Episode Transcript
[00:00:01] Speaker A: Welcome to the Relay, the legal show for personal injury law firm owners presented by Lexamica, the number one attorney referral network. I'm your host, Gabriel Ste. My guest today is someone I didn't meet at a conference. AI thinks I met him at work. Actually, he's my uncle, Josh Sanford.
[00:00:15] Speaker B: Hey, everybody.
[00:00:16] Speaker A: Which became the largest wage hour practice in the country. I was a CFO and co conspirator in a positive way. Now he's the face behind America's Attorney. Today he has 110,000 subscribers. But by the time this airs, it'll do a lot more.
[00:00:29] Speaker B: 111. Let's go. Let's go.
[00:00:32] Speaker A: He's a partner at EKSM, one of the fastest growing consumer class action firms in the country. He co founded Eagle Team with the most watched legal voice on YouTube. And he was an early investor and supporter of like Samica. That's four firms and a software company, if you're counting. But here's the part that matters for this conversation. Before all of that, Josh and I sat on the same side of the table and tried to build something that ultimately didn't work. We had a thesis take everything that the personal injury world had figured out about running cases at volume and pointed at wage an hour workers get their wages stolen every single day in the country and most of them never see a dime.
Nobody was running that like a business. So we did. We ran the law. We ran the business. He ran the law, I ran the business. And we got really good at it. But we hit a wall. Ultimately, I think it was for the best. And we are going to talk about it today. And and Josh, it's great to have you on the show. Thanks for joining me.
[00:01:25] Speaker B: It's a pleasure to be here.
[00:01:26] Speaker A: How does it feel sitting behind a different desk?
[00:01:29] Speaker B: I just found out. I'm your uncle. It's amazing.
[00:01:32] Speaker A: We won't go into all the details.
[00:01:33] Speaker B: Are we doing an autopsy on the wage and hour practice of Stanford law firm? I think because that would be interesting because we've actually never done it and so much time has passed now.
[00:01:42] Speaker A: I think we should talk about it. I do want to spend some time talking about the direction that you've gone since then because there's so much of that. But let's start there. Give me the high level version of it for listeners and then we can dive in.
[00:01:55] Speaker B: Okay. I would love to say that one of the fundamental differences between running a wage and hour practice and a high volume motor vehicle accident practice is that you have to have more lawyers touching the cases a higher percentage of the time in a wage and hour case than in a motor vehicle accident like pre lit department. And that drives up the overhead and makes it harder to be profitable. But I'm not going to say that. I'm going to say I didn't have like a really clever signature block on my emails like kind regards and that's why we failed. I used to just like say whatever, but if I said kind regards we probably would have been successful.
[00:02:34] Speaker A: But let's talk about the scale. I mean, you started the practice in 09. What was, when was your first wage case?
[00:02:40] Speaker B: My first wage case was 09.
[00:02:42] Speaker A: Yeah. So you practice for a long time.
Nine. I started working for you in 1919, so 10 years later. And you at that point had several hundred claims.
[00:02:53] Speaker B: Yeah, we had done a lot of scaling. I know by 2013 we had filed like 35 wage and hour cases, which was pretty significant at the time in our market.
But then by 2020 we, I think we were doing like 4 or 500 a year.
[00:03:10] Speaker A: Yeah, that, that's right. That's right. And the thesis was, well, there's a lot of people who are having their wages stolen. Like that's still true to this day. It's a societal problem that a lot of those claims have value.
Total damages, let's say between 4 and $10,000 maybe.
[00:03:31] Speaker B: Yeah.
[00:03:32] Speaker A: Is that per per claim or per company?
[00:03:35] Speaker B: No, per claim.
[00:03:37] Speaker A: Yeah, yeah. So you're talking in the economic range of a smaller personal injury plan.
[00:03:42] Speaker B: Okay. Yes. But some of these claims, the, the, the workers side of it's a few hundred dollars. There's like a technical violation. What we learned after applying a bunch of force to it is that courts don't want lawyers to make money on wage claims that are small. They basically say not everyone, but they basically say no harm, no foul, we're not going to pay you for that.
[00:04:03] Speaker A: And the. So we scaled it up on the premise that we could run these efficiently and fairly and go get people their back wages. And we largely took the practices that we saw in the personal injury industry of pre litigation litigation. Although as you alluded to, there really isn't a pre litigation phase in pre lit in, in employment law or in wage and hours.
[00:04:26] Speaker B: Yeah, not in wage and hour. I think if you just did like EEOC style wrongful termination type claims, you could have a pretty meaningful pre lit process. But you can't really run that in a wage case just because to resolve them you need court approv. And so you gotta, you gotta get it in Court.
[00:04:41] Speaker A: So basically it's all lit work, but it's all smaller value claims. Although in 2015 at the peak, you were dealing in larger class action claims. But then there's this other macro where arbitration agreements came into the end to like all large employers. And that changed everything as well.
[00:05:00] Speaker B: Yeah. The U.S. supreme Court decided a case called EPIC Systems which said that you can put an arbitration agreement in an employment handbook. You didn't have to have a signature on it. It could just be something that the employees were bound by. And when word of that eventually got out to the larger public of employers, we were no longer able to get classes certified as regularly. And so these claims, the top line value, get cut, hammered down and made it impossible to, to run a firm off of it.
[00:05:32] Speaker A: Yeah. So now we're filing small case value cases in federal court. And turns out that if you lose money at scale, that's more money than losing less money on it.
[00:05:43] Speaker B: Turns out it is. So there was that macro thing.
You know, we did a lot of stuff. Right. One of the things that was like absolutely cutting edge that we did was take a, the, the life cycle of the case and break it up into distinct phases and let specialists inside the firm work on the case while it was in that phase, whether it's the marketing side to drafting the complaint, to the litigation, up to settlement and then a settlement process. We did a great job of it.
[00:06:18] Speaker A: Yeah.
If it had been a personal injury law firm, it would have been well run. It was well run. But the, the thesis didn't work, which became a forcing function of well, this model isn't working. And as we start to see that become apparent, I think there's other really interesting things that are happening at the same time. And this was 2021 through the end of 22 is when we hit the larger headwinds.
[00:06:44] Speaker B: Yeah. We also had another headwind that's endemic to this type of practice, which is that like, if we can just keep comparing to motor vehicle accidents, almost everyone who's been in a wreck knows that they've been in a wreck and they probably know whose fault it was. If you suffered a wage an hour claim, like, you may have no idea. So one of the things that we did was we would try to get around 28 to 31 leads to have one good claim. I mean, I say good with an asterisk because it turns out that some of them weren't that good. But we're like trying to sign 3% of the leads that came in the door.
That's a Different.
[00:07:21] Speaker A: That's a different process that held very steady for a long time. I will say one of the things that I learned from that, that has served very well is to create a good client experience. You do not always need to say yes. And I think that's something that we learned to do very well is how do you create it? By closing loops, by listening to people. We turned down 30 people for every person we signed and we had strong Google reviews. You can go look at Sanford law firm now and see if that's still true. I haven't looked in a little while.
[00:07:48] Speaker B: There are some people who are mad that I won't take their case, but I think everybody has to deal with that.
[00:07:54] Speaker A: But yeah, that's a lot of turn. Turndowns. And so we learned how to do at scale. We learned how to do good customer experience with a lot of turndowns. And then the other thing that we did while we were at Stanford was we built business relationships with law firms are doing advertising at scale. So we saw the, both personal injury law firms doing mass marketing and also we started taking referrals from those firms on their turn down employment cases. And so for me as the operator, there was exposure to a back office problem that existed. Ultimately that became Lexamica. And Josh, how did you end up in social media?
[00:08:27] Speaker B: Uh, you and I went to a conference together and there was a nice presentation by a panel of lawyers. And one of the lawyers who seemed like really down to earth and enjoyable basically said every lawyer should have a YouTube channel. And I was like, yeah, I mean, I don't, I can't argue with that. They. They should. So we went back to the office. We had just hired our first marketing hire and we told her, hey, we're going to start a little YouTube channel together. And we did. And it was horrible. It was so bad. We were aw.
But we never quit and we got a little bit better each time and ended up making a bunch of videos. And now it's. I mean, I don't feel like it's like totally successful, but we've had the success that we deserve. We're on an upward trajectory and it has been a fantastic business development process for me to run.
[00:09:12] Speaker A: I think you are one of the few people that left that conference and actually did what they said you're supposed to do.
It's very hard. But the, the other piece that we started seeing, and both of us have approached this in different ways, is we saw the industry unbundling in pretty interesting and significant ways, or not even that it started to do that, but that. That was what was going to happen. Is that because for all of legal history, all law marketing and operations and litigation have happened inside of the same office.
[00:09:46] Speaker B: Well, yes, but who was on that panel?
[00:09:50] Speaker A: Top dog. Yeah.
[00:09:52] Speaker B: And no one. We didn't know who top dog was. I mean, maybe we had heard of him, but, like, his operation was very, very small. This was December of 21.
And now, like the. The top dogification of case acquisition is
[00:10:04] Speaker A: like a thing now is a thing. But even today, I don't think that we've even seen the S curve finish moving upward. Yeah, I agree with you. That's. People are talking about him all the time now. I don't think that people are actually making that bet as often as they are talking about it, but we started to see that. We saw James Helm, we saw some lawyers getting very successful on YouTube. And also one of the things that struck me was influencer marketing had become massively successful in almost every other vertical. And no one is doing it in law. And the few people that were successful on social media in law weren't using that to drive demand into law firms. And so what you have are fully verticalized law firms over here. You have successful influence on the influencers over here. Digital marketing is becoming more sophisticated. There's really like a couple people who are even like, thinking about this. And then it turns out that we're doing this thing called referrals where you can actually have those two things, the supply and the demand and the operations split out. And. But that also was being run on Sprint. I mean, I have told the story a million times at this point, but the day that I started for Josh, I got a print out of a faxed report from someone's system.
[00:11:17] Speaker B: It's not a print out of a fax. That's what a fax is.
[00:11:20] Speaker A: I don't even know how faxes work.
[00:11:21] Speaker B: The fax is a print. I don't even know if it was
[00:11:24] Speaker A: in 2019 with a list of referred cases. This is 2019. We have Google sheets, at least an email saying, here are the referred cases that we sent to the firm. Give us status updates. And that was my first indication that something was not working in the back office. And so all of those things together, as we're realizing, hey, this business model that we're in isn't working.
We're going to have to go jump into the next thing. That was the next thing. I mean, we didn't have a fully formed idea of it, but we were both starting to work on what is an unbundled law firm look like and how does that work?
[00:11:57] Speaker B: Yeah.
And the world has changed so much. I was talking to an acquaintance last week who said that non lawyer YouTube creators are getting a $40,000 flat fee payment from Morgan and Morgan for running an ad read on social media addiction. That. That wasn't happening four years ago. That probably wasn't even happening two years ago.
[00:12:20] Speaker A: No.
[00:12:21] Speaker B: Yeah.
[00:12:21] Speaker A: No, not even. So, so you want, you want a
[00:12:24] Speaker B: social media addiction case or you want some other mass tort case? You, you are now competing with like the. The biggest budget firm in America who can pay a fee you're not willing to pay to a creator with reach that you're not able to get to. To monetize the parasocial relationship that that audience has with that creator. It's. It's a different world we're living in.
[00:12:50] Speaker A: Yeah, absolutely. And one of the things that is under the surface of all this is that this influencer marketing is inherently national, even international.
[00:13:00] Speaker B: Yeah.
[00:13:00] Speaker A: Personal injury law firms writ large. There's only one or two that are maybe a couple more that are truly national. And so it's really this blind spot where you don't get the payoff for doing any kind of national advertising unless you're like Morgan and Morgan, you somehow have 50 states of. Of coverage. And so that was this thing that we saw really early on. Let's talk about the first way that we start to address it because I love, I love the story. It's. It's become very successful. Let's talk about Eagle team.
[00:13:32] Speaker B: Yeah.
[00:13:32] Speaker A: Love version of it. And I'll fill with mine from the tech side. But you tell how.
[00:13:37] Speaker B: Yeah, let me tell the human side of it.
[00:13:39] Speaker A: Dude. Wow.
[00:13:40] Speaker B: I'm sitting right here. We went to that conference. We met this lawyer who said that every lawyer should have a YouTube channel. His name is Tommy Kirker and he's the K in my current firm. I shouldn't say current firm. Wow. That's hard. In my firm, Eksmith. So we're. We became law partners and, and very good friends. He kind of took me under his wing and trained me on how to get YouTube going. Like nine months after we met, I went to a YouTube conference with him and ran into Legal Eagle, who, if you watch Law Tubers, you know who he is. He has about 3.9 million subscribers on YouTube. He now has four or five lawyer creators who work under him on his platform. They probably post three videos a week. They probably are getting more than a million views a week. On YouTube. He and I met at a time when Lexamica was not ready to pull out of the box yet, but ready to at least test. And so the thought was, let's take your audience, which trusts you and which has legal needs, and let's apply the power of lexamica to it and see if we can create value both for the consumer, for Devin the YouTuber and for Lex Amica, who. Who needs some leads running through it to figure out how to make it work.
[00:14:58] Speaker A: And it was an incredible jumping off place.
[00:15:01] Speaker B: It was a win. Win, win.
[00:15:01] Speaker A: Yeah.
[00:15:02] Speaker B: Which is another win. So it was a true. It was a quadruple win. Yeah.
[00:15:05] Speaker A: And on the, on the technology side, this was a couple months after we had officially gone to work on Lexi Amica. So there was not a whole lot there technology wise. And in retrospect, one, it felt like, well, this is an amazing opportunity. We're gonna run at it. Let's go do this. And then sitting in this chair three years later, I'm like, well, we are completely unprepared for that opportunity. And if you're a tech entrepreneur, I. One of the things I tell you is like, never over build. Like find the use case and then figure out how to make it happen and then go build the technology. I mean, telling you it was zapier Google sheets, some broken stuff that we had that our first engineer was rebuilding because our contractor didn't build anything that made any sense. And so Josh is pitching this like it's a full fledged company.
[00:15:51] Speaker B: Yeah.
[00:15:52] Speaker A: Like we got it on lock. And I'm over here being like, I can definitely make this up, whatever it is that we have decided that we need to do here.
[00:15:59] Speaker B: Well, you're trying to coach potential tech entrepreneurs. That's not me. My version of it is get really enthusiastic about what might be built and then go talk about that, which is what I did. And then you built it.
[00:16:11] Speaker A: And then you built it. Yeah, that's right. Absolutely. Build to it. And that was an awesome jumping off plot. I mean, one, Devin already had over
[00:16:19] Speaker B: a million subscribers, that he had 2.5 million subscribers. However, he wasn't running a law firm that had a certain expectation for how you would monetize the leads that they had. So everything we brought him was upside.
And so there wasn't. There was no pain in Eagle team for Lex Amica having growing pains.
So it was really, it was, it was Fantastic.
[00:16:46] Speaker A: We went 0 to 1 on both sides of let's figure out what it means to have a truly marketing only law firm and this was organic. I mean, Top Dog did something really spectacular, incredibly scalable, paid and social. But Dev, I mean, you guys on Eagle Team, like, you're the only truly organic law firm that is out there even to this day. There are a couple other ones that are, that are getting started, but you guys, you guys built that. No one else was doing that before.
[00:17:18] Speaker B: Yeah, we're not the only one. We were the first one. I mean, the reality is that Tommy Kirker was getting organic leads through. He didn't have a system to make it run on his YouTube channel. Attorney Tom, go check him out. I mean, he needs to start posting again, but he didn't systematize it. But he, he was creating great value off of it. And then I started another firm called Bites Law Group that's connected to a YouTube channel called Legal Bites. Go check her out. She's fantastic.
[00:17:41] Speaker A: And yeah, but you get.
[00:17:44] Speaker B: We.
[00:17:44] Speaker A: I mean, we invented that model. Yeah, we really, we really did.
[00:17:48] Speaker B: Which is crazy.
[00:17:48] Speaker A: Figure it out as we went it it.
[00:17:50] Speaker B: We might look around in eight or 10 years and say this is all that's left.
[00:17:54] Speaker A: Yeah.
[00:17:54] Speaker B: Like there might not be billboards. Like if. No, people aren't driving their cars. You might not want to spend so much money on billboards. I don't know if people aren't watching TV because everything is streaming. I don't know. It's just going to be a different world is.
[00:18:06] Speaker A: And more and more lawyers are starting to do this, which is organic social media. And law firms are also doing more of influencer paid advertising because it is this, this thing that more and more eyeballs like YouTube is now surpassed every other type of content in terms of watch time. And it's only growing.
[00:18:27] Speaker B: People are putting ads, lawyers are putting ads in creative places. YouTube is no longer a creative place for a lawyer.
[00:18:34] Speaker A: You can't take your shirt off on the show.
[00:18:35] Speaker B: No, but I am. I was at a conference yesterday in Texas and drinking coffee all day at the conference. You know the vibe. Take a trip to the urinal. I don't know if you guys can see. This is a photo that I took while at the urinal. What is that? That's an ad on top of the urinal that says, tired of pissing your marketing dollars away.
And it's an ad for a fractional cmo, a sticker on the urinal, that kind of guerrilla stuff. I mean, we saw Morgan put an ad in the middle of a WWE event thing and that was lucrative for them. And like lawyers are. They're figuring out that you can go run ads in some pretty weird places. Doesn't have to be on a urinal.
[00:19:17] Speaker A: But sweet James on Whistling Diesel's channel.
[00:19:19] Speaker B: Yes.
[00:19:19] Speaker A: Like, that was a highly effective ad. Like I know enough from background with them that that worked. And that was blowing up a Cadillac in the middle of a Tennessee field. Like, that's the ad. And yeah, it's unrelated to.
[00:19:32] Speaker B: Do you need a lawyer?
[00:19:33] Speaker A: Absolutely.
[00:19:34] Speaker B: It's. Are you excited about the content that you're watching? Yeah.
[00:19:37] Speaker A: Reaching demographics that aren't going to be reached with traditional advertising too. Because Whistle and Diesel is a young male audience that is not going to be paying as much attention to billboards. So it is the future and this is the direction it's all hap. That it's all headed. So look, Eagle team at a high level, I know you can't share the specific numbers. Is it still working? We're three years in. Is. Was it a success?
[00:20:01] Speaker B: It is, yeah. I would describe it as a raging torrent of success and I'm so glad that we did it. I feel just so blessed, so fortunate that that all came together all at the same time. And what's so funny about it is like, you know, I was, I wasn't like, I was, I was at the beginning of YouTube. At the time I probably had like 2,500 subscribers. Could hardly get 3 or 400 people to watch a video at the time. But like the very fact that I was in the space allowed me to have a conversation with him. He's the biggest person in the space by a mile. We ended up as business partners and I don't know, it's just. I would encourage, not to sound like Tommy Kirker, but I would encourage everyone to like get into social media and figure out like what platform works for you and start creating content. Because content creates relationships and relationships create value.
[00:20:50] Speaker A: 100%.
This is why we're doing this now. What, what are the takeaways? If you're running a law firm now, you have a hundred people, you have a multi state firm, but you're not national. Like, there's, there's some real friction there between that and influencer marketing.
[00:21:09] Speaker B: I mean, yeah, there isn't for me because to me it's super simple.
You, you capture as many leads as you can, you keep them internal for the places where you have operations, and then you use Lexamica to put those other leads to trusted partners. Like, I mean, like, I sure I don't want to come on your show and like pitch Lexamica, but like it's really straightforward. I'm literally doing it off of two other people's platforms. It's not rocket science. Maybe it was, but now it's like super easy for us.
[00:21:43] Speaker A: Yeah, it's, it's.
And where is the industry? Have we reached maximum de verticalization?
That's a chunky word where the marketing is separate. The marketing firms are separate from like look, we had ABs come and there's been a measure of success there. Are we going to continue to see more people who are just doing the marketing and more people who are being fed by those marketers or have we reached kind of the peak of this, do you think?
[00:22:06] Speaker B: I think we're like 2% of the way in.
Because if I'm, if you're saying like close your eyes and imagine the future, what does it look like? I'm saying that the marketers are going to use AI and AI enabled tools to keep leads for as long as possible before they have to share them across the finish line so that they can capture as much of every fee that they generate as they possibly can.
And, and then that increased margin is going to attract more people into lead acquisition which is going to drive up the cost of it. I don't know, I just think it's, it's going to get crazy for a
[00:22:45] Speaker A: while and I am seeing too, everything you're saying is true but also with more private equity roll ups coming in that's creating more national platforms and national platforms are a great fit for this type of marketing. It's, it's, it's, it's happening right now, this year as we speak. And so if you're in the mid market or even top market inside of a couple of states, like you have to figure that piece out in some way or another. And there's more opportunities now for people to create these scaled marketing platforms. It's, I mean I'm, I hear a lot of these conversations but what people are doing, and I don't mean this as like it's mind blowing, like the people that we're working with right now that we can't talk about and the way that they're marketing for cases would actually blow your mind. Yeah, it's, I mean it's, it's a different world. Different world.
[00:23:38] Speaker B: In every market, wherever you are, you have competitors that you don't know, that you'll never see, who will never put a foot down where you are, that are taking cases out of your docket. And it's true that they're not going to get A lot of your personal referrals, they're not going to get a lot of your repeat business.
But everything that's not like based on relationship is fair game. And they, they probably will get most of it.
[00:24:02] Speaker A: They'll, it's, it's not death by a thousand cuts, but there's a lot of little pieces here. And the thing to be aware of is that the ground is, is shrinking. There's a finite number of claims. We know that self driving cars over time are going to make that number of claims smaller. So the question becomes if you want to grow your business, you have to figure out how to work with those people that know how to market really effectively and understand that. I agree with you. We're just scratching the surface. There's not even an app based law firm yet, which is crazy to me. Like this is a huge opportunity for someone to create just an app that lets you hire your law firm and talk to the firm. And I'm not talking about the apps that like give client updates. I'm talking about a app first client experience. Like I am still kind of shocked that nobody has done this or 2026. We have Amazon, we have Netflix, we have all of these things. And still like to me that's an indication that there's a massive amount of headroom for all of the industry to move forward still.
[00:24:58] Speaker B: Yeah, I just don't see a world in which these big tech companies like Amazon or Anthropic or someone else doesn't create that app. I don't think that app's going to come from legal. I think that a lot of us are real content with the margins that we have and we have good businesses and we're going to keep doing what we're doing and we're going to get completely upended when Google or Amazon builds the app that you're talking about.
[00:25:24] Speaker A: Yes. My challenge is, I think the safest thing right now is to do the things that feel the most uncomfortable. Find new ways to market new people, to partner with new technology, to leverage. There's never been more opportunity right now, but it's all outside of the comfort zone of what the industry's looked like for the past 20 years.
[00:25:40] Speaker B: Yeah. And it's hard for me. I'm not arguing with you at all. You need to do those things. No, I disagree with you. I would say, and also it is not too late for you to go build your audience on some social media platform so that you can have a relationship with people that doesn't ever get mediated by a a big app or a larger competitor that's not local to
[00:26:06] Speaker A: you, I 100% agree. The idea that these things are too far and it's too late to. To do it. It's not even close to being.
[00:26:16] Speaker B: If I can succeed.
I mean, can. Can I get it? Can I go over there and get it?
[00:26:21] Speaker A: Yeah.
[00:26:21] Speaker B: Okay. I'll be right back.
[00:26:22] Speaker A: All right.
[00:26:22] Speaker B: This is exciting to me because I've been grinding on YouTube for a while. I haven't opened this box because I have someone who works really hard on the channel with me. I'm going to open this box tomorrow back in the office. But this is my a hundred thousand subscriber play button that we get to hang up on the wall. And if I can do that, anyone can do it.
I mean, this.
[00:26:42] Speaker A: That may be true also. You've worked really, really hard at it, but you started in YouTube two years ago, three years ago.
[00:26:50] Speaker B: Yeah.
[00:26:51] Speaker A: YouTube was huge then. You could. Josh could have said, hey, it's too late. Yeah, this. It's already the biggest thing. Like, it's already. No, like, there's so many people that. That are looking for content. Everything's growing. Josh, it's been awesome having you on the show.
[00:27:06] Speaker B: It's already over, and there's no one listening at this point. They're gone. They've already gone to start their YouTube channels.
[00:27:11] Speaker A: That's right. A lot of good takeaways here. I really appreciate being on the show. Look, we'll have you back on. You're gonna have to hit, like, another milestone, though. Like, 200,000 subscribers.
[00:27:18] Speaker B: I'm happy to do that. I'll be back in a month then.
[00:27:21] Speaker A: There we go. Thanks for being on the show.
[00:27:23] Speaker B: All right, see you.
