1 00:00:00.000 --> 00:00:02.820 Johny Fernandez: Let's talk about funding lawyers. Like I 2 00:00:02.820 --> 00:00:04.800 said, I never thought they'd really need the money because 3 00:00:05.010 --> 00:00:08.280 you always assume that I assume that they're well off and life 4 00:00:08.280 --> 00:00:14.160 is great. But the person on the Daily Funder was asking, you 5 00:00:14.160 --> 00:00:16.410 know, he needs help funding an attorney. 6 00:00:16.720 --> 00:00:22.090 Sean Murray: Yeah. So attorneys, you know, they they are a law 7 00:00:22.090 --> 00:00:26.530 firms. Yeah. Are businesses too. So the idea that a law firm 8 00:00:26.530 --> 00:00:29.500 would need money to do things like expand or hire or whatever. 9 00:00:30.100 --> 00:00:33.610 In that regard. They're just like any other business. So and 10 00:00:33.610 --> 00:00:36.730 they're not all rich. Yeah. Despite, I guess what you think, 11 00:00:36.910 --> 00:00:39.760 not all, not all lawyers are rich, perhaps if you work for a 12 00:00:39.760 --> 00:00:43.210 really big firm and you're a partner, you might be pretty 13 00:00:43.210 --> 00:00:45.940 well off. But even that doesn't mean that the firm itself 14 00:00:45.940 --> 00:00:50.560 wouldn't need capital, right? Individual income does not mean 15 00:00:50.560 --> 00:00:54.370 that the business itself had the income that it requires to grow, 16 00:00:54.370 --> 00:00:57.220 expand, pay a bill, whatever, whatever it is. So yeah, law 17 00:00:57.220 --> 00:01:01.450 firms do need money, and they do apply for alternative financing. 18 00:01:01.480 --> 00:01:06.340 That definitely happens. But as the question on the forum, 19 00:01:06.490 --> 00:01:10.150 suggests, it's difficult to get them funded. 20 00:01:10.360 --> 00:01:10.780 Johny Fernandez: Why? 21 00:01:11.500 --> 00:01:13.720 Sean Murray: Well, let me tell you, Johny 22 00:01:13.720 --> 00:01:13.720 Johny Fernandez: Please tell me. 23 00:01:14.230 --> 00:01:20.620 Sean Murray: Because because it can be difficult. If you have a 24 00:01:20.620 --> 00:01:26.890 disagreement over the terms to cost effectively work it out. 25 00:01:27.250 --> 00:01:30.760 That's because they are the lawyers. And you're going to 26 00:01:30.760 --> 00:01:34.180 need your own lawyers to work out whatever it is they have an 27 00:01:34.180 --> 00:01:37.270 issue with. Yeah. Which means it's going to cost you money. So 28 00:01:37.270 --> 00:01:41.050 let's say let's use a $10,000 example. Okay. Law Firm only 29 00:01:41.050 --> 00:01:43.360 needs 10 grand. All right. I'm the founder. You're the law 30 00:01:43.360 --> 00:01:46.510 firm. Okay, yes. Yeah. $10,000. I'm gonna give you 10 grand. 31 00:01:46.540 --> 00:01:50.800 Okay. Everything started off. Okay in the beginning. Okay. And 32 00:01:50.800 --> 00:01:52.750 then you felt like something happened that shouldn't have 33 00:01:52.750 --> 00:01:53.260 happened. 34 00:01:53.320 --> 00:01:54.520 Johny Fernandez: And I'm the lawyer. So I know. 35 00:01:54.600 --> 00:01:58.800 Sean Murray: Yeah. So or so you didn't know that, you know, but 36 00:01:58.860 --> 00:02:03.600 you have you have a good faith argument to make, or it might 37 00:02:03.600 --> 00:02:06.090 not even be it might not even be accurate. But yeah, you know, I 38 00:02:06.090 --> 00:02:08.490 can make the argument. Yeah. A lot of times I tell lawyers all 39 00:02:08.490 --> 00:02:10.950 right. Yeah. You know, I can make the argument that. Okay. 40 00:02:10.980 --> 00:02:13.650 Okay. So you're the lawyer? Yeah. I gave you only I only 41 00:02:13.650 --> 00:02:16.770 gave you 10 grand. Okay. You felt like something happened 42 00:02:16.770 --> 00:02:19.410 that shouldn't have happened in the transaction. Okay. You send 43 00:02:19.410 --> 00:02:23.280 me a legally worded letter to let me know, perhaps that I'm 44 00:02:23.310 --> 00:02:26.910 potentially in breach of the agreement. Okay. Now, what do I 45 00:02:26.910 --> 00:02:27.210 do? 46 00:02:28.210 --> 00:02:28.840 Johny Fernandez: You call your lawyer. 47 00:02:28.870 --> 00:02:29.890 Sean Murray: I have to call a lawyer. 48 00:02:29.920 --> 00:02:30.280 Johny Fernandez: Yeah. 49 00:02:30.280 --> 00:02:33.630 Sean Murray: The lawyer says, okay, let me take a look at at 50 00:02:33.780 --> 00:02:36.690 their letter. All right, this something I can help you with, 51 00:02:36.720 --> 00:02:41.250 I'm going to need a retainer of $10,000. You're like, but but 52 00:02:41.250 --> 00:02:45.450 the whole, the whole deals only 10,000. And the profit I stand 53 00:02:45.450 --> 00:02:50.160 to gain is only like 1200 bucks on this deal. I gotta pay you 10 54 00:02:50.160 --> 00:02:53.430 grand for the retainer. To work out a deal. I can only make 55 00:02:53.430 --> 00:02:56.670 $1,200 on. And you're like, okay, well it's the principal of 56 00:02:56.700 --> 00:03:02.040 thing, right? So you you pay 10 grand to the lawyer. And then he 57 00:03:02.040 --> 00:03:03.660 goes through and he's like, okay, this is an actual, you 58 00:03:03.660 --> 00:03:07.740 know, this is a a complex commercial litigation type 59 00:03:07.740 --> 00:03:10.680 situation, if this if this continues to go out from here, 60 00:03:10.950 --> 00:03:14.010 and they end up suing, you know, this could go to court and be 61 00:03:14.010 --> 00:03:16.410 hung up in court for years, this could end up costing them a 62 00:03:16.410 --> 00:03:18.810 couple $100,000 Just want to prepare you ahead of time. 63 00:03:18.810 --> 00:03:20.490 That's what your lawyers telling you. And you're like. 64 00:03:21.020 --> 00:03:22.550 Johny Fernandez: This here only costs $10,000. 65 00:03:22.580 --> 00:03:23.330 Sean Murray: That was the retainer. 66 00:03:23.360 --> 00:03:23.570 Johny Fernandez: Yeah. 67 00:03:23.570 --> 00:03:24.170 Sean Murray: That's just to get them. 68 00:03:24.170 --> 00:03:24.920 Johny Fernandez: No, no, no, just. 69 00:03:25.250 --> 00:03:26.600 Sean Murray: That's just to get them on that's just to. 70 00:03:26.600 --> 00:03:28.700 Johny Fernandez: No, no, no, but, but just in general, like 71 00:03:28.700 --> 00:03:31.250 this all started with like, hey, I just need $10,000. 72 00:03:31.370 --> 00:03:32.780 Sean Murray: Yeah, that was that was that? Yeah. 73 00:03:32.780 --> 00:03:34.250 Johny Fernandez: And now it's gonna cost 100 grand. 74 00:03:34.250 --> 00:03:37.690 Sean Murray: Now, it could potentially 10 grand for me to 75 00:03:37.840 --> 00:03:40.960 work on it. Now. Now, this party says, you know, I still don't 76 00:03:40.960 --> 00:03:43.390 agree with what your lawyer says, I'm going to sue and your 77 00:03:43.390 --> 00:03:45.850 lawyer says, okay, before we move forward, I need to let you 78 00:03:45.850 --> 00:03:49.000 know, we're looking at potentially if this go that, you 79 00:03:49.000 --> 00:03:52.330 know, gets prolonged, I'm confident in, you know, in your 80 00:03:52.330 --> 00:03:55.390 position here that you'll that you'll be victorious. However, 81 00:03:55.450 --> 00:03:57.670 going to the court system could cost about 100 grand, you're 82 00:03:57.670 --> 00:04:01.900 like, okay, I almost didn't make about 1200 bucks on this deal. 83 00:04:02.200 --> 00:04:06.580 How did we get to this point? What am I doing? I don't want to 84 00:04:06.580 --> 00:04:09.790 be in this. Okay. Why the heck did I work with a law firm? Why 85 00:04:09.790 --> 00:04:12.850 did I fund a law firm? It made no sense. Now, let's just back 86 00:04:12.850 --> 00:04:15.370 up. Pretend you didn't even send me a warning letter. You just 87 00:04:15.370 --> 00:04:20.410 sued me. You sued me. You're a law firm. You came up with all 88 00:04:20.410 --> 00:04:24.790 these big legal arguments sound really scary, right? And now I 89 00:04:24.790 --> 00:04:27.730 have to answer. And the lawyer that you hire looks at it and 90 00:04:27.730 --> 00:04:31.570 says, all right, you know that it's this is going to be $25,000 91 00:04:31.570 --> 00:04:34.210 retainer, just because it's we're already in the court 92 00:04:34.210 --> 00:04:38.890 system. Right. And then so you pay 25 grand to retain the 93 00:04:38.890 --> 00:04:41.470 lawyer you're still fighting over 1200 bucks. Yeah. There's 94 00:04:41.470 --> 00:04:44.170 like nothing you can do. Yeah. Now, if you have a general 95 00:04:44.170 --> 00:04:47.920 counsel, you might be might be in a better position, because 96 00:04:47.920 --> 00:04:50.470 you might not have to pay your general counsel to do some of 97 00:04:50.470 --> 00:04:52.870 the legal work. But as soon as you start relying on a third 98 00:04:52.870 --> 00:04:57.160 party. Yeah. Lawyers to handle your contract dispute with a law 99 00:04:57.160 --> 00:04:59.650 firm. There's no way you're going to make any money on this 100 00:04:59.650 --> 00:05:01.780 deal. This has happened. 101 00:05:01.960 --> 00:05:04.240 Johny Fernandez: Okay, that sounds I get stressed out just 102 00:05:04.240 --> 00:05:06.850 hearing at it and I'm kind of like, oh man, I just, I don't 103 00:05:06.850 --> 00:05:08.740 want to work with these guys. But let me ask you. 104 00:05:08.740 --> 00:05:10.330 Sean Murray: That's exactly how people feel like they get 105 00:05:10.330 --> 00:05:11.560 stressed out and like it's not worth it. 106 00:05:11.630 --> 00:05:15.890 Johny Fernandez: Yeah. So when it comes to that specifically 107 00:05:18.050 --> 00:05:21.770 what do you what do lenders do? What funders do? What do law 108 00:05:22.250 --> 00:05:24.860 attorneys do? What do you do? 109 00:05:26.420 --> 00:05:28.040 Sean Murray: Oftentimes, they just say we don't work with 110 00:05:28.040 --> 00:05:28.670 attorneys. 111 00:05:28.850 --> 00:05:30.410 Johny Fernandez: So what like if an attorney wants to? 112 00:05:30.410 --> 00:05:32.610 Sean Murray: Which is why we have the question, I guess, who 113 00:05:32.610 --> 00:05:33.060 funds them? 114 00:05:33.060 --> 00:05:33.180 Sean Murray: Who would want to fund them? Because it's, it's 115 00:05:33.180 --> 00:05:33.710 Johny Fernandez: Who funds them? 116 00:05:36.240 --> 00:05:39.000 such a pain in the neck, if something goes wrong, now, 117 00:05:39.000 --> 00:05:40.920 you're betting on the fact that the customer is going to 118 00:05:40.920 --> 00:05:43.890 actually pay it, that you're going to actually get paid, and 119 00:05:43.890 --> 00:05:46.170 everything's going to be fine. But there are plenty of 120 00:05:46.170 --> 00:05:48.840 situations throughout the history of this small business 121 00:05:48.840 --> 00:05:52.590 finance industry, or the law firms. They take a bunch of 122 00:05:52.590 --> 00:05:56.820 these things, and then they weaponize their, their own 123 00:05:56.820 --> 00:05:59.850 skill, their own their own their own business against you. Yeah. 124 00:05:59.880 --> 00:06:02.760 And then they launch an attack, and you have to sit there and 125 00:06:02.790 --> 00:06:06.720 immediately count how much money they're gonna cost me versus how 126 00:06:06.720 --> 00:06:08.730 much we're fighting over we're fighting against someone who 127 00:06:08.730 --> 00:06:11.070 doesn't have to spend anything. Some law firms will hire their 128 00:06:11.070 --> 00:06:14.400 own law firms, right. But in the beginning, they might not have 129 00:06:14.400 --> 00:06:17.400 to. So all their legal work is being done for free. It's a 130 00:06:17.400 --> 00:06:20.100 nightmare. You might be better off doing law firms that are 131 00:06:20.100 --> 00:06:22.860 really big. That way, if you give them a couple 100 grand, 132 00:06:23.610 --> 00:06:27.690 and the dispute is a few $100,000. And your law, your 133 00:06:27.690 --> 00:06:30.960 lawyer says, you know $25,000 retainer it's not out of control 134 00:06:30.960 --> 00:06:33.510 and ridiculous. Yeah. Because the profit of a deal tends to be 135 00:06:33.510 --> 00:06:36.780 more than what your legal fees could be. Right? So I think 136 00:06:37.080 --> 00:06:39.930 working with a small law firm is one of the hardest to deal with. 137 00:06:39.930 --> 00:06:43.290 Because if they say, I'm unhappy with this, you know, this is 138 00:06:43.290 --> 00:06:47.250 going to go to court. There's, it's just, and by the way, if a 139 00:06:47.250 --> 00:06:49.680 law firm is out there watching, this might be like, aha, so 140 00:06:49.680 --> 00:06:51.510 hopefully, hopefully they're not watching it. But. Yeah. This is 141 00:06:51.510 --> 00:06:53.880 the this is the inherent risk. Yeah. Of funding a law firm. 142 00:06:54.060 --> 00:06:56.640 Johny Fernandez: Man, good to know. That question, literally, 143 00:06:56.670 --> 00:06:59.790 I was like, why, like. 144 00:06:59.790 --> 00:07:02.289 Sean Murray: But think, but also think about it right? Even if 145 00:07:02.341 --> 00:07:05.502 you're wrong. I didn't I didn't say anything about whether or 146 00:07:05.554 --> 00:07:08.664 not you were going to prevail. Yeah. On your legal argument. 147 00:07:08.716 --> 00:07:11.721 Yeah. You can make the argument for whatever it is, you're 148 00:07:11.773 --> 00:07:14.987 unhappy about. Yeah. And lose and be and you know, and be in a 149 00:07:15.038 --> 00:07:18.407 strong position to lose, but I'm going to have to spend the money 150 00:07:18.459 --> 00:07:21.672 to get the win. And that money could cost more than whatever I 151 00:07:21.724 --> 00:07:25.041 stood to make having worked with you to begin with. So they they 152 00:07:25.093 --> 00:07:28.410 can know it's a doomed document. Yeah. And still put you through 153 00:07:28.462 --> 00:07:31.675 the wringer. And so at the end of the day the funders, lenders 154 00:07:31.727 --> 00:07:32.660 like not worth it. 155 00:07:32.690 --> 00:07:35.240 Johny Fernandez: Yeah. Oh, man. That's good to know. Thank you 156 00:07:35.240 --> 00:07:37.940 for the breakdown, cause that's a very interesting breakdown. 157 00:07:39.110 --> 00:07:40.790 Sean Murray: And if you're out there wondering why people don't 158 00:07:40.790 --> 00:07:42.650 fund law firms they're like oh, it seems like an untapped 159 00:07:42.650 --> 00:07:44.450 opportunity. That's the risk. 160 00:07:44.690 --> 00:07:45.800 Johny Fernandez: Yeah, that's a big risk.