How do you know if you need a lawyer? If you needed a lawyer tomorrow, would you know who to call? What do lawyers mean for your financial future? In this episode of “The John Chapman Show,” Brooks DePyster, a criminal defense attorney, joins us from Washington state.
The first half of the episode dives into the intriguing world of Brooks’ career — how he got into criminal defense and why he’s passionate about his work. In the second half, John and Brooks explore the business and financial aspects of the legal profession. In addition, they take a look at the importance of building a relationship with an attorney, especially as you are building wealth.
Announcer: (00:00) Welcome to the John Chapman show, where we talk about the path of a wealthy millennial, uncovering the truth about building and protecting your nest egg. Join us on this journey as we hear the stories of millennials and mentors alike to help you plan, manage and protect your wealth. John is an employee of WorthPointe, LLC. All opinions expressed by John and podcast guests are solely their own opinion and do not necessarily reflect the opinions of WorthPointe. This podcast should not be relied upon for investment decisions and is for informational purposes only.
John Chapman: (00:33) Hey everyone, John Chapman here, thanks for tuning in to the podcast. Today we interviewed Brooks DePyster. Brooks and I our friends for … have been friends for many a years. We actually met in 2003 in high school, we attended the same high school and college, and so I’ve looked up to Brooks for a number of years. He served as a bit of a mentor for me and guided me through a lot of ups and downs, but I’ve been able to watch Brooks and his professional career take off. He shares a bunch of really funny stories early on about some learning experiences that he went through, and then sheds a ton of light into how he views his role as a public defender, and his philosophical approach to being an attorney, which was really fascinating. And then at the end we talked a little bit more about some wealth building ideas and how those of us that may not have spent a lot of time engaging with attorneys, how we can think about that as more of an ongoing relationship and one that should be fostered over time.
John Chapman: (01:37) In the same way you’d think about your other professional relationships, certainly with a tax advisor or insurance agent, rather than just being a point in time transaction. And then at the end he talks a little bit about some sort of wealth creation ideas for us to think outside the box. So anybody that’s interested at all in law or interacting with attorneys, this is going to be an awesome episode. So without further ado, let’s bring in Brooks.
John Chapman: (02:03) Hey Brooks, thanks for joining us today.
Brooks DePyster: (02:05) Hey John. Thanks for having me on.
John Chapman: (02:07) This is great. Brooks, why don’t you tell everybody where you live and when you decided to become an attorney.
Brooks DePyster: (02:15) Yeah, so I am 31 years old, turning 32 in May. I live up in Seattle, and I decided I wanted to become an attorney probably in high school, when I saw some nonsense of people being treated differently and getting run around by the system. And [crosstalk 00:02:38]
John Chapman: (02:38) Really? Well, since we went to high school together and I’ve known Brooks since 2003, I didn’t realize it was that early in your life. So what was the experience that awakened your eyes to that?
Brooks DePyster: (02:51) We had some friends that went on some sort of school trip and they got busted for drinking, and it was really interesting to see how the school treated the kids that had political clout or monetary clout, compared to the kids that didn’t have much clout. That’s what really kind of got me in the … just thinking of what it this, how to get justice, how was justice achieved, and it was a bit formative for me through college and eventually onto the rest of my life.
John Chapman: (03:24) Gotcha. Wow. That’s super interesting. I want to ask more, but maybe for privacy we shouldn’t.
Brooks DePyster: (03:30) Yeah.
John Chapman: (03:31) I’m vaguely remembering something like this from the archives, but my head’s fuzzy. So, let’s think after that experience. Or, Did you talk to your dad about it? Were there mentors, family, friends that you could talk to about law or did you just start reading on your own? How actively were you pursuing sort of legal type information?
Brooks DePyster: (03:52) Yeah, so when I was in college, I think it was 2007/2008, it was right when you moved up there. I took some time off and moved to Australia on some crazy-
John Chapman: (04:05) Yes. You made a sabbatical. You did a sabbatical when you were 20, right?
Brooks DePyster: (04:10) I thought I was going to be the bartender on the beach, living the dream, but [crosstalk 00:04:14]
John Chapman: (04:14) The Jimmy buffet life.
Brooks DePyster: (04:17) It was false advertising, so to say. I found myself down there, out of money. Parents weren’t happy with me and because I took some time off from school.
John Chapman: (04:26) That’s great.
Brooks DePyster: (04:26) And I was determined to prove to myself that, hey, I got myself in this mess, I’m going to get myself out. Ended up-
John Chapman: (04:36) Cool experience.
Brooks DePyster: (04:37) Picking bananas, getting chased by snakes.
John Chapman: (04:40) Yeah, the banana farm, there were ex-cons on that banana farm.
Brooks DePyster: (04:44) It was crazy. it was a wild experience. But it was very formative in the sense of, hey, I always wanted to be a lawyer, but now I’m getting very close to adulthood. I need to stop screwing around. I need to get back and really work hard and try to redirect my life.
John Chapman: (05:04) Total formative experience, I think. Then you realized in the heat of the moment what you had gotten yourself into, and then you had to prove it to yourself that you were going to make it back out. And not let yourself down, but also prove to your family.
Brooks DePyster: (05:18) Yeah, I basically dropped out of school, and my parents were not pleased at all, and when I ran out of money down there, for the better, I was too proud to call them up and ask for help. Say, “Hey, I screwed [crosstalk 00:05:32]
John Chapman: (05:32) Really? Okay. So it wasn’t like you asked them and they said, “No, F-U.”
Brooks DePyster: (05:36) Yeah, exactly.
John Chapman: (05:39) That’s great.
Brooks DePyster: (05:39) So yeah, I went back to school, graduated, got into law school. The economy was really bad when I graduated in 2009, so it seemed like everybody wanted to go to law school at that point. But I was motivated, I knew that I wanted to be an attorney, so I work really, really hard. I was able to get a great scholarship for law school and graduated in 2013. Another hard lesson when everyone went to law school after the stock market crashed and the economy was in the tank, the idea was, hey, you go to law school, you work hard, you’ll get out and you’ll have a job that makes 120 to 160 grand a year.
John Chapman: (06:22) Yeah. Just waiting for you on the other side. All you have to do is cross the finish line.
Brooks DePyster: (06:25) Exactly. And that was the absolute opposite of reality. I graduated 2013, took the California bar in 2013, and we had to scrap for work. There were people that were asking for licensed attorneys to volunteer their time just for “experience.” Not to mention-
John Chapman: (06:48) Ouch.
Brooks DePyster: (06:49) Most people are entering the legal field or the legal workforce with six figures of debt. So that was-
John Chapman: (06:58) So do you think that was mostly a product of just simply the supply and demand post-recession? Had it been five, ten years earlier, just move the timeframe back at all, would the supply and demand dynamics of graduating law school be totally different?
Brooks DePyster: (07:15) I do think so. From the older attorneys that I talk to, especially people about 10 years older than me, it was better, certainly better than it was after the crash. My understanding of the economics for the post-dot-com boom to the crash in 2008; people were living high. People were getting paid a lot. Companies had no problem spending money on legal fees. But when the crash happened, they realized that there was a lot of fat to cut off and that even to this day has not fully recovered.
John Chapman: (07:50) Wow. Super interesting perspective. Really. Even to this day.
Brooks DePyster: (07:53) Yeah. Our customers, our clients and businesses realize that hey, we were paying way too much for services that were just inflated. So it’s had a bit of a ripple effects, but you have to be tenacious if you want to make it. You can’t just arrive out with your degree and your [crosstalk 00:08:15] and expect someone to hire you, you’re never going to make it that way.
John Chapman: (08:19) And there’s lots of different fields of law and I’m not super familiar with all the ins and outs. It’s like saying you’re a physician, it’s sort of broad. So how did you narrow down what you wanted to pursue?
Brooks DePyster: (08:31) Yeah, so in law school I got a job working for Liberty Mutual, the insurance company. I worked in their in-house department and did a little bit of everything but a lot of policy defense. So, say you get in a car accident and the guy you hit wants to sue you, liberty mutual will come and give you an attorney for that and they’ll defend you and protect the policy [inaudible 00:08:55]. So I got a good exposure to litigation, civil litigation and from that I knew I wanted to be in the courtroom one way or another. So after I graduated I moved to Reno to help my dad, he had some surgery for a couple of months. So I was taking care of him. I got a job in a small boutique civil litigation firm as a law clerk and I studied for the Washington bar as well.
Brooks DePyster: (09:24) Then when I moved, I took Washington bar in 2014, I passed and I moved up to Seattle in about May, 2014 and I did some contract work for firms, tried to network as much as I could just because I went to law school in California, so it was still a real hustle to find a good job in 2014. I ended up finding a job at a criminal defense firm, which really blew my mind. I had always thought that criminal law was, oh, I don’t know. Maybe be a prosecutor here or there, but I ended up doing criminal defense and absolutely fell in love with it.
John Chapman: (10:09) Oh really? Okay. That sounds super scary. A criminal defense; I know you’re supposed to be innocent until proven guilty, but just as a bystander, hearing these things, there’s somebody that supposedly commits a crime and my inclination is to the think, well they’re probably guilty of it. So as an attorney, how do you wrap your mind around that and try to defend somebody, or I guess what are the circumstances that you’re defending somebody in, in that sense?
Brooks DePyster: (10:39) So my, my first job we took private criminal defense clients. So it was mostly people charged with DUIs or the occasional domestic violence case here and there. But the sad reality about criminal law is it’s not very lucrative unless you’re the absolute best because most criminals don’t have any money or most people accused crimes.
John Chapman: (11:03) That’s a hard reality of it, I guess, from a business standpoint.
Brooks DePyster: (11:06) Yeah. But going back to the more philosophical point of, how can you represent those people? I get that all the time. And what I can say is the vast majority of the people that I represent in their criminal capacity are guilty. They have done something wrong, but I don’t care. I don’t care whether or not they’re guilty or not guilty. My job is to ensure that when the most powerful government in the history of the world is trying to take away someone’s liberty or perhaps even their life in some states, that they’re treated fairly and in accordance with the rules. And that’s really what gets me going. And there might be some dirty lawyer tricks that people might look and say, oh, at the OJ case and everything else. But at the end of the day, I consider myself when I’m in criminal court, as someone who’s defending the constitution. And I take that very seriously and I’m very proud of that work.
John Chapman: (12:06) Wow. I love to hear you say that. And that’s a huge light bulb moment for me. And that’s a complete philosophical shift. You’re the person that stands between this person… Even if they are guilty, they’re owed the right of being treated respectfully and to defend any other freedoms that they might have, if I’m saying that right. So that’s pretty dope.
Brooks DePyster: (12:28) Oh absolutely. Because if we don’t treat the worst fairly, it can creep up; and we’ve seen it in history, we’ve seen it even around the country, you get some cops that don’t like someone and district attorney or a prosecuting attorney that doesn’t like someone. The power that the police and the prosecutors have is pretty much unchecked. So it’s very interesting to take a look at criminal representation with that-
John Chapman: (12:55) Yes. Got It. Wow. That was really helpful. So, okay, then tell me, tell me more about then… This was 2014 or 2015 or so that you were working at…
Brooks DePyster: (13:04) Yeah, so I was working at a small little criminal firm that did DUIs and misdemeanors and I really wanted to take the next step to hone my skills. So I applied and got a job at the King County Department of Public Defense. So I went from a cush job where I made decent money, worked 40 hours a week to being thrown in the meat grinder. Took a pay cut, and worked about 80 hours a week.
John Chapman: (13:35) How was it a meat grinder? What do you mean by that? Besides obviously having more time spent, you said 80 hours a week, but what was it about that that was so much…
Brooks DePyster: (13:43) I went from about a hundred clients a year, to a caseload of 400 clients a year, and these cases… I didn’t get to choose. It wasn’t the people that were accused of crimes, they had money. It was anybody and everybody, and I saw some crazy things; but it threw me in the deep end. There wasn’t really time to check in with your supervisor on every single little thing. You just had to [crosstalk 00:14:13].
John Chapman: (14:14) Amazing.
Brooks DePyster: (14:14) In the two years that I was with the public defenders, I did about 12 jury trials and over 150 bench trials or contested hearings, which was absolutely incredible experience that you can’t really get anywhere else.
John Chapman: (14:31) Okay. Wow. In thinking about my industry, some corporations have such high volume that they talk about planning in dog years. So, one year, high volume shop is seven years somewhere else. And so it sounds like you got a version of that with what you went through for two years.
Brooks DePyster: (14:51) Yeah, it was great. And I’m incredibly proud of the work I did at the public defender’s office. Some of the best attorneys I’ve ever met work there. And I’m incredibly proud of that. But I also wanted to have a successful life where I wanted to start a business and I wanted to have a little more control over my time and everything else.
John Chapman: (15:19) So I want to get to your next phase then. But before doing so; when you say meat grinder, it makes me think sometimes too about relating it to finance, like an investment banking track, and a common path is guys will graduate, go to New York, do investment banking and work 80 hours a week. And that’s their version of a meat grinder. But there’s an assumption that that’s only going to last for a short period of time on both ends, both the employer and the employee recognize, look, I’ll do my two to five years at Goldman or wherever and then I’ll bounce. But what’s the perception from a public defender’s office, working for the state or local government? Are there still guys that view that as a longterm career path and that’s just their calling, or is it fairly common to get guys in there for two years and then they move on?
Brooks DePyster: (16:10) I’d say it’s a little bit of both. There are certainly people that grew up knowing that they were gonna go to law school and become a public defender or a prosecutor. And then there’s people like me; I’ve had a very fortunate life, and I wanted to give back to my public service. So I went and got incredible experience with the public defender’s office. But my two years in; wanted to [crosstalk 00:16:37] something different. I’d say it’s about 50/50 okay.
John Chapman: (16:41) So then, describe the type of work that you’re doing now. So after you left, then you joined up with your current firm?
Brooks DePyster: (16:48) Yes. My good friend Nick Price did the similar track except for he was at a big firm, they call it a big block. It’s similar to the investment banking that you were talking about. You put your time in, you make a lot of money, work 80 hours a week until you just can’t do it anymore. Or they make you partner, if you’re crazy. He and I both were grinding it out, getting the experience at the same time and he decided that hey, this big from life of billing 2400 hours a year is not for me. I’m going to take what I’ve learned and with my entrepreneurial sense and see what we can do. So he started the firm about six months before I quit and he approached me and said, “Hey, do you want to come on board and help me build this thing and grow it?” And-
John Chapman: (17:43) How cool. How did you perceive that?
Brooks DePyster: (17:46) I loved it. I was all about it and I started making sure all my affairs were in order at the public defender’s office and jumped ship. It was great.
John Chapman: (17:57) Wow. So, we chatted briefly before hitting the record button. So this is a mega paradigm shift. Yes, you’re still practicing law, but so many of the other peripheral activities are different, like running a business day to day and thinking about process and procedure and however many [inaudible 00:18:16] things there are. So what have been the things that you’ve had to learn now that, in some ways, you’re both at a practicing attorney, but you’re also a small business owner too, to a degree.
Brooks DePyster: (18:26) Yeah. So I want to be clear, I’m not the owner of the firm, I’m just helping out. But, I certainly feel like I’ve adopted a lot of roles than I had no idea were even related to being a lawyer, [crosstalk 00:18:41]. Chasing people down for money. That is one of the [crosstalk 00:18:45] things that I’ve had to do. As a lawyer, you’ve got to deliver bad news to people all the time or help people out of bad situations they find themselves in, but getting people to pay their bill and trying to convince them, not only should they pay, but there’s a value to your service. That’s been a very interesting lesson that they don’t teach you in law school or [crosstalk 00:19:10].
John Chapman: (19:10) Super interesting.
Brooks DePyster: (19:11) Negotiating leases, dealing with permits, dealing with the bar. Many people might not know this, but we have very strong fiduciary duties when dealing with clients money that’s very heavily regulated with the bars, so we have to deal with the banks to make sure the banks are handling our accounts properly. Make sure that they’re depositing the interest into the state account, which has been an education just because the bar takes that so seriously, as they should because your client’s property is your paramount concern?
John Chapman: (19:49) Most definitely. If I can without maybe going super far into it. Just unpack that for a moment. So, explain the inner workings of what you just said? I don’t think that any… I’ve certainly never heard of it. I don’t know if others have, so you let you set up some type of escrow account or retainer account.
Brooks DePyster: (20:08) It’s called a trust account and both California and Washington have the… And I’m pretty sure a across the country. The way it works is we’ll ask a client they want to hire us. I’ll say, hey, I charge $300 an hour and in order for me to get going, I need you to prepay for 10 to 15 hours, sometimes 20 depending on what the project is. When they remit payment, we haven’t earned it yet. So we have pretty strong fiduciary duties and statutory duties of what we must do with that money, so we put it in a special bank account, where the state bar monitors, and basically protects the money, gives us oversight. And one interesting thing to consider is any interest that is earn on money in those accounts goes to the state bar. It doesn’t go to us, it doesn’t go to our clients.
John Chapman: (21:10) That is super interesting. I’ve never heard that before. Super super interesting. And obviously the banks are going to have some type of process for that, right? So if you have $20,000 and it earns pitily interest, but let’s just say, even if it earns $40 or $100, somehow there’s a way to shave that off the top and send it to the state bar.
Brooks DePyster: (21:33) It’s a colossal headache. You’ve got a case that we got a seven figure settlement and we were doing everything we could to try to not have it route through our trust account, just because we knew it was going to generate some sort of interest and it would have been a mountain of paperwork, which it was.
John Chapman: (21:54) Oh my gosh. Wow. That’s a headache. Okay, that makes me think of a business ideas for later. So I want to move on because, just with in the interest of time, I guess for people listening that haven’t had the experience of dealing with an attorney hopefully none of us who are in a situation where we’re needing a public defender or need a defense attorney I guess, but should that situation arise or even frankly any others, like you’re getting married or buying a house or setting up a trust. Can you just share some ideas of how should accumulators, or millennials as they’re growing their businesses and their career, think about interacting with attorneys in general?
Brooks DePyster: (22:33) Yeah, certainly most people when they hear, hey, I need an attorney. It’s usually something not great, but there’s also… You’ve got to look at it is, you’ve got to build a relationship to help prevent issues from happening in the future. And with that, if you’re looking for an attorney, you should go into it with someone who you can trust, someone that you feel you can communicate honestly with. You don’t want to hold something back because you’re afraid they might judge you or they might be looked down upon you. Honest, clear communication is really what you should look for in an attorney.
John Chapman: (23:14) So I think with my perception at least hearing from other clients too, we assume… Let’s say some service professionals like a like a dentist is an ongoing person that we’re going to work with over time versus… I’ve experienced clients of mine within the wealth management practices that see their relationship with attorney as really like a point in time interaction, rather than an ongoing relationship-based one, which is different from what you just said. So how do you see it from your perspective; is an interaction with an attorney still largely a point in time interaction or, and I guess should we rather than be thinking about it as more of like a long term ongoing relationship?
Brooks DePyster: (23:57) I’m going to give you the hated attorney answer of “It depends.” I think if you’re really focused on building wealth and buying properties and really trying to build yourself up and achieve success, however you define it, I would highly recommend that you have at least a cordial ongoing relationship with an attorney because you never know when someone’s going to approach you with an investment or a property deal that you need someone to take a quick look at and you can just give them a call or shoot them an email to go over something. I like acting like an on-call sounding board for some of my clients that are into buying things or hey, I want to throw some investment properties into an LLC. Talk me through what that looks like, or things like that. Or more importantly, hey, I’ve really been working hard. I just bought a house. I met my partner. I’m thinking about maybe getting married. What should we do here? You really want to think proactively to try to prevent some of the issues that come and plug people later on.
John Chapman: (25:13) And so for the people that are stingy out there thinking well, when, when do I cross over and from networking into billable hours. So someone’s being proactive and they’re wanting to sort of get ahead of the game and they’re like, “Hey, I’m real estate isn’t my future” or “marriage is in my future” or whatever the life stage is and I’d like to start networking with an attorney. I mean, from an attorney’s perspective is that still… It’s great to network and you’re not going to crossover and billable hours until some juncture, or how do you think about that?
Brooks DePyster: (25:45) Yeah, no, absolutely. I’m always happy to give people basic advice for free without… As long as I’m not creating an attorney client relationship, we don’t cross that threshold where my ethical obligations attach and I have to think about my liability insurance and everything else. I’m more than happy to have just general conversations and give general advice for people, because I believe, at least from a business sense that hey, you help someone out for free, instead of charging someone 300 bucks to to talk to them for 45 minutes. If I can go in there and answer their relatively basic question, then when they have some real work that they need done, they’ll come back.
John Chapman: (26:30) I love that. That’s like a… Oh shoot, the word escaped me. Like an abundance mindset, I think that’s the word I was looking for. And this be may be even just more fair to other people and not so that being super stingy with your time.
Brooks DePyster: (26:45) Yeah, absolutely. And I-
John Chapman: (26:47) [crosstalk 00:26:47] you all the time. So it’s nice to get back.
Brooks DePyster: (26:49) Yeah, absolutely. I like meeting new people and I really like helping people avoid some major pitfalls when they’re making some very significant decisions in their lives. Such as-
John Chapman: (27:04) Are there any pitfalls that you can think of that come to mind? Like you said, it depends, but do any come to mind?
Brooks DePyster: (27:11) Yeah. And I want to be clear to your listeners, you know, I’m not your attorney, I’m up in Washington. You guys might be listening somewhere else.
John Chapman: (27:19) Good disclaimer. Yes.
Brooks DePyster: (27:21) Don’t take legal advice from a podcast. I’m not your attorney; but I think generally, when I go into an investment or buying a piece of property, or when I thought about asking my wife to marry me, I did take a look at things through a legal perspective. And I think that especially when I see my clients come in and they didn’t think about these things, I think it’s something that everyone, if you’re thinking about buying property or more importantly getting married, you have to assume that even if it’s a fun, joyous occasion, like a wedding or hey, I’m buying my first house, you have to look at it as a business transaction. And [crosstalk 00:28:03]
John Chapman: (28:04) That’s probably difficult, right? Because you’re in the heat of the moment, you’re emotional. So you’re activating a different part of the brain, thinking about it like a business transaction.
Brooks DePyster: (28:12) Yeah. I mean, buying a home or getting married is for the 99% of Americans is probably going to be the biggest business transaction that they enter into in their entire lives.
John Chapman: (28:26) Yeah. Isn’t that amazing that… You bring up such a good point. In terms of weightiness, this is one of the most heaviest things that you do, and yet we only might experience that, well certainly getting married, maybe once max, two times, hopefully. Hopefully no more than that. And buying or selling a home, that could be five or less times. So the frequency to weight ratio is off the charts.
Brooks DePyster: (28:49) Absolutely. And you almost have to think as the chief operations officer of your own personal business and say “Hey, what kind of liabilities am I walking into? What are the pitfalls here? How is this going to benefit me?” You have to take a very calculated approach, and that’s one thing that an attorney can really help you with. When you’re in love, or you’re in love with certain piece of property, [crosstalk 00:29:17], yeah, exactly. What your attorney can do is… Zoom out a little bit and say, Hey, let’s talk about the subjective. Are you marrying someone that has a spending problem? Are you marrying someone that failed to disclose that they owe the IRS a hundred grand. I’m saying these as firsthand experiences in my work. Almost like when you go get a home inspection, you really should consider the legal ramifications of these major decisions.
John Chapman: (29:54) Super good. Well that was a very enlightening, and stuff I hadn’t necessarily thought about, so I appreciate the perspective on it. We’ll have to wrap up here in a couple of minutes, but are there other things that you feel like you’re passionate about that we haven’t yet talked about, regarding either your career or wealth building or the legal field.
Brooks DePyster: (30:16) Regarding wealth building, it might be somewhat interesting for your listeners. What my firm, Nick, my boss and I have been doing is we’ve been looking at buying other law firms, and I’ll explain why this is a bit of a unique way to build some wealth. So the bar regulates the legal industry, both California in Washington, and a long time ago they made it so only lawyers can own law firms. And this is done as a client protection measure to make sure that big investors can’t come in here and start calling the shots at the harm of the client. It’s just part of our fiduciary duties. So what that has created is a very interesting financial market for law firms, because when the financial crisis hit, a lot of the older law firms, especially the smaller ones, I’d say one to 10 attorneys, they decided to stick it out because hey, the firm was their insurance policy and their retirement plans.
Brooks DePyster: (31:30) So they’re gonna stick through it and keep working. A lot of that generation wants to retire.
John Chapman: (31:37) Yeah. Right.
Brooks DePyster: (31:38) And these firms are worth a lot of money because they have goodwill-
John Chapman: (31:43) Revenue. Yeah.
Brooks DePyster: (31:45) … within the name. They have a giant book of business. They have the reputations. The problem is is most attorneys graduating right now, are saddled with six figures debt. So there is a real opportunity. It’s a real buyer’s market right now. So that’s one of the things that Nick and I have been looking at doing, is trying to leverage some of these incredible opportunities to buy these valuable firms at pennies on the dollar, which has been…
John Chapman: (32:14) Super interesting. Oh Man. My mind is racing because, coming from it from a stock perspective, so public equities in that in the way that we are going to look at sort of valuation of a public company through an accounting standard would be in some ways very different from the sort of supply and demand and accounting setup that you have for a law firm. So that’s super intriguing. I wasn’t clear on something that you said earlier though. Is it still against the law for somebody who is not registered with the bar to purchase a law practice?
Brooks DePyster: (32:51) Yes it is.
John Chapman: (32:52) Like a private citizen or… Just a fund can’t buy a law practice. You have to be an attorney.
Brooks DePyster: (32:59) Yeah, that is correct. So if you and I wanted to gather 500 grand and go buy a law firm that was for sale, was worth maybe 750 but we could get it for 500 because that’s what the market says. We couldn’t do it. It would have to be the me [crosstalk 00:33:16].
John Chapman: (33:18) Wow. Man, that’s blowing my mind right now because again, within wealth management, private equity specifically, and venture funds have poured hundreds of billions of dollars into this space and it has been just a race. It’s like pacman eating other firms, and there has been some gobbling up within the wealth management industry, precisely because boomer advisers, they want to cash out, and and so silicon valley or venture funds, I guess kind of cued into that after the ’08 recession, and it’s just been an absolute mad man’s chase since then. So I had no idea that this wasn’t going on in your industry.
Brooks DePyster: (33:57) Yeah. Not that many people know about it because… I’ve been out of law school, licensed to practice for almost six years now, and the vast majority of my colleagues are still saddled with massive debt and they’re worried about, how am I going to get my down payments wrapped together?
John Chapman: (34:18) Yeah. Or let alone maybe just being a partner of the firm. Right. Which sometimes requires a financial obligation, right?
Brooks DePyster: (34:27) Yeah, absolutely. Yeah. Sometimes you have to buy it.
John Chapman: (34:30) Yeah. Okay. Dude, that’s fascinating.
Brooks DePyster: (34:33) So it’s something very interesting to consider. And Nick and I were talking about how we can navigate these very strong rules about keeping outside money and outside influence outside of the buying and selling these firms. Either personal loans or whatnot. We really kind of brainstormed, but the bar has built an iron case around the profession.
John Chapman: (35:00) Wow. Very interesting. I guess, maybe we’ll have to talk with you about that offline, but that’s a really, really interesting thing for people to hear about. So that’s cool. And there’s a ton more that I actually wanted to actually get through. So we’ll have to have you back on because I wanted-
Brooks DePyster: (35:16) Yeah, absolutely.
John Chapman: (35:17) … [crosstalk 00:35:17] work out, just the inner workings of a law practice and how you think about billable hours versus contingency pay, and all these other dynamics. So maybe we’ll have you on again.
Brooks DePyster: (35:29) For sure.
John Chapman: (35:30) Thanks Brooks. Appreciate it.
Brooks DePyster: (35:31) Yeah, thanks for having me, man.
Announcer: (35:34) Thanks for tuning in to the John Chapman show. Be sure subscribe on iTunes, stitcher, or Spotify. We encourage your questions, comments, and feedback. For additional information, check out thejohnchapmanshow.com, or look for John on LinkedIn and Twitter. See you next week.
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