Disrupting Personal Injury Law With Purpose – Joshua Schwadron – S6E24

00:08 Rob Hanna:

Welcome to the Legally Speaking Podcast. You are now listening to Season 6 of the show. I’m your host Rob Hanna. This week I’m delighted to be joined by Joshua Schwadron. Joshua studied at University of Michigan before his JD at Emory University School of Law. He was the Founder and CEO of Betterfly, the largest online marketplace. Josh spent 2 years as Managing Partner at Summon Litigation Ventures, and is now the proud Founder and CEO of Mighty. Mighty is a personal injury firm revolutionising the support for clients focusing on legal, finance, medical and mental health. So a very, very warm welcome, Josh.

00:49 Joshua Schwadron:

Thank you so much for having me Rob.

00:52 Rob Hanna:

It’s an absolute pleasure having you on the show. And before we dive into all your amazing projects, achievements and experiences to date, we do have a customary icebreaker question here, on the Legally Speaking Podcast, which on the scale of 1 to 10, 10 being very real, what would you rate the hit TV series Suits in terms of its reality of the law?

01:13 Joshua Schwadron:

I would say 3.

01:16 Rob Hanna: 

Okay, and why are you giving it a 3? A little birdie tells me you have seen the show.

01:20 Joshua Schwadron:

So I’m a big fan of a different show. I love Suits. I used to watch it religiously. But I’m a really big fan of a show in the United States called the West Wing, which chronicle the US President and I was always infatuated with that show and in large part wanted to go into politics inspired by that show. And 1 of the things that I now understand as I am older and wiser the United States politics and I think most politics around the world is more like the show Veep than it is like the show West Wing, which is that most people are not competent. And so I think the same thing applies in Suits, which is you have all of these incredibly smart, incredibly competent people who are just, they’re just killers, they know exactly what they’re doing, and they get the job done. And I just, am highly skeptical that many of those people exist in the world. And I’ve seen firsthand that people you’d expect to just be the Harvey Specters are far from that.

02:27 Rob Hanna:

I think you have more than justified your 3. And with that we’re gonna move swiftly on, you touched on it a little bit there but let’s start with Josh, your, your background. Tell us a bit about your background and your career journey.

02:39 Joshua Schwadron:

Yeah, so I went to law school right out of college in the US. And I knew from the early years of law school, when my friends were talking about going to the big firm, that that probably wasn’t the right path for me. And so during my 2 summers in law school, I interned 1 summer on a political campaign. And another summer I worked at Goldman Sachs. Those very off the beaten path, even in law school, amongst my law school classmates. And I had a really informative first job out of law school. I worked for a hedge fund, that 1 of the primary strategies, and this is 20 years ago, was financing personal injury law firm. And at the time litigation finance as a term didn’t exist, but the practice very much exists. And it really interested me because I had a law degree. I had a business background and business degree also at that time. But I had never conceptualised the idea that a lawsuit is essentially an asset. And as an asset, it can be traded, it can be given away, and it could be financed. And so the idea that we could go and finance personal injury law firm was awesome, it was really informative. But there was something else that really struck me too, which is, that these law firms would go out, and they would tell their clients or their prospective clients, you can’t afford my services. So instead of paying me cash upfront, you have to give me interest in your case, a contingency fee, because I can afford to hold these fees, but you as a individual consumer can’t. But the truth is that they actually can’t afford it either. They have to pay rent, they have to pay their staff, they have to pay for advertising. And they also can’t wait, wait for these cases to settle. And so what they did was they came to a firm, like I worked for at the time, and they needed to seek financing as well. And so what occurred to me then, and this has really stuck with me, is it’s not that these law firms were better positioned to hold these interesting cases. It’s that they had the ability to get financing or consumers do. And that insight actually led me, sorry to make this long winded, but that insight actually led me 10 years later, so about 10 years ago, to start my own financing company where we couldn’t we would empower the consumers, just like 10 years before I had empowered the actual personal injury firm. And it was that experience of working with consumers firsthand on personal injury cases, that exposed me too the big problem we’re solving today is, which is that consumers who get injured in personal injury cases, are rarely are able to get back to their pre-accident state. They rarely get the justice that the civil justice system, system promises them. And there’s so many reasons that that’s the case. But 1 big 1, probably the biggest 1 that we found is that the personal injury lawyers that they hire to help them have the wrong incentives.

05:49 Rob Hanna:

Yeah and thank you for giving such a good overview of that, because that kind of dovetails nicely to where you sit today about your background, and it sort of showcases some of your entrepreneurial thinking. And then to sort of, you know, 1 of the key words you mentioned there, as well as around around justice. But I also mentioned so today you sit as the Founder, CEO of Mighty, so can you explain what Mighty is for those who may not know?

06:13 Joshua Schwadron:

Yeah, so Mighty is a service and technology company that has a mission to help people injured after accidents get justice, and we’ve had a lot of different products and services over the years to attempt to do that. But 2 months ago we announced a consumer product, where we would partner with a law firm called Mighty Law, which is a law firm that is independently owned and managed. So there’s no common ownership between Mighty Law and Mighty. But we would partner with Mighty Law to give people after an accident, a far superior and differentiated experience than what they get today by calling the number on the billboard or the TV commercial, I mean in getting a traditional personal injury lawyer. And so for all intents and purposes, we are reimagining the personal injury experience and system in order to deliver better outcome for people injured after an accident.

07:15 Rob Hanna:

And I love that, because that’s so important. And I think it’s so key that you are creating this because it’s gonna help people’s lives and it’s transformational what you’re doing so congratulations. But I know it’s never easy. And also you need to acquire experiences and knowledge along the way. And so you did spend 2 years at Summon Litigation Ventures assisting plaintiffs in their finances, whilst waiting for their legal outcomes. So, what did you learn whilst at that particular point? And how did that really help contribute to building Mighty?

07:48 Joshua Schwadron:

So I think the big thing I learned, which unfortunately I forgot for 5 years, but luckily have remembered more recently, is that the lawyer plays an integral role in the services and outcomes that the client gets. And 1 of the things I saw firsthand when I had a finance firm is that the lawyer does not always act in the best interest of the client. Because often their incentive, the personal injury lawyers incentives, are misaligned, with the incentive of their, with the incentives of their clients. And 1 of the ways I saw this, when I had a financing company, is that the lawyer would advise their client to take a more expensive financing deal with a company where they knew the owners, rather than a less expensive financing deal with somebody else. And that to me was astounding. How could this happen? How can, it’s mad right? It’s, 1, 1 is this, 1 is that, 1 is more expensive and 1 is less expensive. It should be a commodity you should, but in fact it’s not. And I saw firsthand that the lawyer has a lot of power. And the client often listens to what the lawyer has to say. And so in order to really affect change, you can’t wait until after the lawyer gets involved. You have to be involved with the lawyer from an early perspective. And that’s what we’ve created at Mighty with our relationship with Mighty and Mighty Law. And we’re super excited about it.

09:27 Rob Hanna:

Yeah, it’s and it’s a clear synergy I see there as well, and how that, how that comes together. And I just love that, again, it all comes to the right place of justice helping people that get the right help when they need it. So, I want to know a little bit more, just for our audience to understand, explain how personal injury services work in the US and what steps do you have to take perhaps when looking to make a claim?

09:49 Joshua Schwadron:

So, in the traditional system, in the United States, personal injury is dominated by billboards, TV commercials, and other kind of seedy forms of media, if you, if you, if you don’t mind me saying that. And that’s on the advertising front, on the service front, most personal injury lawyers charge the exact same thing as 1 another. They offer the exact same level of service. And they offer the exact same level or lack of transparency. So for example, most personal injury law firms, the vast majority like 99% if I had to guess, don’t list their prices on their website, as an, as an example of this phenomenon. And so what you’re dealing with in the United States is personal injury lawyers, who only differentiate in their messaging and their billboards and how loud that they speak. And when somebody signs up with a personal injury lawyer, they typically give away 33 to 40% of their case to that lawyer. And that lawyer not only helps them get a legal settlement, but often they are asked to help the client do things that don’t relate to legal settlement. Clients, for example, need help with property damage claims, in order to get their car fit. Clients might need mental health support. And law firms only focus and do 1 thing and they’re only incentivised to do 1 thing or just help with a legal settlement. And, and I think that’s very much how a 1 minded personal injury firms are today, in that they basically just try and maximise the settlement for, for which they get a percentage of the gross.

11:27 Rob Hanna:

Yeah and let’s build on that then because it’s a really important point but also, again, it comes to sort of Mighty and how you’re doing things differently because a client, my understanding with Mighty will go through 5 stages, screening, investigation, treatment, negotiation, and settlement, offer and resolution. So can you explain a little bit more about each of these particular stages?

11:47 Joshua Schwadron:

Yeah. So I think, I think what’s important actually before we even talk about that if it’s okay, is talking about Mighty Law and code of conduct that every Mighty Law, lawyer agrees to. And I think it’s important to talk about this because I think it’s almost a precursor to your question. So what personal injury law firms today do, is they act in their own investors, which is not a new phenomenon. I think that’s generally how people act. There’s a very famous Charlie Munger quote, which is a, who’s a partner and protégé of Warren Buffett who said, ‘show me the incentive, and I will show you the action’. And lawyers are incentivised by a certain set of incentives that pits them actually against their client. All Mighty Law lawyers agreed to a code of conduct, which is 13 code, which actually realign those incentives, to make sure that they are in the best interest of the client. And so 1 bad practice in personal injury today is billboard lawyers have an incentive to refer their clients to medical providers who over treat. And the reason is, the more treatment a client gets, the higher their settlement. And the higher the settlement, the higher the lawyers fee. At Mighty we actually have the Mighty Law code of conduct wires the lawyers at Mighty Law contractually, on the, in the retainer agreement with the client, to refund 10% of the medical costs that their clients incur as part of the case, as of their fee for medical procedures on lien and letter of protection. And that aligns the incentives because now the lawyer is saying, if the person gets more treatment than they should or than they need, I actually have to come out of my own pocket, out of my fee, in order to reimburse them. And so the most important thing that a law firm can do, is realign its incentives before the client even comes to the door. After that, everything else is largely gravy because now the lawyer and the clients incentives are aligned and the client knows that the lawyer has their interests, their best interests at heart.

14:01 Rob Hanna:

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16:08 Joshua Schwadron:

Yeah, I think this is really the most amazing part of my job. And I think everyone who works at Mighty feels very similarly, which is, we are helping the vulnerable when they’re most vulnerable. A lot of, the vast majority of people that we work with and that are affected by personal injuries are from marginalised or underserved communities. There’s a often cited statistic in the United States that 64% of Americans can’t come up with more than $1,000 in the case of an emergency. And by definition this is the emergency that they’re talking about. And so, we have this in the personal injury community, we have this special duty to help people when they’re, where they’re most are their most vulnerable. And that’s amazing. Now juxtapose that with the reputation of personal injury, which is really seen as dirty, individual claimants are often seen as frivolous and money grabbing. And the lawyers are seen as ambulance chasers. And 1 of the things that I think is really important for us to accomplish, is not only for us to fight against the bad behaviours of billboard lawyers, but also to reframe the importance of personal injury as a, just a really important part of society similar to the United States Legal Aid, which is often seen as very positive. And so it’s a real honour to be able to work with these people. And it gives us a sense of purpose and responsibility that I think most companies don’t have just again because of the demographic and situation that these people are, are in.

17:45 Rob Hanna:

I can just hear the passion in your voice, you know, coming, coming out there in terms of, you know, you really do want to make a change where people are at their most vulnerable and be there and support. And I think that’s, that’s so important. And it’s lovely to hear. Let’s talk more broadly then, because you’ve obviously talked a lot about personal injury, but why is personal injury 1 of the most important and perhaps overlooked segments of law?

18:06 Joshua Schwadron:

Yeah, so it’s 1 of the most important, number 1 because of the sheer size. So by, you know, a lot of different estimates, personal injury accounts for 1% of gross domestic product in the United States. You know, in the, in the low 100 billions of dollars a year, you know, potential between 100 and 125 billion in effects a lot of people. Second, as I mentioned, most people can’t afford a sudden unexpected accident to happen to them. And it is incumbent upon society to help them in those times. And a related point is the justice system today is ineffective in helping people get back to their, their pre-accident state. So again, it’s millions of people are affected by car accidents, by construction accidents, by other, those people are especially vulnerable. And third, the current system is inadequate to help them. And so I think those 3 reasons are why it is especially important and valuable to, as a problem to work on.

19:13 Rob Hanna:

Absolutely. And again, give some really good practical examples there. So let’s think about mistakes. Then we talked about accidents. Let’s talk about some of the common mistakes people make perhaps when choosing personal injury lawyers, you know, what advice would you give to people to perhaps avoid making those mistakes to ensure that they instruct the right ones?

19:32 Joshua Schwadron:

Yeah, so first and foremost, as a high-level theoretical point, make sure your lawyers incentives are aligned with the incentives that you have. And 1 of the things that I’ve started to do is, getting on and creating videos on YouTube and on TikTok even, my 9-year-old daughter I was very impressed when she got back from sleep-away camp, and my sudden TikTok prowess. Helping people actually answer that exact question, which is what you should look for, what you should do. So what you should look for first and foremost is a lawyer who’s transparent. Does the lawyer actually have their, for example rates on their website? Another way of looking at transparency is there’s a common trick in personal injury, where the lawyer will advertise these large numbers in order to entice clients, that it almost feels like a lottery, hey, we won clients 2 million dollars, wink wink, we can do that for you too. And there’s 2 problems with that. Number 1, our only point 0 0 1 percent of cases turn over 2 million dollars. Number 2, the case that actually settled for 2 millions dollars, the client might have only gotten 100,000, 200,000 300,000 dollars, the rest went to other people who did not even come close to that. So the client doesn’t even come close to getting an amount. When you see lawyers that are trying to create these big numbers, almost like pornography, you should stay away from them, because you know that that is the sort of tac that they take. So that’s on the transparency side. On the actual number side, you should look at a lawyer that, for example, decreases their fee as the settlement value goes up, since typically the amount of work that the lawyer does doesn’t scale proportionally with the, a fee that they get from a larger case. Everybody should negotiate. Everybody should interview 4 or 5 different personal injury lawyers before they, they hire 1. People should look and ask about the level and quality and depth of service. Is it just, are you helping me get a legal settlement? Or do you also help me file a property damage claim, get mental health support, seek financing at affordable rates, because clients after accidents need far more than then legal settlement, they need a holistic support.

21:57 Rob Hanna:

Yeah and again, some practical tips and advice and thanks for, for sharing that. And I love that you also talked about some negotiating because folks, the reality of life is you don’t get what you deserve in this world, you get what you negotiate. So I think it’s really important that you sort of highlight that and so Mighty is a sort of all in 1 personal injury service for people uneasy about billboard lawyers, which you’ve referenced quite a lot. But people perhaps less familiar what are billboard lawyers and why are people less trusting of them?

22:24 Joshua Schwadron:

Yeah, so billboard lawyers are, and they are literally the, the people on the billboards all across the United States. I know this phenomenon is not as prevalent in the UK. But if you go to any major American city, and you look up you will see billboards advertising personal injury lawyers. And the caricature of billboard lawyers is meant to evoke the lawyers who do the bad practices that I just described, trying to make large settlements sexy, misrepresenting their fee for example, is free, which is something that a large, a lawyer in the United States has started a campaign on recently. And they broadly are people who have like jingles and phone numbers that are day to day, day to day, day to day. And there, and there, it’s almost funny. And if it wasn’t so sad it would actually be funny, but there’s a ridiculousness about it. There’s over the top and more than anything they don’t actually serve the best interest of their clients because of the nature of their business and their structure. And so we talk about billboard lawyers but what we’re really talking about is a caricature that amalgamates all of the bad practices of different pi lawyers into, into 1 kind of uniform group.

23:50 Rob Hanna:

Yeah and let’s stick with this then because I know it’s something you’re, you’re very passionate about in terms of sort of billboard lawyers being known for higher rates, outsourced services, over promising, not disclosing, playing the game. And you know, why is Mighty so passionate about challenging the billboard lawyers?

24:06 Joshua Schwadron:

So to understand that I have to give you 1 piece of context of our background, which is for the past 5 years before we launched the consumer service a couple months ago, those billboard lawyers were our software customers, and we had millions of cases on our platform. We had 10s of 1000s of personal injury lawyers. We saved those lawyers over 100 million dollars in efficiency gains and staffing savings. And so we were able to see firsthand the bad behaviour of them and the firm’s and the misaligned incentives between them and their client. And most concretely we saw, that the 100 million dollars that we saved them was just more profit in their own pockets as opposed to passed on to the clients themselves. So part of the reason we’re so passionate about this is because we have a unique amount of information and contacts about these behaviours that no one else has, just by the virtue of us being their, their service provider than being our customers. And so the decision to compete with those customers was just based on us believing that we can serve the injured people in a way that was objectively better for them. And I think it’s really important when there’s an industry that helps the most vulnerable adults at their most vulnerable, but isn’t actually living up to its societal promise that there is somebody who calls that group out and holds them to account. In the United States that just doesn’t exist. And so I, sometimes am, I think, viewed as a bad guy. And I certainly don’t ever mean to be mean spirited. But I do think it is really important that there are groups or people that call out bad behaviour that affects innocent people. And if that has to be me, then so be it.

26:11 Rob Hanna:

Now and again, and thank you for sharing your perspective on that and, you know, wanting to protect people and justice and, you know, people that perhaps are vulnerable, having those, those, those layers, I think it’s really important that we, you know, with all of this, it’s, it’s really putting the people who need the support first and get the service that they rightly deserve. And I guess let’s go back to, to sort of Mighty then and the future and the plans, obviously, you’ve had a very successful journey, you’re obviously you know, you are out there, you are competing, you are sort of, you know, people will be sort of, you know, forming opinions, but you’re, you’re kind of on your journey. So what does the expansion, what does the future look like for Mighty? Tell us more.

26:51 Joshua Schwadron:

Yeah, so, we are currently in 3 states, we’re in Georgia, Connecticut and Texas. But we will soon be expanding to all 50 with a new product that allows us to help more people faster. And so we’re really excited about that. It’s not something that at least as of this airing, we’ve announced yet, but we’re going to, we’re going to do a few things. Number 1, we want to help more people faster. Number 2, we want to continue increasing the scope of our services in order to help people even more holistically. And number 3, and this is so anti-ethical to what exists in PI today, we want to continue putting pressure on ourselves to lower prices, and to increase the quality of service, because we know how important it is that technology and other progress actually results in the consumer getting better and better service and price and in personal injury that hasn’t happened in decades. And so we really want to hold ourselves to account even though we’re already far and away objectively better than anything else that’s out there.

28:03 Rob Hanna:

And it’s so lovely that you say that because we talk a lot about sort of, you know, people say, people before profit, but that just screams that to me that you’re trying to put the consumer you know, it’s about the people, it’s ensuring that how can we get more efficient? How can we get better? How can we actually, you know, pass on a, a more even potentially even affordable, utilise these technologies, improve, expand, offer this to more people, help more people. I love it, just all about the people, of course, you know, windfall profit businesses, but it comes from a very good place based on good values. And you can’t say too much, but if people want to keep up to date with Mighty on what’s going on, which I’m sure our listeners will want to do and find out more about these expanding services, where can they find out more?

28:43 Joshua Schwadron:

So a lot of places these days people can look on our website at Mighty dot com. They can follow me on Twitter. I have a long name, but it’s Joshua Schwadron which is S C H W A D R O N. I, you can follow Mighty on Twitter, I have a TikTok channel where I’m posting at least a couple of times a week. There’s a lot of different places where we are getting the word out. And I think for me more than anything, we want to be a service, that if the sophisticated smart people have friends or family who gets injured, they would say, go to Mighty because Mighty will help you at whatever another example of something that we do that no other, no one else does, on is most personal injury law firms try and sign people as quickly as possible in order for them to, you know, get time to buy the lie, and that Mighty Law any client that’s trying has 60 days to try out the service before the contingency be out gets kind of locked in. And so there’s, there’s things like that that make us objectively better. So I would just say if anyone knows of somebody that gets injured, we would absolutely love them to recommend us as a, as a new service that’s very different than anything that exists today.

30:01 Rob Hanna:

Absolutely, you 100 percent are revolutionising this space. We’re going to share all these social media handles and web links with this episode for you as well. But Josh it’s been an absolute pleasure having you on the legally Speaking Podcast. Wishing you lots of continued success with your career and yourself and all the wider team at Mighty, but now from all of us on the show, over and out. Thank you for listening to this week’s episode. If you liked the content here, why not check out our world leading content and collaboration hub the Legally Speaking Club over on Discord. Go to our website www dot Legally Speaking Podcast dot com for the link to join our community there. Over and out.