How to Take a Business-First Approach to Running a Law Firm with Daniel Hernandez

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Episode Description

Not many law firm owners take a business-first approach. Today we’re chatting with someone who does. 

Attorney Daniel Hernandez discusses his journey to starting his firm, NextLevel Law, right out of law school, driven by his interest in business and entrepreneurship. He shares details on his firm’s pricing models, including how he uses an algorithm to determine the monthly flat fee system, as well as his approach to excellent client service, drawing from his banking background. Daniel also touches on when and why he has expanded his team over time, his current role split between CEO and lawyer responsibilities, and how he keeps his team aligned through clearly defined core values. Other topics include how he came up with the firm name, goals for the future like franchising, and why he defines success as pride in personal growth.

Tune in to hear Daniel’s thoughtful perspectives on running a profitable, client-focused law firm like a business.

Episode Resources

NextLevel Law

Connect with Daniel

Episode Transcript 

DANIEL: [00:00:00] Because every time I talk to someone who runs a firm and they’re telling me about their problems, like I can’t get back to everyone in a day. And I’m like, well, why are you setting that expectation?

LAUREN: Welcome to a different practice. We’re your host Lauren Lester and Jess Bednarz. And we’re obsessed with all things, business well being and optimizing the practice of law for solo and Lauren started her solo practice right out of law school, built it from the ground up, and now works four days a week while earning well over six figures.

Jess approaches the profession as a whole to identify opportunities for growth and help implement systemic improvements. We’re here to share tangible, concrete tools and resources for ditching the legal profession’s antiquated approach and building a law practice optimized for growth and enjoyment.

Think of this as grabbing coffee with your work besties. mixed with all the stuff they didn’t teach you in law school about how to run a business. Pull up a seat, grab a cup and get ready to be encouraged and challenged. This is a different [00:01:00] practice. Welcome everyone to another episode of a different practice.

We’re really excited to have you here today. We’ve got a great conversation with someone who is. Business minded first, which can be a bit of a rarity in our profession. I think a lot of lawyers go to law school to help people. Not a lot of us go to start a business. I know I felt certainly kind of an outcast because that’s why I went to law school.

And so I’m really excited for our conversation today with Daniel Hernandez, who also took that approach, just always wanted to be an entrepreneur. And Jess, you met him through the incubator program out in Chicago. So you’ve got some history with him.

JESS: I do. I’ve known Daniel for, I think, six years now. I met him when he applied for the Chicago Bar Foundation’s Justice Entrepreneurs Project, because he and his law partner at the time really wanted to Start a business focused on serving the everyday person.

And it’s been [00:02:00] so fun and rewarding to watch him grow as a business owner, as a lawyer, as a person, he’s just so impressive. And sometimes I just have to remind myself, he’s still pretty young. And I just can’t wait to see not only what he’s doing next year, but 10 years from now. And we’ll just have to have him back on because he shares a lot of really good.

In a very candid way, in a very relatable way, I think, and, and just in a fun way, he really does enjoy entrepreneurship and business.

LAUREN: And that comes across for sure. This is the first time I have really chatted with Daniel. I’ve obviously known him through you and through his work with the JEP, but I could tell that he gets it.

And he’s just one of those people you talk to that you can just tell has. Such a bright future and like their runway is going to be so long and it’s just really exciting to be able to have a touch point now. And then think in a year from now, we’re going to think about this conversation and see where he’s at and his law firm is at.

And in five years from now, it’s going to look [00:03:00] totally different, but he really does get it. And I do appreciate his honesty. In this conversation about what it’s like to be an entrepreneur, and it’s not always rosy, and we don’t always hit our goals. And sometimes we say those goals out loud, and they don’t come to fruition.

But that’s all a part of the process. And knowing that other folks are feeling the same way. I know at least made me feel a little bit less lonely in this very lonely position of being entrepreneur, but I really do appreciate Daniel’s approach. He’s definitely business minded, first customer focused first.

That really comes through. And I think that’s really impressive. And that’s for me, why I know that he will be incredibly successful because he puts the clients first.

JESS: Absolutely. I’m really excited to hear what our listeners have to say. I hope it resonates as much with them as it has with us.

LAUREN: So before we get into our conversation with Daniel, here’s a little bit more about him.

Daniel Hernandez is a social entrepreneur and attorney who brings [00:04:00] access to justice to families that once could not imagine affording an attorney. At age 27, Daniel started a law firm with the mission of offering competent legal services at affordable fixed costs. He is currently the owner and principal attorney at Next Level Law.

As a practitioner, Daniel assists families in transition through divorce and child custody proceedings. Outside of the firm, Daniel serves as President Emeritus of the Board of Directors at Between Friends, a non profit committed to ending domestic violence. He is also active among many bar associations and currently serves as the President for the Hispanic National Bar Association, Region 9.

In January of 2022, Daniel was appointed by Mayor Lori Lightfoot to serve as a commissioner on the Chicago Commission on Human Relations. Daniel is a recipient of many awards, including the Windy City Times 30 Under 30 Award, the Young Lawyer of the Year Award by HLAI, and the Hispanic National Bar Association’s Top Lawyer Under 40.

In his spare [00:05:00] time, you may catch Daniel rollerblading the Chicago’s late front path or catching up with friends. We’re very excited to catch up with him today. All right. Here’s our conversation with Daniel Hernandez. Well, welcome Daniel. We’re so excited to have you on the podcast today.

DANIEL: Thank you. Thank you so much for having me.

LAUREN: I’m really curious to start back when you first started, because like me, you started your law firm right out of law school. So I’m really interested to hear your story and sort of what drove you to that, what you considered, if it was something that you ever always wanted to do or just sort of fell into it.

So can you tell us a little bit about how you got started with your law firm?

DANIEL: Yeah. So I, I wanna take you back even a little further back than just law school here, right. And like starting the law firm. I always wanted to be an entrepreneur. I always found business fascinating. I always found the idea of having a [00:06:00] business or some kind of conglomerate of businesses to be really cool.

And I, I always kind of bring it back to, in high school, I went to like a semi affluent. borderline affluent high school, public high school, right? And I did have many affluent friends. And I would, I would always be fascinated by, like, my friends that always, like, drove really nice cars or stuff like that.

And I’d be like, what do your parents do? Because clearly, like, that is something that I want. And I remember talking to one gentleman, and he said to me, like, my dad owns, like, 20 different businesses. And I was like, Oh. Wait, your dad’s not a doctor and a lawyer like all these other friends parents are, right?

That’s where the seed was planted, where like entrepreneurship is the way to go to build wealth. And so, fast forward to going to law school, I tried to open businesses before going to law school, and then I would always run into this capital, you know, you have no capital to start a business. [00:07:00] And I remember telling a friend right before starting law school, like, Yeah.

One of the reasons why I’m going to law school is to get the capital that I need because lawyers tend to make more money than the average person does. Right. And so, you know, I’m sharing all of this because I always had the little bit of entrepreneurial spirit. One thing that I’ve learned now well into my thirties is that I didn’t realize that I had in my twenties was that I have anxiety, right?

And welcome to the club. Yes. Right. Right. And, and I only share that because. Starting the idea of starting a law firm really wasn’t mine right at the start. Like I thought, Oh, I would go work for someone. I would get some practice and maybe I would start a law firm or maybe I wouldn’t, right, because my whole idea was that I wanted to be a business owner of multiple businesses, right?

I just needed the capital to start these other businesses. And I ran into my good friend at the time, TJ Walzak he told me that he was going to start his own law firm right when he graduated from law school. He was older than me. This was, I [00:08:00] believe, his second or his third career, right? And so, you know, a lot more life experience than I did.

He shared that he was going to start his own law firm. It hit me in that moment, like you’ve always wanted to be an entrepreneur. This is the perfect opportunity too. And then I kind of presented him with the idea of like, Hey, why don’t we start a law firm together? Then you don’t do it by yourself. Like you were sharing that you thought it was going to be kind of scary.

I’m telling you that the only reason why I won’t start it is because I’m not going to do that by myself without any experience or any anything. Right. And so that is the story of of starting the law firm was just this idea again of really it being like, I always wanted to be a business owner. And then you tack it along with a friend wanting to start one right out of law school and you know, me kind of saying, I want to do this with you.

LAUREN: Yeah. There’s that power in the, in the partnership dynamic for sure, which I don’t have, but I have talked to a lot of folks who do, and I can definitely see the value in it. I find it really interesting your approach to entrepreneurship, because that’s exactly where I came [00:09:00] from. It’s like, I always just wanted to run my own business and didn’t know what that would look like.

And I almost saw. Law as the capital in the sense that it was the investment we made into our education. But once you get out, you don’t actually need a lot of capital to start a law firm business, unlike a lot of other businesses, especially if they’re product heavy, right? You have all this inventory.

But one of the things I do like about entrepreneurship in law is You know, with your computer, which most folks have coming out of law school, a license, and maybe some malpractice insurance, you, you can hit the ground running. So it really is a low capital entry point. So when you brought that up, that, that was really interesting that you ran into that issue in other industries.

Cause it’s definitely true.

DANIEL: Yeah. Yeah. I mean, it’s so funny that you say like, you don’t need a lot of capital. I would always share with my friends, colleagues, you know, even at other speaking engagements, like. I took a thousand dollars and I put it in a business account and my law partner at the time took a thousand dollars and put it [00:10:00] in his in the same business account, right?

Just so that we would have matched each other’s contribution, right? And from there, we just kept on growing the funds, right?

LAUREN: Yeah, it doesn’t take a lot.

JESS: I love the story. This perfectly aligns with everything that I know about you, which is From the day I met you, you’ve always been a business owner first, which I can’t say that about a lot of lawyers and I wish we had more people like you in the profession.

Just a fun story for everyone who’s listening. My introduction to Daniel was through the incubator program that the Chicago Bar Foundation and it was actually through a business plan because. In addition to just submitting the requested materials, Daniel and TJ actually submitted a full on business plan with it, which was so impressive.

And I think I might actually still have it. I’m not in the office. Right now, but I’m pretty sure I still have that because it’s I like to look back at that and it’s just a fun story and really inspiring. So thank you for all of that. What I want to ask you next is a little bit about your law firm, which is [00:11:00] next level law by Daniel R.

Hernandez. So first of all, how did you come up with that name? Why did you decide to go with that versus just your name? You kind of have a hybrid where it’s kind of a branded name with your name. So what’s the thought process behind that and why next level law versus something else?

DANIEL: I just shared that when I first started my law firm, it was with a law partner.

He and I decided that our visions weren’t matching. And so we decided to split things off. And so when I was rebranding and starting my new law firm, Next Level Law, I wanted my law firm to be modern and forward thinking. And I, and I really thought about the name. And I really thought, like, before my law firm was called Walzak Hernandez, our two last names, right?

I could have created the law office of Daniel Hernandez, but Daniel Hernandez is very popular. So is the law office of Daniel Gonzalez. And we can go through a bunch of Latino, Hispanic [00:12:00] surnames that people could definitely confuse me for, right? And so I, I really thought to myself, how do I create a modern law firm that is Pricing different, doing different things, but then still have this traditional old name attached to it.

And I also wanted my law firm to stand out in the sense that I wanted no one to say, I want to talk to Daniel. Like if you got upset. And you were talking to the manager, there was no one above the manager, right? And I feel like law firm names always tend to have that person. Like someone could walk into Sidley Austin right now and be like, I want to talk to Sidley.

I mean, my understanding they’ve passed, but if they hadn’t passed, someone could literally shout that. Like, I want to talk to the person who owns the whole thing. And so those were the reasons why I tried to pick a name that was not my name, right? That was untraditional. And I really started to like.

Thinking of different words that meant something to me. So I really like, like love [00:13:00] and life and those kind of words. And so I thought about like the word, like vida, just, just different words. And I, I was on the phone with a friend and I was like, I can’t figure out this name thing. I’ve got 10 days before I need to, like, have a website and all this up.

Right? Because when TJ and I decided to split things up, we decided this like. in the middle of November, beginning of December. And we were trying to do everything so that at the start of the year, we would both start fresh. And so I’m like, I’ve got 10 names. And I remember just like telling a friend on the phone, like, I’m trying to do some next level stuff here.

And I just can’t figure out the name. And then I was like, Wait, I think I just figured out the name. I think I’m just gonna call it next level off because we’re trying to do next level stuff, you know, and from there, a next level law. And now I have it trademarked and everything. So it’s, it’s phenomenal. I do want to share that I added the, by Daniel Hernandez, because [00:14:00] in branding, I realized that a lot of people were calling my law firm because of my last name.

So a lot of, in particular, Spanish speaking clients were calling my law firm in hopes that I spoke Spanish, which I do. And in hopes to be connected to someone from their community. And so I thought, well, I’d, I’d be shooting myself in the foot if I don’t incorporate my name into this some kind of way.

And similar to how the microwave was created. My next idea is that I want to franchise the Next Level Law brand as a whole, so that there could be a Next Level Law by Jessica Bednarz, right? Or Lauren Lester, or, you know, fill in the blank. So that. Basically, there are owner operated businesses out there for other law firms to have that are backed by the name of Next Level and I think the pricing model and everything else that we do here.

So that’s kind of like full encompassing reason for, for the name. I wish I would have thought [00:15:00] of the franchise piece when I was thinking about the name, but that was totally like the microwave moment where I was just like, Oh, by Daniel Hernandez. And I’m like, now I know what to use this by for.

LAUREN: That’s one of those serendipitous brain moments where the light bulb goes off and it all just works out.

Did you think at all, because I’ve been toying back and forth with Possibly changing my law firm name because I just did my last name because I started and was like, I don’t know, but I, I struggle with incorporating the type of law. And obviously I, like, I love next level law. I think what a fantastic name, but as a consumer, it doesn’t say anything about the type of law.

Did you consider that at all? Or did you want to keep it more Open, which gives you more flexibility to possibly change or like you said, to franchise. And so somebody else who may has a totally different practice area can still use that branding. Like, did that come into play at all in terms of the practice areas?

DANIEL: So it did a little bit because I’ve always had a family law focused. And so when I was toying with names, I was [00:16:00] adding the word like family law to it. Right. So like me, the family law, like love and life, family law, right. Whatever it was that I was coming up with. But then I was practicing real estate law in addition to family law.

And so I thought to myself in that moment, someone might not call me for real estate if the word family law is in the name. Or if the real estate is in the name, then maybe a family law won’t call. I don’t want to tell you it was like something I thought about forever. I didn’t, right? I was like, next level law.

At that point, 10 days away, I was like, let’s keep it moving everyone. Let’s just keep this bus going. On the way that it’s supposed to go down the highway.

JESS: Oh, I think you made a great decision. Thank you. And exciting to hear that you’re considering it as well, Lauren. I can’t wait to see what you come up with.

LAUREN: I know. I’ve been toying with it for like two years now. We’ll see.

JESS: Okay. Maybe we’ll figure it out on the show or by the end of the show. We’ll see.

LAUREN: Maybe. I think I need to take Daniel’s approach and just [00:17:00] give myself some, like, deadline. I think that helps. Like, you’re like, I gotta get it done. Like, let’s just go with it.

I think I think of something and then I’m like, Oh, I don’t know. You know, you said the doubts start to play in.

DANIEL: Deadlines are so great for that. I learned it from a book. I once read that it was like, set a deadline and then don’t look back anymore. Like you were, you’re like, I made the decision by the deadline.

I thought I was going to make, there’s no looking back. You just gotta keep marching forward. Right?

LAUREN: Yeah. I like that.

JESS: Yeah, totally. Because you’re never going to be 100%. Isn’t, doesn’t, isn’t something like even the best decisions are made with like 70 percent of the information or something. You never really get to 100%.

LAUREN: That’s probably quite true. Just go for it.

DANIEL: I think it was Jess Bednarz who taught me that the first iPhone was released with a bunch of problems to it because that’s just how these things work. We, we will never have a perfect iPhone. anything. Just like when I first said next level law, it was just next level law.

And then I added the by Daniel Hernandez because I found another problem that I needed to fix.

JESS: Yeah. Well, if anyone listening to this [00:18:00] episode has any ideas for Lauren, please,

LAUREN: please let me know.

JESS: Daniel, let’s talk a little bit about The mission of your firm, the mission of your firm on your website, you say provide high quality, compassionate, legal representation for all, which is a lot in a very high bar and probably really difficult to achieve.

So I’m just curious, maybe just starting broadly, how do you approach achieving such a grand mission?

DANIEL: Yeah. So I want to share. That recently, I changed the mission we haven’t released the new mission statement yet, but we have added the word affordable. through the mission statement, which has always been part of our mission to begin with.

And I think between the original mission statement from Walzak Hernandez, which then was tweaked become the next level law one, there was always this, are legal services affordable, right? Can we use that word? Does affordable mean [00:19:00] cheap and like all this stuff? And I really thought to myself, like at the end of the day, when I think about Next level in the brand.

It’s that we are affordable. We are providing competent service and we are trying to give you the best quality when we do it. And it’s certainly is visionary and maybe could be part of a vision more than a mission. But I think when you think about. Each component, our pricing model accomplishes the affordability part.

Our attorneys, they complete the high competence part, the quality of legal work. And so for me, it’s more on making sure that the right people are doing the right job. If we have good attorneys, I can train them to be compassionate. Most attorneys are compassionate. I don’t think I’ve ever met an attorney that said I went to law school and then didn’t fill it in to help.

Blank, whether you’re helping a corporation accomplish their goals or whether you’re helping a person accomplish their goals, right? You’re always [00:20:00] helping someone. And so to me, I’m like, we already have the compassion part. It’s about tweaking the training so that the mission is, is being adhered to, is being shared.

And, you know, one thing I’ve learned through the leadership courses that I’ve taken through the experience of being a CEO and a principal attorney is that we have to remind staff. We have to remind ourselves what our mission is. And I think that itself helps accomplish it. I, I never tell myself that I’m perfect.

I’m certain that there may be past clients of mine who didn’t find their service to be affordable. I think that if they took the number of hours that I worked on their case and multiplied it by 350 an hour, 400 an hour, they’d realize that they saved a lot of money with my firm. Will there always be some kind of feedback that maybe Doesn’t fulfill your full mission, certainly, but as long as we’re all trying, we’re putting our best foot forward.

I mean, that’s the only thing I can ask of myself and [00:21:00] everyone at Next Level.

JESS: It’s so funny. I just read affordability right into your mission and didn’t even realize it wasn’t there because I’ve known you since you started your firm and I know that is a cornerstone of your firm and always has been, so I’m really glad that you’re actually putting the words in there as well.

DANIEL: Yeah, yeah, I, I was, I was really happy to when I added it and I did it during a leadership class and the whole classroom that I had to tweak it a little more because they didn’t realize that I was a law firm in the statement, but it was really interesting because they were like, Oh, you’re an affordable law firm.

And I didn’t hear the word cheap. I didn’t hear the word like pro bono. I didn’t hear any of these other, I don’t want to call them negative, but like when you’re thinking about business and what you want your mission to say, like. Everyone there understood what affordable meant, and I’m happy to be an affordable firm.

JESS: Well, let’s dig into that just a bit, because I think you might get different reactions from [00:22:00] attorneys. One attorney might think it’s cheap. One attorney might think it’s something else. What does it mean to you, and how are you accomplishing that?

DANIEL: I think the big thing for me is about peace of mind and certainty when it comes to pricing.

And that’s why my firm is affordable. What I tell my prospective clients, what I share with the world is that in the service industry, for the most part, you’re always paying For the time that the service take, whether it’s a massage, whether it’s accounting services or legal services, and what happens when you do that is that you never know how much something is going to cost.

And so, for me, at my firm, we use an algorithm that that I created. To set a flat monthly price for the services that you’ll need in a given month. And our fees currently range from about 640 per month to a little over 1, 500 a month. And basically, it creates, at a minimum, the [00:23:00] client knows what exactly they’re paying every month.

My contracts are pretty simple. Our engagement letter is very simple. It literally says, if I’m the lawyer, if I’m your lawyer on the first day of the month, then you owe me your monthly fee. And what I share with my clients too, cause I think a lot of people believe that like the law. It’s how you see it on TV, which I think TV lawyers do a great job showing what we do in the courtroom, but not showing what we do in the office.

And most of our job is in the office and not in the courtroom. And so I really explain to my clients just the idea behind the model so that they understand it too from their perspective. Because there are going to be times where maybe in the first two months of a case, someone’s like, wait, I feel like I’ve paid you a lot more money.

Or maybe I haven’t paid you enough money. I don’t know. So it’s, it’s really interesting. What I tell everyone is like in, in the totality of your case, you will more than likely see a savings. It will likely be between 30 and 40 percent when you compare it to [00:24:00] other attorneys. Is it a perfect model? It’s not.

I have had clients that have let me go right before what I like to say, the really good work starts and they did end up paying an amount that I don’t like to see when I analyze each case, those are very small in view. I also want to share just in this conversation about affordability, the idea of knowing is so important, the cost, because I don’t know how many people I talk to that’ll tell me like, Oh, Daniel, that’s not cheaper than the guy I talked to yesterday.

He told me I just pay him 2, 000 and that’s it. And I’m like, no, I don’t think he explained to what a retainer was. Let me explain what that means. And then when I really start sharing those details, people are like, Oh, wow. So it was going to cost me more than 2, 000. I’m like, yeah, it was. And so my fee of 700 a month, it’s probably going to be much more affordable for you in the long run than you paying this guy [00:25:00] 2, 000 and then him asking for another 2, 000 in two weeks.

That doesn’t help you.

LAUREN: That predictability I find is so key for clients, like I almost am surprised at how much of an impact it is. I think I’ve gotten so many sales just because of that. Like, I don’t know if I am more qualified or if I vibed better with the client, but as soon as I tell them this is the flat fee and they have spoken with some other attorneys, they’re sold because that.

Transparency, peace of mind, knowing what the cost is going to be is so critical for them. I’m really curious about your pricing algorithm now. So can you tell us some of the factors that go into it? And then also on the back end, when you are reviewing cases, whether you’re working on them or your associates are working on them, what do you look at to determine if something is an outlier?

Like it was just a kind of case that went off the rails. Or is there something here we can learn from [00:26:00] to tweak our algorithm so that we get better at pricing in the future?

DANIEL: Yeah. So I will share how we, how I used to the algorithm, what the algorithm was. And I I’ll put that in air quotes that word, because when I first started with the pricing model.

In the incubator, when I was in it, everyone was either doing a flat fee or some kind of combination of a flat fee that, that would kind of turn into hourly rates. And I remember being the first law firm to just charge a flat monthly rate every month. And everyone was kind of like pushing back on me on that.

And I was like, well, I’m going to test this out. I mean, this is all really about cashflow. I know what my cost at the firm is. So, so long as I have enough cash coming in every month. To pay for the expenses, then a flat monthly fee is going to work just fine. Now, certainly, for everyone who looks at each case in a micro way, they’re gonna be like, Oh, I’m losing out on money on Lauren’s case.

Okay, well, sure, but, but did you cover your expenses this month? And that’s where the monthly, [00:27:00] the flat monthly fee came out. Came about. So the algorithm originally was just on the number of legal issues you had. So, you know, if you had a divorce with no children and no property and no debts to divide, well, you’re probably on the very low end of the scale.

One legal issue. It’s just divorce, right? But if you have a divorce and then you have children, well, those are What I would consider two legal issues, the divorced children, maybe someone’s a breadwinner there. And so there’s going to be a maintenance issue thrown in there. Maybe there’s a business right now.

We’re getting all these other factors in there. Originally, the pricing was again, just on this idea of legal issues. The problem is, is that sometimes legal issues don’t come out in the consultation. And I. Like to be as good of a businessman as I possibly can. And so I never liked to change prices as I’ve already after I’ve already taken on a client.

So maybe I learned about your business after and I’m like, man, this person would have qualified for, they should be paying an extra 200 a month. But you know what? We signed a contract. I’m not going back on my [00:28:00] contract, right? I’m not going to renegotiate this. And so what I realized was that there are a number of factors.

That have nothing to do in family law, in particular with legal issues that create more work for an attorney. These include things like your client’s personality. And just their, their approach. I think all of us can attest. And even I bet a bunch of listeners can attest, right? You have clients sometimes that are much more needy than others.

And you can kind of hear that in a consultation. And so that is now a factor in, in our, in our analysis. Opposing counsel, knowing you’re opposing counsel. I mean, Hmm. I think everyone can also attest that there are some opposing counsels that their client sneezes the wrong way, and that is a motion that needs to be filed in court.

And you know that, right? And you know that you’re going to be bombarded with three and four motions every single month for nonsense. Those are factors you need to take into account. I also take into account the opposing [00:29:00] party’s personality. So I ask questions about personalities. I sometimes don’t even have to ask the question.

You can hear it in your client when they share something like You’ll never agree to anything. We’re probably going to go to a trial. Okay, well, there’s the factor. Something to check off there. And then, of course, every legal issue that I could possibly think of became a factor, but also the area that I practice in.

Any courthouse that’s outside of the city of Chicago, I take that into account as a factor. I take outside counties as a factor. The only thing that I still haven’t factored in is the judge. And that’s because I don’t believe the judge makes any case more difficult or less difficult. But we can all disagree on that.

But that’s basically what I do. So right now, the way that it’s set up, it’s not a perfect algorithm. But just, just for listeners to kind of get an idea. All I use is a point system right now. So I’ve given everything some kind of point value. Maybe your client’s reasonableness is worth one point.

Maybe the [00:30:00] divorce. On its own is worth one point. And then you add another point if there’s children and another point, if there’s this, and then what I’ve done is that each point turn into a pricing range. So like three points is 640, four points is 740. And you can kind of see how. It can keep going. I have also added, because I’m still experimenting with the pricing model itself, I, I used to have a very simple model where it was like, yeah, I called it a simple, medium or complex cases, or I never used the word simple.

I would say low, low complexity, medium complexity or complex. And so I only had three different prices. And so now with the points. What I’ve done is that I’ve actually inserted even more price points because now I can really evaluate things. One business, okay, but what happens when you’re talking to a client that has three businesses?

That’s a whole lot of points we got to add on to this. That’s a whole lot of work, right? That’s a lot of phone [00:31:00] calls with accountants. That’s a lot of research on, on issues that maybe aren’t the same for someone who doesn’t have those, those things to go into play. But simple, simple point system right now.

Hopefully one day I turn it into like a real. Meta algorithm, you know, I get some advice from some of my tech CEOs out there.

JESS: I love the system. I think it makes total sense, and I can see how more points definitely translates to more costs. It also translates to more value that you’re providing to that person, too, which we like to emphasize.

I just want to ask one quick follow up question. So, just because people might be wondering, does this include trial?

DANIEL: No. From the flat monthly fee, we include trial, trial preparation, emergency motion. Responding to emergency motions and any petition that wouldn’t be part of the case that would create its own new case.

So even though, like, for example, an order of protection might be filed in a divorce case, technically the order of [00:32:00] protection itself is its own case. And so that is excluded from the price. For the listeners out there, anything that you, that you don’t know is going to happen should probably be excluded.

Even in Illinois, I exclude that. Qualified domestic relations orders because You might not need it on your case. So if I, if you include too many things in the factors, right. If you factor in emergencies, well, that alone can make the price skyrocket. I mean, a trial can make the price skyrocket.

JESS: Yeah. So you’re trying to make sure that people are only paying for the services for the most part that they’re going to get.

And then I assume you, you list these things out in your engagement agreements, the things that are not included.

DANIEL: I do. And I make it like really clear. I have like this kind of encompassing term where I just say like. I’m helping you on a divorce case. against this other party with children or without children, and we’ll do all the work that that case takes except for, and then I literally like bullet, like [00:33:00] bullet number one, two, three, four.

I mean, I mean, I think it’s interesting. I’ve had clients tell me like, what do you mean trials not included? I was like, Oh no, that’s bullet number four, like right on the, it was, it’s so clear. In the service that I provide that that is that that was excluded from the price and I recommend that anyone doing an alternate fee arrangement.

Really, you know, make it so clear what the client is getting, but if you don’t make it clear what the client is actually getting, kind of like my overall kind of language on a divorce would basically say you’re getting everything, but I make clear what you’re not getting. That’s great. I

JESS: think we can probably talk to you for another two hours about this specifically, but we’re going to ask you questions about a few other topics because you’re so good on so many things and maybe we’ll have you back on and talk more about pricing.

Moving on. To another area that I’ve always thought you’ve excelled in, which is just client service. I think you have a bit of a background in it coming into [00:34:00] law, which I would love for you to talk about because I think you draw upon it and I think you just enjoy it. So I would love to just hear you talk a little bit about client service, what that means in a law firm context, how you come up with ideas, et cetera.

DANIEL: So my background before I went to law school, I used to work in banking. And I used to work for Chase Bank in particular. And when I was working for Chase Bank in Florida, we had the worst customer service ratings of the entire bank in the nation. Like that was like a statistic out there. They were like, you Floridians need to figure out how you talk to people.

I don’t understand why you guys are so rude down there. And it was so interesting. Cause I always remember they would grade us on like. Five things and then they just started grading us on one question and it was like, would the client refer someone else to the bank based on the service they received?

And I was like, well, from Daniel Hernandez, they are definitely going to get nines and tens. Everyone is going to refer. And so I just kind of share that because I took the service and [00:35:00] kind of what they taught us there, remembering people’s names, just saying hello, remembering small details about someone.

I mean, we’re their lawyers. It’s, people are literally sharing so much with us. I’m not saying to draw, to write down every detail, but I will write down a detail if a client tells me like, Hey, just so you know, next week, I’m going to be on vacation. I’m going to Europe or I’m going to Puerto Rico. I sometimes will send myself an email to email this client in 10 days, asking them about their trip.

Those are like the little things that I think really push you from like good service to like excellent service. And really a lot of the things that I learned about running a law firm and the service there was kind of by trial and error. So I always wanted to be. a great attorney, right? And I wanted to give everyone a great service.

And that meant that I at first would tell myself, like, I’m available all the time. You call my phone, I’ll call you back. The problem is, is that every human needs sleep. And so you [00:36:00] can’t be that person. We also all deserve a break because our brains need it. And so when I really started thinking about like, how can I still accomplish good client service?

And I just thought to myself, Why not treat it like a doctor’s office? I call my doctor up, I don’t expect to talk to my doctor on the phone. My doctor is seeing patients. But what I do expect is for my doctor to schedule a call with me. And I want to go talk to my doctor and tell him all about my stuff and I want my doctor to pay all the attention that they need to pay attention to me in the 15 minutes that they’ve blocked out for me.

And I literally took that model and I put it to the law firm. I have it in our engagement letter that all phone calls must be scheduled. And that alone has taken the service to another, another level. To the next level, dare we say? Huh, huh. But it’s so funny because every time I talk to someone who runs a firm and they’re telling me about their problems, like I can’t get back to everyone in a day and I’m like, well, [00:37:00] why are you setting that expectation?

And it’s really interesting because I, I prohibit, and I use that word for a reason, I prohibit our reception staff to tell anyone that I will call them back. Everyone who wants to talk must schedule a call. The only time you don’t schedule a call is because. You think you have an emergency. You’ve told the receptionist your emergency and the receptionist believes you have an emergency too.

That is the only time that you will likely get a callback, and I’m sorry, I don’t want to sound so strict. Certainly, I have paralegals that sometimes give callbacks, and I have an office manager that works with us, and she gives callbacks too. But, an attorney time, you want to stop the attorney in their track, you want to talk about a legal problem that you’re having, why not have the attorney’s undivided attention?

Why not have that time blocked off? And that, again, just puts the service in a new level. I also want to share with everyone just kind of my idea behind service. And I, I always pose this to new [00:38:00] attorneys that are starting firms. And I say to them, like, what kind of firm do you want to have? And how does that look like if you were looking at it from another lens, from like, for example, the department store slash discount store lens, I always tell everyone when I think about the branding at, at next level law, I think of target.

Do we like to shop at target? We do. Is target perfect? They’re not perfect, perfect. They don’t give you elevated service, but they do give you service. I’ve never walked into a target and been so upset at their customer service that I would never go back. And, and I think you can compare that to other stores, you know, for example, I always tell everyone, like, I don’t consider myself Walmart and, and there are differences when I go shopping at Walmart, sometimes you’ll find pallets of stuff, just sitting in the middle of the.

Walkway at Walmart. That’s something you don’t see it at Target. You know, the lighting is different at Target. They actually have brighter light. It’s for a reason, right? It’s part of their look. Their [00:39:00] signage is a, is a certain way. And I think if you say to yourself, like, that’s the kind of service I want to have, then you will start to emulate that in the firm.

And again, maybe you want to have the kind of service that they give you at Saks or Neiman’s or one of those stores. And that is the type of service that you should put forward, that white glove style service. But I think if we as business owners and as lawyers in particular, we kind of think. To ourselves, like, what is it that I want to look like?

If I was a department store, which department store would I want to look like? If I was a grocery store, right? If you want to compare it to the different types of grocery stores, almost every industry has their, their segments in the market. So it’s like, where do you fit and who do you want to emulate?

LAUREN: You’ve talked a little bit on a number of occasions about your staff and associates and receptionists and office manager. I am curious. How you knew when to add those roles on [00:40:00] and how much attorney lawyering work you are currently doing versus actually being the CEO and running the business. This is a terrible question.

If I was in trial, I would get so many objections. I’m gonna ask you three things at once. So when you knew how to, when you knew when to hire, was it a business? I looked at the numbers. I just felt it like, how do you, how did you know when to expand what your role is in the business now and how you are doing kind of that top down.

Approach that you’ve sort of mentioned a few times. Like it starts with me, the training that you do, that you remind everyone of the mission. How have you structured that? If you do have like a systematic approach to it, to make sure that everyone is on the same page about how you want next level to be presented out to the world.

DANIEL: When to hire, I think what’s so great. And, and I hope all the listeners out there really take this piece into account, right? We’re living in a time where like. [00:41:00] Hiring, even from five years ago, when I made my first hire to today is different, right? I don’t know if I would hire someone today to be on my staff inside my office, just from the things that I’ve learned over the years, I want to start off by saying I hired someone because I no longer could, could work the hours that I was working.

So at the time, my law partner and I, we were working a lot. I was particularly working a lot later and just doing all the administrative tasks, the lawyer tasks. consultations. We both kind of answered the phones. It was just him and I. We were leaving business on the table by not answering our phones when business was calling us.

I certainly couldn’t get Do all the work in the day. And I just kind of looked up one day and I was like, we have to hire somebody. And I just like shouted it out loud in the middle of our office. And he’s like, what do you mean? And I was like, I can’t work till 10 o’clock at night anymore. It’s scary leaving the office by myself.

You’re never here for that. I’m not doing this anymore. I can’t manage our business, [00:42:00] calling people back and doing attorney work. Like it’s too many roles. We need someone in this office. And I remember we just hired someone just to be like an assistant. And do anything we ask them to. And her name is Magali.

She still works here at Next Level Law. And, and she actually just won the Rockstar Award this past weekend. When we were giving out awards in this holiday party. But, I just knew in that moment that I couldn’t grow without the help of someone else. And I won’t tell you that I had all the answers. I would talk to some business owners that would be like, I’m not hiring someone until I have six months of their paycheck, like saved up.

And I was like, that’s ridiculous. That’s so ridiculous because a healthy business only has 90 days worth of. Cash on hand that and that’s a healthy business, like the healthiest of businesses, of course, you can get healthier than that. But like, that’s the standard is just to have 90 days of cash. And so once I had 90 days of cash for all the expenses at the firm, I was like, we can do this.

And I remember looking at [00:43:00] my law partner at the time. And I said, I said, listen, how many voicemails do we get every day of people just saying, like, I was calling to set up a consultation. That’s a missed opportunity right there that whoever we hire is going to pay for itself. Had I known the information I know today, I probably wouldn’t have hired someone to work on my staff, because what we really wanted at the time was someone to help us respond to, like, general emails, to answer our phones, and there are phone answering services out there everywhere.

I have a phone answering service now. And it’s the best thing ever. There’s a staff of five receptionists answering calls all the time at my firm and I say that they’re an extension of my firm, right? I invite them to our holiday parties and everything, their whole team, because I find that they’re, I find their work to be so vital.

But along with their phone answering capabilities, they also do Assistant work that they fill out flat rates to. And so today what I hire someone, if I was [00:44:00] redoing the whole firm, maybe not, maybe I would have started off with some of these services. These services are much cheaper. My, my phone answering, I get.

Hundreds of calls a month, and I don’t pay more than 1, 000 a month. I was paying more than 1, 000 to my assistant every month, and they were a full time employee. And so I just wanted to throw that out there. You also asked me about my role now, my role. Now I’ve been trying to transition to just being the CEO.

I was 100 percent CEO ing for a good amount of 2022, but like every business. I recently learned that we’re either growing or we’re in crisis. And so I had my first crisis this year, and that is that revenue dropped exponentially. And staff had left, I didn’t replace them because the revenue had gone down.

Right. And so I took on cases again, and now I’m recently transitioning back to the way that I like it. I like to say I’m probably about 20 percent lawyer, [00:45:00] 80 percent CEO. And I like that. I like. I realized that if you disconnect yourself too much from the cases, then you don’t know the inefficiencies of your own law firm.

And so I like that I still have a small caseload to kind of always be looking at, oh, do we need a new template? Do we need a new procedure? Hey, team, I was doing it this way the other day. Are you guys running into the same inefficiency? And so it’s really helpful, I would say, to keep a little bit going on.

I also like to say I’m a lawyer, so you know, hard to say you’re a lawyer if you’re not actually lawyering. And then you were asking me, how do I keep everyone together around the mission and be a leader? I will gladly share that I am still learning how to be a leader every day. But one of the things that I try to do is part of the revamp of our mission was a revamp of our vision and our core values.

And I, I realized the importance of core values and having the least amount of core values that you could [00:46:00] possibly have because I think when you start getting like. Between seven and ten values, you start losing what the values actually mean. And a lot of things that we would call a value are sometimes synonymous with one another.

Or one thing can’t happen without the other. And so we have four core values at Next Level Law. Compassion, accountability, diversity, and social responsibility. And almost everything we do has to fall into one of those. And so when, when I’m leading When we’re having a discussion about a client that maybe is being difficult or an opposing counsel, I, or an opposing party, I always say, well, where does that match to our core values, especially if we’re talking about it as a team, you’re presenting a problem?

Well, well, what is it? Okay, we have an upset client. Well, what happened to this upset client? Oh, we said that we would have something to them by Friday and it is Monday and they don’t have it. Well, let’s first acknowledge that they have every right to To [00:47:00] be mad at us because we violated our own core value of accountability.

We said we would have something to a client by a certain date and we didn’t meet that value. We didn’t meet their expectation. We set the expectation when we told them we’d have it to them by Friday. And so I think having those honest conversations around the values, around the mission, around the vision, it, it helps everyone understand where the firm is going, and I think it helps everyone kind of say, like, You’re right.

I shouldn’t be upset. You know, sometimes we take offensively what I’m going to call in family law, our clients anxieties, because they’re like, I need a call back right now. And, you know, to us lawyers, when you have 30 cases, you know, 30 to 35, maybe 40 cases, you’re like, doesn’t this person know that I have 40 other clients to attend?

Why do they think they’re so special? And it’s like, Let’s take a minute. Let’s take a deep breath. Let’s think about that compassion component for a minute there. Have you told the client that you have a number of cases? Have we ever had that conversation with the client? Maybe the client [00:48:00] has no idea how a law firm runs and thinks that you only have five clients and she’s one of the five.

So why can’t you get back to her today? And so certainly we have processes and procedures that are written out and those help keep things in order, keep efficiencies in order. But I think always what’s most important is when you’re training a staff, when you want a team to have a mission, to believe in a vision, the core values are going to be what keeps everyone together, what keeps everyone focused.

LAUREN: And I love that idea of constantly coming back to them and keeping them minimal. Cause I agree with you when you have 10, it’s like overwhelming. How do you actually put that into practice? But to say like we have four and for most everything we can draw back to at least one of them that really keeps it top of mind and then it just becomes ingrained in the culture of the business.

JESS: Yeah, I think it would just be hard to remember more than four.

DANIEL: Well, I used to have seven, and I couldn’t remember any of my seven. So that’s exactly why I had to bring it down to [00:49:00] four. And now I remember all four right away.

JESS: Yeah, totally. So speaking of numbers, you’ve been in business Six years. What is it now?

DANIEL: Six years.

JESS: Yeah. Okay. I thought I was remembering that correctly, but I just wanted to make sure. So you’ve shared a lot about what’s happened over the past six years. What’s next for next level law? Like what goals do you have for 2024 or maybe just the next three years?

DANIEL: I, and I’ll be honest with everyone listening here, I have not broken revenue of a million dollars yet.

And I was projected to break that this year, and then the market did what it was going to do, right? Without any of my goals in mind. And so I still would love as a business to break that mark, but Mostly, I want to break that mark because that means we’ve doubled our impact and that’s what we really want to do.

We currently serve, right now, I just checked the numbers, we have about 75 clients as [00:50:00] of today that are with our firm. We’d like to make that 150 next year, which isn’t that unattainable. We used to have about 110 before our crisis happened and now we’re seeing our numbers get back up there. And so, I’m really excited to kind of see where we take.

Next level law. I have some great ideas around innovation and other subscription products that I’d like our clients to be a part of. And that includes, I haven’t fully thought it out, but it includes a product that would go after the litigation. Twofold it both to help the client, but also to keep the client close to the firm.

I don’t want my clients going to another law firm when they leave us. Cause we didn’t stay in contact with them for six months or a year or six years later. I’ve had clients call me there. They were my very first clients telling me they now have problems years later. And I’m so happy that they remembered us.

So I were really excited about that product. I still haven’t launched it [00:51:00] yet. I. I’m still working out the kinks of that as much as I can. I know we’ll never have a perfect product, but it’s there. And then I would really like to expand Next Level Law into other markets. And then hopefully begin to franchise to attorneys that want to be owner operators, who really love the practice of law.

They want to own their own business, but they don’t want to be a CEO. And they want me to still be the CEO, and I’m okay with that. So hopefully that will launch to probably within the next five years or so. So exciting. I’m really excited.

LAUREN: I love the big revenue goal. I hope y’all smash through it in 2024.

That is such a big one for any small business. That’s seven figures, man. That’s a, that’s a big freaking deal. So I wish you nothing but the best and hopefully this time next year, we can. Cheers when you get there.

DANIEL: Thank you. Thank you. I’m I, I hope so. I hope so. I hope we have another one of these and I’m able to say, Hey, I broke the million.

We helped out [00:52:00] 150 new families and the word is being spread that this is the new way of doing business in the law.

LAUREN: Love that. We’ll wrap up with the question that we ask all of our guests, which is how do you personally define success?

DANIEL: It’s so funny. You guys sent me this beforehand and I was like, I, I don’t know the answer and And it’s crazy because you brought me back to a conversation with a friend that I had years ago, his father passed away, and he said to me, like, do you think my dad would think I’m successful?

And I said, well, I don’t know your dad’s definition of success. But I think you’re successful. You meet what I qualify as success. And over the years, my idea of success has evolved. I, I’m a very measured person, but I don’t think success is measurable, right? I don’t think that success is as measurable as me counting my clients and me knowing that if I doubled my clients, it would be 150.

Would that be success? I think success comes from within. And it is what [00:53:00] you believe success is. And then. Are you being true to yourself and your genuine self. I believe in growth and I believe in having a large law firm and I believe that that’s what my vision is right and so I won’t be successful until I see that.

But I have many colleagues from the JEP that are believe that success is having a small law firm with, you know, one paralegal and one associate working for them and them running and managing the firm and that is success to them. Like I said, it comes from within. And so whatever you believe your goals are reaching those goals should be your marker for success.

LAUREN: I mean, that’s an important point, especially coming off of talking about big numbers. But like you said, those are just numbers and there are certainly many firms who far surpass those numbers, but maybe don’t think they’re successful for whatever reason. So it is an internal marker and any of the outward showings of it or numbers that people might talk about may [00:54:00] not necessarily reflect where the person really is heading and what’s important to them.

So I think that’s a really good point.

DANIEL: Yeah, yeah. And I’ll just add one last thing. It’s almost like that moment when you look at yourself in the mirror and you say like, am I proud of the person reflecting back? That is the measure of success. Are you proud of where you started and where you’re at today?

I shared at the beginning of the podcast, put 1, 000 in a bank account. And now I have a law firm with two associates and a paralegal and an office manager. And that’s just our internal staff, let alone the fact that we have an external. Reception staff, we’re about to have an external virtual assistant from Columbia join our team.

Is that success at this exact moment? Certainly, I would, I wouldn’t say that I’m unsuccessful. But I would say that I have another goal, another success metric.

LAUREN: Continuing that impact. Well, we can’t thank you enough for spending some time with us today. This was such a great conversation. I’m super inspired by everything that you’re doing.

Can’t [00:55:00] wait to integrate some of the things into my firm. So keep doing what you’re doing. And yeah, we wish you nothing but the best. We’re really excited to see where this next year and next five years takes y’all.

DANIEL: Awesome. Thank you so much. And thank you again for having me. I, I hope to be back and to share, to share more with them in a year or so.

That would be wonderful. Thank you.

LAUREN: We’re over here giving you a virtual high five because you just finished another episode of A Different Practice. For more from this episode, head over to adifferentpractice. com slash podcast for our show notes. If you found this episode helpful, we’d love it if you’d share it with someone. Be sure to rate the show wherever you listen to podcasts.

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