John Corcoran 20:26
So that did work out. Well. Now, I know that for plaintiff’s side firms it’s oftentimes not a linear path. Right? There can be booming big successful years and there can be down years. How have you dealt with those types of like roller coasters.
Eric Toscano 20:50
As well as I can. I’ll put it that way. I mean, what I’ll say is like, truthfully, I mean, we’ve been in business for nine years. I’ve had growth every single year except for Covid on top line revenue, which has been exciting two years. We’re not profitable, but I would say one was just almost break even. The other one was a loss, but they’ve otherwise been profitable years. The challenge is having a company where you do the work today and you’ll get paid a year, a year and a half from now, but you don’t know when exactly and you don’t know how much. But you need to make hiring decisions today based on the pipeline you have now. So over the.
John Corcoran 21:29
Years, if you took any random business owner and you said these are the circumstances, they’d be like, how the heck do I do that?
Eric Toscano 21:35
Well, the answer, I mean, there’s there’s a lot of answers, a lot of trial and error. I mean, I think it was a blessing and a curse that I’d never worked in a plaintiff’s firm before. So I didn’t know what I didn’t know, and I didn’t, you know, I just tried to figure things out as I was going along. I mean, I read a bunch of I talked to tons of plaintiff’s attorneys. There’s some really valuable, you know, resources and books I remember reading. And but at the end of the day, you know what I have now? And I hate the term volume practice because it makes it sound like it’s a mill where you’re just everyone’s a number. And that’s not what I do. But I will say my goal is to reach the 17 million renters in California, and there’s a handful of firms that do contingency work for tenants. There really aren’t that many, and they’re almost all in San Francisco and LA. And so there’s I mean, there’s tons there’s basically an infinite number of cases. So who wouldn’t want to work in a practice area where the problem never has never, never, never been finding clients? It’s never been a problem. And even to this day, it’s, you know, even at the size we’re at where we have, you know, we need to make sure that we’re continuously onboarding because we don’t have recurring revenue clients, we usually just have. They come to us with a problem and then, you know, we we help them out and then they go on their way. But, you know, having like it is, I think, the most valuable besides attorneys, which you have to have in a law firm to prosecute the cases, right, to actually prosecute the claims. The most important people in my firm right now are our finance team. I don’t want to I don’t want to offend anyone on our team, but I would say they’re all important. But it’s key and critical to the business operations to make sure you have analysts.
John Corcoran 23:18
Yeah. They’re looking they’re making projections and figuring out if you’re going to run out of money at some point, that’s 100%. Yeah. Yeah.
Eric Toscano 23:25
So it’s like having but the cool thing about a plaintiff’s contingency firm is that at a certain point, you get pretty good at predicting the value and outcomes of cases. So what we’re doing now is I used to just oh, that sounds really sympathetic. And I know a lot of plaintiff’s lawyers work this way. That sounds like a really good case. I’m going to sign it up and we’ll see what happens. Well, you know, we’re 40 plus people now, and I don’t have the luxury of being that cavalier about my, you know, if it were me, just Eric handling the cases, but I don’t I’m not even the managing attorney anymore. I’m just full time CEO, so I have to make sure that things will work out the way they work out. So we have a pretty good proprietary system where a case comes in, we get a bunch of information and we review the evidence. We talk to the client, we interview them. We actually, you know, do searches on asset searches for the landlord. So we actually have a case that comes in, we know what the value is. We have the average time to resolution, and we think we have a pretty good idea of the collectibility based on the research we did at the outset. So it’s less risky. And I would say that we have been able to I don’t want to say crack the code, but we understand I understand the formula pretty well. And so there is less risk.
John Corcoran 24:31
And probably as you add more cases, then that kind of spreads out the risk. If you’ve got five cases and none of them, you know, settle or go to trial in a year long period, you’ve got no incoming in revenue, but if you have 50 or 100 cases, then it kind of, I guess, levels out those those dips in the valleys.
Eric Toscano 24:52
Yeah. Yeah. The more data points, the easier it is to predict. But there have been different challenges, like every step of the way. And you know, where we’re at now is is no exception.
John Corcoran 25:06
But. And you you an interesting thing is you don’t just have like a domestic team with everyone in one office in downtown San Francisco. You actually have a distributed team with people all over, including, you know, nearshore and and outside, you know, and remote staff. Talk a little bit about some of the challenges and opportunities around building a firm of that of that stripe.
Eric Toscano 25:31
Yeah. So, you know, they say necessity is the mother of invention. So I found myself in 2019, I didn’t have like my projections or my pipeline dialed in as well as I could have. So what I needed to focus in on the short term was how do I find great team members when I have an office, a brick and mortar office in downtown San Francisco? That’s super hard to get to. And if someone’s just been displaced from their home, like, how are they going to get here? How are they going to get parking? It wasn’t very convenient for the clients. And then how do I find, you know, good a good, you know, non attorney intake person a good paralegal, case manager, admin receptionist. How do I find them. And like they’re not they’re not just sitting around in San Francisco like I’d have to hire. So they’d have to come in. And I was like, this whole system is kind of messed up because I’m trying to reach tenants who’ve been displaced, and I can do the work where people are coming in and they’re just sitting at a computer all day, and then they’re going at home. So why not just have them never leave? And so I started dabbling with a company called Get Staffed Up in July of 2019. We hired our first staffer. And then, although that I didn’t have a system to really set that person up for success, but it worked out great and it was a remote. A staffer, I think he was in Mexico. Our first staffer. Then we hired one in September who’s still with the firm, another staffer in December who’s still with the firm. And from that point, I said, yeah, we’re just going to shift to fully virtual because these people are doing a great job. They’re working really well. And I can, you know, the real the fact of the matter is, if I can cut out, you know, office rent or at least, you know, downtown San Francisco office rent, that’s going to be great. You know, overhead savings. And then the fact of the matter is, full time, amazing, top of market getting paid paralegal in Mexico is still a fraction of the cost of a top of market paralegal in San Francisco. So that helped me on both fronts.
John Corcoran 27:19
Yeah. We’re almost out of time. But I want to ask you about AI because it’s what everyone’s talking about now is we’re entering we’re recording this in spring of 2025. How do you see AI either helping you in your firm or I, you know, I’ve talked to people that say that, you know, the legal profession is going to be undermined by, I don’t know, I lawyers coming in.
Eric Toscano 27:46
My perspective is that AI is a tool that, if wielded properly, can lead to a massive unfair advantage by the firms that utilise it properly. I think people especially. So we do litigation, we do plaintiffs work, we represent people. I don’t I think people are going to always want people representing them. So I don’t think, you know, and the great thing is the State Bar of California is a guild. They control how many people enter the guild and can practice law. We have a monopoly on the practice.
John Corcoran 28:15
They sure do. Yep, they sure do.
Eric Toscano 28:16
So they’re gonna they’re gonna not want to like, like, loosen their grips on that. So I don’t I think that there will always be a place for, for litigators. I think there are other types of lawyers that their jobs, I don’t know. I don’t think they’ll become obsolete. I just think they’ll change. I do think firms will do more with less. I think that this will probably long term, fundamentally change the role of a paralegal whose job in my mind is you’re just a drafter. And if drafting is going to like shift, you know, I think the most successful paralegals, I would tell them right now learn how to learn how to draft prompts. That’s what’s going to make you very successful. So in our practice quickly and I’ll I just say we do we handle the same type of case like I’m an inch wide in my practice area but a mile deep. So we basically look for the same types of factual scenarios, which has lent it to, you know, where the plaintiffs, we create the same types of complaints, the same types of demands, the same types of discovery. So we have really, really detailed templates and detailed instructions on how to use those templates. So rather than humans, you know, prepare first drafts, we’re we’re literally in the process right now this week, next week, this quarter of rolling out our first AI basically paralegals. And we’re going to continue. And the cool thing is we’re planning on growing our firm 50 to 100%. Like that’s our that’s in our budget. That’s what we’re planning on doing in 2025 over 24 with not much increase in headcount. So it’s not as if people are going to get replaced with AI, but they’re going to learn to manage the systems and we’re going to basically be redeploying people in the firm. So that’s what I’m really excited about.
John Corcoran 29:53
Yeah. Eric, this has been great. Where can people go to learn more about you and connect with you if they have any questions?
Eric Toscano 30:00
If they’re curious about tenant rights law, Tenant Law Group www.tenantlawgroupsf.com is our website and that has all the information about our services to connect with me personally. It’s LinkedIn.com and Eric L. Toscano is my LinkedIn handle would be the best way to connect with me.
John Corcoran 30:17
And I know you’ve been sharing a lot of content up there on LinkedIn, so definitely go give Eric a follow on LinkedIn. Thank you Eric.
Eric Toscano 30:24
Thanks so much.