The Sterling Family Law Show

[EP2] The 9 Secrets I Learned to Build a Successful Law Firm

• Jeff Sterling Hughes

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Build a successful law firm with strategies that actually work—I’m sharing the gritty details of growing Sterling from zero to $17M and 27 attorneys.

No fluff - just the systems, pivots, and hard lessons that built our $17M firm.

This isn't another highlight reel story. I'm sharing the raw details of how we nearly failed at 18 months, made the painful pivot to focus and fixed fees, and built the law firm systems that work. 

You'll get the real mistakes, the expensive lessons, and the specific strategies we use to help family law firms scale sustainably.


📲 Subscribe Now: https://www.youtube.com/@jsterlinghughes 

📝 Get your FREE Law Firm Growth Guide: https://jsterlinghughes.com/


📄 CHAPTERS 

0:00 - Build Successful Law Firm: The Sterling Story Begins 

1:37 - Serial Entrepreneur Journey Before Family Law 

3:17 - Why We Chose Law Firm Over Roofing Company 

6:19 - Starting Family Law Practice: Nine Months To Launch 

7:21 - First 18 Months: Eight Lawyers And Total Chaos 

8:59 - The Breaking Point: Three Bar Complaints In One Month 

10:23 - $10K Consultation That Changed Everything 

11:39 - The Expensive Pivot: Focus On Family Law Only 

14:39 - Fixed Fee Family Law: Why Everyone Said It's Impossible 

17:07 - 27 Lawyers, 100% Fixed Fee: The Results Today 

18:37 - Pricing Iterations: Years Of Painful Learning

23:13 - Leadership Development: You Must Lead Yourself First 

25:08 - Delegation Challenge: Letting Others "Screw It Up"

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Speaker 1:

Have you ever wondered what it really takes to build a successful law firm from the ground up? In this episode, we break down the steps and the strategies that you need to understand when establishing your firm. Well, hello and welcome to the Sterling Family Law Show, where we equip family lawyers how to have the firm of their dreams. I'm your co-host, jeff Hughes, along with my co-host, tyler Dolph. Today we're doing something a little bit different that we've never done before. We're going to do a series on sharing the gritty, raw details of how Tony and I started and built Sterling Law.

Speaker 1:

We've grown that from zero, from a startup, to 17 plus million and 27 attorneys a day, and this isn't just like a war story thing. This is going to be. We're going to dig deep into our failures and share those and some of the good decisions we've made, and share those too. Hopefully you all can take this and synthesize it for your situation and shorten your success curve in your firm. Yeah, tyler, so often I hear all these stories of firms that have started and it's just all kind of the gloss right, the highlight reel, and look, I want to do my very best to kind of share the lowlights along with the highlights, because I think that's where you get some of the most valuable nuggets of gold that help attorneys build their firm. So hopefully we can share some value with our audience here 100%.

Speaker 2:

I'm really excited and, jeff, I want to start by going all the way back to the beginning. You know, because you, for people who don't know it, you are a serial entrepreneur. You've started many different businesses and Sterling was not your first one. Let's start at the very beginning, when you were a practicing attorney and decided to pivot out of that.

Speaker 1:

So I'll give you the condensed version. I started practicing here in the Milwaukee area here in Wisconsin in 1997. So I've got some gray hairs to show it. I go back to 97. So I worked. It was in a small community firm, five attorneys and I was the fifth one, and I was there until 2005 when I left to start or to run a side hustle that I started in 04. So 97 to 04, practice law started a side hustle and of all things it was selling dish network satellite, which is like cable over your satellite right. And so I did that, left my practice in 05. I did that until about five years ago when I that business just basically disappeared. So that was almost 20 years I ran that business. So that's how I got started in my entrepreneurial ways Along the way.

Speaker 1:

I think I counted once I've started nine businesses and six of them are no longer around. Some version of fail. Maybe they lasted a few years or they just failed within the year or so, but one of the successes was Sterling Law. So Tony Carl's and I started Sterling Law 11 years ago this week. So that takes us back to 2004. We started in June of 2004,. Just him and I.

Speaker 2:

And Tony was at the call center right.

Speaker 1:

Tony was with me at the satellite business. Yeah, he ran our marketing basically for the satellite business. So we had worked together in that life came together and decided to start the law firm and we opened up in 04.

Speaker 2:

So I think it's really and I know the story and I love the story, but I think our audience will also appreciate it. Talk to me about some of those initial conversations with Tony. You know, hey, should we start another business? We know that the call center business is kind of declining because over the top, tv and Hulu and YouTube TV and everything is coming on board. What was that kind of like first idea ideation lunch looking like.

Speaker 1:

Okay. So I went to Tony and his boss his name is John so we hired a guy named John. John was his boss. He ran the satellite business at that time and I said, hey, look, guys, go, go sit in a room in a dark room and, like, think through all of our options and come back with some ideas. And they came back and their best idea, which was a good idea, was a roofing company, because it fit the criteria we were looking for.

Speaker 1:

And I thought about that and for years I had been noodling in my mind how can I get back into law and take what I've learned in business and marketing and bring that to law and do something special?

Speaker 1:

But I couldn't imagine a way that we could actually scale the law firm, because most law firms in the B2C space are built one or two attorneys at a time. Okay, it's just slow. Good growth, but slow, and I didn't want to go slow. So as I thought it through, I thought I think we have a way that we could actually scale it using our digital marketing capacity, because we are kind of world-class at digital marketing at that point. So I pitched Tony the idea of starting the law firm and he wasn't like immediately receptive. Ok, because he was kind of really ingrained in his idea of this, of this roofing company. The more we thought about it, the more we researched it, we felt like we could do some real special things there and help some people. So that's the direction that we took. And about nine months later from that conversation is when we launched the law firm.

Speaker 2:

And about nine months later from that conversation is when we launched the law firm. And just to correct me if I'm wrong here, I believe the reasoning behind the roofing company and the law firm was we knew how to drive local leads Right. We had established RocketClicks as an agency. We were building that muscle of driving local visibility and local leads, and so there is actually quite a comparison between a roofing company and a law firm as it relates to how people search for those services.

Speaker 1:

Yeah, if you think about it, the client is obviously looking for a different service. But generally divorce is a one-time transaction, most of the time, right. It's usually high dollar and roofing is similar to that. Usually you're gonna get a new roof once on a house 30 years, right, you live in a house, maybe once you'll get a new roof on it, and it's a high dollar transaction. And it's local search, where people find the roofers through local search just like they find their family lawyers through local search. So it fit every it all lined up and for us the thought process was I was a lawyer, so we kind of had a barrier to entry. We weren't competing against everybody that has a roofing, that has a pickup truck and a hammer. We were competing against other lawyers and we liked the competitive nature of that market, more so than some of these well-established roofing companies that we'd be going up against. So it made sense there.

Speaker 2:

Yep, absolutely Okay. So now we've decided we're going to build a law firm, and it took nine months to from idea to execution.

Speaker 1:

It took a year for my execution. It took nine months from whenever Tony and I decided that we're going to do it to build the website and get it ready.

Speaker 2:

And it originally a full service firm, correct?

Speaker 1:

Correct Everything family law, estate planning, personal injury, criminal. We were going to do it all because we could get the business. So we turned the lights on and right away the phone was ringing. In fact it was ringing before we turned the lights on. We had those early calls go to another attorney across town that was a buddy of mine and he was happy to take those free calls because he did everything. So it worked out great. But the day we turned the light on, so to speak, we directed all those calls to our internal phone bank and away we went and we in that first 18 months we grew to eight lawyers and we thought we were on top of the girl the world. But we were getting bar complaints, client complaints. We were doing everything and totally unhappy with it because it was just felt like chaos.

Speaker 2:

You're building the plane as you were flying it. You know, like you said, most law firms grow one or two attorneys at a time over maybe a two or three year period. You, in the first eight months, hired eight attorneys. Now, was it practice area specific I'm going to get a defense specific attorney. I'm going to family law specific attorney or was it just Well?

Speaker 1:

we started with family law because that's what I knew. So our first three attorneys were family attorneys. But then we're getting criminal calls, we're getting estate planning calls, we're getting PI calls, we're getting liquor license calls. We were getting everything and saying yes.

Speaker 1:

Yeah, we were saying yes to everything. Calls. We were getting everything and saying yes. Yeah, we were saying yes to everything. If you were willing to put your credit card down, we would welcome you as a client and in fact, I think our fourth lawyer was a criminal defense lawyer. So, anyway, we're making lots of money on paper but no bottom line. In fact, we're losing money because it was just a mess. The firm was a mess internally because we were trying to grow too fast and do everything rather than focus on one thing. So 18 months into it, we were just discouraged and felt like we're ready to quit.

Speaker 2:

Quite honestly, that's such a. It's such an interesting inflection point where you've shown your ability to grow. We can hire attorneys, we can get leads, we can bring revenue in. We're not making any money yet, but we're going to figure it out. At what point you mentioned 18 months in, you were frustrated. Was there a moment or a day or a month you remember saying I can't do it like this. We got to change.

Speaker 1:

I think it was our third legit bar complaint. Bar complaints are very scary for lawyers. We don't want them ever. We had three not for me but for other lawyers in the firm in one, in one month. Now they were all turned out to be kind of you know nothing complaints. They went away, they weren't valid. But that third one was like man we are and that doesn't even include the upset clients that didn't complain to the state bar right, it's just goals that are elevated to that point. And that's when I knew we need to do something and that was about November of 2015.

Speaker 1:

And I remember there was this guy named Lee Rosen and he was a he's kind of a famous guy in our world. He was kind of one of the initial kind of gurus in family law and I had been following his following his stuff for a while. So I reached out to him and I said, hey, lee, would you be willing to meet with us and kind of answer, help us, like figure this out. And he said sure, and I go okay, how much will that be, lee? And he's like that's 10 grand. I'm like it was like a pucker up moment. We're like, oh, we got to do that. But I just trusted his wisdom and what he had built there in North Carolina.

Speaker 1:

So Tony and I got on a plane, went right down to South Beach in December of 15. And we met with him and it was absolute mind blowing, opened our eyes to incredible ideas and thoughts that we never even imagined. And we took copious notes, like pages of notes over a seven hour time period, recorded the conversation, left there, went directly across the street into a Starbucks and said, okay, we're going to blow the firm up when we get back and we're going to do this. We're going to do it like in record time, because we were so frustrated with where we are at. And, um, we got back.

Speaker 2:

Huh.

Speaker 1:

Was that?

Speaker 2:

so motivated to do something about it.

Speaker 1:

Yeah, when you're losing money it can really be a strong motivator. You don't want to lose money anymore. So we got back on the plane, came back and told our our attorneys. It took a couple of weeks for us to kind of get the communication right, figure out how we're going to do it. But we came back and say here's what we're going to do.

Speaker 1:

And you know, we had half our clients, 40% of our clients, left because they weren't family lawyers and we were going to focus just on family law and we're going to go to fixed fee and we're going to invest heavily in technology with Salesforce. We made all these kind of cornerstone decisions in a span of about three weeks and come that was in December, so February 1st, we flipped over to fixed fee and we've been fixed fee a hundred percent since then for new clients and away we went. It was painful, we had to. We had to refund 40% of our clients, yeah, and pay severance to attorneys. So it was a really expensive proposition to do that pivot. But we were really convicted that if we focused on family law and we were, we worked on being the best we possibly could be in that, you know, special things would happen.

Speaker 2:

So I want to live in this moment for a minute. Right, you decide to completely change your entire business, your entire law firm, which I'm sure is not very common. You did it in record time, in three weeks. If you could go back and do it again, are there some key learnings in there? If someone is listening to this and they have a multi-practice firm and they're thinking, or have been thinking about focusing it down into a single practice area, what lessons can you share from that pivot the positive and negative that you learned during that time?

Speaker 1:

Yeah, and looking back on that, we went from chaos to even more chaos for a couple of weeks. So we kind of had to get deeper in the mud and the pain, so to speak, before we could come out of that. And you know, for stubbornness or impatience or a combination of all those things, we just we committed to doing it really quick. Now, I don't think that's the wisest thing for every firm, but I didn't like losing money, I didn't like where we were going and we just felt like let's pull the bandaid off, let's rip it off and just do it. So I think that resolve was that's that served us well, tyler, over the years, that resolve of we're going to do it, here's what we're going to do. And we had teammates that trusted us.

Speaker 1:

I got to stress that we had a couple of lawyers, holly Mullen in particular, who's one of our managing partners today. She was with us then and I remember just some of the skepticism as I went to her and said hey, holly, you're an amazing attorney. You've been doing hourly your whole career. I'm going to ask you to do fixed fee. She's like we're in family law. Do you realize? You can't do fixed fee family law? I'm like, no, but here's how I think it might work. And a couple of days of her noodling on it, she's like, yeah, let's give it a shot.

Speaker 1:

And I think we also provided some baseline comp. They wouldn't fall below just to get their buy-in to help us give that a shot. So I think the lesson was we were resolved and committed to it. We didn't want to burn the ship, so to speak. We're going to go all in on it and that worked. But the key I appreciate this a lot, as I know you do about just focus, focus, focus. When you focus your whole firm behind one practice area, you can build everything around that, it, it, it benefits the clients significantly and it benefits you as a lawyer your bottom line, obviously because now you're, you're able to really serve clients in a better way.

Speaker 2:

So that's incredible. It's just crazy to think how far you've come since that moment as it relates to pivoting from fixed fee or from hourly to fixed fee. What was that transition like for the lawyers you mentioned? Holly, you know being an hourly attorney your whole career now having to move to fixed fee. Was that an easier transition for other attorneys and for the clients? Did they understand all that?

Speaker 1:

Give us some more perspective on that kind of fixed fee mindset. Well, I'll answer from the client's perspective. They liked it and loved it immediately. Okay, especially because of how we were quoting them, because they were about a third of where the fees needed to be. So they loved it. Now, that's the good news. I'll get that out of the way first.

Speaker 1:

The bad news is it took us years of a learning curve, a painful, protracted learning curve, to get it right, and so I'll highlight the major lessons from that experience. One is that we did not appreciate the difficulty it would be to change our internal mindset to go from hourly to fixed fee. Yeah, hourly is done on a reactive basis. That's how the law is practiced. In hourly you react to what the court you react to, your client react to the other side. There's very little proactive pushing cases along. Some lawyers do it more than others, okay, but it's usually going to be done by the court or one party's urgency to be done.

Speaker 1:

So we had to change our practice, mindset and habits, and that took years and years to figure out how to do that. So that was in, that that part was there, and then it took us a long time to figure out how to sell it. I mean, so we switched in 16. We didn't start figuring out how to sell it until about 2021, 22 is when we really started figuring out how to sell it. So it took that long and we even started a quote sales program in 18. So it took us from 18 to 21, trying different things till we got the messaging right to sell it. So those two factors alone are really difficult for lawyers to adapt to, and it wasn't easy. I don't want to paint it like it was easy. It can be done, but it's a challenge.

Speaker 2:

Every time I talk about our law firm and I talk to other attorneys and I tell them that it's fixed fee, the reaction is very similar. It's always like well, that can't happen, or how did you do that, or there's no way that can actually work. And it's fun to see the reaction as you or Tony explains it to them on how you went through these iterations and different pricing models to finally get to where you are today. And so I got to believe that someone listening to this is saying the same thing, like there's no way that works. So can you dive into a little bit more on what those lessons learned were during the different pricing kind of conversations and iterations you had?

Speaker 1:

Yeah. So I'll start with the result that we're enjoying today. Okay, so we have 27 lawyers and 100% of our cases are fixed fee. So we have 27 lawyers and 100% of our cases are fixed fee. Now, within those cases, we only do divorce and paternity and post-judgment on either of those cases. We also do some prenups and some mediation, but that's basically the same stuff. So we don't take other cases outside. We don't do adoption, we don't do CHIPS cases, things like that, and our lawyers on average collect average collect north of 650 a year. So the results are strong. From just a dollar and metric standpoint, our client scores are incredibly high. I don't know. We do NPS to check our client scores and right now it's in the mid-70s For family law. That's unheard of. Disney is below mid-70s. So we know our clients love it, our lawyers love it and the results speak for themselves. Okay, so that's what's happened now to get there from 16 to 25.

Speaker 1:

So this nine year period, the the first lessons that we had to learn was just getting the quoting down because we were quoting way too low. But you don't know you're quoting too low until you get six months or a year into the case, or some cases are like three years old on a $2,000 initial flat fee and we didn't figure that part out. So we eventually figured out how to quote a lot closer to the value of what we were delivering, something more in line with an effective hourly rate. That took us years to figure that piece of it out. Then we initially also broke down our fixed fee cases into stages. So like a divorce, for example, would have three stages kind of a negotiation stage, a kind of a litigation stage where you kind of you're more arguing with stuff and you're needing outside help from the court. Then you have a trial stage. That's kind of how they all broke down and it was based on events and sometimes the event would happen in four months, sometimes it happened in nine months. Well, that didn't work because you know now you're doing nine months of work in one case and four months on the other.

Speaker 1:

So we had eventually come to the point where we figured out how to do it on a time-based, where we would promise clients certain amount of work done and whatever in a time period and then that would trigger the next stage and it'd still be three stages roughly negotiation, litigation and trial would be how we would do it. So that took us a while to figure that out, but that was. You know. I'm sharing that here because that was our. That was a major turning point for us to solve that and understand how to do that Right and well.

Speaker 1:

By the way, tyler, if anyone is interested in knowing more about this, they can go to jsterlinghughescom where we actually put up our retainer agreements.

Speaker 1:

You can, like, rip those retainer agreements down, download them and figure out how we do it and, you know, copy those for your, for your state and for your for your practice there too.

Speaker 1:

So that was just on the coding and the sales side of of the experience for clients. The other lesson that it took us a really long time to understand was how proactive we had to be, because if a client did not feel we were really trying to push their case along, when we would say, hey, you know, client, your first stage is over, now we're going to go into the next stage of your case, we have to be able to show them hey, we really tried to get it over with in this stage. We couldn't. And then now it's going to be this next fee, which is a big fee, and you know that took us some time for us to understand how to do that for clients, so they could feel not great about it but at least understand. Yes, you did what you could and couldn't get it over with, and that's not within your control, so we're going to go to this next stage.

Speaker 2:

That's wild. It's interesting that it took so many iterations and obviously you're feeling the benefit of that now, but for our listeners, this success is is never a straight path, right. It takes these iterations and these the the motivation to continue to improve and polish on what you're building.

Speaker 1:

Yeah, it's definitely zigzag.

Speaker 2:

Okay, so now let's take it from the attorney perspective, as they were learning this new model and they were dealing with consumers. One thing you mentioned was the reactive versus proactive. Right now, our attorneys want to get the cases done. They want to push things forward so that they can continue to grow and move on to the next one. How was that mindset, mind shift felt within the firm?

Speaker 1:

Um, well, within the firm, initially our attorneys, especially the new ones, they're going to say the, the objection we commonly hear as well what if the other side wants to delay things and slow things down? And that's a valid concern and it does happen. Okay, that definitely does happen. It doesn't happen as much as we imagine it'll happen. It happens a lot less than that, but it happens and we have ways to kind of push things along. We also have some, some wording in our agreement that to help the client out, that if it's close to a resolution at the end of a stage, we can extend it by 30 days and it's not the full fee for the next stage. So there's certainly we're going to try to work with the client and make sure that we're doing right by them. So there's some ways that we do that too.

Speaker 2:

Love it. We're going to have an entire series. So, if you're enjoying what we're talking about, we're going to continue talking about Jeff and Tony's journey as they've been building Sterling. But, jeff, I want to focus in on a few just overarching lessons learned over the last 11 years, starting from nothing, building it to where you are today, having to re-engineer the entire firm a few years in. What are some things that you want our listeners to take away as they're building their own firm?

Speaker 1:

want our listeners to take away as they're building their own firm. Oh boy, let me go back to the beginning. So when Tony and I started Sterling Law, we came in with the mindset that we wanted to scale it and grow it. That's fairly unusual and it's probably not relatable to a lot of our audience because, like most lawyers would start a practice usually a solo practice and then they just begin to build it and grow it from there. And so for those that are in that I just described, that are in that situation, which are, which are most of our audience I I encourage and I get this question quite a bit, tyler, from attorneys that are wanting to take their practice from a solo or a one or two attorney practice to grow it beyond.

Speaker 1:

That is, honestly. It starts with yourself. You have to be able to successfully lead yourself before you can lead others, and in my particular case, I go. I went back to my years when I practiced law and I would drive back and forth the court I we live in a. My office was in an area that we were in a tri-county area and each county courthouse was 25 or 30 minutes away, so I had to make that trip every day, sometimes twice a day, and I use that time to do nothing but like listen to books on CD back in those days and I had to get to the point where I could lead myself before I could grow and lead others. So attorneys that are looking to grow their practice, you got to first start with can I lead myself? I can. If I've mastered that, or at least got to a point of proficiency there, then I can pass that along and give that to others and help lead the firm as well. So starting there, I think, is like step number one lead the firm as well.

Speaker 2:

So starting there, I think, is like step number one. We, on our law firm interview series that we have on our podcast, I often ask that question of like, what was it like going from a solopreneur to building a firm and having multiple people at your firm and multiple attorneys, and the mindset shift that has to happen from being able to control all the outcomes and build all the processes to now having to let go of the vine a little bit and delegate and set a culture and build a culture with a firm. I think that's what you're saying right as your firm grows, as your business grows, you have to change and grow yourself.

Speaker 1:

Yeah, and I think probably the hurdle that trips up the most is that willingness to delegate and let control, especially of work product, cause we as lawyers we're, we're proud of our work product. We put a lot, we put obviously seven years of schooling into getting the skillset to be able to deliver that work product, plus the years of experience, and it's really tough to give that up. And that is the most common limiting factor for lawyers in growing and building their firm is willingness to let others take over, do the work, not do it. As well as you make mistakes, you be patient with the mistakes, train them through that, equip them through that. And frankly, a lot of folks are they're just not prepared for that, they don't want to do that. And frankly, a lot of folks are they're just not prepared for that, they don't want to do that. It feels so wrong and so off to them that they would just rather not do that.

Speaker 1:

And there's certainly honor in that. No problem with that. Just understand that if that's where you want to be, you won't be growing your firm a ton, and that's great too. One or two or three attorney firms can be amazing. So growth isn't everything, I can assure you that. But if you really want to grow it, you've got to be able to delegate and let others screw it up.

Speaker 2:

That's right. There's this whole narrative that they don't teach you how to run a business. In law school, they teach you everything except that, and so having to learn that on the fly or through mentors is definitely a shortcut.

Speaker 1:

It is for sure.

Speaker 2:

Love it. Jeff, really appreciate your time, excited to continue this conversation and continue to dive into the Sterling story and learn more about your experience in building this amazing law firm.

Speaker 1:

Yeah, it's been fun talking to you, tyler. It's also weird for me, sitting in this seat on my show with you, to get to be interviewed. So we're looking forward to the next couple episodes on this series. I know Tony's coming in, probably in the next one here, to talk about. What's unique about Tony's situation is that he's a non-lawyer and he brings a robust skill set from a marketing and operations standpoint, and obviously you'll see why I chose him as my first partner in this, even though he's a non-lawyer. So he's going to have a lot to offer. And then from there we'll be adding in Jeff Kerlin, who's our current president, to share on what we've done over the past few years and how he's kind of shaped the firm in the way that he has, and then some other folks on our team. So I'm looking forward to sharing this with everyone as we move forward Awesome.

Speaker 2:

Thanks again, appreciate it Cool, thanks D.

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