David Wang

This transcript has been edited for better readability: Henry Harrison Podcast — Entrepreneurs, Business & Finance Guest: David Wang Henry Harrison Good morning, David. Nice to see you. Welcome to the show, Entrepreneurs, Business and Finance. David, you and your firm have been my personal, professional, and corporate counsel now for going on seven years. We met through another person who has also been on the podcast — Alex Vantarakis with The Vant Group. Alex had an appreciation event on a boat, so we cruised around a lake here in Dallas-Fort Worth, got to know each other over snacks and sunshine, and that’s where we first connected. We also spent time together in meetings back when I had a prior company, talking with business owners who were considering different aspects of their businesses. What I’ve found especially valuable about you and your counsel is your wide range of experience for what I’ll call smaller businesses — although some of those businesses have millions of dollars in revenue, like some of mine have, and some may be much larger. That has really been your specialty. Why don’t you start by sharing a little about your background and your experience in business and law? David Wang Sure. Thanks for having me on the podcast. When I graduated from Rice University, I actually started my own business. So my entrepreneurial bent started very early. A partner and I got together and launched a graphic design business. I had studied biochemistry at Rice, so it was a complete departure from my academic background, but I wanted to own a business and so did he. We were part of the very first wave of people doing digital design. We were right there in the transition from traditional paste-up art — where layouts were created manually and photographed before printing — to a fully digital process. So that was my first real entrepreneurial experience. That business never went very far, partly because I wasn’t especially artistic and partly because my business partner had some fairly serious personal issues. Along the way, my father had been encouraging me to think about law school, so after about three or four years out of college, I went to law school. When I got my law degree, I hung out my own shingle from day one. I started as a solo practitioner and built my practice by developing relationships with business owners. So from the very beginning of my legal career, I was on my own and working directly with entrepreneurs. That entrepreneurial background has always helped me. I understand how entrepreneurs think, I know how to talk with them about their businesses, and I approach legal issues in a very entrepreneurial way. Over time, I also did a few other entrepreneurial ventures along the way. Then about seven or eight years ago, my practice had grown to the point where my entrepreneurial clients needed a much broader range of legal expertise. They needed help with litigation, employment law, trademarks, patents, and a variety of other things. They needed a lawyer who could provide more of a full-service platform. At that point, I found what was then the earlier version of Fouts Jordan, the firm I’m with now. It had a business model that I felt was really ideal for entrepreneurs. So I joined the firm so I could bring a much wider range of expertise to my clients without having to send them out to multiple different law firms or lawyers. Henry Harrison And that has definitely been helpful to me. You’ve always given me practical advice on what matters most, and then when a specialized area comes up, you can pull in the right resources. That has been a big benefit. I also think it’s interesting that you were remote before remote work became fashionable. I’m sitting here looking at what appears to be a home office, and that was one of the things that appealed to me when we started working together seven years ago. At the time, I had experienced both very small firms and very large firms. The large firms didn’t really fit my business, and the small firms couldn’t always handle everything I needed. What you offered seemed like the right middle ground. And from my experience, the remote structure creates real cost efficiencies for smaller business owners, which matters a lot more to us than it does to a giant corporation. David Wang That’s exactly right. In the typical law firm model, the overhead burden on an hourly rate is usually around one-half to two-thirds of what the client is paying. In other words, in a traditional office-based law firm, a huge portion of the fee is going toward office space, staff, infrastructure, and all the related costs. What I liked about the remote or distributed model is that the kind of expertise I provide to my clients doesn’t actually require a lot of support staff or heavy infrastructure. To give effective legal counsel to business owners, I don’t need a large office, and I don’t need to be surrounded by layers of staff. That means I can charge half or even a third of what many lawyers in traditional law firm models charge, while still earning a comparable living. That benefits the client because they get the same level of expertise. I’ve been practicing for 27 years. I charge in the range of $350 to $450 an hour, whereas some of my classmates from SMU who are now at major firms are charging closer to $1,000 an hour. And as you said, entrepreneurs often need the expertise of a big firm, but they don’t need or can’t justify the cost structure of a big firm. They also can’t always rely on a very small general practice firm, because they need access to multiple legal specialties. So this model really works well. It gives clients the breadth of expertise they need without all the traditional overhead. Henry Harrison One area where that’s been very useful for me is in partnerships. I’ve had different partnerships and arrangements with business colleagues over the years, and I know you frequently help clients create partnerships, buy each other out, or work through the difficult parts when things don’t go as planned. Would you talk a little about that? David Wang Certainly. Whenever people go into business together, there is usually a complicated set of factors involved. A lot of people start with a simple attitude: “Let’s just go into business together.” But I’ve been involved in enough disputes between partners to know how important it is to have the hard conversations at the beginning. We spend a lot of time talking through issues like: What happens if you stop getting along? What happens if there’s a personality clash? What happens if there’s a financial dispute? What happens if one partner behaves unethically or illegally? What happens if one person wants out and the other doesn’t? Every business is different, and every group of partners is different. So a big part of my role is helping people understand the kinds of disputes that can arise, building in mechanisms to handle those disputes, and making sure there is a structure in place that allows the business either to continue or to separate in a way that doesn’t destroy the company. That’s really important work, and it’s often much more about planning and counseling than it is about drafting the actual documents. Henry Harrison I know you also help people in transactions involving real estate closings, acquisitions of companies, and the sale of companies. And I’m sure there are many other areas you handle that I probably don’t even know about. Would you talk a little about buying and selling businesses, since I know you’ve helped a lot of people with that, including me? David Wang Yes. The two biggest areas of my practice are real estate transactions and business acquisitions and sales. On the real estate side, I help clients buy and sell all kinds of property — everything from raw land to major office buildings. Then once they own the property, I often help them run it from a leasing and operational standpoint. On the business side, I help entrepreneurs buy businesses and exit businesses. I really enjoy that process. Buying a business is exciting because it’s an entrepreneurial act — someone is stepping into ownership and trying to build something. Selling a business is often equally meaningful because it’s the culmination of years, sometimes decades, of hard work. Helping someone sell a company can be a very important moment in their life. In addition to those two large practice areas, I handle all kinds of contracts and transactional work generally. I think of myself as a deal lawyer. So if you need to structure a business arrangement, bring in a salesperson with the right compensation incentives, design an equity plan, or figure out how to transact business with another party, that’s the kind of work I do. Anything that involves structuring and documenting a business transaction is really at the core of my practice. Henry Harrison That’s one reason I’ve often thought of you not just as a lawyer, but as what my father used to call a counselor. My father was also a lawyer, and he would sometimes use that term instead of just “attorney.” In my own life, I’ve had many businesses of different sizes, and the work has always tied into personal goals as well as business goals. When someone is buying or selling a business, it often connects directly to what they want out of life. That means you really get to know your clients. I know you know a lot about me — my businesses, my goals, what I’m trying to do next — probably more than many people do. That must be gratifying in some ways. David Wang It really is. When I first became a lawyer, I heard the phrase “attorneys and counselors at law,” and I didn’t fully appreciate why counselor was part of that phrase. Over time, especially working with entrepreneurs, I’ve come to realize that I’m probably more of a counselor than I am just an attorney. The attorney part is drafting documents and making sure transactions and businesses comply with the law. The counseling part is the bulk of the real work. Take a partnership, for example. The biggest part of that engagement is not preparing the agreement. It’s figuring out what is fair, what each person really needs, how money and effort should be balanced, how conflict will be handled, and what happens if things go wrong. If one person brings the money and the other brings the sweat equity, what’s fair? If people disagree later, how do you resolve that? That kind of work is much more about understanding the client, understanding the business, and understanding what structure is actually going to work. Once you have done that counseling work, the drafting is often the easier part. So yes, for many years now I’ve felt much more like a counselor than simply an attorney. Henry Harrison That’s a great way to put it. And on a personal note, I know you’re a strong family man and involved in your church. I’ve lost both my parents over the last few years, and I know you recently lost your father, which I’m very sorry to hear. Part of what you do through your work is help entrepreneurs and families build and protect their lives, and part of what you do outside of work is give back to your community and your church. Those are hard things to go through, and I know we had a chance to talk about that, since I had gone through it before you did. David Wang Yes, and I appreciated that very much. It was meaningful to be able to talk with you about it. Henry Harrison Well, I really appreciate you being on the show and sharing your expertise. We may have to invite you back, because that was a lot of very good information and I think a lot of good things for people to think about. Thanks again, David. David Wang You’re very welcome. Anytime. Thank you, Henry.