What you’ll learn in this episode:
About Daniel Callahan
Daniel Callahan opened his own law office on St. Patrick’s Day in 1984. From there, he distinguished himself as one of the top trial attorneys in California and has repeatedly been recognized by his peers for his incredible accomplishments. Mr. Callahan was the winner of the prestigious OCTLA Trial Lawyer of the Year Award three times, in 2000, 2004, and 2012. Since founding Callahan & Blaine, Mr. Callahan has won many jury trials and obtained scores of seven and eight-figure settlements on behalf of his clients.
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Daniel Callahan is a legendary California lawyer who has achieved record-setting verdicts for clients. What was the secret to his success? Preparation. By not putting off what he could do now, Daniel had the mental space to think about his cases creatively—and that led to astounding verdicts in seemingly impossible cases. He joined the Law Firm Marketing Catalyst Podcast to talk about his tips for building a network; why current clients are more valuable than new ones; and why client bills are an underused selling tool. Read the episode transcript here.
Sharon: Welcome to the Law Firm Marketing Catalyst Podcast. Today, my guest is Daniel Callahan. He is founder and head of one of California’s top litigation firms and has been a winner of the prestigious Orange Country Trial Lawyer of the Year three times. We’ll learn all about his career path and why he thinks his firm is successful. Daniel, welcome to the program.
Daniel: Thank you very much, Sharon. It’s nice to be here.
Sharon: So glad to have you. Tell us about your career path.
Daniel: It’s an unusual path, Sharon. When I left high school, I did not go to college directly. I went to work in construction because I didn’t really apply myself much during school. I graduated fifth from the bottom in my class. So, I worked in construction. I was doing that. A buddy of mine got me a job, and I’m chopping trees down with my McCulloch chainsaw, and that turned me into a wood chopper. I’m thinking, “What am I doing here?” I saw my buddy. “I know why he’s here, because he’s standing next to his dad who got him the job. My mother and father told me I’d be a good lawyer. Maybe I want to try going to college after all.”
Then, when I went to college, I thought, “O.K., now I’m with all those smart kids, so I have to work really hard.” I put them on a pedestal and worked really hard, and as a result, I had straight As through college. When I went to law school, I thought, “O.K., you were pretty good at college, but now you’re really against all those smart guys.” Again, I put them on a pedestal, worked really hard and finished in the top 10 and editor of the law review.
Then I went to law firms. I was recruited by several law firms. I went to Hawaii to practice initially with the oldest and largest firm in the state. I was there for two years. I learned a lot. I came back to California with another large law firm for another three years, and then I opened up my own shop. I was able to bring in more business than most people. I had enough to keep myself and two other associates busy, so I thought, “Maybe now is a good time to go out on my own.” I did that on St. Patrick’s Day of 1984.
Sharon: Wow! Let me go back for a minute. Why did your parents think you’d be a good lawyer?
Daniel: I think I was a bit argumentative. I could be kind of persuasive and argumentative at the same time.
Sharon: Did you decide to go to Hawaii because that’s where you wanted to be?
Daniel: No, not at all. I had never given a thought to Hawaii, but when they came to interview at the school, I accepted the interview and met with them. I got a call back. Two days later, they invited me to spend five days on the islands. They put me up at the Ilikai and gave me a car. In three days, you get to know the firm, and then you have two days to get used to Hawaii. It was so great! I took the job, but Hawaii wasn’t really for me. I preferred being back in California, where I went to law school at UC Davis. I didn’t go back to Davis, but I went to Newport Beach, California.
Sharon: Was it more formal?
Daniel: It was a very large firm, and I would not say they were formal. They worked really hard, but they also played pretty hard. I got a good grounding from them.
Sharon: It sounds like you have that, between everything you did. Tell us how that led to a couple of your biggest wins, because they’re big.
Daniel: One of the things I learned from my mentor at Allen Matkins was you cannot be faulted for working too hard. Remember, I always put the opposition on a pedestal anyway. I want to be really prepared. They taught me how to be prepared, how not to put things off until tomorrow if you can do it today, because you don’t know what’s coming tomorrow. You may have an ex parte hearing; you may have something coming up. If you planned on doing this but you put it off, now you’re crowded, and you can’t do your best job. That’s why I have been so successful. I almost over-prepare.
When I go to trial, I prepare. First of all, someone else usually works up the depositions and the discovery and all that. They bring it to me and give me an idea which depos to read first. I read all the depos. I summarize the depos myself. I match them with all the exhibits that I read. Then I prepare the examinations of each witness, both our side and their side, linking them to the exhibits, and then I practice the exams. I work with the person who’s in charge of my AV. When I want to do an exam, I want this coming up, and he’s showing me how to put it up on the screen. When we go through these, after a while he knows everything I’m about to do, so you can almost think as I’m thinking. That’s because of preparation.
I also prepare my own opening statements. I go through them two or three times the day before or two days before it’s scheduled. You don’t want to do it too much because it gets kind of old. It still has to have some life to it, but you want to do it a few times to get the bugs out. If I have a group of people sitting in a conference room listening to me, they’re instructed not to say a word during the opening, but after they can critique me. There is many a good idea I’ve gotten from those individuals. Some ideas I didn’t think much of, and I did not incorporate them. Many ideas I did incorporate. When I walk into trial, I feel like the 800-pound gorilla because I’m really prepared. I have all the exams for the entire case done. The only thing I don’t have done is a closing argument, and that’s going to depend on the testimony.
The attorneys who are listening to this should order a transcript of the trial and have a daily transcript. By the way, you should have it certified. If you don’t have it certified, the judge may not allow you to use it. I believe in quoting the witnesses I cross-examine heavily. I believe in doing video depositions. You ask the same question three or four times. You get different responses. You pick out the response you like the best, and then you put a number of clips together and show that either during opening statement or right as you call that witness. Before you even ask him the question, you can play from his deposition. By that time, you’ve destroyed him in the eyes of the jury before he even gets to open his mouth. That is a helpful tip.
I used that in one case called Beckman Coulter vs. Flextronics. That was a $2 million breach of contract case. We discovered a $300,000 fraud and we went to trial. Seven weeks into this trial, I amended the complaint to conform to proof that I had already elicited from the mouths of the defendants. I added two causes of action for economic duress, which is a subspecies of fraud. The jury came back and gave me $2 million on the first claim and $300,000 for fraud on the second, plus $1 million and a quarter of punitive. On the third cause, they gave me $180 million in punitive damages, and on the fourth $750 million in punitive damages, for a total of $934 million, which was and still remains the highest jury verdict in Orange County history. It was the highest in the United States up until about November of that year. How did that happen? Preparation, preparation, preparation. When you do that, when you are prepared, you can allow yourself to think, “What creative way can I go about doing this? How can I do something different?”
By example, I had a smaller case called Radco v. Diamond Walnut. Radco was a producer of urethane foam, and they sent it to work sites in California in 55-gallon drums. They sold it to a subcontractor, but Radco wasn’t paid. So, Radco calls me and says, “Dan, how do I get a mechanic’s lien?” I said, “Well, in California, first you have to do a 20-day notice.” “A 20-day what?” “You have to give the owner notice ahead of time that you’re providing materials to the job site, so he knows to get you paid. Where are these 55-gallon drums?” He said, “They’re locked in a warehouse.” “Well, can you go get them, drive them around the block, release possession and then do a 20-day notice?” He has to do the notice within 20 days of releasing possession. “No, it’s locked in a warehouse.”
I thought through my conversation with him. He said he had sold to Midstate, a subcontractor who could not pay their bills as due. Well, that’s the definition of insolvency. I remember from my days in law school studying the UCC that if you sold something to someone on credit while they’re insolvent, you can reclaim those goods and get constructive possession. So, that’s what we did. I got constructive possession back, even though the drums never left the warehouse. I then wrote a letter releasing that possession, served a 20-day notice and went for my mechanic’s lien. The in-house counsel of Diamond Walnut said, “That is ridiculous.” There was no precedent for it, but I argued it to the judge in Stockton, and he agreed with me. As a result, Diamond Walnut had to pay twice for those materials.
That is being creative. Sharon, if you don’t mind, I think creativity is so important. You have to allow yourself enough time to be creative. Here’s an example. I had a client who’s an SBA lender. He lent money to this company in Orange County who had acquired all of this collateral, which the lender had a security interest in. The lender was not getting paid. He was afraid that if they did the normal due demand letter, filed a complaint, waited 30 days, all this collateral was going to wind up in Mexico.
There are two ways to repossess collateral. There’s a self-help repossession under UCC 9-503. That’s what I did, but in order to make it look better, I put it on 14×11 paper, legal-size paper. I made it look like a form, although I filled it in with the correct statute, and then I had my signature notarized at the bottom, so now it really looks official. Then I went to the police department and said, “I need someone to come with me to make sure there’s no breach of the peace.” He said, “I’ll come with you to make sure you don’t breach the peace.” This was back in the early 80s, when not everybody had a cell phone with a video camera. So, I hired a guy from Los Angeles to come film, and the three of us approached the back of the warehouse. There was an officer from the Irvine Police Department, myself and the videographer.
The warehouse doors were all open, and I said, “Get that guy.” When I approached, I said, “My name is Dan Callahan and I represent the SBA. We’re here to repossess a collateral of loans to the SBA. We’re going to take the CEO down. If you want to be named in the lawsuit, you can go down too, but if you help me, if you identify the collateral right now, then we will let you go.” He went around identifying all the collateral that belonged to the SBA. One of the pieces of collateral was a forklift truck. We had a flatbed and a forklift, and we’re loading all this stuff up on the flatbed. All of a sudden, our forklift ran out of gas. Fortunately, they had a forklift, so we picked up our forklift and everything else and left. We were out of there within about an hour. Whenever somebody came from the back room to look, we had the videographer shoot them, “I got you.”
We went back to the office and had a beer with the client. I got a call from the lawyer representing the debtor, and he said, “Is it true all they had to do was say no?” I said, “Yeah, that’s true.” He said, “Oh, my god. Congratulations on your sting.” The reason I tell you that, Sharon, is because that shows some creativity. On the other one, I grafted the UCC onto the mechanic’s lien law. This one I went in on a self-help repossession, but I did a document. That is legal but somewhat deceiving. It looked like a court document almost. So, there are different things you can do creatively within the law that can get you results.
Let me tell you one more story. There’s a case I had where other lawyers had turned the case down. It’s a personal injury lawsuit. There are these two women who were running in the bike lane, and they got hit by an uninsured drunk hit-and-run driver who abandoned his car. He was caught nine days later in a laundromat with beers in his pocket. He was sentenced to four years. The other lawyers who looked at this thought, “There’s no money. Who are we going to sue? An uninsured hit-and-run driver?”
I went to the site itself and looked where it happened, and I noticed the bike lane. There are regulations for this in California. Usually, the bike lane is about four-and-a-half feet wide. This lane is 11 feet wide. Also in California, it has to be a properly marked bike lane, and this was not. Ordinarily the government would have immunity, but only if they follow the engineer’s advice. They had done it correctly many years before, but there had been a landslide covering the road. When they redid it and repaved it, they didn’t do the bike lane properly. They didn’t do it the way the engineer had told them many years before, so they did not have governmental immunity.
So, I sued the City of Dana Point and demanded $50 million, which was the limit of their insurance. They offered me $30 million. I told everybody in my office, “We’re not even talking about settlement. There is no settlement. You’re not taking your foot off the gas.” For anybody who’s listening to this, once people start talking about a settlement, there may be an inclination to take your foot off the gas. Don’t do it. Just keep it there. On the Friday before the Monday trial, they said, “O.K., we’re in. $50 million.” I got a call from an organization that tracks this, and they said, “Dan, that $50 million settlement is the highest personal injury settlement in the history of the United States.”
Daniel: That’s what I said, wow! They also said, “Oh, by the way, you also have the third highest.” I had one for $28 million. As it turns out, $28 million was third. $29 million had been the highest and became second. My $50 million took over. I don’t know where that stands right now, but I’m sure it’s pretty high up there.
Sharon: You can tell just by looking at your website and all the badges and awards. Let me ask you this because you alluded to it. You said you do consulting.
Sharon: Can you tell us a little about that?
Daniel: Yeah, certainly. I was a founder and managing partner of Callahan and Blaine, 28 attorneys in Santa Ana that do business litigation and personal injury. Now, I’m the CEO of Callahan Consulting. I consult with partners and associates from Callahan and Blaine, but also with other attorneys throughout the nation, giving trial practice and strategy advice. Also, I will be contacted by clients that are looking for a particular type of lawyer in a given community. Just last week, somebody needed a bankruptcy lawyer in Michigan. I researched it, and I found two really good lawyers. I presented them to the client. I arranged for a conference call between the client and each of these lawyers so the client could make up their own mind as to who they wanted to retain. I do this all throughout the United States. Usually, I get about one case a day that I’m trying to help somebody with.
So, it’s two things. I mentor attorneys, as I used to mentor the attorneys in my firm, and I also help clients find the attorney in the right specialty in their community that can help them. The way I’m compensated for this is normal. I get a referral fee when I set up a client with an attorney. I bill by the hour, and the hourly rate goes down. If you use more than five hours, then the hourly rate goes down. That’s just getting at the strategy, how to work creatively to get the best result.
One of the things that’s helped me the most is looking outside the box. That’s because I give myself enough time to be able to have that luxury, and that’s because I don’t put off until tomorrow what I can do today. It’s the lessons you learn in your first few years. You get burned once and then you’ll know. I was in trial one time, and I asked an associated to do a request for experts or expert designation. I came back from trial and asked, “Did you do it?” He says, “No, I didn’t have time.” I go into the court to try to get relief the next day and he said, “No, it’s too late.” So, I went to trial. I still won. I had to take their expert and turn him into my expert. So, you don’t put things off. You get things done.
Sharon: Would you say that’s something you practice in the rest of your life as well as in the law?
Daniel: Yes, I would. I try to teach my children. I have my daughter, Caitlin, and my son, Michael, neither of whom are lawyers, but it’s been drilled into them about preparation and its success and results. I think I practice that in many areas of my life.
Sharon: Do you think you need to have these big wins to be successful? Can you be a successful personal injury firm without huge or noticeable wins?
Daniel: Oh yes, you can be successful without huge wins. Many attorneys spend a lot of time trying to bring in new clients, as well they should, but what you should also do is pay particular attention to the clients you have. Make sure you communicate often and clearly with your clients. Make sure they’re comfortable with you at all times so they know what’s coming and what to expect. When that happens, they’re out there in the community talking about you, and then you get referrals through them. You build your base by working with existing clients who then will be more than happy to refer your business. If they perceive you as someone who cares about them, then they care about you.
That’s how I built my business. It was mostly from referrals from clients. Then it became referrals from other lawyers I knew, and then, because of the big victories, it became referrals from lawyers I never met but knew if they came to me, they were going to get a referral fee. It’s better to get a referral fee on a $10 million victory than a referral fee on a $1 victory. So, people come to me for that reason, and I try my very best to deliver.
Sharon: On your website you have both videos and a blog. Is it necessary to have both?
Daniel: 10 years ago, I would have said no, but now, yes. Videos are very important. People now want to see a video. When they go to your website, they want to see a video, not just a bunch of doubletalk. They want to see what the person is like and how he reacts on film. Do they like him? Do they not? Certainly, you’re going to pitch your wins and tell them what you can do for them. For blogs, it’s the same thing. Blogs are very helpful. People are interested in listening or watching or reading to see if they can learn something.
To get better at the very beginning, I would go to a lot of CEB courses because I figured I’m going to go there; I’m going to learn. I will always pick up something, and in the meantime, I’ll meet a couple of people. We’ll exchange business cards and I’ll expand my network. You’re in the back of the room, you get a cup of coffee, your doughnut, whatever they happen to have, and you meet people. You expand your network. Nowadays with the internet, people are expanding their networks all the time. But I find if it’s a more personal touch, not just somebody I met on LinkedIn, it goes further. So, yes, I believe videos are important, blogs are important, personal touch is important. Get out there and meet people. Get out there and tell people what you do. If it’s just a client, nobody’s going to know about you. You’ve got to go ahead and show a little bit of what you have to offer. It’s always a good idea to tell stories. When you tell a story to a prospective client about a case you won, that prospective client is putting himself or herself in the shoes of your client, thinking, “Damn, that’s good. I wish that was me. I wish my attorney would do that for me.”
I would go to parties and just talk to people at parties. That’s how I would meet a lot of people. I’d tell a few stories and get them encouraged. Your light is always on. When you want to bring in business, your light should be on 24/7. If you go out somewhere, keep in mind you are a lawyer. If you encounter somebody, you should be able to tell them about it and tell them what you can do for them. You don’t want to be pushy, of course, but when the opportunity comes, you are a salesman.
Some lawyers I used to work with felt embarrassed about going out and trying to get business. They want to be a pure lawyer where they just research and write and argue to the court, but they don’t go out to try to get business. Well, that person’s not going to advance. That person is not going to advance in a partnership, because partners tend to look at what this person brings to the table, how much business he has, what kind of book he or she has. You have to always be developing that book, not just so you rise in the partnership, but also for your own well-being. If you have a large book of business with reliable clients, then you have a very good platform for further development.
Sharon: Is that something a non-lawyer or a marketing director, let’s say, should be saying to a lawyer? Have your light on all the time?
Daniel: Yes, definitely. 24/7, have your light on. Be awake. Be alert. You picked a profession. I’m very fortunate because I’m good at bringing in business, but I’m also good at trying cases. In fact, I’m really good at managing a law firm with the numbers and everything, what to spend money on, what not to spend money on and how to spend the money. I do all three, which is a gift. I didn’t know I had that gift. When I used to chop trees down, I was a McCulloch chainsaw guy. It’s something you learn and develop. If you work at it, you’ll get it.
Sharon: Do you think it’s possible to learn the things you’re talking about? How to develop business, how to manage a law firm, that sort of thing?
Daniel: Obviously, when you manage a law firm, if you start out as a solo, it’s not as difficult as stepping in and managing a 28-attorney law firm. There are classes you can take. You can also hire one or two competent people for your office. One is in charge of your accounting; one is in charge of secretarial. Then just manage it. Just make sure you get the bills out on time.
Now, here’s something. Here’s basic 101. If you’re working and billing by the hour, when do you write your time down on your timesheet? When you do the work. It’s amazing how some people can leave at the end of the day and not have their timesheet filled out. They figure they’re going to do it later. I’ve had attorneys working for me, and I just can’t believe it. “What are you doing? Two weeks and you have not billed any time.” “No, but I have all my notes. I’m going to be doing my time.” That’s ridiculous. You need to do it on a daily basis because when you do it on a daily basis, you can actually capture all the time. If you look back a week later, you really can’t capture it, and you can’t be specific enough to sell your information on the bill. When you do a bill, you should write the bill in such a way that the person reading it thinks, “Wow, that’s a lot of work.” Don’t give them shorthand, “A little research.” You should say what you’ve done so they know, “Man, that’s a lot. O.K., I can see why they took an hour and a half,” or however long.
Your bills need to be a persuasive piece of work, and when they’re sent out, they have to be sent out timely. When you do something good for a client, they appreciate it, but the level of appreciation goes down over time. Let’s say you do something for him or her on November 1. You get a bill out on December 10, and they go to pay it maybe in January. By January, their appreciation of what you did goes down. “Oh, really? I guess I could have done that myself.” Clients often appreciate you more at the beginning when you do the work, but if you delay too long—and some people delay a month or two months before sending out their bill. When they do send out their bill, it’s not written like it’s going to make you perspire to read it. It has to be written in a sales manner. You want the guy to read it, appreciate the work and pay the bill. Get it to him quickly and get it to him clearly.
Sharon: It’s something that persuades them. Do you think the aspect of business development—because that’s what we’re so involved in—can be taught?
Daniel: Yes, it can be taught. There are DVDs on it. There are many people that will try to teach you how to develop business. There are a lot of them out there. I’ve spoken to several over the years, and some of them are worth their salt. Sometimes I get a good tip or an idea. People will say you should have a 10-second commercial. When somebody says, “What do you do?” in an elevator, you can summarize what you do within the time it takes you to go from the 10th floor to the ground floor. That’s called an elevator commercial.
Those are helpful, but if people still have business cards now, you also need to exchange business cards or email or text or something, and then follow up on that meeting right away. Whoever you just met, wherever it was, just say, “It was a pleasure meeting you. I enjoyed learning about your son, your daughter, your business,” or whatever it had been, and then note that and follow up. Like I tell my son, you should log everybody you’ve met and put them into a calendar so you follow up in a week. Maybe it’s, “Hey, by the way, I was thinking about you. I saw this may be relevant to your situation. Here’s an email.” Maybe it’s a phone call.
It’s just doing that again and again, and now you’re expanding your network intelligently. You’re not just getting somebody’s business card and hoping he calls you. You’re reaching out and talking to them about something that is of interest to them. When you talk to them, you don’t want to just talk about yourself. You want to find out about their business, their family and what they do for entertainment or travel, whatever you can know. Then, as soon as you get back to your office or home, log all that in and calendar it to get back to this individual. If you do that, you can commit to making three—I’d say five, but even four—phone calls a day to people you met. Or if not a phone call, an email. It doesn’t take that much time, but your network will grow huge. I don’t know how many working days there are in a year, but if you made four phone calls or emails every working day, by the end of that year, you would have a network that’s huge, which can pay off for you. When you want to bring in business, you’ve just got to reach out and touch somebody.
Sharon: I would agree with you, but do you think it’s true for the people who would rather research? They like the law, but they like it from a more academic perspective, let’s say.
Daniel: Yes, I think they have to learn to adapt. I like the law. I like research and writing and arguing; however, I also like to have a comfortable lifestyle where I have a book of business that I can always rely on. That way, I’m more likely to make partner because I have a book of business. Also, I’m more likely to get more and more business. The people that say, “I love the beauty of the law,” that’s good. We all do, but if that’s all you’ve got, when hard times come, you may not be with the firm much longer. You can find dime-a-dozen lawyers that love the law, who think they’re really good at it, that don’t go out and do anything to generate business. That’s not your best way to be a successful attorney.
Sharon: What is your one piece of advice to be a successful attorney? You may have said it already, but what advice would you give a new lawyer?
Daniel: Don’t underestimate your opposition. In fact, you may want to put them on a pedestal and fight the guy on the pedestal. If you put the guy on a pedestal, you’re preparing for Goliath. If Goliath doesn’t show up, but you’re ready for Goliath, you’re going to have success. The keystone is prepare and don’t delay. Don’t put it off until tomorrow. Get it done, and get it done now. If you have an idea for something you think may work, write it down. When you have time to look at it more, maybe you can incorporate that into your action as a plaintiff or a defendant. By the way, I represent plaintiffs and defendants. I’ve only told you about the plaintiff wins. I have numerous defense wins, and I practice the same methodology.
Sharon: Hopefully we can hear about those at another time. I want to thank you for being here today. Thank you so much.
Daniel: Sharon, I appreciate it. I’m happy to be here. Call me again anytime.
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