Fired to Founder: Building and Running a Mega Plaintiff Personal Injury Firm

Katya Valasek:

We're joined today by Mike Morse, a plaintiff's personal injury lawyer who operates a mega plaintiff's personal injury law firm. Your firm is your namesake, the Mike Morse Law Firm. Under your brand, you have 50 plus lawyers and about 150 non-lawyer employees, but you didn't start here. You actually started out at a small personal injury firm. How did you get from one to the other?

Mike Morse:

Well, after three years of practicing law and learning the ropes and how to work up a file and take a deposition and try a case, on September 21st, 1995, they unceremoniously fired me without warning. At lunchtime, two of the partners took me to lunch and said, “we don't want you here anymore.” And that was a Friday. I remember driving to Chicago for the weekend to see my family, my mom, my stepdad. And on Monday, I opened a law office, the Mike Morse law firm, and haven't looked back since.

Katya Valasek:

So that had to be, first of all, traumatic and stressful to experience. How did you even know how to start setting up your own law firm?

Mike Morse:

I really didn't. The short version is I had a friend who was a solo practitioner. He was a good buddy out of law school, Jason Wechter is his name he was referring me injury cases and we became good friends. And he says, come to my office. I have a shared office situation. I think there were probably eight lawyers there and they all shared conference rooms and receptionist. So I walked in, met the owner of the suite, negotiated a nice size office for a thousand dollars a month. I asked him if he'd throw in a chair, a desk and a couple of chairs for clients because I had nothing.

And then my buddy Jason taught me how to get a phone number, how to set up a bank account, you know how to do everything. But by the end of that day, I was running and I was operating. He had cases that we could work on together and we worked out some kind of arrangement for that. And that's, you know, what I did. That's how I started.

Katya Valasek:

You do contingency fee work, which means you're paid at the end. This means it took some time once you opened your doors to your own firm to get money rolling in. How did you survive this time?

Mike Morse:

My average case was the same then as it is now. It's about 18 months up to two years to get your fee. so my dad died when I was in law school and I'm a decent saver from those first few years. So I had a little bit of a nest egg. I mean, we're not even talking six figures, but I had enough to eat and live on. But the truth is I looked at it like if I didn't settle cases, I wasn't going to be able to feed myself and my family. And lots of cases do settle within two, three, four months. And so I was focused on those. I remember cases, you know, trip and falls where you could make a $25,000 settlement. That's over an $8,000 fee.

Back then, that was a ton. I literally thought I won the lottery. I still have that drive in me today. I don't take any of them for granted. If a client fires us or I get a one-star review, which happens to every single lawyer in this country, I take it personally. I get on the phone. I figure out what happened. I think that's one reason the firm has been successful. there's a lot of important things. That's one of them, keeping clients happy, making sure customer service is, you know, perfect.

And when somebody is not happy – because I'm not working on those files much anymore, right? And I have 55 lawyers and so training them, mentoring them, letting them know what's important. That's my job.

Katya Valasek:

Your origin story starts with this terrible experience of getting fired, but you were very lucky in a way that you had someone who was referring you clients. They had space available for you to move into the shared office space. And you had the understanding that if you settled cases, you would start getting some of that contingency fee rolling in more quickly than if you went to trial. So, it takes you some time. You find your footing. You're in a position then to grow your firm. Who were your first few hires?

Mike Morse:

Oh boy. So, I've always had kind of a scarcity mentality. If I made a little bit of money, I was not looking for employees right away. I was working harder. When I was hitting the ceiling and I just literally couldn't do any more, I would hire a part-time secretary, a part-time attorney, I would see where I could get some help. The answer is it was a full-time attorney before a full-time secretary. And then it was, you know, the part-time secretary turned into a full-time secretary. And I was lagging in my hiring. I should have hired them earlier.

Your firm will grow faster, better, stronger, the more you have that team in place and you're not just a solo. I was just petrified, right? dad died in law school. I was at 21. I got fired from my first job at 25. I'm getting married. I'm having kids. Like I was petrified.

I had one of my mentors say to me early on, If you, you know, you're going to pay somebody a hundred thousand dollars a year. You don't have to write a check for a hundred thousand dollars. My old mentality was you're on the hook for that a hundred thousand dollars. I didn't have a hundred thousand dollars in the bank.

He was like, “look, if it doesn't work out, if they're not the superstar you think they are, they're not going to be here for more than a month or two, right?” Oh yeah. And then I did the math. I'm like, okay, I can afford that. I had to shift my mindset that, you don't have to write a check for the full salary at once. And before I knew it, you know, you have 10, 20, 30 employees.

Katya Valasek:

So I think it's so interesting to listen to you share about the things you consider when you're hiring someone from getting over to that initial fear of the expense of having employees working for you to the way you've worked to identify people that are going to meet the needs for your firm when you hire them. I'm curious to see if you do that deliberately because you think there's a difference between running a business and running a law firm.

Mike Morse:

I don't think there's a difference. I think a law firm is absolutely a business. And not all lawyers agree. Many, many, many lawyers don't agree. And you could tell by the way their law firms look and act and sound, and you can see the turnover and you could see the chaos. In fact, twenty years ago, one of my competitors told a friend of mine, “Morse isn't even a lawyer anymore, he's a businessman.” I'm like, that's a compliment, right? My first 13 years of running my practice, I didn't know the first thing about my numbers, didn't know the first thing how to hire properly, didn't know what a core value was. Like, nothing. And then I had a business coach and he explained all these things to me. I'm like, “oh my God, this is what I've been missing.” Teaching me how to delegate, teaching me all the things that I know now. And my business took off, we were at a hundred people within a few years because of that. And people wanted to keep hiring me because of the professionalism that they saw and it wasn't just a mom and pop, two, three people sitting around, messy offices, lots of paper, you know, the traditional old, that was my dad's law firm. And I love my dad and he was a great lawyer, but he was a two, three-person firm. It's all they could handle. They had no concept of how to scale or grow a business. And there's still a ton of firms out there operating like they're in the 70s and the 80s and the 90s.

Katya Valasek:

Well, it's clear that there's something different about your firm because a lot of firms grow to the size of your firm by being a general practice firm. A little litigation, a little transactional, some regulatory work. But you really have focused you and your team on personal injury and specifically auto, truck, and motorcycle injuries. Why not diversify?

Mike Morse:

That's a great question. It's funny because we get 80 med-mal calls a week. We get 50 divorce calls. We get 30 criminal calls and on and on.

I have always had this feeling that specializing is better. My dad was a jack of all trades. He could do a divorce, he could do a bankruptcy, he could do a personal injury case. And the personal injury always brought him in more money. So first of all...just talking honest, personal injury is way more profitable than a divorce case or criminal case or transactional work. There's a lot to go around. And my team is busy and we are busy. And so, you know, I opened a little social security disability practice. It brings in half a percent of our total revenue and yet we find ourselves talking about it.

And sometimes we're talking for an hour and I'm like, “Is this worth it?” Is the squeeze worth the juice? Right? I'm going to settle $220 million in cases this year. If I open a divorce practice or criminal practice, sure. Could I bring in a million dollars in fees or in, and that sounds like a lot of money. It is a lot of money, but the manpower and the time and the energy to do that, in my opinion, I'd rather spend that time, energy, and money focused on getting more personal injury cases, handling more personal injury cases, helping more people. So you've got to do that analysis and you have to know your numbers to do this analysis. So I know exactly what my average fee is for every type of case. I know how long it takes to get through the system. I know my profit margins. I know everything. And if you bring in and if you start analyzing other types of cases, you go through the analysis. Is this worth it?

So long answer to why I don't diversify, it's a business decision. And all the data shows that there's a lot of good lawyers out there who know how to do those cases and they should continue to do those cases and I'll continue to do what we're great at.

Katya Valasek:

I have to tell you what I find fascinating about what you shared about looking at the data and making a business decision is that I can see some attorneys, especially some younger attorneys, who look at the work you do and the contingency basis of it and their initial reaction might be, “oh that's not worth it. I'm not going to get paid right away.” But you do the math. And I think that is clear. A contingency-only practice requires some serious math So you're truly taking a calculated risk. Where most do you feel the tension between the clients who are people with life impacting injuries and then looking at them as numbers on a spreadsheet?

Mike Morse:

Well, I don't ever look at them as numbers on the spreadsheet. The conflict with the clients is it takes two years and they're hurting and they can't pay their bills. It's emotional. The system is way broken. And so we explained that to them upfront. Like if a client calls me and says, I have a horrible injury, I want a million dollars, but I need it by the end of the month. Sorry, I can't help you. This is gonna take two years unless you want me to settle it cheap, which I won't do. And so we do a lot of explaining and teaching early on with our clients to make sure they're part of the process, they understand the process.

Katya Valasek:

You mentioned earlier that someone referred to you as a businessman, not a lawyer. How much law are you actually practicing anymore?

Mike Morse:

if you consider practicing law just taking deposition and writing briefs, not much. I am going to trial in August, which I'm preparing for. I meet with clients and talk to clients every day. I mentor my staff and talk to them every day. I mean, I'm running a law firm. I'm running one of the biggest, I've been told top 10 person in revenue wise personal injury firms in the country. I'm the visionary of the company, I'm the CEO, I'm the 100% owner of the company. Show me one successful law firm with their owner still in the weeds, handling deps and writing complaints and doing all that. Had I not let go of that stuff, we'd still be at 30 people. I'd be helping a couple hundred people a year. I've helped over 40,000 people in my career and it's super gratifying.

Katya Valasek:

Do you ever have young attorneys who are nervous like you were financially at the beginning who are hesitant about joining a practice where the fee structure is contingency based?

Mike Morse:

Well, my lawyers are lucky because I did that for them. They get a nice salary. So we're not one of those firms who eat what you kill and that's all they get. My lawyers have a very, very nice starting salary with full benefits and they get really nice robust bonuses throughout the year, mainly in December. So there's not a big risk coming to my firm.

I mean, I've had lawyers come to me and take a pay cut because they're coming from big law or they're coming from a big firm, but then they end up making two, three, four, five, six times what they earned at big law at my firm within 10 years.

Katya Valasek:

Because it's not an eat what you kill structure, does that mean that the firm then assumes the risk of your team bringing in enough clients, getting large enough settlements?

Mike Morse:

Yeah, people always say. Why aren't you gambling? Why aren't you betting on the sports? Well, I gamble in my practice every day for almost 32 years. That's enough gamble for me, right? I have an advertising budget. I don't know. It's pushing $20 million a year. I have payroll that's pushing $20 million a year.

What if I don't get another client? What if the laws change tomorrow? What if, you know, fill in the blank? And I can't pay off that money. Most law firms take those risks, whether you're a great law firm, not a great law firm. And it's not for the weak. And so, yeah, it's a big risk. I'm taking it from my firm and I explain that to them when they need to hear it, when they need to step up and they would need to do something a little different, a little better, a little harder. And they always do.

Katya Valasek:

I want to talk for a second about some of the commercials you've done, because you've had some really fun ones. So I want to play one of your commercials right now. And then I want to dig in a little bit about what your strategy was with this one.

Super Bowl Ad:

[Construction noises]

The insurance companies hate us because the Mike Morse Law Firm wins more money than any other law firm in Michigan. They take aim, but they miss. Missed! My competitors? None of them like me. Because more people call the Mike Morse Law Firm for accident cases. They take aim, but they miss. Closer! Hurt in an accident? Call me, let’s go for the win!

Katya Valasek:

So this commercial takes place in one of those industrial axe throwing settings that are everywhere right now. People are throwing axes and stars at your face on the target. The first one is very clearly Flo from Progressive. In fact, it's so much of a likeness that you had to disclose in small text that it's not her and that Progressive did not in any way endorse throwing axes at your face. I think I also saw Jared from State Farm. There's an uncoordinated lawyer – obviously, I would assume one of your competitors – missing in a super embarrassing fashion. Then there's another lawyer who's slightly more coordinated but still misses. This ad aired during the Super Bowl, so clearly you invested a lot of resources into it. What were your objectives here besides clearly having a lot of fun?

Mike Morse:

We do spend a lot of extra money on that one spot a year. It's our Super Bowl spot. So it's well thought out for months and months in advance. The production value is high. And they're different. Every year is different.

This is several years ago. And, you know, we were growing leaps and bounds. The insurance companies were coming after us. They were alleging all kinds of nonsense. I don't even remember all the details. We beat them all back of course.

We wanted to make a statement that just because insurance companies deny claims, just because insurance companies take aim at law firms, that they're going to miss, they're going to fumble, and I'm still going to be here. And competitors too.

And first of all, I'm not admitting or denying I'll be a good lawyer right now, that the likeness of Jake and Flo have anything to do with reality. I don't want to breach any trademarks or anything. But those are definitely insurance-looking representatives. Those definitely were competitors taking shots at me. I think one of them either copied my sign or made a comment to the press about me being an ambulance chaser or whatever. I mean, nothing with any evidence. Just, when you have a meteoric rise like I did from 2011, within a few short years, we were everywhere. We kind of just came out of nowhere, took everybody, took the market by storm and people were jealous, pissed, angry. Insurance companies were denying claims and we felt like we needed to make a statement and we did. And it was a great ad. It was a fun spot.

Quick funny story about that spot. The one bullseye that you saw at the end of the commercial was absolutely real. But before I was even mic'd up and sound wasn't even on, they're like, all right, Michael, warm up. So I took the first ax, I threw it, I got it. I didn't even know my line or my face. And I just turned around, I'm like, what the hell was that? The whole crowd, all the crew starts laughing. We couldn't use it, but it was funny. And then it took me about 20 more throws till I finally got the bullseye, but that was fun.

Katya Valasek:

Presumably some of the insurance companies that you referenced in your ad are mad because of both your settlement size and frequency. Do you think you're able to get higher settlements due to your resources and the size of your firm?

Mike Morse:

Yes, that's proven time and time again. You know we hear it from defense attorneys and insurance companies alike that, so this is a little complicated, but it's been explained to me a hundred times. Some law firms, we talked about money and scarcity, and we talked about risk. There's law firms out there who can't make payroll. There's law firms out there who are struggling to keep the lights on.

Like that's not a bad thing, it's just a thing. And if somebody has a $60,000 offer on the table, a lawyer, and that puts $20,000 in their pocket as a fee, and they need that money. But if they know they could hold off for another six months and get the client $10,000 more, $20,000 more, are they going to do it? I've seen law firms across this country have to make those tough choices and settle early. And take the fee early and not be able to wait it out.

My firm with our vast resources, we can wait it out years and years and years. We don't need any money from these cases to pay the lights, the payroll, the health insurance of our employees and all those things. So when clients are looking for law firms, they need to kind of think about that. Does this law firm have the resources to go the distance? And there's a lot of firms, some firms out there, I don't know, hopefully it's not a lot, but there are firms out there who can't. And I have clients call me, “Michael, will you help me with this case? They want me to settle it for $50,000.” And I look at it, it's clearly worth half a million dollars. Why are they doing that? Either they're dumb and they don't know, or they need the fee. That's a problem. That's a problem with our profession.

Katya Valasek:

Yeah, that really says something about the civil justice system, especially for individuals who are very seriously injured in life-changing ways. How long did it take you to get a sense for when two more months was important in terms of getting that greater settlement for your client? Is that something that takes a while to learn or does it become fairly straightforward once you're in practice for a few years?

Mike Morse:

What I hear you asking about, where my brain is going is like, how do you know what a case is worth? You know, because those two months, it's not about the two months. It's about saying no. And it's an art form. I don't know. I've never really explained this. Although we do have a commercial running right this second that talks about this concept. So, basically it's, if you had a personal injury case, Katya, and you went to 10 different firms, you'd settle it for 10 different amounts of money, which my layman friends didn't understand and didn't think that was a thing. It's a thing. The better firms are gonna get you more money. Who you hire matters.

Because there's a bunch of billboards that pop up in my town. There's lawyers from Florida coming up here pretending like they have a law firm up here when they don't and trying to get my beautiful Detroiters to call them with fancy ads and fancy billboards. It's nonsense. They don't know the system. They don't know what the cases are worth up here. And so we have a campaign going right now, who you hire matters.

And it's because I've been doing this for a long time. I have 50 lawyers. A lot of my lawyers have been doing it 20, 25, 30 years. Collectively, we sit down every week and say, what is this case worth? So not only are we educating the younger lawyers, but we're talking about it. And if we say, okay, this case is worth $100,000. It prevents a younger lawyer from settling it for 20 or 50 or 75. We say no. We can look at the insurance company and say, “thank you for your offer of $60,000. We've roundtabled it. We believe it's worth $100,000 or more. We reject your offer. We're going to go towards trial.”

Still 99% of the cases settle before trial. That's just a fact. But how often you say no, listen, the more you say no, the more money you get. The insurance companies don't want to try these cases. And if they do, great. Because there's a lot of plaintiffs verdicts around this country right now, because people are sick and fed up with these insurance companies. There's a lot of nuclear verdicts right now, as they're calling them. A lot of big verdicts. And so anyway, it's a good question. I've never been asked that, but it's a lot of just a lot of time and experience really.

Katya Valasek:

So you were thrown into this solo career unexpectedly very early on in your career. Your father had his own practice. Did you think that running your own firm would be in your future?

Mike Morse:

Never, oh, no, no, nope, nope, nope. I thought, well, when I was in law school, I thought I'd parter with my dad and he had it all set up and I was just gonna walk in his door and it was gonna be Morse and Morse and we were gonna have fun together for the next 50 years.

I knew nothing about setting up a business or a law firm. Nothing, nothing, nothing. I didn't watch my dad, actually never asked questions about running a business. How does he hire people? I didn't care. I was 21 when he died. I was 25 when I got fired. I didn't take a class. They now offer something like business practice management law school. I never took that class. And so...It was just, you know, I worked in restaurants and I…I worked in restaurants my whole adolescence and that was kind of a business. So I kind of had some customer service skills. I knew what, I was a good waiter and I kind of knew what clients wanted to hear and you know, how to make them give you a big tip and you know, be extra friendly. And I just kind of use those skills when I was talking to clients. I had people skills.

But all the rest it was so foreign to me and I didn't want it. I mean I didn't want it and so it's not for the weak of heart like if people think about opening up their own practices, it's not easy but it's rewarding at the end, I guess, right?

Katya Valasek:

Was there a moment when you realized, I'm good at this?

Mike Morse:

Well, not really. Not even up till today, I don't think. I mean...

Katya Valasek:

So it's constant work.

Mike Morse:

It's constant. It's never easy. It's never, I mean, while we're, we feel like we're coasting at times because we have such a great team and we're such great managers and we're organized, but there's always issues. It's never drama free. It's never easy, easy. I mean, it's, it's easier than it was. it's more consistent. We know how many cases are coming in every week. We know how much money are just going to come in by the end of the year. There’s a very robust forecasting model. So it's definitely easier. And it's fun and it's rewarding and it gives you freedom, which is a good thing.