I Sold My Law Firm With Jessica Stern

Jonathan Hawkins: [00:00:00] So you start your firm, just you, not really knowing what you’re doing, as you said but then you grew it over 10 years to you know, managing a firm of 15 people. So, you did mention you had a coach, but how did you figure it out? How did you figure out how to do that?

Because that is a huge growth as a person, as a leader, how did you figure it out and grow so that you could do it?

Jessica Stern: I really attribute a lot to the coaching. I, I really do. I mean, there were plenty of people who were getting coaching who didn’t receive the knowledge and then execute on it in the same way, of course. So I know that I’m disciplined, I set goals and I am organized as you, you notice sometimes that can get in the way of progress.

But I definitely think it served me well, and it allowed me to implement what I was learning because you’re just, you’re getting information and guidance from everywhere and you can’t implement everything. So really identifying what’s important to me personally, professionally, financially, and then kind of [00:01:00] working into those goals.

Welcome to the Founding Partner Podcast. Join your host, Jonathan Hawkins, as we explore the fascinating stories of successful law firm founders. We’ll uncover their beginnings, triumph over challenges, and practice growth. Whether you aspire to launch your own firm, have an entrepreneurial spirit, or are just curious about the legal business, you’re in the right place.

Let’s dive in.

Jonathan Hawkins: Welcome to Founding Partner podcast. I’m your host, Jonathan Hawkins. So if you’ve ever thought about selling your law firm whether you think you can or you can’t, but if you want to explore. that possibility. This is gonna be an episode you wanna watch or you wanna listen to. We’ve got a guest today who successfully sold her practice.

So that’s something I’m interested in and we’re gonna dive in and sort of get some of the details. Not all of ’em, but a lot of the good stuff. So, today’s guest is Jessica Stern. She was an attorney. [00:02:00] Here in Atlanta area I think she calls her practice or her firm did Crimmigration. I think that’s how she says it.

So, uh, Jessica, why don’t you introduce yourself. Tell us about, you know, you tell us about what your practice was and then we’ll sort of dive into your journey and ultimately the sale of your law firm.

Jessica Stern: Sounds great. Thanks for having me. I still am a lawyer. Technically, I. Say I’m a recovering lawyer. Still kind of working through all those years of experience on my shoulders trying to lift that load a little bit. Week by week I consider myself an entrepreneur a disruptor of sorts, a mom, a wife a seeker a director is something I’m discovering in myself and just discovering more about myself every day.

Now that I have more time and space to do that.

Jonathan Hawkins: So explain to me what Crimmigration law is. What is that?

Jessica Stern: Crimmigration is where [00:03:00] criminal law and immigration law meet. And nowadays it’s touching every day. More so than, than people would’ve expected if they were just going into immigration law. But basically when somebody who’s not a citizen has an arrest or any sort of interaction with law enforcement.

There’s going to be the need to really assess how that criminal consequence could impact the person’s ability to be in the United States, improve their status in the United States, or come into the United States for the first time or after leaving. So it was a really. Challenging. Very interesting. Never dull moment practice and really learned something new every single day and had an opportunity to impact the lives of, my clients every single day.

So it was a really rewarding field.

Jonathan Hawkins: Okay, so, so you’re a criminal lawyer and then, did you do any like traditional immigration type work, or was it only criminal law that [00:04:00] dealt with basically immigrants or immigration issues?

Jessica Stern: Yeah. I don’t know if we’re going further back than my law firm, but I started as a criminal defense lawyer, as a public defender. Went to law school to be a public defender. And really saw nothing beyond that at the time, and did that for a few years. And I can go through a little bit more about how I ended up with my own firm, but in the Crimmigration practice, our clients were all not US citizens.

And so I came to creating that practice based on a foundation of criminal defense. Law and experience and realized that non-US citizens really were left, you know, on their own very often without an understanding of how that criminal case situation was going to impact their entire life and their family’s entire life in the United States.

So we would represent the non-US citizen client in a criminal case. And then, by nature of their immigration [00:05:00] status, just not being a citizen. There would be some sort of immigration issue or consequence that we have to deal with. So then we would also help them through that. So if it was deportation that we had to work through, we work through that.

But also the happy stuff, like being married maybe to a US citizen or other sort of family petitions that would improve the person’s status. So we did all of it, but we really niched down and. We’re known for that more complicated overlap of criminal and immigration law.

Jonathan Hawkins: So, so I don’t want to get sidetracked here, but you know, this is sort of coincidental that we are having this conversation now in terms of what’s going on in the world or in the US with immigrants being, you know, shipped off to El Salvador and all that. I imagine you’re not practicing right now, but I imagine that practice of law is probably potentially like exploding now.

I don’t know. What are you seeing?

Jessica Stern: It is, it definitely is. But from my experience with [00:06:00] the first, you know, Trump 1.0 it definitely created a lot of need, but it also created a lot of frustration, fear, confusion. And so that can be very challenging for a law firm to navigate through that. You know, there’s so much psychology that, that goes into it with clients and potential clients, and so it, it adds a lot more complication to it while also acknowledging there is more opportunity too.

Jonathan Hawkins: Yeah. So, let’s go back. So you went to law school, you knew you wanted to be a a, public defender, you said.

Jessica Stern: Yeah, I actually, when I graduated high school, I wanted to be an actress or somehow be involved in the performing arts and decided I was going to tell stories in the courtroom instead. Did an internship in college at the Orange County Public Defender’s Office in Florida. And there was a young, scrappy public defender who let me do way too much, and I had so much client and interaction and I was basically like [00:07:00] representing these people in college.

And I was just. Enamored. I, I loved every bit of it. For some reason I felt like comfortable going into the jail cell. And I was like, this is so interesting. I’m gonna, I’m gonna do this. So that’s what I went to, law school for. And then the minute I did internships also while in law school and the minute my bar results came out, called up the Public defender of the Fulton County Georgia, Atlanta.

Public defender’s office and said, all right, I can work now. Are you ready to hire me? And went in, you know, guns blazing from there.

Jonathan Hawkins: That’s cool. And so you, you did that for a while and then eventually, I guess you left there to go to private practice. Did you leave there to start your own or did you join an existing firm?

Jessica Stern: No I, I worked with an existing firm. I thought I was a lifer, you know, as a public defender or at least 10 years of public service before I considered. Greener pastures. But a few years in, I was approached by a, a federal white collar defense attorney who [00:08:00] saw me just like, pretty much directing the courtroom while he was sitting there for hours waiting for his one client’s case to be called.

And so we, we talked and I wasn’t quite ready to give up the public defender work yet, so I stayed there some more time until I, I was in a serious felony courtroom. And was with a judge who had the worst demeanor. I mean, he was a bully. And so it just really was not the place I wanted to be anymore, and I, I saw that I probably wasn’t going to be able to make much more of an impact on the office itself.

I mean, I was helping my clients and doing good work there, of course, but. I needed to be a little bit more engaged in like the organizational side of it. So I, I was so excited at the opportunity to work with this federal practice because I learned a totally different area, more professional practice area.

Worked with a lot of. Older male attorneys who kind of took me under their wing and I was doing things a little bit differently. So I, I saw [00:09:00] how I could kind of carve my own path there. But it really opened my eyes to a different way of practicing law. And from there I was able to see the niche of criminal and immigration where nobody was really, nobody was doing it, and our clients needed it.

And I saw that I wasn’t probably going to be able to. Implement as much of my ideas as I’d hoped at the firm where I was, that they were great lawyers and still really good friends of mine. but I, I saw a way to, do it differently and took that leap.

Jonathan Hawkins: You know, it’s, you mentioned sort of identifying the niche. You know, I’m a big believer in niche practice areas and I, it’s always fascinating to me how people sort of fall into the, their niche areas. You know, sometimes it’s family law, maybe representing dads. And so you just, there is sort of a path there.

And then sometimes you sort of just like you, I mean, you just sort of saw it. You just saw it there and no one was really doing it. And so that’s pretty interesting. [00:10:00] So how did you sort of notice it? I mean, what was it? You’re like, wait a second, there’s something here.

Jessica Stern: Yeah I mean, I didn’t start out as a lawyer thinking I was going to have my own law firm. It just wasn’t in my sights at all. I think, as I alluded to a little bit, the common thread that I noticed throughout different stages of my life is that I. Need to make an impact organizationally more so than as an individual contributor.

So when I see that, that opportunity is not really there any longer than I notice that it’s not really the place for me long term. So I, I started to just look at things more long term, you know, considering multiple steps ahead and how it might look and I just. Decided that, you know, there was this need that clients were asking me for, and the firm was letting me step out into a different practice area of immigration, but not really comfortable with the other kind of like systematic changes that we would have to make in [00:11:00] order to really do it well.

And I’m just, I’ve learned that my personal motivation is just this better way kind of. Person. So, you know, I’m looking at whether there’s a better way and whether I think I can make a positive impact for the stakeholders involved. And that’s really what was at the core of making that change.

And. It was exciting. I remember crying in the kitchen, you know, my husband, like, I don’t know if I’ll ever have a paycheck again. But thankfully I, you know, since that day, never once had a payroll problem, thankfully. So it, it was the right decision for many reasons.

Jonathan Hawkins: Yeah. So take us back. So I am sure this was uh, you know, not an overnight decision. It probably took a little while to make to get you there, but what ultimately was the final push that you said, all right, I’m doing it.

Jessica Stern: What was the final push to finally start my own firm?

Jonathan Hawkins: to finally, I mean, these sorts of things oftentimes percolate for a while, but then there’s usually something you’re like, all right, I’m doing it. What

was the thing? Was there a thing

Jessica Stern: Yeah, I think so. [00:12:00] It wasn’t the money because at the time I had like a money mindset challenge. So that definitely wasn’t the motivation. I think it was that I wanted to be somewhere where I could comfortably implement things that I saw were. Going to be useful and impactful and not, not be making other people uncomfortable by making those suggestions.

So just considering, you know, how life could look if I was able to envision something and then create it and not feel like I was being kind of an inconvenience, but rather, you know, I was being helpful and innovative. So looking at, you know, how. Ideas I was having about like systems that we could have better client communication tools or industry standards that I wanted to challenge and push back on a little bit.

Just ultimately led me to making the decision that made my life better, and I think my clients’ wives better as well.

Jonathan Hawkins: So can you give us a few examples, like of some of these things you’re talking about.

Jessica Stern: Sure. I mean [00:13:00] even just like simple things about like how we operate a calendar you know, I didn’t realize I was so systems minded until I got into a private practice where there was the structure of a business. You know, before I had always been in more of like government agency types of.

Offices where you really don’t see what’s happening behind the scenes. It’s all like mysterious. So when I actually could see real people implementing all of these things, I could see how ideas turn into outcomes and I started to have those ideas myself. And I started to get the trust of, my bosses to have conversations with clients about.

what they wanted, you know, for their lives and, you know, business ideas and fees and those kinds of things. And I saw that the clients responded to me in a way that felt like they were being recognized maybe for the first time. And so there was something there about like, the client interactions as well, along with the systems [00:14:00] work where I could see how if certain things were done maybe a little bit differently, at least for me, it would.

Make me feel like I was doing my job better. they, They again, were a great firm and do great work, but I just, I wanted to do it differently. So it was down to like the smallest of things like day-to-day operations and then also just how clients seemed to respond to the way I was doing the work.

Jonathan Hawkins: You know, I’ll tell you, I, we met, I don’t know, two, three years ago, I can’t remember now, but I was struck in the interactions we had. I, could just tell that you were pretty organized operationally. I could just tell just from the way we interacted and I wasn’t in, in there to see it, but I, that always struck me. Okay, so. you go out, you start your firm you know, you start, you focus on this niche area. You know, sort of take me through the evolution of the firm. Now we’ve alluded to it. You eventually sold the firm. So maybe the first question is you said you were never really planning to start a firm, but then you did. Were you thinking from the beginning, Hey, I might sell this [00:15:00] one day.

Jessica Stern: No. That was nowhere on my radar. I remember at an early business coaching session maybe like three years. So I started business coaching three years in to having my firm, and then I sold the firm at 10 years. So during those. Seven years, there was a lot of growth and a lot of learning. And one of my earliest memories of that was standing up in front of a large conference room of people and sharing what my business plan goals were.

And one of those areas were the financial goals and what I wanted to earn. And I remember standing up very confidently and saying like, I only need to earn. $250,000 in revenue, actually. So not even earnings, but just, I only need $250,000 of revenue for my firm because, you know, here’s why. And it’s not about the money.

And no, I just, I was not thinking at all about what it would take to sell a firm. And you [00:16:00] hear sometimes people say selling a firm, you’re not gonna really like. Be able to earn much from selling a law firm. So that was always kind of in my head too, and I just was trying to do good work and I really wasn’t thinking that far ahead.

I didn’t have like business guidance other than the coaching. That was the first time. Like my parents weren’t entrepreneurs. I was the first one to graduate college in my family. I was just kind of figuring things out on my own. I didn’t have friends who really were. Successful business owners yet at that point.

So I just, I knew to listen to my instincts, thankfully that was with me at that point, and to take considered risks. Those were the things that were in my mind. And then 10 years later, you know, I went from thinking 250,000 was enough, and 10 years later I sold my firm with a run rate of 2 million that year.

I never would’ve thought that was a goal of mine at all. But obviously you evolve and your goals change and your understanding of life and what you want [00:17:00] changes.

Jonathan Hawkins: That’s cool. Now, a minute ago you mentioned you had a money mindset challenge. What? What’d you mean by that?

Jessica Stern: Well, I mean, when you go to law school to be a public defender. You’re not becoming a lawyer to earn a good living. All my friends were in like social justice fields and public interest and were like activists and everything. And so I felt like I sold out and I was going to earn money off the backs of hardworking immigrants.

You know, that’s what was in my mind and what I thought everybody was thinking about me. You also go from public defender life where you’re doing things. A hundred times a day without realizing what the value is for that. And then you go to having to, you know, figure out how much you have to pay your staff to do certain things and how much things are gonna cost, and you just, you have to start thinking about it differently but some lawyers never do.

I’m sure you’ve, you know, plenty of those folks too who just continue to have that challenge. And so, [00:18:00] yeah, I just, I had to really rethink. What it means. What does poverty mean? What does wealth mean? What does running a business mean? And running it well mean and why do lawyers get taught that profit is like an a dirty word, you know?

Um, Those were things I had to work through.

Jonathan Hawkins: Well, you know, I mean, it’s from an impact standpoint, the better your business is run and the more money you make, the more impact you can make. I mean, that’s just the bottom line. If you’re barely putting food on the table for yourself, how are you gonna be able to really help anybody else? Right.

Jessica Stern: Exactly. Yeah. I remember getting pushback from colleagues and competitors sometimes, whether it was directly or I would hear through the grapevine about fees being too high.

And, you know, I would, see those same lawyers through clients who would come to me for second opinions or, you know, to take over their case and see.

The realities of not charging enough, you know, you’re not able to keep up with [00:19:00] the client’s needs in the way that you need to. You know, the fees really need to be set up in a way that is thinking through even three years from now, how do you wanna be doing this service better? How do you wanna be delivering this service better?

And what is it going to take to do that staff overhead, you know, all of that, and charge that now so that you can start delivering that service to your client as, as soon as possible.

Jonathan Hawkins: So true. Okay. So building the firm up to 2 million a year, that that’s impressive. That’s, That’s great. So, how did you do it? So was it, so let’s talk at the end. Was it just you, did you have staff? Did you have attorneys? You know, sort of tell me a little bit about sort of your setup.

Jessica Stern: Yeah, it definitely wasn’t just me. I don’t think I would’ve been able to generate

Jonathan Hawkins: be, You’d be working, working your ass off.

Jessica Stern: Maybe it’s possible in some fields, but not.

Jonathan Hawkins: personal injury maybe.

Jessica Stern: Okay. Yeah, there you go. No, I had about, there were about 15 of us. And that was a blend of course, like traditional legal staff. A lot of paralegals in, immigration practice.

We had [00:20:00] three lawyers. I finally was able to have a managing attorney on board. I wish I had been able to find good talent sooner. But that was. Key to, you know, being able to sell the firm. And also other types of staff that maybe we don’t see in other small law firms. Traditionally, like marketing, staff, sales, there’s a whole sales team and other like administrative folks.

Jonathan Hawkins: So let’s talk about the sales part. How did you market your firm? I mean, you had a sales team. Well, they, I assume they were not lawyers, which is probably smart. You know, how did you go grow the practice from a marketing standpoint?

Jessica Stern: Oh man, we need a whole podcast. Just, Just on that. I learned so much about marketing and that was really fun. Like that energized me for a while where I thought maybe I just wanna do marketing and sales for law firms. But no, I don’t think so. I mean, for marketing, I think a niche is really important.

You know, being really [00:21:00] specific about what you’re doing and then you know, using specific language for so many reasons of course there’s all the like digital marketing reasons why you wanna be specific with keywords and language, but also just more so how we think as people and how we’re attracted to people who are speaking clearly, plainly, directly and, and sometimes in a way that can be considered a little controversial.

You know, not, not to have fear be the motivator, but to make sure that if somebody. the right client for you. You can identify them right away and they’re identifying you right away, and it’s cutting out who shouldn’t be your client because you don’t wanna be just spending money, you know, throwing money at the wall and seeing if it sticks or whatever the saying is.

I feel like lawyers often do that when it comes to marketing and they don’t really appreciate what they’re spending money on, tracking what the return on the investment is, and then having really good. Record of [00:22:00] that. That was also really important from a sales standpoint of being able to show the stats and, you know, develop a good way to report on that.

That gives you a clear picture easily without having to, you know, pull your hair out, trying to figure out. Where the leads are coming from and everything. I mean, that really helps just running the business smoothly as well. So there’s so much to say about marketing, but I would say probably the one thing that was the most challenging to wrap my head around as, as a lawyer was how to.

How to market your firm. That’s based on, you know, your services as a lawyer, but not to put so much of the focus on you so that you could also involve your team in delivering the service and to attract clients to wanna hire your team, not just you, Jessica Stern or Jonathan Hawkins. You, You want to be able to, you know, open [00:23:00] that up so that.

Not only could you sell the firm one day, maybe that might not be your goal, but even just to have long vacations, you know, like you want people to be able to be comfortable with hiring your staff so that you don’t have to be pulling every lever, every moment.

Jonathan Hawkins: That is such a key insight. You know, I think about it a lot. I think some lawyers do. I mean, some lawyers like, like being the person, you know, some people they’re like I’m the guy, or I’m the guy, you gotta come to me. But it does limit your growth if you can’t expand to the team. So that’s very insightful. So,

okay.

Jessica Stern: your growth, if you don’t mind me saying limits your growth. But also it’s like, do you really want your cell phone blowing up like on the weekend and every time you’re driving in the car you have to be squeezing in 15 phone calls ’cause they’ll only talk to you. You know, it’s just, I don’t know.

I don’t know why that’s the model.

Jonathan Hawkins: Yeah. Yeah. So you start your firm, just you, not really knowing what you’re doing, as you said but then you grew [00:24:00] it over 10 years to, you know, managing a firm of 15 people. So, you did mention you had a coach, but how did you figure it out? How did you figure out how to do that?

Because that is a huge growth as a person, as a leader, how did you figure it out and grow so that you could do it?

Jessica Stern: I really attribute a lot to the coaching. I, I really do. I mean, there were plenty of people who were getting coaching who didn’t receive the knowledge and then execute on it in the same way, of course. So I know that I’m disciplined, I set goals and I am organized as you, you notice sometimes that can get in the way of progress.

But I definitely think it served me well, and it allowed me to implement what I was learning because you’re just, you’re getting information and guidance from everywhere and you can’t implement everything. So really identifying what’s important to me personally, professionally, financially, and then kind of working into those goals.

That’s the 10,000 [00:25:00] foot view answer of, how I did it. But I had a team, you know, the teams. Along the way. I mean, people would turn over quite frequently. I mean, I would have a few really loyal and committed team members over the years. But I, you know, I really relied on my team and put trust and faith in them and made sure that my clients knew that I had trust and faith in them.

’cause I wouldn’t have been able to do it without them. So I’d say good coaching, good team, and. Trusting your instincts and, and working hard. I worked harder than I probably needed to. And maybe is part of why I decided to sell the firm. You know, I don’t know. But I am who I am and you know, it served me well until I just wasn’t having fun anymore.

Jonathan Hawkins: So that, that is a good segue ’cause that’s where I wanted to go next. So we’ve sort of brought you up to the point where you’re, you know, you’ve grown your firm it’s, doing really well. But at some point you said, all right, I think I wanna. Maybe get out of this thing. So what led you to the point where you’re thinking, [00:26:00] maybe I can sell this, maybe I should sell this.

Jessica Stern: Yeah, I just wasn’t consistently having fun anymore. On paper it probably was crazy to sell it because it really was consistently profitable. There was a formula that was working but I was tired of how it was working and I was unwilling really to invest more time in making it. Work differently or to ramp it up?

We, you know, we tracked client happiness and our clients were pretty happy. Depending on the day our staff was happy or they should have been. But I wasn’t, and there really wasn’t much room left over for me or my family at the end of the day. So I just. I chose a different life and, you know, when I was able to make that decision I, I looked back on.

What had happened over all the years, and I accomplished so much more than I had ever imagined I would. I launched [00:27:00] careers of legal and sales staff, you know, that was really rewarding. Helped so many clients live a better life and really the most impactful thing for me was that they’ve felt seen, you know, often for the very first time within.

My rep representation of them and my staff’s representation of them, like they’ve never really. Had an experience with like the powers that be, whether like the government or anyone of like authority or like, privilege or power that like saw them eye to eye. And that was, you know, really important to me.

So I feel good about that. I knew that I’d made a good living that wasn’t the end all be all for me and that wasn’t worth the trade off. You know, I wasn’t going to like trade off my wellness, you know, like my ability to like, think creatively and have space to consider other interests.

I just didn’t need to do it anymore.

Jonathan Hawkins: Well,

I commend you on coming to that [00:28:00] realization. I think some people. Stay in it, even though they reach that point and they stay in it. So, so that’s, that’s really cool. So, so let’s talk about the sale. So, you know, quote, selling a law firm can mean a lot of different things. You know, you can uh, sell it internally, you can sell it externally, you can sort of merge it.

There’s lots of things you can sort of do and quote, fall under the umbrella of what I would call a sale of a law firm. So, what, how did you do it? Was it internally, externally? What, What was it?

Jessica Stern: It was an external sale. It was a real business sale. And I mean it took about two years or I would say it’s not that it took two years, but it was about two years from the time I. I finally accepted my decision and then the law firm sold. And what was the question actually?

Jonathan Hawkins: Well, it was, it, was it external or internal? So it, So

it was external third party sale. So next question, how did you it took two years to sort of finally get it done, but how did you find the buyer? Was it somebody that you knew?

Jessica Stern: No. That was my [00:29:00] biggest concern and the most daunting of factors when I finally accepted the decision to sell the firm. I didn’t wanna go out to like countless lunches with, colleagues and competitors, if you’re gonna be interested in buying the firm, you’re in some way a competitor, right?

And I didn’t wanna just go and like divulge all of my like, future ideas and plans that just didn’t seem smart to me. I, I I just wasn’t comfortable doing that. So I was able to find a broker the law practice exchange, and I was really I’m grateful for the work that they did and their lawyers and CPAs and they helped to truly like not only value the firm, there was a valuation process, which we can talk more about of course. But the biggest value that I found in working with them was finding the buyer.

Just kind of like a like an investment banker would do in a traditional business sale.

I mean, that’s what they’re doing and so they.

Are confidentially marketing the [00:30:00] firm and identifying buyers. And I’ve met with a few that was a strange process. You know, a few came into the firm to see what was going on, and you can’t really tell your staff what’s happening. So that was tricky. It was like this dating courting process and you really have to feel comfortable with.

With who the person is and what they say they’re gonna do, and whether you think they’re gonna be a good fit. But yeah, so she’s an existing she had an existing firm in another state and wanted to specifically bring in the niche of c immigration and get on the east coast.

Jonathan Hawkins: So, yeah, there’s so much to unpack there. There’s no way we’re gonna get this done that, like we could have two more episodes. But so a couple things you said. So, you made the decision you didn’t want to have to market it yourself to. Colleagues or competitors here locally. So you went to basically a broker I assume there was a, whole process there where they sort of evaluate the business, do the valuation, put together a, a, [00:31:00] package that then they go sort of market.

So it sounds like they did, they. Actively find potential targets that they called, for lack of a better word, and said, Hey, are you interested in buying this practice? Is that part of the process?

Jessica Stern: Yeah, they do that. I think that ended up being the least amount of their time in terms of how they went about it. I think sometimes that, that is a big part of it. I identified some people to who I thought. Could be potential buyers that they would reach out to on my behalf. But they also have, you know, a pool of folks that are reaching out to them interested in buying firms, and then their advertising as well.

So that’s ultimately how this relationship came about. You know, it was through. The buyer looking to buy an immigration firm, and I had already been a client of theirs, and so my information was, was out there, but in a confidential way so that it wasn’t obvious which firm it was.

Jonathan Hawkins: Yeah. The other, The other thing you mentioned, which is you know, I think [00:32:00] any business that you’re selling it’s, when to tell your staff and what to tell your staff and how to keep it sort of secret, because you know, if they find out that you’re looking to sell, they might get spooked and all leave at the same time.

So how did you manage that process?

Jessica Stern: Yeah, that was wild. It was really hard. Really hard because. You’ve developed relationships with these people for years. They’re trusting you for their livelihood. And I didn’t know how this was gonna work out. I didn’t know if the sale would really even go through. I mean, in my mind, I thought I was never gonna sell this firm.

I’m like, this is never gonna work. How is this possible? I just didn’t really see it happening in reality. But I was going through the motions, doing everything as carefully as I could, and really, you can’t tell them because it’s it is creating too big of a risk, but at the same time, a potential buyer is going to want to get to know them as well.

And so it, it’s tricky. So there were ways to, you know, invite those conversations to [00:33:00] happen that were like. Bordering on not really true, but also some truth in it. And you just, you hope that you’ve built up enough goodwill over the years for people to understand you and why you would make a decision like that and, and hope that at the time that you’re making the formal announcement that they can trust that you’ve thought through what the future of the firm.

Would look like or hopefully will look like ’cause you don’t have control over it once, once you’re not the owner anymore. But you want them to stay on and continue to deliver the good work that you were doing. And that’s important to the buyer. And it’s important to your staff too, ’cause they don’t wanna be out of a job.

So thankfully that was part of the agreement. You know, she kept all. All of the staff and gave them all a raise and, you know, everybody, everybody seemed happy, you know, and then after that I, I don’t have any control anymore.

Real quick. Thanks for listening. If you’re getting any value out of this podcast, please take two seconds to hit the [00:34:00] subscribe button and leave a five star review. It would really mean a lot to me. Now back to the show.

Jonathan Hawkins: Okay, so, I know it was sort of a long process, two years for the overall process, but the ultimate buyer how long did it take from sort of the introductory. Or the introduction to the actual buyer to actually closing the deal and maybe take me through broad strokes, sort of how that process went down.

Jessica Stern: You know, I don’t really remember exactly. I was also on maternity leave when all of

this was happening. So

Jonathan Hawkins: That’s impressive.

Jessica Stern: was a lot going on. But I would say probably six to eight months it felt like it, it was probably from the time she learned about. firm and when we actually went through closing it was hard.

It was, It was a dance for sure. And they’re not moving as fast as you want them to. And, you know, I don’t know. I don’t know if I’d wanna go through that again. That was very stressful. It really was. But it was definitely all worth it in the end.[00:35:00]

Jonathan Hawkins: Were there ever any moments with this buyer where you’re like, it’s not gonna happen. Like you’re, it is gonna happen, it’s not gonna happen. It is gonna happen, it’s not gonna

happen or, or was it all the way you’re like, okay, I think it’s gonna happen.

Jessica Stern: All the time. No, all the time. I, I doubted it. She didn’t ask a lot of questions, which was stressful for me because I asked a lot of questions and I felt like if I was on that side I would wanna be asking a lot of questions. Maybe it was that the. Reports that we have, we had, you know, were clear enough and maybe, you know, she had some good advisors on her side that she was depending on to kind of synthesize a lot of it.

Yeah, I doubted it all the time, especially when you get to, you know, the client lists and the liabilities that you have and, you know, you really have to rely on the fact that you’ve. Run your firm in a way that was sustainable for you and was profitable for you, and therefore it will continue to be sustainable and profitable for the next to, and [00:36:00] that’s important to be thinking through well before you would go to sell a firm.

Because if it wasn’t really working for you, then why? Why would it work? Well for somebody else?

Jonathan Hawkins: Alright, so big topic valuation. I wanna touch on it because that’s what everybody always wants to know. That’s the, you know, that’s the first question. What’s it worth? What’s the value? And, And know I’m not a valuation expert, but I’ve seen enough and you know, my answer is, you know, the lawyer answer.

It depends. I mean, every

firm Is different. You know what? What is important for one practice area may not be important for another, and you can’t, there’s not just a flat out this is what a firm is worth. I don’t think anybody could say that. But what was your experience, and I’m not asking for real numbers or anything, but just generally speaking, sort of the, the valuation approach to your firm, Any, anything you can tell us about that?

Jessica Stern: Yeah, I mean, mainly that a law firm is a business and it sounds like an obvious statement, but unfortunately, like I mentioned earlier, I mean, the profession [00:37:00] historically has made lawyers feel like I. we’re predatory if there’s a focus on profit. But how else do you sustain a business? Without focusing on profit?

Every other business would expect to assess the financials of a business to attribute a proper value. But I think when people are considering the fact that a law firm doesn’t have a lot of value, it’s because maybe we’re just not as attuned to operating a firm that way. Thankfully I had the most amazing bookkeeper who gave me the confidence and the information that I needed in beautiful financial reports.

And so those reports along with marketing data that I collected over the years and provided, allowed for the broker to do a professional valuation. So there’s the financial part and then there’s the reoccurring. Client base that keeps coming back and showing the formula that has worked. I mean that, that really served me well because [00:38:00] that’s how we were operating at that point.

I mean, there were dashboards and, you know, really clear marketing spends that were yielding certain leads that would yield certain, you know, amount of consults that would yield certain number of clients. And I mean, it, it was shocking after a certain number of years how. Similar, it was every month, year, over year, over year.

I mean, some months would have different variability depending on what’s going on in the world. But it, it was a formula and thankfully that was documented and yielded a clear value. I mean, I don’t know how the CPA, you know, exactly puts it together, but I know ultimately your earnings are gonna be looked at and multiplied.

And so it was. It could be different, of course, depending on how much the you know, the valuation is. lemme say this differently, I guess depending on how much value your firm really has, you know, you’re a buyer would place a different number a different multiplier on it, right? [00:39:00] But when you’re, you’re showing a profitability consistently year over year as a seller, I’m going to demand a higher multiplier because.

I, I am convinced that the firm is going to provide that for the next buyer. So in my case, it was like three to five times earnings. And your report should show how much profit your business is yielding year over year. And so it should really speak for itself.

Jonathan Hawkins: You know, you mentioned something a minute ago too that I always tell people the data, the more data you have, consistent data that you can point to over time, I think the better off or the better chance you can to sell it. So obviously you gotta point to revenue and you gotta talk about profit, but that’s.

Table stakes all the dashboards and the KPIs and all the lines that you could draw that you mentioned with your data over time, that you can put it out there and say, look, this is what, this is consistent. You know, that’s gonna give a buyer a lot of comfort. And so to get there, you gotta make sure you’re tracking [00:40:00] all the stuff so.

Jessica Stern: Yeah. And one other point on that, I mean, you can track all the data you want, but then you can get buried in it and not know how to synthesize it and assess it at all. And I’m, and I was definitely there for a while. One of the staff people that I had was a focus. On specifically systems and tracking the data.

So I think a lot of lawyers would be well served to consider having like a data scientist somehow, you know, even part-time, you know, to help you to. Gather, you know, what your CRM is collecting or whatever your marketing sys tracking system is collecting, and to really figure out how to report on that in a way that’s clear for you as the business owner to just look at it and be able to make decisions.

’cause otherwise what’s the point of collecting? And if you can’t figure out what you have.

Jonathan Hawkins: Yeah. Well, yeah. So, so let’s move on. I wanna make, there’s some things I wanna hit and then we’re running outta time. So, so you eventually sold I assume it was probably like an asset sale type [00:41:00] structure. But was it you know, one question I. A lot of people have is, am I gonna have to stick around?

So is there an earnout? Do I have to stick around? So, I’ve talked to some where they’ve they got a check and they were gone the next day. So, how was it for you in terms of structure and whether you had stick around.

Jessica Stern: Yeah, I mean, I learned it can look so many different ways, just like you’re talking about. I had a few options but overall what I could tell from this buyer. And the one who now owns the firm is that, you know, she was confident in how she had been running her firm, and I’m sure valued some of the ways that we did things, but I think was pretty eager to like, get in and kind of just bring it in to the way she’s, she’s done things and really, she didn’t feel the need for me to be around too long. And hopefully part of that was because, you know, systems were in place and the staff was operating much of what we were doing every day from a. Service, like [00:42:00] from a client delivery standpoint, I still was doing the majority of the business side, really all the business side.

But she, she had confidence in her structure that was already existing for business operations that she’d be able to pull into that. So good procedures in place, good automation in place, good staff that was trained to deliver the work without me having to deal with it directly. Allowed her to give me what I was looking for, which was freedom and space as soon as possible.

So I did have a six month transition period which went by really fast and I thought they were gonna ask me so many more questions during that period. But she had what she needed and pretty much what she got at the time of closing. Of course I was there to wrap up some things. But after six months.

I, I didn’t have any, any ties. I don’t have any ties anymore. I did have the option to either have an earnout with a larger over [00:43:00] overall sale price or a smaller one and have it be all cash, and I elected for the smaller amount, all cash, and I’m so glad about that.

Jonathan Hawkins: So, I wanna talk about the emotional part of the sale. So this is another component that I, I see a lot with lawyers. They say they wanna sell, but I’m just, some of them just, they’re not emotionally ready. You said, you know, you were tired, you weren’t having fun, you were emotionally ready, but you know, you sold your baby.

What was it like on the other side of the deal once you were sort of fully out? What was it like emotionally for you?

Jessica Stern: Yeah it’s a really good question because there’s, you know, different emotions involved. I would say the first one and the largest one was relief. I really felt like the weight of the world was totally off of my shoulders and pride, you know, that. I didn’t have to wind the firm down because I was at the point where I probably would’ve done that and that would’ve hurt so bad because it [00:44:00] was a very successful firm.

And so I didn’t have to do that. And the, the work is continuing on and it’s not happening in the way that I was doing it, and that has to be okay. You know? And I think that is probably the hardest part for me is that, the reason why it was so successful was largely how we were doing it. And I knew that I wasn’t gonna have control over that anymore, and I was okay with that.

It was a choice that I made. But when you know that like the happy client part came from how you are doing it, it is hard when somebody is, is now operating your firm when you know, it doesn’t mean they’re not doing good work, but. It’s happening differently enough where you can tell, you know, that part is hard.

It also still has my name on it, so that’s the harder part because it’s still somewhat affiliated with me, even though I have no control, no involvement, no nothing. So you have to really let go of the ego [00:45:00] and the pride. You really do, and you have to consider. The decision, you know, why you made that decision, and are you gonna be comfortable with that?

A few months, years down the road?

Jonathan Hawkins: And, you know, you mentioned that you were on maternity leave sort of in the middle of this. So obviously you had a young child around that time.

So you got plenty to do outside the firm when you’re done. But, you know, you spend all this time building this thing, you spend all your time on the firm and then all of a sudden that’s gone.

And so in terms of your time you know, how did you manage that? I mean, did you just put it all into your, New child or, or how did you fill it?

Jessica Stern: Certainly, you know, my two kids gave me a lot to do. And I thought that it would feel so much, I thought it would feel unnatural being completely in this different pace of life and going from. A hundred miles an hour, you know, to 20, you know, I really thought it was gonna feel strange, but I realized that I was operating [00:46:00] at such an unnatural pace for so many years that finally just being in the during the day and not being so scheduled and regimented and all the things that I, I did to be successful.

You know, it, it felt natural and it felt good. So it wasn’t as hard of a transition for me as I thought it was going to be. And, you know, I’m, I’m just like living, you know, being in the moment, which was something that was always really hard for me. It’s an actual exercise that I have to intentionally do to not be thinking about.

Steps ahead, you know, so that it is just good for me overall. It’s good for my family. I’m like literally smelling the roses and, you know, I’m like goofy with my kids instead of being really stressed out and not being able to, you know, really engage with them. And it’s giving me the space to consider what more is out there other than.

Law, you know, like that I used to joke and say, the only thing I know is Crimmigration. Like I really didn’t feel like I had much exposure [00:47:00] to other interests or even really trust that I had other interests. And so now, you know, I am exploring those things more. I am still getting my fix, I guess through doing some consulting work and.

Volunteering my time with some organizations who have, you know, a lot of need right now, of course, in the immigration space. But I’m also giving some serious consideration to other, like more creative endeavors like film directing and telling stories that way. So I’m just discovering what seems to be most energizing for me right now and just kind of taking steps in that direction.

Jonathan Hawkins: Well, maybe this will be a step in your law firm consulting career. So I, my next question is

Jonathan Hawkins: for law firm owners out there that may think they wanna sell their firm one day, or at least want the option to sell their firm one day, I’m curious, what kind of advice would you give to them?

Jessica Stern: well, for those who are considering starting a law firm one day that it’s really a [00:48:00] worthwhile exercise to sit down and in a, you know, very simple way, just create like a mini business plan. It sounds like a big endeavor, but just keeping it simple and, you know, thinking through, you know, what do you want?

Personally, professionally and financially within one year, three years, five years, 10 years. If you can get that far. And then try to envision what that firm that you’ve considered building will do to yield those outcomes. Like, how are you gonna get those things through the firm? ’cause I’ve, I’ve noticed sometimes people, they have these ideas like, I wanna hang my own shingle.

Well, why? You know? Tell me why. ’cause there’s sometimes other ways to get the outcome that you want without going through that entire process as you might not enjoy it. And sometimes you just gotta do it to know if you’re gonna enjoy it or not. But other times you can figure that out just by, you know, sitting down and planning things a little bit more.

How [00:49:00] much money do you need to live the life that you wanna live? Not just. Need to get by, but like envision what you want that to look like and build into that and think big, you know? ’cause you really have to start building it the way you want it to. Look down the road.

Jonathan Hawkins: And so if, if I’m a law firm owner and I’m like, what sort of steps I can take today to set it up for me to do a sale like you did. And I know every practice area is different, but what are things maybe they should think about to start implementing now?

Jessica Stern: Are you operating like a business, you know where are your marketing your plans? Your sales pro? Like what does your sales process look like? How do your financial reports look? What are you doing to invest in your staff? How can you find ways to kind of pull yourself out of the center of attention and also operations?

Can you take a week vacation, a month vacation without [00:50:00] everything? Falling to shit, you know? And like, are you still gonna get hired? Can you still earn money while you’re away? Those are good tests, not only to see if you can do it, but inevitably there’s gonna be challenges and those are the opportunities to see where the gaps are in your business. And then just get back in it and, and start building some processes around where those gaps are.

It’s the best way to, figure out what it would look.

Jonathan Hawkins: Yeah, I think that is so key that take. Vacations or time away and then slowly extend that time. So, you know, first it’s a weekend, then it’s a week, then it’s two weeks, then it’s a month.

And

Jessica Stern: And really take the vacation and tell your staff, you know, here are the circumstances where you can call me. You know, and then everything else you have to figure it out. ’cause it’s a good opportunity for them too.

Jonathan Hawkins: yeah. And I mean, you know, you had built your firm with the systems and all that and it, you know, it ran. Really well, from what I can tell. Now you got sort of, burned out and tired of it, but [00:51:00] you would not have been able to sell it if you had not done all the work to get it in the shape that it was in.

And you can’t do it overnight. That’s the other thing. I, you know, I get lawyers that call me and they’re like, I went out in six months and I’m like, you know, and I look at it, I’m like it’s gonna take longer than that.

Jessica Stern: And you can get through it. I mean, there were times where I felt like that too, but the time’s gonna go by anyway, right? So you’re either still just doing the same thing you were doing and not in the way you wanna do it, or, you know, working towards something. So yeah, it’s gonna take time and it does require a lot of work.

But if, if you really wanna do it, that’s what it takes.

Jonathan Hawkins: So, last sort of question here. You may not have an answer you know, but you know, as you look forward over the next, you know, five, 10 years, you know, what’s next for you? What do you think

Jessica Stern: Well, I won’t be doing exactly what I was doing. Um, I’ll be Definitely outside more than I have been in the last 20 years, and I [00:52:00] have already been doing that, which has been nice. I will be realizing that there was like this suppressed creativity that I wasn’t really tapping into or didn’t have the space to tap into.

And I’m gonna be doing something. Fun. You know, not only with my family, you know, have more space to be fun and silly and those kinds of things at home, but the next professional move for me is going to be something that has an element of fun where I don’t have to take myself so seriously or the work so seriously.

I mean, I’m always gonna give a lot to what I do, but I wanna engage with people who are really like embracing all different. Sides of life in themselves. So I don’t know exactly what that looks like. But for now I’m just thinking about really today and tomorrow, and that that feels good.

Jonathan Hawkins: Well, that’s important. That’s all that’s important, really. And enjoy the moment. So, uh, I think it’s awesome what you did. So congrats on, building that and, doing the exit. I mean, because in the law it’s rare. It’s [00:53:00] rare. So what you did is impressive. So.

Jessica Stern: Thanks so much.

Jonathan Hawkins: So if there’s anybody out there that wants to get in touch with you, maybe they’ve got questions you know, how can you help me make my firm a little better or whatever they wanna ask you about Crimmigration or whatever they wanna ask.

What’s the best way to find you nowadays?

Jessica Stern: You know, it’s funny, up until maybe like a month ago, I wasn’t sure I wanted to be found, but I’m like, I’m kind of reemerging a little bit. And so I’m, I’m happy to connect with folks that. That connection is important to me. So LinkedIn really is where I’m focusing right now. So just Jessica Stern I think is, where you can find me on LinkedIn.

Jonathan Hawkins: Well, Jessica, this has been fun. I, I’m glad we got to do this. And again, congrats on what you did. That’s reallyimpressive.

Jessica Stern: Thank you. It was fun talking with you too.

OutroUpdatedWebsite-1: Thanks for listening to this episode of the founding partner podcast. Be sure to subscribe on Apple podcasts, Spotify, or wherever you get your podcasts to stay up to date on the latest episodes. You can also connect with Jonathan on [00:54:00] LinkedIn and check out the show notes. With links to resources mentioned throughout our discussion by visiting www.lawfirmgc. com. We’ll see you next time for more origin stories and insights from successful law firm founders.