Eric Farber: Episode 418

Transcript

[0:00:29] NVN: When we talk about law firms, very rarely does the word culture come up, like it does in pretty much every other sector today. In his new book, The Case for Culture: How to Stop Being a Slave to Your Law Firm, Grow Your Practice and Actually Be Happy, author Eric Farber tackles this topic head on. As Eric explains, law school does not teach lawyers how to be business owners, despite the fact that they often find themselves in this very position. In his new book, Eric guides lawyers through the process of creating a business environment that is sustainable and value driven. Eric, thank you so much for joining us today to talk about your new book, The Case for Culture.

[0:01:12] Eric Farber: Thanks for having me.

[0:01:14] NVN: Absolutely. You are writing about how business owners can stop being a slave to your law firm, grow your practice, and actually be happy. Talk to me with that in mind about your own sort of emotional and philosophical journey in the 25 years you’ve been practicing law?

[0:01:35] Eric Farber: Well, it has been a long journey. You know, to look at it and say it’s 25 years because it certainly doesn’t feel that long. But you know, for many years, being in a service business, so often you feel like you just sort of have a high-priced hobby rather than actually running a business. And several years ago, it’s probably about five and a half, six years ago now. I started to change and really wanted something different, I wanted more of a business than simply being a lawyer for hire. That led to running a business that I didn’t really know how to run. And in studying it and being the leader and really bumping my head against the ceiling and try to understand how to run a business, I really kind of figured out that the only way to truly run a business is to focus on the people. Once we started to create a great culture in our law firm, things really start taking off.

[0:02:39] NVN: You know, that’s interesting to me because I would imagine that most people who own law firms are coming from the same position you were, where you have trained and studied and practiced being a lawyer, not a business owner.

[0:02:55] Eric Farber: Absolutely. I mean, they don’t teach business courses and how to run a law firm or how to run your business in law school.

[0:03:04] NVN: Okay. Normally here, I like to focus on solutions but I feel like it would be helpful for you to share with listers some of the things that maybe you did wrong when you found yourself in that business owner’s position to help them identify with maybe some of the things that they’re experiencing in their own professional lives right now.

[0:03:26] Eric Farber: Well, I think for many years, I failed to make the decision of what my relationship to the practice was going to be. One of the things I think I did wrong, if I wanted to create a lifestyle, have a life outside of the office, was to be the key breadwinner at the office, the key person that was going to get the cases done, hiring people who are not better than me and being in many ways, sort of cheap about hiring people too, you know? Law firms have a tendency to sort of hire whoever walks in the door because they don’t really know how to hire and build a team around them. Those were some of the things that I did wrong. There’s a huge list that I could probably write down of others, right? I mean, we make mistakes every day and it really came back around to all sorts of different pieces, getting other pieces right, to be able to build this patch work of what we’ve been able to build now.

[0:04:25] NVN: You know, that is a really interesting issue that you pointed to. I speak with a lot of business owners and I don’t think I’ve heard anyone say this in any other sector yet but that you felt the responsibility to be the primary breadwinner and generator of business in your company. That is a lot to be doing that and balancing, trying to run the business also, I have to imagine.

[0:04:53] Eric Farber: There’s no question about it and you know, I think so many lawyers and you still hear – I still hear this in talking to people. I was recently away and I met somebody who is a lawyer in LA and it was himself and one other person. He kept saying, “Well, I don’t want to hire other people because I don’t want them to do it wrong.” I thought, “Well you’re just not hiring the right people.” They hold things so close to themselves, they won’t let go a little bit. You have to be able to hire people that you could trust and then start to let go and allow them to take whatever it is on. You know there’s – People are going to fail but failing well is such a huge part of success. When you’re a solo practitioner or small firm practitioner, they just don’t let go enough to stop being the book keeper, the marketer, the person who cleans up at the end of the day. It really is about getting true business fundamentals instilled in your practice. And this is – Sure, you’re talking about a practice, you know, law practice but this really goes with accountants and real estate professionals and anybody running service businesses.

[0:06:14] NVN: Before you had this epiphany, talk to me, when you were doing it all, when you were trying to generate all the income, not really focusing on hiring, all those things. What did your professional and your personal life feel like? Because I have to imagine, there was trickle down on your personal life when you were working like this?

[0:06:34] Eric Farber: Of course. I mean, it wasn’t anything great. I spent a couple of hundred days a year travelling because my practice was very far flung across the country and frankly, around the world. So, I spent a lot of time traveling, my relationships here were – I’d see friends every few months if that. And didn’t quite get to see family very much and I actually moved away from home so I live in the Bay Area but I grew up in Phoenix. I wouldn’t see family very much. And there was no break, there was never a time when I wasn’t connected. I no longer wanted that and I knew I had to change what I was doing and I actually talk about it in the book. One of the great catalysts was you know, my body was given out at a young age, I had a terrible back and I still have back problems but I ruptured a disk in my back while I was gone for a mediation for an old NFL client on the East Coast and I ended up being there for almost three and a half weeks.

[0:07:43] NVN: Because you raptured your disk? You got stuck there?

[0:07:47] Eric Farber: Yeah, I ended up in emergency surgery and I couldn’t fly. I couldn’t come back home, I ended up in a rehab center in Buffalo, New York in the dead of winter. I really knew I needed to change because you know, my cellphone didn’t work very well. I couldn’t quite reach the phone that was there and I was actually getting fired by clients for being in the hospital.

[0:08:14] NVN: Wow! Wow!

[0:08:16] Eric Farber: I knew it was truly time for something different.

[0:08:20] NVN: Yeah. That sounds like one of those perfect storm scenarios that will make everything all of a sudden come to a head.

[0:08:28] Eric Farber: Yeah. You know, the financial crisis hit me pretty hard. I know a lot of lawyers who have their practice but sort of by real estate on the side and they always say, “Well, the real estate will take care of me some day.” I think get your practice in a way that your practice can take care of you some day and it can take care of a lot of other people too.

[0:08:52] NVN: Okay. After you had this moment in Buffalo, what things did you come back and start to look at in your own firm?

[0:09:02] Eric Farber: What kind of clients we were taking in. Can I create an environment with what I had, that would be more conducive to a better life? I realized it probably wasn’t and we started to make in-roads into other practice areas that would be more conducive.

[0:09:21] NVN: That’s interesting. So, you really hit a point, it sounds like where you were willing to step back and reevaluate everything?

[0:09:28] Eric Farber: Completely.

[0:09:29] NVN: Okay. What I would love to do is again, this book is titled, The Case for Culture. I’m guessing that a lot of the changes you made came back to this idea of culture. Let’s start by talking about what you say as the importance of culture?

[0:09:47] Eric Farber: I think there’s a lot of talk about company culture these days and I didn’t see a lot of talk about company culture, what it comes to law firms or service businesses because so many of the professionals are sort of the stars of the show so to speak, rather than the product being a star of the show in a product company. What we see is especially in law firms and other places that have by its nature, a hierarchy, we see the support staff sort of being left behind. I knew that in our company, that in order for us to be successful, we were going to have to have true buy-in from our ‘support staff.’ It was a decision from very early on that I was going to focus, that professional development and the training on the people who weren’t he lawyers. Because they were going to be the back bone of our company, not the lawyers.

[0:10:51] NVN: Yeah, you’re hitting on a couple of interesting points here which is in my experience, you’re right. Culture, obviously, so many people are thinking about it now but I have never heard it brought up in the context of law firms and the law authors that I have spoken to, it’s always been focused on lawyers. I’m thinking back but I don’t think I’ve ever heard anyone mention the support staff before.

[0:11:16] Eric Farber: The support staff is our back bone. It’s the reason that we are able to do what we do. Especially in our business, we practice worker’s compensation on behalf of injured workers. Our lawyers are out of the office at least 50% of the time, if not, more like 75% of the time. We needed to be able to have people who are extraordinarily well-trained, that were going to be around from day to day, from year to year that could truly help the clients. That’s just sort of one part of the culture, I mean, I really look at it as culture as the air a company breathes, right? It is how you get things done. It’s how things get done when nobody’s there. I didn’t want me as a small business owner to be the primary focus of people’s reality. The mood of the company shouldn’t rise and fall on whether or not I’m in a good mood that day. The mood of the company should rise and fall upon how well they’re winning on their own things that they have to get done.

[0:12:19] NVN: With that in mind, how have you gone about hiring consciously? Because I have to imagine, that’s one of the key places where this starts.

[0:12:29] Eric Farber: I think it is the key place and that took us a very long time to figure out. We have installed a hiring program that starts with really understanding the core values of each position and looking for people that – I’ll back up. Really installing something that looks at each position and what the previous people who have been successful in that position, what their core values are about, what their actions look like on a day to day basis and what kind of people they are. Then we build a job description, then we can build a job posting and it goes through where we have to be extraordinarily disciplined, you can look at a great resume and it could be filled with typos. Even if it has one typo, we move on to the next one. If somebody can’t take the time to get their own personal marketing document right, then we’re going to move on to the next person. We try to cast a very broad net to try to bring people in and we’ve installed a great hiring platform that we use to help us with all of this. But we’re sifting through at least a hundred resumes or more to get down to 15 or so telephone calls which will get down to three and person interviews. And by the time somebody walks through the door, we pretty much know that they can do the job and that their values pretty much match with ours and then they’re going to come in, they’re going to do personality testing, they’re going to do some cognitive testing and then we just get to meet them. Are they the type of people that we want to work with every day? The other thing is, we’re very structured in all of this and we tell people upfront that our hiring program takes a long time and it’s very involved and we make sure upfront that they’re okay with that. The other thing we do is that I think a lot of companies don’t do is we make sure that the people that are coming in really understand what they’re getting themselves into and really understand what our company is about and what their coworkers are going to expect from them. We don’t try to sell them on any sunshine and rainbows that don’t exist. We want to make sure that they understand upfront, what they’re getting themselves into, because at the end of the day, work is still work. I think so many companies try to sell them on some sort of fairyland that will happen if they end up here.

[0:15:25] NVN: Yeah. You know, the other thing I do think too is because culture has become such a keyword, candidates are becoming more savvy, also. I think it’s sort of a red flag at this point when you make a workplace sound like it’s all unicorns and rainbows because we’re all savvy to this. It’s sort of indicate a lack of transparency.

[0:15:50] Eric Farber: Transparency is a huge thing. We actually – I’ve done especially when we first installed this new hiring philosophy, which is based off of a book called, The Best Team Wins, by Adam Robinson and it’s a great book and it really changed how I took a look at all of this but as you go through these very scripted interviews, there is sort of one spot in there in which each job, a different job will have a short description. Now, somebody has seen the job post, somebody has seen the job description because we have literally sent it to them and before they even had a telephone interview. And now we are on the phone talking about the job and giving them the description and we basically say, “Is there anything that you have learned so far that wouldn’t be good for you?” because we are really trying to nail down all the aspects of the job and we’re trying to be as absolutely transparent as possible about what they’re really going to do. You know stoic philosophy really talks about work as just a series of tasks that you generally will have to do over and over again and so we want to be as transparent as possible when people come on board.

[0:17:09] NVN: Talk to me – again as you look for people. So, there is this idea of values on a position by position basis. How do you fuse that in with the values of the company as a whole? I mean I imagine there has to be something that’s more overarching here also.

[0:17:28] Eric Farber: Well, I think there’s core things in different positions. We value empathy, it is one of our core values here and I think everyone of our job positions requires a level of empathy but there are going to be some jobs that are going to require more empathy than others. Being a lawyer here requires people to be very empathetic as well as a case manager and an intake specialist. The person standing at the copier it doesn’t quite require the same level of empathy in dealing directly with clients. But it is still a core value. So, we are looking for the values, the characteristics, and the character of each person. I’ll tell you one of the things that I am always looking for in people’s grit. The ability and the desire to persevere that when they hit a roadblock they are going to figure it out. So, I am going to apply that and try and figure out no matter what the job is. I am going to look for somebody with grit.

[0:18:36] NVN: I like that. That is such a specific word too. I mean I would think that that would take you a long way toward finding your people.

[0:18:43] Eric Farber: Look, I am not going to take credit for Angela Duckworth’s book on Grit is fantastic and I recommend anybody to read it. It was whose hiring people because you want to create a gritty workplace, right? You want to create a team of people with grit and you know, Jim Collins talks about the CEO with a thousand helpers is that is a life of hell. I am trying to create people and trying to create environment where people thrive and people learn and people could take a project and go and do it. If they need coaching, if they need some direction, great. But I am not looking for helpers. I am looking for people who get it done.

[0:19:28] NVN: Okay, you know when I first looked at your book the thing that stood out to me the most was the third part of the subtitle. So again, the subtitle is, How to Stop Being a Slave to Your Law Firm, Grow Your Practice and Actually Be Happy, I am fascinated and then very pleased to see that being happy is of such importance that it is right there in the subtitle. Let’s talk about the general experience of happiness in law firms like the one you’re explaining and why this topic is of such importance that it deserves being mentioned here on the cover.

[0:20:07] Eric Farber: Well look, I think there’s – law is an amazing profession and lawyers have taken on a huge duty in our broader culture, in our democracy and it is an important aspect of our community and I think so many lawyers get burnt out so quickly and I think so many lawyers are generally very unhappy with the practice of law. So, I put it right in the title because I think I was extremely unhappy even though I had great clients. I enjoyed my work to an extent. I certainly wasn’t happy overall. And this practice and running it in a different way and as we’ve grown it’s just given me more freedom not less. I remember having a conversation with somebody a couple of years ago and we were probably about 35 or 40 people at the time and she said I hadn’t seen her in years. I used to share some office space with her because her firm used to rent from ours and I hadn’t seen her in years and I said, “Oh I am running a worker’s comp firm now.” And she said, “Oh, how many people do you have?” And I said 35 and she said, “Oh that must be the worst thing ever.” And I thought, “It is the best thing I have ever done.” I think far less about where our next rent check is going to come from than ever before because I am focused on growth and not simply surviving and when you can get out of that feeling of total scarcity and constantly looking for you sort of next thing, you could actually start to focus on other things. I still work a lot because I really enjoy it but I can walk away and write a book and spend months working on it somewhere else and getting out of the office and know that we’re still serving clients and we’re still building and creating great lives for the people who work here.

[0:22:12] NVN: I want to land for a second on that idea of scarcity, which is something you mentioned as being pretty pervasive in your sector. Why do you think this is? I mean it’s interesting from an outsider’s perspective because the legal world is not I don’t associate it with scarcity from the outside.

[0:22:32] Eric Farber: Sure, well what we know about from television and what we know about from sort of the media is that lawyers make a lot of money and they have these big-time jobs and wear a thousand dollar suits and you know, drive fancy cars.

[0:22:51] NVN: Totally accurate, right?

[0:22:52] Eric Farber: Right, sure but the reality is, is that the vast majority of lawyers in America I think the average pay for lawyers in America is somewhere around $125,000 a year. That is the average.

[0:23:09] NVN: Really?

[0:23:10] Eric Farber: Yes. It is much lower than people think and I was actually surprised to see it. I looked it up recently to be at 125,000 because I think it just crossed the $100,000 mark not too long ago. And so, when somebody a solo practitioner or they’re a small firm lawyer, for most of them they are looking for their next paycheck. They’re looking for the next client who is going to walk in the door and they are scared to run it like businesses. So, scarcity is really abound. I was talking to a young lawyer. He’s been in practice for about five years. It’s just him, he rented a small office. He’s doing all sorts of different practice areas. I said, “When are you going to choose one?” “Well I can’t, what if I am unable to pay the rent?” And I said, “At some point you’ve got to just make the choice.” I said, “And you’ve got to build.” One of the things that has been important for me is, “Am I going to build a business that can take care of me if I get sick again? If I am forced to step away?” And I wanted this to be that business. And I think we have been successful in doing that. So much so that it’s not just me that can step away. It is anyone of our valued team members can step away. We have somebody right now just after the holidays whose grandmother is very sick and she is gone to take care of her grandmother in Mexico right now. And I am really proud of the fact that we built a business that allows one of our team members to step away for an extended period of time and the rest of our team members simply fill in the gap.

[0:25:00] NVN: That’s huge. That is changing someone’s life.

[0:25:03] Eric Farber: Absolutely, there is no question about it. And that has happened to at least five of our people because you know for so many years since the beginning of work, you’ve heard,” Leave your personal life at the door.” And we are the opposite in a great culture of caring if you really want people engaged you say, “We understand that personal stuff happens. You just need to tell us when it does, so we know to help.”

[0:25:38] NVN: You know everything you’re talking about there is just so much common sense to it. Because when I think about it, most clients who are going to a law firm are under some level of duress. I mean obviously there is a wide spectrum there of what that means but generally speaking if you need to bring a lawyer on there is something very serious going on. So, I was first struck by how you spoke about empathy being such a key characteristic to look for. But when I take that a step further, it makes so much sense and it is so human that for you to expect your people to extend that sort of empathy, they have to receive it as well through being cared for whatever that looks like.

[0:26:21] Eric Farber: Absolutely. You can’t expect people to do their best work if they’re fearful of losing their job or they’re fearful of not being able to pay the rent at home. So, we have to create a soft place to fall as I say. Now, you can only do this with the right people on your team. You have to build a tribe of gritty people who ca re. They are going to get it done but you can’t expect them to be the eyes and the ears, to be the customer service, to listen to the clients who are going through terrible stuff and expect them to deliver great work unless they know we have their back. And I have always said my job is to take care of the employees, the employee’s job is to take care of the clients and the clients in turn take care of all of us.

[0:27:20] NVN: So, I am curious, when you think about yourself today, do you think of yourself as a lawyer or as a business owner?

[0:27:28] Eric Farber: I’ll always be a lawyer, there is no question and we had a big case. I don’t go to court very often, it’s pretty rare these days. We had a big case for a client and I went just last week with the lawyers from the office that were handling it. But at the end of the day I look at myself as a team builder, as a cultural builder, as a business person building this company. But I will never be able to not think of myself as a lawyer.

[0:27:56] NVN: Excellent. Eric, thank you so much for joining us today. Again, the book is The Case for Culture. So, Eric throughout this interview, you’ve talked a lot about what it sounds like has been a process of educating yourself since you don’t get this business education in law school and you have mentioned a few books that have been helpful. Talk to me a little bit about these resources that have been helpful to you as you have transformed your law firm.

[0:28:24] Eric Farber: Yeah, I mean this is really – it was a self-education. I’ve always been a reader but I think there was this fear that I had that oh my gosh this business is growing so fast and I don’t have the tools to make it happen. So, I just started reading more and more and more and this book I think is really so much a culmination of so many great authors and thought leaders from Jim Collins who wrote Good to Great and Great by Choice. To Simon Sinek who wrote Start with Why and Leaders Eat Last to Sam Walker who was the Wall Street Journal writer who wrote The Captain Class, which is all about teams and what makes the best teams and that he analyzes the best teams in history, sports teams and I just started accumulating this sort of deeper knowledge by reading all of these different things to Matt Walker who wrote Why We Sleep and the importance of sleep and Daniel Pink’s most recent book on When, which is the science of timing. And we take all of these different things and some of these books all pass out to our team or specific parts of our team. We just were about to do a team read of the book Ignore Your Customers by Micah Solomon and I actually have a reading list that I put together, which is my current top 10 books if you want to build a law firm and then the other books as well but it really so much of this and so much of my knowledge has been a patch work of ideas of these great writers. I am a big fan of Ryan Holiday, I think he has written some of the best books on marketing and some of the best books on how to think about your day to day work life and his stoic books. But that’s really where all of this came from was this fear that I am now running a bigger company than I ever expected to. I had no business training. I’d better start picking up a book and just start reading.

[0:30:28] NVN: Excellent and you mentioned that you are keeping a top 10 list, where can listeners find that list?

[0:30:34] Eric Farber: It is on thecaseforculture.com and just go to reading list at the top and you’ll be able to see that list and I’ve got a top 10 for lawyers who want to build their law firm and then I’ve just got a list of the books that I think have been impactful to what we have done here.

[0:30:51] NVN: Perfect and I just want to confirm that there is also a free chapter of your book available at that website too. Is that correct?

[0:30:59] Eric Farber: Absolutely. So, if you want a free chapter of the book, it is on the front page and you just click free chapter, enter your name and email and I think if I am tech savvy enough you get it right away.

[0:31:13] NVN: Excellent and that again is thecaseforculture.com.

[0:31:17] Eric Farber: Yes.

[0:31:17] NVN: Eric, thank you so much for joining us today.

[0:31:21] Eric Farber: Hey Nikki thanks for having me.

[0:31:23] NVN: Thanks for joining us for this episode of Author Hour. You can find The Case for Culture, on Amazon. For more Author Hour, hit the subscribe button on your favorite podcast service. Thanks for joining us, we’ll see you next time. Same place, different author.