54. John Nachazel, Michael Morse Law Firm How Process Makes Profit From The Fireproof Data Evangelist

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John Nachazel has a five-step model to take your law firm from unpredictable to wildly profitable, yes, really! He’s half of one of the legal world’s most respected visionary-integrator duos, and co-author of the hugely successful *Fireproof* alongside his partner Michael Morse. He’s a data enthusiast, an EOS evangelist, a jumbotron fan, and an absolute master at perfect planning and execution!

Today, we discover how John transforms blue-sky thinking into concrete results every time, why the successful firms of the future need to be big on data, and why John can’t stop dreaming about owning a Ford F-150!

Transcript

Chris Dreyer

What would you think if someone told you there was a five step model to take your law firm from unpredictable to wildly profitable? I’m going to guess there’s plenty of you who’d maybe roll your eyes like, come on, Chris, five steps?! You gotta be kidding me. Well, today’s guest is so convinced in his proven model for law firm profit, that he co-authored a book that tells you exactly how to do it.

John Nachazel

Lots of people have visions and that’s not really for me. I’m a big believer in the statement that a mediocre plan perfectly executed beats a perfect plan with mediocre execution.

Chris Dreyer

Our guest today is John Nachazel, COO of the Mike Morse’s law firm. He’s half of one of the legal world’s most respected visionary integrator duos, and an absolute master at perfect planning and execution. Today we discover how John transforms blue sky thinking into concrete results every time, why the successful firms of the future need to be big on data, and why John can’t stop dreaming about owning a Ford F-150. That’s coming up on The Rankings Podcast, the show where founders, entrepreneurs, and elite personal injury attorneys share their inspiring stories about what they did to get to the top and what keeps them there. I’m Chris Dreyer, stay with us.
As most of you know, John Nachazel is a huge name in the legal world. His partnership with Michael Morse makes headlines on the regular as they’ve headed up the largest and fastest-growing plaintiff personal injury law firm in Michigan for several years. But John didn’t set out to work in law. In fact, his business acumen was built while he was following another of his passions: fast cars.

John Nachazel

Right out of college, I had done an internship at Ford motor company so I took a full-time job in vehicle distribution for one year with Ford Export and had a plan to live overseas most of my career. Then I eventually, after one year in distribution, I spent two and a half years in fleet sales, then I took a major change, a transfer, and switched to Lincoln-Mercury Division where I was the zone manager, so I had 15 dealers at a time where I was the manufacturer’s rep, and I would travel out to the zone and live in the zone for the week. And I was their liaison for all matters including acquiring vehicles. It was big data before big data was a thing. And I loved the data and that it pointed the way. It told me what was going on in my dealer’s market and allowed me to consult them and explain to them, provide insight in what was happening. And I just had a real deep affection for that and I was good at it. So then after that, I was supposed to move to Chicago and opted instead to switch my career and go to a company called RL Polk. I was there for 13 years, sat in various seats, sales and marketing, eventually leading most of them then switched to product strategy where I was asked to create the next generation of data products for the auto industry. And we hadn’t refreshed our products in a while, so I created that team from scratch and loved it. And Polk insight was my child. And it’s still their most profitable, highest revenue-producing product. And I’m proud of the work I did on that, that was super fun. Then I eventually worked in mergers and acquisitions business, a business development role for them before eventually ending up switching careers into the legal industry.

Chris Dreyer

So you kind of led me right into that. You know, I was going to ask before we talk about how you met Michael and so what were some of those key lessons that you are essentially building your COO toolkit from your previous job?

John Nachazel

Yeah, I would say… and it was all an accident! I was just my own advocate early in my career, always pushing for new roles, trying to get on every committee and just trying to develop as versatile of a skillset as possible. Not thinking at all that it would all lead to being able to tie it together one day and being able to access each one of those skills. I was just trying to simply stay stimulated and advance my own skillset and pursued various interests. So I would say one of the big learnings is, at most businesses, it’s people. So when I was at Lincoln-Mercury, I had access to the dealer’s financial statements, and I’d go through that with them and I found that the most common denominator between those dealers had a really healthy bottom line. What was it that they all had in common? And what they had in common was when I went to their dealership every month I saw the same people. There was no turnover. They paid their people incredibly well and they made more money because of it. So they had a strong, stable workforce, they weren’t constantly turning over people. So that shaped my interest in championing the cause of: overpay really great people; have excellent people, pay them above market average, treat them great, demand excellence, and they’ll stay forever. And then I guess at Polk it really was I mean my whole life, although the products, everything was about day to data. So it was working with the auto industry and finding out what problems they needed to solve. And invariably the data would size the problem and bring clarity to what the real issue actually was. And once you have that clarity, being able to act boldly and decisively becomes really easy. It’s not courageous, it’s not Wild West making stuff up. It’s just being thoughtful and deliberate and yeah… being able to be in control and be proactive of your situation versus just reacting to what life throws at you.

Chris Dreyer

I love that and it’s not your opinion, it’s look, this thing isn’t working and it’s highlighted. So let’s jump right in, we’ll take it back to 2008, you start with Michael Morse. So how did you and Michael meet, you know, how did you make that jump to this new industry?

John Nachazel

So there’s a part of me and I think there are many people out there that, know, I was at the great ginormous Ford and I was just, I was zone manager E when I left, I wasn’t really a person, I was zone manager E. And then I went to Polk where I knew most people, but there were still, you know, thousands of employees and I mattered, but I wasn’t, it wasn’t the same intimacy as it was at a smaller firm. And so I was just naturally drawn to wanting to have a deeper connection and a broader role, and be able to act more nimbly to identify what action needed to be taken, make that recommendation to Michael and then do it instead of putting into committee and having somebody else sprinkle their thoughts on it and whatever else, all that garbage was just gone. And I would say this, that out just to, to build on a little more, I mean, the auto industry at that time, it was just rough you know, 2008, but it was just horrible. So it was, I didn’t really want more of the same, and to jump aboard Michael’s rocket ship, to have that chance was just, that sounded great to be in a professional services organization that was growing. Every single problem I’ve ever dealt with here at the firm, all originates from how do I cope with explosive growth? We talked about it at the other places I worked, but we never actually achieved it. So to, you know, to have problems associated with growth, I mean, I just, I couldn’t. I could never complain about anything. I just refuse to be stressed out or whine about, oh gosh, I have this problem cause we’re growing!

Chris Dreyer

Yeah. I mean, those are good problems to have – the explosive growth! And you know, you and Michael have grown something tremendous – Michigan’s largest personal injury law firm, and let’s dive right in on. So, your firm is an EOS traction-based business. And for those who don’t know what EOS and traction is, give us the overview.

John Nachazel

Sure. So, there’s a fantastic guy, Gino Wickman, and he is the founder of Vos. He’s the author of a great book called traction. And he’s my friend. He’s, we’ve been lucky enough to. Work with Gino directly for 13 years. So he was working with Michael and actually nudged to Michael and taught Michael that he needed me.. And not me specifically, cause he didn’t know me, but my role as integrator. So it basically gives us an operating system and that’s what it stands for – the entrepreneurial operating system. It gives us one framework on which to hang everything, to drive alignment and accountability. So it’s very simple – it doesn’t mean it’s easy. It just means it’s simple and clear and it forces you through the thought process of, okay, this is who we are, this is what we are, this is where we’re going, this is how we’re going to get there. Here’s our, where we want to be in 10 years. Here’s where we need to be in three years in order to achieve that. Now, if we want to be on track for that three-year picture, what do we have to accomplish this year? Okay. Now that we know what we have to accomplish this year, what do we have to do these 90 days? And so we’ll set rocks to keep us on track, to accomplish those things that are the most important priorities. And then we’ll follow it up with a weekly level 10 meetings where we’re checking in to make sure that we’re on track for our rocks and getting all of our weekly to do’s done. And it’s a beautiful thing. If you just trust the process, it will make a lot of magic happen for you and it will give you direction. And I guess for me, especially, what I would say – and I think maybe an interesting takeaway – is that, you know, Gino’s book is Traction. It’s not vision. And the whole point is lots of people have visions and that’s not really, for me, at least the challenge – and I’m very happy deferring to Michael collaborating with him, influencing him, but he sets the vision. So then once he sets the vision, it’s all about executing it. And that’s where the traction part comes in. And for me, I’m a big believer in the statement that a mediocre plan perfectly executed beats a perfect plan with mediocre execution. So I don’t really get too worked up about what somebody’s plan is. It’s going to be good enough if you take all of the finite energy that a law firm has to offer and you can channel it and harness it and focus it with great clarity and alignment. It’s unbelievable what you can get done. And that’s the exciting part is the actual doing, the actual execution of the vision to me is far more interesting than the: Hey, let’s all get together and imagine what we could be when we grow up.

Chris Dreyer

Well, you’re really embodying that integrator because that, that nails down the role. And one of the things you mentioned there is I completely agree with the execution. So, you know, meeting individuals would probably look at your book and think, oh, you’re giving away all of your trade secrets and proprietary knowledge and tactics, but you still have to have the execution of that consistency.

John Nachazel

Right. We made a deliberate choice. It was like, I guess what we’re trying to do is pay that knowledge forward. And I would say this, that one of the things that we found is, you know, just like with Gino, Gino wrote the book traction, but now he’s got 380 to 390 implementers worldwide because it’s just more effective to have someone an independent professional, helping you and guiding you along the way. And that’s what happened organically out of Fireproof. We didn’t plan to have a consulting company, but what ended up happening after the book launched in June was just a natural reaction of people were contacting us, saying, I loved your book, okay, will you help me do it? And it was, oh, okay, how do we say no to that?

Chris Dreyer

That’s incredible, John. And I just want to echo one of the things you said, because we ourselves are an EOS traction-based business. But one of the things that you mentioned that I really want to highlight, I think it’s important. Anyone that’s pursuing this is we tried to self-implement for three years and maybe we did a better job, right? We were running our business better, but when we went and hired James Ashcroft – for our industry, he was perfect for us. It’s just having that, that third party to kind of guide us and really understands the process. So, you know, any law firm listening and I’m not getting paid to say this, I genuinely believe that you need a guide if you’re going to it’s much better in this journey to implement EOS. I know it’s a choice, so first of all, I really applaud what you’re doing.

John Nachazel

It makes a difference. I’ve actually implemented EOS with I dunno, six, seven companies outside of the law firm and it’s fun and I think helpful to be that outside voice and that facilitator. And I know that we tried a couple times, we tried where we’d say, you know what, John’s kind of got this, Gino, so we’ll run our quarterly without you. And it was okay. It was all right. I mean, I had the skill sets, I knew the mechanics of what to do, but it was just better, we found, when we had Gino there to guide us and allow me to simply be a participant instead of managing the meeting and being an active participant. And I think it’s good to have an outside voice that holds you accountable and points out: guys, this is fascinating that this is the third meeting in a row that we’ve decided to kick this issue around it’s time to bring it to closure. And we can’t hear ourselves saying that when we’re talking about it week after week and you get, you need that perspective.

Chris Dreyer

I completely agree. And I kind of wanted to dive into your relationship, with the visionary with Mike, the integrator. You know, one of the things I see is, you know, the visionaries like, like myself, we have our kind of our hair on fire and we want stuff completed yesterday. So when Michael has a big idea that he’s really wanting to achieve, but you kind of have to push back, how do you handle those interactions when there needs to be a little bit of respectful pushback?

John Nachazel

Sure. So it’s, and it’s funny cause Michael only has those big earth-changing ideas every hour. So he knows that I’m a good, healthy dose of bad medicine for him and I have to tell him his baby is ugly once in a while. But that’s okay. And interestingly, we were actually in Gino’s book a couple of times, his book, Rocket Fuel as a visionary integrator pair that were the polar opposites of each other. So I really respect the fact that Michael went out when he needed an integrator and he deliberately chose to get someone who was his polar opposite, who could actually compliment his strengths, hide his weaknesses, do the things that he hated doing. Cause I love doing the stuff that he hates and he hates doing the stuff that I love. So we attack each problem and each opportunity through a completely different lens but with a layer of mutual love, trust and respect underneath, we’re able to work through that. We have that high level of trust where we can speak candidly to each other. And you know, sometimes not to be discouraging, I guess one of the things that I’ve often done is simply said, oh yes, all of these are great ideas now, which two or three are the best? Is this better than this other great idea that we just talked about? And so it’s not saying no to his idea, it’s saying yes and doing fewer things better will get you to the promised land faster. And he believes that, and I believe that. And so we have to have that you know, conversation back and forth. But he’s great, he has been a fantastic visionary to work with, and yeah, all the visionaries drive all the integrators a little bit crazy and vice versa. But if all you get is a “me too” – a person who sees the world the same as you and says yes to everything, then you just wasted your time and made your company…not any better.

Chris Dreyer

So let’s talk about the data component. So, I believe there are six components looking over the six components of EOS, one of those talks about having a scorecard. In the book, you guys refer to it as your jumbotron. So, what is your jumbotron? How does it work? How does it help you run the business?

John Nachazel

Sure. So the jumbotron is data, it’s KPIs, it’s metrics, it’s the dashboard, it’s whatever you want to call it. We liked the colorful analogy of you go to a sporting event and you see a jumbotron, and it’s got a bunch of numbers on there, that’s a football game. How do you know which players to put on the field? What play to call? If you don’t know the score of the game, if you don’t know the time left, who’s got how many timeouts, what’s the down and distance. You just have to have that data in order to make intelligent decisions. And we’ve found that there are still so many law firms that are playing their game without a jumbotron, and it’s got to cause so much stress and it’s just so much guesswork. So what EOS teaches is you have five to 15 numbers that give you clarity that you need to have access to that gives you a highlight of how to approach your business. And we have gone crazy deep on that and turned it into where I present about 400 unique slides a year. We have our staple of 12 to 15 slides, PowerPoint slides, that I present each week at our leadership level 10, but then I’ll supplement it with here’s the new, interesting thing. Somebody throws out a hypothesis of, I think this is happening or whatever it is, but I, and I’ll do an ad hoc data analysis on it to determine the truth. So they may suspect something and then we go figure out what it is. I’m very dextrous with large amounts of data and we have multiple people on our staff who are as well. So that gives us the ability to properly size the problem and understand the problem. And once you’ve done that, then it just becomes like shooting fish in a barrel to say, okay, well, lots of us are good at knowing what the solutions to the problem are, but too often we are treating the symptom, not really understanding the problem, not able to peel back the onion and see where the data leads you. And so I prefer to trust the data and trust the logic and identify the problem as soon as it emerges. When it’s small in the book, we talk about a smoke detector. If you detect the problem, when it’s small, you can put out the fire with a little cup of water, but if you’re not even aware of it and you wait until the end of the month or the end of the quarter, and you meet with your CPA and you talk about the small handful of numbers. Well, you’re going to have a three-alarm blaze before you understand what’s going on. And we believe you need a weekly cadence, a weekly insight of all the leading indicators that are going to eventually lead to the results that you’re hoping for and tracking, but you need to understand those things that are driving that progress along the way in real-time.

Chris Dreyer

Yeah. Couldn’t agree more, it really highlights the real issues instead of the opinions and guessing. And moving on to the next part of EOS: people, specifically core values. Core values you have, and it’s just, you have to discover them and one of the struggles that I’ve had, and I think many individuals probably have when they’re trying to figure out what their core values are, is that they’ll choose something like a team player and it’s table stakes. Like if you’re not a team player and you work for me, you’re probably going to be gone.

John Nachazel

Correct.

Chris Dreyer

How do you select, you know, what’s the process you take to select these core values, and then how do you hold individuals accountable to those values?

John Nachazel

So it’s usually about a two hour process where you go through, you analyze, you identify as a leadership team who are your star performers, who is it that makes you so darn special and awesome. And who represents the best of you? And then you start brainstorming. What is it about these people? What traits do they have that we admire that they have in common that might reveal and allow you to discover here’s what it is about them and about your firm that makes you special. And I love that. You said they’re discovered they’re not wished for, they’re not invented, you can’t just copy somebody else’s, you have to discover them for yourself – what it is that makes you unique because those are the things that shape your culture. Then once you’ve identified that list of, and they can’t just be, like you said, table stakes. Honest. Okay. Neat. Okay. If you’re not honest, you can’t have a business, so that’s not a differentiator. And you’re trying for as few as possible. Three, ideally, if you have to go as high as seven so be it. We have six, they haven’t changed, they’re the same six that were discovered before I ever arrived. And then how do you use them? You use it to shape your culture. You want to be very deliberate and preserving the culture that you have so that you can attract like-minded people and repel those that aren’t a fit for your organization. It doesn’t mean that they’re bad people. One of ours is dedicated to winning. Okay, so we like competitive people. We attract that competitive people thrive here. If you’re not a competitive person, doesn’t mean that you’re a bad person. It just means that you’re probably not going to be happy with us and it’s better for you to go find a place that you can thrive and fit in better. So the tool that I really like is the people analyzer from EOS, where you identify your core values, and then you rank people, each of your people against those, and you do a quick, simple exercise. And once you learn to trust it, it’s amazing how fast you can really get a grip on understanding how your people are doing instead of talking about an issue or a person meeting after meeting, or for 20 minutes with no resolution, instead, you can say, what are the core values? Core value number one – plus if it’s they exhibit that most of the time, plus minus if it’s sometimes yes, sometimes no, and a minus if it’s you know, mostly they don’t exhibit that core value. And then you simply set your bar. Anybody that gets a minus on a core value needs to go. Putting people through the people analyzer is one of the best ways to understand what it is about this person that has been troubling you all along, which trait is it? And then you confront them and you tell them, here’s the trait that you’re struggling with. You give them 30 days to try to address it. And if they can make meaningful change great, but if they can’t, then you just have to acknowledge. It’s just not a fit for the firm. You’ve got to move on.

Chris Dreyer

And then the third one I wanted to cover is a process. So personal injury, law firms, many old school firms, they have these 50 to 200 page operations manuals just kind of sat in the corner and collecting dust. What steps can a personal injury law firm take to improve their processes?

John Nachazel

So, one is, you want to, it’s exactly what you just said. So you think about that a hundred plus page manual that was super expensive and time-consuming to put together, and then it sits somewhere and it just collects dust and it’s worthless. It’s a waste of time. So what a better approach is to identify that handful of processes, maybe six, even six to eight processes, core processes, and then follow the 20/80 rule to document them. Document the 20% of steps that it would take to have someone really understand the essence of what’s being asked of them. So you want to end up with three to five, maybe six pages of how someone should execute a particular task. If it’s more detailed than that, then it’s overkill and it’s never going to get used. And then what we’ve done is we have taken those processes that are core to what we do and how we develop cases and handle cases and we have embedded those into our case management software, which is Case Pacer. And we have ticklers that automatically pop up every time something needs to be done. And so the process is embedded into the software, the training manuals, the process manuals are there if you need it as a reference, but really if you just trust what’s on your screen and you follow the instructions and do what the system is asking you to do, then you’re forced to comply with the process. And it’s a beautiful thing.

Chris Dreyer

Absolutely agree. And so many of the individuals listening maybe have a handful of employees, like when is the right time to consider EOS, if they’re considering it, how large should they be? When should they start? What’s that process look like?

John Nachazel

So Gina would tell you, you know, anywhere from 10 to 250 employees. I really think that all the principals though in Traction and Fireproof can start with a solo, can start with three people. And one of our Fireproof clients actually is a three-person firm and adding a fourth, but, you know, why wouldn’t you at least begin with the right principles and the right practices? How long do you want to wait to experience that serenity that comes with having things under control? How long do you want to wait to have clarity that the data can provide and have clarity on what your mission is, where are you going, and what type of people do you want to go there with? So I really think there’s, you know, in reality, it’s never too small. And so I just encourage anybody to get that outside help and bring that outside expertise.

Chris Dreyer

Great points, John. Great points. So shifting over to personal here, you know, I believe you’ve been within around the Michigan area for most of your life. So what do you love about Michigan apart from work, what keeps you there?

John Nachazel

So I feel really blessed to be in Michigan. And it was, you know, maybe more accidental than anything, but I’ve been here since high school and after growing up in Kentucky and Indiana. So, my favorite thing in the world is water you know, other than family, of course in my, a lot of my family is here. My wife’s family’s all here, so, but I like water and then it’s like, okay, well, do I like freshwater? Or do I like saltwater? I like freshwater. All right. Well, do you know small inland lakes or big water? I like big water. Well, oh, my gosh I’m surrounded by the great lakes, what a fantastic thing. And we bought a condo right on Lake Huron and one of my favorite things is just to go up there and enjoy the water and everything that it can bring.

Chris Dreyer

That’s incredible. Yeah. We have the Lake of the Ozarks pretty close over here and I really enjoy it.

John Nachazel

It just calms me and it’s fun, it makes me happy, it always has. And I mean just how blessed am I that I, if I could have picked anywhere in the world, if I looked spun the global round and I said, okay, where’s the biggest bodies of fresh water in the world? Well, they surround Michigan. Cool.

Chris Dreyer

Yeah. Yeah. That makes sense. So you spent a lot of time working alongside the motor industry and you saw tons of vehicles. So what’s your dream car?

John Nachazel

Well, right now, my dream car is the Ford F-150 I’ve never had one, a couple of my brothers have one, my son has one. Maybe I’m just jealous of them. I love the Rouge factory tour. My dad worked at the Rouge factory years ago, early in his career. I worked at Ford for six years so I would love to, you know, I always try to be thankful they paid for my graduate school education gave me my start to my career. So I try to be loyal to Ford when I can and employ people in my own community, try to help them out.
So, and we have a black lab, a leader dog, future leader dog puppy, that we’re training and she’s gotten bigger and kind of crowding us out of our current vehicles. So it’s time to just suck it up and get the big honkin F-150 and get a boat to pull and all the things and have a limitless life.

Chris Dreyer

Living the dream there. Yeah. So as we close up here, John and I are three for three, it’s just three questions and three minutes, it’s a quick hit around. So I think you’re going to understand where this first one comes from, but what is your top search engine optimization tip?

John Nachazel

So I would say the GMB really getting the Google My Business page optimized. And if you’re not doing that, then you’re missing out.

Chris Dreyer

A hundred percent agree. And which entrepreneur do you admire the most?

John Nachazel

Boy, is it Henry Ford? Because he just killed it for execution. He did not invent the car, he invented the assembly line, or at least he applied it to the auto industry and it was that obsessive detail. And just, I guess, having that beaten into my brains from all angles in my career, in my taking my children on field trips and whatever, I’ve been exposed to a lot of it and admire him.

Chris Dreyer

Great. Great. And what is the next thing on your bucket list?

John Nachazel

Well, I’ve been told that the next thing on my bucket list is to write book number two, but I never planned on book number one! We’ve had different ideas thrown at us, but I guess I want to keep, you know, and I thought about teaching Fireproof at the university level. That might be kind of fun. I was able to teach at a law school as a visiting guest once and it was really fun and rewarding. So, so maybe it’ll be that. But right now I’m really enjoying, continuing to run the law firm and continuing to grow Fireproof and helping others experience the same joy and profitability that we’ve been able to.

Chris Dreyer

Awesome. I love hearing John’s thoughts so much his vision of core values, aligned employees, and scrutiny of data are a killer combination. Line those up with a laser-sharp execution and a jumbotron and you’re onto a winner.
You’ve been listening to The Rankings Podcast, I’m Chris Dreyer. A huge thanks to John Nachazel for joining us today. And you can find more info, as always, in the show notes. And we want to hear from you! Has John Nachazel finally convinced you to throw out those operations manuals gathering dust on the shelf? Send us a review and let us know! Thanks for listening. We’ll see you next time.

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