Rob and Heather Macklin – Blue Collar to Buyout: Legal Playbook Nobody Talks About

There are people who own companies that own a job and

there's nothing wrong with that. There is a great path to being

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enough, that's been a path for a lot of them to to build a

business, employ a lot of people, grow it, scale it and

really give them generational wealth.

Back in high school, if they'd said I want to go be a plumber

and I I think I'm going to make millions, the guidance counselor

would have laughed him out of the office.

Now they're the ones laughing. I was a Defense Intelligence

Agency certified interrogator. We did a bunch of stuff at

Blackwater. That was the best three weeks of

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Again, that is athlete fresh dot shop slash from the ground up

show. Hey there and welcome to From

the Ground Up Show, the show where we encourage and inspire

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shop.fromthegroundupshow.com. Today I am really excited to

have Roberts and Heather Macklin joining me.

Roberts and Heather do not work in a blue collar or

unconventional job, but they help a lot of unconventional

leaders in their capacity as attorneys.

They have particular expertise in mergers and acquisition and

helped our frying our friend Brian Gottlieb exit his

businesses over the past few years.

I'm confident that they will have a great deal of insight and

information that is valuable for those of us that are in the

trades or unconventional careers.

So, Robert and Heather, thank you for joining me.

Yeah. Thanks, Fran.

Awesome. Well, we will dive right in.

We like to start every show just getting to know you guys a

little bit. So do you mind telling me a

little bit about your life growing up and how you guys got

together and what led you to become attorneys?

Sure, Heather, you want to go first.

Sure, so I actually come from a blue collar background.

I was born and raised in the Joliet, IL area.

My dad had many businesses of his own that he started over the

years. He was everything from a private

investigator to a chimney sweep to like a maintenance mechanic.

We had a security company kind of did the gamut of things.

And my mom managed a doctor's office.

So Rob and I met actually in law school at the University of

Chicago in Chicago, IL. And that was many, many, many

years ago. And so we met there.

I got married a year out of law school.

I practiced primarily in commercial civil litigation at a

large firm in Chicago for 20 years.

And 10 years ago we moved up to Appleton, WI for Rob's job,

followed him. I was the trailing spouse.

And once we moved up here, I moved my practice to a small

local law firm. We ended up buying part of that

law firm. We merged into some bigger law

firms. And then in December of 2022, I

left kind of that big law world and I stepped out and I opened

Macklin Law, I Macklin Law and opened it to be a boutique law

firm. In these days, the vast majority

of our clients are in the home improvement construction world.

I do some litigation still, but I use what I've learned over 25

plus years of litigating. You learn what goes wrong and

why it went wrong. And so I now use a lot of that

expertise to guide and counsel clients before they get into

litigation to hopefully actually avoid ever getting into

litigation. Put them in a stronger your

position to avoid that with disputes.

And if they do end up in litigation, they're hopefully in

a much stronger position to resolve it quickly.

That's great man, that sounds like a very interesting

childhood. Is there anything that your dad

didn't do? No, I used to laugh.

I mean, he was sort of your, your Jack of all trades, master

of none. And he loved generating new

ideas. And so he'd come up with a great

idea for a business, and he'd get it started and going, and

then he'd get bored with it and he'd jump onto something else.

So yeah, I got to watch a variety of careers unfold over

my childhood. You know, when he was a private

investigator is often times following cheating spouses.

So he'd bring my mom and I along on stakeouts because nobody's

looking at a family, you know, like, are they following me?

Yeah. And so we just kind of go along.

And so, yeah, when I was a child, I got to got to be

involved in some of those kind of fun shenanigans.

Man, that's awesome. That would be very interesting.

I'm sure he'd be a fascinating guy to chat with.

Awesome. Yep, he was.

Well, Rob, how about you? What was childhood like for you?

Yeah. So I grew up in in Los Angeles,

in the, in the San Fernando Valley.

That's, you know, Capital T Capital V, you know, if you, if

you've watched movies from the 80s, this is the valley family

came like probably half the people in California came out to

California either in the mid late 30s, early 40s, either

either because of the Dust Bowl or from World War 2.

Went to UCLA out there and then, like I said, went to went to law

school, met Heather there. So I was kind of a typical

California kid growing up. I still to this day wear shorts

in the Midwest way too often, probably and flip flops.

And if I could find Maui and sons T-shirts in my size, I'd

probably still be wearing those too.

And so we we met in law school. Heather.

Heather can go like I spent the next 20 years at the same firm.

I I had a bunch of different jobs.

So I started out at A at a very large kind of global M and a

firm named scab Narps doing in a multi billion dollar

transactions. I went from there to a small

housewares and porting companies.

So got to go to England and China to buy basically

everything you see in Starbucks. That's not the coffee, things

like that. So whether it's an espresso

machine, a press, a coffee cup, all that stuff.

I was I was fortunate enough to be kind of be in the Chinese

economic zones really early on, like prior to 911 was was there

when China was still industrializing, like super

interesting times. Went from there to a company

that introduced Blackberries to the United States.

So wireless technology company. We owned a data network and a

satellite and, and did a lot of work in kind of

telecommunications. And then I was in that period of

time, I, I joined the Naval Reserves as an intelligence

officer, did a bunch of training, deployed to Iraq.

I was part of a SEAL teammate at that point as an Intel guy, not

a, not a SEAL, but but an Intel guy doing human intelligence

collections for them. Came back from that, stayed in

technology a bit, ran an IPO, went to a large healthcare

company for six years, did all kinds of M&A there and then took

AGC job with a company called Alliance Laundry.

So if you ever had a, a washer or dryer, if you remember the

brand name Speed Queen, that was the residential still is the

residential brand of that company.

And then they moved to Miami and I didn't.

And so I, I ended up joining Heather at that small law firm.

So then our, our paths crossed together.

So I've been in a bunch of different industries doing M&A,

securities work. I was the corporate secretary

for a lot of these companies. It's a lot of just general

corporal work. And then once I got to a small

law firm, I ended up kind of almost, I don't even know how it

happened. We, I ended up crossing the path

with Brian Gottlieb and that got me into home improvement and

started doing, you know, I what I just sold three companies and

bought one for him. But I'll soon doing deals for,

you know, for Roscoe and Woodbridge and Carefree and safe

showers, all kinds of other guys in the space, Florida window and

door if it's work for them and just kind of really kind of

blossom for Heather and IA ton of work there, whether it's M&A

or TCPA stuff, a lot of employment contracts, a lot of

folks want to give equity to their employees and kind of that

employee equity component always it seems to align with corporate

work as well. And then I kind of got sick of

that, honestly and and wanted to go out of my own.

We, I've met up with Brian's former finance manager, Justin

Hatcher and he and I and his wife Jen started one in fund,

which is a home improvement finance platform.

I think we think it's the best out there.

And we merged with One Click Contractor, which is a pricing

tool last April and I'm on the board of that now.

And somehow along the way, Heather and I ended up starting

a concrete coatings company called BAM Concrete Coatings.

We're in Iowa, Wisconsin and Texas and then have a shower

company that we started really spun off on its own this year,

American Shower company. I hear him here in Wisconsin as

well, doing quite well in that and, and kind of off to the

races. Somehow didn't have any sense of

getting ever in home improvement and just it happened that now in

other countries. Oh, and I also do some

consulting work with, with a few folks at finish line strategies

as well. So we help companies exit.

So any given day I've got a half dozen different e-mail accounts

that I'm monitoring. So it's a little confusing at

times, but I don't know. I almost said like Heather's

dad, but I but I have been in in a lot of industries, not as much

As for me was, but but certainly been been in a lot of different

places. Yeah, I was just going to say,

they say a lot of people pick someone like a parent that they

end up marrying. And those stories have a lot of

parallels there. You've got your fingers in

almost everything from construction to legal to large

corporate man. Is there anything you guys don't

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funny. We, we, we, we do do that, but

but from a legal perspective, we, we do a lot of things for

home improvement folks, but we also, we know what we don't do.

So I'll give you for instance, like we don't do trust in the

states. Like it's super important if you

have all improvement company, there's a lot of things you need

to do. Like most particularly

understand what what happens if I get hit by a bus?

Who runs the company? And the answer is I'm going to

give it to my wife or my husband.

Is it usually a terrible answer and you need to figure that out.

I don't do it. If you call me up and say, Rob,

can you get me a, can you help me with this?

I'm going to go like, here's who I use for my own personal stuff,

right? So kind of knowing what you know

and knowing what you don't know, it's critical.

But we can do most anything on the home improvement side.

We've kind of got that that specialization on on an industry

basis now. Man, you said a few things there

that have me really curious. I know we got to be cognizant of

time, but it sounds like you you join the Navy Reserves a little

bit later in life than most people do.

Yeah. What?

What gave you the motivation to do that, or what led to that?

So that was a post 911 sense of wanting to, to do something to,

to get to get in the fight somehow.

A lot of my family members had been in the Army or the Navy as

well when I was kind of coming out of college, right?

I graduated in 93, graduated law school or city, graduated high

school in 93, college 96, law school in 99.

You know, 90s if you remember back that far was a massive

drawdown in the military. I had friends that actually went

to flight school in Pensacola, FL and one guy in particular was

there for nine months and he flew 7 hours in training.

And they finally just said like, we're going to kick you out

because we don't have any money for fuel at this point.

So kind of the 90s was if you're getting out of those checkpoints

in your life, 90s is not a good time to try to join.

So it was kind of post 911 wanted, wanted to do something

interesting. I actually called the Army

recruited in my area because I figured I'm a lawyer.

They're going to make me Jag officer and they never called me

back. So I'm like, well, who else?

I mean, Navy's Navy's got cool dress uniforms, you know,

Heather, like the dress whites had top guns.

So let's let's go there. And they had this program.

So about half of at least the time, I don't know what it is

now, I've seen something close half of the Navy's intelligence

capability actually wise in the resort.

So unlike a lot of a lot of a lot of reserve units, when

you're in Intel, you actually didn't work on a daily basis.

It's not like you train you actually do stop.

So I, you know, I would spend my weekends, you know, writing

strategic papers, drafting reports, things like that.

It's kind of cool. Like you actually have to do

things. And then, you know, when it came

time that I was going to deploy, you know, figured let's do

something really interesting here.

So, yeah, I, I, you know, you're going to deploy.

It's Iraq's going on. Everyone's going to deploy at

some point. And the unit I was with, we

would have deployed to England. And I'm like, I don't really

want to do that. Let's do something more

interesting. And, and I had found out that

the the Bullfrog. So the Bullfrog is your senior,

most sealed by years. The Navy had started up a

reserve unit called O, and I tried it that was specifically

designed to provide intelligence capabilities to SEAL teams.

So natively, a SEAL team has only two intelligence officers,

just not sufficient. Like it's really, really good.

If you go back to like the 80s, it's Russia and the Seals.

You put 7 or 12 guys on an aircraft carrier and it's like,

OK, we want you to do Marine reconnaissance of this, this

beach or go look at this, you know, go blow up this radar

tower that's in 2 miles inland, whatever.

Like you don't need a ton of Intel capacity.

But when you get into the War on Terror, now your job is to go

find bad guys. You have to figure out who the

bad guys are. And that requires a lot of

intelligence. In particular, you're, you're

taking individuals high value, you're taking individuals off of

targets and you're interrogating them afterwards, or you're

running sources or you're working with locals.

And that intelligence capacity just uses a lot of resources.

So Captain Pete Weichel at the time created this unit, called

him when I tried it, which is reservists.

They sent us off to a bunch of really, really fun training.

So I was a Defense Intelligence Agency certified interrogator.

We did a bunch of stuff at Blackwater where the Seals

trained. That was, that was the best

three weeks of my life. It was just a lot of like

driving cars at inappropriate speeds, shooting every gun of

the inventory and, and, and when the US government is buying new

ammunition, it gets really, really fun for a while.

So we got to do that and then deployed to deployed to Iraq.

So I was gone for about a year at the time, Heather, Let's see,

we'd had my son was nine months old when I left 15 months old

when I excuse me and my, my daughter has just been born.

So Heather, Heather kind of bore the brunt of that.

So thankful to her for her ability to, to, to to watch the

kids. So she took some maternity leave

from her firm at the time. Her God sister stayed with us

and her kids. So they had a, they had a big

household for a while, but I was, I was off in Iraq for, for

six months or so, did six months training stateside.

It was, it was an interesting time and it was kind of a good,

good time to be in Iraq. We got to see really the at the

time, the really the ebb of violence right after the surge

was was in that period. I'm really jealous that you got

to go train with the seals at the Blackwater facility.

That, that sounds like a dream come true to me.

That has been pretty. Cool.

It was it was pretty fun. They had so our unit went out,

we had an FBI guy, two former special forces that have retired

during the training. And what's cool about the ranges

there is you don't have to it's it's weird like if you've never

been in the military and I say the military is afraid of guns.

Like it's weird that like that the Army doesn't like they don't

like guns. They just don't, they don't want

people carrying guns. And so you have the situation

where like you go and you train people and you train them on a

cold range and they can never have their weapons loaded unless

they're already pulling down range.

And you go, awesome, we're going to send you to a rack.

And you can't have your weapons loaded on a base and get a

carrier with you. And then you leave the gates and

it's like, OK, load your weapon and wander around and have a

360° fire lines like you've never trained for that.

And so it's funny like you can't, you could do stuff in

Blackwater that you can't do it on military range.

Yeah. You know, you could run a hot

range, you can do facing movements, things like that.

It's it's very weird in how the military's relationship to to

weapons. Well, thank you very much for

your service. And man, yeah, that's

fascinating. I bet we could do a whole

episode just chatting about your time there in the Navy.

So. Yeah, it was.

It was interesting, Yeah. And it's strangely enough, when

we moved to Wisconsin, the only guy that I knew here was a guy

that I deployed with a good friend of mine and called,

called him up, called Chad up and said, Hey, we're, we're

moving up to Wisconsin. You know, who do you, who do you

know? And he goes, well, my, my

fiance's sister's a realtor up here.

I'm like, that's odd. The last time I talked to you,

you were married, but whatever. So he ended up finding us a

realtor who then became her friends and actually our

business partners in a, in a bunch of different things as

well. So kind of really turned out in

a very fortuitous, fortuitous way.

That's pretty cool, so. I know as lawyers you mentioned

a few graduation dates. You guys have some pretty

extensive education. What does the education track

look like to become an attorney? I'll jump in so they don't have

to listen to Rob anymore for a while.

It can look the path can be different for everybody, right?

Your undergrad can be in anything.

A lot of people go political science or you know, they think

that's the route they need to take to go to to law school or

they do a pre law track. It's not necessary that you do

that. I actually double majored.

I majored in English with a writing emphasis and I majored

in speech communicate. Both are areas that require have

skills that are required in being a lawyer, right?

You write a lot when you're a lawyer and you talk a lot when

you're a lawyer. So that was my path to get to

law school. I know Rob majored in economics

at UCLA. We had a lot of people in our

class. We, we actually had some

doctors. We had one guy who was actually

doing his residency at the University of Chicago medical

facility while simultaneously getting his JD at the law

school. I actually think his, his time

in, in the law school was more when he slept, but he managed

to, to graduate and get his degree.

So he was a really smart guy and you know, you can kind of take

the path anyway. And then once you're at a law

school, if anybody's watching and thinks they want to go to

law school, my biggest piece of advice to you is go to the law

school. That's the highest ranked one

that you get into, because that's really where the jobs

come from, right? They start at the top.

And if you're in the top 20 2530 law schools in the nation,

you're going to have a much easier time finding a job

getting out. We were at University of

Chicago, which was fourth in the nation at the time.

So we interviewed at a lot of different law firms.

I took my offer at a law firm called Barrack Ferrazzano in

Chicago. I was a solid mid size firm size

wise, but we tended to play in the pool with the big law law

firms and that's where I was for 20 years before we moved to

Wisconsin. So you then pick your what

you're interested in. A lot of people go litigation

because that's how they teach. Law in law school is reading a

lot of cases. But there are people who know

they have no desire to be in a courtroom ever, and they find a

different path. So Rob was one of those.

And, you know, he went off into the corporate realm.

We have friends who, you know, went off and became patent

attorneys. We actually have a number of

classmates who are now federal appellate judges.

And we have one sitting on the 5th Circuit.

We have one sitting on the Federal Circuit.

We have two classmates who are on the 9th Circuit.

We have a close friend and classmate who was the solicitor

of Labor under George W Bush. And he also was chief counsel to

Vice President Mike Pence. Like, he came from a class where

a lot of people have done a lot of really cool, interesting

things in the legal world. That's really cool.

Yeah, Sorry, go ahead. For the education itself, It's

it's it's three years, but the first year is really where the

difficult, the hard part is you're going to adjust to it.

And today is I don't, I don't know what law schools are like

today necessarily. But certainly at the time, the

inner Chicago was, was much more traditional in, in its approach

using the Socratic methods. You know, I'll, I'll recommend

to folks, if you've never seen the movie, the paper chase, it's

wonderful movie from the early 70s.

You know, John Houseman. If you don't know the name, you

certainly would recognize him or recognize his voice at the very

least. But you know, most professors

didn't have you stand. But but, but basically it was

here's the case for today. You read it, you come in and the

professor will just randomly call in somebody and tell you to

talk about the case. What do you think?

And then they'll just start asking you questions.

What about this? What about that?

What if this had happened? What if that fact had changed?

Where did it go that people would argue?

So you, you may spend an entire hour in that class and the

professor never actually told you anything.

They would want to make you think and ask questions and,

and, and question your own assumptions and question your

own knowledge. And so people who came in that

were very, very confident that they knew the right answer

oftentimes left befuddled and confused, which frankly is a lot

of a lot of being a lawyer. There is very little in the

legal world where, man, there is a straight obvious answer.

And even if there is a straight obvious answer, if you have to

go to court like Heather does, maybe the judge gets it wrong.

Maybe the judge doesn't like the way you look.

Maybe the judge thinks that you look like their 5th grade

biology teacher that flunked them.

Who knows? And so there's just a lot of

uncertainty in the world. And we, we try to portray that

to our clients. And sometimes you get a lawyer

that says, if you do this, this will happen.

It's absolutely certain. And anytime you have a lawyer or

frankly financial, any of the device that tells you that

they're they're wrong, the people who are very, very

certain about themselves tend not to really understand the

issue. So it sounds like you guys both,

yeah, started pretty early from the very beginning of your

career or your education. We're headed towards law.

When was it that you first became interested in a career in

law and and what caused you to pursue that?

That's I think your assumption was incorrect actually.

I couldn't even I honestly can't tell you why I took the LSAT and

decided to go to law school. When I think back to college,

that wasn't really on the radar. Somehow I took the LSAT and I

did a really had a great score on the LSAT.

And so I was applying to law schools and there was a point in

there where I had senioritis and was like, why am I going to law

school? I didn't, I didn't come in to

college to go to law school. And I went and talked to one of

my professors in the speech communication realm and he's

like, I think you should teach. I think you should go get your

masters and your PhD and you should teach.

And I was like, you're right. So I ran off and I took the GRE,

confirmed that my LSAT score was not a fluke because I got the

perfect score on the logic part of the GRE, which is very much

what the LSAT test is. It's all logic based.

And then I was offered a couple of full ride teaching

assistantships for getting my masters in speech communication.

But if I didn't wanna teach and I had a masters in speech

communication, it was kinda like, what do I do with that?

What am I? If I go to law school, I'm a

lawyer. And honestly, that was kind of

what drove me in that direction. And then I ended up at

University of Chicago and I've met Rob and I mean, I've, I've

enjoyed my legal career, don't get me wrong.

It's just funny, when I think back, I don't can't really

pinpoint a moment where I was like, I'm going to law school.

OK, interesting. I kind of ended up there almost

by accident and kind of get to senior year and I started

throwing in interviews in the Career Center for jobs and like

I, you know, not really sure what I'm doing.

I kind of had no guidance. Nobody's sort of said like,

well, this is the path to go down.

And then I, there was a guy that I used to help out who was a

deep wedding DJ. He used to help out Allen and,

and you know, shut down the like, you know, shut, shut, shut

down, pack up all those sorts of things, hang out, spell them on

a bathroom break, whatever it's going to be.

And he's like, you know, I just read an article in U.S. news

report that like the highest, the highest earning people are

joint JD MB AS like, oh, let's so I started putting in

applications to law school and MBA school And, and then I was

doing an interview with somebody and they're like, you should get

a PhD in economics. And I thought, I don't know,

well, you're Chicago's pretty good for economics.

Maybe I can kind of seek into the, into the program there if I

went to law school there or maybe try to seek into the

Business School. Not really sure.

The law school accepted me the other ones that deferred me.

And so I went and I kind of just like, I don't know, it's kind of

fun the first year, right? I enjoyed the, I enjoyed the

kind of interesting intellectual nature.

You know, Heather mentioned some of our classmates who were

federal judges are well, you know, she and I did both pretty

good in school. And you go to a place like

University of Chicago and you think like I'm not really that

smart. Like there are a lot of people

that are way, way smarter than me.

Now, some of them you wouldn't actually trust to walk your dog,

but that's a separate issue. But like just from like pure

intellectual horsepower, you know, like if you've if you're a

fan of The Big Bang Theory, you know, the Sheldon's of the world

also go to law school sometimes and there are people like that

and you're like, I cannot, I cannot believe how

simultaneously smart and stupid you are.

But so we work. So Heather, ever kind of like

mid, you know, middle of the pack, more average people at the

law school than than some others?

OK, but we still managed to get jobs and make a career of it.

Yeah, there you go. It seems like it turned out

well. Yeah.

You know, especially the the millennial generation, we hear a

lot of stories of people that kind of went to college because

they didn't know what else to do and, and they wind up in a job

that didn't require their education with a, a bunch of

student debt hanging over their heads.

It sounds like you guys maybe kind of did the same thing, but

it turned out really well. How do you look at education?

And you know, how would you advise your kids as far as

education and planning a future career given your experience?

We've, we've gone through this recently.

So we have a son who is a first year in college and we have a

daughter who's a senior in high school.

And our son didn't know what he wanted to do.

He, he has a ridiculous amount of passion for and knowledge

about trains. Like he can talk trains ad

nauseam all day long to the point where I'm just like, how

do you know this stuff? And he'll go out and he'll find

people that he can talk to and ask questions about a particular

that he's researching. We have the National Railroad

Museum here in Wisconsin and Green Bay.

He volunteers there. He does a lot of research for

them to figure out like a piece of rolling stock that they have.

Where did it come from? What's its history?

And he'll just call people and e-mail people.

And but he didn't know what he wanted to do for college.

And Rob knew somebody who their child was applying to the

University of Edinburgh in Scotland was like, well, that

could be kind of cool. Like, you know, I mean, that's.

So he applied there and he got in.

So he's completing his first year at the University of

Edinburgh in Scotland where he's studying history.

And he's one who, when he didn't know what he wanted to do, I

said to him, listen, if you don't know what you wanna do

right out of high school, that's okay.

I sort of look back and I think it's ridiculous, that sort of

thought. We knew what we wanted to do.

And if you need to take time, you want to go to like the local

Technical College. So Fox Valley Technical Colleges

here in Appleton, go there for a year, take a bunch of classes

and a lot of different subjects and see if something grabs your

attention. But the history thing worked out

and he was accepted at Edinburgh.

Now we're at a point where he's actually considering whether he

wants to stay there. He he's done a full year there

at the bureaucracy of the United Kingdom in all of its various

levels has been kind of frustrating for him.

I told him it would be. And so now he's considering

whether he wants to transfer back to an institution here in

the United States. And we've been having those

conversations with him. And we're like, look, you know,

if that's what you choose that you want to do, that's great and

we support you in it. But make sure that it's, oh,

you're not going to regret making the change.

And you know, you're going to have to do some of the legwork

to research and determine what the path is you want to do.

Our daughter, on the other hand, decided about a year and a half

ago that she wanted to be a dentist.

And she did all of the work to to figure out where she wanted

to go and what she wanted to do with that.

And we pushed her on it because we were like, well, that's out

of left field. Why do you why do you want to be

a dentist? But she had good answers.

And so she's now been accepted to Marquette University.

But for both of them, we've always said since they were

little, you know, college might not be the path.

It's not the path for everybody. And it's more important, in my

opinion, that you find a career that you can be happy in, that

you can enjoy doing. You don't dread every morning

getting up and going to the office or going to the shop or

whatever it is you do. The most important thing, in my

opinion, though, to be happy in whatever career you choose, is

to live within your means. Don't live beyond your means.

And so for our kids growing up as the children of two

attorneys, you know, we said to them like, look, if if your

dream is to be something that doesn't make maybe what an

attorney makes on an annual basis, that's great and we

support you. But don't expect to live the

same lifestyle maybe that you grew up in as the children of

attorneys, right? You might have a smaller house,

you might have, you know, an older car, you might not eat out

as much. Whatever it is, just be

cognizant of that. And I would say that's true for

anybody. Even if you're, you know, a

surgeon making, you know, $1,000,000 a year, don't be

buying $20 million homes on that salary because you'll be

miserable because you're constantly feeling the pressure

of having to pay the bills. And then you have the golden

handcuffs and if something else comes along that you're

interested in doing, it's going to be very, very hard to now

step out of that world into a different world because you're

going to feel bound by all those tethers that you've you've made

for yourself. And I don't know if you know, if

you work, you're working with a lot of the blue collar segment

sector. I'm sure you follow Mike Rowe a

lot. I mean, he's obviously somebody

who's a champion of the blue collar worker.

And he once said in an interview something that I he still, you

know, this is a big thing for him.

But this particular turn of phrase that he had really stuck

with me. And he was, he was talking to

somebody. He said, you know, we're sending

kids to college and we're training them for jobs that no

longer exist. And in order to do that, we're

lending the money that we don't have and they're never going to

have a chance to repay. Like it's this vicious cycle of

telling them they have to do this, but not really preparing

them for what that means. And not everybody needs to go

that path. And I think that that's that's

really true even in today's world.

I think it's been true for a long time.

Not everybody needs to go to college to be successful.

And I think right now, you know, we're going to see a real

tipping point in our world, you know, with AI coming online,

right? AI is going to take out a lot of

jobs that are those those careers that are typically and

traditionally thought of as needing to go to college and get

your 4 year degree. And but I don't think AI is

going to be taken out the plumbers anytime soon.

AI isn't going to be taken out the electrician's the HVAC.

I mean, there's elements of AI that will come into those areas,

but AI isn't going to change the, you know, the ring on your

toilet if it goes bad. It's just the reality.

So I tell a lot of people that I talked to now whose kids are in

that, you know, age of trying to figure out what they want to do,

like look into the trades man. There's there is a great path to

being successful in the trades. And I know a lot of tradesmen

who make a really good living and they're very happy doing

what they do. They love working with their

hands. They enjoy the job.

No day is the same. And and they're bringing home a

good wage and, you know, they can afford to do a lot of the

things that they want to do. And then if they're lucky

enough, like a lot of the people that we work with to sort of

create their own business, you know, that's been a path for a

lot of them to build a business, you know, employ a lot of

people, grow it, scale it, and then find that somebody out

there sees value in that and wants to pay them for that value

at some pretty sizable multiples and really give them

generational wealth that they might not have thought back in

high school. You know, I'm sure a guidance

counselor 20-30 years ago, if they'd said I want to go be a

plumber and I think I'm going to make millions, the guidance

counselor would have laughed him out of the office.

And then like, no, sorry kid, you're not going to make

millions. Now they're the ones laughing.

So yeah, oh man, there's some great advice there.

Sorry, Rob, go ahead. Yeah, I know.

It's like you when you talked about taking on the debt load.

I think that's where it's, you got to have a really good look

at the university you're going to, right.

So if you go to law school, to University of Chicago, I have no

idea what the tuition is now. It it may cost you.

Let's let's say you're going to take on $250,000 of loans, maybe

$300,000 of loans if you're going to borrow the money to go

to UC law. But you have a 99.9% certainty

of getting a job if you want it at a law firm that's going to

pay you a starting salary. What's first year at big law

now? Probably 220.

Two $120,000 a year. Like so it's not it's not an

insane calculation to borrow 300 grand so that you can walk out

at the age of 25 and make $225,000 a year with a path

towards making a half million bucks if you're willing to work

hard. Now you're telling me you want

to go to, I don't know, Illinois State and go to law school and

take on that kind of debt and like, it's just not worth it.

There are other places that you can go.

And if you want to go to a small liberal arts college, that's,

that's, you know, charging $75,000 a year for tuition.

If you got rich parents that can afford it, sure.

Otherwise, why would you, Why would you do that?

I, I think you could have amazing experiences and we are

fortunate to be in position to send our son to, to Scotland for

a year. But, but honestly, like that

year in Scotland, even with the travel is cheaper than a than

than the private liberal arts College in town here in

Appleton. We, he could have a, we could

have a great experience, get get an entire semester in and still

come back. So it's really about, I think

being honest with what your, what obligations you're taking

on in the future and where it's going to lead you is, is really

the key to my opinion. I, I just looked it up out of

curiosity while Rob was talking. So annual tuition at the

University of Chicago Law School is currently $85,000 a year.

That's just tuition that doesn't include, you know, your room and

board, your, your, you know, cost of living, meals, things of

that nature. And it wasn't anywhere close to

that. That's, that's more than double

what it was when when we were going there 30 years ago and.

Look, and then you ask, what do you, what do you get for that?

Like what are you getting? You get a great education.

I get it. But quite honestly, and this is

not a dig in your Chicago, but any law school after the first

year, there's not much education happening.

What what you're getting is a bunch of connections.

You're getting access to a bunch of potential employers and

you're getting a check mark by your name that says somebody

else vetted me and found out that I was really smart and a

really hard worker. And that to be, I mean, there

there's there's a whole series of economic literature on this

basically comes down to most economists agree that you don't

actually learn. There's nothing you learn in

college or Graduate School that makes you better at your job.

For the most part, that's a very minimal effect.

What it does is it tells the world that you were able to do

that, that you were smart enough to get into a great college and

that you were good enough and that you were conscientious

enough to stick around. It's a signalling effect.

It's not actually learning anything.

And if you go back 150 years and you go back, let's say you

wanted to work for Thomas Edison, you wouldn't go to

college, but he'd make you take a test and you got to pass the

test to work. And that that's for a variety of

we can get into this later with a variety of reasons that that

now becomes highly problematic under our civil rights laws to

do that anymore and a shift back towards that could help identify

like a really smart 16 year old. I'll give you, I'll give you an

example. The seat, the CTO that we had at

one fund he emancipated from his parents at 16 and would

immediately work for Microsoft, you know, and, and the dude is

brilliant. He's the best, best CTO I've

ever worked with in my life, best program I've ever seen.

But he could do that and somebody who's willing to take a

chance on him like that. So is college the right path for

everyone? No, maybe, yes, but but

certainly live within your means and and understand what it is

that you're buying from college. And if your parents have an

extra half million bucks to give you 4 years of party time or or

seven years of party time depending on how good you are,

like great, but just but consider it that it's a gift and

party time, not not a serious educational experience

sometimes. That's some great advice.

I love that. I really like the, you know,

living be living within your means and recognizing the

choices that you make, that you know, life is more than just

numbers on a check. And when you choose what you

want to pursue and what you want to devote your life to, you're,

you're making a choice that affects a number of things in

your life. And you need to do that with

your eyes wide open and, and realistic expectations.

And some jobs pay more than others and you can enjoy a life

making a lot of money with a high paid career, or you can

enjoy life with a lower paid career.

You just need to be realistic about the choice you're making.

I like that. So I know you guys both left

other practices to kind of go all in on, on Macklin law and

and now branching off into other businesses as well.

What was it that caused you to want to go all in on your own

firm rather than continuing a career working for someone else?

For me was, so I had been at a bigger firm in Chicago and then

I moved to Wisconsin and I was at a very small firm and the

legal market locally is a vastly different legal market than the

one that I was in for 20 years. But I found over time that I

liked dealing with that sort of smaller market to some extent.

I liked working with kind of those smaller startup mom and

pop businesses business owners. I often was dealing with the

same attorneys on the opposite side for me, you know, all the

time, which never happened in Chicago.

I never once had the same attorney on the other side in a

case when I was in Chicago that never happened.

And there was there was just something about it that I liked.

And then as that firm merged into bigger firms at the end

there, they had just merged and merged into an Amlaw 200 law

firm that had offices in five different States and was 250

attorneys in size. And I that was the wrong

direction for me. I didn't want do that anymore.

And I also realize that the economics of it, there's

trade-offs. I mean, what we were just

talking about in terms of live within your means, right?

Make the choices you're gonna make.

Be smart about the choices that you make.

Think about the choices you're gonna make and understand that

there's always a trade off when you choose one thing.

By choosing that, you're necessarily not choosing

something else. And it was the same in the

economics of working for a law firm.

You know, I was looking at how much time I was spending on

something. I knew what the firm was billing

me out at and I knew what they were paying me.

And I was like, well, wait a second.

Giving other people an awful lot of my work ethic, my time,

they're benefiting from it greatly.

And I didn't know that I really felt like I was getting a lot

back in return other than what they were paying me as a salary.

I wasn't wasn't necessarily because I was at that firm

generating more business and people were like, oh, you're a

lawyer at that firm. Yes, I want to hire you.

They were hiring me because of me.

They were hiring me because of word of mouth from people that I

had worked with were like, oh, so and so worked with you.

They said I should call you Rob. And I talked and I was like,

why? Why am I doing this and killing

myself where I'm, you know, if there's a month where I traveled

or I didn't go into the office as much, they're like, well, you

didn't bill enough hours this month.

Like really? So if I stepped out and was

like, you know what, I'm gonna, I'm gonna start my own thing.

I think I have enough clients who will go with me.

I have some ideas on how I can generate business on my own to

pay the bills if I need to. And, and so I did.

I kind of took that leap of faith.

I started the law firm it, you know, having law firms, not a

huge capital intense startup, you know, there's not a lot of

equipment you need to buy. And I work out of my house,

which to me was a way to minimize the overhead.

And then I could be smart about how I was charging my, my legal

fees, right? I wasn't charging people for

some fancy office somewhere. I was charging them for truly my

time and the value of that. And I'll tell you now, I've,

I've had the firm for more than three years.

I've never once advertised. I don't, I don't have a

marketing budget. I don't pay for ads.

I don't, I'm not on the radio, I don't have TV ads.

I don't advertise and chamber stuff like I just don't

everything that I've built in the firm.

And then when Rob came in and and joined me too, it's all been

word of mouth. It's literally been people that

we've worked with. They're talking to somebody,

especially in the home improvement world, right?

I mean, that world in particular, we got to know a few

people, they worked with us, they liked us, They appreciated

the value of what we were providing to them.

They didn't just view us as a, as a, you know, a lot of people

view lawyers as all you just want to bill the fees, you just

want to charge us money. And they don't, we're not a

revenue producing aspect of anybody's business, right?

We don't produce revenue for any of our clients.

We do, however, protect the revenue that they produce and

earn them advice to hopefully avoid the problems that could be

a drain on, on that revenue that they've made.

So they appreciated the value of that.

And it's now funny, like our paralegal, we have a paralegal,

Tina, who works with us and you know, she and I laugh sometimes.

Like, you know, like any business, it ebbs and flows.

There'll be a period where you're kind of slow and you're,

you're resolving some things and you're closing out some matters.

And you think, goodness, I, I don't, I don't know what we're

going to do next month. Like, I hope some more work

comes in. And then suddenly like the

phones just light up and I'm getting text messages and emails

like, hey, Brian Gottlieb said I should contact you.

I've got a business here. This is what I'm doing.

Like, can you work with me? And, and, and then the phones

just keep ringing and it's, it's been great.

That's, that's been fantastic for us.

Rob's got a slightly different path because he's, he's gone

into some other stuff just in the last couple of years.

Not law. Yeah, So I mean, I, I started

out at a big law firm, right as a junior associate.

And there you don't have enough time to you get you get barely

time to think, let alone go out and find clients, right.

And then I went from there. I went in the house.

So I did, I had one client. And so when I came back out

after I left Alliance Laundry, kind of a small law firm.

I what, what I didn't know was how to sell.

I didn't really know anything about selling.

There was a, there was a, there was a guy that we, we brought in

that I worked with a little bit, worked with the rest of the team

and, and I and I took, I took his lessons to heart on, on sale

and a couple, couple things I took away.

There was, look, at the end of the day, fear of loss is what

drives buying behavior. And I, I'm a firm proponent of

that, that you have to show people that they're going to

lose something if they don't go with you.

And the other, the other thing I, you know, the other thing I,

I really took away is like, don't even sell.

Get an upfront agreement. Talk about what you're going to

do. Hey man, I got some questions

for you. I'm going to ask you a few

questions. Is that OK?

And then I'll tell you what I do.

And, and if you want to move forward, fantastic.

If not, like no worries, like no, no problem at all.

And, and have that confidence and say like I am who I am.

I know what I know I can help you or not.

If I can't help you, I'm going to tell you I can't.

Like, like we talked about, we don't do trust in states.

Certain things we don't do. I don't do tax like I'm going

to, I'll help you find somebody like do that as a favour, but

I'm not going to do it for you. I don't know how to do it.

I don't pretend to know how to do it.

And when I, what I learned then is that selling wasn't that

hard. Now, you know, at least for me

and the way I did it and the, the market that I'm in, but at

the end of the day, it no matter what industry you're in, the

people that make the money are the ones that can sell.

It doesn't matter whether you're a lawyer or an accountant or

you're selling concrete coatings or you're working for RBA

selling windows, People who can make the most money sell.

When I was at, at Healthcare Hill Run and we had sales reps

that would make 1,000,000 bucks a year, you know, on a regular

basis because they were really, really good at convincing

hospital systems to sign $50 million deals, right.

And they got paid for that. They were fantastic at that.

And so that that's out there. And so once I knew that I could

sell and, and I then did the calculus that Heather mentions,

like why would I send 60 or $0.65 out of every dollar to the

corporate offices in Chicago when I don't need, I, I don't

really need something fancy. I mean, if you think about post

COVID, especially like the need for office space goes away,

right? I have a computer and a desk and

a phone. What else do I need to do when

I, when I'm in COVID and we're working at home all of the time

anyway? And I, the office, my office at

the time was about 6 minutes away and I worked from home four

days a week. And I would only go in the

office because there was like a piece of mail for me.

Like that was like, why, why would I do this?

So why do we need those things? Why we, why do we do you take a

look at the business? Why do you need those, those

kind of accoutrement like Dwight, if someone who's going

to be impressed by the quality of our office space when they're

coming in, probably not the client we're working with

anyway. As opposed to let's say 35 years

ago. You go back to downtown Chicago

and you have, you know, two-story mahogany ceilings and

massive doors and you know, because the clients don't know

any better. There's no Internet, there's no

e-mail. I need to be physically present

because there's like paper memos that are circulating around the

office. There's an actual like law

library with books that we have to go look at.

Like I haven't the last time I looked at a legal book was

probably lost, right? I mean, those, those things have

gone away. And if you can't adjust to that,

you can't. And, and frankly, most big law

firms are still stuck in the mindset of they need that space,

but their people never come in because, you know, the, the

knock in working home is how do you track productivity?

But if you're in professional services, it's really easy.

How many hours did you bill? You know, how much did you

collect from your clients? And frankly, I don't really care

where you work and you can work anywhere as long as those

numbers stay going and you're not exposed to me to

malpractice. Like, fine.

So that's where we ended up. It's basically just became a

calculation of how much money do I want to spend?

And then the other calculation became, well, if I'm on my own,

you know, I can start some of these other businesses because

to, to what Heather alluded to earlier, you know, like you can

make a really great living. Like some of our installers, the

coatings company, they made over $100,000 last year.

Like they, they work, they work really, really hard.

They're super efficient, They take piece work jobs and they

can make 100 grand. Like that's awesome.

But if you want to make a lot of money, you got to own your own

business. And so the problem with being a

lawyer is it's, it's really easy to make kind of cash upfront.

But the day that I retire as a lawyer, the law firm goes away.

There's no continuing existence of that business.

And, and so I think professional services, especially at a

smaller scale like that, whether it's legal accounting, you know,

real estate brokerages, same thing.

It's, it's hard to have them survive the personality that

drove it. So we thought, what else can we

do that'll, that'll create something.

And that's kind of what started one in fund and then one in fund

led to the other businesses, but it was the chance to sort of do

both things at the same time. And if if I can make the same

amount of money billing 1/3 of the time that I was before, it

becomes easier to do those other things.

That sounds like a great plan. And yeah, I can relate to a lot

of that that you were saying as as a customer of professional

services, I get kind of annoyed when somebody wants me to come

into the office. I'd I'd rather just, you know,

let's do it over e-mail. Yeah, yeah.

You don't need to do that. Yeah, I'm already at my desk in

front of my computer. I I don't need to come drive

down and look at your mahogany doors.

Yeah. And it's, I suppose if that's,

if that's the way you came up, right, if that's kind of how you

came through the system, it's really, it's really easy to get

attracted to that, right? It's, it's, you know, I still do

in some sense miss the days we lived in the suburbs of Chicago.

We had the train line in, you know, like man, taking the train

into the city, putting on the suit, going in, going to the

fancy dinner, right? That's fun for a while.

And it can be fun from time to time, just like business travel

can be fun from time to time. And I did a lot of that for a

long time. And now I'm like, I don't really

want to do that anymore. So, you know, we can get, let's

say we go to Arizona or Las Vegas for a convention or

conference to meet clients. Man, if I take a Delta flight

that wraps through Minneapolis and Detroit, I know I'm getting

upgraded to 1st class the whole way, but I'd rather just take

the Allegiant flight that's direct and nonstop from Appleton

to Phoenix because like 3 hours of my time is worth more than

the fancy the fancy accoutrement you get to a point in life.

Like I don't, I don't really want any of that.

Like I don't need those things. I would rather have my time

available to me to do to do the cool stuff, even if the cool

stuff unfortunately sometimes just sitting on my phone in

front of the fire, you know, because it's like a 2 feet of

snow outside like we did yesterday here in Appleton.

Yeah, yeah, that's great. I think you just summed up the

the mindset of a lot of entrepreneurs of owning your

time and making the trade off of, you know, some of the

fancier things, the nicer things to to own your time and do your

own thing. So that's great.

All right, well, we can dive into a little bit more of the

the meat for our listeners here. I know you guys serve a lot of

blue collar customers, a lot of entrepreneurs and and small

businesses. What are the things that you

most commonly assist them with? Other one of you, one of you

start. So what I've found with with our

blue collar contractor home improvement clients is most of

them are very, very good at what they do.

They're really good at, they're remodeling business, they're

really good at their windows business, their one day bath

business. Like they're, they're good with

their hands. They, they understand the

construction side of things. Some of them are even really

good at, you know, they're good at selling or they're good at

scaling that business and growing it.

And you know, every year they increase their revenue and

bringing people in and they're very good at their business.

The unfortunate reality of our world today is, and I guess we

can blame lawyers and politicians for this, there's a

lot of laws and regulations that come along with owning a

business. It's not, it's not easy.

The government hasn't made it easy for people to start a

business and contribute to the economy and hire people.

Whether it's how you employ people, right, how you're

designating them as employees, how you're paying them, what the

documentation looks like, you know, are they especially for

salespeople are are they an employee?

Are they AW2? A lot of people think the only

other option is, well, they're a 1099.

Well, no, there's other options as well.

They can be AW 2, but under the IRS code, they might be a 35 O 8

direct seller so they don't get charged like AW2 employee from a

tax perspective and they're treated like a 1099 by the

federal government for taxation. But they don't satisfy the test

in the state where they live to be a true independent

contractor, which is a 1099. And they just don't understand

all of that. And I totally get it.

It's a complicated, complex area of the law that even lawyers who

practice in it every day and have for 20 years still

sometimes have to sit back and go, all right, let me think

about this one, how we, you know, how we work our way

through this problem and make sure that you're doing it

correctly. And that's just one area.

Do you need a license in the state that you're in for the

type of contract, work contract or work that you're doing?

You know, maybe the state requires you have a general

contractor license, and so you got to go through all that.

But even in some areas, yeah, I've got a general contractor

license for the state, but the municipality that you're working

in might also have another layer of licensing that they require.

So for instance, here in Wisconsin, you might have a

dwelling contractor's license issued to you by the state.

And then you go do work in Milwaukee and you learn that

will Milwaukee also requires you to submit certain information

and to pay certain fees to them. I'm cynical.

I think that's really what's driving it.

Yeah. You pay that fee to the city,

you give them your fingerprints, you do these things and now you

have the Milwaukee license that goes along.

And so now you can practice in Milwaukee and if you've got a

sales team working for you, who's going, you know, out in

people's homes and selling your products, they individually,

each one of them have to go into Milwaukee and get a salesman's

license that they have to like. So there's these multi layers

and then yeah, you have the licenses, the business, but

depending on the type of work you're doing, you might have to

go get a pull, you know, pull a permit.

Now some work you do, you might not have to pull a permit.

You've got to look at the laws and you got to figure that out.

And you know, it's, it's again, layers of confusion.

And then now throw into it, well, how do we generate leads?

How do we generate business, right?

Like the home improvement world in particular is very big.

Lead generation is one of the biggest issues they face.

So they go out and they hire, you know, lead generation

vendors or, you know, they're advertising through social media

or they've got their web page, they're sending direct mailers.

What are the rules now as to when I can call somebody?

You know, you've got the Telephone Consumer Protection

Act. Most people know it as the TCPA.

That's a federal law that adds complexity to how you can

contact people when you can contact people.

If you can contact people, that's the federal layer.

But then the state has its own layer, right?

You might be fine under the TCPA.

You might be in full compliance under the TCPA, but your state's

laws might have some wrinkles that now they view you as a

telemarketer even though you're complying with the TCPA because

there are two different pieces of legislation.

And that gets extremely confusing for people.

And they're like, well, I only called this person because they

filled out the form on our website while they entered the

wrong phone number. When they filled out the form

and you called a number that isn't their number and the

number you called didn't give you consent to call them to

market your product and your services, Technically that could

be seen as a violation. And look, there's no secret that

here in America, we live in a very litigious society.

There are people out there who their career and job is to be a

serial litigant. They've found these little niche

areas that they know the insurance and outs of it as well

as any attorney does. And they, they exploit it.

And they, you know, right now in the TCPA world, you've got

serial litigants out there who they start by sending a letter

to the owner of a home improvement firm and they say

you called my number on these dates at these times, you know,

10 * / a two-month period. I never gave you consent.

You violated the TCPA. Each violation of the TCPA is a

$500 fine. If you know certain things

happen, those, those damages could be troubled.

So that one violation is 500 is now 1500.

Each one of those calls is a violation.

So you've potentially opened yourself up to thousands of

dollars of damages for this one person.

But they send you a letter and they're so generous.

They're like, well, I, I'm going to give you the opportunity to

resolve this for the low, low price of and they throw out a

number that's less than the potential overall damages.

And if you pay me this amount of money, I will release you from

any and all claims and we can go about our lives, right?

It's extortive is what it is, right?

It's it's legalized extortion because the schemes of these

statutes are set up in such a way that the congressman or

woman who voted for it didn't think about some of the

consequences down the road from this statute, which, by the way,

was passed in 1991 when nobody had cell phones, right?

I mean, we live in a completely different world, technological

world today. I mean, I don't know about you,

but my cell phone rings. I glanced at it.

I don't even have the ringer set.

I see it light up. I look at it and I go, I don't

know who that is. And I just ignore it.

It doesn't impact my life, doesn't inconvenience me.

If it's important, they'll leave me a voicemail or they'll shoot

me a text and I'll get back to them.

And if they don't, it probably wasn't important and so I didn't

need to talk to them. But the statutes don't take into

account they haven't caught up with that reality of the

technology. And so getting back to the

original question, like all of these things play into what a

business owner in today's world has to think about beyond just

how do I fix a toilet? How do I install windows and

doors? Right.

And so that's where people like Rob and I come in or, you know,

Cpas that we might refer people to or a tax specialist or

somebody on the estate planning side who can help them set up

some trusts to give them another layer of protection.

You know, I, I don't, I don't know how to put a window in, but

I can certainly talk to you about the things you need to be

doing in your business to protect that revenue that you're

generating when you put those windows in.

Yeah, yeah, I, I think Heather covered a lot of really good

topics. I mean, I, I, I in my mind, the

way my brain works, I tend to like kind of divide taxonomy,

right. So there's, there's, there's two

kinds of issues people come to us for.

It's either reactive or proactive.

And to be honest, the more proactive you are talking to us,

the less reactive you're going to have to be.

So on the proactive side, like if you want to, if like I, this

just happened, I want to start a brand new one day bass business.

Man, that's awesome. Now I can for a flat rate, I can

go through and say you're going to need this, this, this, this,

this, OK, we'll set up the organization, we'll make the tax

filings, we'll get you your employee handbook, we'll get you

your employment contracts, we'll get you your offer letters, all

of those things, your terms and conditions, marketing

documentation, everything you need to run that business.

And that the means down the road when you have to be reactive

because you run into a serial litigant, you're going to be in

the best possible position that you can be.

And the cost of being proactive is much less than the cost of

having to be reactive, right? I mean, you know, for, for 10

grand, we can get a business off the ground and get you a really

awesome set of contracts. And then if you have those

contracts or you have that employee handbook and you don't

actually follow it and now you get an employee claim to the

state, your whatever your local state is for $18,000 and change

or something like that. Because you haven't categorized

them correctly, you didn't follow those rules or or you

didn't like when something tweaked, you didn't reach back

out to your advisor, whether it's us or somebody else and

say, what do I do here? And you try to kind of make it

up your own 'cause you didn't want to have a 10 minute phone

call with a lawyer and pay him 50 bucks.

You know, then, then you end up, you kind of end up in a world of

hurt. So where do we see?

And then I will say at the very end of the line and it's like,

OK, how do we sell you? How do we bind the company for

you St. transactions that's it's own.

But if we say at the end of the day, what are, what are the

things that get people in the most trouble, it is, you know,

90% employee or TCPA issues. And what's common with the, the

commonality between marketing issues, TCPA stuff and employee

issues is you have multiple overlapping sets of law at the

state, local and federal level with multiple legal schemes that

exist. You end up in a spot where if I

don't have all the facts as your lawyer, we're going to make a

bad decision. If you don't know the right

questions to ask, you're going to make a bad decision.

You might be able to go to ChatGPT or Grok or Claude and

ask some like get some good advice.

And and I'm not going to lie and say that I've never done that

myself, but I know the right questions to ask, right, because

I understand the barriers overlapping scheme.

So here, here, here would be a really good.

For instance, under federal labor law, the classification of

an employee is exempt or non exempt is is very dependent on a

very series of very specific items.

It has nothing to do with whether or not that employee's

drawing a salary. Moreover, if that employee's on

piece work rate, they're going to be having imputed minimum

wage. So they don't get, they don't

technically get paid piece work, They technically get paid an

imputed wage based upon that piece work rate, which then

intersects with the intersects with the overtime laws, which

exists at the federal level, but also potentially at the state

level, which then intersect with how you're actually calculating

things like bonuses or things like expense reimbursements.

What is the take away there? The take away is you can

actually pay an employee more money than they are legally

entitled to, but if you do it in the wrong way, you're still

going to have to pay them even more money and pay fines to the

state. Heather has had clients that if

you actually, if they had paid over time correctly, they would

have paid $50,000 less over the course of 1/2 of a year than

they did. But they still ended up paying

another 50 or 100 grand because they did the right thing in the

wrong way. Right.

And that is like an example, like TCPA works the same way.

All of the marketing laws, the way they intersect have this.

And, and both of those things are situations where there is no

perfect answer. There's never right, right way

to do it. And because those laws are so

complicated, following them on your own is hard crap.

It's hard for me to follow them and more importantly, it's hard

for the state regulator to follow them.

The number of state regulators that don't understand what

they're doing because these laws were passed periods of time ago

and because if you think about your typical person at the DMV

and now I don't want to like, you know, I don't want to malign

government workers. But at the same time, you know,

this is really hard stuff that a couple of lawyers that went to

the University of Chicago have trouble tracking at times.

You know, a 22 year old who gets a job with the state government

is going to have a really tough time as well, except they have

the power to issue subpoenas and find you money.

So that's where you end up with. We want to be as as clear up

front as you possibly can, as proactive as you possibly can to

avoid those things down the road.

Now, the the common objection you'll get is, well, I've been

business for X number of years and it's never happened to me.

That is absolutely true. There is an author who's I think

it was Hemingway or I don't know something.

We'll go, we'll go with Hemingway.

That sounds right. So we'll go with that.

He said something like, you know, we asked how did you go

bankrupt? He said very slowly and then all

of a sudden, right. And that's what happens from a

legal high ability perspective, almost nothing happens for a

really long time until you have like a couple of employees make

a claim or, or you get the random letter all of a sudden.

And then then you're writing a check for a lot of money.

So it is possible to be in business for 40 years and never

have something bad happen to you.

That, that, that could happen. It also may happen the next

year. And so you, you can't ever be in

a position of it's never happened bad before.

Now it's it's never going to happen bad again with the

Internet, with things like Reddit, with people being able

to go to ChatGPT or Grok or Claude or whatever it's going to

be and figure out how to sue you.

Heather's Heather's got a case right now that she's having a

lot of fun with what the pro SE plaintiff who's decided to just

put stuff into ChatGPT once a day and make another filing with

the court, right? I mean this this seems to be

what's happening on a regular basis.

So. Wow.

I mean. Oh, sorry, go ahead.

I was going to say that when Rob talks about, yes, I've heard

this from many people, I've never had a problem.

We're fine. And I'd, you know, I'd rather

spend that money on a new truck or a new piece of equipment.

Like, I get it, Like Rob said, you've been lucky and that's

great. It just takes that one situation

where you're not so lucky. The TCPA is an example.

I already talked about the troubling of damages.

Now you get somebody who actually works with a lawyer on

these cases, right? They have their go to lawyer who

only does TCPA plaintiff side litigation.

And so every time somebody calls their phone, they, you know,

they know they let them call multiple times, they don't

answer. They know that there's a cadence

in all of these call centers that if they don't get you

today, they'll call you later today.

And if they don't get you then they'll call you tomorrow.

And you build up a number of calls that came through to your

phone that you didn't answer, you didn't ask for.

You go to your lawyer that you work with who has got nothing

but churned out volume litigation in the TCPA realm,

and they bring a putative class action lawsuit on your behalf.

Now, maybe your company only called that person 10 times when

they filed their lawsuit, but they're alleging it on behalf of

a greater class of people. They're going to do discovery on

your company. They're going to want to look at

all of your call center records, and they're going to want to

confirm that every phone call you made, you have consent for

that call. And you have to prove for each

phone number that you called that you have consent.

And they're going to identify a similarly situated class of

people who didn't care that you called them and maybe didn't

have their consent or, you know, they're not serial litigants.

They just look at their phone and go, I don't know whose

number that is. And they ignore it and go on

about their life. But now a lawyer calls them and

says, hey, you got these phone calls from this number.

Yeah. Well, you know, we've got a

class action. You're part of the class, and

you might get some money. Well, a lot of those people are

going to be like, oh, free money.

Cool. Awesome.

So what was a couple $1000 with one person?

Now suddenly you've got a class of maybe hundreds, thousands

depending on how many calls you do annually in a year.

And that piece of litigation just became bet the company

litigation literally really like a judgement come down against

you that just wipes you out, wipes out everything you've ever

done. And so say, write me a check

away.

And you're like, yeah, I may do that.

Huh. Oh man.

Well, you guys touched on it a little bit there, but one of my

favorite sayings is you don't know what you don't know.

And so are there some some common things that people miss

putting together their businesses or, or things that

you wish they would ask you about that they commonly don't

What what are the things that we're just not?

Thinking about let me let me let me hit the employee side Heather

and then you can take the marketing side.

So on the employee side, every single bit I do I've done, I

have lost track of the M and AM and A deals that I've done.

Every M&A deal you will do someone will go through all of

your employees and it'll ask you for a list like what is this

person's name? What is our title?

Are they exempt or non exempt? I have never ever done an M and

A deal in my entire career, including companies that are

that are billions of dollars of revenue where that

classification of employees was totally correct.

It is never correct. I guarantee you if you have more

than one employee and I went into your system, I would find

mistakes and those mistakes would continually pop up.

That is probably the single biggest miss that I see

consistently is misclassification of employees

right after that employee side is not paying them correctly.

Not not that you're not paying fairly, not that they're not

making money, but you're not paying them according to these

weird specific rules that existed the that the state and

federal overlap. That's 100%.

I almost guarantee you that every single person listen to

this podcast that's got a company, they probably have

misclassified employees. Not that they're doing anything

wrong, not that they're doing it intentionally.

It's just it's a really hard arcane system that doesn't keep

up with the time. Or more accurately, changes from

administration to administration depending on who's writing the

regulations at that given time, right?

On my side, I would say there's the marketing side, but then

there's also your, your contracts, your terms and

conditions. So a lot of people, they start

their business, They don't want to spend the money on the

advisors, right? They've got a truck, they've got

their tools, they're, you know, they've got a website.

They, they advertise on Facebook, word of mouth,

whatever. They start generating their

business. They don't want to spend what

capital and revenue they've got on attorneys or other advisors.

And so then that also means, well, they've got to have a

contract, something that on paper that they write down with

this person in their home about what they're going to do.

So especially in today's world with AI, but also even before AI

was a huge thing, there was Google.

And surprisingly, Google does not have a law degree.

And Google doesn't know what questions to ask you about your

business. It just waits for the question

you put in. And so you go, I've got a bath

business, I need a contract for it.

Google doesn't say what state are you in?

Google doesn't say what products are you providing, what services

are you providing? Google doesn't say what is your

warranty that you're going to offer.

So Google just puts up a bunch of contracts for bath businesses

and you pick one and you're like, oh, that one looks good.

It's formatted nicely. I'll just plug and play my name,

my address, my. Sometimes you don't even pick up

like what state law it's governed by.

And you use that as your, you plunk your logo on it and that's

what you use. And then a problem comes up down

the road where that customer that you deal with, it's a

difficult customer and the job didn't go well and they're

threatening to sue you. And so now you do have to call a

lawyer. And the first question I always

ask in that instance is, well, send me a copy of your contract

with them so I can take a look at it.

I got to see what your terms and conditions say.

And I get the contract. And I'm like, I thought you told

me you're in Wisconsin. I am.

Why does your contract say that It's governed by the state law

of Georgia. Were you in Georgia at some

point in time? No, I just got the contract off

the Internet. Great.

OK, well, now we already have problem #1 Wisconsin has very

particularized laws. There's one called the Home

Improvement Practices Act. And, and it governs and, and

says what you have to have in your written home improvement

contracts with residential customers.

And if you don't hit all of those things and have them in

your contract, not only is that a potential violation under that

statute that that customer can sue you and get attorneys fees

and double damages, but the state attorney general's office

and the Department of Agriculture, Trade and Consumer

Protection investigators get wind of it because that customer

files a complaint with DATCP in Wisconsin.

Now suddenly you get an inquiry from the state saying, we

understand that you may be using contracts that don't satisfy

state law. We would like you to please send

us copies of every contract you've entered into with the

Wisconsin consumer in the last three years.

Well, that might be a lot of contracts.

And now they're going to look at it and they're going to want to

know why you had terms in there that you can't have in there,

that you don't have terms in there that you're supposed to

have in there, right? So what could be civil

litigation where you have damages assessed against you and

you have to pay a customer who's unhappy The state may now come

in too and now they might find you and it becomes this big

morass. So on the contract side, I would

say that gets people in a lot of trouble is not having the proper

documentation. They don't have terms and

conditions. They don't have a contract that

is appropriate to their business in the jurisdiction where

they're doing business in the construction world, home

improvement or just general construction.

Secondarily is orders the number of contractors who have a

contract and they go out to the job site and they're working

there every day and the homeowner comes in and goes, oh,

I don't, I don't think I like that door and I don't like where

we're putting it. Can we move it over a foot and

can we get this door instead? And the contractors like, yeah,

but that's, you know, that's not in the contract.

It's not my scope of work. That's going to cost you more.

I don't care. I want the door there and I want

this door instead. And they don't do a written

change order. The final bill comes in and they

send it to the homeowner and the bill is $20,000 more than the

contract said. And the homeowner's like, you

never told me it was going to cost that.

I told you it was going to. No, you didn't.

I had no idea. I thought that.

Show me a written change order that I signed, Right.

So that's, that's problem #2IN documentation, I would say, you

know, so that happens all the time with contractors.

So making sure your contract is appropriate for what you're

doing and where you're doing it, Making sure that you are

documenting everything in the way that you should be

documenting it and when you should be documenting it.

Those, those are the two big ones on that side.

That on the marketing side, we've already touched on it a

little bit, but there's the federal and state layers of

making sure that you're not violating telemarketing laws,

that you're not violating the TCPA, that you're getting the

appropriate consents that you are.

You have your internal written policies in place.

Like there's certain things you're supposed to have

internally that you're training your team on, that you have an

internal do not call list in policy that that's being

trained, that that's being implemented, that your CRM is

set up appropriately to deal with those things.

And then you're thinking, you know, a lot of contractors like,

oh, I work with, you know, I work with big vendors that are

really well known and they have a great reputation.

And, you know, they're they're providing the leads and I know

that they're making sure that they're getting all the

appropriate consents. Well, how do you know that

they're getting the appropriate consent?

Well, they told me that they only will send me a lead where

they got the consent. OK.

Well, in a year or two, when somebody files a complaint and

the state comes and says you called Mr. Joe Smith On this

date and time, please show us the consent that you had.

And you go back to that vendor and you say, hey, you sent us

this lead, please send me the consent.

And they say, well, we don't. You have to get a separate

account with active prospect and you have to go in for each lead

and you have to claim that consent.

And if you didn't do that within 90 days, it expires and they no

longer have it. We can't show you that we have

the consent. Well, you didn't know that.

You they told you we're getting the consent.

We'll have all that information. You know, you, there's a trusted

certificate from this vendor or that vendor, but they don't tell

you unless you go actively claim it and have it in your system in

two years, it might be a problem for you.

So really it's about talking to each client and saying, OK, let

me understand your business. Let me understand what you do

and where you do it. Let me understand how you're

generating your leads. Let me understand, do you use an

internal call center or you are you farming that out?

You might be using a contractor for your call center.

What is your contract with your lead generation vendors look

like? What is your contract with your

call center vendor look like? Provisions are in those

contracts to make sure that you're as protected as you can

be. What are they representing to

you that they are doing to comply with law?

You know, how's that process work?

What does their consent language look like?

And, you know, just kind of going through that with them and

making sure that they're set up is as best they can be.

I mean, even with all of that, it's still a little bit of a

moving target. Because the other thing we

haven't touched on is there's these different pieces of

legislation. And that legislation over time,

it evolves and it changes because courts have to make

decisions when cases come in front of them.

And by doing so, the court is now making its own law through

those interpretations. And it's, it's melding that

statute in a certain way. And it depends on what state

you're in or what jurisdiction you're in.

And is it a federal court or a state court?

Has it gone up to the Supreme Court in the state?

Has it gone up to the Supreme Court, the United States Supreme

Court, Like all of this happens. And tomorrow a court somewhere

might issue a decision that suddenly shifts everybody to a

different way under that law. And of the way you thought it

was always being done and that you were always doing it, now

suddenly there's a wrinkle that you're not in compliance with.

So having a relationship with with legal counsel that you can,

you know who understands your business, you've had those

conversations, you've set everything up as best you can,

that legal counsel is going to know if you're working with them

regularly. Hey, I got to let you know, Tom,

that this change just came down because of this decision from

the court. I know your business does this,

this and this. You're going to want to make

some changes. Now you're going to have to

adjust a bit. So having and developing those

relationships, I think is a very important thing for any business

owner in this industry to do and to stay on top of and be active

with to make sure that they're continuing to be in compliance.

But those are, those are two areas where I see problems all

the time. And then the third one I would

say is it's a very customer centric business.

A lot of people, very rightfully so, want their customers to be

happy with the job that they do for them, right?

Because word of mouth is going to be a great way to get more

business. And so there's this mentality

of, well, we have to make the customer happy because there's

nothing worse for us than a bad review.

But sometimes your sales Rep actually sells a contract to a

psychopath and that happens from time to time and you have to

like be willing to say no eventually.

Yeah. And so you need to understand

like, OK, maybe we did do something wrong.

Maybe it it did, you know, the workmanship wasn't great on

this. Maybe the the product that we

received, the manufacturer had some defects in it.

Like there's been some problems on this project.

It didn't go smoothly. That doesn't mean that I have to

buy you a whole new house, right?

4 Windows had some issues. We had to order them again.

We had to reinstall them. There are some adjustments that

need to be made. That doesn't mean that I owe you

a whole new house, right? There's depending on the

jurisdiction, the state you're in, how you measure construction

defect damages. It's important to understand

that because it might not be that you owe this person, you

know, $100,000 in damages on a job that was a $20,000 job.

You owe them like in Johnson, you owe them the cost to repair

the defect or the diminished value for their property.

So like an appraiser comes in and says, well, this defect is

present. If it wasn't, this is the value

of your property. But with that defect, this is

the value of your property, that difference.

And then the courts say, OK, what, which is less the cost to

repair or the diminished value? The diminished value is usually

the cost to repair. So it's, it's about the same.

This person's claiming I'm going to sue you.

I'm going to get, you know, all these damages you cause all

these problems, blah, blah, blah, blah, blah.

And you're thinking, Oh my goodness, I'm going to be on the

line. And you talk to lawyers like how

much would it cost to repair the item?

They're complaining about $2000. Well, there's your damages,

right? Like so understanding that when

those. Problematic customers or

problematic vendor relationship arises and you haven't been able

to resolve it on your own. Having a good idea of when is

the right time to pick up the phone and call your attorney and

say, hey, we're having this issue.

How do you advise that we, we move forward with this, right?

That can save you a lot of heartache, a lot of headaches, a

lot of stress and a lot of money by picking up the phone and and

getting that advice earlier rather than later.

I've never said to a client you called me too soon all the time.

They call me too late. That's some good I've never.

Had a client, I've never had a client at the end of litigation,

no matter how good the result we get for them is like, maybe we

completely get the case dismissed.

They oh, no damages. Maybe they even got some

attorneys fees paid back. Like it doesn't matter how good

it comes out for my client. I've never ever, ever had one of

them come up to me, shake my hand and say, God, that was fun,

let's do that again. Every single one of them comes

up and shakes my hand and says thank you very much.

I appreciate everything you've done for me.

I never want to work with you again and I don't take it

personally personally when it's a litigation matter because I

understand it's stressful. It takes away from their actual

business. It takes away from, you know,

the time they should be selling or installing or, you know,

managing their business on a day-to-day.

There's a time suck. It takes away from their

employees time. It's stressful.

So avoiding it as much as possible is good.

And and unfortunately, in those situations where it pops up,

knowing how to get get rid of it as quickly as possible is also

good. Well, I, I think we covered a

lot of the, the kind of scary things that can happen.

And I know you guys mentioned a lot of the things that get

missed. But for the, the guy that's

starting up his business and, and capital is tight.

They're wanting to use everything they have for

equipment or marketing or whatever it is to get things

going. You know what, what would be

kind of the bare bones or what do they need to be looking for

to make sure that they have their bases covered in an

appropriate way? Yeah.

So there's going to be a little bit of industry specific

specific things here, but first thing you want to do is you want

to have a plan about how you're going to run your business.

If you're, let's say you're in the, in the general construction

kind of blue collar world, how are you going to, how are you

going to hire sales reps? How are you going to hire

installers? Let's let's think about those

two things first, because if I'm hiring independent contractors

on the install side or I'm hiring 35 awaits in the sales

side. If I can do those two things

early on, if I can, if I can get them into that, into those

categories early on, that's fantastic.

Now, if you're in California listening to this, you're

screwed. Don't even try to do that

because it's not going to happen.

There are some other states that are becoming.

Minnesota. Minnesota is becoming very

dramatic. Illinois is horrible too.

Let's tell me your real opinion. Yeah, Yeah, let's say you're in

Florida, right? And you and you could do those

things. All right, That's, that's

fantastic. We know that first, then it's

going to be OK, what are you installing and who, who's your,

you know, well, we need to know like what are you installing?

Who's your vendor? Those things Now we can like

create your corporate documents, right?

And so just just your basic thing is going to be your

probably going to be an LLC means you need to file something

with the state called your articles of organization.

You need to have an operating agreement.

Now if it's just you by yourself, really, really simple

to have an operating agreement could be 4 pages long.

The bank will ask to see it when you open up your bank accounts.

That's probably the last 12 to look at it.

If you've got partners now, that's a whole different

conversation we need to have because we need to figure out

what's going to happen when you guys disagree.

And that's really the point. If you agree and everything is

fine, fantastic, you've got partners.

That's going to be harder. Let's assume you don't have

partners. What are we going to look at?

You're going to need some. You're going to need your

contractor agreements, you'll need your operating agreement

with the state. You'll need to make probably a

tax selection. You're probably going to be an S

corporation to talk to your accountant about that.

And then you'll need just kind of your your minute books set up

along those lines. And then we'll then suggest

after that, if you've got that is have some marketing

agreements in terms and conditions as well.

You'll need, you'll need TS and CS to sell your product.

And we also would recommend your own marketing agreement if

you're buying leads or what we call like a TCPA override

agreement, which is basically a single piece of paper that says,

hey, if I have to use your marketing contracts, Mr. and

Mrs. Vendor, I want you to sign this thing to tell me you're

going to provide me those consent certificates and

identify me if things go wrong. But that's can be done

reasonably depending on how much work there is for called 5 to

$10,000. But that that basically is your

entire set up for the rest of your life.

Now, I would say along that if you're going to do that, you're

probably going to have employees eventually.

So let's get an employee handbook in place.

Let's take a look at your pay practices, all of those things

put together. And then after that it becomes a

becomes a maintenance and it becomes knowing when to call.

So there's probably I I just did one of these of the day.

I call it a good 15 documents that I would want to have in

that in that case, and you're and you're pretty well set.

And then it becomes let's have a relationship.

Let's have an ongoing relationship.

Sometimes a lot of these folks, what we'll do is we'll, we'll

have like a monthly fee, like, you know, for X dollars a month,

you know, we'll be your kind of outside general counsel and

we'll evaluate after three months or so.

Like, are you calling me too much to the point where like

it's not worth the money and we're going to readjust the

price or are you never calling me?

And I'm like, let's change the price the other way.

We kind of do it and have and have that trust going back and

forth. Most things go and that that'll

last. You, you could, you can kind of

live in that universe up until the point that you have, man,

you sold a house, you sold something to the wrong person.

There's a lawsuit, there's a TCBA claim, there's a state

investigation up until that point in time, it becomes a

very, very, I would say kind of like a routine groove to get

into with your professional advisors.

And that's, that's lawyers or accountants, both, right?

I mean it it always raised a check in.

And I would add to that, I analogize it oftentimes, again,

we've talked about nobody wants to spend that money, right?

You want to deploy that money in another way.

But I'll say to people, well, you have a couple vehicles in

your business, right? You drive or you're one of your

installers drives and you've got some big equipment that costs

you quite a bit of money, right? Yes, you have insurance that

covers those vehicles, right? And you have insurance that

covers that equipment. You probably have a general

liability corporate, you know, general corporate liability

policy that your insurance broker also sold you.

And you have workers comp. If you've got employees, you

might have to pay for unemployment insurance.

You have all of that, right? Yeah, yeah, yeah, yeah.

We're licensed, we're bonded. We have all that insurance, OK.

You pay a premium for that every year, right?

And you had to pay that premium upfront to bind that coverage.

Yeah, yeah, yeah. That's how insurance works.

OK. You never once said, well, I'm

gonna, I have these trucks and I'm gonna have this equipment,

I'm gonna have these employees and I am not getting insurance.

I'm not putting money to insurance.

Well, no, because insurance protects me.

Exactly. So does legal counsel.

Legal counsel can set you up. Like Rob said, we do flat rates

for a lot of this stuff because it is fairly, there's templates

we can work with now. We customize them to you, to

your business after we have conversations with you to make

sure that we understand your business and we're giving you

what you need. But you have a pretty solid idea

up front like, okay, this is the flat rate for that package.

And Rob said maybe you don't have employees.

Now, you don't have to get the employee handbook right now.

You just know that we say to you, hey, one day when you start

hiring employees and you have W2 employees, you're gonna want to

come back to us and you're gonna want an employee handbook.

And you're gonna want us to look at your offer letter to these

people to make sure that you're covering what you need to cover

in that. We just want to have a

conversation to make sure that you're, you know, reporting to

the state the appropriate things that you need to report to the

state. So you don't have to spend that

money on an employee handbook right now.

But in two years when you've grown and you have to bring

somebody else in and you're going to hire them as an

employee, come back and give us a call and we can help you set

that up at that time, right? So there are ways to mitigate

how much you're going to spend upfront, but you have to think

about it like you do think about other things like insurance and

you know, all of that. You could be in business 40

years and never have and never total a truck.

It's possible you could be in business 40 years and never get

sued, but you know you're going to not smart money to take that

chance. Yeah, yeah, that's a good way to

put it. Look, and the other thing, the

other thing I'd sorry, the other thing I'd say on that is at some

point in time you're going to want to sell your business.

Setting the business up the right way so that a buyer is

looking at the business and saying that is a business I want

to acquire is super important. So it is not just a matter of

we're preparing you in case something goes wrong, it's we're

also preparing you for when something goes right as well.

Yeah. Can we come in and a year before

you're going to sell and fix everything?

Yeah. Have I done that?

Yeah, I've done that a lot. Is it easier just to do it right

from the start, right, Knowing that you're going to want to try

to sell this thing in seven years and like get it set up for

right from the start. So when diligence happens, we

don't have to come up with explanations as to why things

happened in the past and you don't have to indemnify the

buyer for like an employee matter that happened 18 months

before we sold, right? There's there's, there's ways to

do this correctly from the start.

And it looks and a buyer, a buyer will pay more money for a

company that apologies for has that shit together.

If you got your shit together, a buyer will pay more money for

you, guaranteed. Now, is it going to be, is it

going to be two terms on a multiple board?

No. Could it be 1/2 term?

It might very well be, particularly if you're in a

competitive process and you've got a banker out there that that

knows what he's doing. Well, that's great.

And that was a great segue. I was about to say we've we've

chatted quite a bit about setting up a business and I know

you guys work a lot in mergers and acquisitions.

So for somebody on the the other end that's looking forward to an

exit or maybe even somebody that's young in their business

but just wants to make sure they get things set up, what advice

do you have for somebody that's looking ahead towards an exit?

A lot of it depends on how far away you are.

So we'll work, we'll work backwards over time.

If you're, if you're eminently going to exit and you're like, I

want to get out, you know, in the next 12 to 18 months or 12

to 24 months there, there's there's two things I'm going to

tell you to do, neither of which involve me, frankly, I'm going

to say go hire an investment banker or go start talking to

investment bankers. I can make recommendations

there. And the second is going to be

once you have that investment banker in place, go talk to a

really good accountant and make sure your financials are put

together properly. And by properly, I mean true

accrual accounting. So let's, let's take those two

in turn, huh? I'm going to, I'm going to

assume your business of some material size, like you're not

doing 1,000,000 bucks or a million and a half, right?

I'll clarify that even further. There are people who own

companies that own a job and there's nothing wrong with that.

At Macklin Law, we own a job like because the day that we

leave that the firm doesn't exist anymore, still provides a

good living. We can do it.

We want, you know, we can expense things that we want to,

you know, we can go out and visit clients in Las Vegas,

right? And, and, and stay, stay at The

Mirage or stay at the Venetian and expect that's, that's

awesome. Love doing that, that's, that's

really fun. But it's, we own that, we own

that job, right? If you own a business, that's

something you can transfer on yourself.

And if you own a business that's of any material size, call it

$1,000,000 or more and even a ideally $2,000,000 or more, and

even a, you may be selling to either a strategic or private

equity group at that point in time.

Again, a lot of this depends on what space you're in.

There's all kinds of variables there, but let's let's presume

that you're big enough that you're going to attract interest

from a financial buyer or interest from multiple strategic

buyers. Getting an investment banker in

early allows you to actually get some guidance from the banker on

what the market is looking like at that point in time, what they

want to see, how they want to stretch your business, things

that you can do to your P&L and your balance sheet to make you

more valuable. Highly important to do.

The second thing then is to get yourself on proper accrual

accounting. That might take some time.

You know, I know some folks that I work with in the accounting

side. I'm happy to make referrals

there that can, that can help you do that.

And a lot of people in this, in this space, in the blue collar

space will say they're on accrual accounting and they're

not. They don't understand all of the

implications of it. So for instance, they might not,

they might only recognize revenue upon installation of a

project rather than taking a deposit.

That's awesome. But what are they, What are you

doing with your inventory? How are you treating your sales

reps? Are your sales reps of the front

half Commission? Is that being capitalized or

not? How about your software packages

that you're paying for your CRM? How are you handling those

things? There's a lot of aspects of

accrual accounting and I would say a lot of people miss some of

it and that's going to take some time to straighten out.

Again, that's one of those things that's, you know, good,

fast and cheap. Pick two or three if you want it

to be good and not horribly expensive.

You want to start that process early on.

Then as you get closer to that sale date, call 9 months out to

six months out. You want to start what's called

a quality of earnings if you can, ideally early.

Some people will have to jam it at the end.

The quality of earnings is basically a sell side.

Quality of earnings is you're going to hire somebody to tear

apart your financials and business like a buyer would and

point out all the holes in the flaws.

And you might, if you do that early enough, you can catch some

of that and fix it. Or at least have a really good

explanation and a tight answer as to, you know, well, if a

buyer says, well, what about this customer?

Are they going to leave soon? I mean, like, no, that's not a

problem because of XY and Z, whatever it's going to be,

right? Those things, if you're earlier

in the process than that, what I would say is, you know, you want

to get a business health check and get a business health check

from your advisors. So that's your lawyers and your

accountants. We do a lot of what's called

reverse due diligence. And I'm going to say like here's

what a buyer is going to ask you for.

Do you have all of these things? Like what is your employee

handbook? I don't have an employee

handbook. All right, let's get you an

employee handbook, right? Or whatever those are going to

be. Are you on accrual accounting?

Maybe? What does that mean?

I don't know. I want you to talk to this

person, go talk to Todd or whoever, and they're going to

help you out, right? Those things could happen

earlier and those can be those could be any time before,

ideally the last minute, the last minute jam towards that.

And then as you get towards the end there's, you know, we do

those other things. So it's it's it's definitely

it's absolutely 100%, you know, a, like I said, a good fast or

cheap, pick two of three. The more time your advisors have

to pull this stuff together, and quite honestly, the less time

that I'm working at midnight because something has to get

done by tomorrow at 8:00 AM, the more efficient I will certainly

be. Or I can be, not that I'm going

to overcharge you because I'm working at midnight, but because

let's be realistic, if I'm at midnight, I'm probably not going

to be as effective as I would be at 9:00 AM, right?

And so the more times you have to jam up your advisors so

they're working late, they're missing calls, they can't do

things, they're less efficient, they're less productive, it's

just going to be better for everyone all the way around.

And I'm going to jump in and add on that real quick that last

point. If you're a client who you know,

Rob said nobody ever calls him too soon, right?

They always call us too late. We're not gonna charge you more

cuz we that's unethical. Like we have an agreement with

you. We have an engagement letter.

It says what we're gonna charge you for our time.

However, if you're one of those clients who makes your fire

drill my problem because you were not proactive about coming

to me sooner, and that happens over and over and over again,

I'm less likely to pick up the phone when I see that it's you

calling me. It might be a day or two before

I get back to you because I'm like, they're gonna call me and

they're gonna want to ruin my Friday night again.

And I'm not doing that. Like, yeah.

And at a certain point, this is gonna be true of all of your

advisors. They're not gonna want to work

with you anymore. You're not gonna be that client

who I have some clients who they call.

And if I'm not on another call or doing something and I see

that it's them, I immediately answer like, hey, how's it

going? Right.

Like I'm gonna pick up the phone and talk to them because they

don't make my life horrible as their attorney.

And so that's just a, it's not an economic thing.

That's just a common sense thing.

Like be smart about how you interact with your, your

advisors, treat them the way you would want to be treated.

And they will go the extra step for you.

They will pick up the call. When you do have that emergency,

a true one on a Friday night at 8:00 PM and you call them,

they're going to answer the phone, even though it's Friday

night at 8:00 PM, they're not going to be like it's Friday

night at 8 PMI am not talking to that person.

I can get back to them Monday or Tuesday of next week, right?

Like it, it's just a better way to go about it.

And as Rob said, they're going to be more efficient and you're

going to get better service, right?

Like, so just try to be proactive and try to be

diligent. And I get it.

A lot of these guys, right, they're overwhelmed in their

business. And we understand this now being

owners of these types of businesses as well.

Like we get it, like it's overwhelming.

And there's times where you take on too much because you're like,

well, I have to pay somebody to do that or I can do it myself.

And then other things fall by the wayside and they slip off

and they get buried under a pile of paper.

And then when you dig through that pile of paper, you're like,

my God, I totally forgot about this.

And you, I get it. But the more proactive and

upfront you can be in getting out and head of it, it's better

for you for a lot of reasons and it's better for the people that

you work with. Great advice.

Well, thank you, guys. So if there was like 4 or five

things that a potential seller needs to really be paying

attention to, you guys mentioned doing a health check with your

attorney, getting on accrual accounting, making sure that

your financials are all in order.

What else? What are the things that are

commonly missed that you guys? End up having to clean up the

most important thing. Get your accounting squared

away, get your employee, your employees squared away.

That's the liability of buyers not wanting to pick up and that

that is looking at your employees, looking at their

classifications and so forth. Get the those two things done.

Get a check on the business to make sure your licenses are all

correct. If that's done properly, take a

look at your marketing processes that to make sure you're doing

things correctly, particularly marketing.

But then I guess the 5th would be all of your processes, get

them documented. If it's not written down, it

doesn't exist. Now, there was very little that

I said there that was legal. Like there's accounting, there's

employee classification, there's marketing, you know, there's

your and there's your, there's your like processes.

Like that's not a lot of legal stuff, you know, and I give you

a diligence list and say, here's some things I want you to do,

but a lot of it's going to be go do this and come back in three

months. And that's where the time is.

It's like, do you want to be documenting how you, how you

install a fence like a month before you're trying to no, you

want to have that. You should have that in place

anyway. I can't help you with that.

I just know a buyer's going to ask for it, right?

What's your installation process?

What are those things? That's the biggest thing.

And I would say like the number that if you say like pick two

man, it's it's accounting in employees.

Those are those are the things that are going to trick you up

and there you're going to have the biggest liabilities for

sure. OK.

Well this is my favorite question I ask of every guest.

Do you guys practice a particular faith tradition?

And if so, how does that affect the way that you conduct

yourselves in business? So we do, we're Christian and we

do have a church we go to. I would say for me personally,

like I will liken it back to when I stepped away from big

firm practice and I started my own firm.

Actually throughout my career, there have been a number of

instances where I've had to make decision.

We've talked about, we talked really early on in this about,

right, the trade-offs in, in any career, any business, any job.

And throughout my legal career I've been faced with those as

well, right. You know when Rob talked about

when he was deployed and we found out that he was being

actively ployed, deployed overseas and I had a 7 month old

at the time. We found that out and I then

found out I was pregnant. With our 2nd and I was like, OK,

I'm I'm going to have a 15 month old and a newborn and my

husband's going to be overseas and somewhere people would ask

me where he was when he was gone.

And I was like, he's, it's classified.

I think it starts with an A or an I, but I can't tell you that

for sure. You know, I had to make a

decision at that point in my career.

Was I going to hire somebody to raise my children while my

husband was in a war zone so that I could go back to work

full time as a partner in a big law firm in Chicago?

Or was I going to go to my head of my group and say, listen, I

need some flexibility here. I'm I need a longer than typical

maternity leave and I recognize that that means, you know, leave

without pay, but I want to know that my job is going to be here

when I come back. And and I did that right?

And that was AI had to step out on faith in that decision,

right? Like, is this the right thing to

do? Will we?

We'd be OK. When I left big law practice and

I started my own law firm, that was a leap of faith.

And I had to ask like, OK, is this?

Is this the right thing for our family?

Is this the right thing for me? But I had to have faith that it

was going to go correctly. And well, I prayed on it.

And I felt like even if this doesn't go the way I think it's

going to go, I know that I've got other opportunities or other

paths that I can take. And I've always felt like I've

had that safety net there that I've, you know, God's always

protected me and been there with me and it's always worked out

and it's always going to work out.

So for me personally, you know, I've had those moments in my

career where I've, I've had to sort of make that leap of faith

and feel like I had that, that backing there, you know, both

from the faith perspective, but you know, also the partnership

that you're in. Realistically, I mean, Rob and I

are a partnership, right? I mean, we're married, we're

also legal partners, We're in businesses together.

A lot of people are like, God, I don't know how you work with

your husband on a day-to-day basis.

Like I could never do that, right?

A lot of people are married, but they go to their job and they go

to their job and they're not, they don't mix in that fashion.

We always have. Even when we weren't working for

the same law firm, Rob was on the more corporate side, I was

on the more litigation side. We'd run things past each other.

He'd have a deal. He was doing like, hey, I'm

worried this could create problems down the road.

What do you think? I'd have a litigation matter

that started as a corporate deal at some point in time.

And I'd say to him, like, I don't understand why they did

this. Can you look at this and figure

out why they did this along the way?

And that's, you know, that's been great too, to have that

partnership And, and quite frankly, our clients kind of get

a 2 for one in some respects. Like they called Rob with a

question. He realizes very quickly that

like, oh, this is something Heather might be able to.

And he's like, hold on, I'm gonna put you on speaker.

Heather's here and puts it on speaker.

And you know, you've got a husband, wife, legal team who's

working with you and, and has that combined knowledge that

they're offering use that probably went a little further

afield than the question you asked, but that that's how it

plays out for me. Yeah, I guess, yeah, I'll, I'll

echo what Heather said and then maybe just just add to that.

I think there there's, there's work that's not worth taking.

There's ways to make money that aren't ethically sound, that

would fit morally with with what I said.

Like if I, I was like, I want to make a lot of money as a lawyer

really, really fast. Some of the stuff that Heather

defends against we can do. And it's not illegal because

you're taking advantage of the laws, being badly drafted and

being outside of the time. But I would feel horrible.

I couldn't, I couldn't look at myself doing that.

And I think there are folks that can justify mentally why that's

OK. And I'm, you know, I'm not one

of them. So we, we, there are clients

that we have fired from time to time because we didn't like the

way they behaved. There are clients that have

mistreated folks that have worked for me that we have, that

we have fired. There's a couple of bars here in

Appleton and I can't go into anymore, which I mean, there's

still a good Niner 9 hundred 950 bars left in Appleton because

Appleton does have the highest number of bars per capita of any

city in America. That is our claim of train.

So if you ever come to Appleton, there's a lot of places to get a

beer or Brandy. But yeah, there's, there's, but

there's at the end of the day, you got to be able to get

yourself in the mirror. And so am I Am I happy doing

what I was doing? And did I did I feel like I made

made the world a better place by acting in that manner?

Good stuff. Awesome.

Well, I know you guys spend a lot of time working with small

businesses, blue collar businesses, sounds like startups

and M&A. If any of our listeners are

interested in gauging your guys's services, are you taking

new clients, And if so, what's the best way to get in touch

with you? Yeah, We're always happy to talk

to to new clients, new potential clients.

You know, like Rob said at the beginning, sometimes we talk to

them. It's not a right, it's not the

right fit. And that's that's totally OK.

We're happy to have that, that 1015 minute conversation.

We don't charge a consultation fee for that initial

conversation to see if we can help you and if it's a working

relationship that we both want to have.

So it's really simple. We both have e-mail addresses

that are very similar. Mine is H Macklin at

macklinlawlc.com. Robsisrmacklin@macklinlawllc.com.

Make sure you put a whole fee at the end there because there is a

separate Macklin law out of New York or something like that, so.

Yeah, there is a Macklin Law in New York, different, different

law firm, but we have the LLC on the end of ours, my phone

number. Always it's embarrassingly bad

but but as others said, we've never advertised so.

It's got all our information on it.

It's, it's Macklin, lawllc.com. It's got, you know, our contact

information. You can call us, you can text

us, you can e-mail us. And we are actually in the

process kind of of expanding the firm.

We've kind of made the decision to make it, to make it bigger,

to bring in some other partners so that there's some continuity

when we whenever we decide to retire, it's not going to happen

in the next, you know, couple years, but but trying to expand

that out. So we are actively bringing in a

labor and employment person. We're actively recruiting,

actually trusting the state's person as well as as another

corporate person. So we feel like we have enough

clients of work now that we can start to, to, to do that and

spread out and make it, make it a bit bigger.

It's not something we never looked for in the past.

But you know, when we started this, it wasn't as construction

home improvement heavy as it is now.

And now as we, we were talking about this, I was actually, I

was working, working with Claude over the weekend to design a new

website, kind of look through our client list, like, man,

it's, it's almost entirely pink collar stuff at this point

there. I mean, a handful of people will

get the random like, you know, Doctor Who was a non compete or

like, you know, we were really good friends with some Realtors.

So we somehow often end up in like Realty realtor situations,

but it's it's really heavily in that and that's kind of where

we're happy to stand. So we're now we're, we've sort

of solidified on that idea and we're going to kind of expand it

and make it bigger. I love that you don't have an

awesome website. I think the best businesses do

survive on word of mouth and and they don't have to have the

cutting edge website or or spend all the money on marketing.

It sounds like that's right where you guys are at you you're

great at what you do and your customers appreciate it and tell

their friends that's. What we hope for.

Awesome. Well, is there anybody that

you'd like to see on the show? Somebody, maybe a client or a

friend that has a really cool business, a really cool story

that you'd like to learn more about.

I'd actually love for you to get Justin Hatcher or and Jen

Hatcher who's the Co founder of the one in fund on there.

Justin's kind of the, he's kind of turned to the godfather of

financing in the construction home improvement space.

So he's really, really good at talking about how that really

impacts the company's P&L. And what's amazing is the

companies I've sold, there is a direct correlation between the

amount of financing that a company utilizes in its sales

process. Any blue collar company, if

you're selling, if you're not, I guess outside of like massive

single home remodels where a person, it's a $200,000 job and

a person has to take out a HELOC to do it.

If it, if it's, if it's, whether you're an HVAC or plumbing, you

know, fencing, decking, one day baths, concrete coating, it

doesn't matter. Like windows utilizing financing

is, is critical. And he, he was the one that kind

of evangelized it to me and how we started one funds.

And, and I'm, I'm a believer there.

He's, he's fantastic. I, I definitely look to get him

on if you could. He's he's a fun guy.

Awesome, awesome I. Agree with Rob, Sorry.

Yeah, I was going to say Jen, his wife is also like she's,

she's a very energetic, she's a ball of energy and she's got the

financing background too. So they're, I mean, you're going

to go the route of husband and wife teams.

They're they're a good one to, to think about speaking to

because I think that they both have a lot to offer both in

wisdom and advice and experience to those in the blue collar

industries. Well, I might reach out off the

air here, see if you guys could make an introduction because

that does sound like it'd be very beneficial.

That's an area that I don't have much experience in, so I'd I'd

love just to learn more about it.

So awesome, awesome. Well, thank you guys so much for

joining us here on from the Ground up show.

I really appreciate your guys's experience and input.

I think it'll be very beneficial for our listeners and thank you

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