Episode 5 •

79 min 52 sec

Raising the Bar

With Eric Pacifici

Founding partner at SMB Law Group.

Episode Description

My guest today is Eric Pacifici, a founding partner at SMB Law Group. Eric has a background in BigLaw, having worked in M&A at some of the most prestigious firms in the country. He’s also the only person I know who used an anonymous Twitter account to jumpstart the founding of a social media-driven law firm focused on small business buyouts. Eric is a passionate advocate for entrepreneurs and small businesses and our conversation covers his journey to a top law school, a life-altering health event involving his family, and why he chose to become an entrepreneur. Please enjoy my conversation with Eric.

Eric Pacifici:

Eric on X

SMB Law Group

Tim Ludwig:

Tim on X

Podcast website

Topics:

(00:00:00) – Intro

(00:01:31) – Eric’s Pizza Fridays

(00:03:30) – Eric’s upbringing & early career

(00:18:29) – Are you an intense person?

(00:23:00) – Getting to law school

(00:29:39) – Eric’s law career in big law

(00:40:33) – Health scares

(00:56:09) – Launching SMB Law Group

(01:15:54) – Is there anything on the horizon that has your attention?

(01:17:44) – How has your role in SMB Law Group changed?

The content of this podcast does not constitute investment advice, an offer to provide investment advisory services, or an offer to sell or solicitation of an offer to buy an interest in any investment fund.

Transitions with Tim Ludwig is produced by Johnny Podcasts

EPISODE CLIPS

"Eric's decision to form SMB Law Group"

  • Eric's decision to form SMB Law Group

Tim Ludwig: Where I’d start with this is with pizza.

Eric Pacifici: Ooh.

Tim Ludwig: There, I already got the reaction I was looking for. You are well-known online for being a pizza aficionado, having it every Friday night, and I’m curious, is that a shtick? Is that the real thing? Where does it come from?

Eric Pacifici: Yeah, I love pizza. So I love eating pizza on Fridays, and I have fun with it, obviously. I make a lot of jokes. But I don’t- decently and obviously, pizza in your late 30s, it starts to feel different when you eat pizza, so I don’t eat a ton of it. But I like to order a pizza on Friday because it’s just something to end the week that gives us kind of a feel good moment. Everybody loves pizza. It’s Friday, end of the day, I’m having pizza with my kids. It feels like the end of the week, kind of a marker in the week to kind of indicate where we’ve come. So, it’s nice, and yeah, it’s turned into a little bit of a shtick. I don’t know a ton about pizza. In fact, I love to tweet the pictures of pizza, but the worse the pizza, the more engagement it gets. And so, I have some fun with it. Because I’m not a pizza snob by any stretch of the imagination. In fact, the best pizza place I think for us is the local place called Marcos because it’s right in the neighborhood. They can get you a pie in like 10 minutes and it’s delicious.

Tim Ludwig: I was going to ask about Marcos because there’s a little bit of controversy surrounding them with you.

Eric Pacifici: Right. Yes. Well, it rhymes with Narcos. I guess I shouldn’t say Marcos. But no, they’re fantastic. I like to tease them online. They have a pretty bad social media presence, and so I’ll tag them in something or whatever, and then they respond to me like Monday at 9 a.m. I’m like, come on guys. They’re missing a big opportunity.

Tim Ludwig: Yeah, and you’re not going to be following in Dave Portnoy’s steps with the whole one bite pizza challenge, right?

Eric Pacifici: No, I’m not trying to compete with Dave Portnoy. Obviously, I’m not trying to be Dave Portnoy. I just love eating pizza on Fridays. I think people, it resonates with a lot of people, so I keep sharing it. And honestly, if nobody responded to it, I probably would still share it. But a lot of people seem to- it seems to click with a lot of people. So it’s a fun- shows a little personality, which is nice.

Tim Ludwig: Let’s maybe switch gears and now talk about your background. I want to- maybe starting with a 10,000 foot view about sort of where you come from and what the upbringing was like and then we’ll get into some of these more pivotal moments that have been part of your journey to date.

Eric Pacifici: Yeah, sure. And thanks so much for having me on, Tim. I love that you’re doing this, and I’m excited to hear the other stories, obviously, of people that are going to be coming on as well. So, thanks for making me a guest. Where do I start? So, my upbringing, I grew up in Michigan, obviously Southeast Michigan, suburb called Livonia. Divorced parents, lived primarily with my mom, and pretty standard childhood. Good high quality public schools, played a lot of sports, played football in high school and had a lot of fun as a kid. Had a great childhood, not a ton of controversy, not a ton of adversity. We were, I guess statistically, we’d probably be characterized as lower middle class, or maybe even if that. My mom was a schoolteacher for the Detroit Public Schools for 30 years, so we had her income, and then had a stepdad come into the picture a little bit later, like my pre-teen years, so we had a little bit of an income adjustment there. But not a ton of money, but also not a ton of problems either. It was a pretty classic 1990s, early 2000s childhood and upbringing.

Tim Ludwig: By high school, you were sort of known as an athlete, were playing on the football team, starting quarterback.

Eric Pacifici: Yeah, so I probably focused too much on athletics in high school. I grew up in a very sports oriented family, watching a lot of football, a lot of basketball, playing a lot of little league sports, which was a ton of fun. Learned a lot of skills as a kid playing sports. I think team, how to be a part of a team, how to lead, how to compete, but probably focused too much on sports and athletics in high school. I was the starting quarterback of my varsity football team. As a sophomore, I was the first sophomore to ever do that. In my high school, we had about 2,500 students, so it was a large high school. But then, in my senior year, I actually got supplanted by a kid behind me who was much better, went out and played college football. So, I had kind of a fun- in hindsight, it was a good experience because when I got moved up to varsity, I was probably 15, maybe, going out there playing with like 17 or 18 year old kids, a quarterback, and they’re trying to kill you. So, there was some maturation from that process, but then also then getting supplanted by a person behind you that was better than you, so there was some maturation from that as well. So, in hindsight, it actually worked out quite nicely, I think, the experience that I had from an experiential standpoint. But graduating from high school with a 2.5 GPA, was not focused on academics. I guess I’ve always been kind of a quintessential lawyer because I knew exactly what I needed to do and where the line was, and that’s exactly what I did academically. I don’t think I failed a single class in high school. Never got anything less than a C, but probably never got anything higher than a B or B- either.

Tim Ludwig: Eric, was that just lack of effort for the most part or was it lack of focus, like just that was what you’re capable of then?

Eric Pacifici: I was focused on social life and athletics and having fun. I wasn’t thinking much about life after high school really until graduation day or approaching graduation and then realizing my friends and guys that I had been playing football with, all of a sudden, they’re going off these colleges. And I was like, wow, I didn’t realize you guys were doing all that.

Tim Ludwig: Coming back to the grades again for just one more second, I had another question about that. Did having a lower GPA like that and not excelling at that point in your academic career, did that impact your self-confidence or your self-belief in what you were capable of academically? Or was there always still inside you like that I know I could do better if I just applied myself more?

Eric Pacifici: A hundred percent. Yeah, it never affected my self-worth, self-image, my feelings about my intelligence. I knew I was going to be successful, Tim. And I guess whether I’m successful today or not, I’ll let other people be the judge of that, but I always knew that in life I would be successful. And I still feel like I’m going to go on and do great things. And I just didn’t have- I didn’t know what that path was going to be. And truthfully, in hindsight, in high school, I had a really good friend, a best friend who I spent almost every day with. And his dad was a successful entrepreneur, kind of in the blue-collar space. He was doing general contracting and plowing snow and doing roofs and all that. He would take us around to do all these different jobs. And so, I kind of thought as a younger person that I’d pursue that route as opposed to kind of a traditional college route. But meanwhile, my mom was also a teacher. She had been a teacher for 30 years in Detroit Public Schools. She had multiple master’s degrees and all that. So, she had been saying education, education, education. So, I knew I was going to college. So, I had kind of a swirling of things. And meanwhile, I just wasn’t- I didn’t have the maturity to say, well, let me just do good in school just in case I want to do blah, blah, blah. But I will say, Tim, when I did eventually get to the point, because then I go on, I go to four-year undergrad and get into the honors college and then go to, and we can talk more about the actual pathway, but go to Duke Law School. When I was applying to those law schools, having been that 2.5 student not very long before, there definitely was a mindset of like, am I doing this with a straight face? Like, do I realistically have a shot to get into these schools? I’m trying to apply to Harvard Law School. I felt like I needed to do certain things to make sure that I could do it with a straight face. And so, there was a little bit of an extra kind of late bloomer process that took place there.

Tim Ludwig: Let’s get into that a little bit because it wasn’t a linear path for you education wise after high school. It was not like I just went to school for four years, then I went to law school for three years and then I worked for big law. There was a lot more in that part of your journey than I think what people might normally assume.

Eric Pacifici: Yeah, it was a long winding path. And there’s a famous Steve Jobs quote where he says, he was given the commencement at Stanford, he says, you cannot put the dots together looking forward, it’s only in hindsight that you connect those dots. And so my story now in hindsight looks like it makes a ton of sense maybe, but at the time, I was just trying to do the best I could in each step. But chronologically what happened was I started undergrad at the local community college called Schoolcraft College, there in the same small town, I think, not small town, but in the same town that I grew up in. I think a credit hour was like $62 a credit for somebody in the city. But I actually didn’t even take a full course load. I took nine classes because I was- or nine credits, because I was saying, okay, now I need to like- I need to do well. That’s when the light bulb went off. I thought, okay, I need to do well. So let me start off with something that I can sink my teeth into. So I did nine credits. In that semester, I was goofing around on campus, and I got a Disney internship, interviewed with the Disney program, again, not thinking that they’d hire me because of the grades and everything.

Tim Ludwig: And this was down in Florida when you were in school in Michigan?

Eric Pacifici: This is in Florida. I’m in Michigan. Yep, this is for an internship in Florida. Turns out they’re just looking for cheap labor, so they hired me. I go to Florida for a semester as a brand new undergraduate student. First time leaving the town, first time being away from my parents. Frankly, I didn’t even think my parents were going to let me do it, but they were like, yep, go for it. So, I was like, wow, okay. So I go down. I come down here where I now live actually most of the year, not too far from where my internship was, and had an incredible experience. Met people from all over the world. I’m working for this great company, doing interesting things every day. And so then transitioning back to Michigan at the conclusion of that was like a holy, I need to- now I need to go because now I’ve seen outside of my little bubble, even outside of like the state schools, and I really want to go be in the world and do things and meet people and have some fun and live life. And at that point, I’m realizing like the pathway to do that is to be successful within school. So, we got to go. So, I go back to the community college. I sit down in one chair in the library, had a pretty nice library, one chair in the library. I’m like, I’m just going to study my ass off. I’m not going to get up from this chair until I know everything I need to know to get 4.0s in these classes. And so really worked extremely hard. Finally had that first semester where I got a really solid high 3.0, high 3 grade point average and thought, wow, okay, I can do this. Pretty exciting moment to realize, okay, like I knew I had the capability, but now I’m seeing it come to fruition. I leave community college and I go to a four-year school at Western Michigan University. I chose Western for a variety of reasons. Again, it felt bite-sized, no offense to Western. I love Western so much. But it felt doable. I had thought about trying to apply to University of Michigan at Ann Arbor because at this point, I’ve got a high three GPA, nearly four GPA at the community college. I probably could have got in on one of their transfer equivalency programs or the like, but I’m like, you’re not ready for that. Let’s go somewhere where you know you’re going to do well, or you feel like you could do well. So, I go to the four-year school at Western. I spend a semester. I get a 4.0 GPA at Western, I think, in my first semester. I applied to the honors college, so I’m an honors student at the school. I spent two years, two and a half years at Western before graduating, graduated with like a high, almost 4.0 GPA, honors college, got a bunch of awards and whatever, Phi Beta Kappa all of a sudden. So now I’ve transitioned in like a three or four year period of time from like a 2.5 high school student to like nearly 4.0, Phi Beta Kappa, whatever, all the different awards.

Tim Ludwig: That’s pretty amazing. It’s just like you just flipped the light switch and boom.

Eric Pacifici: I guess. Obviously, when you live it out, it’s not that way. Like it’s a lot. And I joined a lot of organizations too. That was part of it. Like I really dove deep on education. I was the chief of staff for the student government. I was the student representative for the newspaper. I was giving tours for the honors college. I was working in the admissions office. I mean, the list- I was representing the Disney company on campus for the internships, like the list of things that I was now doing, like I was everything, all in, still having a lot of fun, probably too much fun, but really now going, okay, this is my key to getting out of here, is to do well. And I remember walking on campus and just being like stressed, Tim, just like everything’s riding on this. It’s so important. But hindsight, it’s kind of silly. But I graduated from Western. I went and took a job actually with a company now called Rocket Mortgage, Quicken Loans, that’s what it was at the time. I’d spent some time actually while I was in community college working for them in sales. I did two years of sales or whatever, selling mortgages and an incredible experience. I would highly recommend that anybody who doesn’t know what they want to do with their life, go do some sales. Because it’ll teach you urgency. You’re moving fast. Time is money. It’ll teach you communication skills. It’ll teach you competition. It’ll teach you time productivity to output or compensation to productivity, which is a super important thing for someone to do. Had a ton of success selling. I had a month in, towards my second year, was the highest senior banker commission in Rocket Mortgage history. It was like a 45- I’m sure it’s been passed now, but had a $45,000 commission check as like a second year entry level in a month. Yeah. So super excited. It was a ton of fun. But meanwhile, I’m applying to law schools because I’m going same ethos. Like now I’m really committed to education because I’m going, okay, like this is the keys to the kingdom or to society, and so I really need to invest in that. So, I wanted to go back to law school.

Tim Ludwig: Even with that level of income, you still were saying I’m willing to forego all that and go back into education and get a law degree? Because a $45,000 commission check is not nothing.

Eric Pacifici: No, it was cool. I made six figures in my first year. You’re selling. And at the time, I had thought that there was a way in life to guarantee yourself an income or guarantee yourself kind of a higher level of whatever in society or in life as opposed to sales where sales is what did you do for me yesterday, what are you doing for me this month, that’s what I’m going to pay you. And I wanted something more. And in fact, I remember having a conversation with a colleague going man if I could just- because we would see- we had the benefit, Tim, of seeing- we would pull 10 to 15 credit reports a day, we’d look at everybody’s personal finances, all their trade lines, all their credit card debt. We’d find out how much they have in retirement savings, how much they earn, where do they work. And so, I’m looking at entrepreneurs, I’m looking at people who have been in the military, that have retired from the military after 20 years, that have retired from a company and now they’ve got three incomes. And I’m seeing all these different anecdotes over two years of how you can be successful in society. And I remember having a conversation with one of my colleagues at the time, who actually he’s now like a high level vice president of that company, and both of us going like, man, if we could just have $250,000 a year in salary, like that would be so sweet. We’d just show up, get your 250, and whatever. And it’s funny because he continued on that route; I went on this route. And I now know that none of that’s true. Like no matter what you do, unless you’re like a public school teacher, whatever, whatever you and I go do, Tim, we’re going to need to sell, we’re going to need to have a track record, we’re going to need to be productive and successful. So, you never get what I thought I was going to get out of a law degree. I guess I could go work for the FDIC or something, but I don’t want to do that. So yeah, so I give it up. I go back to law school. I actually applied to a variety of law schools. And now at this point, really want to move to Florida. Love it down here. My objective is to live in the state of Florida, work, whatever, but not for Disney because I want to be able to make a better living. And I get into the University of Florida at Gainesville. So I’m like, all right, sweet, we’re going. We come down. I spend my first year of law school. And something planted a bug in my head before law school, actually. I’d been reading a ton on a forum called Top Law School, it’s like a really comprehensive forum, about how to be successful in law school, but a number of things, particularly the transfer journey, and somehow, I got it in my head that maybe I could go to Florida and then transfer to one of these top schools, maybe even Harvard. And I got really excited about that idea, bought all these books on how to be successful in law school, had all this stuff. Before I even started law school, I knew exactly what I was going to do, how I was going to approach the courses, and just ran the play and grinded. Again, I sat down in the library at the Levin College of Law in Gainesville and just studied, Tim. I mean, like nothing else. And I had the benefit of the sales background. I just came out of like a high intensity, 80 hour a week sales job. My classmates have not. Many of them are K through JDs that just came out of undergrad. They’ve got completely different ethos, or they’re wealthy. The car lot at that school looked like a high-end car dealership. So they didn’t have that same ethos, not even close. And it’s no disrespect to them, tremendously smart and successful people. I still- many of them are my colleagues now here in Florida, but I mean, I just blew them out of the water. Second in my class. I was not the smartest person in that class by any stretch of the imagination, but was number one in my group, there’s three groups, number one in my group, and then number two total out of 300 students in that first year, both semesters, was number two twice, which is a little bit frustrating.

Tim Ludwig: There’s a lot of intensity sort of wrapped up in what you’re talking about, I mean, going all the way back to the start of your story that we’ve been talking about where just you’re sort of all in on all these things. I imagine it was the same with football. And then you go to college and you find this afterburner and the intensity of I’m going to plop myself in this chair in the library and I’m not coming out until I’ve done it all. And then you get to law school and I’m just going to outwork people. I may not be the smartest, but with work and focus, I will achieve all of my goals. Is that a fair characterization? Are you an intense person like that? You sort of get consumed by these goals?

Eric Pacifici: That’s a good question. I love a project. Like I love if you give me something that like, I tell everybody every day, I’m like, find something you’re passionate about, find something you’re good at, and find something you can make money doing, work in the middle of those three things and you will be successful. And so, when I find something that I’m passionate about and that has upside, I guess I make up for maybe I’m not always the best, but I am extremely driven. And I can sit, like I remember one of the first things I actually had that experience with was in high school. I had one teacher who she was like my person. Her and I still talk all the time. She looked after me. And she was the web development teacher, and she gave me- they were creating a website for the school. She gave me the football portion of the website and was like go to town, build a website for the football team. And I sat there like a crazy person, like it was the first time I’d ever focused on anything, and I remember learning HTML and all this different stuff and little icons and I made an amazing football website. It had videos and all this. And so I’ve had those experiences throughout my career, whether it’s from that stage to, like you said, the different levels, the sales, even very focused. And you know as a person, Tim, I’m sure you have that feeling, you know when Tim is giving his very best, you know when it was your A work, and you know when it wasn’t. And I get a lot out of knowing that I’m doing A work.

Tim Ludwig: And you seem to do a lot of it. I mean, I have the capacity for hard work and focus like that, but it’s more episodic. There seems to be just this consistent level of determination you’re able to apply for extended periods of time that to me seems unusual in a good way. And it’s certainly been very beneficial.

Eric Pacifici: It could be. I don’t feel like I work that hard, Tim. I really don’t. The people around me in life tell me that I do, and they’re like, you’re so busy, you’ve got so much going on. And sometimes I look at that. It’s almost like if you’ve ever fallen. Like as a kid, like when you- I remember I was rollerblading. My neighbor, Corey, was pulling me on his bike with a rope and I was on my rollerblades. Man, I took a dive and just wiped out, skinned my knees. I think I hit my face on the curb. I had like baseball pictures like a week later, and I had scabs on my face. And you hit the ground and I looked up and I was like, oh. He was like, Eric, it’s bad. It’s bad. And when someone else tells you it’s bad, that’s when you have that moment where you’re like, it’s bad, Corey, isn’t it? And so I get a lot. But I don’t feel that so much. My colleague Ellie has a concept that I love of the full integration of life as opposed to the kind of compartmentalization and trying to like have a balance because you create work life and then you put those two things at odds with each other. When in reality, you should be saying my life, like it’s a component of the broader life and they should all kind of work in concert.

Tim Ludwig: I think there’s something to that. That work-life balance is more work-life integration.

Eric Pacifici: Integration, yeah. But for me, it’s sprints too. I think one of the things I’ve struggled with the most professionally was coming out of college, and in college, you’ve got semesters. And in those semesters, you go, okay, I’ve got five classes. And even the law school, I got constitutional law, I got contracts, I got writing, and I got whatever. And I’m like, I got to crush these, and then I’ll get a break, and then I’ll start new ones. And then you come out into the workforce, you come out into everyday life, especially in sales, and they’re like, every month for the remainder of your life, Tim, you need to produce. And it’s all going to be exactly the same. And we just need you to go. And you never get that break. There’s no summer vacation. There’s no final exam. You’re just grinding. I’ve struggled in those environments. I really excel where I’ve got a discrete project, and I think maybe that’s why I ended up as an M&A attorney where I’ve got discrete project-based work. I’d love to have recurring revenue, by the way. I’d love to have recurring revenue. But yeah, I love a good project.

Tim Ludwig: Got it, okay. So back to the law school journey here. So you were an L1. Is that what they call it, or 1L? Whatever the nomenclature. And crushing it, second in your class. And you’ve already, before you started law school, started thinking about maybe there’s a possibility to transfer. You’ve got your aspirations set high. How does that go?

Eric Pacifici: Yeah, so I go into law school and I’m like I’m going to try to apply to Harvard. Because at this point, I’m just pushing my luck. You’ve seen my journey from 2.5 to undergrad to whatever. I’m like, let’s see how far we can take this. So can we get all the way to Harvard Law School? So I go all in. I get second in my class after my first semester, because first semester I’m like, inputs are one thing, but is it going to translate? And then it translated. So I’m like, oh shit, we’re in play. Like this could actually happen. This is viable. I can apply with a straight face. So I go nuts. I remember there was a night second semester of 1L where I woke up at 3am and I was like, you’re not doing enough, Eric. Like this isn’t your A work. Like you need to go. I studied for my- I studied like a crazy person. I knew the black letter law inside and out. But so then I started applying. I got a bunch of professors who were Harvard Law alumni, Professor Johnston and a number of people who I had research assistance for and had taken classes with that were Harvard alumni to write me Harvard specific letters. But I also knew I needed to cast a wide net because the background here, Tim, is that in the legal profession, it’s very much a profession of have and have nots. You have very wide disparate outcomes based on the institution that you get your law degree from. And lawyers, for better or worse, they’ll still ask you, man, after 20, 30 years, you’ll be 50 years old, you meet a lawyer, and one of the first questions they’ll ask you is, where’d you go to law school? Very, however you want to characterize that, it’s a fact. So I knew in the law, there are 14 law schools that are traditionally the top 14 law schools, the T14, from Yale at number one, Harvard and Stanford at somewhere between two and three, New York, Chicago, and Columbia at four, five, and six, somewhere in there, then like Michigan, Virginia, Duke, and then rounding that out, it was like Georgetown and a few others. And that’s changed a little bit even since I’ve graduated in the last decade. There’s been some fluctuation. But I applied to all 14 because the outcomes for those 14 schools are vastly different. If you graduate from a top 14 law school, you’re talking about like 99% employment within six months after graduation, most of them had jobs already secured after 2L summer, making, and at the time, it was on average $160,000 starting income. Most of them are in New York, LA, Chicago, DC, and then the Texas cities, Dallas, Houston, and Austin, and a few other outlier cities, but that’s where most of those graduates will go and get those salaries. And then you look at even like Florida, like a solid top 50, top 30 law school, like the University of Florida, when the average starting salary is like here in Florida, if I wanted to get a big law job in Miami, there’s a handful of jobs, first of all, much more discreet. And those starting salaries at the time were like 105 to 135. So, a pretty significant difference then. So, I’m like, all right, I’ve got student loan debt, and I want to make money. Let’s go get some experience with one of these big firms. I got to get to one of these schools. So, I applied to all top 14 schools, including Harvard, and started getting into most of where I applied, even all the way up to Columbia, New York, and Chicago, and then did not get into Harvard, Yale, or Stanford. In fact, I didn’t even apply to Yale. I didn’t think it was a good fit. It’s the number one school, and it’s very academic central, like very high-end philosophical. They would have denied me, for the record, but I also didn’t think I was the right fit. So I didn’t apply. But I got into all the rest, but waiting on Harvard, waiting on Harvard, waiting on Harvard, and then they denied me. So, it is what it is. But I got into the two schools then that came into play. My wife and I didn’t want to move to New York. We didn’t want to move to Chicago. And the West Coast seemed pretty far. I flirted very heavily with the idea of Berkeley, but moving all the way to the West Coast seemed like a lot for us, which seems silly in hindsight, but we like dogs and all this. We’re like, we’re going to move all the way to Berkeley, crazy. So we were torn between the University of Michigan in Ann Arbor and Duke. And then the back story with Michigan, again, I grew up in Southeast Michigan. Both of my parents are Michigan State grads. I’d always been like kind of hostile to the University of Michigan. That’s changed over time as like my younger brothers went there and whatever. But I really didn’t want to go to Michigan. In particular, I didn’t want to move back to Michigan. Because again, my whole goal from day one, Tim, all the way back to the Disney experience, was to get to Florida, to live in the warm weather, to live in the Southeast, to be out of Michigan, be out of that bubble. So the idea of going back kind of felt like not a good fit in the story. I would have done it because, again, the outcomes were so much better. But Duke came through, got into Duke, similarly situated in terms of whatever, job prospects. And so went to Duke and had a really good two years there. I’m really happy I did that.

Tim Ludwig: Did the rejection by Harvard, did that put a chip on your shoulder? Some people, those things turn into fuel for their ambition and like I’m going to prove to them that I could have- Was there any element of that, or just like, yeah, I tried, didn’t work, Duke is still a great school and moving on?

Eric Pacifici: 100% Yeah, the latter. I don’t live my life kind of feeling that way towards people or towards things. What I would bet is they looked at my application and they said this kid’s not going to be a good fit. This isn’t going to be a good situation for him. He’s probably not going to be successful here. They know that better than I do. They’re looking at the other applications and the credentials and whatever. And truthfully, even showing up at Duke, like I was frazzled for those two years. It was a great two years. I suspect most people would describe their years in law school as frazzled. But like I was frazzled. And I had a really good experience. Duke won’t rank you. So, I don’t really know. But my first semester at Duke, I was a 3.86, and I remember the admissions counselor, the career counselor who they linked me up with, Adrienne, she came up to me and she’s like, Eric, that’s like top five students in our class. Now that was second year. And how much are people putting in an effort in the second year? But these kids at Duke were like, it was crazy. I was in a banking regulation class with a guy named Lawrence Baxter, who he was a vice president at Wachovia Bank before it failed. He’s one of the leading banking experts in the world and he asked the class, this was big bank regulation, it’s my first semester, and he said, how many of you in this room have been to Hong Kong? I swear to God, Tim, maybe it was self-selection, but every single hand was up. I was like, who are these kids? Who is this cohort? So it was really good experience. So, it’s quite conceivable that if I had gone to Harvard, I would have been in over my head and it wouldn’t have been a great fit for me. So, no ill will towards, yeah.

Tim Ludwig: So, good experience at Duke and then coming out of there, this is the time to grab the brass ring and join one of the top, what is it, Amlaw, whatever firms that’s at the pinnacle of the profession?

Eric Pacifici: Well, so what I did was a little bit, I guess, more my style. Because I don’t really care, and in fact, I didn’t really know who the firms were. I guess I knew who Cravath was and Wachtell, but Latham, Kirkland, Sidley, I don’t know. But what I did know is that, again, the salaries. The salaries were $160,000 in New York, LA, Chicago, DC, Dallas, Houston, and Austin. So where would you want to go, Tim, if you’re a rational actor? There was a chart put out by Above the Law in the year that I graduated, and it had Dallas as the number one city in America for first-year lawyer buying power, indexed for inflation. And I remember running the numbers. I took federal income tax, and I had a study partner named Mark who was going to a firm in New York. He actually just made a partner in a big firm in New York. Awesome, awesome guy, really smart guy. But him and I did the math, and we did the indexing for inflation and then consider tax. Because he’s paying city tax, state tax, New York tax, whatever. I’m going to Texas, not paying any state income tax, any city tax. And at $160,000 in Dallas at the time, you would have had to earn $315,000 in New York. And he wasn’t. He was making $160,000 also. So, we had the ability to go to a city with much lower cost of living, pay off our student loan debt. We really invested heavily in paying off our student loan debt early on in the process. And so, I was kind of thinking more about it from a return on investment perspective than I really was from a legal perspective. I ended up having a really great legal experience and I’m actually frankly kind of glad that I went to Texas as opposed to some of the other markets. If I could do it again, maybe I would have tried New York or I would have tried one of these bigger cities I was a little intimidated by I guess back then.

Tim Ludwig: Did you know what kind of law you wanted to practice coming out of law school or was that secondary to just getting a job that paid that amount of money?

Eric Pacifici: Secondary to getting a job. Because, again, I’m still thinking, hey, I’m not a kid who- I don’t have up safety net. I got to get a job. So, they do on campus interviewing for second year summer where you go- It’s a cool process. It’s kind of a neat American tradition. But all the law firms will come to campus and you do a lottery system. You bid for the firms. You go to a local hotel. We’d go to the Hilton, and the law firms take different rooms, and all the law students line up on the hour. And on the hour, you knock, and you go in, you do your 20 minute interview and you come out and you do that 25 times and then hopefully you get a job. Hopefully you get called back and you get a job.

Tim Ludwig: Speed dating for legal jobs.

Eric Pacifici: Speed dating for legal jobs. And so I went into that, Tim, knowing that my life depended on getting a job, depended on getting a job. I’m married, I’m young, I got no money, I got a ton of student loan debt. You could have given me a job in the mail room as long as you’re going to give me the salary. So, I remember I had rehearsed my line, which was I think I would be a good litigator for these reasons. I think I would be a good transactional attorney for these reasons. It’s hard after my first year to put my finger on exactly what I want to do. And that resonated really well with everybody because everybody’s like, yeah, I mean, obviously, who knows. And then as luck would have it, I ended up in a practice group. Again, maybe it was that the screener, similar to Harvard, they’re looking at applications, resumes, and they’re talking to kids, and they know better than you do what you’d be a good fit for, and I ended up in a discipline that I think was a perfect fit.

Tim Ludwig: It’s interesting, when I look back at the start of my career after college, I gave almost no thought to the culture of the firm that I was joining or the manager that I might be working for, the things that would most impact my day to day experience. It was all about the prestige of the firm, the amount of money I was going to make, and the city I was going to live in. And then I don’t even think I had the tools then to evaluate what would have made like a better business to join. Now, having spent time as an investor later in life and being able to marry that with the experience of being in more of an operating role, the combination of those two things for a job seeker, if I had to go out and do that again today, would really radically shift the way that I approached it and thought about what I was trying to optimize for. It sounds like, we’ll get to this in a minute I think, but you got really lucky with where you ended up. But it could have all, I mean there’s a lot of horror stories about people joining these big law firms and having very poor experiences, right?

Eric Pacifici: Well, I think most experiences are poor, yeah. And in your discipline, there’s true delineation between opportunities and between a good company to work for, a bad company to work for. In the big law world, there’s not a whole lot of- it’s different flavors of the same thing, in my opinion. And you go into these interviews and you say, tell me about the culture, and the word collegial is used so much it almost loses meaning. Because the problem in big law is just it’s the incentive structure. Like if I’m going to bill as a fifth year, if I’m going to bill at $1,500 an hour, if I’m not willing to work on Christmas Eve or during grandma’s funeral, somebody else is at those rates. And when these firms are- it’s high stakes, the company litigation or transactions, like they don’t give a crap about your grandmother’s funeral. They can’t. And for most in-house lawyers that have lived that life, they’ve been those outside lawyers, they have no sympathy for you. And also, they can’t because they’re hiring you primarily as CYA for their board. And so, if you fumble the bag, they’re going to try and throw you under the bus, but to the extent that they can’t, they’re going to get thrown under the bus, so just it’s no mercy. So once you understand that and look back at it with a decade’s worth of industry experience, you go, what a silly question to even ask.

Tim Ludwig: Nobody cares about the culture. The culture is work hard and serve the client.

Eric Pacifici: The culture is build your resume and make lots of money and then maybe move on or maybe be one out of a hundred that makes partner. And you look at these guys and gals that are six, seven, eight year attorneys in these firms and the level of life in their eyes is- It’s interesting.

Tim Ludwig: What happens to the people that go through that whole process and don’t make partner?

Eric Pacifici: Couple of things, in practical terms. Either you go to another firm. Oftentimes, there’ll be another firm in town that will take a chance on you, make you a partner. Not as good of a firm, of course. Or you go in-house, or you become of counsel. And they basically say, Tim, I’m not going to make you a partner, I’m not going to give you equity in this firm, but you can continue to work for us. Sound good?

Tim Ludwig: But the payoff at that point is much, in almost all those situations, the payoff is probably much less than if you actually become an equity partner.

Eric Pacifici: Yeah. Getting a slice of the pie at AMLaw 100 or top law firm is incredibly lucrative, but primarily because they screen so much. But they’re never going to tell you, Tim. They will keep you around and they will, so long as- when they’re ready to get rid of you, all of a sudden, you’ll get a bad evaluation and all this stuff will come out of the closet. Until then, it’s going to be, everything’s great, don’t leave, Tim, we’re going to make you partner, we’re considering you, blah, blah, blah, because you’re a laborer, you are revenue for them. So, their incentives are to keep you as long as conceivably possible. And it just it is what it is. But how many people are going to feel bad for a Duke, Michigan, Berkeley, Stanford educated attorney, like if you don’t realize that, then that’s on you.

Tim Ludwig: All right. So, you move to Dallas, you start as an associate, you’re making 160 grand a year. What was that like? What were you working on?

Eric Pacifici: Yeah, so I started with a firm called Baker Botts, actually, which historically there had been three firms in the state of Texas that were the Texas firms. There were no national firms in Texas. They couldn’t get in because Texas was very insular. In fact, so much so that when I was applying to law firms, the colloquial wisdom was don’t even apply because I’m from Michigan, they’re not going to hire you. They did, but they were one of my very last bids in the process, but I think I got lucky. But that changed right around the time that I started there, and the big national firms, Kirkland and Latham and Simpson Thatcher that now have big, prominent Texas offices, you don’t have to start a firm from scratch, just go hire the lawyer, give them a big bag, they’ll bring the clients with them. They’re actually not loyal to the firm name, they’re loyal to Tim. And so that’s what they started to do. And all of a sudden, these firms were able to blow up. And so, I joined a law firm called Baker Botts in September, and less than a few months later, a big group of partners that actually had recruited me down from Duke left to go open an office with Sidley Austin in town. So, the group went from 13 partners to like, I don’t even know, nine. And then by the end of my first year, it was down to six partners. And a big group of the very best partners left to open a firm called Gibson Dunning Crutcher. It’s a LA-based law firm, top 10 national firm, and to open the Houston office. But one of the partners was with me in Dallas, and this was the very best. I mean, some of the best- I think probably arguably the best corporate lawyer in Texas today or will be soon, is a partner named Hillary Holmes. She left with them. Really incredible group. And so, I thought, okay, the writing’s obviously on the wall. I mean, I’m brand new here, but I mean, we went from thirteen to six in a year. I better go with them. I had the opportunity to go with them. I would have never gotten a job with that firm. Again, would have never gotten a job with that firm directly out of law school into Texas. There’s no way. They rarely hire at all. So, I got incredibly lucky I had the chance to go over there. So, I did and ended up working with some really incredible lawyers. And it was interesting because it’s almost like my UF to Duke transition. It’s very similar in that I show up at Gibson, no disrespect to the Baker Botts attorneys, they were really good. It’s a top 50 national firm. But the lawyers at Gibson were doing nothing but pure play M&A. Like they were really intense. The junior lawyer, I remember working with the junior lawyer there, Jonathan Whalen, and just being flabbergasted at his M&A capabilities as a junior attorney, just turning private equity M&A deals for a bunch of prominent Texas funds and then working throughout the Gibson system. And so, I had the opportunity really fast to join a much better group. Two doors down was Jeff Chapman. Jeff was, at the time, I don’t know what it is today, but he was one of five-star individuals in private equity M&A in the country. And he was the only one in the state of Texas. He’s two doors down. The partner that I had worked with the most, Doug Rayburn, who’s an incredible lawyer, he was the top corporate lawyer in the city of Dallas. Like just really an incredible group of people. So, it worked out. I think it worked out extremely well.

Tim Ludwig: Yeah, that’s a powerhouse group. What a great training ground for you.

Eric Pacifici: Scary. Yeah, it was scary. I mean, it makes sense in hindsight, but obviously, at the time it was an intense experience.

Tim Ludwig: Yeah. Let’s maybe leave big law behind and fast forward to the health challenges and scare of 2022 with your second son.

Eric Pacifici: Yeah, so you’re connecting the dots, so we ended up, I worked for a number of- ended up working for Kirkland Ellis and left. Finally got a chance to move to Florida. This is during COVID. I started to post on social media about M&A, primarily trying to network in the entrepreneurship through acquisition and kind of SMB communities, thinking about buying a business or being involved in business buying. So we launched the law firm. We can talk more about that. But in the first month of launching the law firm, my one year old at the time, two young kids, both boys, but the younger of the two, he had developed pediatric epilepsy. And it was hard to detect at first because it’s a rare form called Doose syndrome where he has two different types of seizures, but they’re drop seizures, if you’re familiar with that, his head kind of drops. And when he was crawling, we just thought he was clumsy, whatever. And then one day I realized, holy shit, he’s having seizures, which just scared the heck out of us. And we go see a pediatric neurologist and start going through the whole process of trying to figure out why is he having these seizures, how do we treat them and whatever else. Well, in the process, they start doing a ton of testing, and they’re trying to figure out is his brain okay, what’s going on? And they did a lot of tests. We did an MRI on his brain, blood tests. And it was like one bad thing after another kept kind of popping up. And it probably started, he turned one in May, we probably started the testing in like March. And then on July 4th of 2022, not last July, the July before, because of a long chain fatty acid test where they took a blood sample of the very long chain fatty acids, and they drew the conclusion that he had X-linked ALD, X-linked adrenal leukodystrophy, which is a rare form of kidney issue where you’re not processing these long chain, these C24 and C26 long chain fatty acids properly because you’re missing an enzyme. And when they detect the buildup of the long chain fatty acid, to the doctors and everybody’s credit, when you detect that, there’s a very few number of reasons why that would be the case. And they’re all a death sentence. And in fact, X-linked ALD, frankly, it’s the best of the bunch. If you have to have one of them, you want to have X-linked ALD because at least you can do some stem cell stuff and some different stuff that I can talk about that can prolong your life. But suffice it to say, most children that- and it only affects boys. It’s given from mother to son. But most boys who have it, they develop a breakdown of the nerve endings, the nerves in your nervous system. Between ages four and eight is when it catches up to you. And the problem that happens with X-linked ALD and why they’ve now implemented early detection newborn screening in 38 of 50 states – they really need to do it in all 50 states – but 38 of 50 states is that by the time you find- when you find out that most kids have X-ALD, is when the nerve damage has become so- it’s manifested and they start to like drool, will be drooling. You’re like, why is he drooling at age four? And then the breakdown happens between ages four and eight and then they die. So it’s a tremendously sad condition. Our story is that they were wrong. And we get this MyChart notification on July 4th, 2022, middle of the day, sitting in my backyard and it’s the MyChart. It says indicative of X-linked ALD. And at this point, we had- we’re going, what’s going on. Something’s going on.

Tim Ludwig: Did you know what X-linked ALD was when you got that MyChart notification?

Eric Pacifici: Never even heard of it, Tim. So obviously what do you do as a parent? You immediately Google it and it immediately sends you into a state of total panic. You call the doctor, doctors, they’re all off because it’s July 4th. I don’t know why their system is set up to do that, but they pushed it through to us on July 4th. So, we ended up getting through to somebody, and we’re hearing new journey, new journey, new journey. The doctors are sure. They’re like, we’re 100% sure. We’re really sorry. Dr. Ronald Davis here in Orlando, he’s head of pediatric neurology for Arnold Palmer Children’s Hospital. His office is really good at pediatric neurology, and I’m with his PA and she’s like, you’re going to come in tomorrow. I’m so sorry. But she’s like, this is over our heads. Masonic Children’s Hospital in Minnesota is the right place. They’re already talking about, on the first day, about us going to Minnesota for whatever, trying to find stem cell donors. And it was bad. The really scary part about it, Tim, and this is where things got very dark for me, is it’s a genetic condition that… I don’t know that I’ve ever told this full story, by the way, to anybody. But it’s a genetic condition that it’s from mother to son and does not affect daughters, except for maybe later in life. Women can develop issues much, much later in life, but not life threatening issues. In boys theoretically, in many cases, it kills you. 50% chance that both boys had it. So, we get the diagnosis on the one. They’re like 100%, new journey, new journey. And I’m the only person that’s doing the read- because now I’m reading everything, Tim. Because again, projects, like give me a project. I’m reading everything, Tim. I’m reading the studies. I’m reading the studies on the study. I’m reading the meta studies. I’m looking at the C24, C26. I’m looking at charts within these charts, and I’m charting his on the chart. But I’m also the only person it seems like that realizes that if Edison has this, there’s a 50% chance his brother also does. And then I’m like, what are the odds? And of course, you’re Googling it. Now all of a sudden, you’re finding like 60 Minutes episodes and stuff like that with brothers that both have X-linked ALD. Literally, Tim, I’m dying. I’ve just started the law firm. I’ve just started the law.

Tim Ludwig: And the doctors weren’t suggesting that you test the other child?

Eric Pacifici: Well, so the process was a nightmare. So, July 4th is when they give us the diagnosis, and this is your healthcare system. We go in, but the main doctor, he’s on vacation because it’s July 4th. He’s not coming back until July 12th, so come in on July 12th. And then we’ve got to go see the geneticist, and she was amazing. She’s with Arnold Palmer Children’s Hospital in Orlando. She’s a genetic doctor. But she’s saying that there’s no… We’re going to do a rushed test through Invitae of the little guy, but we’ll wait to see what it comes back with before we test the four-year-old. The problem is, Tim, I just described how this condition works, is that it kills boys between the ages of four and eight in most cases. He’s four, okay? I don’t have time for three weeks for Invitae to process this to then get… They’re like, well, you’re going to have to pay out of pocket. I’m like, I don’t give a f*** what I got to do. You’re going to run that second test now. So I’m like- I’m like yelling at a doctor, and it wasn’t her fault. It was a mess.

Tim Ludwig: And it must have just all felt like it happened in the blink of an eye. Like you went from zero to 100 miles an hour on this diagnosis, and what do I do? Your whole life must have just been turned upside down in an instant.

Eric Pacifici: Horrible, yeah, and we just started the law firm. It was the first month of operations of the law firm. My poor partners, they’re sitting on calls with me, and we’re trying- Because I told my wife, I’m like, we cannot compound crises. We have a health crisis. We can’t also have a financial crisis.

Tim Ludwig: Practically, how do you compartmentalize that and not just be a complete basket case on every call you’re trying to join? And where does that strength or ability come from?

Eric Pacifici: You’re in shock. I mean, I was in total shock. So I mean, the clients I had at the time, fortunately, some of the early clients that we had were like longtime good friends of mine. Frank Rivera, I’ll say a name. Frank is a long time good friend of ours. He was the person who introduced me to ETA. He’s bought a business in Texas. He’s doing extremely well. He was one of my first clients. I’m like, Frank, here’s what’s going on, man. Like, bear with me. I actually handled it quite well because you have to. But it was like I do a call, I’m doing purchase agreements. And then Tim, I’m walking through the woods. I’m screaming at the sky. I’m punching trees. I’m thinking there’s a chance my whole family’s dying, my whole family, not just my two boys, but also there’s a chance if the boys have it, my wife has it, which means she’s going to start to see issues later in life. This is a bad situation.

Tim Ludwig: Horrible. Yeah, worst case.

Eric Pacifici: Horrible. Because it’s like watching- the analogy would be like watching your loved ones in a burning apartment for years and there’s nothing you can do to save them. And so, just incredibly traumatic situation. So, we live with that for a month. The upshot is we lived with it for a month before we got the DNA test back, and it turned out to be not true. Which again, then you’re still freaking out. I mean, I didn’t stop thinking about it all day, every day until probably the end of the year, probably around December, January of 2023 is when it finally, I was able to stop thinking about it pedantically. Because you start to think all kinds of things. Because now, okay, well, so the DNA test came back, but what about these long chain fatty acids? Does he have one of the other things? Because the other things are also terminal. So, we had to process through a lot. It took a long time to kind of unwind the mess. And even as I say it today, I’m like, do we need to go get those long chain fatty acids tested again, like ASAP. But I’ll stop rambling.

Tim Ludwig: No, that’s not a ramble at all. I mean, I’m so thankful that the story has a happy ending and that there was a misdiagnosis. But even that must have been traumatic, just being able to go through that kind of a cognitive journey of like everything seems to be okay, yes, my child has epilepsy, but it’s manageable to my whole family may have a death sentence to, oops, they were wrong. I mean, the swings there are gigantic. I mean, almost impossible to imagine.

Eric Pacifici: Yeah, I have some gray hair. This was the result of it. I mean, for real. But in addition to starting the firm, and fortunately, everybody, my partners were incredible throughout that process. The logical question I get from everybody is like, are you mad? Like, how mad were you at the end of it? And I was like, I wasn’t because I promised God in many long conversations that we had over that period of time, that if it was not true, that I would not be mad. You know what I mean? Those were like concrete promises that I had made. I think it was, in hindsight, one of the best things that ever happened to me because it’s hard to live through something like that and then go back to worrying about ordinary day to day stuff.

Tim Ludwig: Say more about that. What are the other residual effects that, now a year and a half or so later, is that right? Well, however many months it is later, what’s sort of stuck around? What’s changed?

Eric Pacifici: Well, first of all, I have so much appreciation for those little boys. I’m not going to cry here. I’m going to take a breath. But we do a ton of stuff and seeing the development that they have, just seeing like little strides, particularly with Eddie because he still does have pediatric epilepsy, and knock on wood, but that can have a profound impact on cognitive development. And fortunately, he’s been seizure free for an extended period of time, and knock on wood, I’m praying that that continues to be the case. But so when I see him take strides, it’s like it takes my breath away every time. He does a little kid’s class and he’s very wild. He’s a wild little boy, which is not a bad thing. It is what it is. And seeing him start to like, things to click and the cooperation and being awesome. And last Tuesday, he was probably, I’ll say this, I’m biased, but I think he was the best one in class. Like he was awesome. And stuff like that, man, it’s just like I could break down and cry at a moment’s notice, just on day to day stuff. So it’s good to have an appreciation in life for little things.

Tim Ludwig: That’s a great gift. I mean, I think if you can take one one part of that experience and turn it into something like that, that will be with you for the rest of your life to appreciate those special moments, that’s really precious.

Eric Pacifici: Yeah, we deal with a lot, Tim, particularly as entrepreneurs. You are an entrepreneur. It’s high highs and low lows. And it’s stressful in a whole variety of ways, particularly when you’re doing transactions. And I’ve always been a pretty low stress guy. I don’t get very anxious. I’m not a worrier. I really do feel- maybe that’s why I’ve been able to just like set aside some of my early struggles and just get on with it because I don’t worry too much about things. But having been through that, I mean, at this point, what could you throw at me that is going to make me feel like the world is ending?

Tim Ludwig: Right. Yeah. What’s harder than that?

Eric Pacifici: What happened is I felt like the range of possibilities was this big. This is your low. This is your high. I thought it was this big. And it turns out it’s bigger than the frame of this picture. The range of possible things that can happen to us, I struggle to think about, well, and I won’t even say the things, but I struggle to come up with things that could really be a game over. Because to me, Tim, I’ve always been a glass half full guy. I am a guy who finds solutions. Maybe it’s why I’m a lawyer. But you give me a problem and I will find a solution. In that situation, there was no solution. And I was still searching for one. That’s why I was charting C24 and C26 levels going like this doesn’t- something’s not adding up. I was trying to solve it. But it was a true game over. It was a true, if this is true, there’s no fix. Your life is over.

Tim Ludwig: As a glass half full person, did you ever feel like there was a moment where you lost that kernel of optimism that people like you have?

Eric Pacifici: Early on, 100%. Because the way that it played out is they were like, this is 100%, this is your new journey. For like- and I don’t know how many days or weeks that was, I don’t know. And so, to get my head wrapped around what is this, what are the potential implications, and then get to a place where like, of course, now my mom’s there, my brothers are taking care of us. I’m sitting there on a Saturday night with a notepad and a bunch of papers on the kitchen table, going through all the different test results in the MyChart and comparing them to metadata and all that and finally getting to a place where I’m going something’s not adding up. Yes, his C26 numbers are in this range, and that’s not a good thing, but the C24 and the C26 together is just not making sense. And so, when we actually went on July 12th, so I guess it probably happened fast because we finally meet with the head of pediatrics on July 12th, and I’ve got a notebook. I’m like, here are the things that I need you to make sense of for me. And at that point, I had the realization this is going to maybe sound whatever, but I was sitting there across from this man going, like with a deep realization, like I know more about X-Linked ALD than this guy does. I probably- if that’s the case, I probably know more about this than anybody in the city of Orlando right now. Like this is weird because…

Tim Ludwig: And certainly more about it as it relates to your child than anybody else on the planet.

Eric Pacifici: Yeah. And things weren’t adding up. So that’s why I started to have optimism, but I thought maybe I was losing my fucking mind. I thought maybe I was self-soothing in like the deepest of possible ways. And of course, at that point, we don’t have DNA testing back. And yeah.

Tim Ludwig: You mentioned that at the beginning of all this, it was the first month you also launched your firm. So maybe that’s a way to create a segue here back into that topic. You also mentioned earlier that there is this ETA, Entrepreneurship Through Acquisition journey that you had started to consider while you were a lawyer. Was it because you didn’t enjoy law at that point, or you just wanted a new challenge?

Eric Pacifici: I was struggling with a lot of the things that my clients struggle with. I was doing fine as a lawyer until we had our first son. I didn’t love it. I was working extremely hard. But it was just me and my wife and the dogs, and if I had to do whatever I had to do, no big deal. And then all of a sudden, I have my first son, and I’m like, this doesn’t work. Like he goes to bed at six o’clock every day, which means if I don’t leave the office at five for my 25 to 30 minute drive home through Dallas traffic, I’m not going to see him that day. Like I’ll have seen him in the morning. I was getting up with them at, I was getting up with him, reading him stories for like an hour or two hours before work. But like, I’ll see him again tomorrow. Like that started to kill me. And I remember driving Mockingbird Avenue’s a 50, I remember doing like 65, 70 miles an hour down Mockingbird, trying to get home just to have a few minutes with the guy. And so being like this doesn’t work. And if I could do something entrepreneurial, then maybe I could have more control. And obviously, seasoned entrepreneurs will tell you that more control in certain ways, less control in others. But the backstory there is I had been introduced while I was a lawyer at Gibson Dunn to the person I mentioned recently, earlier in the conversation, who he was at Goldman Sachs, and he was going to buy a business in Austin or looking to. They moved to Austin to start a search fund. And him and I are talking about life objectives. I’m like, I really want to live in Florida, but there’s not a good legal market in Florida. I’ll have to take a big pay cut, blah, blah, blah. And he’s like, you should buy a business. I’m like, buy a business? What are you talking about? It’s like 2017. He’s like, yeah, you should read this book. It’s the Harvard Business Review Guide to Buying a Small Business. I was an M&A lawyer. I’m like, who’s going to buy a business? That sounds crazy. So I read the book. He sent me the book, I think, if I remember correctly, and just lost my mind. Again, somebody who dives in. Read, buy, then build, and everything that I can conceivably find on small business M&A. Got super excited about the idea, but also was like, okay, I can’t go buy a business. I’m listening to podcasts, worrying about a lot of things that my clients worry about, which is like, how am I going to come up with a 10% equity injection for a multi-million dollar business. And so spent a few years just kind of letting it marinate. Love the idea, love the concept, but I’m working in big law. I’ve got little kids. Actually, we paid our student loan debt. We had $250,000 in student loan debt from my wife and I’s collective undergrad and college and her master’s degree. We paid that off the week that our first son was born. So now I’m debt-free. I’ve got a new son who I really want to be there with and spend as much time as I can with. And that’s what kind of triggered the events that led to 2020 when I started talking about it publicly.

Tim Ludwig: Publicly on Twitter?

Eric Pacifici: Yeah, well actually it was 2021. So I started following social media, Twitter, much more closely during the pandemic, bored at home, whenever. I’m now in Colorado. I’m working in big law, but I’m in Colorado, I’m in a beautiful home outside of Boulder, looking at the mountains every day, doing legal work. We’re having a ton of fun. It’s the pandemic and we’re drinking IPAs and making s’mores and whatever, it was great. But I’m also reading Twitter a ton now, and I’m learning about Nick Huber and Red Zeller and all these different people that are on- you, that are talking about business buying and followed that conversation for a while and then decided August 23rd, 2021, that I was going to make an anonymous handle and just start talking about M&A because that was the one thing that seemed to be missing from the conversation. A lot of business buyers and operators, but nobody from a legal perspective that could tell you how to concretely buy a business. And so, I just started tweeting about that, and it happened extremely fast.

Tim Ludwig: Tell us what your handle is on Twitter.

Eric Pacifici: It’s @SMB_attorney, small medium business_attorney.

Tim Ludwig: And the reason I bring that up and wanted you to mention it is because you were not a small and medium sized business attorney when you created this anonymous account.

Eric Pacifici: That’s right. Yeah, that’s right. I was working at Kirkland Ellis doing a hundred million dollar, billion dollar transactions.

Tim Ludwig: So why did you give it that handle? Was it because that was what you wanted to talk about, because you thought that was where the audience was or that was where the gap was or because you were already foreshadowing that this might be a bridge to a next stage in your career or all of the above?

Eric Pacifici: Yeah, well, so I never claimed to be an SMB attorney, never claimed to be a attorney that works in SMB. I told my whole story right there and pinned it to my bio, which is I am a lawyer at a firm at this level that does these things and want to talk about small business M&A because I want to get to know you guys, I want to network, and I want to potentially buy a business myself. And so it was like SMB, attorney, not like SMB attorney. But what happened was I started having conversations all day long, every day with people who’ve bought businesses or are operating businesses and talking about M&A, talking about reps and warranties and how to guess work INVESCO, hey, what’s market for these indemnities or whatever, deposits and working capital and learning little bit, little bit, little bit and having these conversations. I remember little things like a guy named Mike Bakken here in Central Florida telling a story about working capital in SMB where a seller had told him working capital sounds like a you problem. And kind of learning how these sophisticated, true mid-market M&A concepts now apply to mainstreet sellers where it’s dramatically different. And I was very ethically compliant as an early stage social media lawyer. I still try to be, but now that I’m public and everybody can, you can go to my bio, you can see who I am, you can talk to my clients, you can talk to you about me, there’s a little bit less of an onus. But when I was an anonymous account, because I started out anonymously, I felt very concerned about losing my job at Kirkland because I had no idea any of this was going to happen. I thought I was just experimenting, talking, whatever, and very concerned that I was going to get in trouble from an ethics perspective. So I was very, very cautious. So I was always completely honest. I still am.

Tim Ludwig: So most of the information started to come through direct messages it sounded like and people reaching out to you so that you could then move the conversation offline?

Eric Pacifici: Well, even then, I was not taking transactions. I was working at Kirkland. My hourly rate was like, I don’t even know, $1,500 an hour, somewhere in that range. And so, I couldn’t take these deals myself, nor could I take any deals or make any money off of it because I was concerned that the content that I’d put out would be deemed as legal marketing or advertising, even if I was taking like referral fees. And so, I was passing work along. So, when I get DMs from people, and I started making friends and stuff, but most of the conversation was out in the public. It was out in comment sections and yeah.

Tim Ludwig: So how did that turn into the origin story for SMB Law Group? How did these casual conversations and you just filling time during COVID manifest itself into, oh my gosh, now we’re going to do this and there’s a firm?

Eric Pacifici: Yeah, it was a happy accident. And both my partner Kevin and I probably tell different versions, or my founding partner, Kevin and I, and Sam, tell different versions of the story. But for me, it was start tweeting about M&A. I don’t really know what I’m doing with that other than trying to learn about the business components of it. And then started getting a ton of people coming and saying, hey, I need a good lawyer for my 2, 4, 6, 8, 10 million dollar deal, who do you know? I didn’t know at the time that it largely doesn’t exist. Like you have small business lawyers who will take anything and everything, and most of the time, they’re terrible, but they don’t tell their clients that, their clients don’t know that. And so, we see them on the sell side all the time and they get their butts kicked. Or you’ve got mid-market attorneys that are built for 50 million dollar plus deals that are good M&A lawyers but they bill by the hour, they’re really expensive and they’re really annoying and they’ll have 12 matters going at any given time and your $2 million deal is going to be the 12th most important thing that they’re working on. So you know what that translates to. So, we started having conversations about potentially starting a project, and Kevin’s a really good corporate lawyer. He started his career at Cravath. He was working in-house. He was doing some of the deals on the side that I was- that people that were coming to me. And I finally talked him basically into the idea of starting a firm. But the missing element that we had, because again, I was not an SMB attorney to start, the missing element was to get that mainstream true transactional experience. So, we went out to a guy named Sam Rezati, who is a really awesome person. But Sam, he was a lawyer by training, went to UVA Law School, and then he bought a business, exited, and now he invests, and he still keeps his law license. And we said, Sam, we need to marry up our transactional experience with your mainstream experience. And so, we did that. And I think it made a nice- complimented very well.

Tim Ludwig: One of the other things that you did that was really interesting is your product development was all sourced from your future clients online. Like there was a lot of testing going on about, well, tell us about some of the things that you were testing and trying to ideate around to form this, the shape of what you now do.

Eric Pacifici: Yeah, well, it was a product of I think Kevin and I saying we don’t want to just start another law firm. Like, I don’t want to start a crappier version of other things that already exist. And honestly, Tim, I don’t love the legal profession. Like, I just don’t. I think I’m a good lawyer. I think I’m a good transactional lawyer. But I think I’m more of the Rainmaker personality type in the Culture Index. My Culture Index is the Rainmaker, Cast Typer, probably even if I took it multiple times, I probably would even dabble in the Daredevil section, which is maybe not the great Cast Type to be a long-term lawyer. So to me, I’m like, yes, I will start a law firm, but this needs to be a legal business, not another generic law firm, because you go build, and one analog is a law firm in the city of Dallas, it has somewhere in the neighborhood of probably 50 plus lawyers now, built by a very well-connected individual. He’s the son-in-law of a prolific NFL football player. They run deep in the Dallas wealth circles. He founds this firm, he builds it up to 50 plus lawyers, they’re doing everything from litigation to corporate to bankruptcy to everything. And then in comes my buddy who left one of the big law firms I was at in Texas, joins that firm, becomes head of the corporate department in that firm, and in his second year, makes almost as much as the founding partner of that firm. Because the way law firm incentives are built is you eat what you kill and I’ll go build- everybody’s a partner, so we split the equity so much that we’re a mile wide but an inch deep. Meanwhile, I’ve built an organization as the founding partner that’s 50 to 100 people. I’ve killed myself to build this institution. If I had done it in anything that’s non-law, my net worth is probably in the eight figures. I’ve made an enormous amount of money. I’ve got a huge exit coming. In the law, you don’t have any of those things. You’re not earned by the dude who just came in off the street who generates more work than you. Meanwhile, you’ve bared that cross. I’m like, I’m not going to do that. I’m just not going to spend my life building an institution because I am not wired that way. So, if I’m going to build a law firm, it needs to be a legal business, it needs to do something different for our clients than what already exists, and it needs to be high quality for me. And so, we go out to our clients, we’re like what do you want from a law firm? We went out on social media – what do you want from a law firm that doesn’t already exist? Tell us what to price, how you want to price, what would you do differently? And you guys told us everything. You’re like here’s how to bill, here’s what to bill, here’s how to charge it, here’s the things we’re worried about. Not everybody’s worried about the same thing, so obviously we had to kind of pick and pull, but I would say, by and large, 85% of legal consumers or more do not like the billable hour. They hate the billable hour. They don’t just dislike it, they vehemently hate it, so much so that they don’t want to talk to their lawyer. So they’re like, we need certainty of spend, Eric. We need to be able to talk to you as much as we need to. We want to be able to go to lunch with you without feeling like you’re going to bill me. I want to be able to call you after a call with opposing counsel and just have a laugh if something silly was said. I want to have a relationship with you, not a transactional experience that’s incredibly expensive. Because then also the incentives are a disaster. And so, we’re like, okay, cool, let’s do a flat fee. They’re like, we’re also concerned about busted deal fees in transactions. It’s a big risk to us. And we’re like, okay, let’s make some of it contingent. We can’t make it all contingent because of legal ethics. And then also we have a business to run here, and we can’t do that. And also again, then you have the incentives problem. If I’m completely incentivized to get you across the finish line, what is that going to do to the way I think about things? Like, are you okay? And we had a collaboration with our clients before they were our clients and said, what if we do X, Y, and Z? And they literally built us the playbook and, frankly, the community was so good that they were able to even say, yes, some of these, like some of the little things, yes, it would be amazing to have the compensation be completely contingent on closing, but we also understand why you can’t do that and we’re okay with that too. And so not only was it- it was just an amazing experience kind of building the model of the firm. And what I now know which I did not know at the time is, because it was kind a happy accident, is product market fit in a business is so essential. And when the community gave us that product market fit on day one and said here’s what doesn’t exist and here’s what we want, we were able to take it, and the analogy that somebody recently used is it’s the difference between pushing a boulder uphill or guiding a boulder downhill. Was that you that used that analogy, Tim?

Tim Ludwig: I don’t think it was me, no. But that makes sense… It certainly feels that way when you do have product fit. Everything feels easier. What’s supposed to be hard just seamlessly falls into place.

Eric Pacifici: Yeah. And so, it was a great start. I don’t know that we could have possibly had a better start.

Tim Ludwig: Yeah. The other thing that from the outside seems different is that this notion of having a life outside of the law and respecting that people are multifaceted and have competing priorities, not on the client-facing side as much, but for your internal staff, seems to be another part of the DNA that you’ve created.

Eric Pacifici: Right. We’re very fortunate, and I think it’s a product of we built a firm that we would want to work for. That was our ethos is we’re trying to create something for us that obviously does high quality work for our clients, caters to our clients, but also that we want to actually work for, which means we don’t want to be doing the long commutes anymore. And I understand some work in this economy has to be done in person and those things should be done in person. But for the rest of us that don’t necessarily need to be there in the office just for purposes of the legal profession, like putting on a tie and going to the office because it makes the old guy down the hall feel like he’s got more control over you, like it’s not true. And you’re talking about in our profession, we benefit from being in an industry of, at least at our level, of incredibly driven, incredibly accomplished, type A individuals that have always been successful. Like the lawyers in any of these firms have been successful their whole lives. And so, what is going to change now? Particularly if you build their incentives to tie to their performance, just like you should, they love it. They feel like a business owner, but also they have that control and the ability to, again, not- You lose control in certain ways, you gain it in others, but most importantly, we’re a group much like our community. This firm, I think, is really a reflection of the SMB community, which is a family-oriented group of people with a little bit different priority of having that autonomy, but also owning the responsibility. And we are a reflection of that. And I think we, as a result of it, recruit disproportionate to what we should ever recruit. We are a startup business really, and when we go out with a job application, we get applicants from every top 25 law firm that you can think of, and that’s just crazy. But it’s because so many people want the same things and so few traditional thinkers are willing to give it to them.

Tim Ludwig: And growth has been like a rocket ship, I think plus or minus a billion dollars in transaction volume in a little over a year. I mean, just phenomenal numbers. With growth, there’s often challenges. I mean, you found the product market fit. But what has been the key challenge of keeping up with that pace of growth since you founded the firm?

Eric Pacifici The difficulty we have is professional services are tricky, and particularly legal professional services are really challenging to scale. We’ve said from day one we don’t even know if it is scalable. Because again, the traditional law firm is a mile wide and an inch deep. And Tim, you’ll join our firm and you can serve a certain number of clients. And as soon as you hit capacity, we’ve got to add another Tim. It’s really tough to add people below Tim for so many reasons. It’s the client’s expectation if they’re coming to work with Tim, but also then you create this ethos within the legal profession that everybody’s going to end up with equity. So if you’re going to recruit somebody that’s going to be on a partner track, their expectation- finally, Tim can recruit somebody beneath them, but then that person is only going to be there for a period of time before they’re saying, hey, I either need equity or I’m going elsewhere, or I’m going to go compete with you because also in the legal profession, I can’t have non-competes. You cannot put that person in any situation, so that you could teach them everything they know, and then your choice is you either give them equity, which dilutes your value, or they go and they compete with you.

Tim Ludwig: Yeah, and you’ve demonstrated there’s a lot of demand for these services in this market and sort of open sourced your playbook about what kind of firm can be built that thrives in this marketplace.

Eric Pacifici: And so it’s been- it’s an open question, even to this day, as to whether or not this business is really scalable in a traditional way, the way that you would scale an HVAC business or any business that our clients are going to go out there and underwrite and say, hey, this is an investment I want to make because this business is able to be grown. I don’t know if that’s the case. And so, somebody asked me the other day, what’s the exit here for SMB Law? And my response is, too early to be thinking about that, but it’s quite conceivable that we get to a place with this business where we go, we’ve built something unique that services this space. And that’s a great thing. It’s not an extraordinary business, but it has met the needs of people that we care about. And now we’re going to do something different while that thing continues to live on. So, I don’t know.

Tim Ludwig: But your journey is one of, I think, incredible self-belief and grit and setting really high goals and then going out and actually achieving them, for the most part. To sort of bring this to a close, you’re kind of a guy that, as you said, goes all in on things. I imagine SMB Law Group is sort of where you’re all in now, but is there something next on the horizon that you’re already starting to feel or think about?

Eric Pacifici: Not right now. So, and if you ask me every day, I’ll give you a different answer to this question, but we are at the center of so much opportunity within our firm. I mean, we see that visibility to endless investment opportunities, and it’s really easy to get shiny object syndrome and think, hey, I’m going to go spin up a fund, but we’re not going to do any of that. Right now, my focus is that everybody within our business should have a job, and you should be focused on doing your job. What is my job within that firm? When I wake up in the morning and I sit down at my computer, I should be focused very pedantically on accomplishing those couple of things. Once you’ve done that, I think that’s the only way we’re going to scale this, is if we have enough bodies that are focused pedantically on a few things. So you have to fight that shiny object syndrome. But it’s hard in our industry because I tell all of our prospective clients that as much as we are really good transactional lawyers, which I think we are, I should qualify that for ethics purposes, but as much as I think we’re good lawyers, more than that, we are really, really well connected. And if there are things that you need in your deal, whether it’s financing sources, investors, QE providers, industry experts, we can find it for you. And the problem with that is it also comes and finds us. So, I don’t know.

Tim Ludwig: Has your role already started to change? That was supposed to be my last question, but it sparked another one, which is, has your role already started to change within the firm from being a transactional lawyer with a full client load to do you have to do more management, firm building activities, marketing? What’s the split and balance for you?

Eric Pacifici: So, for me, I market obviously, well, I wouldn’t describe it as marketing, but I tell the world what we’re up to on a regular basis in an educational and informational way. But then I’m doing deals. Yeah, I love the deal work. I love having clients and working on transactions. So, I still have a full load of transactions. But it dovetails back into the culture index conversation from earlier because when we started the firm, Tim, we sat down, we did a culture index to figure out what I was good at, what Kevin was good at, what Sam was good at. And it turns out we have very complementary but different skill sets. Kevin is really good with technology. He’s really good with administrative things. He is also a really good lawyer, but he doesn’t want to do as much social media. He’s not wanting to make a fool of himself all the time like I am. And then you got Sam who is your accountant type and much more of a business builder from zero to one kind of guy. We brought in a chief of staff who is really kind of our COO, runs the business from an administrative position and he’s building beneath him. And so, we’ve done a pretty good job thus far of getting the right butts in the right seats. And so, I don’t think I’ll ever be the CEO of anything, Tim, because that’s just not my skill set.

Tim Ludwig: I can appreciate that. Well, thanks for making all the time and congratulations on all the success. And I’m most grateful for you being willing to share as much of your story as you did. And I’m really excited to see where you guys all take SMB Law Group in the future.

Eric Pacifici Yeah, thanks, Tim. This is going to be a cool podcast, man. I’m excited to find out who else you have on here. So drop these episodes. Let’s get going.

Related episodes

Join our Mission

Listen to Transitions today.