One of the hardships entrepreneurs face is solving problems that involve legalities. That is why it always comes handy to have a relationship with a lawyer even before you end up in a crisis. As a Ziglar Legacy Certified Trainer and Board Certified Attorney, Scott Reib knows the importance of having a team of professionals in your business, and he gives us the reasons why. Scott talks about his journey from being a sales representative to becoming an attorney, sharing how he has navigated through insurmountable problems with grace. Scott talks a little bit about the Access Plan, a system he created to make business legal services and advice available to thousands of small businesses everywhere.

Obtaining The Right Professionals For Business Legal Services with Scott Reib

My guest is a Ziglar Legacy Certified trainer, a Board-Certified Attorney with several years of experience and he has navigated seemingly insurmountable problems with grace and good humor. His focus is working with small business and has created the Access Plan, a system to make legal services and advice available to thousands of small businesses everywhere. Welcome, Scott Reib.

Thanks for having me.

My pleasure, Scott. Give us an idea of where you started. How did this all begin for you?

My journey began in Tulsa, Oklahoma in 1991. I was hired as an independent sales representative for a major telecom company to be their outside sales rep to sell add-ons for their phone systems, which in ‘91, meant voicemail modules. The modules that you could do the phone trees where it’s styled push one for sales, push two for service. That was brand new stuff back in 1991. That’s what I was doing. I found a way in their computer system to greatly increase the chances of their customers on renewing their warranty plans. We started sending those out and selling them at a very rapid rate and making more money than then my 23-year-old self-thought was possible.

We got a new manager and they decided that they were going to take what I was doing, make it their own and give it to a minimum wage person. They breached my contract and sent me out to Poteau, Oklahoma which is southeast of Oklahoma. I’m not sure if in 1991, they even had phones. I very quickly figured out that they were trying to show me the door. I was frustrated that I’d been taken advantage of and decided right then and there that that wasn’t going to happen to me again. I took the LSAT and applied for law school and then headed off to the University of Oklahoma in the fall of ‘93.

Spoken like a true entrepreneur. Entrepreneurs have a problem, there’s no way to solve it that they see until they figure out the best way to do it. For you, the best way to solve this problem was to become an attorney and prevent others from getting into trouble the same way you did. During the years you were selling those systems, I was buying those systems. I built a software company in the late ‘80s and early ‘90s. In our nine-year history, we had run through three complete phone systems. We had outstripped the capabilities one after the other. Our final system was an almost $300,000 system. It took up a whole room and consumed. It must have been thousands of watts of electricity every single day to keep that thing running. Now it’s all in the cloud. Who needs those things anymore? It’s a great world. What I love about your story is the fact that you had the perseverance first to solve a problem once you felt like you were unfairly treated, then solve another problem. Let’s take it from when you finally graduated law school and you became an attorney. What was the first type of work that you got to do?

I was hired by a federal civil litigation firm in Texas. We were doing very high-end copyright and trademark litigation in the Eastern District of Texas federal courts, which sounds exciting until you get into the work. What that means is that you sit on conference calls with engineers talking about things that you don’t understand and don’t care about and you feel like you’re not helping anyone. That was the first thing I did. The highlight of my day was I would get to walk from our office three blocks to the federal courthouse to check for any filings on whatever the big case that we were working back then because you couldn’t check that stuff electronically back in 1996. I had to wear a suit and tie every day because I had to walk to the federal courthouse. I would sit on phone calls talking about things that bored me to death.

You get paid for the value you created. Click To Tweet

That was the start of my career. I was pretty good at litigation. I learned how to do that stuff. I know how to take depositions and present evidence in court. It wasn’t satisfying working for the Fortune 500 companies doing that high-end stuff. I quickly pivoted and found that we had in the firm some personal injury cases where I got to get my hands dirty. I talked to real people and helped them solve real problems. The great thing about it was that you got paid for the value you created instead of how many hours I billed. I had this sheet of paper on my desk that I had to write down every half hour of time and report it to the managing partner every day so they could make sure I was spending enough time on billable work. That wasn’t fun.

When I worked on the personal injury cases, there was a contingency fee. The faster I can resolve the case, the more money the firm would make, the more money the client would get and the more money I would get. That all made sense to me. That was a lot more satisfying. I started focusing on that. I ended up getting asked, after working through a major catastrophic injury case, to join another firm that did more of that work for real people, solving real problems. I was much happier for about three years doing that.

While you were keeping track of time, are you telling me that you didn’t use Timeslips?

We had paper time slips.

You didn’t use my software, though?

No. Someone in the office had Timeslips and they entered it into the system, but all the attorneys had a paper that we had to fill out. I had to fill out those, then turned it into the billing clerk and that would enter into your software. I had to also keep this running total every day of how I was spending my time to give to the managing partner.

The revolution in the legal community started taking place around 1990. That’s when PCs became cheap enough to put on lawyers’ desks. Up until that point, many of the older lawyers would regard keyboards as women’s work. That was the back office stuff. A lot of the progressive attorneys at that time were getting their own computers. They were loading up Timeslips, keeping track of their time, loading up all their legal search stuff and connecting up through dial-up to those databases and doing research right from their desk, which was crazy back then. That was so new and innovative. Now it’s as normal and common as can be. There you were, ambulance chasing just like my brother-in-law and all of the other folks that I love and hold dear. I have a lot of attorneys in my family. They’re making great money doing it too. There’s nothing wrong with that and helping a lot of people. Where did the transition finally take place for you?

FTC 141 | Business Legal Services

Business Legal Services: The faster you can resolve the case for the client, the more money the firm would make. The more money the client would get, the more money you would get.

 

In 2002 and 2003 in the state of Texas, the tort reform wave hit. I could see it coming. Everyone kept saying, “It’s not going to pass.” I knew it was going to pass. I kept telling the partners in the law firm that we needed to diversify. I had a broader experience base than the other lawyers in the firm because of my business background. I started diversifying, even though they don’t want to. I started doing business transactions. I started taking business litigation cases. I started billing clients by the hour again. I also started to do family litigation, divorce and child custody. The way I got that business was I started running ads in the classified section of the local newspaper, doing $500 divorces, which sounds crazy to me now. At the time, I was getting calls from people that were saying that other lawyers in town were wanting to charge them $2,000 for a divorce where they had everything agreed. There were usually no kids.

It was just pots and pans divorce. Everything was agreed and they were trying to get $2,000 out of these people. I decided that they didn’t need to get robbed at the same time they were getting divorced. I decided I can do it for $500. I started running those ads and it appeared that it was a lot more than the phone calls I was getting one of those divorces. All of a sudden, we had 20, 30 at a time that we were doing on those divorces, which wasn’t hard work. It wasn’t a whole lot of money, but it enabled me, about a year and a half later, to exit that law firm with a client base. The way divorce works is that you do the initial case, then they get into their divorce about a year, then they want to change something. They started calling you again. By diversifying what I did, it enabled me to have a client base to start my own firm with when I did that in 2005.

There’s that entrepreneur again. I feel like that’s what I would have done too because you had the vision to see that that $500 initial fee would lead to building a base of clients. That’s just terrific. When you went to work for that law firm, did you sell them a phone system?

No, I did not. I did not have a relationship to do that. No, but it would have been great.

I know. It just crossed my mind. You could have double dipped there.

I did run a project and brought in a new phone system because what they had was antiquated. Since I had the background, I was able to put in a very state of the art system for 1996.

I know where you’re coming from. At this stage, what I want to talk about is we have a lot of people in the show that are in business. They’re small business owners. They’re people who are about to become small business owners. There are those who built a sizable company already and they are tuned-in because we bring brilliant people on who share some incredible wisdom. From you, Scott, what I’m looking for is a solution to the problem that we started our introduction with. How can we stay safe? How do we keep ourselves from making the mistakes that get us into legal binds later? Where do you start?

Start a relationship with the right professionals. Click To Tweet

You start with a relationship with the right professionals. That is the key. It’s a power move for any entrepreneur to have a team of professionals that know the things that you don’t know. I’m going to start with the most important, which is legal. You need to have the relationship with a lawyer and you need to have that done before you end up in the crisis. You never want to buy services when you’re in crisis mode. You want to have that relationship nailed down. I would prefer it to be a subscription-based model where you have a set fee for that access and advice. Even if you do the old-fashioned deposit money and they’re going to bill you for it, at least have that nailed down in advance and have a relationship with them so that they know you and you know them. They know how your business works and are ready to jump in and help you solve a problem quickly, rather than a long, dragged out battle where they’re trying to figure out what’s going on. That would be my first tip. The second power strategy that I would say that they should use is what I call the power of systems. You have to have systems in your business so that your business isn’t people-dependent.

Those are two excellent tips. When I started my first business because I had a partner, the first thing I needed was a partnership agreement. The other thing I needed was a software licensing agreement, which was a new contract back then. I went and sought out the guy who wrote the first software legal agreement, software licensing contracts for digital equipment corporation. I was lucky enough to get an introduction. I spoke to him briefly when he said to me, “I’m going to be retiring soon. I’m going to introduce you to my associate here in my office.” That individual became our attorney. If you have this experience, I guarantee you’ll never forget it.

Our relationship was not just lawyer to client. We became friends. I would call him for advice. That was outside the scope of whether or not a contract was properly written. I would call him for advice on how to negotiate, how to structure things, how to deal with people inside the company because this guy had so much wisdom and so much skill. I highly recommend that you follow Scott’s advice. If you don’t already have trusted legal counsel, get it. These days, Scott, your second suggestion is probably more of an automatic standard for most companies these days and that’s to put systems in place, wouldn’t you agree?

I would agree that it has become more standard. I know from experience what happens when you don’t.

Are you talking about specific types of systems? Why don’t you elaborate?

I’m talking about generally making sure that everything that you do in your business has a system. For instance, in our Access Plan that you mentioned, we have a system for how each appointment is scheduled, how the reminders go out. We’re using software to automate those, but there’s a checklist that the coordinator for that program goes through to follow the system. If I bring in a new coordinator, all they have to do is follow the system. They don’t have to have any skill. They just have to have the ability to follow the checklist and watch the videos on how to use the software. A system is a group of parts that will accomplish the goal. Every business needs to have many systems that all work together to accomplish your overall mission. I learned that the hard way back in 2014. When I was two years into the Access Plan, I was doing very well with it. I still had a good litigation practice. I had six full-time support staff. I had two other full-time lawyers. I thought everything was going well.

I was spending most of my time out meeting people, solving problems and bringing them into the firm. I was having a great time, but everything I built was all people-dependent. I went on vacation and three days into my vacation, I got an email from the lawyer that was left at the office. He was leaving effective tomorrow. “Here’s a list of all the cases I’m taking with me and attached are the resignations of the staff that are leaving and good luck.” I was very ambushed. One of the bad things about a law firm is lawyers can’t do non-compete because clients can go wherever they want to go. We can’t track them.

FTC 141 | Business Legal Services

Business Legal Services: You have to have systems in your business so that your business isn’t people-dependent.

 

I was sitting there in California with my family. My boys were then fifteen and twelve. We had this family vacation, having lots of fun at Universal Studios and I had to decide, “Am I going to end this vacation in the middle and go back and fight over this business?” or “Am I going to finish the vacation and then go back in and deal with it?” I decided that the vacation was more important. I set up an answering service remotely. I had to do that because when my eighteen-year-old receptionist showed up that Monday for work, no one else showed up and she left and was never heard from again.

I set up a remote answering service and then finished my vacation and walked into the office on June 4th. I had about 2,000 square feet at that time and it was just me. I was back. I had fewer people than when I started my firm because I started with two people. I had to figure it all out. I didn’t know how to run credit cards. It was amazing what I didn’t know because I had become so people-dependent and there was nowhere for me to go. There wasn’t a binder that had “Here’s the checklist for this.” I didn’t have that. Everything was based on people. I had to do a couple of things. I had to figure them out. As I figured them out, I would start documenting them. I should have known better. I was paying coaches at that time several thousand dollars a month, who were telling me about systems and I wasn’t implementing what they were telling me to do.

All of these things that happened to us, like what you described, later, it turned out to be blessings. Where was the blessing for you here?

There were several. There were some direct blessings that when everyone leaves, your payroll drops tremendously. My payroll had dropped. I knew my costs were down. I then did what would be the opposite of what everyone would think you should do. I increased my prices, which was part of my salvation. Everything I did was worth more and it costs less to provide. I had to start. I started building my systems. It took me a little while to finally get the right people back on board and everyone in the boat rowing with me. I learned that as people exit and we still have people.

I had an employee leave in October that had been with me for a lot of years. When she left, I stepped into that role for two weeks and was able to see all the holes in our systems. All the things she was doing that I didn’t realize she was doing and some of the crazy things she had to do. I built systems and then I brought the replacement in. They were able to come on faster and get up to speed very quickly. I now have the value of understanding what those positions do and what systems they needed. I wouldn’t have known how to do that had that not happened to me in 2014.

Clouds have silver linings. In this case, yours was a very valuable lesson at an earlier time that gave you the ability to potentially head this off again in the future. We had something called job books, which are probably like your systems. What we did is every position, the person responsible for that position had to build their own job book. The job book was nothing more than a Word doc at the time. These days, we use learning management systems but it was a Word doc, which literally documented every element of the job.

We would periodically review those for completeness and issue bonuses if they were accurate. We would literally take a new employee, sit them down with the job book. We have them go through it all, then at the end of the exercise we’d say, “If you find anything missing and update it, there’s a $500 bonus in it for you.” They got excited and they found things that weren’t in the job book and they put them in there and that changed our world. That’s exactly what you’re talking about, I would assume. We’re about to get into some very interesting discussions. Scott, I know that you have a very valuable giveaway. What is the name of this giveaway that you’ve put together for us?

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How to Create Binding Contracts with your Email.

I didn’t know you could do that. Maybe you can give us a little preview. What’s that about?

We’ve been talking about all the technology improvements and things that have happened in the business world. A digital signature isn’t just what we think of when someone sends you a contract and you type in your name or you use your mouse to sign it. That is a digital signature. The statutes for digital signatures says that a reply to an email is the equivalent of that signature. If we’re using emails in our daily business to discuss a transaction, rather than have a handshake deal where we’ve talked about it over the phone, my suggestion is that you use the white paper that we talked about, How to Create Binding Contracts with your Email.

Follow the steps and include certain things in your email discussion. There are a few basic elements that if you put them in your email back and forth with the other party, then you’ll have the basic bones of the agreement. What I’d love for you to do after that is go to your lawyer that you already have a relationship with and say, “Here’s the agreement that we’ve got via email. Would you put that into a written document? Memorialize that for us.” That would be a great step, but you don’t have to do that. Your email record, if you have these details in it, would be very sufficient to go into court with and prove your case if you follow the steps in this white paper.

Scott, thank you so much for providing that. I know that I will be one of the first to download that because it will certainly benefit me. The issue that seems to come up these days, at least from my experience, is people have a conversation over the phone and reaching some agreement, then they document it with email. At that point, when they send those emails to one another, the conversation continues. That’s what the white paper will do. It will help us understand specifically what we have to say in those emails to make sure that it is treated like a contract.

You want to have words or specific language at the tail end of that negotiation that summarizes that these are the terms that we’ve agreed to and this is our final agreement.

I don’t want to give too much away, but this is a great giveaway. I urge you to take a look at that. Let’s get into this thing that you called the Access Plan. There are lots of different plans out there. There’s a $29 a month plan. What would you say is the distinct difference between what you are offering and with so many of these other budget plans offer?

Business Legal Services: You want to have specific language at the tail end of a negotiation that summarizes the terms that you’ve agreed to.

 

Our plan are those plans that I would say are on steroids. There are benefits to almost all of those plans. They’re better than the nothing. What we do is form a relationship with the clients. It’s all about the relationship. You described the relationship you have with your lawyer where he’s a trusted advisor, not just for legal-specific questions, but questions that are tactical. Question that’s maybe your negotiation strategy, a question about, “Is this a good deal or not?” If you have a relationship with a lawyer, you can run those things through them and then they’re able to spot mistakes that you might be walking into before you make them. An example would be that all of our Access clients have the ability to have us review every contract that comes into their business before they sign it.

The way that works is they email it to us or upload it into our support portal. The team reviews it. We put together contract memo that walks them through the concerns that we have. They can get back on the phone with us and discuss it if they want to or they can make a decision. A lot of contracts are take it or leave it. If it’s a take or leave it contract, you just have to make a decision. Is it worth the risk that we’ve outlined? We had a client out of Florida, he’s in the fitness industry. He’s pretty well known and does a lot of fitness modeling type of gigs. He had a contract come across that he had signed many times before. Before he signed it, he went, “I had signed up for Access. I can have Scott look at it.” He sent it to us, we did the review process and sent it back to him and he said, “I can’t sign that.” We ended up saving him $20,000 by not signing that contract.

You also rewrite the contract to cover the changes that you talked to your attorney about.

If it’s a contract that we feel can be rewritten, it’s not with a Fortune 500 company or someone that won’t negotiate, then we make suggestions to revise it. If they want us to deal directly with the other party, then we do that as well.

In your Access Plan, if I wanted to call you and talk about something other than a contract, for example, I’m having a problem with an employee or I’m having a problem with a vendor, can I pick up the phone and call you and not be charged anything extra?

You can call my cell phone. You can send me a text and say, “Scott, I need to talk to you.” If I’m not available, another team member will call and then we talk about your problem right then. If we needed to schedule another call because we need more time, that happens. We handle those things on the fly a lot. You hit on a big one that happens a lot is, “I need to fire somebody. Scott, I’m scared. I don’t want to do it wrong.”

I’ll tell you the truth. It’s probably the one thing I’ve used attorneys the most for over the years. The service you’re providing, it sounds like it’d be a perfect fit for a lot of the clients that I work with. I’m probably going to be recommending this. The thing that I have been talking about these days are getting away from direct hiring and using a Professional Employer Organization, simply to avoid the hassle of going through the hiring and firing process. What do you think about that?

Every business needs to have systems that work all together to accomplish your overall mission. Click To Tweet

I like the PEOs. I think it can help. I don’t think it completely alleviates some of that responsibility. I even have clients that go so far as, “Scott, I need to fire Jennifer Jones tomorrow. Will you come to the office and fire her for us?”

Did you do that?

Sure. There are different leadership styles. There are some people that may be able to run their business very well. They may have the vision for it, but their personality is such that when they get in the room with someone they need to fire, as soon as the person starts crying, they’re not going to fire them. They’d rather give them a hug and make them feel better. If they don’t have someone else in their immediate team to do that, then we’ll step in and do it for them. I’m very dispassionate about it. They’re not my employee. It’s very easy for me to look at the paperwork and say, “You didn’t do what you were supposed to do, so this is the end of the road. Today’s your last day. Do you have any questions?”

I believe that what you’re talking about is the type of relationship everybody should have with their attorney. I had it and I could feel the empathy in your voice when you talk about the relationship that you want to build with clients. For me, and this very important, I found that that relationship became a cornerstone of my business. Here you are offering it for a very low fixed fee with unlimited use, which seems crazy. I can imagine what your hourly rate is. I know in Boston we were paying, and this goes back almost a decade, over $600 an hour then. I don’t know what it would be now. Your services are a fraction of one hour of legal advice from my Boston attorney.

It sounds to me like you’re probably going to be building a big business with this. More importantly, you’re going to be building some great relationships, that’s what’s exciting about this whole process. Before we go on to the next phase of the interview, there’s this whole issue that a lot of us are always struggling with. When we work with virtual employees, how do we treat them? Do we treat them like 1099 or W-2 employees? If they are in this country but a different state, does that make a difference as well?

The answer to the first question is no, you don’t. If they’re a virtual employee and they’re W-2, you’re withholding taxes for them, then you need to treat them like you do every other employee. They’re subject to your employment policies and procedures and they should be accountable for that. On your second question, if they are in other states, then you have to have someone that’s up on the employment laws in that state so that you can make sure that you’re following them. For instance, every state has a little bit different way of handling insurance when someone leaves your employment. Everyone doesn’t do the same federal standard like for COBRA. Texas is different than California. If you have people across the country, you have to keep up with that, which is one place that the PEO that you mentioned can come in handy because they have people in every state, so they are very well versed in that. It’s a very cost-effective way to deal with having people across the country.

I had a client and he had these folks that he was paying under the table. He’s paying them commission only on whatever they sold. I warned him about that. I said, “You must put in place a PEO so that you could isolate or insulate yourself from any problems that might come about.” He said, “Yeah.” He never did it. About a year later, the state agency walked in and said, “All these folks, for all the years that they’ve been associated with you, have been employees. You owe us all of the back taxes, including all of the social security and everything else, including all the penalties. You have to pay it in fourteen days.” Taking care of this stuff in advance is huge. I’m glad we got a chance to talk about that. Scott, we’re at the point now where I’m going to ask you a question that readers enjoy having me ask because it helps us understand a little bit more about you. Although I feel like I have a great understanding about you, I’m hoping we can continue to have this conversation even after this is over. Here’s the question. Who, in all of space and time, would you like to have one hour to enjoy a walk in the park, a quick lunch or an intense conversation with?

I would want to spend that hour with Jesus Christ.

Another check on the Jesus Christ tally. We have a lot of people who select Jesus, and for a very good reason. It would be a very insightful hour. I would agree with that. Do you have a question you’d like to ask him?

My question for him would be why he allows bad things like cancer to happen not to good people necessarily, but to people that would claim that they are part of his family. Why does that happen?

That’s the type of question that only he can answer. Here’s the grand finale question. This is the change the world question. What is it that you are doing or would like to do that truly has the potential to literally change the world?

What I want to do is teach other lawyers how to live in freedom by creating practices like the ones that I have created. It’s with a recurring revenue model where they’re building relationships with clients, providing value to the clients. That then provides them and their family with a repeatable, consistent income that’s not dependent on the billable hour.

One that I myself have endeavored to attempt as well, but not with lawyers, but with coaches. Fantastic work, Scott. Thank you for taking the time to be with me and to help our audience get a grip on what’s going on in the world, with the potential of building a strong relationship with lawyers like you. Scott, you and I are going to talk again. Thanks again for being a guest.

Thanks, Mitch.

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