Episode 11: How to Grow a Large, Profitable Law Firm with Stewart Guss

Growing a large, albeit profitable law firm is no easy feat. In this episode of Lawyer Mastermind Podcast, Stewart Guss talks about how he grew his law firm and the important concepts he has learned on his journey to success.

Stewart J. Guss has been practicing personal injury law for over 20 years, representing clients from all over the world in the most serious and catastrophic injury claims.

After many years of nationally recognized professional accomplishments, Stewart has been recognized by the National Association of Distinguished Counsel as one of the top one percent of personal injury attorneys in the country in 2015; by the National Trial Lawyers as one of the top 100 trial lawyers in the nation in 2016; and as one of the “Best Attorneys in America” by the prestigious Rue Ratings since 2015.

In addition to gaining substantial peer and industry recognition and numerous professional accomplishments, Stewart is an active philanthropist and avid believer in the need to “pay it forward.” He sponsors an annual college Scholarship and established, runs, and funds Houston’s Unsung Greats “HUG” Award.

Prefer to read? Read The Transcript Below

Interview Transcript

Casey Meraz:

Hi, I’m Casey Meraz from the Lawyer Mastermind Podcast. Today we’re joined by an experienced personal injury attorney, Mr. Stewart J. Guss, whose grown his personal injury law firm from just himself, to over 120 employees in seven offices across several states [inaudible 00:10:37]. Thank you so much for joining us today, Stewart.

Stewart J. Guss:

Absolutely, my pleasure. I’m not sure how I mistakenly got invited to the Mastermind Podcast, because I wouldn’t call myself a mastermind at anything but I do appreciate the opportunity to share what wisdom I can.

Casey Meraz:

Well that’s funny. Well, your experience definitely shows that you have succeeded it seems like, across a number of years here. So, tell us your story. Where did you start, and how did you get to where you are?

Stewart J. Guss:

Yeah, no problem. As I’ve mentioned before, I’m a bit of a talker so I’ll try and keep it fairly succinct, but yeah. I attended undergrad at the University of Texas, and spent some time after I graduated at the Red McCombs MBA program. This was back in ’80s, realized that I didn’t want to wear my hair short, so I didn’t know if business was the right career. I looked into law, it seemed like a good fit. Ended up going to U of H Law, graduated at a time in Houston when the economy was a little bit rough. Managed to pick up a job, basically my first job out of law school, I was an appellate lawyer. So I started my career basically fixing other lawyer’s missteps, which at the time, I was too young and too hungry and too in student debt to know any better, but it was actually a great way to start my career.

Stewart J. Guss:

Ended up doing a little bit of… I had clerked for a really great personal injury lawyer, Kenny Cole, he’s moved to Tennessee now. So as the PI cases came in, I built up my docket. In 1999, I started off on my own. Just me in a 12 by 12 rented office, made the coffee in the morning, sent all my own faxes. I hope your listenership knows what a fax is.

Casey Meraz:

Some do.

Stewart J. Guss:

Then at the end of the day, did everything all day long, and at the end of the day, cleaned the coffee pot and went home.

Casey Meraz:

Wow, okay. Well that’s awesome. You started off by yourself and I think a lot of people are intimidated, whether they’re working at a firm right now and they have that dream of starting their own firm. That transition, one of the things that I hear most common is, “How am I going to have that security or that money?” How did you finance the growth of your firm? Did you just start off from day one? Did you take a loan? What happened?

Stewart J. Guss:

So I can say this safely because my wife and I are so much in love after 20 something years, there’s no chance of a divorce. So I will say this right here right now, in case you’re listening, Kelly. I owe it to her. She had a great career, she was a nurse anesthetist, had a steady job and a steady paycheck. So it was honestly a little bit easier for me because as you solos know, some months you eat the fat of the calf, and some months you’re eating the shoe leather at the bottom of your worn out shoes. So, I did have my wife’s career as a backup to help smooth out the income curve.

Stewart J. Guss:

But at the end of the day it really doesn’t matter, if you can cut your budget down low enough and manage yourself to keep those expenses as low as possible, anyone can open up as a solo. You’re not going to have oak paneled office, you’re not going to have a million dollar appearance, you’re not going to have a bunch of staff people running around but I think you can open up a solo practice on any budget, particularly today, thanks to the internet and technology that’s available.

Casey Meraz:

No, that’s a good point. The internet and just obviously with everything that’s going on in the world right now. The ability to work from home in a lot of cases has changed things.

Casey Meraz:

Now, as far as if you were to give advice to somebody that’s starting their firm now, I think a lot of business owners can relate to thinking of the cash flow side of things. Sometimes that’s going to be good, sometimes that’s going to be bad. What would you tell people to save if they’re starting a new firm? What percentage, or?

Stewart J. Guss:

Yeah, so I’ll tell you. This is honestly probably the hardest thing that takes the most perseverance and dedication, but what I realized early on. I’ve always had a small stock portfolio and I still do. It’s not particularly huge but I have invested. My parents taught me well ever since I was young, but I realized from an early age that I have faith in myself and I realized I had faith in my business. I just turned to my own law firm as the biggest investment that I could make. So, from the day I started turning a profit at the law firm, I would make sure that essentially I would take 90 cents out of ever $1 of profit and figure out a way to reinvest it back into the firm. I’ve done that month after month, year after year for 20 years.

Stewart J. Guss:

That’s really, so the wonderful thing that I like to explain to people is, I’ve grown a fairly successful, fairly large practice. The real beautiful thing about it is that although I love bankers and I have nothing against them, I haven’t borrowed a single penny to build what I have. I don’t owe anyone a dime.

Casey Meraz:

Wow, that’s incredible. I feel like not only is that rare, I mean that discipline that you have. It’s just amazing because that’s the biggest problem that I hear from other attorneys is cash flow or they can’t manage that money or they have money in the bank and then they spend that on all these upgrades or things they think they need. It’s like taking that profit first mentality to an extreme, is what you’re doing. I love that.

Stewart J. Guss:

Yeah, yeah, so I think the trick there is to make sure… I was as guilty of this as anyone. Every lawyer, you’ve spent so much time and effort. You put your heart and your soul into going to law school and passing the bar. There is something about having the trappings of a lawyer, that Beemer, that Mercedes, like I said, that beautiful mahogany desk. But I think that if you really want to invest in yourself in the long term, you have to let go of those trappings for a while. I drove a beat up Nissan Sentra for first four or five years of my career, as much as I wanted a Benz. Again, it was just a question of prioritizing investment into my business and in the future.

Casey Meraz:

Awesome.

Stewart J. Guss:

I did get a Mercedes, finally. It just took a while.

Casey Meraz:

That’s awesome. I mean, I really like that prioritization though, that’s really great advice I think for anybody who’s starting off, especially if they can’t wrap their mind around the money side of things.

Casey Meraz:

So, obviously when you’re starting up and you’re building a business, there’s a lot of different struggles that you have. What would you say is your biggest struggle?

Stewart J. Guss:

Yeah, well so that’s actually as a lawyer, but particularly as the owner of a law firm. I do categorize those two classifications differently. My biggest professional struggle, and I mean this. I mean, I look back on when I was going toe to toe every morning in the courtroom, lawyering, deposing, trial work, all that stuff. I thought that that was really hard and really challenging, but in hindsight as the owner of a business, that was easy compared to the challenge of managing people.

Stewart J. Guss:

I will tell you without exaggeration that if you really want to succeed in your law practice and you want to build it, whether you want to build it to 100 plus people like I’ve done over a couple of decades, or if you just want to have five or 10 people, maybe a branch office in another city. You have to be able to manage people. You have to be able to spot talent. Best advice I ever got, hire slow, fire quick. You need to make sure that your people are motivated, that they work for you not just for the paycheck but because they believe in your vision in what you’re trying to do. Trying to work with all sorts of different personalities that have a different approach to the same job set, there’s no bigger challenge as a business owner in my experience, than learning how to be a really good motivator, leader, and manager of people.

Casey Meraz:

Wow, yeah. No, that’s also great advice because in my own experience, I found that managing people is the hardest part of any business.

Stewart J. Guss:

Absolutely.

Casey Meraz:

I also like that advice, hire slow and fire quick, because a lot of times if you don’t address those problem, what happens? You’ve probably seen that definitely more than me, and I’m sure that you’ve seen how it can bring down an organization as well.

Stewart J. Guss:

Yeah, and I actually would. When it comes to the personnel struggles, if you don’t mind expanding on that a little bit, because I think your viewership, your audience are probably all growth minded.

Casey Meraz:

Absolutely.

Stewart J. Guss:

So yeah, so there’s going to be a question of adding staff and staffing up. The two other pieces of advice that I’d like to give for whatever it’s worth are, you need to make sure that you hire ahead of your need first. We were talking before about cash flow issues. Believe me, when you’re starting up on that cash flow curve and you’re still struggling to make ends meet, it is the hardest thing in the world. My philosophy early in my business was, I’m not going to hire next employee until I’m absolutely at the breaking point and the wheels are coming off the bus. Then I’ll invest. I have learned the hard way that you actually need to project your needs into the future, and if you see a steady increase in your docket which I hope all of you do, I’d highly recommend you hire in advance of your needs. There’s nothing harder, I understand, than meeting payroll when you’re only at 90 or 93% staff utilization but it is the only way to avoid… if you do it the way I used to do it, you are always going to run around in crisis mode. The only way to maintain stability, control, and not have everyone running around with their hair on fire, hire ahead of the curve. That’s my first piece of advice.

Stewart J. Guss:

Second piece of advice, learn how to delegate and do it responsibly. Delegating is not telling someone, “Hey, Attorney John, I need you to do this,” or, “Hey, paralegal Steve, I need you to take care of this.” Delegating is setting aside the time to sit down, really go through what your expectations are, what the execution is on the task, what the purpose is of their doing. Take the time to train, let them run around for a while. Do it, come back, and take the time to check and make sure it’s being executed the way it needs to be. Again, as a lawyer growing a practice, it’s always hard to find time but you have to make time to make sure that you train and delegate responsibly.

Casey Meraz:

Absolutely, yeah delegation, I want to touch on that just a little bit more as well. So it sounds like that you’re very clear on what that outcome is for the people that you’re delegating that work to. How has that freed up your time to focus on the more important things?

Stewart J. Guss:

Well, so the way it used to work was when I was growing my business, essentially I never… these are all lessons that I learned the hard way. I wouldn’t take the time to delegate responsibly and appropriately in the way that I discussed. So what I ended up doing was, I’ll keep it clean. I did a half-tuchus job of delegating and training. If you don’t know what tuchus means, ask one of your Jewish friends. So what I ended up doing was I’d have a bunch of well meaning, dedicated staff members that were really trying hard to do what needed to get done for the organization. They were doing it about 83% correctly. Well, then I would come back a month or three months later and I would have to spend all of my time fixing that 17% because if you don’t go back and check that things are being executed the way they need to be, you train someone to do something, they develop habits. They do it once, twice, 50 times, 100 times. Their heart’s in the right place but if it’s not being done the way you need it to be done, you’re going to end up with a lot more time spent on clean up, than you ever would’ve spent on appropriate training and delegation in the first place.

Stewart J. Guss:

Does that make sense?

Stewart J. Guss:

I don’t know if even answered the question that you asked, I’m sorry.

Casey Meraz:

No, that’s fine. I mean, because you got me in a different direction now.

Stewart J. Guss:

Sorry.

Casey Meraz:

That’s if you have any tips to make sure that people are following up on this and it’s being done the right way, as opposed to just letting it fail into that 17%.

Stewart J. Guss:

Yeah, and really what it boils down to is this. Again, I mentioned earlier, I was very thankful to have a bunch of great lawyer and business mentors as I started my practice. One of them gave me the best piece of advice. So what I’m suggesting people do, no matter how busy you are, always spend the time upfront to make sure that you’re heading in the right direction. Nothing is harder when you’ve got a response for a motion for summary judgment due, and you’ve got a trial next week, and all this other stuff, but you’ve got to take the time to get everything going in the right direction.

Stewart J. Guss:

One of the best pieces of advice I ever got. Ready for this? If you don’t take the time to drain the swamp, you will spend your entire life fighting alligators.

Casey Meraz:

Interesting, okay. I like that, that’s a good analogy.

Stewart J. Guss:

Yeah, and that stuck with me.

Casey Meraz:

That’s awesome. So, it sounds like that you’ve had good experience with when you’re having the cash coming and that you’re managing people and using other people’s talents to help grow your firm. What would you say to law firms that don’t have that business coming in? What area should they focus on to get new cases?

Stewart J. Guss:

Yeah, so I’ll explain a little bit about my marketing. Just so you know my background, I was a computer geek when I was a kid back in the ’80s. So my dad worked for IBM and I built my first IBM XT out of spare parts, in ’85, ’86.

Casey Meraz:

Nice, okay.

Stewart J. Guss:

So I’ve been on the bleeding edge of computers and technology for a long time, which means that I don’t know when I registered my domain name, but I mean it was probably at least 18 or 20 years ago. I decided early on to go with a digital model for advertising. I have a lot of friends that do more traditional advertising, so when I was coming out of the box, obviously the Yellow Pages. Again, for those of your audience members who don’t know what a fax machine is, they’re not going to know what the Yellow Pages are either. Look it up on the internet, it’s a wonderful thing. So, Yellow Pages, billboards, and obviously television advertising. I am friends with a lot of enormously wonderful, talented and successful lawyers that have taken those routes and have succeeded.

Stewart J. Guss:

I think that a digital marketing model makes a lot more sense in the 21st century because you’re able to target your audience where you want them, when you want them, and really, when they have a need.

Casey Meraz:

Yeah.

Stewart J. Guss:

So, all of our marketing is basically designed to be, if you don’t need a lawyer, you’re never going to see me or hear about me but if you engage in any activity on the internet that indicates a need for a lawyer, we’re going to come up. We should be showing up as an option for you to explore.

Stewart J. Guss:

You could think about it like this, billboards, television, old school advertising, the way I always thought about it, you could put 10,000 flyers in a helicopter, little leaflets. My headquarters is in Houston, I could take that helicopter, take it 10,000 feet over the city of Houston and dump 10,000 leaflets. But if I do that, I’m hoping that six or eight or 10 of them will land on the windshields of people who need a lawyer. That’s the way I look at television and for instance, billboard advertising. I understand and I respect the nature of branding, I just found that I was able to spend my advertising budget much more effectively with a much higher ROI, exclusively doing digital means of advertising.

Casey Meraz:

Okay great, well no, that’s good. Like you were saying, people are looking for you at that point. They need your service, and so they do that search and they find you. So you’re going to be in front of the right people at the right time, if that’s your goal.

Stewart J. Guss:

That’s the idea, that’s the idea.

Casey Meraz:

Nice. So, let’s talk about how your firm transitioned and has grown over the years. What’s the best move, I guess, you’ve ever made? What are some other challenges that you’ve experiences?

Stewart J. Guss:

Yeah, so I’ll tell you. It’s fun, I’ve always had a mind for business and an eye for business. Like I said, I started at the Red McCombs School of Business before I went to law school. I can remember the first time I hired an employee, she was a friend of mine and she had worked with me at a firm that I was employed at previously. She was moving back to Houston, needed a job. I said, “Here’s the deal. I know you, I love your work and I’d love to work with you. I have no idea what you can do for me. I have no idea what I’m doing that I can give up to someone else. So I can only hire you part-time. Even then, you’re going to have to help me figure out what your job is because I can’t think of anything I do that I’m willing to give up.”

Stewart J. Guss:

Then I started to staff up a little bit. I figured out the hard way, how to delegate. Staffed up a little bit, and I remember I had two or three employees and I was sitting in the pool with my dad 15 years ago. I said, “Dad, my dream come true one day, I think I might some day get up to 10 or 12 employees, but then man, I’m done. That’s it, I will never get any bigger than that.” But then things just keep happening, things keep rolling, the docket keeps increasing. You find more and more clients that you can do good work for. You get great outcomes on your cases, and it’s very motivating.

Stewart J. Guss:

In terms of actually breaking through some barriers on growth, I’m going to give one really important piece of advice to your listeners that maybe are in the five to 20 employee range. You need to think about opening up a separate intake department. There’s a very specific reason that I’m going to tell you this. Up until about that point, I did a little later, maybe 20 people, 25. I had my attorneys and my case manager and my paralegals doing all of the intake for me. Funny thing is though, the same people, those same people who were doing the intakes subconsciously… I don’t think anyone would ever deliberately fudge an intake but in the back of their heads they’re thinking, okay so I’m going to sign up for this case for the firm and that just means my workload is one case larger.

Casey Meraz:

Good point.

Stewart J. Guss:

There’s nothing wrong with it, and it’s human nature, but I’ll tell you what I did. Several years ago, I opened a separate intake department. Now I have a whole department, it’s supervised by attorneys, but their whole job is to field inquiries, talk to new clients, and basically gather information that we can then use for attorney review, in terms of direction, sign up, don’t sign up. So I’ve got my intake department totally and completely motivated to and focused on intake and signing up qualified cases.

Stewart J. Guss:

Then I’ve got my in-house production team. The case signs up, and then they are absolutely focused on working those cases through to the maximum result for the clients without having to worry about being interrupted every 15 or 20 minutes to take a potential client call.

Casey Meraz:

Oh wow, okay. No, that’s good advice. Interesting, did you see a lot of growth specifically attributed to that?

Stewart J. Guss:

No, because well… not necessarily, because what that did was is it freed up everyone’s time and it freed up everyone’s focus. So the growth of my docket has actually really correlated very closely to my marketing model. I mean, that’s logical and that makes sense. So it wasn’t necessarily that I had an explosion in my docket or a big chunk increase in my docket. What it did was, it gave all of my team members the ability to really narrowly focus on what their task at their responsibility in the firm was.

Stewart J. Guss:

So when I broke out and started my own intake department, it’s not that that caused an increase in my docket but it did result in a huge increase in productivity. So as my docket naturally grew as we invested more and more into marketing, we were able to more efficiently and productively managing work through those cases. If that makes sense?

Casey Meraz:

Yeah, no it does. Okay, well that’s great. You got to spend your time on the things that are going to have the biggest impact. So it sounds like that was a good part of your model, a good change.

Stewart J. Guss:

Yeah, so not to go off and be all geek-like. I don’t know if you’ve ever read any Kurt Vonnegut, but he has a great short story, I think it’s called Harrison Bergeron. I won’t go into details, it’s basically a society where everyone has to be equal. So if you’re really intelligent and focused, you have to wear a little hat and an alarm goes off every 60 seconds just to distract you. Well, that’s what my paralegals and attorneys were going through in a sense, as they were working on their docket, working on their cases, potential client call you have to pick in. You spend 20 minutes, 30 minutes on the phone. You can even remember where you were, where you stopped to pick up that call.

Casey Meraz:

Mm-hmm, no, that’s a good point. If your people are doing that and they’re getting distracted all the time, I feel like that would also maybe have a negative impact on customer experience. How customers are experiencing working with your firm. But when you talk about the long term success where you’ve gone from to where you are today, what are some of those strategies that you would put in place or tell other law firm owners?

Stewart J. Guss:

Yeah, so this is actually, if you really want to succeed as a lawyer or I like to characterize myself, the owner and operator of a law firm, and I wear both of those hats, I think there are two core pieces of advice that I would give you. Honestly, this is the same advice I would give whether you were that solo working in that 12 by 12 office like I was, making your coffee in the morning and cleaning the pot at the end of the day or, if you run a 400 or 500 person law firm.

Stewart J. Guss:

Number one, always, always, always put the client’s needs first. That’s drilled into in law school and particularly when we study ethics, but where the rubber hits the road, there are always temptations to deprioritize something or take a tiny little bit of a shortcut no one will notice. I think that if you focus every intention that you have and every minute that you put onto your files, always remembering to put your clients first before anyone. Now my staff is a close second in my priority, but if you always put the client’s needs and interests first, that’s my first rule of success.

Stewart J. Guss:

Then very closely tied to that, it’s very simple. Every day when you go to work, and this is true for lawyers, it’s also lawyers, true for your staff, file clerk, paralegal, doesn’t matter. You will be faced with a decision that you have to make. When you are faced with a decision that you have to make, it’s very simple. Do the right thing, period, end of story. You know what the right thing is. Do the right thing.

Stewart J. Guss:

Then as they say, lather, rinse, repeat. The advantage of this is, not only will you be setting yourself up for very long term success, but to be honest with you, when you take those two approaches to the practice of law or running a law firm, the best advantage you have is that when your head hits the pillow at night, there’s nothing keeping you up because you know you’ve done the right thing all day long. Just like you did the day before and the day before that.

Casey Meraz:

That’s awesome. Do you think that your clients notice that and that makes them feel like working with you is an exceptional service?

Stewart J. Guss:

It’s interesting, some yes and some no. As every lawyer knows and particular, personal injury lawyers, 80% of your clients are pretty easy to work with and understand what you’re doing and are appreciative. But then you have the 10% of your clients that will bring you champagne and flowers at the end of a case and they’re always so sweet to you. Then you have the 10% of the clients that no matter how hard you work and even though you ran uphill in the snow five miles in three degree weather to win their case for them, they’re still not happy.

Stewart J. Guss:

So here’s the thing. The short answer is, sometimes they notice, but here’s the key. It doesn’t matter. It doesn’t matter whether your clients know that you’re doing the right thing for them and putting their interests ahead. It’s great if you can communicate that to them, but that’s not the point. The point is that you know that you’re putting your clients first and putting everything you’ve got into their cases. That’s all you can do, and beyond that, I think sometimes you just have to let the chips fall where they may.

Casey Meraz:

Got it. Well, that’s really good business advice. Then what would you say, as we get to the end here and we’re wrapping up, what’s your… sorry, what’s your best personal advice that you would give?

Stewart J. Guss:

Yeah, so everybody who knows me, and it’s funny, new friends that I meet, they hear that I’m a lawyer and I’m a litigator and all this. Quite frankly, someone meets me, they expect to see an egregious, egotistical, abrasive jerk. That is 110% opposite of who I am.

Stewart J. Guss:

My philosophy in life and I was raised, Stephen and Evelyn, my parents, were just the most generous, loving, and kind people. They taught me so well in that regard. My best piece of advice again, whether you’re a lawyer or want to be a lawyer or support staff, or you have nothing to do with the law. Be nice, just be nice. It doesn’t cost you anything extra, and after 53 years on this planet of doing everything I can to be nice all the time, whether it’s God or whatever or karma, it works out well in the end, it really does.

Casey Meraz:

That’s awesome. That’s sound advice for life, really. I’ve seen and worked with attorneys that have thrown chairs at other people – this approach. I definitely appreciate that and your compassion.

Casey Meraz:

Speaking of that, thank you for joining us today and sharing all of these wonderful tips with you. I know we had talked about… or, sharing these tips with our audience. I know we had talked a little bit about you being available to potentially answer questions that people may have. Would you be willing to share your email address?

Stewart J. Guss:

Yeah, absolutely. At the ripe old age of 53 and having achieved what I’ve achieved with the help of those who came before me. Now that I’ve got a little gray in my beard, I am absolutely happy to help those who are up and coming. Feel free to email anytime, stewart@attorneyguss.com. That is, S-T-E-W-A-R-T@attorneyguss, G-U-S-S.com. I’d be happy to chat or give any advice for whatever it may be worth.

Casey Meraz:

Awesome, well thank you so much for that generous offer. Thank you so much for joining us today. It’s clear that you’ve been very successful and I wish you the best moving forward.

Stewart J. Guss:

Thank you very much, it’s been a real pleasure. I appreciate the opportunity.

Casey Meraz:

Absolutely, take care.

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