Episode 10 – James Albertelli: Finding Ways to Grow During Turbulent Times
After starting as a sole practitioner and handling whatever came in, Jim joined a large firm. But three months later, he had a “Jerry McGuire moment,” took the goldfish off his desk, and went back on his own. This time, he narrowed his focus to the mortgage industry. He started with the bank branch that held his client-trust account and won some residential closing work. From there, he built relentlessly, growing A|LAW to over 400 employees, launching two other companies, and weathering many industry-wide storms along the way.
Full Interview Transcript
Michael: My guest today is James Albertelli, the president and CEO of ALAW, a full-service real estate firm with over 400 employees and offices in Texas, Florida, Georgia, North Carolina, and Alabama. They represent the mortgage industry including the nation’s top financial institutions throughout the loan life cycle. Jim also founded Oversite Data Services, creators of BestX Litigation Oversite software and Brightline Title, providers of title and escrow services. So thanks for joining me Jim.
Jim: Oh great to be here. Thank you.
Michael: Yeah, so let me ask you, I mean you’ve got a lot of different companies, maybe just give us an overview. How do these fit together and what’s the operation doing these days?
Jim: Yeah, well the companies are all complimentary to the financial institutions that we represent. So when you’re looking at it, the law firm itself provides legal services on the entire loan life cycle. So really we have a division that does securitization we call it the contract finance division, all the way through liquidation workout, bankruptcy. So anywhere along where you’re going to have residential or commercial real estate our firm’s going to practice. From that, of course, the other side of it is really the consumer-facing side. So a lot of the I’ll say it, the default practice and certainly the securities practices all B2B, right? So the B2C piece is the Brightline Title piece and that’s your family friendly, high volume closing practice so that’s what title escrow does.
The technology company really organically grew out of what we were doing as a law firm. On the one hand, we were working the Florida legislature to create some new laws and one of those just happened to be around legal publication. So we got it built up some connectivity 5o the clerks of court and give us access to lots and lots of data. The firm had 40,000 matters, probably about half of that now, but 40,000 active matters across multiple states that we were managing.
So I was really trying to determine a couple of different things. One, how can I take all of my associate attorneys and partners and protect them? Even from a mail room miss, let’s say. You miss a document and then it could be malpractice, so how can I do that? Two, how can I route-optimize my cases? I’ve tried cases in multiple jurisdictions state and federal court over 22 years of practice, so I was starting to say, “Well, how could I get my attorneys to treat cases like I would and be able to visualize them easily so they can know what the next step was?” And that’s where Oversite Technology grew out of. So that Oversite is a proprietary technology internally for us to help manage our law firm and really route optimize our way to a judgment on our cases, so that’s what they do. So each component part is part of that totality of service to the financial industry.
Michael: Right, right. And so okay, so that’s great. That’s where you’re presently and I think it’d be cool if you’re up for it is to maybe go back to the beginning and then bring it back up.
Michael: When did you start practicing and what was kind of your first gig out of law school?
Jim: Yeah, so I went to Emory Law School. I graduated in 1994. And it was unique back in the ’90s and prior to that that you could actually study for the bar in your third year and you could hit the ground running. So I’d been interviewing and doing the typical things the law students do looking for that job, to pay off some of that law school debt, right? And didn’t have anything firmed up. Was newly printed, admitted to the bar in May, and then an attorney called me a guy that was a sole practitioner I’d helped out. He said, “Look, I’m in contempt of court in a domestic case and I can’t say another word in this case. Would you help me out?” I’m like, “Well, I don’t know. Well, what does it pay?” Then he gave me a fee, a $2,500 I think what the fee was. And I went in and finished the questioning of the witness and resolved the case. I thought I was rich, right? That was my first matter out of law school. So I said, “Wow! I guess I’m going to be a sole practitioner because these jobs aren’t coming through and it’s another market downturn which we don’t have too shortages of those.”
But anyway, so I started working with a group of sole practitioners and really fielding any matter that came in the door. I was really renting just a little room among a bunch of sole practitioners and I take court acquainted cases and I take whatever came in, whatever they gave me. And I guess I made the District Attorney’s life so difficult defending indigents that they offered me a job and I went to the DA’s office. So it’s how I made my transition out of law school.
And so then at the District Attorney’s office, you did the standard stuff. I started drafting indictments and then got a Grand Jury commendation and run the drug court multi-jurisdictional task force, did that for a while, moved to the chief judge and it was about a two-year process of building skills. The good part about it was I really learned how to try cases effectively, working with some great people and that. I had that skill set added to my repertoire. And then it was 1997 I left there, went to a big firm in Atlanta and lasted three months and then after that took my goldfish and I’ve been on my own ever since. That’s my pathway and I went back into being a sole practitioner basically.
Michael: Okay, when did you start to specialize with mortgage industry clients?
Jim: Yeah, so my undergrad is in finance and economics. It was an epiphany, right? I’m sitting in a law practice and I have got a conflict letter that’s state and federal court in six different jurisdictions and the cases range from EEOC claims, bankruptcy cases, criminal defense, domestic, like I said state and federal actions, immigration, I got certified that as well, so I’ve got this wide spread of case, I’ll never forget. I went into court one day. Judge is calling the cases and he says, “Mr. Albertelli, what would you say about your case?” I said, “Oh, Judge. I’m ready for trial.” I had just met my client, right? So I logged out and I got paid my fee and was going back in. I just thought to myself, look, a couple of things struck me. One, you can’t be good at everything, right? So there’s a need to specialize, despite the fact that you got to pay the rent as a sole practitioner and you’re always in that struggle of taking that next case and trying to determine who not to take and who to take. So there was that.
Secondly, I noticed that if I was their trial counsel, and I really enjoyed the trial work. But if I was trial counsel, you were limited by what your clients could certainly afford and secondly you’re limited. Life is at zero-sum game there’s only so much time. I couldn’t hand the case off to anyone else. I couldn’t say, “Hey, I’m sorry. I’m unavailable but Bill in my firm will take your case.” People build that relationship with the trial counsel specifically and especially when your clients are individual consumers, right? And so I sat back and said, “Wow! At this point, I need to specialize.” I’m limiting myself because it’s got to be me and I really wanted to look and say, “What can I do with excellence?” How can I distinguish myself around my peer group? And so I started at that time to specialize in financial services industry which is really working with small banks, real estate agents and brokers, mortgage brokers and that’s how I began my practice.
And so I started to winnow away from the domestic cases, the criminal cases, the random federal matters that where I was counsel, asset forfeitures. I was doing all of those different things and limiting myself and starting to really, really focus and follow if you will follow the money up to the financial institutions, right? So that was the process. But there was actually a moment, a Jerry McGuire-esque moment where he said, “You know, wait a second. What am I doing? And where do I see myself as a lawyer and what do I want to really do well?” And so you’re trying to make a self-assessment and move in that direction.
Michael: When do you think that was that you had that clarity and started taking action on it?
Jim: I’d say it was probably around 2000, 2001.
Jim: That I really, really started to focus.
Michael: And I’m curious, did you have any of those banking industry clients when you made that decision or did you have to go develop right from the very first one?
Jim: No, I went and develop right from the very first one. What I did was, I had a bank, I had a trust account, right? I had an IOLTA account, and which every attorney really needs to have to take fees and earn them. There was a bank I used, Wachovia. And I went to Wachovia and I asked to see the gentleman who does mortgage origination loans. I started talking to him and he said, “Well, you need to be able to issue title insurance.” I was like, “Okay. How hard can that be?” So I went out and I hired a paralegal who was experienced in title and closing and came back a couple of weeks later, and said, “Okay, we’re ready to go.”
And back then it was pretty simple. We had the relationship working with the bank and they sent their first closing over. And so it was great. I didn’t have to beat anybody up for the fee. There was actually a closing and you were paid at the end of it. The people were happy they got a new house. The seller was happy they sold the house. And so it was all a pretty good experience. So from that, I started to expand the reach and develop the materials as well to support the practice area, right? And market directly to banks, etc.
Michael: Right, so you literally went to your local bank, met the local banker, talked to him into sending you some business.
Michael: And you’ve grown this large firm just from that initial toehold.
Jim: Yes, and from that initial toehold. And ridden the origination business up and down and really trying to create a law firm hedge if you will. So people are buying and selling real estate or it’s up or down, real estate’s on the move and in movement you actually have the ability to earn a fee. But yeah, it all started from that simple conversation and by getting my first title insurance license and then it was like anything else.
In the criminal arena, there’s word of mouth that you’ll get from doing a good job for a client but then there were the jail lists. So you’d end up with a list of people who were, they were new residents of the jail and then you solicit it and you end up soliciting, trying to solicit clients that way. Domestic was similar. It was really word of mouth on how you performed and then the limited advertising the bar would let you do.
So this actually seemed more direct. If I provided a really good service, it was repeat business, if I was at the closing table or a third party was at the closing table as long as they were a lawyer in the state of Georgia, then there was no problem with it. So it’s really ultimately about the client experience and client being more broad rather than your direct legal representation, right?
Michael: Right, right. And I imagine as you had spent more and more time in that industry, you learned of other opportunities and ways to market and built on the basic of having already had a book of business etc.
Jim: Yeah, you had a couple of things. As you built up your book of residential and commercial closing work then I was able to go into small banks and say, “Hey, would you like? You want?” They didn’t have automation so you had to draft the documents. I said, “So well, look I’ll provide the drafting of the documents.” And then from that I would add, maybe some SBA representation, I said, “Well, I’ve got a finance economics background. I can help your small business move their way through this process.” And it just grew organically from that. And so then it was just about really, as you’d imagine, selling your services among your peer group, meeting other lawyers, telling them I did real estate transactions and working closely with some of my peers.
Michael: So how long would you say it was…what were the stages of development in terms of how long were you building a personal book of business before you started adding other attorneys to the practice once you made that transition?
Jim: It was quick. Based on the service I did first at Wachovia and the title work I was performing then the title agent, representative actually mentioned me to another financial institution and they were looking for a high volume closing practice. So it was pretty quick. I’d say within 12 months I was layering in associate attorneys into my practice to help me with the volume of closings. And unlike the big firm that I worked at for a short amount of time, I know this doesn’t work for every large firm but for me, what I instantly saw was the ability of some attorneys or the willingness I should say, not the ability I think everybody probably has the innate ability just how did you call it or how do you or really, look inward and draw it out of yourself. But I could see where some would build business of their own, so I provided a profit share mentality very early on in my practice.
My practice of you might be, I’ll say in air quotes from traditional terms, an associate attorney, but you had profit participation at a very early stage which grew and was paid differently based on your origination. So regardless of the fact whether you are five minutes in my firm or five years, if you had the ability to generate that work, the lifeblood of the firm then you were paid a participation. And so I would train my associates actually to come to me and say, “Hey boss, this business is portable and I grew it.” And as we were having the compensation discussions, it was a more informed discussion but it allowed me to retain attorneys for I’ve got attorneys that are with me nearly all of my practice now in my time.
Michael: Right, right. Yeah, what you don’t want to do is train someone so well that they go out and outcompete you? You want to give them…
Jim: Right, and you do. You know what? Look, you want to set it up, so you’re not really worried about it. If you’re engaged in the practice and we have a relationship, generally our relationship is going to stay with you with the firm. If you become an absentee land owner or if the business is portable, you end up just buying the business. This person develops it independently if the barriers of entry are low with some of what I do now is really, really, high barrier to entry to represent the financial institution. You’ve got to spend a lot of money on infrastructure. But if it’s just a residential closing practice or some other practice maybe, it’s domestic or criminal whatever. There may not be the barriers to entry so you want to provide the participation that allows them to grow up and keep their portable business and it’s worthwhile to staying with you and of course, take all the brain damage away from your practice, the health, the benefits, the payroll, stuff like that.
Michael: Well, okay. Have you had any issues with attorneys getting so excited by that opportunity to develop business that they start doing that very early in their experience with you such that they don’t truly develop their practice skills? Is that something you’ve seen? And if so, how do you address it?
Jim: I guess so I look at it this way when you come out of your undergrad and your law school you have certain core competence right? The general legal education. And then you pass the bar, certainly you’re certified to then practice in that state or jurisdiction. When attorneys come into my firm, I’ve got it basic re-stratified. So depending on the level of experience, they get a different training and inculcate when they come in, so if you’re brand new out of school, for example, you don’t get the same kind of training module as you would if you were, “I’m out of the DA’s office I’ve been practicing five years, what are the states attorney’s office or what have you?
So we’ve tried to tailor our on-boarding process to really address that. So you’re going to have the core confidence in that practice here. If you were going to be in securitization or you’re going to be in title closing, or you’re going to be in commercial, you’re going to work with somebody who has seasoned in that area and you’ll have all of the tools necessary to perform with excellence. Excuse me. Then it’ll be based on your personality and really how you develop whether you’re going to ask for the work or whether you’re going to have the awareness to see what the opportunities are internally. A lot of lawyers and you can see it with law students that I’m teaching now are so focused on one area and there’s good reason to be focused to have a degree of excellence that you can develop.
But there’s a fear that you can’t reinvent yourself. Well that’s not true. You can reinvent yourself and you certainly can evolve your practice. And so I’d say, keep your head up for the low lying fruit or low hanging tree which is going to be other opportunities within the bank . When you go in initially and maybe you do the residential closing, but they also have a commercial department and you get the introduction to the commercial department and you get the commercial checklists and the forms and you work with the commercial practitioner and you develop some expertise and then you ask for the work. Right? So it’s an evolution and some lawyers really just gravitate towards client relations and client relations has its own stresses, its own challenges. So it looks real great okay, they’re going to dinners but the 50th state dinner, you’re over steak, right? And then being away from your family and traveled around and all that wear and tear on your body and not having a routine and being told no.
And a group of people aren’t very comfortable in that. And then there’s a group of people who really can manage a case load, adroitly, or provide compelling arguments and they’re really well-suited. And they really enjoy what I’ll say is a traditional lawyer’s skill set of presenting cases in court or doing legal research or doing transactional work and you’ll see those attorneys gravitate towards that. So I tried to, after doing this 22 years and to try and be self-critical, look and see where the skill set is and then move those attorneys in those directions where they can be the most successful.
Michael: Yeah, that makes sense. Okay, so as you were practicing, your firms started growing pretty quickly, started adding associates. What would you say was maybe the next inflection point where things were so busy that something about the way you were operating had to change because you just couldn’t continue to operate in that same initial way?
Jim: Look, a couple of things. At some point, you’ve got to be ready and you should be willing to hire the best people. I know it sounds like a simple thing but a lot of times the “B”s will hire “C”s and “A”s may hire “B”s not necessarily “A”s. When the firm started to grow quickly I tried to bring in the best management I could and round out my skill set. Looking very self-critically again at what do I like to do? Okay because that’s where I’m going to be drawn and what don’t I really enjoy doing and what’s going to be a credo to my practice? So finding someone who is going to provide I’ll say robust financial management skills, right finding a manager to just do that and focus on that. It’s so important in the practice.
We don’t get any passes. Your escrow account was out of balance. It’s a one and done, right? Don’t believe the press. So you have to be really conscientious about that. It was really about bringing someone in to provide institutional controls and so it was the daily accounting functions, it’s reconciling your balances every day. It’s some of the blocking and tackling of a larger business you need to bring in.
The second skill set was process management. If certain things in your firm are repeatable and they should be reportable and managing by exception report. You know what? Nobody tells you in law school that you’re going to need to manage by exception report or that you’re going to bucket work or that you’re going to look at inflow, outflow in the rate of change, but those skill sets need to be developed to really build a robust practice at some point.
And there’s an inflection point and depending on the nature of the practice when you can’t reconcile on your own accounts and you certainly can’t do it with some amount of regularity, it’s time to get that accounting executive in your firm, right? You may stay with it and start with an external accounting firm and push it all to them and really lease time from someone external and then ultimately you’re going to need to bring them in-house and you’re going to separate some of the functions to provide better controls. And so that’s one of those first points.
Michael: Well, okay. So I wondered as you were contemplating adding administrators, obviously with 400 employees now, it’s a different story. But in the early days, were you feeling the stress of taking that expense out of your overhead?
Jim: No question.
Michael: What’s the philosophy for going ahead with that decision and moving forward that way?
Jim: Really, the philosophy for me, well what occurs in a real estate practice is that you have these reconciliations. So as the amount of dollars came through and the amount of work kept me so focused on the work and not on the finances, I recognized at that point, “Okay, if I can’t spend an hour a day or 30 minutes a day reviewing my accounts, making sure my checks have cleared, making sure we’re on target for our financial, for the pay day, right? If I don’t have time to really reverse engineer all of my financial files, then at this point do I need someone focused on that?”
But they’re going to do a couple of things. They’re going to come in and that might be a person I really made a definite line of skill sets, what did I want? I wanted the ability to reconcile accounts. I wanted the ability to do payroll. I wanted the attention to detail, so I really came up with a list of what I thought was comprehensive of what I wanted this financial person to look like. And then I was going to invest. What am I going to invest? I’m going to invest $5,000 a month in this person. Let’s say it’s a $60,000 a year person. So I would invest that. And so I said, “Okay, well what is that going to do? What am I going to do during that time that I’m saving?” What’s the highest and best use of my time? Then I started to look at that and I also was fortunate enough to get someone that had some process management skill as well, so they made our process more efficient.
And so we started to look at things how can we do things more efficiently, more effectively? And that person had the time to start looking at our suppliers and all of a sudden you’re cutting costs, in your supplies that you buy, you’re cutting costs on your software. You’re cutting all these costs you don’t have the time to think about and the return of investment was positive and it allows you to grow even further. And grow with which I’m sure it keeps a lot of practitioners up at night making payroll, right and reconciling accounts. And so having that separated gave me an additional control and that’s where I thought the inflection point was, so financially where I’m making a decent return. And decent to me is 15% to 20% on the capital of deploying and so I could take those dollars, I’m going to invest a portion of those dollars in the skill set.
And I tried to do the same thing with lawyers that I brought in as partners. I tried to look and say, “Hey, you know in my real estate world, what’s my weakest skill set?” Well, you know it’s been a long time since I went to the deed and record and pulled title, so maybe somebody who has really a depth and breadth of title insurance knowledge. What could I do with that? Well, not only could I support my practice but I could sell it to third parties, so I’ll productize what they did. All right, so then I brought that person in. So I started looking at my skill set and shoring up each aspect of it with the smartest and best people I could afford and that’s what I did.
Michael: Okay, so how long was it? How many years since that first client would you say it was before you started to recognize that you need to spend essentially all your time on leadership and vision rather than the handling of individual files?
Jim: That probably happened about three to four years in.
Jim: Where it really became the case that I would have to focus on as the firm continued to grow that more and more, my time was really dedicated around product development and in building relationships with our clients, right? Really the rainmaking. So rainmaking became the predominant part of my time and effort and so I’d break down my day by some personal skill development which is one of the reasons that I’m teaching but there’s personal skill development. There are the time with the clients and spending that just to pick out what their needs are, what are the products, what’s going on next in and really my clients were all so I can better empathize with them and understand what they need delivered.
And then with my senior leadership team in planning, I’m trying to at this point in my career I’m working on 2017 and 2018, right? Back in ’05 and ’06 when I was more of a one-man leadership band and it was all residential commercial closing work but I was watching it go away. I was passing out really large checks to people and they would buy multiple homes which didn’t seem like the most sophisticated investors, right? So in that way, I start to invest in the bankruptcy expertise in the foreclosure expertise, so I started to add to my firm while I was watching my closing practice decline, predicting that there would basically a bubble in the system and we would be ready to capitalize on some of that which we did effectively.
So now, you’ve lived through all this and you get some of that experience and you really see, here’s my practice went. You go from yourself and the goldfish, right? To 50, 60 employees then you’re back down to 20 key people you’re really trying to hang on to and the firm was under a lot of pressure in ’06 to ’07 because of the dearth of financial transactions real estate acquisition transactions. And we had to take some key risk investment and I had to actually what a lot of people don’t do, I had to reinvent or create another aspect of my practice. I had to risk additional capital while business was declining. and I had to put more money in marketing not less as the business was declining.
So I had to take a larger piece of the pie and dedicate to these other investments and I think that’s some of the toughest thing that you do if you’re watching your business go away, a lot of people want to retrench cut cost, cut cost, cut cost and which you certainly have to have a keen awareness of your cost and an eye on your cost structure maintaining your margin in your practice, right? But at the same time you’ve got to be willing to take some of the risks and determine where the markets going to go next. And so that was the other aspect of it. I was trying to figure out where the market would go next so that we could be ready in place with a presence to take advantage of some of that.
Michael: The other thing I’ve seen is that when things are not going well, it’s harder to feel like you want to continue to be visible as a leader. Is that something that you experienced? Did you feel an urge to hide or maybe just you’re so busy trying to figure things out that it was hard to be in that leadership mode?
Jim: Well, actually when it’s a challenge to make payroll or something, you have that pressure on you, and you’re looking at your employees around you, it could be you did start to be motivated to not be there but that’s when they need you the most. If you’re going to make the tough decisions and we upsized and downsized and it’s been difficult to release people especially when you get to the core group of people who you really think they’re performing well but for your stewardship of those resources, maybe they’d still have a job right? So that stuff for me my presence was even more important and I learned this really early on no matter what I was going through personally and this is the toughest part. When I went into court, it was a stage, right?
The people watched back in the day (this is for millennials that don’t remember this so you might have to Nexflix it…) Law and Order. It’s a real short segment. You’ve got to be professional. You need to be ready. You need to be congenial. You need to be engaging. Your problems don’t matter. For your clients it’s the same way… and you have to provide comfort to your client and show your professionalism but also make them feel comfortable in a difficult situation, right with you as their advocate. So you’ve got to put all that aside. That’s the tough part. You don’t get a bad day as the owner. You don’t get a day off.
I try to explain that to some of the attorneys when you’re representing these clients, there is no Saturday. There’s no out of office message. You see that a lot. No, the sacrifice you make to achieve a certain level of success goes hand in hand with what I said. If you want to outperform and be the top 10% of earners, you’re going to have to outperform 90% of people. So that comes with sacrifice and it’s tough to find that but back to your initial question, now, where I might have liked to be away on vacation playing golf and forget about it all? I need the golf lessons anyway. But no, I would be there and visible and working through the issues and taking the phone calls and addressing it. And all those initial people, I personally, I did all of the termination side myself so they could see it was angst, it wasn’t a good thing. I cared about them as people and you try to lead through that difficult time.
So I think that’s more of what makes you who you are as a leader, hopefully, 22 years in, right? I’ve been through good and bad, you’ve seen it all. You’re real about it. You try to be very realistic about the future. For example for a large part of our practice, right the defaults have gone down and reduced. The portfolios reduced but I could have been one of the people that sat back and said, “Oh well, we’re just going to have to keep cutting instead what we’ve done is we’ve picked up market share, we’ve been more visible, we’re thought leaders. We provide solutions like this technology solution.” So we’ve actually gained market share and been able to expand our firm in a time when the markets decreased 50%. Some of its the mentality, some of its the will, some of its the team you put around yourself. And again I’ve got some really great people that I’ve been fortunate to work with.
Michael: Yeah, that’s really interesting. So you’re in a decreasing market or at least, a segment of your business is and yet are you continuing to grow in those segments or just stay in the course?
Jim: No, because of the nature of the market, we’ve actually expanded our reach of services into multiple states, so over the past two years we’ve gone from Florida and Georgia primarily to Florida, Georgia, Texas, Alabama, North Carolina, South Carolina, so as other firms change their course and leave the segment, we have the ability to be there and pick up that work and become more of a singular resource. So what we’ve done is built our reputation, our performance in our first state of Florida and Georgia where we’re generally at the top of the class among our peer group.
And so that’s allowed our clients as they’ve expanded our portfolios and moved between clients. They can rely on one solution with the same back office standards with the same attorney on-boarding, with the same info sec policy, with the same redundancy and security. So that’s allowed us to continue to grow in a declining market which we think is leveling out and like anything else it’s cyclical and when the cycle changes, we’ll be able to be there for that cycle.
Michael: So you also talked about the mindset. Is it as simple as recognizing there’s always opportunity we just have to look for it? Or is it more nuanced than that do you think?
Jim: Well, I think there is, look if you’re listening to this podcast and you’re sitting out there and you’re a sole practitioner office and you’re not seeing business come in. You’re going to be like, “What is this guy talking about opportunity? Right? He went to his local bank, he got some mortgages. Now he’s running a $70 million operation.” But I would say you do need to ask, you do need to be ready to deal with no and I said deal with it, don’t accept it but listen to it, right? And come back and ask again and you need a degree of perseverance. So yes, is there opportunity all around us? I say this to my law school students have and they worry about all the job market usually but they should. I said look, the best cobbler that guy or gal that’s still making shoes and probably charging a pretty penny for it, so the best in anything is going to be employee.
In a manner of getting the word out about your practice, how do you market your law firm? And how do you distinguish yourself? What do your interactions look like? I really firmly believe that it is a mindset that ultimately you’re going to be a success, you will be. The problem is sometimes it takes a year or two and really it’s how do I stay around in that year or two? There are clients that told me no, would go away probably in much more colorful terms, for a long period of time until the time was right. And then we got the account. I never took it personally. It’s just part of the business mentality. So when you’re sitting there and going, “Well, how am I going to get the next criminal case? What’s going on in my peer group? Were they really bringing more cases? Is it their podcast? Is it their e-newsletter which really cost very little to disseminate? Is it a network with police associations? Is it something that I’m not seeing? While there’s a case or community. Is there something about my presence?” Really rethinking every aspect of your practice to give that service and that comfort level will ultimately distinguish yourself.
Michael: Right so yeah, I noticed too you talked about product development and being in communication with your clients and I think that’s part of what you’re talking about too is having that deep awareness of the needs of your clients so that you can provide genuinely valuable solutions.
Jim: That’s right. Well, in some places the nature of your relationship, the sole practitioner to consumer client versus the law firm to an institutional client and really understanding what is their business. And ultimately it is a business if it’s an institutional client of some kind and how can you provide a cost savings methodology that might distinguish your firm against the incumbent? How can you translate that to value for that practice? How can you take some of the noise or confusion or obfuscation that just comes as a practicing law it seems like it’s all behind the curtain to a lay person? How can you strip that away and say, this is really what we’re doing and working with you long term?
And how can you create that solution? And so being thoughtful around that. And then looking when you’re behind the screen curtain which again going back to the law school example, law’s I think still one of the greatest careers ever. I would always recommend law school over business school. Law is the framework on which everything else rests. So you’re going to get behind the curtain and it’s up to you what you do with that. Right? And so I think a lot of attorneys don’t necessarily think that way, right?
Michael: Yeah, the one thing I was thinking about though is when you’re dealing with market forces and they’re real, they’re affecting firms across the industry and you can see the numbers. People are leaving that practice or going out of business, there’s I think a need for more than simply persistence. Right? You need to approach the problem with some creativity and when that recognizes the reality of what’s happening and looking for the opportunity in that context.
Jim: That’s right and then look, that’s in large part what we did with Oversite Technology. I mean we looked at it and we said, “Okay. Our clients are financial institutions and or their investors, they’re hedge funds, some of the largest in the world.” And what’s going on? What are the economics behind the scenes in NPLA (non-performing loan acquisition) or in default management, and so what’s missing? And so that’s where we use the technology because I could see that the communication that was permeating within our clients the way they managed their data was inaccurate and what was missing was a clear communication with certain metrics that I could then translate into data that they could ingest to make decisions on.
So I can strip out attorney noise and give them a clear view of what their attorneys were doing across multiple jurisdictions. So I used that technology and expertise to help us distinguish our firm and then allowed our firm and the firm’s core performance. I used that same technology within our firm to give us a competitive advantage against our competition, allow us to excel and then gain market share. You’re absolutely right. I was watching the market decrease. I had to think creatively. What can I do for my client? My client cares about the time value of money. So if I’m really being thoughtful about their economics, what tools can I create to help them with their core functions, right? So what tools can I help them develop to deliver their core functions more effectively or comply with the consent more effectively because all of the major financial institutions are under consent order?
So what’s going to give visibility, cost savings and then allow us to separate ourselves from the pack? So your point’s well taken. It obviously, it’s not one or maybe if it was the opposite of what I’m saying but it’s not one element. It’s a multitude of factors. One is the perseverance? That goes in with not accepting necessarily, no, keeping a positive attitude which means a calming influence and leadership in tough times, spotting the opportunity. A lot of people can’t which goes back to your other point about hiring. It sounds great to spot opportunity. Oh, I’m going to spot the opportunity with the next market. What does this Jim Albertelli telling me? This guy, right? It’s really easy for him to say, “spot a bunch of opportunities.” When I hired the business manager and it took up a large portion of our revenue at the time. It’s a small operation. It allowed me to step back, and I did step back. I stepped back from the day-to-day so I could think strategically about the business.
Law is oftentimes a practice much like a search where you are so focused on the smallest of details because in your case it can derail or because it can subject you to criticism by other people, right? We get that from law school on. So and criticism could be good or bad and we can] talk about that in another podcast but essentially that’s what it does. So oftentimes you don’t get to separate yourself from the day-to-day noise to think strategically about, “Okay. How did I get this client? Why did I get this client? Where did I get this client from?” And so looking at all of the key questions you look at, the hows, the whens, the whys, the wheres, the whats, and then say okay. What does that tell me about the next opportunity?
So yes, it’s not just perseverance. You could be a strong willed person until they’re taking all your stuff out the back door right? I don’t want that for anybody. I don’t want them to say, “Jim said be persevere, or bang my head against the wall.” That’s not what I’m saying. What I’m saying is you’ll have to have a combination of qualities, willingness to take a risk and it might be outside your core practice area. Don’t turn it away because it’s a risk. Don’t turn away because it’s unknown. You’ve gotten here, here’s been about unknowns. Your undergrad was an unknown. Law school was an unknown. The bar was unknown. You’ve met every unknown, you’re here. You’re listening to this podcast. You’re looking forward, you want to figure out law firm excellence, you’ve done more than most people. You’re here, right?
So it’s going to take the perseverance, the understanding, the heads up play, the willingness to associate yourself with people who are smarter than you. Right? Find that but be introspective. What are your weaknesses? Bring that person in and then be willing to take a step back and look collectively at the opportunity and attack and I think it’s going to take all of those things. Now on top of that is there a luck element to it? Well, yeah, there is, okay. I mean there is a timing element that works and so for example, it just so happened I was…a quick anecdote. I was going to get my pilot’s license and I’m flying this little plane into a little airport and another little plane flies in next to me and I get out and I see a guy that I hadn’t seen for probably 10 years. And he was one of my buddies in law school. And he gets out and he goes Albertelli, “What are you doing?” I said, “I’m doing real estate law.” He says, “You should be part of my network.”
Oh geez, this guy’s got a network, right? He’s better than nothing in court, he’s worse in network. And he told me what firm he’s working with. Well, it just so happened it was a firm that managed attorneys throughout the country. And I didn’t know. I thought it was going to be like any other CLE [SP], so I showed up in board shorts and a t-shirt, right? Figuring out that I’ll do a few hours of CLE and I go lay by the pool. Everybody else was in a business suit. So I was like, wait a second. This is the real deal. Right? This is really to talk about the mortgage business and how you’re going to execute as an attorney for it. So I ran out, got my suit, came back and but it was that happenstance. But then I took that chance meeting and started cold calling people in these divisions who said, no, no, no, no, no, then I took money I didn’t have and I bought some tickets to a sporting event and I invited one of my friend’s friends and one of the people that controlled the work and then they met me.
I said to the person, “Why did you stop?” “You never picked up my phone call.” “Oh, Albertelli we don’t need another lawyer.” And I said, “No, but here we are…” And he said, “Okay, look. Call me Monday. I’ll give you some business.” And Monday came and I ended up with $30,000 worth of work a month and I was off to the races right? And started building my resume. So I’m not here to say there’s not going to be luck but if you see the opportunity, you have to take the risks. You might have to use money you don’t necessarily air folks [SP] have right? It’s a credit card whatever it’s debt.
And you better be willing to ask for it and accept the initial no but at that point, I was pretty motivated let’s say to work through it so that was my story of the time when things were looking really dire. And I was just trying to be in the mix but then had I seen then the guys and said, “Oh, God, there’s the guy fro law school–I don’t want to talk to him.” Or had I said, “Oh I don’t want to meet your friend,” or had I not followed up or had I not taken the money and borrowed it through these expensive tickets or had I not followed up with client afterwards or had I not built the infrastructure to perform well. Long-end: even though I didn’t have necessarily the skill set right, to do it in bulk. I would have been out of business before I even started.
Michael: Right, right.
Jim: And each one of those could have been a challenge, right?
Michael: Yeah, yeah. And so you just have to believe that there’s a “there” at the end of the road and keep walking down the road as though you’re going to get there.
Jim: Yeah, and you’re going to step back and you’re going to say strategically in my practice and it may sound corny but is there a vision? What is your vision of success? If you looked about it, what would you like it to be? And how am I going to step through to get there? Maybe you ultimately would like to teach at a law school. How am I going to ultimately morph my practice and have enough resources so that I could move into that phase of my life? Or maybe you’re going to become a partner at an AV-Rated Firm and you really want to be a partner there and you’re a young associate, what am I going to do? Well, I would say, what is your boss? What are the challenges of your boss? What are the challenges of the firm? What are you going to add to do? Look, no one’s going to add you into the whole, right? … to make you a partner if you’re not going to be a creative.
It’s two things. One, am I going to add to the overall firm skill set? Am I going to make the firm more profitable? Guess what? You’re in a business. So how am I going to do that? How am I going to make my boss’ day easier? Right? You’re going to have to develop those skills, otherwise, they’ll bring another really bright associate in from Duke, UVA, Emory, Harvard, wherever and they’ll stick that person to the box and that will be the new associate and you’ll be in a mid-year position and maybe not making a difference. And then also, be willing to make the practice change. If you’re not feeling passionate about becoming a partner, if that’s not important to you or in the classical sense, finding what your real skill set is, which could be the challenge that takes you in a leap of faith.
Michael: Well, as I think about the fact that you were able to spot opportunities that allowed your firm to grow and other firms are downsizing or moving out of the practice, I’m also curious if you are using your own insights to perceive their needs or you’re just directly engaging your customers in questions about their needs to facilitate your ability to perceive those things? Do you ask them, what else are you trying to do or what else is on your plate? What’s your biggest problem or things like that?
Jim: Yeah, they tell me, right. Okay, I do stay up-to-date on my industry. So I read my trade where it acts like a daily e-mails on what’s going on in the mortgage and financial industry, around Fannie and Freddie, what’s new there, the conservative shift, what the feds are doing with interest rates, what’s going on the mortgage market? What’s going on in my state as far as legislation that might affect my practice, right? So I’m doing that. And at the same time, I’m thinking, is that the most efficient allocation of resources? Is there an efficiency opportunity? Is there a legal efficiency opportunity? Is my client dealing with some new challenge internally? Okay, I see it. Oh, there’s a consent order. You named the financial institution, right? And there’s going to be challenge with this information. Or what component of that consent order would affect my client? And how would that eventually relate itself?
And we’d actually see it in our relationship between each other so is there another service I can provide to ameliorate some of that effect. Or to distinguish my client among its peer groups, right? Because maybe there’s a tool that they could use to say, “Hey, guess what? We’re using this tool to manage our counsel internally for better optics and better performance,” that FHFA might really look at and say, “Wow, that’s a great tool. And other firms should use that tool.” Maybe they’ll help them and that translates into millions of dollars of clients. So I try to do both. I engage them. I engage where I can socially whether it’s a dinner or a conference. I try to engage them in some social event so they can see Jim, the person. And friendship buys you one thing. It buys you a second chance.
If you make a mistake with a client, you’re fired. If you make a mistake with your friend, you get one opportunity to square it up then you’re fired. So it behooves you to become close to the client and they give you the one opportunity to fix it and make it right and there becomes a relationship there that’s more than dollars and cents. So I did both. I look at the industry and try to say, “What’s next? What can I do better?” And I was part of legislation that took legal publications online. It was around service people that were overseas or it was absentee land owners who they don’t read these publications that are small circulation, legal pubs, those types of publications probably are unconstitutional anyway. They were great a hundred years ago. They’re still operating under the same law, so it really needed to be on the internet where the people could electronically check and protect themselves.
So when I saw what was going on with service people not being able to get noticed, I thought, “Let’s take these legal pubs online let them opt-in and get an email notification wherever they’re deployed to protect their resources.” So it’s those heads up plays and then being willing to invest into a practice area or service that will further help your client, so that’s the other key component of it.
Michael: That’s awesome Jim. S what’s next for you? I mean you mentioned you’re looking ahead. Anything you can talk about?
Jim: A vacation which I’m looking forward to. No, from the firm standpoint, I expect that we’ll grow several areas of our practice over the next few years and we’ll end up creating a national offering, just some of our financial institutions. I also think that the technology is something I’m excited about, predictive analytics in the law, so really looking about and providing a one-stop objective shop for the general counsel to be able to manage attorneys around the country in state courts and superior courts and circuit courts and district courts and have a dashboard so that lawyers can really become business partners to businesses and I think that’s where our technology is going. Say if I called you could say this is my run rate, this is my inflow, outflow, global risk, and they could digest it, right? Show that you really care about your boss which is what we were talking about. So I think that’s what’s next for me.
Michael: Does that include managing attorneys in other practice areas beyond the ones that you’re involved in … or could that tool (do that)?
Jim: Yeah, well that tool could certainly do it. We looked at it as anywhere a general counsel would be focused. So for example if you were general counsel at a medical service provider, you might have different tort claims that would come up. If you’re a manager of a financial institution, you’re going to have the land of the liability cases, right? You’ll have slip the falls all that stuff. You’re going to have the compliance cases which are going to be brought in different courts. You’re going to have the small claims brought against you because someone did something. So really aggregating that information and showing global risk and tying it to dollars and then tying that to law firm performance, what’s our total spend month over month, year over year?
Giving some interesting tools to general counsel to put them in a position to become the next CFO or chief operating officer of their firm and I think there was one attorney, I don’t know if he was ever general counsel who is running and he stepped it downward to CEO of Delta Airlines. It’s good to see an attorney that made it there. You got to have imagined right that he definitely had some soft skills and financial skills to get in that spot. So that’s what we see our tool helping attorneys do.
Michael: Nice, nice. So that sounds exciting.
Michael: So what’s a good way for folks to get in touch with you? I presume it’s your website.
Jim: Yeah, it’s pretty easy, email@example.com and is probably be as going to get in touch with me. I’m right at that email. I’m the only one on my email, so personally. If you don’t get an answer right away, like I said, don’t take no, the first no for an answer. Definitely pursue it and I’ll get back with you on your question.
Michael: Nice. Well, thank you so much. I really enjoyed this conversation.
Jim: No, I enjoyed it. Thank you for the opportunity. Take care.
Michael: Yeah, you bet.
- A|LAW: http://www.alaw.net/
- Brightline Title: http://www.brightlinetitle.com/
- Oversite Data Services, creators of BestX Software: http://www.oversite.com/
- Description of the three companies Jim manages [0:15]
- Jim started out in 1994 with a solo practice handling a hodgepodge of matters [3:27]
- Starting to specialize with mortgage industry clients [5:50]
- The 400-employee firm started with a single closing that came from the Wachova bank where Jim’s client trust account was held [9:05]
- Keeping an eye out for opportunity to provide other services to his growing base of clients [11:55]
- Adding attorneys to the practice after the first 12 months in banking [12:55]
- Taking a profit-sharing mentality early on in the business [14:00]
- Providing training for attorneys at the level they are prepared to receive it [16:25]
- Rapid growth and the importance of hiring the right people [20:05]
- Feeling the financial stress of investing in administrators early on [22:20]
- Making hiring decisions to shore up areas where he was not strong [25:05]
- Getting to the point where he needed to focus on leadership, vision, and rainmaking [25:40]
- Getting through tough times in 2005-06 when the residential real estate commercial closings were drying up [27:10]
- Feeling the pain of investing in bankruptcy and foreclosure expertise while the firm was downsizing because of the decline of residential real estate business [27:30]
- Investing in growth while the business was declining [28:30]
- Staying present as a leader during the tough times [29:30]
- Shifting again to respond to declines in the market and growing when others are retrenching [32:50]
- The mindset that has enabled Jim to find opportunity in difficult market conditions [35:00]
- Being willing to continually re-think every aspect of your practice [36:45]
- Having a deep awareness of the needs of the client in order to provide value [37:30]
- It takes deep insight and creativity to solve hard problems [39:00]
- Seeing a gap in the market led to the formation of Oversite Technology [39:40]
- Keeping a positive attitude means a calming influence and leadership in tough times [41:30]
- Hiring a business manager in the early days was a big investment but it allowed him to step back from the day-to-day so he could be more strategic [42:12]
- Thinking strategically means looking at the “hows,” the “whens,” the “whys,” the “wheres,” the “whats” to understand how your opportunities are coming to you and then asking– what does that tell me about the next opportunity? [42:30]
- Luck is a factor too but it’s worthwhile being open to all opportunities [44:33]
- Showing up at a meeting in shorts and a t-shirt to see a roomful of suits; he ran back out, changed, and came back in to capitalize on the opportunity [45:15]
- The importance of having a vision for success [47:45]
- Jim’s process for gaining customer insights [49:18]
- What’s next for A|Law? [53:05]