Mike_Ketchmarkv2
00:00:00.000 | Hello, everybody. It's Sam from the Financial Samurai Podcast. With me, I have a special guest,
00:00:14.560 | Mike Ketchmark, who is a trial attorney. You might have heard of him from winning the landmark
00:00:21.080 | lawsuit regarding real estate collusion against the National Association of Realtors, Keller
00:00:26.800 | Williams and Home Services of America. Welcome to the podcast, Mike.
00:00:30.680 | Hey, great to be here. Thanks for having me.
00:00:32.360 | I saw the news and I was absolutely shocked at the amount, $1.78 billion. And then it talked
00:00:41.560 | about trouble damages of potentially over $5 billion. And I was wondering if you could share
00:00:47.560 | with the audience, how did those numbers come about? And then as we go on, what could be next
00:00:53.720 | for the whole industry?
00:00:55.000 | Sure. Standing alone, it's a shocking amount of money, but if you break it down into what
00:01:02.400 | it involved, we represented 500,000 people across the state of Missouri who sold them
00:01:08.840 | over 260,000 homes over a seven-year time period. On average, our clients were schemed
00:01:15.280 | and bilked out of $7,000. And so as an individual, it's not that much, but as it adds up,
00:01:23.200 | it's a tremendous amount. And actually what I described to the jury in this case, and I did
00:01:28.240 | during the jury selection process, talked about numbers can be these huge numbers. And what I
00:01:33.200 | said during closing argument is the defendants talked about, "Well, so much money. Look how
00:01:37.040 | much money it is." But I said, "Look, if you rob one bank for $7,000, you don't get to keep it
00:01:43.680 | because you robbed 260,000 banks and it's just too much money to get back." And that's why it's
00:01:48.840 | a lot of money. And that's why they've got away with it, in my opinion, for so long is because
00:01:53.880 | they just take little pieces of the American dream and of our home equity, but they do it so far and
00:02:01.520 | so vast and in such a large scale that it adds up to almost $70 billion a year in our country
00:02:07.680 | in wasted commission dollars. That's unbelievable.
00:02:10.720 | And under the federal antitrust law, it's called the Sherman Antitrust Act. It was passed back in
00:02:15.800 | the late 1800s, a time when corporations had a lot of power, in a lot of ways they still do. But
00:02:21.720 | monopolies were really huge back then. And the law was passed. And what it said is, "If you can
00:02:27.360 | prove price fixing, competitors getting together and fixing prices, we're creating a system like
00:02:32.320 | this was created to fix prices." And not only do you get your money back, it's effectively a refund
00:02:38.040 | case, but then they do what they call triple damages. They triple the damages. And it's designed
00:02:43.600 | to punish the defendants, to stop them from engaging in behavior like this. And so that's what
00:02:49.960 | happened. And people thought that we stood very little chance of winning. It was a tough case. We
00:02:56.720 | had a group of, I think, four heroes. They stepped up and we had a retired police officer, a retired
00:03:03.920 | school teacher, a public school advocate, an attorney who works in elderly law, as our main
00:03:08.800 | plaintiffs. And we, four years ago, filed this lawsuit on their behalf for a lot of the same
00:03:14.440 | reasons that you and I talked about offline, about the fact that what's happening in our
00:03:19.960 | country is wrong with forcing, when you sell your home in our country, it's one of the only
00:03:25.480 | countries in the world that does this. You're forced as a seller of a home to pay the buyer's
00:03:30.520 | agent's commission in order to list your house on the internet. And the National Association of
00:03:36.080 | Realtors is functioning effectively as a cartel. They've carved our country up into 880 different
00:03:43.080 | regions for these multiple listing services. And the only way to list your house on the internet
00:03:48.400 | is through the MLS. And the only way to do it is if you agree to pay the buyer's commission. You
00:03:54.120 | can't put your house on Zillow. You can't put it on realtor.com. You can't have it anywhere on the
00:03:59.200 | internet unless it's done that way. And it's designed by them to take control of the housing
00:04:06.200 | market.
00:04:06.560 | Right, right. That's unbelievable. I was looking at a statistic for 2022, and it showed that the
00:04:14.640 | lobbyists, that the companies or groups that spent the most amount of money lobbying, and the
00:04:20.000 | National Association of Realtors was number one at around $88 million. What are they doing when
00:04:25.540 | they're spending all that money? Is it whining and dining at the Capitol Grill? What are they up
00:04:29.680 | to with that money?
00:04:30.360 | Yeah, and that's one of the things we do a lot of to prepare for trials. I do something called a
00:04:36.220 | mock trial where we'll pull together jurors, and I'll put the plaintiff's case on, the
00:04:42.440 | defendant's will put, we'll have a defense lawyer put the defendant's case on. And one of the
00:04:46.200 | things I kept hearing throughout this case is they kept referring to themselves as a not-for-profit,
00:04:50.720 | or not-for-profit, or not-for-profit. Well, what I didn't understand until I started getting into
00:04:55.080 | this and looking at these mock trials is when I think of a not-for-profit, I think of a 501(c)(3),
00:05:00.060 | like a church or the Boy Scouts or the Salvation Army. But there's actually a 50(c)(6), and that's
00:05:09.340 | a special entity that the real estate industry, I kid you not, they've set them up with a special
00:05:15.480 | lobbying interest. So all it means is they don't pay taxes. And it's called a 50(c)(6) corporation,
00:05:23.000 | or 50(c)(6). And what they do with that money is they pass laws to protect their corporate
00:05:31.880 | interests. And when you have, like in the Northwest MLS in Seattle, they tried to break away from
00:05:38.640 | the control of the National Association of Realtors. So they actually passed a law in the
00:05:42.800 | state of Washington that said that you don't have to show a house as a buyer's agent unless the
00:05:48.440 | seller agrees to pay your commission.
00:05:50.040 | That's ridiculous.
00:05:51.520 | They break that into the contract, and they bake that into law. And it's just designed, I think,
00:05:56.320 | and I told this, explained this to the jury, that trade associations can be good things if they
00:06:02.080 | focus on ethics, they focus on education, like the American Medical Association, the American Bar
00:06:07.160 | Association, American Teachers Association. But when they focus on money and commissions and
00:06:13.520 | getting competitors together to rig the system, that's where corruption happens. And that's when
00:06:18.680 | lobbyists become too powerful. And it was stunning to me. I mean, I always think of lobbyists and I
00:06:24.440 | think, you know, big pharma and the insurance industry and the Chamber of Commerce. And when
00:06:30.200 | you realize that more money is being spent by this Realtor Association than anyplace else, it's
00:06:37.280 | mind-numbing. It's because they are literally pulling $300 million a year out of the pocket of
00:06:44.160 | local realtors and putting it into their corporate coffers at NARC. And doing that because local
00:06:50.080 | real estate agents have to blister houses on them less to make a living. And so they have this whole
00:06:55.080 | thing propped up. And we saw what happened. That's what led to the president of the organization
00:07:00.680 | being run out on rampant charges of sexual harassment. At trial, we ended up not putting this
00:07:07.160 | in as evidence because the judge thought it was more prejudicial than probative. But the CEO who
00:07:13.640 | just left the National Association of Realtors, he was making $3 million a year. And he had,
00:07:19.720 | he had, in his contract, they had to pay for him to be a member of a country club in Chicago,
00:07:24.240 | a country club in DC, first-class travel, pet service, first-class job for his wife,
00:07:30.280 | all of his living expenses. And it's all on the backs of local realtors. And it is,
00:07:35.520 | it's just awful. And so when we got involved in this, we got a pretty small group of lawyers. I
00:07:43.200 | mean, there's only four attorneys in my firm, myself and three other people. And then the other
00:07:48.320 | firm we were with, he's just got two lawyers. And we're like, you know, we want to take these folks
00:07:53.920 | on and we want to hold them accountable. And so it really kind of felt David and Goliath-eth,
00:07:59.480 | but it was a worthy fight and struggle. Definitely a worthy fight and struggle.
00:08:06.080 | I love to talk about probabilities. And what do you think, what was your thought in terms of the
00:08:11.080 | probability of you winning the case before you found the verdict? And also, what were you thinking
00:08:16.760 | could be the potential damages or the win amount? I mean, I always felt from the first time that I
00:08:25.360 | got involved in this case that we would win. But my wife tells me sometimes that I put hope over
00:08:35.040 | experience. But look, I felt it's a righteous cause. I felt factually we were right, legally
00:08:42.120 | we were right. So I just always said in my heart, I thought that we would win. And I told the jury
00:08:47.040 | that my mom and dad sat through the whole trial, one of the coolest things, having them sit in the
00:08:51.760 | front row during their mid-eighties. And I told the jury that I learned every single thing that
00:08:58.240 | I needed to learn about this case from my mom when I was in kindergarten. If you take something that
00:09:02.960 | doesn't belong to you, you have to give it back. And we proved the trial that they were taking
00:09:07.840 | money that didn't belong to them. And so we asked to have it refunded and give it back. And I really
00:09:13.560 | felt that we were going to win. But you know, the other, we got some really talented attorneys,
00:09:20.640 | probably at times we'd have 50 lawyers watching in trial on both sides. And a lot of my friends
00:09:27.840 | and colleagues and men and women who have practiced within Kansas City come and watch. You'd ask them
00:09:32.640 | what odds they think we're winning. They'd say 60%, 65%. I always thought it was 9,800%.
00:09:38.560 | But maybe because it's my skill as an advocate. You know, you don't know because the hard part
00:09:48.400 | about federal court, a lot of people don't know this, is you have to have an unanimous jury. And
00:09:53.080 | in our day and age, trying to get, we had eight people on the jury, trying to get eight people
00:09:59.920 | to agree on anything is difficult. But the cool thing about this is regardless of your politics,
00:10:07.320 | we had one of our expert witnesses used to be in the antitrust division, Deputy Attorney General
00:10:13.880 | under Donald Trump. Another one of our experts who we worked with in this case worked in the Obama
00:10:20.280 | administration. We were working with advocates from the Cato Institute, a very libertarian,
00:10:26.880 | conservative think tank, and some housing advocates who were very much on the left-leaning
00:10:34.240 | side. Everyone universally agreed that corruption and fixing the prices in real estate is wrong.
00:10:42.880 | And so I really believe that if I was able to distill this down into principles that a jury
00:10:48.240 | can understand that they would be disgusted. And they were. They were absolutely disgusted
00:10:51.960 | with their behavior. Yeah. I mean, now that the verdict is
00:10:56.320 | done, it seems obvious to a lot of people there was price fixing. There was real estate collusion.
00:11:03.520 | I myself sold a house in 2017. I argued down to a 4.5% commission, but I had to pay 2.5% to the
00:11:11.920 | buyer's agent while the buyer's agent was hammering me down on price during the contingency process.
00:11:17.480 | It was like, "Give me $35,000 for the window credit and all that." And I was thinking to
00:11:21.960 | myself, "Why am I paying you a 2.5% commission while you're trying to hammer me down on price?
00:11:26.400 | This is totally misaligned incentives." And so after I sold the house, I told myself,
00:11:32.000 | "I'm never going to sell a house again until there's a change in the real estate commission
00:11:36.240 | structure." So to me, it seemed really obvious there was some type of collusion,
00:11:40.960 | price fixing that wasn't fair to the consumer. Why do you think this has lasted for so long, Mike?
00:11:47.440 | It's been around for a hundred years. The National Association of Realtors,
00:11:50.720 | when they first reformed, actually had price cards where they would pass it out and they
00:11:56.160 | would set the commissions at 6%. And then in the 1950s, the Supreme Court struck it down and said
00:12:02.000 | it was against the law. And then for the longest time, what they did when my wife and I first
00:12:05.840 | bought our house in 1990 in a little small town outside of Kansas City called Lee's Summit,
00:12:12.400 | Missouri, we had a phone book and it was called an MLS book. And a lot of the people who are
00:12:17.040 | listening, you're certainly too young to remember this, but they used to be in big, thick books.
00:12:23.120 | It was multiple listing book and there'd be pictures of homes and a description of houses.
00:12:26.560 | And we'd sit down with our agent at a local coffee shop and we'd go through and flag the
00:12:30.400 | houses in our price range. We'd go around and see open houses. And on the outside of those books,
00:12:34.240 | I actually introduced one of them at trial. I had to go on eBay and buy it. It said, "Property of
00:12:38.960 | the National Association of Realtors, $1,000 fine to let this get into the wrong hands."
00:12:44.640 | And what the seller's agents would do is they'd pass them to the buyer's agents and they would
00:12:48.480 | control the information. And when they had control of the information, they could fix the prices.
00:12:54.320 | But then the internet comes along and they're really worried about it shifting things. And
00:12:58.720 | the word that they use is disintermediate. They were worried about it getting in the middle and
00:13:02.880 | knocking them to the side. So what they did is they crafted this series of rules that said that
00:13:08.800 | you have 24 hours to list the house electronically and to put it into these portals that they have
00:13:15.440 | set up where they've carved the state of Missouri into four areas or the country in 880 areas.
00:13:20.640 | And if you don't put it in there, you're not allowed to list on the MLS. 90% of the houses
00:13:26.160 | in our country are sold on the MLS. And then what we started uncovering and we introduced evidence
00:13:30.400 | to the jury and you kind of, at your core, you knew this, but we proved evidence. We saw the
00:13:35.440 | emails and the training on this. What their agents are trained is to scare home sellers into,
00:13:41.840 | look, if you don't pay the buyer's agents commission, no one will show your house.
00:13:45.840 | And if they don't show your house, your house will go stale. People think something's wrong with it.
00:13:50.400 | ISKRA: Right.
00:13:50.960 | MCLURKIN: And so they scare you. And then there's this whole concept called steering. And steering,
00:13:57.280 | a lot of your listeners may be familiar with it because it has this kind of racial history. And
00:14:02.960 | ironically with the national association of realtors had a real bad history with a lot of
00:14:07.360 | the racial problems we had in housing, but it used steering people away from certain neighborhoods is
00:14:13.040 | what people think of, but steering is used by buyer's agents who refuse to show houses where
00:14:19.760 | the commission is not being paid. And if you think about it, it kind of makes sense. If you're a
00:14:25.840 | buyer's agent, you're going to want to work where you're getting paid. There's nothing like this
00:14:30.320 | evil for the buyer's agent. But what's happening is half the time, these corporations on the real
00:14:35.680 | estate, these big, large corporations like home services and Keller Williams and Remax and
00:14:40.560 | anywhere you name them, half the time they're making their commissions selling houses and half
00:14:46.640 | the time they're making their commissions buying. So they've created this little club.
00:14:50.000 | ISKRA: Yeah.
00:14:50.720 | MCLURKIN: They're taking the money from the homeowners. They're giving half of it over here
00:14:55.760 | to the buyer's agents. And then half the time they're benefiting on their side. And it's just
00:15:00.000 | trading this money back and forth. And I really think that the last four and a half years, what
00:15:05.040 | I've learned about this case is what's unique about this is we just don't buy and sell houses enough
00:15:12.320 | where you become accustomed to it. It's not like a car versus life. You're probably,
00:15:18.400 | you know, if you're lucky enough, you're going to own many cars. People might get a new car every
00:15:23.280 | six, seven years, but houses, maybe two houses in a lifetime. And that lack of knowledge
00:15:29.360 | creates this uncertainty. And then also what happens is there's so much paperwork and there's
00:15:37.840 | so much inspections and all these things these banks do that, that, that makes it kind of like
00:15:42.640 | mystifies it. And so they use that to their advantage. But the reality is that we don't,
00:15:50.000 | I mean, buyers agents are really by and large, a thing of the past. And it's hard to say it.
00:15:55.760 | It's tough to say it because there's a lot of really nice buyers agents, but, but, but,
00:16:00.000 | but look, they just are. And when I, you know, when I first started practicing law back in
00:16:05.280 | 1990, 30 some years ago, if I had to travel for work, I would use a travel agent. Remember travel
00:16:10.320 | agents? And if, if you wanted to book a plane or hotel, you'd call a travel agent and he or she
00:16:19.440 | would, would book a plane for you. They charge you 10%. We don't use that. We use Orbitz or we
00:16:24.240 | use Expedia or we go directly online. Imagine now if every time you went online, if the national
00:16:31.200 | travels association sent you a bill, I mean, that's what they've done. And it's just,
00:16:38.320 | it's shocking. You know what we did, and I thought it was one of the cooler ideas that we had. My,
00:16:42.800 | my partner, Ben Fadler, who's just this brilliant attorney who I work with. And he's,
00:16:46.640 | he's got some really, he's got real common sense about him.
00:16:49.600 | The national association realtors, they did this report. They called it the danger report.
00:16:55.360 | And they looked around the world where you don't have the, you don't have the MLSs.
00:16:59.040 | And they looked and they said, look, we don't have buyers agents around the world. And I
00:17:02.080 | identified Australia as a country where the commission's between one and a half, 3%.
00:17:05.840 | So Ben and I picked up the phone and we started calling agents in Australia. And we, we found one
00:17:11.520 | of them to come as an expert witness. We flew him to Kansas City, Missouri, and he testified to the
00:17:18.160 | jury. And I remember the very first time I talked to him, his name's Todd Reynolds. And he was a
00:17:22.560 | great dude, is a great dude. And I said, Hey, I was explaining what we were doing. And he's
00:17:28.560 | explaining, well, we don't have buyers agents in Australia. And he actually asked me, he said,
00:17:32.960 | do you not have the internet in Missouri? And I said, we have it. He said, well, why would you pay
00:17:38.240 | somebody to find you a house? Don't you, can't you go online and look at videos and do? And so he
00:17:45.520 | came to trial and testified to the jury and they loved him because it's just, there's just a better
00:17:50.640 | way. There's just a better way. And it's no knock against buyers agents, but it's like feeling
00:17:56.800 | sorry for the people who used to sell me movies at Blockbuster. I mean, they have to move.
00:18:05.360 | And if somebody wants to go and spend in Missouri, houses, aren't as expensive as they are around the
00:18:10.240 | rest of the country, but on average houses here, $300,000 house, a $9,000 commission.
00:18:16.720 | We reviewed 130,000 transactions over a seven year time period in the Kansas City area. 98.2%
00:18:25.600 | of them were at 3% buyers commission. I mean, that's stunning evidence of price fixing.
00:18:31.760 | And the other thing too, I mean, and I know you know this because I've been thrilled after you
00:18:37.760 | reached out to me, I've been listening to your podcast and the level of expertise that you have,
00:18:42.480 | and you're got some very savvy listeners. It was stunning to me because I was a major in philosophy
00:18:49.280 | and finance wasn't my background, but when I actually calculated it and had an expert calculate
00:18:56.080 | it, it takes an average homeowner seven years on paying their mortgage down until they just have
00:19:03.760 | paid it down enough to pay that 3% buyers commission. So what we explained to the jury was
00:19:10.480 | this teacher we had, we had a single mom and had two boys when she first started her life
00:19:16.400 | down in Springfield with her house. By the time she went and sold her house,
00:19:19.920 | she'd been there 10 years and when she was moving out to South Carolina and she went to sell her
00:19:25.600 | house, the agents who were involved in the sale of her house and the buyer side took 42% of the
00:19:33.040 | equity out of the house. It's not just 3%, it's 3% of the cost of the house, but it's not 3% of
00:19:40.400 | your equity and it's just because they're getting away with it. They're getting away with it.
00:19:47.360 | That's why they're doing it.
00:19:48.320 | Let me ask you this. I think you make a great point regarding people
00:19:52.640 | not familiar with buying and selling homes, maybe twice in their lifetime. They're scared to do the
00:19:57.520 | wrong thing. They're scared to have a stale fish listing. They're scared to lose money.
00:20:01.680 | Do buyers not know that the 2.5% to 3% commission the buyer's agent earns is really the 2.5% to 3%
00:20:09.920 | of money out of their own pocket because they could have negotiated a lower price
00:20:15.520 | because if they didn't have that commission.
00:20:19.120 | No, in fact, what they do is the National Association of Realtors and these real estate
00:20:23.520 | companies forever, they're training agents, buyer's agents to tell buyers it's free.
00:20:28.320 | It's free. If you go on Zillow and people don't even know this, but if you go on Zillow right now,
00:20:37.120 | go on zillow.com and do a search and it populates in Kansas City, it'll populate 7,000 houses for
00:20:43.280 | sale. Every single house on Zillow is a house that's part of this system because the National
00:20:48.800 | Association of Realtors has a rule. It's called no co-mingling when Zillow or these aggregators
00:20:55.200 | like realtor.com or Zillow, or Trulia, when they get that information, the only way they'll feed
00:21:01.200 | it to them is that they refuse to put it in there for sale by owners or people who are not members
00:21:08.160 | of NAR. When you click on that, you click on a house in Zillow and then you go to an agent and
00:21:13.840 | the agent says, "I'm not going to charge you anything." You think this is the greatest deal
00:21:17.360 | ever, but you're right. It's baking it into the cost of the house. If I'm trying to net out a
00:21:23.920 | house of a $300,000 house, I'm willing to pay $9,000 for a seller's commission, but I'm trying
00:21:31.600 | to net out $290,000. If I didn't have to pay the buyer's commission, I'd drop the cost of my house.
00:21:38.720 | Right. Or everybody wins. You drop it a little, the buyer saves a little,
00:21:44.560 | the agent still earns this listing fee of 2.5%, 3%.
00:21:48.000 | Or what ends up really happening, and this is what they're terrified of,
00:21:52.480 | is if I have to write a check as a buyer and if you're doing a $500,000 house, am I ever going
00:22:02.320 | to give somebody $15,000 for helping me go over some paperwork that my bank is going to insist
00:22:09.520 | that – I mean, you think a bank is ever going to loan you $500,000 for a house without making
00:22:13.520 | sure that you have inspections and making sure that you have a free clear title? No,
00:22:18.800 | they're never going to – what they're afraid of is that people are going to get in there and
00:22:23.200 | realize it's not worth what they're paying. That's why they fought us. That's why they had
00:22:29.120 | 200 lawyers from the largest law firms in the country that they just tried to crush us,
00:22:37.840 | because they know what they're doing here is fundamentally wrong, and they're just desperate
00:22:44.240 | to get away with it. Right. Well, let's play devil's advocate a little bit here, because I've
00:22:49.360 | seen some decent arguments where it says, "Well, the buyer, if he or she had to cut a check to pay
00:22:59.040 | the buyer's agent, then he or she would find it even more difficult to afford a home."
00:23:05.360 | So what would you say to those people? I'd say – well, I would say it's hogwash,
00:23:10.640 | and that's a legal term I guess I learned in law school in the Midwest.
00:23:13.360 | Why in every other country in the world that the National Association of Realtors looked at,
00:23:20.400 | that's not true. In the UK, Singapore, Germany, I mean, Australia, across the world, it's not true.
00:23:31.200 | That's number one. Number two, what buyers then would do is they would pay for what it's worth.
00:23:37.040 | And the second thing is first-time homebuyers, what we forced their – they had a former HUD
00:23:43.200 | executive come in, the director of HUD, come in and testify on the defense side. He's part of
00:23:49.520 | the corporate real estate world now. And I made him admit on the stand to the jury
00:23:55.520 | that every single state has something like a Missouri. It's called the Missouri Housing
00:23:59.440 | Development Commission. It's a first-time homebuyers program. And I don't know if your
00:24:03.040 | listeners know this, but every state has it. It's something you ought to do a podcast on sometime if
00:24:07.200 | you're not familiar with it. In the state of Missouri, for families that are making less
00:24:11.680 | than $140,000 a year, you can get up to 4% of the value of a $400,000 home. And as long as you live
00:24:20.800 | there for seven years, you never pay it back. And they are actually having difficulty giving this
00:24:28.640 | money. It has to be a first-time homebuyer. You have to meet the income qualifications,
00:24:32.720 | but $140,000 for a married couple, and that's 4% of the value. And one of the reasons they're
00:24:39.040 | having a hard time giving the money away is because buyer's agents don't even push people
00:24:42.800 | in that direction. Because –
00:24:44.160 | I've never heard of it.
00:24:45.280 | Right. And type in any state and look at – do you like the state name,
00:24:53.840 | Housing Development Commission? And housing advocates started pushing this years back,
00:24:58.560 | and it's very prevalent and very common. So that's for first-time homebuyers.
00:25:02.080 | And the second thing is that what would happen is buyers would realize that they don't need to do
00:25:07.840 | that. Because really what's happening is every one of our clients we had, who I met with, and all
00:25:13.120 | the documents we went through, because we went through all these documents, I mean, millions of
00:25:16.800 | different transactions. They're almost all on DocuSign now. And so any of your listeners who
00:25:22.560 | have purchased a home recently, some of them will never maybe even meet their agent because it's all
00:25:27.440 | on DocuSign. And here's another radical point that I made at trial. Well, look, if you can't afford
00:25:38.560 | something, well, then don't buy it. I can't afford to go to a nice dinner when I'm first out of
00:25:46.800 | grad school. It doesn't mean I go and sit down next to you and make you pay for my meal.
00:25:52.080 | I mean, so if somebody truly has difficulty paying for the buyer's agent, and the second
00:25:57.440 | thing that's just disturbing to me at my core, one of the single most important financial decisions
00:26:02.960 | you do is when you buy your house. If you don't have commission, like in Missouri, if you don't
00:26:08.480 | have four or $5,000 to pay for commission, then you ought to rethink whether or not you're going
00:26:13.520 | to get your house. Because what are you going to do then when your air conditioner goes out or you
00:26:18.400 | have a leak in the roof? I just think it's a bunch of scare tactics that are designed to try to scare
00:26:24.800 | people. And I really believe that. I just don't think any of that's going to change. And houses
00:26:32.320 | are still going to be very readily – prices are going to come down. And all we're going to see is
00:26:37.360 | that these corporations are making less and less money. And look, agents are nervous about it,
00:26:44.320 | but I call it corporate real estate for a reason because what's happened is when this came along,
00:26:49.360 | companies like Home Services, it's Home Services of America, it's a Berkshire Hathaway,
00:26:54.480 | Warren Buffett company. They started going in and these big Wall Street
00:26:57.840 | corporate real estate brokers started gobbling up the local mom and pop real estate companies.
00:27:03.920 | And so that's why we are not dealing with local agents. The local agents were not even defendants
00:27:11.760 | in our case. It's the corporations that sat at the top. And what they're doing is they've
00:27:17.040 | literally gone in and just gobbled up – Home Services has gone across the country and
00:27:21.280 | methodically gobbled up all of the local real estate agents in different cities and towns and
00:27:27.760 | states across the country. And the reason they're doing it is because they were pulling out
00:27:31.520 | billions and billions of dollars a year in these commissions. It's going to change. I mean,
00:27:38.640 | I believe at the minute this verdict came in, we filed a new nationwide lawsuit.
00:27:42.640 | And if they want to change their ways, they got a chance to sit down and have a conversation.
00:27:48.480 | But if not, if they want to keep fighting like they're fighting, then we'll just continue to
00:27:53.280 | hobble them to their knees and hold them accountable across the country because this
00:27:58.960 | is what's happening here is wrong. Yeah. How long do you think it'll take before
00:28:06.000 | real estate commissions materially decline, you think?
00:28:09.760 | Unfortunately, I think it's – Even if tomorrow, if the National Association of Realtors stop
00:28:19.840 | this illegal behavior and let's call it what it was, the jury found it's illegal price fixing.
00:28:25.360 | If they stop this illegal behavior, it's going to take a while for it to change. I would think
00:28:32.400 | 10 to 15 years maybe. 10 to 15 years.
00:28:36.800 | You know, it's hard to think mentally it will change.
00:28:39.200 | Okay.
00:28:39.700 | But as far as where people – where it just doesn't happen anymore, because it is so baked
00:28:46.240 | into our culture that people think it's just a 6% commission. I mean, it's just something that I
00:28:54.320 | always just thought, "Well, that's just the way it is." It's almost kind of like it's Americans
00:29:00.400 | just think, "Well, that's just what we do. We just pay that." To change that mindset when they've
00:29:06.560 | ingrained that pattern of behavior into us for so long, they're going to hang on to it as long as
00:29:14.240 | they can. Interesting.
00:29:15.280 | Are you familiar with the game called Whack-A-Mole? Have you ever heard of that?
00:29:20.560 | Yes.
00:29:21.280 | Yeah. Right. So anybody who has kids, they were talking about – You know,
00:29:23.760 | your young children – When my children were younger, we used to take them to Chuck E. Cheese
00:29:27.600 | and they'd play Whack-A-Mole. For your listeners who aren't familiar with this, a little mole will
00:29:32.320 | pop up out of 10 different holes and you hit it, then another one pops up. This has been a game of
00:29:36.720 | Whack-A-Mole with this industry forever. I think what I told the jury was that we want to unplug
00:29:43.680 | the machine. They're going to keep trying to plug it back in. They're coming up with new creative
00:29:49.680 | ways to try to stop it. I think that this really is the first shift. My hope is that in my lifetime,
00:29:59.120 | that we'll look back and this will be a thing of the past.
00:30:02.320 | Yes.
00:30:03.780 | When I'm over at some people's houses, this doesn't happen very often, but you're at someone's house
00:30:12.640 | and you see a phone that's hanging on the wall with a cord, right? We don't really remember when
00:30:19.280 | they – when it changed. When did we quit having those? But at some point, we did.
00:30:24.720 | Yep.
00:30:25.360 | So that's what I'm hoping is going to happen here.
00:30:28.960 | I think it's going to be faster than 10 to 15 years and I think it's because of you and your team.
00:30:34.640 | I think we're underestimating the speed of change because after your verdict, your win – because
00:30:42.000 | I was talking to a real estate agent a month ago and she was like, "Well, what do you think? Should
00:30:46.320 | I list your house at this 5.5% or 6%?" I said, "I would like to wait until this verdict comes out
00:30:51.120 | before I talk to you." So now when I'm going to go back, I'm going to talk to her and say, "Hey,
00:30:54.960 | what do you think about this verdict? It does seem like there is some price fixing going on.
00:30:59.520 | How about 3.5%? How about 4% and not 6%?" I'm going to ask right away and I hope any seller
00:31:05.120 | who's thinking about this asks right away.
00:31:08.560 | Sure. I probably answered a question that wasn't really asked. What I was meant is,
00:31:15.360 | I think within 10 to 15 years, we will no longer see buyer's agents.
00:31:18.960 | So I think we will no longer see that. I really think that that's going to be a relic of the past.
00:31:26.640 | But as far as open negotiations and commissions and all that, I think that
00:31:32.960 | significantly faster than that. I do agree with that. But also, unfortunately, and one of the
00:31:39.360 | beauties of programs like yours is we got to keep this fresh, but the public tends to have a
00:31:46.240 | relatively short attention span. And this isn't the most, it's not like the sexiest, most interesting
00:31:53.280 | topic out there, right?
00:31:54.400 | Oh, this is pretty sexy, Mike.
00:31:56.080 | I mean, to people like me, it is, right?
00:31:57.920 | No, this is the most amazing topic I've come across recently.
00:32:01.600 | But it's one of those things where they're really desperate to hang on to this. And I don't know,
00:32:08.960 | maybe it seems like this case has been going on four and a half years and they're going to try to
00:32:14.320 | drag it out on appeal. But I mean, look, I'd like to see a change tomorrow. I mean, I've called upon
00:32:21.440 | the new CEO of the National Association of Realtors to sit down with me and to sit down with
00:32:25.840 | me and to sit down with federal regulators, the Department of Justice, housing advocates,
00:32:31.920 | to come with a spirit of contrition and a spirit of willingness to bring about true change.
00:32:38.800 | If they want to do that, that's what I want to do. Get this money back to the people it was
00:32:43.680 | taken from and find a path forward. But right now, all they've shown is a desire to continue
00:32:49.200 | to fight, which is okay. I'm a scrapper. I'm a fighter.
00:32:51.760 | Well, so once you won the verdict, you filed a new motion to sue other companies,
00:33:00.560 | other brokerages. Right. A new lawsuit. So given that there's precedence that you won this massive
00:33:07.440 | trial, it seems to me as an observer, casual observer, well, you're going to win again
00:33:13.440 | because all the information is out there and you guys fought for four and a half years and you have
00:33:17.840 | all the evidence and the documentation and the witnesses. What are your thoughts on going forward?
00:33:24.880 | Yeah. So I think the other companies kind of recognize that as well. But what people want to do,
00:33:30.800 | and I think a lot of these corporate real estate companies, they just want to throw money
00:33:34.240 | at it to make it go away and not change the way they're doing things. And we're unwilling to do
00:33:40.240 | that. We've got a team of attorneys that maybe we're all kind of true believers. But until we
00:33:47.920 | can get the National Association of Realtors out of the business of allowing their system to be used
00:33:57.200 | to force homeowners or even to allow them to make these offers of commission to the buy side,
00:34:05.440 | I don't think anything's going to change. And so there's two sides of a lawsuit. There's the
00:34:10.720 | money side and there's what's called the injunctive side, the change side. And we're not
00:34:16.960 | just going to take a payout and let it continue as business as usual. And I think that we've made
00:34:25.680 | some folks on their side believe us because they tried to get us to go away before trial and we
00:34:32.400 | wouldn't do it. And these cases are very, very seldom for these antitrust cases to be tried.
00:34:37.840 | Someone told me this is the largest antitrust verdict in the history of the country. And very
00:34:41.920 | few of these cases go to trial because there's so much money at stake. But to me, this isn't about
00:34:49.360 | the, it sounds weird for a lawyer to say it, but really, I mean, I believe that this isn't just
00:34:54.560 | about the money. I mean, the money's a piece of it, but it's not just about the money. It's about
00:34:59.200 | the need to change their behavior. And until they're willing to fundamentally change the
00:35:05.920 | way they're doing things, I don't see this lawsuit going away. I don't see the new one going away.
00:35:11.680 | And so, I don't know. David reached into his pocket and pulled out a stone one time and we've
00:35:20.640 | got some more stones and we've got bigger pockets. So we're going to keep swinging.
00:35:24.960 | (00:36:15): When you talk to the regulators,
00:35:27.760 | I guess the government officials, folks looking at anti-monopoly, what do they say? Because again,
00:35:34.640 | to me, it seems obvious that there's an issue.
00:35:37.280 | (00:36:25): So the department of justice has got an
00:35:40.560 | extremely dedicated, smart team of attorneys that they work in the antitrust division. And one of
00:35:47.040 | them sat through the opening statement, sat through the closing statement. And these are men and women
00:35:51.280 | who devoted their lives in the real estate area and to antitrust. And there's been a real difficulty
00:35:59.760 | trying to hold these folks accountable. And I think there's a real sense of excitement and joy
00:36:07.120 | because now we know that you can take complex, complicated problems, but explain it and distill
00:36:15.520 | it down to where juries understand it. And I think that they fundamentally want to see change here.
00:36:24.240 | And I feel that there's a real kindred connection with our trial team because they have lawyers on
00:36:33.040 | our side that we want to see real change as well. I feel like I went to law school, so I had the
00:36:43.120 | chance to make a difference in people's lives. And what an awesome, cool way to do it. I mean,
00:36:52.720 | class actions get a bad name all the time, man. I used to personally hate class action lawyers and
00:36:57.600 | think about that they're the people, the men and women who are giving coupons and taking hundreds
00:37:02.400 | of millions of dollars in fees. And I think that this is a chance for us to show that that's not
00:37:09.680 | what it is. It's a way when Americans, when the system, when a lobby becomes so strong and
00:37:16.800 | powerful that you can't get real change in DC. And you can get ordinary citizens, ordinary Missourians
00:37:25.040 | to band together and pull together a jury under the Seventh Amendment. I mean, it's there because
00:37:31.600 | people fought and died for a bill of rights and to get them together. And for two and a half weeks,
00:37:39.600 | the most powerful men in real estate, and I'm using that word intentionally because that's
00:37:44.080 | exactly who it was. It was men in real estate were called to the stand in Kansas city and held
00:37:49.520 | accountable for their conduct. And they looked at what happened and they said, stop it, knock it off.
00:37:56.080 | And that's why I went to law school and heady fun stuff. And so we'll do it again if they want us to.
00:38:06.240 | Now, I mean, I really think it's great as an outsider looking in. I like to complain against
00:38:12.720 | the government a lot because of the inefficiencies, the $500 paperclip example, all that fun stuff.
00:38:18.640 | Is this a failing of the Department of Justice to not do what they should have done? So private
00:38:24.080 | citizens like you and other lawyers step in and you know, Missourians, juries.
00:38:28.480 | I never want to say it's a failing of the Department of Justice because I think that
00:38:34.560 | the Department of Justice has some really tremendously talented attorneys and there's
00:38:41.200 | a tremendously talented folks. But look, it's all part of the executive branch and there's
00:38:48.160 | always politics and there's all kinds of politics at all different levels. And it is much easier
00:38:55.120 | when we're making a decision on our trial team, we've got, you know, I'm the lead trial attorney.
00:39:01.200 | I take input, but I make the decision, I make the call. And it's a much more efficient way
00:39:07.120 | to make a decision about how we're going to act and what we're going to do. And it's a lot easier
00:39:14.560 | to massive undertaking to take on a trial, millions of documents, almost $10 million out
00:39:21.920 | of pocket expenses to litigate this case. You know, all kinds of, you know, 10,000 plus hours
00:39:27.920 | of time. I don't know the amount of time, probably 20,000 hours of time of attorney time.
00:39:32.480 | But ultimately it's something that we were able to do and that's far easier than it is to get a
00:39:41.360 | piece of legislation through the house. Far easier than it is to navigate the intricacies, I believe,
00:39:52.800 | of the department of justice. And that's why we have private rights. That's why the Sherman Act
00:39:59.760 | exists because if for whatever reason, I don't know if it's politics, if it's efficiencies,
00:40:06.880 | if it's whatever reason, but for whatever reason, if the governmental entities don't take down
00:40:14.880 | monopolies that collude, the private citizens have the ability to rise up and do so.
00:40:19.200 | Got it. Wow.
00:40:20.320 | And that's what happened. And it is a really cool thing. I told the jury during closing argument,
00:40:26.480 | I mean, this is just a jury of normal folks. I said that the most powerful seats in the courthouse
00:40:32.880 | were the ones that are sitting as this big, beautiful, epic courthouse with an article
00:40:37.360 | three judge who's just a tremendously talented, brilliant man who's given his life to serve on
00:40:42.720 | the bench and all of the power and the magistrate of that courthouse. But the most powerful seat
00:40:50.000 | was the truck driver and the nurse and the substitute teacher and the retired person
00:40:59.280 | from the park department. I won't go through all of their careers, but these are just real people,
00:41:02.560 | the stay at home mom. And they were sitting in seats in a criminal case, life or death,
00:41:09.840 | and in a murder case. Someone goes to jail for the rest of their life or they walk free.
00:41:14.880 | And in this case, you had the most powerful corporations in the world.
00:41:19.360 | They can either hold them accountable or they could tell them to give back
00:41:22.720 | $5 billion of money that they wrongfully took. And that is a cool thing about our country.
00:41:28.800 | If we can figure that out and we allow that to happen, why are we the only country in the world
00:41:33.920 | that pays 6% commissions when the rest of the world pays 1.5%?
00:41:38.960 | Right.
00:41:40.160 | It makes no sense to me.
00:41:42.000 | Change is coming.
00:41:44.080 | It is, man.
00:41:45.280 | It is. And really, thanks to you. I'd love to understand more about the economics of being
00:41:50.400 | a trial lawyer, a personal injury lawyer, a lawyer such as yourself. How did the economics work?
00:41:55.440 | Because you said almost $10 million out of pocket.
00:41:58.560 | Yeah.
00:41:58.800 | To win this case over four and a half years, tens of thousands of hours.
00:42:03.040 | How do you pay for that? How do you pay for that? And what if you lose?
00:42:08.960 | Well, yeah, it's a...
00:42:09.760 | What if you had lost? Are you just out $10 million?
00:42:12.720 | Yeah, that's exactly what it would be. So we've been blessed. We've got a small firm. It's my
00:42:20.480 | best friend from law school and one of my really good friends who I met who was a defense lawyer
00:42:25.360 | down here, my son, the four of us. And we've had a lot of success. Four years ago, well, I guess
00:42:33.520 | the first big case I had was in early 2000. I had a case that went to trial that resulted in a
00:42:39.440 | multi-billion dollar verdict. And it was a pharmacist who was diluting chemotherapy drugs
00:42:45.280 | and killed about 1500 people. But we've had a lot of success over the years. And we've decided
00:42:54.640 | when we're doing that, that we're just going to invest in causes we believe in.
00:42:58.720 | And the economics of it are that you, in a case like this, the reason this costs so much money,
00:43:05.440 | unlike a traditional personal injury case, which can be expensive, but the reason this case is so
00:43:10.320 | expensive is the data. So we had to collect all of the data in these giant data dumps
00:43:21.040 | where you'd have 260,000 transactions coming from multiple different brokerages.
00:43:28.480 | And it would be very jumbled and difficult to understand and figure out. So we hired a team of
00:43:35.760 | statisticians and economists and their expert witnesses. And that's where all the money comes
00:43:41.760 | from. I think they spent 10,000 hours on just expert witness time. And I remember when I first
00:43:49.680 | got involved in this and I got my first bill, and a brilliant, brilliant professor from Texas A&M,
00:43:57.840 | Dr. Craig Schulman is his name. And he's a brilliant antitrust bind. And he's just,
00:44:03.040 | he's extremely bright. And Professor Roger Alford, who used to be in the antitrust division
00:44:08.560 | with Donald Trump. But when I first got my first bill from these expert witnesses,
00:44:12.800 | and I opened it up, it was $1.7 million. And I just, I'm like, okay.
00:44:18.960 | Then I guess at that point you're just kind of pot committed.
00:44:21.120 | Pot committed.
00:44:22.560 | But yeah, had the trial come back and if the jury had ruled against us, we would have,
00:44:29.200 | that money would have been gone. And we had for the last four and a half years,
00:44:35.840 | this is the only thing that my firm's worked on. And the other people I've worked with, I mean,
00:44:41.600 | this has just consumed all of our lives. And that's, you know, but you try to put that out
00:44:48.240 | of your mind because it can be kind of soul crushing if you don't. But that's the nature of
00:44:56.400 | it. But like in a traditional, if you just think about it, and people, you know, people knock
00:45:00.080 | lawyers all the time. But if you think about it, like two of my closest friends in the world are
00:45:07.600 | lawyers here in Kansas City, they were just trying to case over in St. Louis, Missouri for a police
00:45:12.720 | officer who was paralyzed and it's a quadriplegic from a horrible car, from a roof crushing on a
00:45:21.680 | car. Second case, they've taken a trial and it's resulted in, they called a hung jury where the
00:45:25.840 | jury couldn't resolve it. And they just, they don't get paid. But what you do is it, I think it
00:45:36.400 | increases the quality of cases because I wouldn't be filing cases and spending money and doing
00:45:42.960 | things like that if they were frivolous or if they were, first of all, I wouldn't do it because
00:45:47.600 | you should be filing frivolous cases, but you're not going to do cases unless you believe in them.
00:45:52.080 | And isn't that just the essence of the free market? That if you have somebody like me
00:45:56.720 | and my team that's willing to invest our time and money and effort into this, hoping that we
00:46:04.000 | could prevail at trial, then we're going to work harder to get the story across, to define the
00:46:11.120 | evidence, to uncover the evidence, to invest in it, to put the best case forward. And so that's
00:46:16.080 | the economics of it. But it's, I'm not sure what coach said it, but it's certainly true in litigation,
00:46:23.120 | it's better to win than to lose. So.
00:46:24.880 | Sure. So you've won, however, I'm sure the defense is going to appeal.
00:46:30.080 | Sure.
00:46:31.200 | So does that mean it could take years and years for you to actually collect a percentage of the
00:46:37.280 | winnings? And so there's no pot of money right now.
00:46:40.560 | Nope. That's correct. And even when you win, it's not automatic. We keep track of our time.
00:46:47.120 | And it's one of the things I actually explained to the jury because a lot of people don't
00:46:50.080 | understand this. Maybe a lot of your listeners don't understand it, but it's not like this
00:46:53.760 | happens and that money's wired into, even when we collect and win, the money's not like wired
00:46:58.160 | into some bank account in my law firm. When it happens, the money goes into the court,
00:47:01.840 | it's supervised by the court. We actually have to file a fee application with the court.
00:47:06.320 | We have to show the court the time that we spent, the money we spent, how we spent it.
00:47:11.520 | And we have to ask for the court's approval and permission to be paid anything. And it's
00:47:16.480 | all subject to the oversight by the court. And that happens in all class action lawsuits,
00:47:20.720 | which is different than a typical personal injury case. But, so we won't, at the end of the day,
00:47:26.080 | there won't be any money that's paid unless we win the case. The money's been collected into
00:47:30.960 | the court system. We file a motion, a hearing's held, and the court approves our time and expenses.
00:47:36.720 | And so that's how all that happens.
00:47:38.880 | Is there no, okay, you guys won the case. The defense have to pay at least the legal bills that
00:47:46.480 | you've incurred so far?
00:47:48.560 | Nope.
00:47:48.800 | Nothing.
00:47:49.440 | Nothing.
00:47:49.680 | Wow. So it's really a gamble of conviction.
00:47:55.360 | Yeah. Yeah, right. It is something where you really need to believe in it. But yeah, it could
00:48:04.720 | be, and massive undertakings like this are harder. Big class action cases are harder. But you're
00:48:11.360 | right. But it has to, you know, you ride it out until the end. And then ultimately, the goal is
00:48:21.040 | to refund the money to get the money back to the people who it was taken from. But yeah, that's
00:48:26.960 | how all that works. And that's true. Almost any case you hear, anytime there's a jury verdict,
00:48:32.240 | the lawyers are always doing that on a contingent basis. And he won't get paid unless they recover
00:48:39.040 | money for their clients.
00:48:40.480 | Right. That's amazing. You know, offline, we were talking about kids.
00:48:45.840 | Yeah.
00:48:46.880 | And you talked about your son being born during your first case. Can you talk about that a little
00:48:52.480 | bit and how that affected the case and how it kept you going?
00:48:56.080 | I'll never forget it. My son, Steven, back in 1997, when my wife was in the hospital getting
00:49:06.960 | ready to go into pregnancy, and the doctor walks in and I'm reading this book, it's called
00:49:11.840 | "Trying Cases to Win." And he kind of looked at me, he's like, "Do I have something to be
00:49:16.640 | worried about?" And Steven was born. And a week later, I went and tried my very first trial.
00:49:22.880 | I was 32 years old, and I had never stepped in front of a jury before in my life. And it was
00:49:31.280 | kind of a wild, wild thing. I had started my law firm in 1995. And for two years, we didn't make
00:49:40.560 | a dime. I mean, literally, we didn't bring one dime in. And I decided at that time that this
00:49:45.280 | is the most logical time for my wife to get pregnant and for us to start our family.
00:49:49.840 | And we were in our new house. And so we went to trial, and thankfully I won.
00:49:57.360 | But then I had my daughter shortly after him in '98, and I never pushed law on either one
00:50:05.920 | of my kids. I always kind of tried to stay out of the way and let them do what they wanted.
00:50:10.560 | And ironically, they both ended up wanting to go to law school. And my daughter works for legal aid.
00:50:16.240 | And my son is an attorney now in our firm for the last year. And he poured his heart into this case.
00:50:23.840 | It was a really cool thing to be there at trial. And I was talking about both my parents in their
00:50:32.960 | 80s watched every day of trial. But I'd look there and my son's sitting there, and my parents
00:50:37.680 | are there, and my daughter would come and watch, and my wife was there. And it provides a lot of,
00:50:44.240 | to me, it provides a tremendous amount of source of energy and a tremendous source of drive,
00:50:50.640 | which you need, right? Because I think I was functioning usually on an average of three or
00:50:54.880 | four hours of sleep a night. But it was cool. It was fun. And he was a tremendous gift in this case.
00:51:03.200 | And thankfully, he gets a lot of his smarts from his mom.
00:51:07.520 | [laughter]
00:51:09.680 | So let's say we fast forward, Mike, I don't know, four years from now, let's say it's finally over
00:51:15.600 | and you win and you collect, let's say it's not a 1.8 billion, but it seems to me that the final
00:51:22.480 | settlements generally are less. I'm not sure why. Let's say it's $200 million. And let's say your
00:51:31.040 | firm collects 30% of that. What do you do? What do you and your partners do with that windfall?
00:51:36.960 | What are some things that come into mind with that type of life-changing money, which maybe
00:51:43.520 | it sounds like you were able to have that windfall in the past?
00:51:46.960 | Yeah. Unfortunately, and that just shows you the difference in concept and scale, but I would view
00:51:53.920 | that kind of more as disastrous because if you think about it, by then we'll probably have been
00:52:00.560 | carrying a bank note on our client cash, we call them client cash advances, money we've paid out
00:52:06.400 | that we're paying interest on. We've been carrying it by that point for probably seven or eight
00:52:10.000 | years. And I guess it might've amassed $20 million. And then you're also, we're supporting
00:52:17.280 | our internal structure and salary because people have to live, right? I mean, we have attorneys.
00:52:22.160 | And so typically what firms like mine will do is you'll run up a line of credit and you'll go to
00:52:29.200 | a bank and they'll loan you money. And so people look at that and they think, "Oh, geez, you go and
00:52:35.600 | you collect, you made 25 or $30 million." Well, no, I actually didn't because I had to pay back
00:52:41.200 | 30 million. And so there's that business side of it. But what you end up doing when you do,
00:52:50.160 | if you do get a large amount that's collected, everyone's indifferent. What I try to do is
00:52:58.560 | stay grounded and stay focused on the fact that I personally have seen money screw people up more
00:53:09.600 | than I've seen it be something that's beneficial to them if they're not grounded in it, right?
00:53:15.680 | And it can lead to false hubris and things like that. So I just stay grounded and reinvest it.
00:53:24.960 | And then find the next case that you want to throw your money into and you want to throw
00:53:29.280 | your time into and throw your... But also there's a big team of people that are associated with it,
00:53:34.160 | other teams and so it never goes as far as you think. People hear about like the... We had
00:53:42.240 | that pharmacist had a $2 billion verdict on, but your numbers were right in that case.
00:53:47.760 | I think at the end of the day that maybe our firm ended up making like $20 million,
00:53:54.080 | which would seem like a tremendous amount of money. But after you paid off,
00:53:57.600 | you did everything else. I mean, nobody was... We weren't buying yachts and planes, I'll tell you
00:54:01.760 | that. You do that, but I don't know. It's a passion. It has to be a passion to grind that
00:54:13.440 | long to not know whether you... To grind that long without making any money and to know that
00:54:19.600 | you could lose. That is an unbelievable passion. It's very respectful.
00:54:24.640 | But it's thrilling too. I mean, I'm not going to kid you. I don't want to act like it's just like
00:54:31.840 | Atticus Fenske and Killmonger. There's a tremendous amount of charge that there's
00:54:37.760 | a tremendous amount of adrenaline, a tremendous amount of... I'm not a guy who likes to gamble,
00:54:42.880 | but man, I tell you what, when that jury's out in this case and that jury's deliberating and they're
00:54:49.760 | coming back in that room and there's probably 300 people and all eyes are on that jury and
00:54:54.960 | they're going through and they're only answering five questions. I mean, you want to talk about,
00:54:58.800 | that's a stand up on the edge of your seat kind of moment, and it makes you feel fully alive and
00:55:06.800 | it makes you feel... It makes you just embrace the beauty of your craft. Oh, yes. Based on this
00:55:15.360 | verdict, I'm assuming people are emailing you and knocking down your door asking for representation.
00:55:21.120 | How do you deal with the publicity and the inquiries or is it just you have to focus on
00:55:26.960 | this real estate price fixing situation for the next several years?
00:55:31.600 | I let it get to my head and realize that I'm the same idiot that I was the day before.
00:55:36.560 | I mean, you're the same person and try not to let it get to you. And I'm staying focused on it.
00:55:47.760 | There's a lot of unfairness, I think, in life and I see parts of it. The more success I've had
00:56:00.640 | as an attorney, and so I've, thankfully I've never lost a trial and I've never had a verdict
00:56:07.840 | less than a million dollars. And I've had a lot of really big verdicts because we work really hard
00:56:13.040 | and we do really well. But the more success you have, the easier it is to be successful.
00:56:17.200 | And it's weird, but just like with your podcast, when I see the people who are on there,
00:56:24.960 | when you get bigger gets and then your audience grows and it's easier to get people. And so the
00:56:29.600 | same thing happened with me. And what I have to remind myself of is don't get too full of yourself.
00:56:36.240 | Hey, but you know what? I know why you're so good at what you do because you're very easy to talk
00:56:42.000 | to. And where are you located at? We're in San Francisco. So it's a big deal,
00:56:46.960 | big prices and big commissions. Yeah. Actually, I spent a fair amount of time
00:56:51.040 | out there taking depositions because the Anywhere, which used to be Realogy's,
00:56:57.520 | had a lot of their folks based out there and they used one of their big law firms
00:57:02.400 | was located there in San Francisco. But I was going to tell you, when you get out here to the
00:57:06.240 | Midwest, I'd love to take you out to some real Kansas City barbecue and get you to
00:57:11.760 | the Kansas City Chiefs game and let you see how real football is played.
00:57:15.200 | I'd love that. I love Kansas City barbecue. It's the best. I would love it. Mike, thank you so much
00:57:23.440 | for your time. I really enjoyed it a lot and I'm looking forward to hearing this and you have a new
00:57:28.640 | fan of me. I'm definitely going to start following your podcast. Thank you. Thank you so much.
00:57:33.280 | Take care of those kids. Bye-bye. Take care.
00:57:34.720 | I hope everyone enjoyed my interview with Mike Ketchmark. It was scintillating to hear him speak
00:57:41.120 | about how he was able to battle Goliath and win. And for those of you in the real estate industry,
00:57:47.680 | this is not an indictment on you by any means. I know many of you are good folks. This is just
00:57:53.600 | about change and how technology and capitalism forces change and has forced the commission
00:57:59.760 | structure in almost every single industry closer to zero, if not zero. Change is inevitable and
00:58:07.440 | we've got to change with it. Also, shout out to Financial Samurai reader and fellow author,
00:58:14.080 | Jimmy Soni, who wrote the book, The Founders, The Story of PayPal and the Entrepreneurs Who
00:58:18.800 | Shaped Silicon Valley, for introducing me to Mike Ketchmark and enabling me to do this interview
00:58:25.520 | for all of you all. Thank you so much, Jimmy. And if you enjoyed this podcast episode, I'd love a
00:58:31.040 | share, a positive review. It's what helps the show grow and it keeps me motivated. So thanks so much.
00:58:37.200 | Finally, if you want to keep in touch and know everything that I'm writing and recording,
00:58:42.800 | please subscribe to the Financial Samurai newsletter at financialsamurai.com/news.
00:58:46.960 | Until next time.