130. Tighe Wilhelmy, Velawcity — Law Firms of the Future: Mass Torts and Hyper-Growth

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Investible law firms are on the not-too-distant horizon – growth is a guarantee. The consumer protection sector alone is expected to explode from $2 Billion to $4 Billion in the next two years. Can your firm handle the growth?

On today’s episode, I discuss the future of the legal industry with Tighe Wilhelmy, CEO at Velawcity. We get into building a strong foundation of systems to operate with increased velocity and diversification in mass tort cases. At Velawcity, he and his team provide case acquisition and administration services to law firms nationwide for mass tort, class action, and mass arbitration lawsuits. They have served over 250 clients and managed over 300 mass tort campaigns.

What’s In This Episode?

  • Who is Tighe Wilhelmy?
  • What systems do mass tort law firms really need?
  • How can a firm increase the velocity of cases closed?
  • How can a firm be automated during hyper-growth to capture a larger market share?
  • What assets should a mass tort firm be building for growth?
  • Why are some of the best mass tort cases held close to the vest?

Transcript

Tighe Wilhelmy

It’s exactly where the industry is going. And if that’s not how your mind is thinking, you’ve already lost.

Chris Dreyer

The consumer protection sector is expected to double to $4 billion in the next 12 to 24 months. Gain market share the right way by picking the right vendor to help your firm get the most outta mass tort litigation.

Tighe Wilhelmy

In order to increase access to justice, the infrastructure needs to evolve. It needs to become more progressive and it needs to support other businesses being able to be built on top of it.

Chris Dreyer

You’re listening to Personal Injury Mastermind, where we give you the tools you need to take your personal injury practice to the next level. Tighe Wilhelmy, CEO at Velawcity, provides case acquisition and administration services to law firms nationwide for mass tort, class action, and mass arbitration lawsuits. He and his team has served over 250 clients and managed over 300 mass tort campaigns. We discuss the future of the legal industry, and the impact of the Arizona rulling for outside investments. And how to pick a vendor that can tackle the load of an industry that is about to explode. I’m your host, Chris Dreyer, founder and CEO of Rankings.io. We help elite personal injury attorneys dominate first page rankings with search engine optimization. Being at the forefront of marketing is all about understanding people. So let’s get to know our guest. Here’s Tighe Wilhelmy, CEO at Velawcity as he explains how his services have evolved over time.

Tighe Wilhelmy

I’ll do my best to answer what I would consider a hell of a loaded question out of the gate. But yeah, long story short, it’s been a journey, man. It’s been a journey I got into the legal industry while I was still in college, arizona state go devils. And basically if you can graduate from Arizona state, that’s as much of a degree as you need. And if so came out of college and started a legal YouTube. This was back in the days of directories and all you really had to do is have a pulse and a backlink and you could charge a hundred dollars per local listing. That was the idea behind that. If you build it, they will not necessarily come. We were ahead of the curve. In my opinion we were producing video nationwide. We had over 52 local production facilities in our network that we had set up at a fixed rate. Sending lawyers in to do FAQ’s and profile videos. And, oh man, we thought we had just nailed it. And it was just, it was such a massive undertaking, the amount of infrastructure and SEO and organic presence that was needed in order to prove value to consumers and lawyers was too much of an investment. So after doing that for about five years, I think the biggest takeaway that we learned from that experience. Was ultimately lawyers want to pay X, get Y and have that be worth Z. And hopefully that Z is in the black and profitable somewhere. And after we took that on the chin with our first experience with Local Lawyer Guide was the name of that venture. We pivoted and my now business partner came on board at that time and. We got into lead generation and that’s where we learned much like any other parties in lead generation that it’s either your fault or it’s the intake company’s fault. And after enough of those conversations, we decided we need to control more of the final control enough of the variables to where we could defend ourselves against people that argue for a living. We ultimately got into marketing and intake services. We recently acquired a contact center in January of 2022 this year. And it’s really turned the next chapter for us.

Chris Dreyer

Everyone knows the value of video I always wondered from your perspective is in, this is highlighted in Hormozi’s book. The a $100 Million Offers, like what makes a good offer is decreasing the effort and sacrifice by the client. Was that like a big hurdle, like trying to get them involved, to show up prep, to do, to do scripts, to. To do the work. Was that one of those big challenges from, or was it just, it, was that just a small piece? Was it logistics? What kind of went into that

Tighe Wilhelmy

In terms of some of the obstacles that we experienced, the logistics were an absolute nightmare. The preparation was a nightmare. Contrary to popular belief. As well-spoken as attorneys mostly are they are a absolute disaster in front of the camera because anybody is, was really what we learned. It doesn’t matter who you are, how well-spoken you are, how articulate you may be when the camera goes on and the lights are in your face, you freeze. And unless you are accustomed to that it drew out the durations of our schedule. It made the lawyer uncomfortable, which is not a pleasant experience when people of that status are uncomfortable and not in their flow state, if you will. Between that, and then the economical challenges of video production, being more of a one-off expense and asset, there’s not much need to continue to go back to the studio, which is an uncomfortable experience and produce more videos so that you can market yourself. It’s more of a long-term assets limited lifetime client value. And we were really failing from a number of different areas and that’s when we decided we needed to find the next thing we knew, we had the education and understanding of the ecosystem at that. I mean at that point, what was this 7, 5, 7 years ago? You could ask me anything about all 130 plus many practice areas across the United States. And that could have at least shed some light in some capacity on them. We were getting our PhD in legal at the time. And yeah, like I said we had to figure out what the next thing was going to be.

Chris Dreyer

I appreciate the vulnerability and the transparency, and I’ve always wondered that from the cashflow perspective too. And I, I’ve heard this saying that, when you do just project only work you’re one project away from going out of business every time. Because you always got to get the next project and . I really applaud you as is going right into lead gen, Hey, results oriented, you’ve got to deliver. So when you launched Velocity, what was going in your head, In terms of developing that offer?

Tighe Wilhelmy

Vulnerability is has been kind of part of the process that I’ve learned at least failure typically results in success. I I hate that methodology, but I am just another statistic in that regard. We were in survival mode, Chris. Every day coming in as if it was going to be our last paycheck. When we were shutting the doors on Local Lawyer Guide, I was returning from a trip from South Africa. Which was about a 45 hour travel day. I landed back in Phoenix and the next day I let go of 12 people, one after another, and thought I was going to be met with obviously some contention. And that was met with. Sadness and empathy. And we loved working here and we loved working with you and that just made the situation all the worse. But coming out of that we were very frugal. We were very lean. We were very pragmatic on what every single next step was going to be. And for those that we were close with on the client side, during that one to two year transition, They know that we weren’t selling anything. Chris, we were going, I was continuing to do my public speaking. We were continuing to sell what we were ultimately looking to sell, but we weren’t taking orders. We were really doing a lot of thought leadership and rebranding at the time. And we ultimately deployed a champion defender tactic with different contact centers in the legal industry. And what we found were that not many of the existing intake solutions were of high enough quality in our eyes. And so through that process and trials and tribulations during that kind of one to three-year timeframe, we identified a contact center that we had a really good relationship, really good working professional relationship with. And after a couple of years of that decided, Hey we need to make this a more formal. the rest is history in that regard.

Chris Dreyer

Great vendors will take the time to understand a client’s pain points, listen, and ask what they REALLY need. Tighe has served over 250 clients – He shares what happened once he started reading between the lines.

Tighe Wilhelmy

And once we started doing that, the rest was history. we started doing the marketing, we started doing the intake, but more importantly, we started really focusing on their downstream business. What happens after you get that signed routine? What happens then what happens with the consumer? What happens with the client communication? What happens with the automation, the record retrieval? Are you able to pick up the Baton and start moving? Great thereafter. Or did we not do our job in a manner that allowed for continuity or automation on the other side of the fence? And I think so much, so many marketers, so many lead gen experts come into the legal industry from their world thinking I’m going to do so much business for you. Not realizing not all attorneys can handle 1000 new clients this month. If the most amount of clients they’ve ever had in a given month is 35. And I think that’s a responsibility of somebody from the marketing perspective to understand in, an advance of what’s going to happen to that attorney.

Chris Dreyer

So you’re concentrating on the entire throughput, from end to end. And I imagine you can see where those bottlenecks are and the throughput and how you can overcome those different issues for for your clients. I know you focus a lot on mass torts and you can do it from a, like a lead gen perspective, have you tried to do it for like motor vehicle accidents or is that more like on the demand gen side where it’s more, creating demand? or. Is it really the sky’s the limit for your prospects?

Tighe Wilhelmy

We really did give a good faith effort to motor vehicle accident and nursing home abuse type cases over the period of a couple of years back in probably 2017. And we thought we were having success. But the problem with those practice areas where some of the damage caps obviously you have state by state jurisdictional issues. And on top of all that. You have preferential obstacles meaning each offer or a managing attorney feels differently about a soft tissue case versus a broken bone case. And what they’re willing to accept there or not. For that matter nursing home was just purely a. Damage cap type of issue, unless you could really tap into corporate back to entities, but we quickly moved out of those areas, wore them off the amount of infrastructure and back office required to support those practice areas was just unreasonable and our eyes. we were pretty sensitive to anything that required too much human capital on our side or investment. The mass tort was an easier practice area to get into and really cut our teeth on. It was universal criteria. Everybody seemed to be on the same page from a leadership level and obviously the economies of scale and the numerosity of cases was much greater in general. So that’s really where we cut our teeth. And since then, it’s been a matter of. Okay, let’s get in with these attorneys. Let’s help them build this infrastructure. Let’s listen to what new ideas they have and, for those paying attention to the global industry, the industry as a whole and mass tort are understanding that it’s evolving right. You’ve got your, what we consider now, your legacy drug and device type of claims, but more so lately you’re seeing this expand into a bit of a gray area that now includes environmental litigation, sexual abuse litigation. You’re seeing a number of laws be pulled back in the case of sexual abuse to what some states have adopted as 1985. And so you’re going to see this. Big window, maybe three to five years where we’re going to see more sexual abuse cases filed in this country than in the entire history combined So it’s very fascinating developments happening in the space, new verticals opening up, but more or less, we look at it as. How can we take what we do now and take the printing press approach to set up all of these ancillary verticals that are emerging now that legal is going through, would it be what is ultimately a hyper-growth situation?

Chris Dreyer

Because you have those standards, you can set KPIs, you can get your numbers right, where it’s a worthwhile investment in terms of your cost per acquired client. Those key numbers that all marketing and business owners want to see. I’m sure many of the personal injury attorneys listening, you’ve got a successful practice. You want to get into mass torts. Hear a lot of people doing it seems a little overwhelming, what’s the process. What if the client likes their intake? Do you take over just the other portions? What does that process look like?

Tighe Wilhelmy

My answer to that question a year ago would have been different than the answer today. So I’ll try to address a couple of the questions in there directly, and then I’ll go back on my soap box, the answer to if they have their own intake, would we provide strictly the marketing for them to work up on their own? The answer isno. We really try to stay laser focused in what we do. And if what we did was simply marketing and intake. I think the answer would be sure why not send our leads to a firm for them to work up, but it’s so much deeper than that, right? It’s well, how are you going to handle these 500 cases? What is your record retrieval process look like from there? How many days is it taking you to get that back? And we’re consulting on. I would say at this point, litigation funding, lien resolution record retrieval, really trying to create that continuity amongst all of their vendors. Most attorneys that are doing this type of work, aren’t in touch with the ecosystem as a whole, it’s get cases processed the cases. Get cake there are so many steps to the equation involved that some may or may not know about. Who’s going to champion the galvanization of all the vendors to ensure that things are being done in as expeditious a timeframe as they should or could be. And so that’s really why we’ve. Stuck to our single business model and not tried to a la carte our services in that regard. You’re an end to end solution because it’s a better solution, you’ve had more reps, you vetted the intake. You understand the key KPIs. That’s what I’m hearing. So say you have clients that have a great domain authority, right? They put up a landing page and they can rank for these torts.

Chris Dreyer

Does the process then work instead of Hey, sending the lead instead of that, sending it directly to. Maybe their intake, maybe they send it to your intake and maybe it’s just bonus. Is that something that you could do or, Hey, continue to send it to yours, but we’re doing, you pay us for us. And that’s what we’re doing.

Tighe Wilhelmy

Yeah. You’re the timing of your question at this stage of our business is fascinating because we in acquiring that contact center, in theory, we can now offer intake services to the masses and this can be a new revenue stream. And ultimately what we’ve decided here as a leadership group is that’s not the business we want to be in. There’s two businesses. I don’t want to be in record retrieval and intake. Intake services and record or Shreve. We’re both low margin, high minutia. you’re most of the time, the bad guy, whether you’re right or wrong, you’re wrong. And so that’s just not the business I like to be in. Whereas however, I say, it’s a fascinating question because. In our line of work, we’re obviously an attractive vendor, right? We create assets for law firms for which they can go and use as collateral and ultimately finance the growth of their law firm or whatever future endeavors they may have. So naturally we are highly sought after we are typically turning most clients down. I hate the word boutique. I don’t like to use that to describe our firm, but in terms of. How many clients we work with comparative to some of the other top tier lead generators in the space. It is certainly a fraction of that. And we do that intentionally, right? We want these relationships to be hyper intimate hyper personal friendly and commercial. Our best clients are typically sharing information with us. We’re sharing information back with them and we’re looking to take over the world together, right? How do we build the most elegant machine together? And I think when it comes to the intake, we’re open-minded to helping out in certain capacities, whether it be customer service or, one off campaigns, but those are case by case situations. Our contact center is most definitely an internal contact center.

Chris Dreyer

So we have a lot of that common, right? So we limit the number of clients that we work with for a lot of reasons in terms of quality and you keep clients closer to the executives because everyone knows at the top of Bloom’s taxonomy. When you’re moving from recall all the way up to analyze and synthesize. Those are like unicorns, right? It’s harder to find those. And so when you just have a wide span of control, it’s further from the executive. that lends itself to better quality. Let’s say hypothetically, right? You got this PI firm, they get a great reputation, a great brand. They got a lot of capital, they want to invest. They want to add on to that. To their practice and really go in to torts and they are the avatar. How does that perfect relationship look like?

Tighe Wilhelmy

That relationship typically kicks off with probably my co-founder and chief strategy, officer Phil Botiero for some of those marquee client type relationships that the question becomes, what’s the plan, right? Sure. Let’s say you come to us and you want to get, you want to double the size of your Zantac docket. Get you want 2000 more Zantac cases and we’re going to burn and turn until you damn near get that right. The question becomes, what are you going to do with that? Who are you co-counseling with? Where’s your funding coming from? Is that a stable source of capital? Is that being released in traunches on a weekly, monthly or quarterly cadence? Are we being expected to operate as a clearing house? How is this going to play out over the next three to seven years? Because so many of these attorneys, quite frankly, can’t even do napkin math and that’s not a shot at them. It’s just the, that’s not what they went to school for. We all know the old adage at this point, but the ones that are good can do the napkin math. And that seems like such a. Such an audacious statement, but in the case of 3m earplugs, when these cases start to get up to an acquisition cost of $1,000 to $1,500, The odds of you making an ROI three to seven years after calculating for the time value of money and your cost of capital over that three to seven years, whether that be debt or equity based is probably going to put you upside down. And so when I say we’re creating assets for attorneys, For every new claimant that they retain under our services, that is an asset. It is worth a certain value, a perceived value. And that is substantiated by all the litigation funders that have been in the space and are now swimming around the space and inserting themselves, which has grown 3, 5, 7 X in the last 12 months. but large in short we’re creating assets. And what happens to those assets? We do have a vested interest in.

Chris Dreyer

How important is the timing in terms of being first in, on the talcum powder or the, or Zantac or whatever, from an SEO perspective, it’s huge because most of the individuals canonical lies themselves from the original source of information. That’s a really nerdy term but basically it is the source and everyone else’s a duplicate of it. So timing’s really important from SEO. What, how important is timing? For these torts. Yeah,

Tighe Wilhelmy

Boy, that is another loaded question. The strategy behind when you get in and in what capacity you get in is an ongoing conversation with any client and that is different from client to client. So I’ll give you my overview but generally speaking. At the onset of these litigations, sometimes they’re held close to the vest. Sometimes there’s NDAs involved. Sometimes people think they’re the only ones that know about these cases. When in reality, we’ve gotten 10 calls that week. Getting in early and getting in fast in hard allows you to accumulate a asset class, at a low cost basis, at which point you’ve gotten a leg up on the competition. Now, the question becomes how large of an asset class do you develop? Because it’s still early, the science isn’t there. You’re going off of a lot of hearsay, probably a coalition of firms that have put in the hours and due diligence. And that could be weeks, months, years in some cases on these litigations. And so it’s not to say that they’re not well vetted, but it is to say that it hasn’t gone through Dobber and it hasn’t been stress tested with true experts in defense counsel on the other side, everything sounds great when it’s five people of the same opinion wanting for something to happen. Lawyers are great at discerning, but it doesn’t change the fact that there’s no defense counsel sitting there. There are no experts being waved in or excluded from these litigations. So pre Dobber pre science day as it’s also referred to is a risky time to get in these litigations because you don’t know what’s going to happen right afterdobbert there’s some data out there with litigation funders, where they feel that after science day, if it makes it throughdobbert or, you typically see a 90 plus percent chance there’s some figures as high as 95, 90 9% chance of a return on your investment. Now that’s a big assumption, right? Assuming that you’re processing these correctly and that you’re got your house in order, which many firms do not. But at that point, at that inflection point, we typically see a big surge. we typically see big surges in investments coming out of like the call them Kool-Aid fests, like MTMP and national trial lawyers. And that’s not a knock on them. It’s just, anytime you have a large congregation of people from one industry. You’re drinking booze, you’re eating burgers and pizza, and everybody’s getting hopped up on the same two or three claims, whether they’re victorious or not. We typically see a big surge. So some people that are, I think, more savvy in this industry, keep things close to the vest until after those major conferences. And then they try to get a headstart with their coalitions. And by that time it’s not an oversaturated market where the cost of acquisition is going to three X in the course of two, three months.

Chris Dreyer

Diversification is essential. And thinking about capital allocation more like a portfolio than a single investment will put your firm ahead of the curve as legal becomes a major industry.

Tighe Wilhelmy

It’s exactly where the industry is going. And if that’s not how your mind is thinking, you’ve already lost. The legal industry is experiencing hyper-growth because of the Arizona rule change, which allows for non-lawyer ownership and essentially people without a bar license to, to experience or share and fees, or be compensated in some fashion legally now there’s still some gray area and contention and debate on how that applies to all the other states and especially states like Texas and Tennessee and so forth. But lo and behold, those are probably short-term debates in the end. The reality is that legal is an emerging industry. Soon to be a major industry the returns are unlike any other it’s better than insurance. It’s better than a real estate. In some cases, if it’s done right. And so in terms of how to look at the industry, how a lawyer should be considering their acquisition of these cases, it’s absolutely a portfolio. And I use the word assets and asset classes intentionally because I’m trying to shape that narrative with firms moving forward. So many of these conferences talk about the litigation updates and what’s going on and what’s not going on and who’s screwed over who and why we don’t like this person anymore and blah, blah, blah, blah. Very few conferences, very few organizations in this space center, the conversation around vendor forward. And how we are planning to handle this expansion of the addressable market by two X. Right? How does it market go from 2 billion in consumer protection to 4 billion? Because that’s, what’s happening. That’s how that’s what’s happening right now. New York won’t stop until that vending machine takes another $2 billion in a timeframe that’s totally unrealistic. And I will go on record to say, I will quote my business partner, that all boats don’t rise together. So if you think that us as a vendor and all these other vendors that you use in some are vetted in some are unvetted are going to be able to process an additional $2 billion in this industry over the next 12 to 24 months. You’re out of your goddamn mind. So yes, it does need to be looked at as a portfolio. There’s certain times where you may need to de-risk yourself and offload some of these towards or stop acquiring some and acquire some others. We’ve seen kind of two trains of thoughts per predominantly with firms that we work with either. They’ve got a shotgun approach and Hey, we’re going to, we’re going to get involved with seven or eight of these. And we’re just hoping that at least four to six of these play out and if they do, and we did our math, we’ll be okay. We don’t know to what to do. But we should be okay. And then you’ve got the other side of the coin where, Hey, we only get involved with one, two, maybe three at a time, and we outsource the rest and refer those out to co-counsel. But those are the two trains of thoughts. I think that what you’re going to see. Moving forward is a larger trend toward the former and a larger portfolio base. Significantly more capital involved. You’re going to have more intimate relationships with vendors like ourselves, refusing to work with the masses and only those who have the infrastructure systems and processes to actually take these things across the finish line at scale. And so this consolidation is definitely upon us. And I think that if you’re not looking at it from a portfolio and a capital and a wall street level, there’s going to be room to be remain a local mom and pop or local PI firm. But if you’re looking to get in to mass torts right now, I hope you’ve got eight figures behind it, or else I would put your money in your piggy bank and go invest it in real estate like your grandfather suggested in the first place.

Chris Dreyer

Tighe has spent over a decade watching the legal industry evolve. He sees infrastructure as the future of the legal industry.

Tighe Wilhelmy

It’s the basis for which they changed the Arizona rule here. And I think so many people are getting in from a marketing perspective and there will be beneficiaries that, get through that maybe were not the intention of the rule change. But in order to increase access to justice, the infrastructure needs to evolve. It needs to become more progressive and it needs to support other businesses being able to be built on top of it. So we’ve moved forward with a handful of new ventures that we’ve gotten underway. This calendar year, last calendar year Toward X, that is going to be the name of our law firm. We feel strongly about that being. A more friendly B to C brand. regardless of how good of a brand that learner and Rowe and Morgan have, which I would consider, hallmark brands in this industry. The truth does not change, which is that inherently human beings in the USA, having angst toward attorneys, whether it’s deserved to run deserved and less than I’ve met plenty of amazing attorneys in this space. And I think that the stigma is unfortunately not deserved and certainly not by the clients that we work with. But we will be praying on that. We will be looking to create the Amazon of lawyer representation, because that’s what consumers gravitate to. And if you can’t see that, and if you’re trying to continue to invest in your something and something last name brand. I think that’s ultimately going to be a losing battle in what is going to be the parallel development of every other industry in the world. Every other industry, real estate, Zillow, insurance, Select Quote. I don’t see any names in there and that’s, what’s going to happen with legal.

Chris Dreyer

I see so many advantages to that in terms of, legacy and taking capital and how you can advertise, So

Tighe Wilhelmy

Tort X we’ll be live within the next 30 to 60 days. Our other project, is called Cross X. And this one is especially valuable. We in this marketing advertising space over the last 10 years have seen fraud go up from the likes of five to 7% on any particular litigation to most recently with Boy Scouts and Zantac up to 25, 30 plus percent. And there’s one primary reason that is it’s the legal industry is going through a boom and every Joe Schmo out there knows about it, and the attorneys don’t necessarily have all the systems to detect that fraud. So Cross X is a fraud prevention software that we are launching as we speak should be go live through beta at the end of this month. So live by July 1st. All we hope to do is cut back on the amount of fraud that’s coming into this space so that we can ultimately put ROI back in the hands of plaintiff counsel, reduce the administrative constraints with court systems and their admin staff. Present a little bit more clarity, bring back some of the integrity defense counsel will be in favor of something like this as will the judges. So that’s my SAS kind of data project on the horizon that I hope you keep an eye out for. And other than that, hopefully find some time to hit the beach and relax your soon.

Chris Dreyer

Set your firm up for success by focusing downstream of client intake. What happens to client communication, automation, and record retrieval? Before building the marketing flywheel, have the correct systems in place so that you can scale your firm with unreasonable velocity. I’d like to thank Tighe Wilhelmy from Velawcity for sharing his story with us, and I hope you gained some valuable insights from the conversation. You’ve been listening to Personal Injury Mastermind. I’m Chris Dreyer. If you liked this episode, leave us a review. We love to hear from our listeners. I’ll catch you on next week’s PIMM with another incredible guest and all the strategies you need to master personal injury marketing.

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