Leading with emotional intelligence in litigation with Brett Donnelly

Transcript:

Adam: All right, welcome back to the Reed Smith's Disputes and Perspectives podcast. I have a special guest with me today, Dr. Brett Donnelly, who is not only both a psychologist, but also a founder. And we're going to talk about some of his accomplishments, his lessons learned, and some of the different things that we can use from his life lessons to help us as litigators, as we develop our practices and elevate our practices, Brett, welcome to the podcast.

Brett: Thanks Adam. Thanks for having me.

Adam: So let's start back a bit and then we'll talk about kind of where you're heading, where you're going by training. What's your background?

Brett: Yeah. So I'm a clinical psychologist and founded my, my company, a mental health company called Acacia Counseling and Wellness back, oh gosh, this is back in 2014 and had pretty, pretty minimal business training. I, I took quite a few business classes in, in undergraduate, but didn't go into graduate school or anything like that, just knew that I wanted to solve problems and be creative and I could never really be employed by anyone. So I figured entrepreneurship was a pretty good gig.

Adam: And when you started the company, how many employees were there?

Brett: Well, it was just myself and my business partner. We were 50, 50 partners and we found a, an old church to do some individual therapy sessions out of. And so it was just him and I until about a week later when we started having our schedules jam packed and creating a waitlist and realizing that we need to start, start to hire more and more employees.

Adam: Then moving forward at a later point, did you end up scaling the business?

Brett: Yeah. Yeah. So, you know, kind of going back to the very beginning, I had worked in college counseling centers throughout my training in grad school. So I worked at university of Illinois, Chicago, university of California, Santa Barbara, a couple of smaller institutions in Chicago as well. And I just kept on noticing the same problem popping up all over, no matter what school I was at, which was at the demand for psychological services, far exceeded the supply of clinicians that we had. And so, you know, when I was in my postdoc and I was trying to think of what my future was going to look like, I just kept on coming back to this problem. And I knew, you know, having talked with many friends who were at college counseling centers, that this was a big problem. And it was something that I felt like I could offer a solution to. So right, right in the beginning, even though I just started with my business partner and I, you know, we wanted to use our own capital. And so we wanted to just kind of start things slow and start from the ground up. But there was always, you know, my intention was always to have a fairly large company. I had envisioned hundreds of, of these clinics outside of college campuses, you know, all over the country. And yeah, so we, we kind of started off slow, but the vision was always to scale this thing into, you know, a large, large group.

Adam: And ultimately what was the size when you ended up selling the business?

Brett: Yeah, we had about 200 employees by the time that we sold, I think we had something like eight locations, including a telehealth location, and we were scattered across California, mostly working with the UC system out there. And we also had an office at the University of Minnesota in Twin Cities. And yeah, we ended up growing quite a bit actually in the first, cause we only, we only had the company for seven years before we sold it. And we made it on the Inc fastest growing companies list three years in a row. And so it was a pretty, pretty high growth, high risk effort that we, that we did.

Adam: And let's talk about risk then, because as litigators, we're always trying to weigh risk and then give some type of informed decision to our clients about what is the actual risk and when do you proceed and things like that. And I see parallels between founders and litigation partners in that respect. Can you identify any significant decision you all had to make as partners in your company where we have two paths and one path may be riskier, but there's a reason we chose the path. What's some of the risk factors you use as a founder to decide which risk is palatable and ultimately, you know, why do you make the decision you do?

Brett: Yeah, this is a fascinating question. So I'm going to answer this kind of in a little bit of a timeline here, because there's the old me and what my, you know, risk tolerance was then, and the new me and what I've kind of learned since then. So we always had this running joke at the company, you know, my business partner was in his fifties and he was an ex-military veteran and we had very different, I think, risk profiles. I think the running joke was that I was go, go, go. And he was whoa, whoa, whoa. And so, you know, me being in, you know, I was in my early thirties when we started the company and I think between probably my, my age, but also like kind of some of my, you know, background growing up, I just, I really wanted to push on the accelerator and it kind of felt, you know, somewhat addicting at times to, to grow and to grow quickly. And when you see, you know, so much need out there and you know, you have a really strong business model, there's a temptation to just, you know, really, really press on that gas pedal and go. But looking back on it now with the wisdom that I have today, I think that I probably took, you know, on a little bit too much risk. And what I mean is, you know, the second that we started having profits rolling into the business, all I wanted to do was to spend those profits and grow more. And, you know, when you're, when you're working with, you know, limited amount of working capital, you can, you can kind of make that work and it does okay. But as soon as you start to, you know, have, you know, revenue that's in the tens of millions of dollars, you know, if you start to be off by just a few percentages in your, in your calculations and your risk profile, that can all of a sudden mean a significant amount of money that, you know, we didn't necessarily have sitting in the bank. So I think back then, although it worked out luckily for us, we, you know, we sold the company and we built a really, really great, I mean, I love the people we worked with, we built a great company, but we lived by on the kind of the edge of our seats and, you know, there were moments where we weren't sure if we were going to make payroll and we somehow found a way to make it work. And I would never choose to run that kind of business again, moving forward. I'm still a risk taker, right? You have to be as an entrepreneur. You have to bet money to make money, but I think it was very unwise and yeah, I, I feel even somewhat embarrassed by how, how much risk I took when we had, you know, a company with 200 employees, you got to make sure that you, that you, you know, have six to 12 months of, of capital in case things go wrong, you can't just continue to, to grow and project that things are going to go perfectly as they did before, um, yeah. So to answer your question, there was like certainly a lot of risk in the early days. And I would say that we, we might've even lucked out and it worked out okay for us. Um, but you know, moving forward, I think growing at a little bit more of a, of a steady pace and making sure that there's a lot of like protective mechanisms to fall back onto. Cause the last thing you want to do is, is blow up a company that's actually working because you're spending too fast. You're growing too quickly. Um, yeah. So, so quite a, quite a different risk profile that I, you know, that I envisioned now versus then.

Adam: How about as far as partners, you obviously had a partner with your last company and in litigation, we see so many business divorces and even well intentions often don't end up that way. So from our perspective as litigators, by the time you get to us, there's typically a break that's happened long ago. From your perspective, being involved in multiple businesses, ones that go well, ones that don't go well, where do you see are when partners are able to stick together versus things that caused them to break apart? What have you seen on both sides?

Brett: Yeah. Well, I'll just first speak from my own experience. I loved my business partner. Him and I are extremely close friends and we had this beautiful blend of, uh, you know, kind of having very complimentary skill sets that fit in, in line. You know, if you ever have read the book traction by Gina Wickman, you know, he talks a lot about kind of the, the visionary and the integrator role. And I'm definitely the visionary. My business partner was the integrator. And so it was a really beautiful partnership that we had. And, you know, not only did we have these differing skill sets that worked well together, but we also had the same values and we both operate with a lot of integrity and we both trusted each other quite a bit. And so, I mean, that was like a partnership, you know, made in heaven. It's not, not to say that we didn't struggle at times that, you know, you know, he didn't want to, you know, bring, bring me out or whatever, but like, I don't know. I think it overall worked pretty well. So when, as I, after selling the company and I started kind of a couple of gigs on my own, it's been interesting to see the dichotomy between being a solo entrepreneur and actually having a partner. I really miss the, kind of the, the, the sense of like belongingness and community that I had with my previous partner, you know, and at the same time, it's, it's, it's kind of interesting and nice to have the efficiencies and the decision making ability to, to be solo. You know, my, my personal perspective and everyone's going to be, I think, different with this in terms of choosing, choosing a partner is I, I think I prefer having a partner. I think that's something that I'm going to want to find in, in the business that I'm currently working on. But it has to be the right person. I'm not going to like, try to fit a round peg into a square hole. And so it has to be the right person. They have to have the same, you know, or similar values to me. I have to really trust them. I have to enjoy working with them. And so that's what I would say to anyone that's like looking to have a partnership, you know, whether you're talking about a business partner, a marriage, you know, a legal partner, you know, I think just like really trying to find someone where your, your gut feels like, Oh, this is a really good fit. This is someone that I trust. And this is someone who I feel like I can grow with, right. That the business can grow with. Um, and so, yeah, yeah. I mean, when, when you can find that person, they're, they're tough to find, I think, but when you can find it, it's a good fit and you can ride things out and have a lot of success. Uh, and if not, you know, running things solo can have its own benefits as well. And yeah, you get to learn a lot about yourself in the process and you get to work on leadership skills and, you know, trying to be both the visionary and the integrator at once can be quite challenging, but there's a lot of growth in that as well. So I've kind of enjoyed having my feet in both kind of a solo gig and a partnership, but I would say I'd probably prefer the, the partnership model.

Adam: We want to talk a little bit about the psychology behind decision-making and one thing I really want to emphasize is distinguishing between reasoned decisions and emotional decisions. And the reason I raised that is because I think either in startup world or in litigation world, there's a risk of making an emotional decision rather than a strategic, logical one. In litigation, for instance, the other side does something that frustrates you. You've been with them, you know, litigating for over a year and it evokes an emotional reaction with a client behind you that oftentimes regardless of whether it's a personal or a business relationship is going to have a personal emotional aspect, just the nature of the case and things like that. And so from litigators, we're impassioned, but we also want to avoid making purely emotional decisions, especially as that person, similar deal on the entrepreneur side, you're fully invested. You put your life into this company and so it's easy to get emotional. From your perspective, kind of taking a step back on the psychological side, what are some of the checks you use to make sure you're making a decision because it's reasoned and it's not driven by just pure emotion?

Brett: Yeah, so, you know, I don't know that you should ever make a decision that is completely based around emotion, nor do I think you should make a decision that's completely void of emotion. I think emotion actually can be quite a useful tool for us to have some gut checks about, you know, how things are going, the direction that you might want to take the company. And so, you know, for me, I think that there needs to be a really nice balance between those two things. I just actually last night was reading this book called Unreasonable Hospitality. And it's about this, this restaurateur who was really discussing, you know, this balance of like, kind of wanting to like look at the P and L and have all of these sort of like more logical conclusions about what the restaurant ought to do. But then realizing that when you have too much control, you start to drain creativity. Right. And that creativity piece is oftentimes what builds culture. It's what builds a really successful brand and business. And so there's kind of I almost saw that in the same way of how you asked this question, which is like, how do you weave in this sort of rational, logical decision making efforts, but also be able to like kind of check in with your gut and be like, Hey, this might not be the most rational move, but something feels really right about this. So he like in this book that I was discussing, he talks about kind of this 95, I think he calls it the 95 five rule, which is like 95% of expenses. You're going to have a lot of, you know, control over a lot of deep insight in, but then five that you're just going to blow on just like whatever feels right to you in that moment, you know? So his example was when they're doing wine pairings, they're actually going to use cheaper wines for a majority of the pairing throughout the evening. And at the end, the last bottle of wine is just like this ridiculously expensive bottle of wine that they can afford because they more closely monitored the spending in the first few bottles. And so, you know, I think of when I think of like business and how you can be successful. Yeah, you want to I think you want to pull in some some logic. And if your emotions are feeling if they're if they're what I would call below the water, which is if you're experiencing fear, if you're experiencing anger, if you're experiencing resentment, I don't think you really want to make decisions from those places. I think oftentimes those lead to going in not so great directions. But if you can be above the water and you're leaning into like love and hope and prosperity and abundance, and there's something that's that you're feeling about, hey, I think it'd be really cool for the business to go in this direction. I think people are wanting this. They're yearning for it. You have to be in touch with with humans and you have to be in touch with emotions in order to have a successful company. So, yeah, I think there's a weaving in and out of kind of the rational, logical mindsets and then also really being able to feel into your culture, into your people, into your company, into your mission.

Adam: You're raising terms that are unfamiliar to us as litigators, like feelings, emotions, all those things. And it's interesting, right, because you start, you know, at some point you as the litigator, you're a human before you're a litigator, but then at some point you can't unchange yourself, which is the nature of the process. But you can have self-awareness during it, which I think is an interesting check, because ironically, too, as litigators get more senior, you get less checks because there's more people working up to you rather than you reporting that other direction. So it raises an interesting point of, you know, as you kind of go up the ladder as a litigator, you oftentimes get less and less feedback, even though you probably need more of it. Not that different than as a CEO kind of develops from more handling everything as a founder to growing up in the company, where sometimes you almost lose the ability to have that connectivity. What were some of the things you did as the company grew so that you didn't lose touch with the people that you were working with or the people that were reporting to you?

Brett: Yeah, and I just had a really quick question about what you're saying as a litigator, because I was wondering, like, how does that work when you have a jury in front of you? I know there's different kinds of litigation, right? But like, isn't there there's a certain skill that attorneys develop where they can actually connect emotionally with the jurors, more so than just laying out the logic, right? There's like there is some sort of that emotional intelligence that you're working with as well, is there not?

Adam: Yeah, and to me, what's so fascinating about that is, by the time you get to the point that you are the lead counsel, that you are the one that is doing the opening, the closing, making all the decisions, you have to be hyper connected. The flip side of that, though, is also by that point, you've been trial tested from the practice such that you oftentimes lose that connectivity with people. And so it's a weird balance where to get as good, you need to spend that 10,000 hours plus chiseling yourself into that hardened person, that analytical beast. But then the flip side is, how do you take that edge off that made you successful that then you could become human on the back end?

Brett: Lovely. Yeah, I like that a lot. Yeah, it's like that's it. That's the balance you're trying to weave there. The first thing that pops into my mind is that I think as a founder, you want to have a very safe relationship with your employees, particularly the ones that are closest to you. So maybe some of your C-level, your chief operating officer, your chief marketing officer, the people that you're trusting to really kind of run the day-to-day operations of the company. There needs to be a great deal of safety that they feel towards you so that they can be honest and direct with their feedback of what is happening with the company. One of the really unique lessons that I learned was when we were small, when we were just one or two locations or even three locations, I knew all of my employees by name and I knew a lot about their story. I knew about their families. I knew what they were interested in, what they felt passionate about. I think that as the company grew, I started losing touch with that more and more. I mean, with 200 employees and people kind of weaving in and out of the company, new hires coming on board, I just couldn't keep up with everyone. And that felt kind of shitty to be honest with you. It was hard for me because I'm such a relational person and I really feel into how things are going for my employees and I really want them to feel connected. I want them to feel connected to the purpose and to the mission and not just to like how many sessions that they needed to be doing in order to make sure that we were profitable. Right. And so, you know, I think that when you start to have a larger company, you can start to like detach a little bit from what's actually happening on the ground level. And I think that's a really important like finding some way to stay in touch with what's going on on that ground level is so, so important. So whether it's like making sure that your employees feel really safe coming to you with problems, you know, making sure that you can successfully work through conflicts and even sometimes just, you know, getting out of your perch, right? Like sometimes we have a tendency to be up on this like, you know, 10,000 foot view of things and we're looking at P&Ls and we're trying to figure out like, how do we make this, this and this work? You know, sometimes you just need to go back into into the office and start like connecting and laughing with your with your people, start really touching, touching in with your customers. I think this is something that Jeff Bezos has really has really advocated for along the ways is like really like make sure you really, really know your customer. What are they what are they looking for? What are they needing and wanting? I think the same needs to also go for your employees. I mean, that's your team. You know, there is no company without that, right? And so you really have to be able to have like a heartfelt connection with with those people in order to, I think, continue having success. But finding some way to do that, I think, is is pretty essential.

Adam: As you've looked at the different business models and leaders, what's a leadership style that is different than yours that you wish you could pull from or that you have pulled from?

Brett: You know, I think when I look at my own growth and development as a leader, I think one of the things that I really want to work on is when I start to see something or feel into something that doesn't feel right, to kind of be able to nip it in the bud pretty early. Sometimes I have a tendency to either say, oh, you know, I think it'll work itself out, I think it'll be OK, or even maybe experience some fear of, you know, I don't want to this person's got a lot on their plate. I don't want to overwhelm them with this thing. And so I might kind of take it, keep it back to myself. I think that there's a real disservice to to the company, to me, to the employee that I'm working with. And so I really like leaders who can, you know, very clearly and calmly and with a lot of like compassion and understanding for the other person, be able to like nip problems in the bud, you know, pretty early on and those that can handle that conflict really well. There's another book that I'm reading that I'd highly recommend any any person to read, really, but especially if you want to become a really great leader. It's called How to Win Friends and Influence People by Dale Carnegie. And it was written a long time ago, but it is a classic read. And he goes through all of these principles of how we can, you know, better deal with people. And, you know, I really respect leaders that they can take their own kind of ego out of it and really put themselves in whatever position that they need to be for the best interest of the company, for the best interest of the employees, of the of the customers. And so those are the leaders that I, you know, that I really respect and ones that that lead with an iron fist, not ones where people don't feel safe or valued at their their jobs, but the ones who can not only provide a great deal of of sympathy and understanding and compassion and just be good humans, but also the ones that can balance that with, hey, sometimes we have to deliver hard feedback. And that's that's just as important as all the flowery, beautiful feedback as well. So that that's such a that's such a delicate line to weave, you know, and I just really love leaders who can do that well.

Adam: How about delegation? Because obviously that's something for litigators that is very tough because sort of the natural path for a litigator, right, is you're an associate, you're then you start handling a lot of decisions, managing day to day, then you become a partner and then you keep yourself 100% busy as normal, the normal sort of emphasis. And then you start bringing on people. But you don't start typically with managing people as from day one of your job. It's like you wait, you go 10 years before you have to really learn how to manage somebody, let alone yourself. And so it creates these very interesting dynamics where you can't scale, you can't grow your practice, nor can you really deliver to the client on larger cases until you can figure out how to delegate. And I can imagine some of the arc that you see for litigators is not that different from founders who start with a company where they do everything, but they can't grow without delegation. So for you personally, what are some of the delegation techniques that have worked? And how do you deal that, especially when you're talking a macro scale, where you go from doing everything to having to start to be hands off? What works for you from a delegation perspective?

Brett: Sure. Well, you know, the first thing that I think about when someone struggles with delegation is I think, do you struggle with control? Because I think that the most difficult piece for, you know, a lot of people to kind of cope with and delegating is losing a sense of control. And in order to feel good about losing a sense of control, you have to really trust the person that you're delegating to, right? You have to trust that they know their job, that they know to come to you if they experience problems, or they know the right people to go to, they can problem solve on their own at times. And so I think, you know, if you have a dream to have a large, a large company or a large firm or whatever, you know, I think you have to find ways to get comfortable with delegation. I mean, there's just no way around it. You know, I can't, I can't have a billion dollar company. And I can't be you know, I can't be the one responsible for accounting and payroll and marketing. And there's just there's just not enough time in the day to do that. When you're small, you can do it. And in fact, I encourage a lot of entrepreneurs to like start small, like don't go out and raise, you know, $100 million to start a business until maybe you've had some experience of like, what is it like to actually be the person doing your accounting? What is it like to be the person doing your marketing and social media? I think you can kind of start to learn just a lot about what works well, what doesn't in those areas. But you know, again, if you if you're wanting to grow and have a large company, then there's just no way around it. Like there's not enough time in the day. And so what it becomes about is it becomes finding good people, right? And again, this is something that you could you could look logically, and you could say, I want to like do this interview process. And I want to make sure that they can pass these tests and these standards. And that's, that's great. That's one way to look at, you know, hiring. And the other is just like that gut feel like, oh, does this person feel like they, that they can hold themselves really well, that they really are passionate about this mission that they're going to be able to work through conflict, right? So it's a little bit of trying to be an oracle and see like, okay, how is this person going to fit in? And a lot of that's just like a gut feeling as well. I think once you have that solid, that solid person, those solid people in your organization, then you can really begin to delegate. And this was something that was so, so beautiful. And the previous company that I had, because I loved my team, I felt like they were all very capable. They were young, and they needed to learn a lot. But they were so thirsty to learn more, to learn from me, to learn from Keith, my business partner. And that was just like a really beautiful thing to see. Because we, we pretty much all of our C-suite members, we grew from the bottom of the company up. And so I think like having that trust, knowing that they were, that they were sticking with us, that that was really important for that delegation. And I got, I felt like very comfortable delegating and, and still would feel comfortable when there's the right people.

Adam: I want to wrap up on talking about systems and processes, because in my view, as you continue to scale up, whatever you're doing, you got to have systems in place. So for you, some personal accountability systems, what are some of the things you found to be very helpful? Just action items, things like that, that you do that were really helpful as you grew to kind of keep all the plates spinning along the way?

Brett: Yeah, so a couple years into our business, we started implementing this kind of entrepreneurial operating system that we actually use from Traction by Geno Wichman. And so we ended up instilling that into the organization, which is one of the best decisions we ever made, because it set up this like, you know, like you said, this structure that you could kind of have this like consistent checks and balances and make sure that you're attuned to all the parts of the business that you need to be attuned to and make sure that you're tracking things along the way. I mean, you know, I think we've all heard a lot about the benefits of like having KPIs, right, key performance indicators and things that you're saying, hey, this is, this is going to be a very close correlation to how healthy the business is, right? I mean, certainly you could look at things like revenue and profitability, you know, but there's other, there's other metrics that you can use to net promoter score, making sure that your customers are happy using surveys, just all these sort of various metrics to measure the health of your business. So I think having a structure and a system in place where you can collect data on how things are going, I don't, yeah, from your customers, from your employees, from your team, and then be able to, you know, meet on a frequent basis to make sure that if anything is off track, we're discussing, hey, what's the problem that is creating this, this measurement to move in a direction that we don't want it to? And like, how do we then have a systematic way to, you know, kind of solve those problems? So for us, it was like these things, it was called a level 10 meeting, which is part of the traction, traction book, which is like, you know, you're coming in and you're looking at the scorecard or your KPIs, you're noting if there's anything that looks off in that or not in the direction of what your goals were, right? We always set annual goals, we set, I think, three in 10 year goals, then we would break it down into as far as into quarterly goals. And so if like, if we set those goals for ourselves, and they start to get a little bit off track, then we can go into what we call the identify, discuss and solve portion of the meeting where we're really trying to say, okay, what is the problem? Let's define it, let's understand it really well, what do we think is going on? And then what do we think are going to be solutions so that we can get this, this thing back on track to the vision and the mission that we have? I think that if you don't have those, like kind of more structured systems in place, you run the risk of just kind of losing track of things, and maybe not being able to have a clearly delineated way to work through, you know, problems. And so I really encourage, you know, anyone, whether it's in your business or in your personal life, but to really like know the direction that you're headed and, and have kind of a system to make sure that you're continuing to move and grow in that in that direction.

Adam: Well, I appreciate your time today. That's all we have, but I really appreciate the insights. And I certainly look forward to building on these as we scale our practice throughout the firm. So I appreciate it. Thank you very much.

Brett: Yeah, great to see you, Adam. Thanks for having me again.

Outro: Disputes in Perspective is a Reed Smith production. This podcast was produced by Shannon Ryan and edited by Julian Baughman. For more information about Reed Smith's litigation and dispute resolution practice, please email [email protected]. You can find our podcast on podcast streaming platforms, reedsmith.com, and our social media accounts at ReedSmithLLP.

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