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By J.D. Houvener
Patent Attorney and Founder

Hello out there and welcome to the Bold Warrior show I’m your host JD Houvener with my co-host Matt culseth Matt good everyone doing uh doing great how are you guys doing I’m here I’m doing great we’ve got our special guest here uh Doug Bend from Bend Law Group Doug hello to you sir yeah thank you for having me you’re very welcome this is awesome so we’re um we’re on video here uh we’ll be broadcasting it across Facebook LinkedIn and YouTube um this is our new YouTube channel on the board lawyer show uh this is my effort I want to make a real you know hanging out there tell everyone about what it’s like running a law firm um the audience here I’m hoping is going to be maybe some people that are in-house or at a larger firm or in-house or I mean even still a law school and trying to get them interested and information that may not be as public about what it’s like running your own Law Firm starting your own Law Firm um and all the ups and downs challenges and opportunities and fun things too that we can talk about um as part of that so um we’ll keep it pretty free form here um and I I want to just uh give you opportunity Doug to start it out if you don’t mind with a uh founder story but you share about what uh what got you started toward owning your own Law Firm sure I’d be happy to share that so I you know every now and again someone will tell me that I’m I’m so brave for starting my own Law Firm but the the truth of it is that’s not really what what happened I wish I could look back and say that it was due to you know me uh you know uh taking this big step without being pushed over the the ledge so to speak but I started the firm in 2010 and I got laid off in 2010 and I was applying to jobs it was a downturn no one was really hiring and while I was applying to jobs you know not hearing back from anybody I started to hear from Friends mostly friends of my brothers who went to business school who are asking hey while you’re looking for work do you mind doing some stuff for us on the side and after a while I started looking at the numbers and thought to myself well you know what I’m not even not even marketing myself here maybe I should really go all in on this law firm idea and start my own law firm and see where it goes and um that’s what I ended up doing so I started taking on clients in August of 2010 and then by December 2010 that’s when I filed my business license to go ahead and start the firm officially awesome that’s awesome Doug I mean uh we all came out of law school around the theme time I came out in 2011 very similar experience you know uh I guess pain is a good motivator for me right and so I was doing I was having to do like Doc review right out of law school I hated it I was working until I was like doing like a night shift Doc review thing and then trying to hustle you know my business on the side um yeah no I give you a lot of credit I think you are braver than you think you are yes of course when I’m brave when forced yeah so 2010 um and so I I assume it wasn’t you know a team at that point it was it was it was just you is that right yeah it was just me and and really uh you know it started with a road trip so you know I get laid off I live in San Francisco I work in San Francisco decided to clear my head and took a trip down to Highway one for a few days and visited um a friend that you know JD Levy bar Lobby down in LA and he was a law school classmate of mine who had started his own Law Firm a couple years prior to that and I said you know Levy we’re having dinner I said you know it seems so daunting to me for you to go out and to start your own law firm and that just seems that just seems crazy to me that that you would even do that and I’ll never forget this conversation I could almost picture the table where you know he said Doug you know it’s starting a law firm isn’t hard you know you need a i Ulta account you need a city business license the hard part is getting clients that’s the hard part so you know hanging up your own shingle that’s actually not that difficult it’s getting enough clients who are going to trust you to do the work and who are going to pay you for the work in a way that’s going to be sustainable for you to have a healthy lifestyle yeah

um and it’s it’s always that you know ramping up period for me I I had the the luxury of having a job a day job as I started the practice I was at Boeing if you remember um did you have something like that where you’re actually able to just have enough money to eat and pay the bills I mean I don’t know

I really didn’t I uh you know I don’t come from a wealthy family I don’t there was no trust fund that was pulling down on what I had some uh I had been at a big Law Firm so I had saved a little bit of money to uh have a bit of cushion to uh to get going but there wasn’t a lot of cushion this wasn’t something that could take years for me to figure out and so it was um it started kind of doing a few hours here and there and then starting to look at the numbers saying you know what like I’m not even marking myself I’m making you know two to three grand a month and one nice thing there’s challenges about the law but one nice thing about the law and have your own practice is that margins are good and so starting to think about really what would it take uh to make this uh a viable business and I think one thing that I when I talk to people are thinking about starting their own Law Firm one thing I’d like to chat to them about is that the metric is very different for Success than the metric that if you’re at a big Law Firm so if you’re at a big Law Firm a lot of big law firms expect you to Bill eight hours a day that’s what you’re expected to bill and if you’re not billing that you may be asked to leave when you have your own batik Law Firm if you’re able to keep your expenses in check you can make good money with billing two maybe three hours a day and that’s easier said than done to get those two to three billable hours a day there’s a lot of work that goes into getting those two to three billable hours a day but if you run the math on it you know if you if you do you do 48 hour 48 weeks in a year you know billing you know 12 to 15 hours a week 300 an hour and you’re keeping your expenses in check you can make 100 Grand you know just billing two to three hours a day and taking a pretty good size multiplication of year that’s cool really good let’s talk about billable hour that is still a foreign subject to me too um I you know start wherever you want in terms of you know the past 13 years of your firm I mean um maybe yeah yeah how do you how do you do that effectively you know like you said you just said than done to even get those two or three yeah what are some some of the big Golden Nugget things that have helped you get to that level where you are able to build consistently at that two three hours per day I think that you know by half the work we do is on a flat rate about half the work the work do is on a billable hourly rate so I think the first thing is is taking a look and thinking about what types of services do you want to offer and early on I did some estate planning work some probate work I wasn’t sure if I wanted to do business law if I wanted to do estate planning I think there’s a lot of similarities in that both areas of the law you add a lot of value to the client that feels good to me right but I think figuring out what step one is what area of the law do you want to practice it and you know just because you did something in a different Law Firm doesn’t mean you have to do that at your the law firm you’re starting maybe that’s a component of what you’re doing the second step is out of that scope of services what things are conducive the flat rates there’s a lot of advantage of flat rates and what things are not conducive to the flat rate so we found so for example for us a lot of contract negotiating isn’t conducive to a flat rate I experimented that early on uh and you really run into two problems problem number one is a lot of clients treat it as an all-you-can-eat buffet and so hey it’s a flat rate for you know reviewing and negotiating this country track maybe I ask you to have seven rounds of revisions where if I was paying on an hourly basis maybe there’s just two rounds of revision so really people taking advantage of that and two you know negotiating contracts a lot of that’s outside of your control we have a very good idea how long it takes us to review that contract initially and to provide feedback but we don’t know the other party are they going to sign off on revisions more likely there will be some back and forth is it one or two rounds is it three to five rounds so because there’s so much variability there we do that on an hourly basis so that’s just an example of you know types of work that maybe is more conducive to hourly work than flat view work and then the last thing I say I think I’ve learned anything is that you know you don’t want to be the lowest price option that’s out there because you’ll attract a certain type of clientele that aren’t the best clients you know it’s a race to the bottom so I think early on a mistake I made was that I had my rates set too low because early on is all about breaking even I need to make this much to live in San Francisco it’s more expensive than other parts of the country so I need to make this much I just need it every month trying to break even try to bring and so quoting myself low too low sometimes in the hopes of signing that last project on the 28th of the month to put me over the hump but I think what I’ve learned over time is that the best clients are willing to pay a fair market rate if you have great expertise and those are the clients that you want and so if they’re calling three different Journeys and one’s quoting a thousand one’s quoting two thousand and one’s quoting 300 they may look at the person with 300 like what’s wrong here like what what are they not doing it needs to be done what are they missing I may not go the two thousand dollar attorney but maybe I hired a thousand dollar attorney because I want it done right right and so I think really making sure that you don’t um undersell yourself you should have fair market rates that reflects the level of experience you have and the value that you’re adding to the client so smart Doug so smart I um that’s a lesson that I had to learn too is that you know my services my expertise or you know lack thereof when I was younger um you know it’s important today right and it’s worth something and um yeah I don’t I don’t fool around with clients who aren’t you know willing to pay a fair fair rate for the products and services anymore so and I think really you know one advantage having your own practice is that you can experiment and so when you work with another Law Firm it’s very much your hourly rate is 300 your holidays 400 this is what it is next year you bump up to a little bit higher but this is what it is when it’s your own shop you can set it at whatever you want to set it at experiment experiment with quoting different rates and and seeing what the conversion rate is you know if you’re quoting um 20 higher but your your sign is a little a few fewer people maybe you’re netting more money for Less work and so I I always found for me that whenever I raise our rates we don’t do it that often maybe annual annually we’ll take a look at it but typically when you raise our rates our reaction isn’t like oh let’s backtrack let’s go back to what we were before it’s oh my goodness like people are still saying yes yeah no that’s that’s something that I’ve discovered too is that you know the the market for Legal Services is pretty elastic right the clients that I work with and that I value and who value me you know if we increase our prices like we’ve had during the last couple years it doesn’t impact you know the retention rate or the sign up rate for our clients right if anything it’s just the firm’s able to make more income have you ever done that Doug where you actually charge more for the same service

this is a private setting right yeah

so uh I I have and it’s um I think it’s uh it’s usually a few different things so one it’s you know one of my favorite sayings to JD we’ve talked about before is you know don’t paint the red flags green and so when you’re onboarding a new client you’re doing that that interview process and it should be more of an interview where they’re feeling you out seeing if they want to work with you you should be seeing if you want to work with them and if we’re seeing a lot of red flags really either referring that to another attorney that might be a better fit for that client or baking that into the pricing particularly it’s a flat rate saying there’s a lot of wrinkles here a lot of things are coming up if it’s if this is on the initial call who knows what else might be out there let’s make sure that the flat rate reflects this additional layer of complexity um that it’s that this uh project is going to entail so that’s that’s one example where you know a California LLC might cost you know X for one type of client and why for a different type of client I do over time I have grandfathered in clients with older rates as I’ve increased my rates over time and part of that’s been you know a thank you for them getting involved with me early on and part of it frankly is an availability with my time so at this point you know my book is pretty full in terms of the amount of work I do and we have other Attorneys at the firm and so it’s to say hey look like you know one I have a lot of experience but I don’t have a lot of available time and so if you really want to get at that time you’re a new client there’s a bit of a premium there we have other Attorneys At The Firm they’re very capable of doing great work for you their rates are lower maybe you want to work with them instead so kind of encourage clients assign the some of the other attorneys The Firm really based on availability where the clients have been here for a while their rates tend to be a little bit lower to reward them from getting in early on oh that’s really cool what I thought you were going to say is um for for basically Peta pain in the ass clients right yeah there’s a tax for that as a way to you know maybe Usher them out Freedom up to the marketplace charge them more I’ve always said I would do that I don’t think I’ve actually ever done that have you guys had the guts to do that yeah would you recommend it

my clients that are that are fun and easy to work with that have like a good um set of boundaries between us you know that don’t text me on the weekends you know those clients get first class service and they get first class rates right I mean they get a good reasonable rate if you’re if you’re a client who’s texting me on the weekends and always in my ear or jumping on my calendar you know without prompting me you know first next time we do business I’m gonna charge you more that’s just it because I I know that you’re you need you’re handheld and you’re a heavy user and my you know my participation is going to reflect that you know I know a law firm here in San Francisco they charge a premium for work that’s done on the weekend or after after business hours if the client insists on it right so if it’s hey if I’m deciding to log in on Saturday morning to do it because that’s when I have availability they don’t charge more but the client’s like this has to be done this weekend they charge a premium and it’s a pretty hefty premium and you know I think part of that is the culture that they’re trying to build their Law Firm to be more of a balance you know and having that relationship with the client and if that client’s expectations really are that I expected to be picking up the phone at 1pm on a Saturday for something that’s not a true emergency you know maybe that firm’s not the best fit they’re trying to build a culture where there’s a little more balancer with their attorneys and the work that’s being done interesting hey Doug I have a I kind of have a rule myself for the clients that I work with um you know my rule generally speaking is if I’m not talking to the owner of the company that I’m working for that company is not a good fit for me um if they have a general counsel VES that’s probably not for me why not so I like to have like a personal relationship with the the business decision maker right and so I find that that is really important it kind of lubricates the process and if I’m working between intermediaries on the intermediaries you know our efficient process my efficient process just goes to Pieces so I’ve learned that I like to work with companies that where I’m talking to the owner or the decision maker um and if that’s not the case then I got a referral for you and it’s a bigger firm here in Minneapolis okay I mean it reminds me a little bit of you know you know Tim paris’s four hour work week one of his core principles is that 20 of your customers clients almost regardless of what business you’re in create 80 of your headaches and really

well as a business owner is to get rid of that 20 percent yeah really focus on the clients another 20 of clients give you 80 of the game right and that I think there’s a lot to be said about that and really thinking about um you know who’s a good fit for your client uh through your firm and really if you’re a good fit for them long term yeah and I think that goes back to and what JD and I do is is flat fee too right and so we have you know um we have a process in place that fits probably 80 of the clients that walk through a door right but the other 20 maybe doesn’t fit clean and we’re not a good choice for that um because we don’t Bill buy there we build all the project so something else we just did this is fresh off the presses we just implemented this um we have in our client service agreement we’ve snuck caught snuck in but we’ve added in our hourly rates even though everything we ever plan to do is going to be on a flat fee schedule because we’re starting to do something after say we file a provisional patent application there can be a full year without any actual work being done there’s not an open schedule but oftentimes we’ll get pinged and our status stuff they pay what’s going on I’m doing this with a manufacturer are we okay you know and we’ve all up until now but have done that for free no longer is that going to be the case because that’s not going to be either hourly or you have to pick a maintenance plan on the naming of it yet but some sort of a plan to where we’re going to be their routine we’re retain Council and you got to pay to have that representation during that lull or in between the flat fee schedules what are your thoughts on that Doug well I think there’s a lot to be said about that right and it’s all about Fair billing and I think one of the nice things about a flat rate project is a client has the they know what they’re paying going into that but I think a key on the lawyer side is to have a very specific list of exactly what’s included in that project so when it goes outside that scope of what’s included it’s fair for both parties say you know you hired us through X you’re also now asking us to do why that’s not included within that original scope of services so that would be extra and I think as long as you’re transparent with the client saying uh you know just so you know this is outside your flat rate and we’d be billing you hourly for this or you still want me to get you get back to you on this analysis I think that’s perfectly okay I think where clients get frustrated is is when they get a bill that they don’t expect I mean no one likes getting an invoice they don’t expect so when they get an invoice end of the month that says oh I didn’t realize it and uh that you’d be billing me for this that you know I wouldn’t have asked that if you know I didn’t know you’d be building me for this that’s where they get frustrated right I think sometimes it’s um on the client you know sometimes you know we send out hundreds of invoices a month every month there’s one or two it’s like I’m surprised got bill for this and often my reaction’s like why are you surprised like you hired us you retained us you know or we have you know you we pay by the hour we pay pass invoices and I’m not doing this for fun this is what I do for a living um but uh you know so sometimes you think it’s on the client their expectations but sometimes not an attorney particularly the scope of a flat rate project let them know that these are really what you hired me to do for that flat rate happy to help you out this other item but that would be additional do you want me to move forward so I’m not getting an invoice in the end of the month that they’re not expecting it’s really good one thing that Megan went at our firm uh she’s our CEO is that we have that ability to charge but we have that also the ability to say you know what you’re just checking in for the status ah don’t worry about it right it’s on the house but it’s sort of that extra benefit of waiving that of what we could have charged um is I think maybe even the biggest upper you know the biggest leverage to just show you’re you’re doing doing right by it by the clients but for those helicopter clients those 20 you’re trying to kick out they’re getting a bill so what I really try to do is I think it’s uh in you know an invoice is many things one of the books I read about practice management really emphasized that an invoices that can also be a marketing document which is a lot a lot of times people don’t think about it that way but you know taking that extra 30 seconds when you write off time to put that on the invoice you know you know 0.1 hours wrote back the client wrote off 0.1 hours and I think what that shows the shows I think that invoice is much more likely to be paid when they’ve seen that you’ve already written time off for them um you know working on a project so that I almost view it as marketing time taking that extra step the internet additional uh entry into uh the invoice the client can see when we’ve written out anytime off oh my gosh okay that’s I’m writing that one down now this guy you’re this guy lawyers we need we’re just scratching the surface purple Pentagon um

okay well okay let’s fast forward let’s talk about your firm okay Bend Law Group Ben Law Group tell us about your firm and the attorneys you know what you guys are currently doing and what’s your what’s your business plan sure so we serve as outside general counsel for entrepreneurs uh we’re based in San Francisco our clients are most in the Bay Area we have clients around the country around the world it’s everything we help set up over 50 new companies a year a lot of contract wrap negotiating raising Capital uh some buying and selling companies and then we have a couple litigators on staff that litigate as well so there’s six full-time Attorneys at the firm uh it started with myself initially as the only attorney I hired my first uh W-2 employee in 2013 and then since then um you know every few years we’ve added someone on as the growth of the firm has uh indicated that uh maybe we have enough volume work there to support it oh that’s awesome good for you what have you found to be the top few things that have helped helped you to grow well I think a lot of it is you know it just takes time time and I think when you start a law firm it’s frustrating and you know I probably like this analogy because I’m from Nebraska originally but I view it very much like farming right so you you plant a lot of seats and some of those seats take a while to grow and to mature into great referral partners and great clients and when you’re getting started the law firm is frustrating as you can you’re out there doing all these things and sometimes it just takes time for those to turn into actually close business so someone can like you a lot and want to send you business but it may take a few months for that right lead to come up for them so I think it’s easier said than done but I think patience especially on the early side uh until like really fostering those relationships you know recognizing who is it that is likely to send you business and you figure that out by asking other attorneys that are in your area right so meeting with attorneys that do similar lines of work and asking them who sends you business and I think you know for me one of the answers I was expecting one of the answers I wasn’t expecting you know the answer I was expecting was other attorneys you know send business you know attorneys work you know shocking the answer that was surprising to me was CPAs uh and CPAs sent a lot of work to business attorneys and a lot of it is because of two reasons one they’re trusted people and so you know you’re showing your CPA all your financials you know they they know a lot about you right and so they often trust that person and so when there’s an introduction from a CPA the conversion rates are very high does that trust often uh transfers and then for the kind of work that we do a lot of energy formation work that’s often very tax driven with setting up S Corps for uh particularly with Source providers so but I found that out by talking to other business transactional attorneys about who sends them work so I think that’s Step One is identifying who your ideal referral partners are step two is figuring out a way to add value back to them because you know if somebody is sending you you know five leads a year and you’re not doing anything that that helped them back in some way some fashion or at least showing that you appreciate what they’re doing they’re going to find someone else who does at some point right so I think it’s you know being proactive and thinking about ways you can maybe generate some business for the them or if you’re going to a networking event ask them to if they’d like to attend especially if it’s a thing that they might be interested in or if they like wine or baseball tickets you know you know you know comping them some Winer baseball tickets now again but at the very least sending them a thank you note you know saying thank you particularly a handwritten think you know I appreciate your trust I appreciate you you introducing me to this person I’m gonna do everything that I can to help them out oh my gosh Doug by the way thank you for the referrals you sent me this year the uh the wine I also looked at baseball tickets what kind of wine do you like okay this is really good I mean if you if you’re sending work to other people do you send you good referral fee for that are you a very select uh group of attorneys so California’s minority rule state and that uh you can you can refer work and get a commission from it to other attorneys as long as that other attorney doesn’t charge anything more to the client and as long as they disclose it to the client and so there’s it’s really only it’s that’s probably less than half a dozen attorneys that we’re already referring a lot of business back and forth that have asked for that and they asked for something that we’re certainly open to but number one the quality of work has to be very high because it’s a reflection on us the kind of work that they do so it really has to be someone that we’ve gotten to know over a period of time and I think you know with that a big surprise for me is that I was worried when I did it for the first time I was afraid the client would think is Doug referring me this person because they do great work or because he’s getting a cut of the business and that really hasn’t been uh the case I think a lot of we work with a lot of business owners I think a lot of them recognize that there’s real value in closed business when you send it to somebody else um particularly if they’re working with an attorney that they really love that we facilitated that introduction yeah yeah I feel the same way about that you know I don’t see any any problem with it you know if it’s a relationship you’ve had for a long time that you feel is really important integral from your business your client’s business um yeah and as long as it’s transparent to the client and I’ve never I’ve never 12 years of practice I’ve never had a client once you know mention like an up-counter relationship or like a referral fee or anything like that they just you know they see it and they’re like okay I get it right yeah it’s like us us attorneys are thinking about it 10 times more than the client is you know we’re trying to analyze it from differences right right and of course we are because we have to you know we have a code of ethics right and it’s important that we’re actually transparent and unlike a lot of profession who can’t do stuff you know on the slide right which is great which is how I’d like to operate anyway but yeah we want to do right by our clients right and so that becomes part of the analysis um Doug I have a little bit of inside baseball knowledge about Luther um and how you track you you you walked you talked a lot uh in terms of tracking your referral sources can you share with us how you keep track of that yeah yeah I think uh up until recently it was just in my head which is a horrible system right if this person seems to be someone who sends me a lot of business I should make a Better Effort of sending them work back and really in the last uh two or three months we’ve started to integrate Cleo grow into our our practice and one of the things that we like about cleopro is that you indicate on the intake form like who who not just of an attorney such a business but who sent you business yes you have reports that you can run we can see who’s sending the most you know leads six months a year not only the most leads what’s their conversion percentage and so are they sending me leads are they sending me garbage sorry still appreciate it but what who are sending me the best leads and also the average price on the lead so you can say who sends me the highest value leads averages out ten thousand fifty thousand um who are the people that should be really taken out to dinner um you know making sure I’m adding value back to them in their lives and hopefully uh keep those leads coming Doug yes Cleo grow game changer for for me because I do the exact same thing right I track every client matter that comes through the the door and wheel grow who it comes from if I have a referral arrangement with them what percentage they’re going to get or it makes things amazing and it makes writing those um those thank you notes at the end of the year they’ll see no Christmas cards you know that much easier too it’s pretty cool okay gold I gotta put it down we’re stuck in some other world yeah Genie we we have to do Cleo grow we have to do it’s incredible this is this is the time I’ve heard it from you now Doug and Matt’s been raving about it for um so Clio manage I hate Cleo manage can you grow that’s that’s the sauce okay so okay uh last couple minutes here Doug anything you wanted to share anything top of mind you know coming into the show um let’s you know anybody wanna anything you want to say to a budding uh you know attorney that’s looking to hang their own shingle perhaps yeah I’ll say that the first year is the hardest and it’s hard for a number of reasons one of the reasons it’s hard is that there’s a lot of things that you have to do that you’re not making any money off of or you’re spending money on so websites business cards you know getting a work email account and so you’re you’re turning you’re putting all this effort in planning all those seeds and waiting for them to grow and so I think the first year is very challenging to start your law practice but if you can make it work long term I think that there’s a lot of unhappiness in the practice of law this is an area that you can really have some better uh work-life balance you know and you know I work hard I have a lot of flexibility in when I work you know I have my kid gets off to summer camp at three o’clock I can go pick them up it might mean I’m working a little bit later you know to make up for that time if I’m in a big Law Firm that’d be much more difficult to do that right so I think I look at starting your law firm as is an investment and perhaps having a more work-life balance and long-term it’s amazing don’t and you’re thank you for that you’re um your firm is fully virtual we are yep okay that’s two there is kind of I’ve heard it from a couple different places people I talked to about this kind of especially the larger firms they’re trying to get Buds and seats again um so I would love to have you have you on we’re gonna do a virtual practice management kind of a a chat uh get your take on that and you know whether clients really do want to see people in person or if it’s just kind of something else going on um that’s kind of just a measure of control perhaps you know of of the workforce so Chris got your thoughts on that um we’ll show you back on to talk about that we’ll leave a little Cliffhanger I’d love to come back I definitely would love to have a second bite of the apple with you because um you’re a wealth of information well okay quick plug I do have a a legal Mastermind uh for for those that are super select now we have invited you I know I know I was what was I doing I had a meeting that was at an emergency so if you do want information about joining on I’m going to give my email address here um I don’t charge a darn thing for it yeah I’m just kidding no I’m not going to charge it’s a free deal I get an immense amount of information from it collaborating with other business owner Law Firm owners is so cool we all actually are interested other than unlike our spouses and something and others like it’s amazing you know when you can get together virtually and uh and chat so Doug thank you so much for being on a pleasure yep thank you for having me appreciate it Maz thank you for co-hosting and uh for the Bold lawyer show we’re out we’ll see you next week Tuesday at 2 30 Pacific take care buddy

About the Author
J.D. Houvener is a Registered USPTO Patent Attorney who has a strong interest in helping entrepreneurs and businesses thrive. J.D. leverages his technical background in engineering and experience in the aerospace industry to provide businesses with a unique perspective on their patent needs. He works with clients who are serious about investing in their intellectual assets and provides counsel on how to capitalize their patents in the market. If you have any questions regarding this article or patents in general, consider contacting J.D. at