- Why they started Complete Legal + what it’s like to own a self-made independent business
- The importance of personal relationships
- Their ability to take a long-term approach
- Where their challenges have brought them today
- The journey of a partnership and how they make it work
- Focusing on results so clients will come back to the Complete Legal team case after case
Listen to the podcast here:
About In The Arena Podcast
John Lovell is an entrepreneur, insurance futurist, thought leader, avid golfer, a proud husband and father. He prides himself on living in the trenches and this podcast “In The Arena” features interviews with fellow business owners, CEO’s and colleagues who are blazing their own trail in their respective fields as well as thoughtful analysis on everything from business to current events.
“It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena.”
PODCAST TRANSCRIPT
John: All right, so I’m super stoked and excited to be in the arena with my good buddies Eric Kelting and Jeff Dreiling from Complete Legal. We go way back number of years as we used to both compete in the same industry. I’ll just start with you guys right now. Tell us a little bit about how Complete Legal came together, and then we’ll talk a little bit about the backstory too. When you guys came together to put Complete Legal information back in–
Eric: 2014.
John: 2014?
Eric: Yes.
John: Maybe take it back to how you guys worked together back in the day…and how you went your separate ways, but what brought you guys back to this industry and decided to give it a run on your own?
Eric: You were there first, but yes, Jeff and I started working together in 2006. Jeff had been at a company a few years before I had gotten there and we always joke we never–
John: Was that Omnidocs or was that…?
Eric: You started Omnidocs. I started at Compex. What was our joke? I think we never left, but the company changed names several times over–
Jeff: Four names in one location and seven different ownership groups, but I never quit my job.
Eric: Yes. Anyway, that last merger that we were a part of, we gave it a good try for about a year and a half, and it turned out to be just a dumpster fire. We went our separate ways. We stayed in Legal. We both ended up in software sales. I was at a large company. Jeff was at more of a startup, and so we were living that life, but both just very different companies. Sitting in a booth at O’Neill’s at 95th and Mission.
John: That’s where all the magic happens.
Eric: That’s where all the magic happens. Yes, we started talking about how we’re very unfulfilled with software sales and started talking about the industry and why we left, and what we would do differently if we could do it our way. We started actually talking that out, what our way looked like. I’d say over the next several months, Complete Legal started to form and was born in September of 2014, we launched.
Jeff: Yes, I think it was from maybe April or May from concept, and I think the LLC papers were signed in August, and we were official in September. At the time, it seemed like it was actually pretty fast because it’s a pretty major switch or change, but I think that we both had a sour taste in our mouth when we left our previous employer. We had built something that we were pretty proud of with Eyevis in an effort to make it more, got in bed with private equity and–
John: Private equity.
Jeff: We know how that ends if you’re not Savvy, and we by no means were savvy at that time–
John: You’re not giving yourself enough credit. I think there’s a really savvy.
Jeff: Through mistakes.
[laughter]
Jeff: Savvy through mistakes. We hadn’t made that mistake yet. Basically, we saw all the relationships and hard work that I think at that point I was 10 years in and Eric was six or seven. We saw all of that basically get lit on fire, and we heard from our old customers that had supported us and helped us be successful of like, “It’s that’s not the same anymore. Miss you guys, wish you guys were still around.”
I think that gave me the confidence to say, okay, maybe we can do this because I think in the back of my mind and Eric will probably say the same thing, we didn’t leave with a sense of, okay, I can put that behind me. There was still some unfinished business for me at least.
John: Yes, and the relationship capital. I think that’s so important in anything we do especially in a professional services firm like you guys or like what we do, but how many years it takes to build that up and then when the timing is right, and it doesn’t usually happen overnight or right when you come out of college, it’s like you can capitalize on that with an opportunity to go start or create something on your own which is what we all envision as entrepreneurs, but a lot of people don’t see the time and energy and effort it takes to build that up, so that when you do go out and you finally take that swing or get that hat bat to create it, that was the crux of the hard work.
You were trusted, you’re respected, you’re knowledgeable, and it was– and then these big PE groups come in, and they don’t necessarily value the relationships as much and that’s what people want.
Eric: Remembering back now that there was some fear too because we had really left the Kansas City market, and we were in these national roles at the end of the time with that previous employer. We were no longer really working with clients locally, and so we were living on airplanes, flying to all the other markets.
John: Rocket man.
Eric: Yes, very glamorous. Lot of travel points, so that was nice. A lot of trips to DC and other markets, and so we hadn’t been present in Kansas City for a while, and obviously we had left and so there was a little bit of fear too that maybe those relationships were no longer there. I remember humbly just being amazed at all those years of service even though it had been a year and a half, maybe two years, how quickly they were resurrected and folks–
John: All those years pushing boxes up and down, what was that main street?
Jeff: Main street, yes.
John: [laughs] The two-wheeler?
Jeff: Yes.
John: Here’s the question I have because I was in the same industry, we had Versadox at the time and we were 90% paper. The eDiscovery was really– it was something that a lot of the groups like ours had access to or to do, but I thought it was interesting because when I got out of it in 2015 how much that had changed. I always felt, well, gosh, do we have the capital or the ability to invest in this technology or is it really meant for these PE firms? They’ve got all the money and they’ve got all the–
How are you able to navigate that? There was still a lot of paper at the time, but just feeling– there’s a little bit of what you were jumping into and why you felt like you could take that on, or what was that gap? What was that thing that made, okay, this is what’s missing right now in our industry?
Jeff: I think what allowed us to have that confidence is that we had sold and consulted on the highest levels on eDiscovery, and we knew what the big automakers and the big pharmaceutical companies, we knew what they were asking for. We knew what products they had available to them. Then we also knew what the middle market law firm and the solo practitioner had available to them. That gap was huge.
It wasn’t insurmountable technology-wise or really even people-wise. It was just a reach question. How do you educate thousands of individual people? How do you meet them at their level at that right time, at the right place? Private equity and larger companies realized very early that it’s easier just to go after the–
John: The whales.
Jeff: The whales, yes. Because you only have to get 10 whales to equal 1,000 little fish. We went after the fish because everybody else was passing them by and ignoring them. That was our opportunity. That was our crack in the sidewalk, and that’s what we started our business on.
Eric: Yes, really. We saw as companies like us were getting gobbled up and merged with larger companies bought by private equity firms, the gap in the sidewalk was that no one wanted to do paper anymore. There was a low barrier of entry on that service line, and that gave us revenue immediately, which was important to start feeding the business some revenue so we could start to scale higher, run out to microcenter and buy a bunch of towers to process data on this little baby server and all these towers–
John: Baby server.
Eric: Yes, it was very crass–
John: Is that like Baby Jesus?
Eric: [chuckles] We talked about dipping it in bronze and making a statue to it when it finally died.
John: What does that thing look like? Is it like a Dell?
Jeff: It looks like a computer. It’s a baby server.
Eric: But no, it was very grassroots and building it from scratch and paper was a part of that beginning. Then quickly technology and the software that we use, the playing field started to level. When you started looking at cloud environments, and all of a sudden you could do all of these things up in AWS or Azure and you didn’t have to buy tens of thousands of dollars of servers, technology playing field started to level and so quickly companies like us could scale and compete with those really large companies.
John: Because I remember early on, it felt like the cost of discovery was just getting outrageous because at one point I had created a spin-off from Versadox, which was– I was essentially a middleman leveraging different technology platforms out there, some of these bigger groups that did it. The cost, it’s like data dumps and things like that. You talk about representing the small fish because you knew if they didn’t know what they were doing in ESI protocol and again, we’re probably going over some people’s heads about– I do want to get into what exactly you do so people understand that better.
At that time, you could give very little transparency onto what the total costs were going to be and these solo small firms or the plaintiff’s firms may have agreed to something that was you’re getting ready to get hit with a ton of data that we’re going to have to upload, that we’re going to have to process and there’s a cost to that. How you guys were able to navigate that or get enough technology platforms to actually give a little more transparency and predictability and what those costs would be and then be able to scale it and make a business out of it and be profitable.
Jeff: The other thing that I think that should be added there is that we didn’t just compete against and we don’t just compete against the big boys and the billion dollar companies, but we also customize our solutions for our clients, whereas they very much incentivize their clients to take the fastball down the middle and be happy with it. That’s one added level of complexity, but it also, I think, is what has allowed us to survive and thrive this long.
Each lawsuit has a different set of circumstances, has a different timeline, has different types of communications that are important. Some cases are as simple as finding the emails, but usually, it’s not. Bringing in cell phone data, bringing in social media–
John: That was just really starting to hit.
Jeff: Our puppy-like ability and desire to please our clients to survive was very good for this environment where most of our competitors are saying, “This is our solution. Throw it at it. Let’s see what works. You get what you get. What’s wrong? You agreed to it.”
John: You get what you get. Don’t throw a fit.
Jeff: Exactly. Whereas when someone comes to us and says, “How much would you charge to do this?” We say, tell us about your case. Our immediate assumption is why are we going to do this? If you’ve got 100 units and you want to do something with it, our first gear is to say, where is this 100 units coming from, and can we get rid of part of it before we touch it? Because that’s automatically going to help us win on price and help you win.
Taking the time to ask that question is something that we have the luxury of doing that quite frankly, we didn’t when we were working for bigger organizations.
John: Just quickly in a nutshell, what do you guys do? What services do you provide so the listeners have a better understanding of what really makes the world go round? Which is lawsuits and insurance.
Eric: Simply put, we assist litigators with data and documents, locating documents relevant to litigation, whether those be on a cell phone or a file cabinet. Getting those into a platform so they can conduct their review, and then eventually produce the documents to opposing counsel and then we’ve got some services on the backend to help them prepare for trial.
John: eDiscovery,
Eric: Litigation support.
John: Litigation support services. I love it. I think one thing that I want to dive into a little bit because as a business owner, there are so many complexities and things that you have to go through as you’re building a business from where it was before to where you guys are today, the team you’ve put together. I want to talk about partnership. One of the things that I’ve seen and experienced in my past is partnerships are very difficult, especially when you own a business.
You two obviously had the experience working together for many years, but I feel like you complement each other very well as we start to understand personality types and strengths and weaknesses. What do you think has made your partnership so successful thus far in the short amount of time that you guys have been operating, and maybe some tips or some lessons out there for others because they’re difficult. Partnerships are very difficult, and you guys seem to have navigated it very well.
Jeff: They are. I’ll go first on this one. I would say that the reason that Eric and I’s partnership is successful is because there’s a friendship that was there first. I think that more often than not, when our backs are against the wall professionally, I know I find myself drawing on that friendship more than the partnership. That’s nice to have a couple of different modes to be able to engage each other.
I think the reason that Eric and I work is because nothing about our relationship from day one till today has been contrived or fake. When Eric and I started working together we were peers for six weeks or seven weeks, and then all of a sudden through a personnel change, I was thrust into the role of his boss. I was 28, almost 29 years old. We probably had 30 employees, half of which were older than me.
John: You think about that now looking back, it’s like who would turn the keys over to a 28 or 29-year-old?
Jeff: Some crazy guys, right?
Eric: I joined the company in the first two months. There was a lot of turnover. Account manager leaving, managing partner leaving. We were thrusted into chaos.
Jeff: It was chaos. To say that I wasn’t prepared to lead that organization by myself at that time would be an understatement. Quite frankly, the new guy took the shit and Eric was the new guy and he was the sales guy. We did not have a great relationship.
John: Did you know each other before–
Jeff: No. Just we knew of each other.
John: Because I know you’re both at KU at the same time, but–
Eric: I was working for the Bar Association and he was at Omindex Compex, and so we knew each other casually for that first year or so, but really not that well at all.
Jeff: We coexisted together. There was a healthy professional respect, but there wasn’t a real strong friendship there. Social, but not real. Then one day I had just had enough with whatever we were going on and I approached Eric after a sales meeting we went on together. I said, hey, man. I was like, I’m thinking about quitting and doing this on my own. What would you think?
He looked at me and he goes– something to the effect of, “I thought you’d never ask. I got a job interview for a pharmaceutical sales job this afternoon. What do you have in mind?”
Eric: I forgot all about this until he went down this path.
Jeff: For me at that moment, I thought Eric and I had a pretty good relationship. At that moment it changed because he realized that I think– the way I look at it back after all these years, I think he didn’t realize how much I respected him until I asked him to go quit his job and start a business.
John: Were you married at the time?
Eric: Oh, yes. We were both new dads.
Jeff: I had a second kid on the way at the time.
John: Always a great time to go start something up.
Jeff: It wasn’t that was the time that we chose, it was that was the time that chose us because of a private equity maneuver that was going to basically leave us further behind the eight ball. Ultimately, because of the children that were on the way, the risks involved, the fact that we were blatantly violating non-compete and non-solicitation, we ultimately backed down on that, but we didn’t just quit on it.
John: You just tabled it.
Eric: When we walked up to that ledge, I remember we had a resign date. Our lawyers had advised us on how to properly quit. There was a pending deal, which was really going to bring a lot of litigation our way. I don’t know. Looking back, you never want to second guess things, but you always wonder what would’ve been or what could’ve been if we had done it then.
I know we learned a ton over those next few years before we eventually obviously launched Complete Legal. I wouldn’t ever go back and want to give up all those learning lessons we got for the next few years in that last merger.
John: You were still close in the business. You were, I think Lexus Nexus, weren’t you? Is that where you went?
Eric: When we left? Yes. I was at Lexus Nexus.
Jeff: The story that I was talking about happened earlier, 2009, 2010. That I think for us was necessary to clear the path for what we have now. Then our friendship from that point forward, even though we didn’t start the business ultimately at that time, our friendship then took the lead. It was like that all the way through when we started the business in Complete Legal.
I think that starting Complete Legal together took our relationship and changed all of it, and I think it still has. I think that you go through phases. I think there’s times where there’s excitement together and you can help build excitement. There’s times where negativity can fester between us. There’s times where we spend all of our time together. There’s times where we avoid each other. It’s like a marriage.
John: You know when to mess with him and when not to mess with him, right?
Jeff: It’s like a semi-successful marriage.
Eric: We’re getting better at that, right?
John: You just seem very calm. You’re very steady. He feels very steady to me, and you and I feel like pants on fire.
Jeff: The cool thing about Eric and I is that when we close the door, we can change roles and fluidly go back and forth. Sometimes Eric needs to be the one that says crazy things that he doesn’t mean just to get them out, and then now he can think about the solution. 90% of the time, that’s me. 10% of the time, that’s Eric. The cool thing is that we allow each other to play those roles, and get out when we need to play or get out when we need to get out.
John: I think when you’re, let’s say you’re getting ready to launch Complete Legal and I know there were some other parties involved at that time, but a lot of people go into partnerships and we’ve got this grand vision, and here’s a way we’re going to go, but it seems to me is the foundation was built on that friendship and a mutual respect for each other. It wasn’t– I mean, obviously in industry that you guys had were involved with and felt confident that you could be successful.
You learned so much about business, this personality testing, and some of the things we’ve learned through other organizations or groups that we’ve been a part of that we may have not paid attention to, but how you envisioned your partnership at the beginning or how you were able to create that, everybody goes into it thinking everything’s going to be great, but no one takes the time to say, “What if this…”
How do you have those conversations up front and then how does that evolve too as the business grows and changes?
Eric: You brought up a great point. We did have another partner at the time. I actually remember sitting in the office with an attorney when we first launched, just tell him about the company. He said, “Hey man, don’t forget you’re in the honeymoon phase.” He said, “I see a lot of you guys when it goes south.”
John: It’s all going to be great.
Eric: He goes, you end up in my office disputing the partnership agreement or if you are successful, a lot of times that can breed resentment and fighting over the pot of money. It was funny because I was absolutely in that honeymoon phase. We’re going to kill it. Literally month one, week one, whatever it was, and he was like, “Hey, just stay grounded.” I don’t know, I didn’t obsess with that thought, but it was always in the back of my mind like, “Hey, this is the honeymoon phase we’re launching, we’re a startup.” It’s really exciting.
Then you really get into the trenches of that first. I’d say that first year was really hard. Just battling through growing and we were obviously very close at the time and I think it was right about the time you decided to leave the industry. You remember that year as well. Yes, it’s difficult. We obviously no longer have that third partner and it ended well, but it was, I think–
John: We’re going to focus on this. You go focus on that.
Eric: Yes. We launched a second company and so I think– I know from my vantage point, it looked like if we stayed on that path, we were all going to get sideways. I think the great thing about the three of us is that we identified this isn’t working. You take that, we’ll take this, we’ll go our separate ways and stay friends. We were actually able to dissolve that and then go to Vegas and celebrate, and part as friends. That was really important because I can see how–
John: What happened in Vegas?
Jeff: A lot of Red Bull, a lot of vodka.
Eric: Very tame Vegas trip.
Jeff: A lot of hangovers. A lot of craps.
Eric: Yes. Expensive dinners.
John: That’s interesting. You think about it as you started the business, you had a third partner and how many years into that was it dissolved?
Eric: Two years. We launched our second company in that time span and that was preparation too quick.
John: Preparation before with your lawyers. Did it make it cleaner when you went through that separation and got through those things?
Jeff: Yes, we definitely started the business with the end in mind. I think that’s the thing about Eric and I is that naturally, we approach the world in two very different ways, but we almost always end up at the same point when it’s important. I think when it comes to the incorporation documents of a business, there’s nothing more boring or mundane for guys like you and me to deal with, but we got some good advice in that.
Our third partner, honestly, was the one that had seen the sour end of those deals and was pretty adamant about, “Hey guys, let’s put in some provisions here.” Those provisions were put in and when it became obvious to the three of us that it was probably time to separate, there’s always some contention when you’re talking over money and negotiating, but like Eric said, we sealed it with a trip to Vegas. I’ve had a lot worse endings to relationships in my life.
Eric: Yes. Really we were able to talk through all the issues at hand. We always joke too, we still have a very thorough partnership agreement, but we always say if the day we have to get that out to resolve a dispute, we’re in a…
Jeff: We’ve fail. There’s a whole series of problems.
Eric: That thing should just sit in a safe somewhere just in case, but it really comes back to communication and talking through and keeping an open dialogue. Obviously, our industry exists because that doesn’t always happen.
Jeff: While we’re talking–
Eric: As a business, we hate when people do that.
[laughter]
Jeff: Yes. We practice what we don’t preach. Most of our business comes from when people get their feelings hurt or their egos hurt because of disputes over power and money. Eric and I have very consciously made sure that that has never infested our partnership or our friendship. We are 50/50 partners straight through and through, we make decisions together.
John: You were probably advised against that too, weren’t you?
Jeff: Totally.
Eric: We have some really cool Texas shootout provision.
John: Levers, some hammer clauses.
Jeff: I was the majority partner before we bought out our third partner because as you know, with three partners at 33.3, somebody has to have that 33.4, and I think a coin toss made me the majority part, not the majority partner, but the largest partner.
Eric: The coin toss became very important, didn’t it?
Jeff: Yes. I very gracefully gave up my 0.01% a few years back when we bought out our third partner. I think for a while we struggled doing things together. We thought being a partner means we did everything together, and that’ll about drive anybody crazy after a while.
John: I was going to say, how long did it take you guys to figure out where you were going to spend your time and where you were going to spend your time?
Eric: Probably a year after the partner buyout. Yes, that removed one person from the company, but that really forced us to reassess all of the company needs and who was going to do what. We lost some support staff with that move as well that the other partner provided. I’d say, within that first year of trial and error of you do this and you do this, and where do we collaborate?
John: You had a decent foundation or base two years into it, right? The business was moving in the right direction.
Eric: We were growing every year, which we’ve continued to do, and we were starting to hum a little bit, but as you know, every year or two it’s, let’s scale to the next level. You look back, we’re seven years in and I’m like, how many times have we torn it all apart, and gone to the next level? Three or four times maybe. Yes, I think we were probably right in probably one of those phases as well starting to really show some explosive growth in some of those early years. That was just as challenging.
John: Yes. You talk about scale because I think it’s interesting as you go into it in the beginning, it’s like you want to get as big as– it’s just a race. I want to be the biggest agency. I want to be the biggest litigation support services firm in the country, or whatever that may be. Just like you said, you have to tear it down and rebuild it sometimes. Do we as entrepreneurs ever get to a point where it’s like, okay, this is enough?
Where we’re still evolving and making sure we’re staying in front with that, but it’s like how do we go to the next market or do we want to do that? Or is this our niche and this is how we’re going to operate?
Jeff: I think that’s a personal philosophy, and I think Eric and I, I think the second reason we started the business– the first is that our customers were talking about where we went and we had an itch that we needed to scratch. I’m not going to lie and say it was a different primary reason, but there was a close secondary reason, which is, we both watched in the past and at the time currently, great human beings that were super knowledgeable, so smart, amazing, Some of the hardest-working people I’ve ever seen in my life came from this industry.
What the litigation support industry does traditionally is it takes the high achievers and the pleasers and it chews them up and it breaks them and it spits them out and it leaves them either broken in the industry or more likely not out of the industry and disenfranchised with the corporate life. It’s because the hours worth the stress, the strain that was demanded upon, especially the project management type people, client-facing people.
We set out to create a place where people could have a career, and that didn’t just mean understanding that they needed a work-life balance, but it also meant making sure that every person that wanted one and we make sure we have more that want than don’t, had a next level to work towards and achieve. Whether that was somebody that was really good at operating a copy machine, learning how to operate the scanner, it could be something like that.
Or it could be taking somebody that had worked previously at a big company and done one function, one very spec-specific function with any discovery, and showing them, here’s the whole picture. This is what you were actually doing is this one piece. Here’s the whole picture. Now, you’re going to manage this whole process and watching that evolve over seven years. Everything in between our director of eDiscovery right now was a paralegal for 20 years and watching her come in.
John: Let’s name-drop her.
Jeff: Yes. Bradette Groves. She’s an amazing woman. She’s so powerful and so strong. She came in having lived at her ceiling because she was a non-attorney working within a law firm, and she was a client of ours. My first introduction from Bradette came from you, so thank you for that, John. We saw her and she had so much to offer. She was our client and she was managing us. She was telling us what we needed to do.
She’s like, “Don’t you see this? You need to do this, and when you guys give your demos, stop doing this and do that.” We just were like, okay. I don’t know if it’s just the story that’s evolved over the last four years, but Eric and I were talking about it a few weeks ago. We’re pretty sure that she told us we were going to hire her. I think that’s how it happened.
John: You’re going to have to hire me at some point.
Jeff: Yes. Being able to take somebody like that and not do anything, but simply give them a sandbox to play in and watch what she’s done with it and watch what she’s become personally and professionally and where she’s headed, and the people that are on her team that are coming with her, that’s why we started the industry or started the business in this industry is we thought there was a way to do that. We’re just figuring it out every day still.
John: I think one of the things that you hit on there that I’ve talked a lot about, so having an internal champion at one of your clients, which was Bradette. Also, I think sometimes the thing we think is the thing, isn’t necessarily the thing, and that perspective from the internal champion or someone, I always say like, if you change your perspective, it’s like you are getting such valuable information from her, from the inside to say like, “Oh, well maybe we could serve our clients better because we’ve been focused on this and you’re telling me it’s this.”
Jeff: That’s exactly it, John. That’s exactly it. It’s that added client perspective. We had people that had worked in law firms that we’ve worked with before, but never in as hot of a seat and seen with as many different aspects of the law firm’s side of the interaction with us as what she had. That really just coupled with the– I think at that point, Eric and I probably had 30 or so years of experience on our side.
She had 20 years from that side. Obviously, there’s lots of other people that we trust, and listen to their input but that’s where we were able to start to build a true solution, not just a service.
John: How do you make sure you’re continuing to evolve or adapt? Because it feels like, at least when I left it, it was like your industry was continually changing all– it was just significantly, whether it was a new tech platform or whatever that may be, so what is it– How do you as business owners make sure that you’re getting that feedback or understanding, okay, that was great two years ago, but here’s the new widget or new thing we need to adjust so that we’re fitting that need, because the competition is always, “Oh, well, we’ve got this and we’ve got that.”
Sometimes it becomes an arm race and they always wonder whether it’s really a value or if it’s just a way to try and sell someone something.
Eric: Yes. Candidly, first off, legal is generally a little slow to change and slow to adapt to new technology.
Jeff: A little slow.
John: You’re still making copies?
Jeff: It’s the last industry to change. If people that were–
Eric: You could throw banking in there, but that’s maybe a different podcast.
John: Although I’ve fallen back more in love with the old school paper and things these days than I was before…
Eric: …on insurance brokers or insurance industry as well. I don’t know which industry is the slowest to change, but that does help because yes, tech, there’s all this disruptive technology, and obviously with the influx of private equity in the last 10, 15 years. There is a lot of chaos. I think one of the things that we’ve learned is that chaos doesn’t trickle down right away.
Obviously, we have to keep a pulse on the technology, the industry, the clients, the client needs, never stop listening to clients, making sure that we are listening to all of our clients, so big and small plaintiff defense and house corporation, legal departments. Just really getting a full snapshot of everyone that we do business with. I think just navigating what’s real value to our clients, just because there’s a new tech release or a new widget or a new platform, it doesn’t mean that it’s the best fit for everyone.
Really doing our due diligence on proving those things out and testing those platforms and technology before we take them to our clients as recommendations, I think, has been a big part of our success. Again, and not being backed by private equity and not being one of those companies. We’re not incentivized to force that stuff down their throat, like, you must use this.
We still at the end of the day are service providers. We have to reach into our toolbox and grab the appropriate tools that make sense for our clients. We’re not limited by any one tech or subservient to one PE firm.
John: Yes, I noticed you just added Disco. I just want to make you guys aware that in 2015 I was using Disco. Now if you’d have been paying attention to me, then.
Eric: The first time I ever heard Disco brought up was by John Lovell in the basement of the building in the plaza and he said, “It’s awesome.”
John: Cheesy name, but it’s really good.
Eric: Then we went to all the really smart people and they said, it doesn’t really work that well.
[laughter]
Eric: We went back to John Lovell, he’s like, “It’s awesome.” You’re right. They have come a long way, but you are a thought leader, which is I think…
Jeff: Trendsetter fashion and technology.
John: Bridette, Disco, I don’t know what else-
Jeff: What else is there?
John: Yes, what else? I’m sure I’ll think of something for you guys. Wrapping up the year, what do you guys do as business owners? You do some planning, you do some mapping, some goal setting. Do you use traction? How do you prepare for 2022? How do you take a look, appreciate what you’ve done in this last year, and then have some ideas of where you’re going in 2022?
Eric: December always feels very chaotic. I think we turn on that creative part of our brain in November and start talking through. We don’t wait till November, but that’s when the creative juices really start flowing on, what do you want to do next year? What do we want to do? What’s our goals as an organization? Then logistically, that’s when all the insurance is reset, open enrollment, all those types of tax, forecast, and cash management, all that stuff really sets in.
That’s a distraction to all the visionary stuff that we’re chewing on and trying to work on. I don’t know. We don’t really have a defined process. Lot of conversations, lot of reflecting back on the year and then trying to get a pulse on where we think we’re going to take the organization in the next year because I think we start every year with aspirations of making a change for the better. Going to another revenue hurdle. Like I said earlier, we’ve grown our business every year we’ve been in business and so that comes with a little bit of chaos and controlled chaos at times.
Jeff: A little bit of chaos. For a personality type like me, mustering up the energy to plan for something that may or may not happen is difficult. When I watch how much of an impact it has on the comfort level of everybody else, including– especially Eric, but also the employees, to see that there’s a clear defined vision, that we have a plan that isn’t just in our heads or one of our heads, I think that’s a necessity that we owe to our employees and that’s the way I look at it.
It also is really smart. It’s slow, it’s painful. We have to talk about failures and mistakes. I don’t like to use the rearview, but it’s important to make sure we learn all the lessons we make, or learn all the lessons from the mistakes we make. We do that and we challenge each other usually, and that’s always difficult. It’s probably harder to be the challenger than the challengee, but we both do it for each other.
Then really at the end when we get all of that out, we’re left with, okay, what are we willing to do next year? Because we’re still a small enough business to where if Eric and I-
John: Mail it in?
Jeff: Yes. If we don’t keep moving, the organization might not stop, but it’s going to slow down.
John: You get stuck inside the business and you don’t even realize it.
Jeff: Yes. It’s a good time for us to worry about the things that aren’t fun, and then be able to measure against those throughout the year very quickly and say, okay, we’re okay, or we’re not okay. By dealing with, okay, here’s our budget. This is how much we can spend on client entertainment. if I go way over that, then Eric can say, “Here you go.”
[laughter]
John: You mean, when he goes way over that?
Jeff: In June? Yes. Versus trying to just-
Eric: Six months in, he’s hit his annual number.
Jeff: There was a year or two where Eric and I would just look at each other and try and get that feel back in before we were comfortable with our partnership, so it’s way better this way. We can talk about those things. We don’t have to make decisions in the moment. Do we want to go to this trade show or not? That decision is getting made in October or November now. Not in May when the show’s in June and we haven’t built a booth yet. That has made life easier, but it still sucks every December.
John: Yes. Where I’m like, a week before I’m leaving to go to some show and I’m over there going, “Okay, we need a sign, we need this. We need that.”
Eric: Yes. Look at the last two years too, and it’s been all the planning in the world March of 2020, it was thrown out the door. We’ve had to learn. The last two years have been very challenging, obviously for a number of reasons, but trying to plan and manage a business and think too far in advance has become very challenging because we have very little control over–
John: How did the pandemic affect your business? You’re in and out of law firms, all the time and I’m just curious. Most places shut down and it– I know for us, people that like to be around people, it was very difficult just being locked down.
Eric: Yes, it was interesting to say the least.
John: How could you serve your clients if you can’t get in there?
Eric: Yes. I just remember, initially, I was actually out visiting family when the world really started to lock down. Jeff was there by himself or here in Kansas City, sending folks home and getting remote sets and–
John: Poor Jeff.
Eric: Yes, the details guy.
John: Yes. You deal with the pandemic.
Eric: I’m like, what’s going on? He’s like, “I sent everyone home.” I’m like, oh, shit.
John: You deal with the pandemic, I’m out of town.
Eric: No, honestly, the first couple months weren’t good. We were able to keep everybody employed, no layoffs, no terminations initially. We were able to float through those first few months and business did suffer. Ironically, we grew our business 25% last year. Trials stopped abruptly. Courts were closed, judges weren’t making rulings. We look back on these last two years and like the bookings of our services were hit really hard last year.
There weren’t a lot of new cases getting filed. No one was going to trial, but firms had stuff that was already in process to work on. That really carried us in 2020. Looking back on 2021, it all has reversed. New litigation has picked up and we’ve started to see that for these last several months. Trials have started back. I know we did a few remote trials, but really the summer trials started to come back.
That lack of pipeline from lawyers having new cases filed, or filed against them, we saw that impact this year in the middle. For 2022, we’re optimistic that since things are starting to pick back up on the front end, that that will–
John: Good. More lawsuits.
Eric: Yes. More lawsuits are coming back and so that’ll help 2022, but at this point, let’s flip a damn coin.
John: Yes, who knows what they’ll throw at us or what. We’ve talked a little bit about private equity, just in general overview of your industry, where it was when you first started and where it is today and where are the opportunities in the future for you guys and what’s that look like down the road.
Jeff: Well, I’ll give you the brief full history as I know it. The industry itself started in the ’90s and it was a bunch of people with– as I describe it, Kinko’s on steroids, where–
John: That’s how I always explain it. It’s like a Kinkos on steroids.
Jeff: You walk into the basement. The industry had a habit of getting basement and crappy office spaces that nobody wanted, like windowless spaces and major class-A office buildings, so really cheap, low-grade dungy rooms full of copy machines. You’d see a bunch of guys in $1,000 suits pushing boxes up and down the street going, what the hell do those guys do to make their money? Those were the good old days of the business. That was before I got in, but I know a lot of those guys, and Eric does still.
John: You could get eight boxes on one of those two-wheelers.
Jeff: All the guys that were in the industry back then tend to be bigger-than-life characters too, so whenever you find one, they’ll be like, “Man, when the competitors took a client of yours because there’d be a Mercedes sitting out in front the next month.” They weren’t kidding. That’s how the industry started. It was not started from a base of Ivy League-educated people that are really thoughtful MBA people.
John: Obviously, you guys wouldn’t be in the business.
Jeff: There’s a bunch of barely college graduate cowboys just going out there making promises and figuring out how to fulfill their promises as they went. That was how– and when it started, there was one in every major city, and then they all banded together in a company called Knight Rider, which then got bought by Icon.
John: And so was with Lanier.
Jeff: Lanier was another one.
John: Professional services, Copy companies.
Jeff: The copy machine operators probably at some point go, “Man, these guys are doing $3 million clicks a month. What are they doing? We got to get in that business. We do all their maintenance.” The copy machine companies controlled the business when I got in there in 2001 and it was a fight for who could get the most paper. That’s all it was. When I started in 2001, we had one computer for four salespeople that we shared and we had to log in and log out on Outlook Express for our email.
There was no company email. I had to use my Hotmail for work. That’s when I started in 2001. That’s exactly the tech setup I had. For me, starting Low Man on a totem pole of what was a dying industry, which was the paper side of running everything I saw eDiscovery as something that was there. It was part of the process, but most of the people in the industry could have cared less. There wasn’t a focus on computer knowledge. There wasn’t–
John: Maybe we should get some of these emails and see some of these communications.
Jeff: When that started shifting to eDiscovery it turned the entire industry upside down.
Eric: The federal rules changed in 2006, and so leading up to that change, I think private equity firms took note and said, “This industry is about to go through a disruption and they’re going to need a lot of technology, it’s going to be very capital intensive to deal with data off of computers, email, files, things like that.”
John: On the uptick of how many emails we were starting to get.
Eric: This is the data explosion, right?
John: Needle on a haystack. If you took all our emails for the last five years and you’re trying to find one person or some communication between someone like that.
Eric: It’s probably the year we got handed our first Blackberry, I remember thinking how–
John: I had the Nextel because it was always some –
Eric: I’m a businessman now.
John: You got to pick up over at Sherman Taff Bangert.
Jeff: Oh, yes. Eric already said this, but just to expand for the layman– Pretty funny. When Eric says the federal rules changed in 2006, what happened is that the federal rules of civil procedure said, electronic messages can be considered in every single case and they should be treated the same as a paper document, which saying that right now sounds crazy and obvious.
Back then, in order to get somebody else’s emails, which is really all emails and Word docs, that was it. My documents and email, that’s how you eDiscovery started. To get that there was oftentimes a huge uphill battle to convince the judge that you had a right to it. That changed in 2006, and that’s exactly what spurred private equity running in and trying to assume that this was like every other industry where there was some structure and accounting system.
It was just everybody did everything by the seat of their pants. There weren’t a lot of systems, there weren’t a lot of processes. There was definitely no standards. There was no uniformity across company to company within each city, but then especially across cities. Private equity likes to come in and put everybody in the same box and then figure out what works and replicate it and then sell it. That has proven to be a tall task in this industry for the last 15 years.
John: Are you still seeing PEs still have their footprint in this industry quite a bit and I just–
Eric: Yes. It’s the lion’s share of the hook right now. The companies like…
John: We are a rare breed.
Jeff: We’re a dinosaur, but we don’t think– hopefully, not like an ostrich that has our head buried in the sand. We see the playing field. There’s opportunities for people like us and companies and our clients tell us over and over again through referrals and trying to work with us as much as they can, how much better it feels to work with us than them. To say it’s not an uphill battle, come on, you got unlimited, especially during the pandemic, they got bigger and they went shopping and they bought up a lot of people like us.
That’s only left us even more on an island, but we’re not alone. We have other people around the country that we work with. We have friends that have businesses in other cities that are similar to ours that we work together. There is a network of us out there and there’s no fear in saying that we are on an island. We actually like it.
John: Well, so it’s the same thing in our industry and as a business owner, it’s like, “Okay, well they’ve got a ton of money. Is there anything that they’re adding of value that we aren’t doing or we’re doing better than they’re doing?” It is the fear that somebody’s going to come in with a stroke of a pen or wave the magic wand and they’ve got some new technology or something that actually provides a meaningful difference.
What we’ve learned over time is a lot of times that isn’t the case. It may feel like it’s something of a true differentiator, but it truly isn’t and like we talked about is, they don’t all have to just fit in your way of doing it. Each client is different, each one has different expectations. You could create those bespoke solutions for those clients that you might not be able to do if you’re part of a bigger organization.
That’s why we’ve staved off that private equity push and people trying to acquire our business. We just went through that this year and getting some valuations, I just remember doing these interviews, it’s like they’ve never seen us. They look at your balance sheet and they’re willing to write a check for whatever, based on a multiple that they’ve come up with. I was like, they don’t know us. They don’t, we still–
Eric: We always take the calls. You never want to burn a bridge. A lot of knowledge can be gained through those phone calls and to understand the way that the PE firm thinks and is looking at the industry. We begrudgingly take the calls several times a year. I think the other thing, and I’m sure maybe you go through the same thing is–
John: $1 billion. Would you do it?
Eric: Yes.
[laughter]
Jeff: I don’t know.
John: Oh, come on.
Eric: Here’s that Texas shootout clause.
Jeff: He does know our agreement?
[laughter]
John: He reads it every day.
Eric: I read it every day. It’s my bedtime story to my kids. …forgot what I was going to say. Yes, it’s always a potential option and yes, it’s obviously out there, but I think, I don’t know about you, but we look at each other and go, “Well, we got to do something for a living.” I’m not ready to be done. I know Jeff isn’t either. We’re still excited to keep building the company to the next level. That’s always a move and maybe you get cash out and you can buy a boat. I don’t think either one of us has any fulfillment in that at this stage in our careers, at this stage in our live.
John: It’s funny because if he’d asked me this in my 20s where it was my new sole focus is how much money I could get and a boat and a house and all this, but then as you get into the business and you get older, obviously, you mature a little bit. Jeff, not so much, but I’ve tremendously matured over the years now.
Jeff: Well, but it’s actually you’re in love with owning your business and doing things the way you want to do it and how you want to do it, and that stuff doesn’t matter as much.
Eric: I was badmouthing PE I think to one of our bankers and he reminded me, said, “Hey, if it wasn’t for private equity, you guys wouldn’t exist.” It’s an ecosystem, it’s a circle of life that private equity drove– If it wasn’t for private equity, there’s no Complete Legal because we wouldn’t have been driven away from that company that we were trying to help build.
There’s a little bit of love-hate or a tip the hat of respect because you get gobbled up. You do take that check, you buy your boat, you do whatever, and then you’re like, “Well, crap, I want to go and rebuild it again and do it my own way.” It is part of the ecosystem and you have to every once in a while just sit back and acknowledge that.
John: Well boys, it has been a pleasure watching you guys grow this business and do great things in our community, and seeing you guys do a lot to give back to. It’s very noticeable and noble. I think that’s something that’s been important to you guys. You are servant leaders. You do have a giving mindset and I think that’s why you’ve been successful in business and I appreciate you coming in here and sharing your story and having a few jokes and also maybe giving some people some info that they can put to use down the road.
Eric: Well, I appreciate it. Thank you.
Jeff: Thank you to our unnamed third partner that we figured out. Basically, we exist because of you. Thank you, John.
Eric: We’re going to pour a cocktail and keep this thing going.
John: Now you can light up a cigar.
