This episode is supported by Cleo, the leading practice management software for solo small and mid-sized law firms. Visit cleo.com/lunch to see why 150,000 legal professionals use Cleo to manage and grow their firm. Alright, as we mentioned in the news, there was some big news in the legal marketing acquisition space, and that is Scorpion's acquisition of Get Notice Get Found. And at the risk of staying the obvious, Scorpion and GNGF are competitors of both Attorney Sync and Mockingbird. And we don't want this to come across as, you know, piling on. But we thought it'd be an interesting opportunity to talk about what lawyers who are, you know, working with a vendor, marketing agency should be thinking about when a transaction happens. And Conrad, you wrote this up on the Mockingbird blog. We'll make sure we've got a link in there. What are some of the things that you would encourage lawyers to be thinking about in the context of their agency getting bought by somebody else? Sure, I think one of the most important things to think through is how does this systemically change your relationship with your agency? Or does it, right? And one of my ongoing critiques, and it's not just me, but it's lots of people, is the handcuffs, right? What does this mean for our relationship? Am I tied to you? Am I not tied to you? And Scorpion kind of really goes out of their way from a technical perspective to tie you to the agency. I think this is one of the reasons that a lot of people, you've been contacted by a lot of people. I've talked to a bunch of agency owners who have been talking to GNGF clients because they don't like the handcuffs of the Scorpion platform. What I mean by that is the website is not a WordPress website, which means the only people who can work on it are Scorpion. Some of the law firms that I've talked to have said, this has been this transition plan, Scorpion talking to all these GNGF clients. And I've heard from these people that the pitch is very much, "Oh, you need to update your website." And that means you need to move it to the Scorpion platform, which takes control out of the relationship. And I find that to be extremely problematic. The next thing that really greats my gears is, and this is not just a Scorpion thing, but I would want to make sure, and this is why you have to own your key items. You have to own your website. You have to own your accounts. You have to own your data. You have to own your Google business profile. You have to own all of your analytics. Don't give that stuff up. Make sure that when you are moving over, that you remain in control of all of that data, and you have access to all of that information. That, Gee, to me, we've talked about this in some fashion for years, and I don't understand why someone would put on their own handcuffs and strap on a blindfold and get on a path to who knows where, because you don't know. Yeah, I think you pointed this out in your post, at least alluded to it, to play devil's advocate for a second. Scorpion will say, "Hey, the acquirer, whoever is the purchasing company." They're going to say, "Look, we've got all this data that we can use to understand who your target audiences and buy media in a way that you just aren't able to do because we have more data." You know, we talk about that even in our agencies. In fact, I can point to episodes where you've said we have an advantage as agencies because we have data, and I think there's no doubt that Scorpion is arguably most data in digital legal. One of my issues here is that, aren't they using your own firm data to compete with you? Like, aren't you training their AI or whatever platform? And then aren't they using that to buy your competitor's media? And in a look, again, try to play counterpoint here, they might say, you know, look, it's not that big of a deal, because if we've got two personal injury lawyers in the same area, they're both happy and they're both ROI positive or they're hitting their growth metrics. It doesn't matter. And that's the part that's just always the rub for me. There's only so much real estate on a search result page. And it's a winner-take-most game. And so like, yes, I hear you. You could have two firms being managed by the same company and both happy with their investment. But at the end of the day, it's still a conflict of interest, is it not? And the biggest problem is you can't ever validate whether or not it's a conflict of interest, right? Because you don't have access. This is the thing that really great. I keep saying greats my gears. I sound like I'm an eight-year-old man. Great gears, sir. Great my gears. You cannot pop pork, whippersnapper. That's got a big one. I don't know. So anyway, I'm trying to make my gears, is I've never heard that before? I'll tell you this. I'm saying great my gears because I'm trying to avoid the f-bomb. I'm replacing that with the great my gears anyway. The thing that really pisses me off is you don't have access to the keywords. You have no idea what you're buying. You have no idea what you're buying. I saw that in your post and I was actually surprised. I was surprised to see that you were not surprised. There we go. There's our explicit rating. There's no way you were surprised. I don't buy that for a moment. Well, I mean, maybe surprise is strong. I can't believe that from what I understand, again, I'm happy to be corrected if I'm wrong. But from what I understand, it says it right in the agreement that the lawyers don't have access to the queries and I'm like, that should be a non starter in my view. They don't have access to the queries. So you don't know what you literally don't know what you're buying. They could just be buying your name. They could just be buying your name and you don't know. Scorpion also reserves the right to change at their own discretion where and when your ads are displayed. So in the same way that you're giving up control of your website, you are also completely giving up control of the advertising. So wait, just so we just to be clear. So if I say I'm signed up here, I'm a lawyer and I don't want to I'm like, hey, I don't want to advertise on Breitbart. I can't tell them that. I can't tell them no advertising on Breitbart. Nope. You can't take a vacation when you're not going to answer the phone either because you can't turn the ads off because you don't have that control. That's bonkers. You can't say, hey, I'm opening a new office in North Atlanta and I want to put all my ad dollars there. You can't do that either, right? Because you have no control. It's bonkers. So, but hold on. You said the counterpoint, like the data thing is very, very real. I don't I don't want to skim over that too fast. This is an email I got from someone after I wrote that article. And it says, I've been a score a client of scorpion since 2016 or so, and they have done well for me since day one. They have literally made me millions of dollars. Nevertheless, I appreciate the information. There's value in this data. I would love to get my hands on the scorpion data to make our own campaigns more effective. But I would never do that at the cost of taking that data away from my clients that I just can't live with. You know, look, people should be evaluating this from kind of where they are too, right? So, like, if you're running your own Google heads campaign, I bet you scorpion is going to beat you. The point being that, you know, there's still a lot of there's a lot of agencies out there. And, you know, I don't know if this was true of GNGF before the acquisition or not. But there's a lot of agencies that still aren't using, you know, offline conversion import to be able to manage media to at least qualified consultations, if not actual like client signups, right? They're still basing it primarily on pixel fire. So we sit here in like our like, you know, somewhat maybe condescending of the situation. But for a lot of firms, it could be an upgrade. It could be an upgrade. But there are a couple, you know, a couple of things that I really don't like. The website costs at scorpion are it's a monthly cost, right? So you need to fold that into your ad management fee. You're renting your website. So the ad management fee that they quote is not really what you're paying as a percentage of your advertising. We did it. We looked at a couple of contracts, scorpion contracts. The ad management fees north of 40%. You break this down in the post to this under business model and expense. Why don't we walk through some of this? Because, you know, to me, I've always looked at it like, look, any kind of agency fee, media, and vendor, whatever tech stack you're using, it's got to be absorbed by your target cost per acquisition of a client, right? And so, like, when I start looking at this, I'm like, wow, you have to have a really high threshold for client acquisition costs in order for this to actually start making sense, right? Yeah, and I don't know how this scales. Like, I haven't looked at hundreds of scorpion contracts and I'm sure there are hundreds of scorpion contracts. So I've just thousands probably. And I grabbed one and I didn't cherry picked this because it was exceptionally awful. But if you're spending five grand to license your website, that's coming out of the amount of money that you're putting towards your ads, right? That just is. And you have to make that up every single month. It's not like you do a one off $30,000 website build and you're good to go. They license their marketing AI, which, frankly, and this is this example. This was $1,500 to license the marketing suite. I would do that. Scorpion, if you want to license me, the marketing suite, we can have access to your data for $1,500 all day long, because that is really, really valuable. And then there's other stuff, you know, the kind of tack on. And then there's the ad management fee, right? So when you put all these things together, the amount of money that you're actually spending on your advertising on the ads advertising campaign. It's just over half of the overall spend. That means that that effectiveness of the AI and the intelligence and the greater economic efficiencies that are generated through their advertising campaigns has to be a lot better. Not twice as good as ours. More than twice as good as ours. I don't know what you tried from an ad fee perspective, but we start at 20% and go down. This is over 40%. So, so scorpion has to be better than twice as smart as we are at generating business for their clients. Maybe they are, right? But that's, that's a, that's a big hurdle. So check out the report. It goes deep into trends and strategies to grow your practice, improve client satisfaction, and streamline your operations. Download Clio's 2024 Legal Trends Report for solo and small law firms today at Clio.com/trends and start transforming your practice. Again, that's Clio.com/trends. Hey, lunch hour listeners. Do you know where your best leads come from? And when they come in, are you confidently converting each one into a client? CallRail makes this easy with call tracking and analytics that show law firms which marketing drives their best leads so they can optimize campaigns and maximize ROI. Thanks to CallRail's detailed call data, lawyers never miss a prospective client or an opportunity to grow their practice efficiently. CallRail can help you transform your lead process so you can focus on your practice. Go to callrail.com/lunchhour now and try it for free. Yeah, and again, I think the biggest problem as you already alluded to is is like, it's very difficult to do apples to apples comparisons because you don't know what keyword universe you're in. You don't know where you're buying media. You don't know brand versus non-brand. You know, you're also at the disadvantage. I mean, you could figure out if they're working with some of your competitors because they put their little logo and link at the bottom of the websites. But you don't know, you know, is your media buyer driving up your costs by buying media for your competitor? Like, I just, that's the thing that I'm, and we just be able to, you'll never know. Well, and I believe, and this, this holds true for at the risk of throwing crap at everyone in the market right now. This is true for internet brands and it's, and all of the brands underneath internet brands. It's also true for scorpion. I believe they are, they are optimizing for the system. They are not optimizing for Bill and Jane, the attorney, right? And when you don't have insight, and then that is a very good reason for them to let you not, to not let you have insight into the actual data. And so to be really effective as a scorpion client, my, I suspect the way to do that would be to be their largest vendor to market and be a really big pain in the ass to your account manager at scorpion and constantly be threatening to leave and make his life miserable. Right? That's how I think you could be in a, which is something I like, that's not how I like to do business, but that's how I would look at being a really effective client from scorpion. Make it look like you're always ready to leave. I have a, I have a question and this is a legal question so you can put on your, your lawyer hat. This is not legal advice. This is just, this is not legal advice, but we're going to say this on the air co-hosting advice. We're not walking into tortious interference of a contract here. Are we, sir? I certainly don't believe so. You know, that's a legal, that's a legal conclusion. I mean, I wanted to draw, I wanted to ask that question because there, I think there was a contract question, which bluntly as a non-law, I really can't answer, but, you know, scorpion is trying to move people into a new contract with scorpion. The fact that they were purchased, that they purchased GNGF to those contracts roll over, I did talk to a law firm that is saying scorpion is trying to enforce their long-term contract with GNGF. Right? So I think one of the first things that you think about when you're, if your agency is purchased is what's the duration of my current contract with, with my agency? And what does that mean from a flexibility perspective with what I can do? But this is, it's a weird kind of situation. The other thing that I think about, and this is why, you know, you and I will never be acquired probably in not making a lot of friends with the venture capitalist and the private equity world. Private equity world? Right. This is the game plan, right? The game plan is, you're going to put them into tech. You're not, yes, you're going to have an account manager. Someone's got to be able to tell you the story of what's going on. But don't be surprised to see this type of stuff happening with other big names in legal, right? We've been talking about consolidation for a while, and I wouldn't be terribly surprised to see some of the other software platforms getting cozy with the big players or building their own. And so again, when you're out in the marketplace and you're making these decisions, those, these are the things, and that's the whole point of this is to really be like, look, here's the things you should look out for. Are they working with your competitors? Do you own the data? How long are you locked in? What level of transparency are you going to have with how all this stuff is going to be working? Because in some ways, it's the same thing we talk about when we talk about like the big ad platforms like Google and meta. You've got to recognize how you're the product and how your data is being used. And it's the same in this context, your data that you might not own, right? Because if you don't own the accounts, if you don't own that stuff, you're licensing access to their data to buy media for your business, you're not building the same equity up. Anyway, that's, I think that's the thing to look out for. And again, I know this is probably going to cause me, at least, I don't know about you, but to be less invited to some of these conferences, which, again, is another problem because these folks are going to be on, you're going to see them on stage because they're paying to be there, telling you about how great everything is. That's really the purpose of this is to say, hey, look, heads up, everybody. We've been talking about some of these issues for a long time. It doesn't matter what logo you slap on it. It doesn't matter who the company is. We're not trying to pile on any particular company, but there are trade-offs. And I think most lawyers that are out there, they're trying to run their law firms. And so they're not seeing all this nuance and digging deep enough. And a lot of them, a lot of times, too, I don't know if you still see this. We see a lot of lawyers, they don't even bother to read the contract. And then they're surprised to learn they're locked into this contract where they don't own any of their own data, they're licensing their content. I don't know where we are in the licensing content thing these days, but, you know, I know that that's another issue out there where like, it's like, hey, yeah, look, you can quit any time you want, but then you got to pull all this down. You can never, you know, Hotel California. Anyway, so to me, the transparency and the owning the data, those are the two big ones. I think exclusivity is something to talk about. There's certainly, again, to just play counterpoint, there is upside to access to data. As Conrad mentioned, if you're the market leader in your area and you're pouring money into their machine, their machines probably buying media better than a lot of other machines are going to buy it. But, you know, if you're a couple thousand dollar a month player is, you know, your cost per acquisition, is it going to work? Are the economics going to work when you look at the fee schedule? I don't know. I mean, this is a no brainer, but like you're entering into a relationship with a very, very new agency, right? And you are going to have things to think through. You know, I do know that a lot of agencies are talking to scorpion clients or sorry, GNGF clients now. I think a lot of people have these concerns. So I think to some extent we've done a good job of raising these in the past. It's not just us, but I think there's a concern over these things, which, you know, previously, a lot of you guys didn't read the contract, all that much, all these things. And you're probably going to see more of this as he hinted at. But, you know, if I was going to sell my agency, I would go out of my way to make sure that my clients were taken care of. And I think that's a really important factor. Well, and again, like I said, there might be some people that this is great for, right? They maybe they look at this and they're like, yeah, we're going to base on what we're doing. This makes more sense for us. I just, my thing is just to make sure people are doing with their eyes open, just make sure you understand exactly what you're getting yourself into. Because, again, it's sometimes for a lot of firms, this stuff's running in the background, you know, they're not, they're not listening to lunch hour legal marketing. They're not following the press releases, which will, we can put some of that in the show notes too. You get both sides of the story here. And then one day you wake up and you're like, wait a minute. I'm not even, this isn't even close to what I signed up for in the first place. [Music] If you're a lawyer running a solo or small firm and you're looking for other lawyers to talk through issues you're currently facing in your practice, join the Unbillable Hours Community Roundtable, a free virtual event on the third Thursday of every month. 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