Radio Made the Solo All-Star
Episode 11: Radio Made the Solo All-Star
From finding employees who were simply willing to show up to being sued by another law firm, Arash Khorsandi’s journey to solo success was anything but a walk in the park. Pratik and Arash chat about the lucrative personal injury firm that Arash now oversees and the little AM radio show that helped him get there.
In This Episode
Arash Khorsandi, Arash Law Injury Lawyers
Pratik Shah (00:06):
Welcome back everybody, and welcome again to Bootstrap Solo. I am your host, Pratik Shah, and today we’re going to be talking about the good, the bad, and the ugly about running your own practice. This podcast is for those that want to know what it’s really like to start, run and grow a practice. Today’s guest is my good friend, Arash Khorsandi. He runs a 75 person practice that focuses on personal injury. He started his practice back in 2009, has been growing strong ever since. Arash, thank you for joining the pod. How are you?
Arash Khorsandi (00:39):
Great, man. Thank you for having me.
Pratik Shah (00:41):
I mean, what a treat for me. I mean, 75 people, that’s a lot of people to manage.
Arash Khorsandi (00:45):
Well, let me tell you, I was talking to Theresa before, bigger’s not always better and it’s always a challenge, but we’re blessed and we’re always looking for improvement and building and breaking. But yeah, especially now in the last two years, three years with COVID, it’s definitely been an incredible journey. Lots of ups and downs, a lot of hurdles and challenges with management of humans all around, both in-house and clients and vendors and so on and so forth. But hey, we’re here. We crank it through.
Pratik Shah (01:30):
That’s it. We wake up every day and try to do some good.
Arash Khorsandi (01:31):
That’s it. That’s it. Yeah.
Pratik Shah (01:33):
So it’s interesting you mentioned about transitioning through COVID because I remember when I was in my practice and COVID hit and everybody was transitioning to home. I had a meeting with the team and was just like, “Look guys, we’re going to do our best. There is no playbook on how to run your firm during a pandemic. Everybody’s trying to figure it out as we go along.” How did you handle that initial talk with your staff?
Arash Khorsandi (02:00):
It’s similar to what you’re describing. You have to be flexible and part of running any business, whether it’s a law firm or a restaurant or whatever, you have to be nimble and flexible with the circumstances. Because truly you can never predict anything so you got to have multiple contingency plans.
So from my perspective, initially, I’ll never forget when COVID was breaking out and people were like, “What is it? Is this is just the hoax, is it not? Are we going to go?” And I remember sitting at my desk one day and I had talked to one of my buddies in New York who was in the finance field and he’s like, “Hey, shit’s hitting the fan.” Sorry, pardon my language. “But this is kind of getting crazy here.” And immediately I went on to Amazon and I went and I bought 70 laptops. Immediate. I didn’t even flinch because I’m like, “If this is going to go down, we might have to actually go remote.” And in a week, week and a half, these laptops started coming in and then laptops started selling out everywhere and you couldn’t even get more laptops.
So anyways, you have to be nimble. And we were really playing it semi by ear because like you said, there is no playbook for something like this. Nobody has. Not the government, not anybody else. So you got to really buckle up and you got to rely on your core team because your core team and the people that you have built with, the people that you have struggled with, the people that you have wrestled with for the last 10 years, however long it is in your office that you consider your core, you got to rely on them. And you got to listen to the people that are talking to you internally and be ready to make moves and changes.
And by the way, U-turns are alive. You might make one decision and it may not be the right one at the time. And we’ve done it and God knows how many times I’ve done it and I continue to do it in the office. But U-turns are allowed and it’s okay if you identify a decision that was poor or maybe not the right time, and even if it’s you as the [inaudible 00:04:12], but you got to make that call. And so we’ve done that several times through COVID with hybrid, with coming back, so on and so forth.
But I think the most important thing that helped us throughout this process was we had such an incredible group of core people in this office and everybody was participating in the process and brainstorming and we were going by it. So it was really a collective decision and effort all throughout. And part of that, when you have people participating in the decision making process in these circumstances, you also get some sort of buy in and people are buying into what their decisions are, for better or for worse or at least a period of time.
So we’ve gone through that like everybody else has. And then obviously we mandated a bunch of in office testing twice a week. We brought a company in when we came back and we still do it today. Believe it or not, I think we’re one of the few places that’s still. It’s not mandatory, but hey, every Monday and every Thursday after the weekend and before you go in, you just like, “Hey, the nurse is here. You want to take advantage of it’s free, handle it.” So even now you get some upticks of COVID, you got to just deal with it.
Pratik Shah (05:32):
You just got to deal with it. There’s a couple things you mentioned I want to touch on. The one thing that really stood out to me was U-turns are allowed. I love that saying. I mean, I’ve never heard that before, but I think that’s beautiful because that’s it, right? You’re growing your practice, you started off with just you, you’re up to 75, 13 years later and there’s no argument that during that 13 years there’s been decisions where you’re like, “Ah, maybe I shouldn’t have done that. Let’s try something else.” Can you tell us about maybe a particular decision?
Arash Khorsandi (06:01):
Pratik Shah (06:01):
That fell into that category.
Arash Khorsandi (06:03):
Yeah, absolutely. They’re probably literally on the daily, I would say decisions like that. Because as a operator of, again, a law firm or any business, as an operator, you don’t understand. I mean, you do understand, but you appreciate how many decisions you’re making on an hourly, daily basis. So one thing that I’m big on is your decision tree, or how you’re making decisions, or the speed of which you’re making decisions, and the speed of which you’re recognizing the failure of some of those decisions and not letting your own ego or someone else’s get in the way of making that U-turn when a U-turn is necessary. Sometimes they’re big decisions, sometimes they’re small.
So like I was saying before, your ego is not your amigo. You got to park that a door, whether you’re the operator or a manager or a litigation manager, whoever. And you got to be okay. So it’s the frequency and the speed of which you catch those incorrect or mistimed decisions that helps you. And the more you do it, the faster and quicker you become at identifying them. And so literally, I’m not even close to perfect. I make incorrect or mistimed decisions on the daily. Thankfully they’re all small and it’s insignificant, and it’s more because I also move very fast. So I make decisions quickly on the fly a lot of times. And that’s again, after starting from scratch in an interior office 13 years ago without Windows in an executive suite, this is before there was Justice HQ and WeWork and all that. It was executive suites. And I had to do everything myself. I had to set up the fax machine myself, I had to pick up the phones myself. I had to do literally all of it.
And by doing that and going forward with it, you learn all the little details on how much time it goes into just the simplest things. So part of that is really just being comfortable with making some U-turns.
Pratik Shah (08:17):
Right. So let’s go back to that executive office. I want to hear a lot about that. Back in 2009, we talked a little bit about this, that a lot of times there is a misconception out there that people start their practice and they either become successful right away or they never make it. But I think that’s just not reality. Obviously, you started a lot of folks, small office, just you, solo. You had been practicing for how long before you started your own practicing?
Arash Khorsandi (08:46):
About two and a half years. I was at a very good firm with one of my mentors now. And I had left and it was a PI firm. And I had left, not because I was going to start my own practice or do PI. I had left because I wanted to do real estate finance and just get out of the field of law entirely. I had zero, zero, zero expectation or desire to do what I’m doing today. And even in law school, all my friends that knew me in law school, they’re like, “You’re in the last place that we ever thought you would be.” Because I would always be like, “Guys, we’re not going to be litigating stock. Why are we going to the evidence class? Why are we doing this? Why?” And here we are.
But when I had first started, when I had left, I wanted to do real estate finance, not even law or anything like that. And of course in 2009, the markets were so just horrific.
Pratik Shah (09:40):
Yeah, not a great time for real estate.
Arash Khorsandi (09:42):
Not at all. But I didn’t know any better. I was just like, “Okay, let’s just do it.” And I was forced to eventually, after not being able to crack into the real estate world and failing at that, I was like, “Okay, what am I going to do?” I’m like, “Okay, I know PI pretty well. I’m pretty young. I liked it. I was burnt out as hell.” But I was like, “Okay.” So I went back to my former boss and I sat down with him and I explained it to him and he gave me his absolute, “Hey, go for it. You’re going to do great,” blah, blah, blah. I’ll never forget, he even at the time offered me financial help. And I was just so blown away by it, which was very nice.
But I started and I was like, “Okay, I didn’t have a single client,” and I had an option when I was getting my office space. And he was the important parts. When I was getting my office space, I remember walking through with the leasing lady and showing me, “Here’s this executive suite and here’s this executive studio. We one, it’s got corner, it’s got windows, and blah blah blah, and this one and this and that.” And she showed me, just one of them on the side was literally the size of a janitor’s closet with no windows. And she’s like, “Oh,” and that one, she’s walking by. I’m like, “No, let me see that one.” She’s like, “No, you don’t want that one. You’re going to be depressed and kill yourself in there. Nobody wants that.” And I said, “No, no, no, I want that one. I don’t fricking deserve that window corner office in Century City,” blah blah blah. And the difference of rent was probably the time, I remember my first lease was like 650 bucks a month versus 980 or a thousand bucks for the window office. Percentage wise, that’s a huge percentage.
Pratik Shah (11:24):
And in the beginning, every penny counts.
Arash Khorsandi (11:26):
Every penny counts. And it was like, “Okay, I could spend another 400 bucks a month and get this blah, blah. I’m like, “I don’t freaking deserve it. What have I done? I haven’t done shit. I don’t have any clients, I have nothing.” So I got the interior office. And one of the most important things that I see today with this new, I don’t want to call it generation because I still consider myself very young so I’m part of this new, young generation. But part of what I see today in 2022, that is, I think, one of the biggest hurdles that people are having is the power of showing up physically and mentally.
But there is a physical component of physically showing up. When I started, I forced myself, no matter what. I had no clients. I literally had zero. Nothing. I forced myself to get behind my desk by 8:00 AM. I was behind my desk. And I sat down, I turned on my laptop, I had my phone and I sat in this room and I looked it around. There was not even an artwork on there. It was literally an insane asylum. The lady was right. But I showed up. I drank my coffee at the time, I think it was Myspace, and I would go out Myspace a little bit. I was just like, “Okay, I’m here.”
And what ended up happening was by showing up every morning super early, and I was not a morning person at all. By showing up early in the mornings, I was forced to find things to do and I was always chasing things to do. Whereas on the days that I realized I would show up at 9, 9:15, 9:30, I was no longer chasing things to do. I was just reacting to the day and I was just being reactionary. And when you’re starting, and even now, but even more importantly, when I was starting and we were figuring out how to even get a single case through the door, you have to show up so you can be proactive and get ahead of the game, get ahead of the day, otherwise the day will wash you out. And you’ll go through the cycle for months and months and months and months and you’re like, “Wait, why am I not advancing at the pace that I want?” And then you’re like, “Shoot, I got to figure something out.”
So the power of showing up physically. Now I get it. We’re in 2022, remote and people want to work from home and do all that. You can still accomplish that.
Pratik Shah (13:44):
Exactly. Yeah, exactly. I think it’s a difference of being on offense versus defense. And in the beginning, if you show up and especially when you’re not a morning person and you show up. I did that too. I would show up 8:00 AM, I would be at my desk, and if it was 8:01, I’d be upset with myself because I’m the boss. I can get here at 8:00 AM. Why can’t I get here? And once I’m there, even if I have nothing to work on, you start thinking, “Well I got up early, I got ready and I got here. I better be productive, otherwise that was a waste.”
Arash Khorsandi (14:16):
Absolute. That’s a perfect way of putting it. That’s exactly right. And it also starts to build discipline. It’s like working out or something else. Clearly I don’t work out anymore. But it’s about building that discipline. And part of the interior office versus the exterior office analogy and example that I went through was hunger. You got to stay hungry. So you are the only person that controls your own destiny in terms of controlling your level of hunger. So you control that level of hunger. Nobody else. There’s outside variables or factors, but you control that and you can contribute to that.
And for me it was like, I don’t deserve X. So which was the exterior office. Keeping that interior office, small, tight, gloomy was my own torturous way of really doubling down on the hunger. Yes, I was actually hungry, but it was really like, “I’m going to work my ass off to get out of this space fast.’
Pratik Shah (15:18):
I don’t want to be here.
Arash Khorsandi (15:27):
I don’t want to be here and I don’t want to get comfortable here. And getting comfortable is part of losing that hunger. So even now, 13 years later, Pratik, there’s a challenge always. I’m older, I have kids now, there’s other priorities and responsibilities, but I always have to find ways to create that hunger, so to speak.
Pratik Shah (15:41):
Yeah. And so that journey from 09, internal office, to 2022, 75 people, and I’ve been on your website, I know what your firm does, you and I know each other, and I know the millions of dollars in settlements and verdicts and victories that you’ve gotten. There’s a great story in there. So I want to start in 2009, internal office. Obviously your first case out the gate that you settled was not a seven figure case. Fair?
Arash Khorsandi (16:11):
Not even close. Not even close, yeah. Fair is right. I was the king of prop 213s. That’s what it was. So in 2009, I was still not in the game of PI yet, but I knew that’s where I wanted to go. But I also knew that I needed some money to get there because even back then, obviously different landscape than today, but similar. Even back then, you needed capital or at least some capital to compete with the marketing that it takes to generate. I didn’t have a name, I didn’t have any results. How was I going to get cases? It wasn’t that easy.
So I knew that I wanted to be in the PI field, but before I entered PI, and a lot of people don’t know this, I recognized a small little opportunity in lemon law. And here in LA County there’s one radio station that was a Persian radio AM station for the Iranian community here. And I didn’t even listen to it myself. It’s for the older generation. But I realized that, “Wait a second,” someone told my dad or someone told me, “Hey, there’s nobody on there advertising for lemon. There’s tons of personal injury lawyers on the radio, but nobody’s advertising lemon law and if you like cars, you know cars, you do this, that, the other.” So I said, “Okay.”
So I contacted the radio station, I said, “Hey, how much is the advertising?” And they told me for 30 days, it was something like 4,500 bucks. And I’m like, “Boy, that’s actually pretty reasonable,” because it was AM and it was blah blah blah. So I said, “I want to do a live show.” So I decided to do a 30 minute live show that was kind of like an infomercial. And at the time it was literally, I think maybe it counted for 50% of all the money that I had. [inaudible 00:17:59] saved up. And I said, “Okay, I’m going to rule the dice. Spend this 4,500 bucks.” I got to get at least one client. If I can’t get one client, I need to reassess my shit and I-
Pratik Shah (18:11):
Yeah, maybe you’re not cut out for it.
Arash Khorsandi (18:13):
Maybe I’m not cut out for it, but I’d rather find out now. I’d rather find out now. I don’t want to do this and then figure it out three years later.
So anyways, I went on this radio station, AM station. I did this live show and immediately on the station, and I didn’t have a single employee. So the lady, the host of the show was giving out our phone number throughout the show and nobody’s there picking up the phone because I didn’t even have an employee to pick up the phone. So I had literally an answering machine picking up these calls that people were calling because they were giving out the number, which was mistake number one. But learning. Learning, learning. All absorbing. Who the hell it goes and you don’t have someone answering your calls. It’s insane. But I did it. Like, oh, I did it. But that was my first lesson in intake.
So that was the first show and people were calling and I’m listening to these calls on the air and they would ask me Q and A. “Hey, my car is this, I have this BMW, you have that, blah, blah, blah.” I’m like, “Yeah, that’s a great case.” The next one. Yeah. I’m like, “Damn, there are five good cases right now on the air.” Obviously I can’t sign them on the air. It’s live going on. So couple of them called back afterwards, not even the five. I think maybe the first one, it was two or three that I was able to salvage. But there were two or three slam dunk, low hanging fruit, beautiful cases. Okay.
I like, “All right, I just spent 4,500 bucks. I signed up three cases. Cost me, let’s say two grand a case, roughly $1,500 a case.” Whatever. I expected to make somewhere between seven to 8,000 in fees on these cases at the time. I’m like, all right. So I spent 1500, getting back seven. I like that return. Cool. So I went back again, got another three, and I went back again and boom, boom, boom. For the first six months, that’s all I did. And until I realized, “Holy shit, you’re leaving so many cases on the table because you don’t have someone in the intake room. You don’t even have a human. Get somebody. An intern, a college student, anybody. At least answer these calls live so people are not calling some law firm and they’re getting some voicemail. That’s all so dumb. Who wants to get a voicemail when they’re calling for a consult.”
Pratik Shah (20:31):
Especially when they’re hearing you, they’re excited, they’re ready to hire a lawyer. They’re interested. They call. Nobody picks up and they go, “You know what? Forget it. I’m done.”
Arash Khorsandi (20:40):
Totally. And so I probably lost, I don’t know, 25% of the leads at that point. And for months, until I was able to turn some, I couldn’t afford anybody. Literally I spent half of my initial budget on this air time. Of my budget, meaning my entire bank account. And so once I was able to turn these cases fast, because that’s all I had, I would go on radio once a week, do the show, take the cases, process them by the end of the week to make sure that everything was done on all the phases so I could just redeploy. So I didn’t have to do it. Once I started turning some money, then I hired my first person that I hired.
Pratik Shah (21:18):
So how long from when you started to you hiring your first employee?
Arash Khorsandi (21:24):
My first employee was about six months in.
Pratik Shah (21:26):
Arash Khorsandi (21:27):
If I could go back and if I could redo it again, I would’ve hired them at the month and a half mark or two months mark because I left so much on the table between that two months and six months just in intakes, during that time that I could’ve recaptured with proper help and back up that I would’ve done it earlier. But hey, I didn’t know. I was scared. I was-
Pratik Shah (21:49):
Arash Khorsandi (21:51):
No budget. I was busy juggling. So you’re always juggling. When you’re solo, you’re always juggling, you’re constantly juggling. So it feels like you’re just going up and down. But when I did hire that first person, again, it was really a horrible hire. And we were talking about it before we went off air. My first employee was a serious drug addict, unfortunately. Okay.
Pratik Shah (22:17):
And I’m sorry to laugh, but that’s kind of funny. It’s funny now.
Arash Khorsandi (22:21):
It’s funny now. And I didn’t realize it. It took me a few months. I’m like, “What is going on?” Some days she just wouldn’t show up. I text her, call her, no response. Show up the next day with some excuse. Then I started seeing other signs and she was really a good, sweet lady, but she was … Then I realized, oh, this person has a drug problem and no wonder she’s working for $11, $10 an hour, whatever it was I could afford at that time.
And then unfortunately one day she just disappeared and she didn’t come back. And I’m like, “Damn, I hope she’s okay.” But it was one of those learning moments where my eyes just opened to so many things and management and this and that. But I could literally reach out; the room was so small I could reach out and touch her shoulder. That’s how close we were sitting.
Pratik Shah (23:14):
Yeah, that’s what I was going to ask you. I mean, you had just this little internal office that barely housed you. Where did you put your employee? You brought her into the internal office.
Arash Khorsandi (23:21):
Into the internal office, absolutely. I had put her right at the other side of the wall. So I was on one wall and she was on the other wall. And even when she left and we brought the next person in, same deal, man. It was just us two in that room and we just worked cases and worked files.
So once I did this six months of lemon law, one of the lemon clients, and this is the power of cross referrals and crosspollination within your own office. Even a tiny office at the time, I might have had 30, 40 active lemon law cases at most. One of the guys, I was meeting with the husband of my client and he’s like, “Oh, I have a PI case.” I said, “Oh really?” And he’s like, “Yeah, I have this case.” And he starts talking about his PI case and I’m like, “Holy crap, this guy’s got a $500,000 case. Legit.” And I’m like, “Hey, man, I really want to take your case.” And he had already, maybe the case was two months old. And he was sharp, the guy, the client. So he played me real good. I didn’t know I was getting played, but he played me so good. He’s like, “Okay, you want the PI case?” Then I realized, well why did he bring it up and blah, blah, blah. Months later I figured out I was being played.But I didn’t mind being played. He played me well. And here’s how he played me. He’s like, “Hey, so my wife’s lemon case, I want you to do it for free,” and blah blah blah and this and that, “and all these preconditions for me to give you this PI case. And you have to wrap up her case before you even get it because I got to see if you’re even legit. You’re some young kid, I don’t freaking know you. Yeah, you’re smart, you’re sharp, you speak well, you’re a smooth talker. But I don’t know.” I said, “Fair.”
So I made her case a priority, I wrapped it up, she was super happy, blah blah, blah. And I took on my first PI case came from there and it was from this lemon law field and crosspollination is what I like to call it. And that case eventually, a year later. So for the 500K. Now, throughout that time, yes, I did have a bunch. I was starting to get into PI. I had a ton of prop 213s, disputed liability, soft tissue. It was really the worst of the worst as far as legal goals. But it was the best of the best as far as the clientele would go. Because just because someone has a low case or a low value case, that doesn’t make them a bad person or an invaluable client.
In fact, those clients are just as valuable as any other big case because they are extremely grateful because nobody else took their case. Likely, they were all coming to me after they were already consulted with four different lawyers. So the fact that I even took the case was super cool for them. And then what I would deliver at the end, nothing big, but I would deliver something. They would be super happy.
So we started working on all these bad reject cases, and for the first year and a half, two years, aside from that one case that I had for 500K, that was from the lemon law with that guy, every other case that was brought in was very low value, horrible cases that everybody was rejecting. And that’s how we started building a client base.
And for my own personal operations, I was under the operating of like, “Hey, I’m a single guy, I don’t have any responsibilities right now. I need to live on a shoestring budget, personally, so I could live off of three grand a month.” And it was cool. So any money that we made over 3000 bucks a month for that first two years, the entire 100% was going back into the practice in some form, whether it was marketing or staffing or whatever for the first two years. And some people were like, “Oh, 401K and blah blah blah.” A 401k, let me talk to you. It’s called a 401AK. We’re investing in ourselves. We are taking that money into our own belief and responsibility. And so that just continued to happen till today. I still operate similarly. Obviously it’s not no longer 3K a month.
Pratik Shah (27:50):
It’s 3,500 now.
Arash Khorsandi (27:52):
Inflation, it’s crazy. Inflation’s going up. But I still till today work under the sink, kind of MO, just a little bit obviously different scale and different numbers.
Pratik Shah (28:06):
Well, nothing’s going to give you a better return than reinvesting in yourself, and learning new skills, and growing, and marketing and getting new business. There’s nothing in the market that’s going to get you a better return than that.
But I’m glad you brought that up because I was doing the math in my head and I was going to ask you this is because if you started with approximately 10 grand, you spent 4,500 on the infomercial on the radio. As you got clients and settled cases, you reinvested back into more infomercials. And then as you started building a bit of a bankroll, you then hired somebody. And as I do the math, I’m like, “Hey, there’s no money left for Arash Khorsandi.” How long was it before you even took that 3K out of the business?
Arash Khorsandi (28:53):
Oh, at least a year and a half. Easy.
Pratik Shah (28:58):
So that’s a year and a half of no salary.
Arash Khorsandi (29:01):
Yeah, absolutely. Absolutely. I was bare, bare, bare bones. I think for part of that time I was still living at my parent’s house, so I didn’t have any rent. If not, I don’t remember. Maybe most of the time I was living at my folk’s house.
But yeah, yeah, absolutely. Zero salary for at least a year and a half, two years. And even then, after we started taking a “salary”, the salary itself was absolute bare minimum because, number one, hunger and you got to create and continue keeping that hunger. And number two, I was always of the mindset that you need to build a war chest in this field. The way that we were planning on growing and the way and the things that we were planning on doing, and that can’t even be more true today. The market and the dynamics of the field of personal injury have changed so dramatically since 13 years ago and even from five years ago. So I was always at the opinion that you got to be able to accumulate a war chest of sorts. So yeah, I mean salary was not even on the list of things to think about.
Pratik Shah (30:11):
And that takes discipline, too. Just like we talk about the discipline of showing up at 8:00 AM. The discipline of, “Hey, even though I settled a case,” you talk about the case you settled for half a million, it sounds like that’s a nice settlement, but that wasn’t a nice settlement for you personally. That was a good settlement for the business. It’s not like you took that money home. You still took your 3K home and put that back into your war chest. And that discipline of, “Hey, even if I have this big settlement, I’m not going to do anything crazy with it,” is also something that you have to learn in building your business.
Arash Khorsandi (30:42):
Absolutely. Absolutely. I mean, the same way we tell our clients, “Hey, please don’t spend this money when we give them a big check.” Like, “Hey, structure it, do this, do that, do this.” I tell clients now when I know they’re not going to structure anything, I say, “Here, do me a favor. For the first 30 days of this money, just take out 10 grand and promise me that for 30 days you’re not going to touch it. Do not.” And I tell them that because I want them to start at least thinking in a disciplined way when they don’t want to structure their fees, have their stuff.
But it’s the same concept, man. You got to build that discipline because you need to have that ready to go for whatever you’re planning on doing. Whether it’s again, infrastructure, systems, processes. All these things cost money. Marketing, everything.
Pratik Shah (31:31):
Yeah. So in 2009 for several years, you’re building, you’re reinvesting. This is kind of a tough question, but I want to ask you. What was the worst moment during that time period where you were just like, ‘I don’t know if I want to do this.” Did you ever have that moment?
Arash Khorsandi (31:48):
Yeah, I’ve had multiple moments like that. And one of them that sticks out, and I was telling somebody about this the other day, the same story, and I will share it with you here. I had a case that we had signed up and it was a case involving a minor. And it was a minor where the parents were driving and they were making a left-handed turn. The parents were making a left turn. And the minor suffered some head trauma and some scarring on her head. And we had the case for a little bit of time, maybe about five, six months, going at it with the other party. And the guardian for the minor was the mom or the dad, one of them, I don’t remember. I think it was the mom, because the mom was in the car.
Anyways, fast forward. We had this case, then unbeknownst to us, the client was tempted and left our firm to somebody else for some reason. And then five weeks goes by, the client comes back to us apologizing and explaining what happened that they went there. And I was like, “Wow, that’s super shady.” I was like, “Damn, this is crazy.” The thought of not good things happening, really, it just didn’t even cross my mind. I didn’t expect people to be that.
And so this case went on and long story short, there were a couple of instances and run-ins with this attorney, this other attorney. And this other attorney thought that he was going to bully me and he tried to sue us at the time. This was early on for a bunch of nonsense like business interruption or something like that. But he ended up dismissing his lawsuit within 48 hours after we had to bully him back. And he realized he’s not going to get away with it.
Fast forward, that attorney is currently disbarred. And he’s a famous name that people would recognize and I’m not going to talk about it. But during that time, I was a young guy, this was all shocking to me, and it was a time where I picked up the phone and I called my dad, and I’ll never forget it. And I’m like, “Hey, I’m done with this. I’m closing this shit up. I cannot. This is crazy. This is not what I signed up for. I wanted to practice law, not all this other stuff.” And so that was very early on, in a very dark place that I was, even though it only lasted, maybe the whole thing lasted 72 hours by the time he dismissed the case within two days because it was total nonsense. And he knew he was crossing so many ethical boundaries by doing that and other things.
So it was just a tactic. But the feeling and the emotion that I had during that time was still something that took its toll on me during that period of 3, 4, 5 days. And then thereafter, even while this thing transpired, that I was really upset in an angry place. And so that taught me a lot. And it really toughened my skin, first and foremost. Toughened the shit out of my skin. So if that happened today, I laughed about it if someone … We just go nuclear, but we also have more resources. We’re also in a different phase that we were.
And it also taught me nothing is permanent. Unfortunately, or fortunately in life. Nothing is permanent. Nothing good is permanent and the bad is also not permanent. So if you’re in a bad place, something bad happens, if you’re in a dark place, things are not going well, things are stacked against you, you feel like everyone’s out, you’re under the gun. You feel like you’re very … You just have to know, it’s not permanent. There will be light. But you got to go and find the light. You got to dig yourself to get to the light. You just cannot sit there and be inactive. You got to move. And it’s when you’re moving and moving and moving, things will start to transpire.
Pratik Shah (36:06):
Yeah, I mean, what a scary moment. If you’re early on, you’re already not paying yourself, you’re not making a lot of money. Maybe you’re paying yourself a little bit, depending on the timing of this. You got a decent case you’re working on. And then the some big name in town, who at the time, nobody really believed anything that bad or shady was going on, comes after you and you’re like, “What am I going to do against this behemoth of a firm?” And even though it only lasts a short time, you don’t know it’s going to last a short time when that suit comes in.
Arash Khorsandi (36:39):
Absolutely. You don’t.
Pratik Shah (36:41):
You’re like, “Am I going to be dealing with this for months? I can’t afford a lawyer. I don’t have the time or the staff to say, ‘Hey, just go file a demur or do something.’ Like, I got to do it myself.”
Arash Khorsandi (36:51):
Yeah. But thankfully I did have, and this is kind of part of, Pratik, you know this better than anybody else, you got to have good people around you. You got to build your tribe, as I heard people say. That’s a good one. But you got to build your community of people, mentors, help, lawyers, non-lawyers, people that you consider to be telling you stuff the way it really is and not sugarcoating it. People that actually have your best interest in mind. Not haters, no jealousy, none of those people. Good people that you actually … They don’t have to be in the same field. Anywhere.
So thankfully I was fortunate enough that I had several people in that category. One of them is Rahul Ravipudi, and Rahul was involved in this particular issue that I just described. And Rahul was a big part of resolving this in a very, very expeditious and proper manner. And this is so many years ago. And it’s good to have people like that, that are good, good humans. Of course, he’s also a great lawyer, but he’s a good human. Ultimately, that’s what it comes down to. So it’s always good to have that community of people surrounding you when shit hits the fan because you’re going to need some sort of, at least at a minimum, some sort of crying board.
Pratik Shah (38:16):
And you need a support system. Nobody does it alone. Everybody has to be the spearhead of their own success and has to be on the front lines doing the work and putting the effort and teaching themselves. But you have to be able to pick up the bat phone, so to say, and call somebody and say, “Hey, I screwed up. Or this thing happened to me, or I did this thing. How do I fix it? How do I get back onto the right track? Or I made these bad decisions.” Whatever it may be, whether it’s your fault or someone else’s fault. And if you don’t have anybody in the law that if you don’t have any lawyers that you know, you have to be intentional about going out there and building that community in whatever fashion it may be.
And just like we talk about making mistakes in building the practice, you’ll make mistakes in building your tribe. You’ll bring people in that you think you can trust and you’ll realize that you can’t, you’ll think they’re on the same page as you, you realize that they’re not. I’m sure you’ve gone through that, too.
Arash Khorsandi (39:16):
Absolutely. And that’s why there’s no ever perfecting anything and there’s no a hundred percent. There is no a hundred percent right decision or whatever. For crying out loud, the divorce rate in America is close to 50%. And that’s people in love and dove and, “Oh, I love you, smushy smush,” and this and that and all that good stuff. And even then, which is the biggest decision you ever make, frankly, is your spouse or your significant other. Even then, your error rate is up in the high forties.
So you just have to realize you’re never going to be perfect and you can’t be a perfectionist either. Being a perfectionist also prevents you from growing because you won’t move fast and you won’t do things because you’re always expecting perfection.
Pratik Shah (40:07):
One favorite statement I’ve always heard that I live by is, perfect is the enemy of good.
Arash Khorsandi (40:12):
Pratik Shah (40:13):
Or enemy of done. Get it done good enough and then fix it as you’ve finished that decision.
Arash Khorsandi (40:20):
Absolutely right, man. That is so damn true. And we see it every day. We see it all the time, in work and out of work, obviously. But in the practice we see it all the time. And you’ve got to find that happy medium, so to speak.
Pratik Shah (40:34):
Yeah. So another question. You start in 2009, you’re working these lemon law cases, small cases, building, building, building. When did you hit that first seven figure case? And I know you’ve had a lot. That’s a big moment for PI firms. You start your solo practice and everybody, every person that starts their practice is like, “I want a seven figure case. That’s my goal.” So was that your goal? And when did you reach that goal?
Arash Khorsandi (41:04):
It was an unstated goal because I never thought I’d actually get a seven figure case. So when I first started and I was doing this and I was just going with it and trying to get cases, build the firm, build the practice, hire somebody, not be solo. At least have two people in the office that I could talk to and not be crazy. So I didn’t even think I was going to get a seven figure case. So it was an unstated goal in my head, but it was so farfetched at the time that it was like, “Ah, yeah.”
And then, to answer your question, it was sometime in 2014, about five years in, I would say. Four and a half to five years in, roughly when we got our first seven figure case and resolved it and got a successful resolve. And I will never forget that time. Why? Because the second we got it, and then eventually when we resolved it, because first is identifying and getting the case. And not all of them scream out at you. Yeah, there’s some that scream out at you, but there’s a lot of seven figure cases that don’t yell out at you if you don’t know what you’re doing.But first you have to get it, then you got to take it to the finish line properly. So once we finished that case, I was like, “All right, I’m done. That’s it. This is-“
Pratik Shah (42:23):
Shut it down.
Arash Khorsandi (42:24):
I’m like, “All right, let’s go home. This is over.” I can’t believe it. This was it. I’m never going to get another one and that’ll be it, and blah, blah blah. And I can’t believe it. I was so happy. But it was four and a half, five years into the system. And at that point, once I got over my, okay, done, let’s go. And I’m like, “Okay, back to reality AK. What the hell are you going to do? You got to continue. Great.” Then I realized, “Okay, let’s try to turn this into a systematic approach.” There is a formula. It’s not rocket science in terms of we’re not NASA here. We’re not doing complex engineering for crazy things. There is a formula, and even in NASA there’s a formula, but here the formula’s a lot easier and more straightforward and you don’t need to be a computer science and ask for it.
So I really tried to then focus on the system and the process of how to repeat this. And that became the next, I would say the next five, six years of the practice was developing that machine, the infrastructure/whatever you want to call it. It’s not just infrastructure, it’s more than that. Developing that process to get more of these types of cases, tho higher value, seven figures, so on and so forth, while also maintaining all the other cases you have to do that are still there.
Pratik Shah (44:01):
You can’t just only work on the seven figure, two or three seven-figure cases you may have in your office.
Arash Khorsandi (44:05):
Absolutely not. Because they don’t come without the others, at least in our office, in the system that we have. Other places, yes, I’m sure you can. I’m talking only for me and only for us. We have, even today, 2022, when we sit here, we have hundreds and hundreds and hundreds of very run of the mill, normal non-seven figure cases that we service and provide love and care for, and they become a foundation for our clients, our firm, future referrals, so on and so forth. And we have become a lot better at extracting value from those cases and also building more systems today to monetize them.
A firm like us, our size or bigger, believe it or not, loses a ton of money on the small cases, dollar to dollar, pounds per pound. If you were a consultant or an analyst looking at it from an outside, the small cases, the 15Ks, the 25s, even if you get the entire policy, even if you’re a soft tissue guru, and blah, blah, blah. It’s a financial loss, but it’s a loss leader. We have to still take them. We still take up to the finish line, and we still have to service them because it’s a part of the job and it’s part of also building the bigger picture.
Pratik Shah (45:37):
So let me ask you. We asked about your worst moment, and I want to flip it and I want to ask about your favorite memory of those early days of when you’re growing. What was a moment when you felt like, “Okay, I’ve turned a corner and I’m going to do this?”
Arash Khorsandi (45:57):
So my first office, the executive suites that we started in 2009 was in Watt Plaza. It’s Century City, large office. Everyone knows it. It was amazing. And then within the first five, six years, during that time, seven years, so it’s up until seven years. During that seven year span, I expanded within that building and got another suite. First I went from an executive office.
Then once we had three or four employees, then I went into a shared space with three other lawyers. So there was a business real estate guy, there was a criminal defense guy, and then there was me and some other soul. There was four of us sharing a regular, your run of the mill normal office. And then from there I went to another … All in the same building, all in Watt Plaza in this nice Century City space, which I love. And as we added more humans to the practice and as we added more investment into it, and I’m like, “Wow. So basically I’m pregnant now. I’m in this. There’s no turning back now.”
But I am so deep in this that I don’t even realize how deep I am and like I’ve been saying, you’re either pregnant or you’re not. There’s no middle ground. And I’m like, “There’s no middle ground. You’re not kind of pregnant.”
So I’m like, “All right, AK, you’re pregnant in more ways than one.” All right. So I’m like, “Okay. So I see you adding to humans, I see what’s going on.” And back then rents kept going up, rents kept going up, rents kept going up, and parking started at $180 a person. Then the building raised it to 200 a person. And I heard at that time, they were about to go to 225 a person. Today, that same building I think is at 260 right now per person today.
So I’m like, “Oh, this is getting crazy.” So my favorite, and I guess at that early on stage moment was when I decided, I’m like, “I need to get out of here and get my own place.” And I knew that I wanted to have my own building no matter how shitty it was. And no matter how small and rinky-dinky and in a bad area potentially it was, I knew that I wanted to have my own space. For so many reasons. For creativity, for workflow, a million different reasons.
And also, financially it made a lot of sense because again, at the time it was dollars and cents. Parking plus rent plus increase, and also signing a minimum five year lease. That was always scary to me. Even later on. It was scary to me. And frankly, if someone comes to me today, even right now, if someone comes to me and they’re like, “Hey, you got to sign a five year lease right now and it’s going to be $60,000 a month,” because that’s how much [inaudible 00:48:33] would be. I would be scared. Despite all the shit that I went through and the thick skin, I would be scared.
So anyways, that was my, wow, this was an amazing moment. I was so happy when I was able to do that, accomplish that, as small and rinky-dinky as it was, as a bad area that it was relative to Century City. Didn’t have the pizazz, didn’t have the thing. And it was bigger that I could chew off at the time, but I figured it out. And that was, to me, really rewarding because it did allow me to have my own freedom from the landlord.
Pratik Shah (49:11):
Yeah, that’s amazing. That’s amazing. That’s got to be a moment. I mean, you’re in. You’re all in. And I love that.
One more question before we wrap this up and I can let you get back to managing your 75 people. If you could go back to 09, 2010 and you could meet the younger Arash Khorsandi, you’re young still, but the younger one and just tell him something to get through those dark days, what would you tell him?
Arash Khorsandi (49:38):
Wow. A lot of different things, actually. I would tell him to stay focused on building the process and the systems early and invest into building that earlier on than I did it. Whatever. And if my wife is listening, I would’ve told him get married to her earlier. But I’m pretty sure she’s not listening. So I would’ve said, “You’re going to make it, okay. So get this concept of making it out of your head. You’re going to make it, so you should now focus on not making it, but you should focus on building the right foundation and infrastructure as far as systems, protocols, and processes so that when you do ‘make it’, everything is smoother and you can run faster when you are in that place. You’re not running with a backpack full of rocks. And sometimes it feels that way if your processes and your systems are not fully efficient. When you are pulling so many cases in volume and scale, sometimes it feels like you’re running with a backpack on.” And that is the biggest advice I would say.
And the last thing I’ll add to that is, people say, “Oh, you guys are successful.” Or I’ll hear someone say about some other lawyer, and before we’re talking with Theresa, success is not an end destination. There is no finish line of success. Success is a daily accomplishment. You either win or lose the day. And some days you lose that day and some days you’re not successful. But success is an ongoing, living, breathing kind of animal altogether. There is no finish line where you’re like, “Ah, this guy is successful.’ And we’ve seen it. You’ve seen it with other lawyers unfortunately, and other businesses. And my biggest thing is Blackberry. When we had Blackberry phones and I thought, “Blackberry, I love Blackberry. And where’s Blackberry now?” They’re not anywhere. So success is every day, you go out, you got to win that day. So win today, win tomorrow. And if you don’t win tomorrow, just remember there’s another day right behind it. You got to win the next one.
Pratik Shah (52:00):
I love that. I love that. I want to end on that. So thank you AK so much for coming on. I really appreciate you taking the time. Thank you for listening or watching. We’ll see you on the next episode of Bootstrap Solo. And remember, just because guys like Arash make it look effortless and easy, it doesn’t mean that it is. And I have one ask for all you listeners and people that been downloading the podcast, we’ve seen the numbers grow. Really appreciate you guys enjoying it. But our only ask of you guys, if you don’t mind, is to share the podcast wherever you share stuff, whether it’s Instagram, TikTok, LinkedIn, et cetera. And we can only grow if you let others know about it. So I really appreciate you guys sharing it. That way I can continue to get great guests like Arash to come on and tell us their story. Thank you guys so much and enjoy.