The American Bar Association named attorney Jeff Hughes of Santa Monica a "Legal Rebel" for his brilliant idea of opening up a coffee shop where you can get low-cost legal services. Since 1996 he's owned and operated the Legal Grind café, which employs 10 other attorneys. The ABA thinks this is awesome, but the ABA never asked if this is a sound way to do business and try to raise a family.
Jeff and his wife are exploring franchising their coffee-and-a-prenup model. So they went to the ABC television show Shark Tank and pitched for funding for franchising. They sounded foolish, unable to answer the most simple questions, and were deservedly turned down:
If their entitlement complex gets on your nerves, just skip ahead to 37:30. They explain that they need funds because they don't know how to manage a franchised operation, even though they have "over a hundred" people asking to be franchisees. The panel asks them how they'd learn to be franchisors, then. They answer that they'll use the money to "hire legal consultants" to do it for them.
One, these guys are entrepreneurs? He's an attorney? Why can't he teach himself how to be a franchisor? Why hasn't he done it long before now? If there are, indeed, dozens of people knocking down their doors to be franchisees, then why, to paraphrase one of the panelists, are they wasting the show's time and taking the space of some entrepreneur who really deserves a chance in front of these guys? They don't even need the venture capital or a business loan themselves; they can shift that burden to the people who are begging them to be franchisees. Which is kind of the point of being a franchisor.
Two, I think that their plan to hire legal consultants must be an ABA-inspired jobs program. Hire consultants! They'll be self-employed 1099 contractors! No fuss, no muss! No need to put them in offices, pay their health insurance, or throw holiday parties for them! Wait -- maybe you can even offshore their work to India!
Earlier in the clip, the Hugheses say that their salaries are only about $50,000 annually (it's not clear whether each makes that, or if it's $25K apiece), and and they're barely clearing a profit above that. How would they possibly convince a potential franchisee to buy into such low returns? Consider that running a coffee shop is a 7-day-a-week gig, even if the legal services are available only on weekdays. In an ordinary coffee shop, the average ticket is probably under $10; this is why coffee shops open at 7:00 or even 6:00 and close at midnight. Adding legal services to a coffee shop, or a coffee shop to legal services, is a fun little side-line. It's a gimmick. But it's not a business model. I'll take them at their word that they have "over a hundred" requests about franchising opportunities, but I gotta wonder how serious, and perhaps how dated, most of the inquiries are. And how serious they'd continue to be once they hear that you have to start with a law license, something that ain't cheap to begin with, and ain't easy to pay off in $10 or $50 increments.
God bless the ABA for showcasing these people as exemplars of the profession. They're so out of touch with business reality, they should be law professors.
The phrase "legal rebel" is kind of meaningless, of course. I think the ABA intends it to connote a sense of empowerment to those of us who graduated in the bottom 90% of our law school graduating classes, who've been laid off from our firms, and who otherwise are significantly underemployed lately, due in large part to some of the ABA's policies and decisions over the past several years. The ABA's Legal Rebels are "maverick[s]" and "pathfinder[s]" who are "committed to innovation" during "this time of economic crisis." The Legal Grind café looks good on paper -- but only on the paper they use for my monthly ABA Journal, not on a spreadsheet.
Subscribe to:
Post Comments (Atom)
Posts
No comments:
Post a Comment