In this episode of The Geek in Review, hosts Greg Lambert and Marlene Gebauer, along with special co-host Toby Brown of DV8 Legal Strategies, discuss the subscription-based legal services model with Mathew Kerbis, founder of Subscription Attorney, LLC, and Jack Shelton, co-founder of Aegis Space Law. The guests share their experiences and insights on adopting a subscription-based model as an alternative to the traditional billable hour.

Mathew Kerbis explains that his inspiration for transitioning to a subscription and flat fee model stemmed from the realization that many attorneys, including himself, could not afford their own billable rates. He emphasizes the importance of automating processes and leveraging technology to manage workflow and client needs efficiently, especially when offering lower-priced services.

Jack Shelton, whose firm focuses on the commercial space industry, shares his motivation for adopting a subscription model. He highlights the benefits of predictability and cost transparency for clients, particularly startups and small to medium-sized businesses. Shelton also discusses the development of in-house software to streamline complex analyses and improve accuracy and record-keeping for clients.

The guests explore the challenges and opportunities of scaling and sustaining a subscription-based model. Kerbis notes that the model is highly sustainable due to the predictability of monthly recurring revenue, while Shelton emphasizes the importance of refining processes and forms to ensure efficiency and effectiveness.

Looking to the future, Kerbis predicts that the rapid advancement of AI and the changing nature of legal practice will lead to a significant shift in the industry within the next five years. He suggests that if big law firms do not adapt, there may be a mass exodus of young associates seeking better work-life balance and the opportunity to start their own practices. Shelton, while agreeing with Kerbis to an extent, remains cautious about predicting a flood of lawyers leaving big law due to their risk-averse nature.

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Greg Lambert 0:04
Welcome to The Geek in Review the podcast focused on innovative and creative ideas in the legal profession. I am Greg Lambert. Marlene is with us. But she’s got an emergency call she had to take at the last second. So she’ll hopefully join us later. And I’m joined by a special co host today, Toby.

Toby Brown 0:25
Toby Brown stepping in to help both hosts. So I may have some knowledge about the subject matter. And one of the original geeks,

Greg Lambert 0:34
Yeah, well, there will be a test at the end. And I’m sure Toby will be proctoring that that test ring. So. So we want to talk this week about a different way of looking at the way law firms bill. And for over the past half century, the billable hour has been kind of the dominant way in which law firms have charged their clients. And for almost as long and especially really kind of starting about the 2008 recession. The talk started around the billable hours, and usually that it was any talk was titled something along the lines of, you know, the death of the billable hour. That was that was kind of the discussion. And yet, despite all of that discussion, is still remains the primary business fee model for most law firms that are out there. And this was backed up recently when we had Chris Satkunis, on from CounselLink. And she talked about her recent survey. And even even now with as much as we’ve progressed, fixed fee and alternative fee rates really only make up about 10% of at least large law. Billings, and that number has been pretty steady for years. So, you know, so we thought instead of having the typical talk about, you know, just billable hours equaling bad, we thought we’d bring a couple of practicing attorneys on to discuss how they’ve adopted a subscription based model and why that works for them. So first up, we have Mathew Kerbis, out of Chicago, he’s the 2024 James Keane Award recipient, and founder of subscription attorney, LLC. And Mat, I’m hoping that the numbers are still right. This is a service that starts at $19.99 a month. And $49.99 a page. So Mathew, thanks for joining us here.

Mathew Kerbis 2:46
Happy to be here.

Toby Brown 2:49
And in Jack Shelton, in addition to billing differently is in a very unique area block is the co founder of a just space law, a boutique law firm that focuses on the commercial space industry, with a particular emphasis on export controls government and commercial contracting issues surrounding foreign ownership and control a licensing launch vehicles and spacecraft so really cool stuff. A just baseball also works on as we’ve been saying a subscription model for their clients, which includes startups and other domestic and international companies involved in the space industry. Jack, thank you for joining us as well.

Greg Lambert 3:28
Alright, so Mathew, let’s start with you. Talk to us a little bit more about you know, what inspired you to transition away from the traditional billable hour model to a subscription and flat fee model for legal services. Do you mind giving us some insights on what kind of inspired you to do that?

Mathew Kerbis 3:48
Yeah, so I, I was the last division Chair of the ABA back in 2013 or 2014. And I was at some ABA event where at the time ABA President James Silken who is a partner at side, we’ve started going to Cromwell or at least he was at the time so large old law firm was talking about the Access to Justice problem, which somehow I liked, had never really been exposed to before that moment, even though it you know, two years of law school just focused on studies in my third year, and he made some comment, some offhanded comment that people chuckled out. But he said he couldn’t afford his own billable rate. And I thought, well, that doesn’t make any sense. And since I’ve been giving CLEs on the subscription model, I like to ask the room, hey, who here can afford their own billable rate? And not and to this day, never seen it? After a few years of doing this? Not a single attorney has raised their hand. So it turns out, it’s pretty common. But that was sort of in the back of my mind. And when I got started practicing law, I was actually doing foreclosure defense work. So it’s keeping a roof over people’s heads. This would be this would be a few years before I went to do insurance defense work, where I was billing time on So I grew my salt before I sold my salt a little bit. So I ended up with net regular salt. But, but the point of that story is when we were at when I was doing foreclosure defense work, my, my boss was essentially charging our clients on a flat amount every single month that we could keep them in their homes within the rules of civil procedure. I mean, because they didn’t pay their mortgage. So like, what else could we do, right. And it was really the subscription model. And so it’s sort of that, you know, I heard about the attorney can afford his own legal fees. And then I was sort of introduced without really knowing it to the subscription model. And then after several years of billing time, I just knew there had to be a better way. And I went looking for that answer. And kind of found it, there was like one ABA journal article about some lawyers using subscription and alternative fees. There weren’t a lot of resources. And so I just kind of had to just make it up as I went, which I’m still doing today, I take a very much a startup mindset of continuing to build the ship as I sail it, and sort of continue to adapt as we go. But that $20 A month thing that was from the very start that that pricing is still accurate.

Greg Lambert 6:07
So I’m sure Toby will have some comments on how much you need to raise your fees every month. But before we get to that, Jack, do you mind telling us, you know, what motivated you to adopt a subscription based model? And, and how does that work across a firm that has multiple attorneys?

Jack Shelton 6:28
Yeah, so I got started doing subscriptions, just because I hated billing hourly. It initially just started, like, I really just hated the practice of doing. And I worked for a couple of bigger firms. And that was the norm, you know, we had to do. So I got started in the maritime world, working for ocean carriers, a lot of what I was doing was, you know, you would have vessel collisions, things like that, suddenly representing these insurance companies. And, you know, when you’re representing insurance companies, you got to do the billable hour, you have to code all of your entries in a certain way. And you have to write these long descriptions. And just thought it was the dumbest, most useless, pointless thing. And then I was transitioned from that to mostly representing businesses and transactional matters, and well, how the small businesses that are taught to you it really is really like this, like when they give it to you in this format. Now, the stresses me out stupid. So okay, well, I guess I don’t need to write these long descriptions of every six minutes that I spent working on your team. Another thing that kind of sent me in that direction was, there was one alternative for most working for. And she was just in business transactional stuff. And she had this great idea that I thought is a great idea. She would charge for transactional clients $200 a month or something like that. And that would just be for her to be on call. And she wouldn’t charge them for phone calls. After that. Any substantive work, she would bill out. But for that $200 a month, she basically said, hey, I’ll pick up the phone anytime you call. And I’ll answer your question if I know it. And that way, you never feel stressed out about picking up the phone to call me incentivize you to do that. I thought that was really smart from perspective of benefiting the client, but it also had this really brilliant benefits her in that it made her sticky like that clients not going to go find another attorney after that to do the substantive work if they’re getting hurt and bath to do that. So I thought it was really smart. So when I when I left the last law firm that was working out to start my own. The first thing I did was I found one client who was willing to pay me a certain amount every month just to be there. Gertie has kind of a fractional in House Counsel’s. And I just grew up from there.

Toby Brown 8:53
So Jack, I want to turn a little bit to the client experience, because in my experience, I have a lot of big law, a lot of clients say that we don’t like the billable hour, but when push comes to shove, they go with the billable hour and this guy. They I can’t tell you how many times I ran my purchasing team through the exercises, say we’re going to put this into some kind of fixed fee, retaining a monthly retainer subscription order model in the last hour, the client goes, Yeah, we just want to do rates and discounts. So how has this model impacted your clients experience, particularly in terms of the cost, transparency and predictability? I’ve had conversations with Bailey [Reichelt], your Co Founder, and you mentioned that predictability and cost is very important to start. Can you give us a little more color models of how that as as blue out? Sure.

Jack Shelton 9:43
My experience, the companies that tend to want to stick to the bill about billable hour tend to be the larger companies that are smaller businesses, medium sized businesses tend to be more concerned with just unpredictability. Rather than counting every hour and seeing where they can figure out how to say no to that six minutes I spent over a year. The small businesses that we work with, it’s really important for them to be able to set a budget. Yeah, and for a rebuild to be a line item. Especially because they don’t have a tremendous amount of money for operating expenses. And you know, everything like legal is going to be cutting into that. And so just knowing that it’s going to be a set amount every month or every quarter, it really helps them know how much money they need to set aside to do certain things.

Toby Brown 10:38
So that you don’t have him coming back to you and saying, well, in April, it didn’t seem like he spent a lot of time so we need to talk about that.

Jack Shelton 10:46
So one of the things we explain on the front end is, look, there’s going to be months or quarters. So just explain, sometimes we build quarterly, we’ve tended to do that. More recently, when we got started, it was more monthly, but now we really do quarterly. But when we explain it to clients, we say, look, there’s going to be certain periods in which we are working a bit more than what we’ll have initially conceptualized when we sign you on, and then other periods is can be a little bit less, it’s going to tend to average out. If it doesn’t, and we’ll come back and we’ll adjust it. And people have tended to be really happy with that. They just said the predictability.

Toby Brown 11:28
The only the larger clients can.

Greg Lambert 11:32
It’s only No, probably not right.

Marlene Gebauer 11:36
Alright, so I’m jumping in. Thanks, everybody, for your patience. And questions for Mathew, as you if you as you grow a subscription service and add more and more clients, how do you navigate and manage the workflow and the needs of those clients? You know, are you able to leverage any process improvements or technologies to help with that demand?

Mathew Kerbis 12:01
Absolutely. Fantastic question. I also have like, a 60, minute CLE, pretty much are dedicated to that. So trying to just get it narrowed on this one? Yes. Yeah, absolutely. I mean, essentially, even before, like Gen AI, I hit the scene, I was using AI tools that were available to me, which sometimes did and sometimes didn’t include automation. But like Calendly, for example, is a tool that I leverage. And they have tons of automations that you can build in to it, right. So one of the things that I do is, in particular, when you’re trying to serve the legal market like I am, and you’re charging not a lot of money to do so you have to You’re not billing your time, but you have to manage your time very well. And so one of the ways is no, like Jack gave the example of somebody who was charging 200 a month, you could call whenever they want and they didn’t get billed separately for it. Well, I don’t do that that’s not an option to my subscribers, one of my subscriber benefits is being able to schedule 15 minute calls with me at a time. And that $20 a month level only gets you the end of my day, every day, and occasionally an hour or two of availability on a Saturday. Meanwhile, my higher level subscribers just get access to my entire calendar of availability, right. So like whether you’re billing your time or not, none of us as lawyers can really just answer the phone whenever that’s why there are answering services, and we have to hire staff and stuff. I’m a true SoloQ some of the ways I continue to charge lower prices, is I just have to be efficient with my overhead as well. And so I have to automate everything. And so like leveraging tools, like Calendly really helps do to do that. And that’s like, like if there’s anything that there’s a takeaway from that 60 minutes. CLE is like just use a tool like Calendly you know, Microsoft bookings if you’ve Microsoft Google appointments if you’re just all in on Google, but I prefer best of breed tech. And so I really like a tool occasionally that like we just do scheduling, that’s all we do. We do it better than anyone else. And so like, you know, your acuity was acquired by Squarespace. So now, it used to be like that. But now it’s built. It’s one feature in Squarespace. I don’t know that they dedicate the resources to acuity that maybe used to be when it was a separate company. But if you your website back end is built out using Squarespace acuity is built into that nowadays. And I think LawMatics, too is like this version for legal tech, if you’re looking for like a legal tech based solution, and using some of those other CRM related features, which I have a different platform I utilize for that. But then also font and the last note I’ll say on that is like utilizing a client portal. First of all, it’s probably necessary to maintain attorney client privilege instead of emailing unencrypted emailing back and forth. So like utilizing a client portal, I use non legal tech solution for that called Sweet dash. Its white label client portal software that integrates with stripe. You also have to automate all your payments right so like once my client signs up, like I never have to worry about anything because Sweet dash and Stripe automate all the automated subscription charging, and when I do charge flat for flat fee work only available to subscribers, those are all built out in sweet dash, right just drop down menu, click, boom, it’s off, and I don’t have to worry about it. So automating all the invoicing and billing and subscription stuff, too, is also super important. You could do that right within stripe, or some of these other platforms. But I prefer to utilize suite dashboard because of the layering on top of stripe that it offers, in addition to the client portal features that I use. So

Marlene Gebauer 15:32
go ahead, Toby,

Toby Brown 15:34
I have to give you points removed correction. So years ago, I worked with the Utah State Bar, and I understood the technology email, and I argued that we should had an ethics rule that says you can’t use email privilege. Unless it’s encrypted. And man, I was shot down, I was shot down. So thank you for actually understanding

Mathew Kerbis 15:54
To that point. Like I try to make all my clients communicate with me in the client portal. But they do just sometimes want to email me sensitive things. I’m like, if you do, we may be waiving attorney client privilege, you know, if this is how you want to have this conversation, I just got to let you know that I preferred some the client portal and so you know, it’s introducing some friction, which is not great. But for the bigger clients I have, like I’m in their Microsoft Teams and I the account with their you know, so that’s like, for the really big clients. I care about that stuff. That’s how I’m handling that kind of sorry, Marlene.

Marlene Gebauer 16:24
But no, that’s all right. It’s like, you know, I was it sounded like, you know, also some of these these different tools that you’re using, you know, they might, you know, there, there might be some integration and there might be some automation, like between tools. You know, is that something that also that you do? Because I’m sure there’s folks out there that are like, Oh, that’s so many things to have to observe, remember? So tell us a little bit about that. Yeah, yeah,

Mathew Kerbis 16:49
I mean, I am not really leveraging like Zapier or make, which used to be, was it Integra mat or something like a really bad brand name, and now it’s just, which is good. And so I’ve looked at these tools, they don’t always really do the integrations I want to do. So I primarily just look for tools that have API’s with each other, and they inter already integrate with each other like Stripe, for payment processor basically integrates with everything. Because it’s like the largest one out there that’s in terms of ease of ease of use. And stripe only takes a percentage of the transaction, you know, there are ones out there like, like your law pays and Affinipay is and can find a legal that can be IOLTA compliant. So if you want to do a subscription, and your jurisdiction is such that it has to go into an IOLTA account first before it’s transferred, like at the end of the month, which I know some jurisdictions I know some lawyers I’ve had on my podcast have have said that they do that, you could you could then use like a confido legal, which automatically charges that 2.95% From your operating account. And you could still power your subscription that way. So there are tools available to do that. And, and even even with that all integration thing, I’m of the mindset in particular, for smaller law firms. I’m of the mindset that you want to maintain your subscription pricing separate from your other tools in the event that you want to switch because it reduces switching costs if you like, I don’t love sweet dash. So like the next time I do get a bigger high ticket subscriber, I’m actually going to put them on a subscription. Separate from that. I haven’t decided if I’m going to stick with stripe for that or if I’m going to use a confido legal but the reason for that is I don’t love sweet Dash. And I think I might want to switch client portal solutions. And I want to reduce the like inadvertent churn, which is where you lose a subscriber when I want to make that eventually make that switch. And so I’m actually have the mindset that maybe you don’t necessarily want everything to integrate in the event you want to because again, I’m sort of I want the best of breed tech. And if everything is integrating, you know, I’ll lose out in some automations if they’re not integrated. But then the benefit to me as a small business owner is why could switch if I find a better solution for another thing, without losing all these, these integrations and automation. So there’s definitely trade off. And you just have to, you know, every one of these software companies you charge, they charge you a subscription, they want you to be successful with their platform. So you could go out they have like YouTube FAQs, they have a knowledge base, you could learn and if you don’t want to, that is what you know, Fiverr or these other websites are for hire a freelancer that will help you set this up. Make sure your contracts are tight with them and that you own off the IP and all that just legal information for educational purposes, not legal advice. But you could always hire an expert. If you’re concerned that there’s too much technical stuff for you.

Greg Lambert 19:36
Jacqueline, let me toss it back over to you for now, on the technology piece. Are you also needing to, you know highly leveraged the technology in order to keep the efficiencies going?

Jack Shelton 19:51
We’re using some we’re actually working on developing some software in house for a few things for our clients to use. One thing that we use, and plan to explain a little bit about what we do. We work a lot in what’s called export controls. So it’s really two sets of regulations. One is called the International Traffic in arms regs. The other one is Export Administration rights. And essentially, what they say is, Hey, you, as a company have some stuff that has some national security interests involved in it, we don’t necessarily want foreign persons to be able to see your stuff and understand how to re engineer it outright. And so you have to protect your technology. And so for example, if they had CAD files related to their the wages they make, and they were to upload them to the cloud. And that cloud as a server based in Russia, animals, they essentially have exported their stuff to Russia. And that’s something that we’ve had to deal with before. And so we build out these procedures for our clients, so that they don’t inadvertently export their stuff. And the problem is that they have a whole lot of these trigger events that raise this question of me exporting when I do this thing. If I am exporting, do I need to get a license from the government? What do I need to do? And for most of our clients, they might have one in house person, or they might have zero and house persons who are able to do other stuff with them. So we serve as an outsourced compliance counsel for now, it’s difficult for them to just send us emails asking us these questions, because the emails get lost, the threads get confused. And then they’ve got all these record keeping requirements as well, that where they have to keep a record of the whole analysis, and when they raise the question to us and how we analyzed everything. So what we did was we created, we took some software that’s typically used for IT Helpdesk records. And we re engineered it for this purpose. So we created some very complex forms for them to answer intake questions. We then have a whole bunch of checklists on the back end that we go through where we can document our analysis, we can basically push a button, and it brings them the template, the Analysis template, and then you can click through, say, yes, yes, yes, no, no, yes. And so you can get the full analysis required to determine if we need to get a license for this person to take their laptop on vacation with. This has really reduced the amount of time it takes for us to do something, it also makes us we’re accurate. Because we’re all doing it the same way every time. And enables the client to have a really clean record of the analysis. And you know, if we determine we need to get a license from the government, we apply for the license, we get the license, we can upload it to the ticket so that it’s all there in just one record. They’re not having to remember, okay, Jack sent me an email, I need to download that PDF, I need to put it in the transaction folder, which just never happens. And then when they have an audit, it’s like, go through all of the emails and find all the things. So we just maintain the record for them. It makes it really simple.

Greg Lambert 23:19
Sounds like sounds like there’s some best practices in there.

Toby Brown 23:25
Greg, if I can add a little color like I did with Mathew, Jack, I’m gonna give you points for standardization. Most lawyers think bespoke means quality. But you nailed it. Standardization means it’s quality, every top. So well done on that’s, again, you guys are forward thinking in more than just fixed fees, subscription model and standardization,

Mathew Kerbis 23:47
Toby, to your point, and I’m sure Jackie agrees. And she did it. Like when you’re not billing your time, the less time you spend on something, the more money you make. And so like by standard like we’re incentivized financially to standardize, yes.

Jack Shelton 24:01
There’s, there’s a story that I read early on, when I was conceptualizing how we’re going to do subscriptions. I can’t remember where I read this. But it was this young attorney who came into a big law firm. And there was some sort of process that they had to do for clients all the time. I don’t know if it was in corporations or whatever. But it was some something that they spent a tremendous amount of time doing. And it was always exactly the same thing. And so what he did, he got clever, and he wrote a software program. And then he took the software program to his boss, and he said, Hey, this thing that you said took us hours and we can get it done in five minutes. And the boss became furious and was fired.

Greg Lambert 24:42
I think it’s a case of clarity story.

Jack Shelton 24:48
For law firms billing hourly, to get efficient, and to actually just get better at what they do. Instead. They tend to take as much time as they possibly can him also answering, read answer, writing memo,

Greg Lambert 25:06
I don’t think on when it comes to the billable hour, that you can take your time to do things and you don’t feel necessarily the pressure of being efficient and every single time. But when people think about a subscription model or an alternative fee model, where the less time you spend on something, the more money you can’t possibly make. And so the issue comes up of How sustainable is that? And how can I scale that in a way that, you know, that is effective, both for my clients, so that the clients get the outputs that they need, and for me so that I’m not, you know, at the end of the month having to write a check out of my own pocket to keep the lights on? So, Jacqueline, let me ask you first, you know, how do you how do you? Have you found that you’ve had any challenges when it comes to scaling things? In implementing the model? If so, how do you address those?

Jack Shelton 26:19
I’d say that the biggest challenge right now, is just the fact that the analyses that we have to do are so complicated. And so, like, the forms that I’ve created, for example, in our service desk, I created everything, and then I pitched it over to my colleagues to say, hey, go take a ticket, your here’s an incoming ticket, I’m assigning it to you. Take let’s see, see how it goes. And then she’ll come back and say, Jackie, you left out some questions, this is a stupid form, you need to fix it.

Greg Lambert 26:54
I I know who was saying that.

Jack Shelton 26:58
I didn’t do this intelligently enough. And so it’s always going to be, there’s going to be a period of time, where we’re just gonna have to keep refining. It’s going to take a walk.

Greg Lambert 27:10
But it isn’t one of those things where it’s like, it’s like publishing the most expensive one is the first one. And then after that, once you’ve kind of figured out the process, you can you use the next next one’s a little faster. The third one’s faster than that, that how you see it.

Jack Shelton 27:27
I think so. I mean, I put a tremendous amount of time into creating all the checklists and everything on the front end. And as we go, we’re gonna tweak the minutes. Frankly, it’s not that hard to tweak the machinery as we go. So I do think that at some point, we’re gonna get to a point where the client facing forms are really pristine. We’ve got explainer videos embedded in the forms, if they have a question don’t understand something, they just click video and have it explained to them. So they don’t have to call loads. And then on the back ends, the analysis forms that we’re using, making sure that we’ve thought through every single little, little iteration. And then making sure that the forms themselves aren’t overwhelming, making sure that we’re chunking the information correctly and breaking it down in such a way that it’s neither overwhelming your client and or overwhelming us. And then after that, how do we eventually get, let’s say paralegals, doing the analysis, having them trained up enough so that they understand they’re part of the assembly line, then we’ll have a system that’s actually running really well. And maybe we would have a business we can sell one day, and not just have a bunch of attorneys kind of doing their own thing.

Greg Lambert 28:49
And, Mathew, what about you any challenges you’ve seen on sustainability or scalability?

Mathew Kerbis 28:56
I mean, I’ll speak to challenges in a second. But first, just on the success of the sustainability and scalability, right, so like, it is absolutely sustainable, right? Because now you’re talking about monthly recurring revenue and annual recurring revenue for the law firm. So it’s easier to manage a business when your outgoings expand is predictable, which of course it is, because it’s all subscriptions, or salaries, or lease payments, or whatever. So basically, all of your expenses are on a recurring basis as a law firm, for the most part, even if you have like a well oiled advertising machine, which I don’t, because I’m not really advertising and that is a hint on the problem of the scalability point. But, then when your income is something that’s recurring, that you could count on, you can anticipate it just becomes holy, easier to manage your business, right. And so from a sustainability standpoint, I think there’s nothing better than a subscription model. I think it’s about how like we define the benefits, the subscriber benefits or the value of what We do as lawyers, like in particular, with AI, right, like, Gen AI ai has made it easier than ever, for me to get results to clients faster, and to do things that it would never have made sense for a human to do. Right. And so even the value of what I’m able to provide my clients in a speedy fashion has significantly improved. From the day I started my practice to present day. And I’ve played around with a lot of tools, like dozens and dozens of AI tools, and I found a couple that work really well for me. And I’m not really using like the free ones that are out there, or the general tools, I’m using legal specific tools just like how, you know, lawyers will go off and they’ll be a CEO of a company, or they’ll be a politician, or they’ll even do some other things where they’re not practicing law, that legal mind helps them will these models that are trained on legal things I find do a heck of a lot better than these Large Language Models, then just the general not specific Large Language Models, just an even everyday thing. Like I’m using Paxton, and there’s a lot of them out there. But, but I’m using it just for like the way I used to use ChatGPT. I’m not, I’m still using Claude and some other things for like non legal work. But for the but even for the non legal work, I like to use these legal AI tools. And I’ve used some other ones as well, I just right now. That’s my favorite tool that I’m using. So, and I’ve had the other ones on my podcast with founders of the other ones. But, but so that helps with that in terms of scalability. I mean, it scales incredibly well, too, because you’re trying to automate things, you know, like Jack said, with forums, like I offload a lot of things to my clients to fill out whether that’s through a Google forum that I built, or through gavel, which is another automation platform that I use? Well, yeah, and so. So like offloading things that the clients can do, I have not had to hire yet, I’m sort of looking into it. But when I’m trying to hire is I’m trying to hire like a law clerk who knows how to use AI like legal AI. And there’s not a lot of those yet. And so because I want the substantive work, like I’m not trying to offload non substantive legal work, because I’ve got that all automated for the most part, right. So like, I’m trying to offload substantive work, and like there are lawyers would be too expensive, who know how to use AI, for like a firm like me to hire. So I’m really looking for like a law clerk, but they don’t really exist yet. So just throwing that out there into the ether to see if that comes back to me in some way. And and then the biggest problem for scalability for me, since I’m not charging a lot of money, I’m not willing to take on a bunch of debt is the advertising marketing side of things, right. And I had Alan Rodriguez on my podcast. And you know, he’s with one 400, and SR Law Group, came out of Legal Zoom and productize, their subscription offerings over there. And one of the things he said to me, which was illuminating was, the only thing preventing you from scaling is that you’re not willing to spend a lot of money on marketing, because your business model is pretty cool. And I think people would hire you. But like, You got to be willing to, you know, maybe take on a little bit of risk in that department, which I’m still kind of not. But in spite of that I am growing. And I mean, I from year one to year two, I’m more than 3x, two, my revenue. And I hope to do that, again, from year two to year three, and I’m in the middle of year three right now. So and I’m I’m progressing in that direction, right. So like sloped slowly, but surely, I think it is scalable. And if you’re willing to take more risk as a business owner, then you think it could scale incredibly well.

Toby Brown 33:25
So for the next topic, we somewhat addressed this, but I want to bring it into a different focus and go there, I’m going to tell a story. So I like to tell stories. So 15 plus years ago, when I first got into legal pricing, I would talk to clients about six fields. And a concern they would express is I’m afraid that if I’m incentivizing you to not bring great that you’re gonna cut corners, and you’re gonna find the cheapest way. And my response we’re being a big law firm is, we don’t know how to do that we only overwork everything, so I wouldn’t worry about, but that perception was still there. So Mathew Greene your view? How does this subscription model have influenced the actual practice of law? For example, does it affect the way you or your team approach while you approach legal problem solving or client interaction compared to a billable hour because you better go

Mathew Kerbis 34:21
well, for those who are listening, and they’re, they have a bingo card, or they’re playing a drinking game, I’m gonna say it depends. So okay, so we set it it but it does depend on practice area in particular, but the subscription model solves that problem incredibly well, Toby, because the incentive is I want you to stay you client to stay subscribed to keep off offloading your legal services to me. And so I’m incentivized to do really effective work that is valuable for you on an ongoing basis so that you stay subscribed, instead of just this one off thing. So the analogy I like to use somebody did something with fish or something at some point, but I like an apple analogy. So most lawyers or law firms look at a client matter as a one bite at the apple situation, I get one bite at the apple, I want it to be the biggest juiciest bite I could possibly bite. Because there, they may never come back to me. But for me, what I do is I think I want to eat this whole apple. But I’m going to do it over time. And so we’re at and it’s gonna, it could take 20 to 30 years because the subscription model makes you think about here’s another subscription economy term lifetime value LTV. And so the lifetime for me might be like 30 to 40 years as a practicing attorney. So I am thinking about things in terms of that, that mindset. But to Jack’s point, I have a brand, I’m building a brand, not just a law firm that’s just attached to my name. You know, Jack’s got a just law, I think I’m pronouncing that right II just like you, Jack will tell you,

Jack Shelton 35:52
It depends on if you have a military background or literature background.

Mathew Kerbis 35:56
Right. So like we’re building brands, so I’m thinking about lifetime value towards me. But I’m also thinking about lifetime value in terms of the life of the business. And the businesses that my law firm is serving, which could be for hundreds of years. And when you start to think about things in terms of that mindset, it totally shifts the dynamic. And it also lends itself to problem avoidance, where like an expert litigation firm can maybe just their subscriber benefit could be we helped keep you out of litigation. Yeah, an ongoing basis, because we’re experts in litigation. And so and there’s always potential for litigation. So I think that, you know, it just depends on how you frame it. And it depends on the practice area. This lends itself better to like trademarks, where you’re always protecting a brand, you know, cease and desist letters, maybe you’re registering new marks, right. So like, it makes a heck of a lot of sense. And like copyright trademark IP work. That’s kind of where the, the subscription model really took off with Ken Bennett, right. But it works really well. freq for fractional GCS, as well, which is, which is really what I do is fractional general counselor. So

Toby Brown 36:56
Mathew, again, I’m gonna give you a point here, because, well, that was a very good answer. But on top of that, this is something I tried to get law firms to get in their minds. It’s a thing that every other business dreams of and it’s called recurring revenue. Instead of a single bite, it’s not only you get to eat the old Apple, you have a yellow line of apples to go out into the into the future. So recurring revenue is a core, you know, most businesses that that is a sought after thing, but most law firms don’t even know what it means. So well done. Thanks.

Greg Lambert 37:36
Jack, let me let me turn it back over to you do you first see that this subscription model is something that would become more prevalent prevail and in the legal industry, not just for startups, but actually, do you foresee this leaching into bigger law firms, as they see success from firms like yourself? Or do you think you’re standing alone? I can, I can tell you don’t think this.

Jack Shelton 38:06
Law firms are ever going to do it based on the weather models work, they’re always going to build hourly, I’ll give you an example. This is my co founders story, Bailey, she’s. So she’s helping this client of ours. From an export control standpoint on this big deal that involves potentially selling some widgets to a foreign country. And there’s an investor on the other side that’s going to invest only if this widget can be sold at the swearing in. So that investor has seven attorneys on the phone. And our client has seven other attorneys from another law firm, where the corporate CPAs attorneys, and so you’ve got seven plus seven and then Bailey. That’s how big law firms make money.

Toby Brown 39:52
Well, this is not normal for me to defend big law firms. And we talked about this a little bit earlier at In my experience, and I gave a story about how I would provide fixed fees and clients will always revert to disk. And that that has not changed 15 years. And what I came to realize is, clients do not know how to buy on a fixed speed. They, they don’t, they don’t know how to say, okay, for x, it shouldn’t be $100,000. Whatever it is, they’re unable to do that, in part because they don’t scope their work. And then they don’t manage the scope. If you’ve got scope and a budget, then it makes sense to say I can price compare across the only way they can price compare his own rate. And so clients who buy from big law are unable to buy other than the hourly or rarely do it. But, you know, obviously, there’s exceptions. I know Amazon was very, you know, fixed fees, and some other clients are into that. But for the most part in house counsel, that’s the only way. So sorry. But I that’s why I’m agreeing.

Greg Lambert 41:01
Let me turn that just a little bit. If I’m the client that has, you know, seven or 14 attorneys, and, you know, if I’m thinking about it, and I realized that the one person who knows what she’s talking about would be, you know, at least I would know exactly how much I was going to be paying her every month, every month. And that would be of great benefit for me. So how is of how are you able to spin situations like that and to recruiting new clients that lived through that? Or is that not necessarily your client base that you’re looking at?

Jack Shelton 41:47
Yeah, and we’ve been a little careful what you say, we’ve been able to take a number of clients, and these aren’t massive clients, but take take a number of clients away from the bigger firms, the bigger firms, both because of our expertise in what you’re getting forgetting, we’re not allowed to say the word expert lawyers, but our our knowledge in the subject matter. Both both both our deep knowledge and subject matter and the way we bill and the trans pricing transparency, we’ve been able to take some clients away because of that, you know, we, another attorney who were close to, in our, in our industry told us that he had a meeting with a big firm that was considering copying what we’re doing. And he looked him in the eye and said, You’re not going to be able to do it. Because you’re a big firm and the way all of your incentive structures work and can’t tell you what to do, or I just don’t see big firms doing this.

Greg Lambert 42:58
And we’ve had a similar conversation when it comes to out even between two big law firms like technology, how we implement things, even if I gave you a checklist of everything that we do, your structure is so different from ours, there’s no way that you could even do it, because it would it would entail changing everything from the ground up. So very interesting.

Marlene Gebauer 43:27
So speaking of change, this is the part of the podcast where we asked our crystal ball question to, to our guests. So basically, we’ll start with Mathew, you know, what do you see as a major change or challenge for the legal industry over the next two to five years?

Mathew Kerbis 43:50
Yeah, so I think two to five years is hard. But I think that’s the right range. Right?

Marlene Gebauer 43:57
Because question that you want to be asked.

Mathew Kerbis 44:00
I hear you, I hear you. You know, exponential growth is something that’s hard for people to understand. And even those of us who like try to understand it, it’s still hard to understand, right? Like, how many times do you double folding a piece of paper over? So that encompasses the whole earth? And it’s like, really, it’s like less than 50, right. And most of that coverage happens in like the last three folds. And with the way AI is going and adoption and improving. It’s at an exponential growth curve. And so I think we’re actually going to see a lot of this happen in the next five years. I don’t have a lot of data to go off of, but like I’ve been giving CLAS on this for a little while now. And I don’t have statistics from all of them. But lawline has the numbers there. So like there’s over 550 people who want to know how to do subscription legal services, just mine. I know lawline offers other programs out there from the AI will end the billable hour are you prepared one which is less than a month old at the time of recording? There’s already Almost half that 245 People who have viewed that one, right. And I know I’ve done this more. So there’s even more lawyers who are interested in this kind of thing. I think that we will start to see if big law doesn’t adapt. There’s a lot of If This Then That, you know, stuff for my prediction is big law doesn’t adapt, I think we’ll see a mass exodus from big law, where young associates who don’t want to build time and they want more work life balance, and they decide that a lower six figure salary is enough, of course, they’d be paying themselves because they’re starting their own law firms, it’s easier than ever and cheaper than ever to start your own law firm. And when you use something like a 650, as a back office are some of the other competitors out there. You know, these other sought like legal tech software solutions, some of which have spun out of law firms, like 650 did that are more reliable, then I feel like you know, just becomes easier than ever for them to just leave and start their own thing. And there’s already a labor crunch. And that’s why you’ve seen people like Alex Sue, go to attitude. Because of like the way like the nature of of the structure of law firms and how we practice law is radically changing. And I think I think it’s, it’s safe to say that if if we see status quo with big law, then then in five years from now, big law will look very different and less big law debts. And for the solo, small lawyer, we’re going to be offering more affordable legal services. So we’re helping to close that access to justice gap, and we’re going to be making more money doing so. And I think that’s a good thing for everybody.

Marlene Gebauer 46:30
Very good. And, Jack, what is your crystal ball telling you?

Jack Shelton 46:36
I really hate making predictions because that was wrong when I do and I’m already regretting not on taking on the last question. So to a certain extent, I agree with Mathew, I don’t think I’m more cautious about saying that we’re going to see a lot of attorneys go out and start their own gigs, because lawyers tend to be so risk averse. If I just think back to like my graduating class, to read only a couple of people who ever had an entrepreneurial owning their body that would go and start their firms, terrified, terrified. I was one of the people who’s terrified of it. It took me a long time before I finally just hated what I was doing enough that I went out and did my room che. So it, I don’t know, you might you might be right, Mathew, I do. I do think that there are there’s something peculiar about lawyers and how risk averse we are that probably not to be quite a flood of people leaving big law. But there’s, there’s definitely a certain extent…

Mathew Kerbis 47:44
We are the commensurate problem solvers. And I think that if the problem is the billable hour, and there’s a better way to solve it, and the solution is I have to start my own practice. And there’s a law firm in a box solution using AI and automations that they could just set up shop and go. I don’t know, I think we’ll see.

Greg Lambert 48:03
Well, as the great Yogi Berra once said that predictions are really hard, especially if they’re about the future. So we’ll, we’ll have to see how things go. So Mathew Kerbis, from Subscription Attorney, LLC, and Jack Sheldon from Aegis Space Law. Thank you very much for joining us today.

Mathew Kerbis 48:25
Thanks for having us.

Greg Lambert 48:26
And Toby, thank you for CO hosting.

Marlene Gebauer 48:33
And of course thanks to all of you our listeners for taking the time to listen to The Geek in Review podcast. If you enjoy the show, share it with a colleague we’d love to hear from you so reach out to us on social media I can be found on LinkedIn or on X at @gebauerm

Greg Lambert 48:46
And I can be reached at on LinkedIn or on x at @glambert. So Jack first of all set the record straight How do you pronounce it Aegis or E-gis?

Jack Shelton 48:58
I pronounced an Aegis Aegis military so there’s there’s a Jace is used in a few different contexts in the military. So anybody with a military background pronounces ages but people who didn’t have more of a literary background and read Greek will pronounce that Aegis

Greg Lambert 49:20
so where can where can people reach out to you online?

Jack Shelton 49:24 that is A-E-G-I-S dot law and I’m on some of the socials at @SpaceLawyerJack but mostly among

Greg Lambert 49:36
Mathew How about you?

Mathew Kerbis 49:38
So I have tons of content out there about this and I look forward to having Toby and Jack independently on my podcast last subscribed about it. So if this topic really interests the listeners last You could subscribe to the podcast there for email updates or search last subscribed in any podcast app and listen to listen to it. There are I’m over 70 episodes now and a lot more in the can. And then the firm is subscription attorney LLC so All my engagement agreement is public or my pricing is public. I do this in the interest of the potential clients but also for other lawyers who want to do it too and see how I’m doing it. If this podcast episode when it’s live will be up on Plenty of Mathew are all my past speaking engagements are there. So if you like listening to me, because last subscribes about my guests, is about where I’ve been speaking. And then I’m doing a new educational thing for kids called the law for kids podcast a LFK pod on all socials, where it’s just one minute quick bite sized pieces on like things like what is a tort? What is negligence? What are damages? I try to answer those questions in a minute for kids to understand. So that’s a new thing that I’m doing. And the search the subscription attorney on LinkedIn, DM’s are open.

Marlene Gebauer 50:56
I’m sending my kids to listen to that. And well, thank you both again. And as always, the music you hear is from Jerry David DeCicca. Thank you very much Jerry.

Greg Lambert 51:11
All right Jerry. Thanks, everyone.