, you know, it's like a roller coaster. Yeah. And they can only take so much of that. And once you've brought in two or three or four that fizzle out for whatever reason, buyer reason, seller reason, then they're like, I'm done. I can't do it. I'd rather just it's not I've heard these terms. It is not worth it to me. I'll just take my last case and close the doors. Yeah. And so what she could have done was insulate herself from having the only other employee being a family member. Could have maybe stopped one practice area beforehand and just maintained the other and then sold that but built it into something that somebody would want to buy. And I would say the estate planning side would have been the stronger one because there's recurring revenue opportunities there and stuff like that. But having a plan, you know, as we talked about before, you know, we create something at Quid Pro Quo for clients that's the one, three, five year strategic plan, you know. Create the plan, execute the plan. So, but don't do it six months before you want to get out.

46:32  |  Tyson Mutrux  So I wonder, I just went through my dad just went through this process. So he sold his he's a mechanic, right? He owned his he'd owned a garage for two decades, right? And but he's I mean, he was a mechanic for fifty years, right? Like he's he's still working. He just had a double lung transplant. So he's not currently working, but like a week before he had his transplant, he was still working. But He went this, and I was, I was surprised by how much he was able to sell his garage for. And like he, because he had there was land associated with it. He had the business, but the buyers seemed to put a lot of value in their customer list. And I it's interesting because my dad didn't actually shut down shut down his garage. He just couldn't operate within the city limits based on their agreement. So he could still do the work in the county at his house, which he still did. It seemed like the buyer was putting too much value on the actual. Customer list. Cause like my client list is really valuable to me. I don't know how valuable it would be to you. So I wonder what your thoughts are on that.

47:34  |  Victoria Collier  Would say that, you know, from a car mechanic place, the multiples are different. And the reason for that is that a mark a car mechanic, you know, they can offer maintenance, you know, like every three months or five thousand miles, you need to be in here doing that. So we can give specials around that. So it's recurring ish, or at least, you know, what's the word I'm looking for? They come back. And it's predictable for the most part. If you're any good at what you do and you stay in front of your client list, right? Lawyers are different. Especially let's say, for example, personal injury, right? Sure. And you know, I mean you get hurt once. You hope you don't get hurt again.

48:25  |  Tyson Mutrux  Never called back.

48:26  |  Victoria Collier  Exactly. You're not out there saying, Hey, go get hurt so I can help you again, you know. Same with, you know, I mean, same with criminal law. Now we know the recidivism rate, so they're likely to come back if you did any.

48:39  |  Tyson Mutrux  Yeah, the you definitely I when I had criminal I definitely had returning customers.

48:42  |  Victoria Collier  Same with family law, you know I mean, divorce. You hope you're not gonna see him again. You might.

48:47  |  Tyson Mutrux  You know, okay, so real quick, the odds I want you people to Google the odds of you having a second divorce if you get a first divorce, it is insane.

48:54  |  Victoria Collier  It is insane. It is insane. But these are these are repeat clients, if at all, right? Whereas you do have firms like IP, Trademark, Estate Planning, maybe immigration, where it is where you can Do the recurring business. Repeat and recurring are two different things, right? And so businesses that have recurring, like client maintenance programs, they're gonna sell for higher multiples than those that have no repeat and/or maybe some repeat. And so that's where the client list becomes important. And how warm are they? So are you contacting the list regularly? Are you in front of them somehow, you know, well, how do they know you versus somehow they went to some seminar and now out there on somebody else's newsletter. You don't have a newsletter, you're not sending it to them. You did the work, but they're getting someone else's newsletter. True. You know? And so that's one thing is we've got to see it's not about just getting the clients. It is about continuing to nurture them after you've completed the services, even if you don't have a client managed program. Back in 2014, I think it was I was looking to buy an estate planning firm in Atlanta and she'd been in business 30 years and all she could say is I don't do any marketing. Everybody is that comes in is basically a client that came in before, but I don't even reach out to them. So they call me because I did services and they love me. Well, I'm not you. And you haven't touched them, you know, in forever. So w how valuable is that list to me? Sure. Not very. It was very dependent on her. You know, and her not even having a relationship, just having done something good. So you know, just like we classify clients, A, B, C, D, E, F, we classify our employees, maybe A, B, C, D, F. We classify the list the same way. A, B, C, D, F. Meaning, how warm is it? How hot is it? How often have I touched it? Do people respond? Like, for example, with my business quid pro quo, we send out a newsletter. How what's our open rate? That's gonna tell you how hot it is, you know.

51:15  |  Tyson Mutrux  Mm-hmm. Excellent. Okay, so I brought up that seventy year old attorney with the two practice areas. Give me the opposite story. Give me the situation where they like the story of the most sellable firm that's ever come to you.

51:29  |  Victoria Collier  Yeah. Well, I mean, they look very different. B and the very first firm I sold was a small firm, but it was very sellable. It was an owner who still worked, but only about twenty-five hours a week doing just lawyer stuff. Had an associate attorney who never wanted to be an owner, so just a great grinder. Had a part time marketing person. Had an office manager and a part-time intake person. So it had all the core members you needed in the firm. Solid every single year was making about the same money, right around $500,000. Every single year the net profit was exactly the same, about $120,000, $130,000. So predictable does not change. Ah

52:24  |  Tyson Mutrux  Love it, yeah.

52:26  |  Victoria Collier  Very easy to sell. And in a practice area which was estate planning, very easy to sell. So I'd say that because it had everything. It was an easy bite to chew for someone buying a firm for the first time. You know, that just wanted to tack onto their own.

52:39  |  Tyson Mutrux  Not ten million dollars yet.

52:41  |  Victoria Collier  No, no. The other, let me think of a different kind that I've had that was very easy to sell. So I had sorry that so many of my examples that are easier actually estate planning, because they are one of the easier practice areas to sell. Although we have sold n a number of immigration firms, we've sold a PI firm, helped a client acquire a PI firm, and also have done family law but and employment. I've sold several employment law firms, but this one's estate planning as well. And this one, you know, I mean, it didn't have so is a the owner, been working for a long time, still put a lot of hours in. And The spouse worked as the office manager, but only coming in to do project to clean things up for like two years, two or three years. Was extremely skilled at doing that and did that, put lots of policies, procedures, everything in place. Right. And then they hired a really seasoned lawyer from another state that came in like within the last year before we sold it, you know, but very seasoned, very well known in the in the United States. And so and lots of, you know, staff that could do some stuff. Great reputation, great profit margin, all of the things. Except that this, you know, the lawyer was kind of new. But the reason why it was so easy to sell is not because the firm looks beautiful. It's because we found the perfect buyer. And sometimes we focus too much on the firm itself, but we have to find the perfect buyer sometimes. And this buyer was a like did a lot of real estate title work and it blended well with the estate planning that they were doing. And so it was a strategic purchase for crossover clients. And they really wanted that client base. So I'd say that one was easy to sell.

54:45  |  Tyson Mutrux  I've mentioned your core four a lot on the show. What are the core four?

54:50  |  Victoria Collier  So you've got to ha have somebody's the face of the firm that brings in so that'd be like marketing. You've got to have somebody that can do the work, that's production. You've gotta have the lawyer legal work. So legal and then I would say sales. You can't yeah, I mean you bring in, but somebody has to sell them. So intake, so marketing, sales, production, and lawyer.

55:15  |  Tyson Mutrux  So it doesn't matter what you call those things as long as they fit in those categories.

55:18  |  Victoria Collier  Correct. Doesn't matter who does those things unless they fit in that category, except for the lawyer. Always has to be the lawyer. Always has to be the lawyer.

55:26  |  Tyson Mutrux  Yeah. For now. We'll see what we'll see what that changes. You I think you're predicting more mergers and roll ups, is that right?

55:34  |  Victoria Collier  I am. I mean I'm seeing it every day. Yeah.

55:38  |  Tyson Mutrux  So that means more we mentioned private equity, that means more money's coming in this space. What are sophisticated buyers seeing in law firms that law firm owners themselves are not seeing?

55:51  |  Victoria Collier  So let me first start if I can and say that the acquisitions and roll-ups are not just gonna be from private equity. You've got lawyers who on a small scale are doing the exact same thing, but they're buying solo practitioners. Except they're not bringing money to the table. They're basically just now having you work for them. I think it's servitude or something. Until you decide you don't want to. And you know, and there's a great model around that. But ultimately, these lawyers are now getting practices in all these states with varying goals. But one of those goals is so that they can then sell their practice that has lawyers in all these states to larger law firms or private equity. Okay. So I don't always want it to feel like it's private equity coming in because small ones are doing it too. But The private equity, what are they seeing in firms that we don't see for ourselves? So you have to understand the private equity space to actually, I think, answer this question. And that is they see that when you can get your business to what they call a platform business, which is making 21, sorry, 25 million EBITDA, which isn't gross, everybody. It's not the revenue, it's the EBITDA. Then they can sell it and they can get out. So what they see is that we can buy a really solid firm that's already solid. We're gonna pay you more multiple than we should based on what other people would buy a law firm for, to get the first one. And then we can tack on smaller ones and pay them more traditional

57:34  |  Tyson Mutrux  Mm-hmm.

57:35  |  Victoria Collier  rates, build quickly, streamline using AI and our systems and everything, get everybody on one platform. Which is where all the cost individually comes from, right? Sure. And then we can sell that. And then that's where they cash out. So they have the resources to be able to scale quickly, whereas we don't. And it's not that we don't all see that. It's just we're not capable of implementing that. And they are.

58:02  |  Tyson Mutrux  Are there specific practice areas that you think they're gonna be targeting?

58:06  |  Victoria Collier  number one right now, they are hot and heavy in the P I space. Hot and heavy. I don't know why, but they are. And if I have anything to do with it, they'll start looking at estate planning next. Yeah. So

58:19  |  Tyson Mutrux  I think that's the one that you could systemize the most. Like it's just like estate planning is. I it's interesting about the litigation w with litigation and PI, because i understand why private equity could come in, but I think that I think California just had a rule where if private e private equity comes in, they cannot make any decision making c having any influence on the decision making of whether to take a case or what decisions to make during litigation, which I think is actually the smart move. It is the smart move. I don't know how you do that though.

58:48  |  Victoria Collier  I think it number one, I think it's the smart move and I think it's essential. I think if we're gonna keep as intended, then they run the business side and we run the law side, they cannot have any decisions on what kind of cases we take and stuff like that. Now I think that's gonna maybe sound contradictory to that is I think we as a firm, like I as a firm, whether I have private equity or not, I can always decide what is the type of case will take. Sure. And what won't I? Let's say I'm a criminal defense lawyer. I personally will never take a child abuse case. Period, the end. Okay. Well, I think that if private equity comes in and buys my firm, I think we can agree that I'm still never going to take sure that case. Now, I think the gray area is if private equity comes in and says, you cannot accept a case that's going to be worth less than $25 million.

59:44  |  Tyson Mutrux  And they're gonna do it. You know they're gonna do that.

59:45  |  Victoria Collier  But I as a lawyer could independently decide that's what I want to as well, right? And so where do you have that line?

59:54  |  Tyson Mutrux  I think the bigger problem is gonna be actually a little deeper in the case. I think the early in the case, it's easier to decide. I think you're gonna have your same rules, whatever. It's harder in the case whenever a c a case turns, right? Sometimes a case turns in litigation. It just does for a variety of reasons. It's that spot where I think we're gonna have a really hard problem with private equity trying to put their thumb on things and the attorney's trying to push back. That's where the issue's gonna be.

1:00:21  |  Victoria Collier  Well, and this is how I see it is at least with the private equity firms that I've had the ability to speak with, is I don't think they're ever going to know what's going on in any one case. I think that they have KPIs, which all firms should have and most firms don't. Yeah, that's right. And I think that's the benefit of bringing them in is actually we get KPIs which we've always should have. But they're gonna look at the KPIs and then decisions are going to be made based on KPIs. So the lawyer is gonna have to start thinking, how am I gonna make those numbers? How am I gonna make those numbers? Now I'm gonna be making a decision, do I take this case or not so I can hit my numbers? Right. But I don't think private equity is gonna come in and say, you need to take this case so you can hit your numbers. It's the lawyer who's gonna have to make that decision.

1:01:11  |  Tyson Mutrux  Interesting. Okay. Last question. So you 'cause I want to bring this back to you. Like you hit that emotional wall, right? And you went back, you said, okay, I gotta get the firm ready and then you end up selling it. And then you went back and you bought a farm and you sold hemp for two years, which I think is we didn't even get to that, but we could that some other day we'll talk about that. Everything that you know today about building something that you could eventually leave. What are you building in your life around today that eighteen year old law firm owner Victoria wasn't thinking about?

1:01:46  |  Victoria Collier  So I'll give you a great example. And that is I actually own, I co-own an ABS law firm in Arizona. Didn't know that. Which just, you know, was approved in 2025. And from the beginning, I have not been the lawyer and I have not been the salesperson. We have two people that operate it. It makes over five hundred thousand dollars in its first year. And you know, so what I learned. From my experience, is start out how you intend to go on. You know, people say all the time, start with the end in mind. And I believe it, I profess it. I can't say I'm great at it because I can't really see the end so much. But I do know that I can begin how I want it to continue, and that is without me being the lawyer. And so I am looking at, you know, where do I want this to be? And where am I now in figuring out what is the gap? Who do I need to be so that I get that result? Who what am I afraid of, you know, that's preventing me from getting there as well. And I'll give you an example. I mean, I personally am looking at buying law firms right now, me personally, not just on behalf of my clients. And so I have to have my very strong buy box. I have to know what is it I want and what is it I don't want. So that I can start in the place I want it to continue, which is never stepping in and being that lawyer. Now all these lawyers, they're already in it. So how do you step out of that if your goal is to sell someday, right?

1:03:25  |  Tyson Mutrux  Your answer is too good, so I gotta ask some follow-ups. It wasn't my last question, I lied to you. All right, couple things. How much should someone be willing to invest in an ABS to make it worth it?

1:03:38  |  Victoria Collier  Well, I mean our costs were not more than fifteen thousand dollars for lawyers fees for the application, I believe.

1:03:48  |  Tyson Mutrux  Why am I investing in the firm itself?

1:03:50  |  Victoria Collier  In the firm itself, well, the beautiful thing for us, Is that we knew we had a client base from the beginning. So we knew we'd profit from the beginning. And so I was willing to invest in the salaries of the two people that had to run it and knew that we would get it. But I think with any business, I don't think it has to do with an ABS. I think with any business, whether you're starting one or buying one, and whether it's traditional or ABS or an MSO, is what are you willing to invest? Enough to get profit off of it. But the question really is, but when? When are you going to get that profit? When you're going to get your return on investment, right? And so, and not just money investment, but time investment. How much time am I willing to put into this? Right. So I had set up for the ABS. I'm willing to work, you know, 20 hours a week for three months to train up the people and make sure we had everything in writing and all that kind of stuff. That's my goal, because I have partners in that, you know, and so I had to make a commitment. They had to make commitments. I am not a tech person. I am not a systems person. So they had to commit to doing the systems. I had to commit to train the people, right? And so that's a very individualized question, I think, answer. Because I also own other businesses, you know. I mean, I can't commit 247 to one business when I've got these three others over here. So I think that's all uniquely individualized.

1:05:27  |  Tyson Mutrux  Sure. Yeah. All right. This really is my last question. Cause I want to ask about you're talking about mm, buying up smaller firms. You know, it could be smaller, smaller, it could be solo firms. Most I think people think of when I buy something, I give X dollars to it. And that's not really how it works with buying businesses. There's a variety of different ways of buying a business. Can you give some of the ways of buying a business that a lot of people wouldn't think about that actually could be pretty favorable to someone wanting to buy a firm?

1:05:53  |  Victoria Collier  Yes. So I'm looking at it from the buyer's perspective here. The traditional way in the past was always I'm not gonna give you any money up front and I'm just going to pay you a certain percentage of revenues that come in based on your list, your phone number and your website. Or, you know, somebody that just calls because they know your name. All right. So that generally has held to be between ten and thirty-five percent of that revenue stream. Now, then there's the, and that revenue stream would be either forever or for over two to three years. Okay. Then there was the, well, I'll pay you a certain amount for your website, your phone number, your brand, you know, your goodwill, and then a percentage of what comes in off your cases. Okay. So these are really solo practitioners for the most part that we're buying into there. And then there's always question, do they need to stay and do anything for any of that to get paid? So then there's well I'm just gonna buy you outright, use conventional loan, SBA. I'm a big fan of the SBA loan, or just money that I have. I'm never a big fan of that. And because, you know, why would you use your own money when there's so many other options? So they pay all or some of it, you know, and that could be you know, you hear out there all the time, share the risk, share the risk. I don't want all the risk. You know, if I pay a hundred percent using an SBA loan, then I'm taking on all the risk and you can just walk away. Where's the goodwill in that? Right. Whereas the seller is like, look, you come in and you know, you want a hundred percent seller financing. So let's say it's a set price. So this is another option, asset price, but it's 100% seller financing on a promissory note. Well, the seller's gonna be like, I don't know you. How do you know? How do I know that you're not gonna tank the whole thing? Sure. You know? Yeah. And so

1:07:59  |  Tyson Mutrux  See my biggest concern, yes.

1:08:00  |  Victoria Collier  right. And so somewhere they're trying to find that balance. And so it's like, okay, well, maybe 50% SBA and 50% seller note, right? And so, but the key there is it's a asset price versus just a percentage off revenues. Then we have the other model which buyers tend to like. I don't like it for buyers or sellers, and that's the earnout model, which is okay, well, I'll sell it for a set price, for example, and I'm gonna get, and let's say it's two million dollars. I'll give you a million dollars cash up front, but I'm only gonna pay you the other million if we hit certain matrix. Okay. Again, I don't know that you're gonna hit those matrix. So from a seller standpoint, we have to make sure that you're still spending the same amount of marketing that we spent. And that your sales closure percentage stays about the same as our sales closure perfect.

1:08:51  |  Tyson Mutrux  The buyer could come in and tank it. Ah

1:08:54  |  Victoria Collier  So the buyer's the one who wants the earnout because they don't want to pay unless they hit certain matrix, but you don't know if they're any good at any of those things when you're agreeing to that. True. But there but that's so the buyouts, sorry, yeah, the earnout is what that is. And then also there's you don't always have to buy a hundred percent. You can just buy in. Like twenty percent or eighty percent, a controlling share. And especially when you're buying out of state and you're not licensed in that state, that can be a creative way, to buy into another state and not be licensed there. It can also be a creative way so that you don't have to give the disclosures to the clients that, hey, we just sold the firm. Instead, you're announcing partnership, which is a better way to transfer goodwill. When you do that. So those are different ways. Love it.

1:09:49  |  Tyson Mutrux  Victoria. I know I asked a lot of you on that question, but I appreciate it. Thanks for doing this. Really appreciate it.

1:09:54  |  Victoria Collier  You're welcome. Thank you for having me.