In this episode of Shorr Solutions: The Podcast, “A Cautionary Tale with ByrdAdatto”, co-hosts Jay Shorr and Mara Shorr are joined by Michael Byrd and Brad Adatto, partners of the ByrdAdatto health care law firm.

Jay and Mara were able to share their own “dumpster fire” story (a poorly mismanaged situation that leads to a disaster) and something so profoundly important to what led to the start of our company: the passing of Jay’s late wife and the loss of their multi-million dollar practice which he was a partner and practice administrator for.

Listen as they share valuable life lessons, business mistakes to avoid, and at the end of the episode, Michael and Brad discuss the 4 C’s of business planning: Cost, Compensation, Control, and Contingencies. Plus, legal mistakes to steer clear of in order to avoid future dumpster fires.

Dumpster Fire Story:

Jay: I do want to make a disclaimer before we start, I will refer many times to my practice but I am not currently and have never been a physician. I don’t say that as a joke, I say that as a disclaimer because, in the state of Florida, you can be a partner in a medical practice without being a physician. Many times I have spoken with medical terminology and people think I’m a doctor, I really want that to be known right from the very beginning.

Secondly is that Mara and I are equal 50/50 partners in Shorr Solutions and we’ll get into that. It didn’t start out that way but that’s the way it is and hadn’t been for several years. The part of my story that I brought on a campaign for many years and speak is called preparing for the unexpected. I was trolling along for many years, I retired from corporate America as a corporate director of safety prosecuting fraud and embezzlement for a major Fortune 500 company, and when I retired, I had gone into helping my wife in her medical practice she was a leading. She was a board-certified dermatologist, we had cosmetic and plastic surgery in house and we had three locations, here in South Florida.

In November of 2011, the medical director was diagnosed with stage four cancer, and in June of 2012 lost her short hard-fought battle of only seven months. The reason it was so near and dear to me is that the medical director was my wife, and the dumpster fire was we were a multimillion-dollar gross revenue multi-location and multi-million dollar net profit. The dumpster fire is that Jay was ill-prepared for what he was about to face because it can’t happen to me. I was ill-prepared for all of it because it couldn’t happen to me, we were moseying along, we had a retirement plan in place but it just didn’t include the parts. She was given a 5% chance of survival. If there’s a 5% chance of survival, I’m a very positive person with the power of positive thinking, I’m going do everything I can to be that 5%, knowing that you’re going into a burning building, but why not. That’s what I fought for, thereby leaving the practice in somewhat of a disarray and other people’s hands were traveling around the country we were headed out of Houston, every other week and I was not prepared for what I was about the face, shock, anger, and denial. How do you face all the stages that you’re about to uncover without believing because it was asymptomatic, and when it was already in stage four.

Now, I had a side hustle, and we’re going to get into that at the end, my side hustle was the Best Medical Business Solutions, which is hence our former name which still is our corporate name. My goal was that when we were going to retire, my late wife and I would buy a Winnebago and say that as we travel around the country and we’d help medical directors, she would work with the doctors and I would work with the management team and we would have a little side hustle consulting, whenever we want it. I then became very well known in this industry because I wrote the business plan for a certified aesthetic consultant for the aesthetic show and Mara I wrote one of the business programs for a few firms. That was going to be my exit strategy, but I never realized it. My wife became part of faculties we traveled around together I was still running the medical practice and after she passed I took a year off.

Mara had her own company and she had her own client base, of which I was one of her clients. She was doing marketing for us and helping us, and she was also doing marketing for our side hustle, which was my late wife and I, Mara not included. She wasn’t a consultant if you will. Then, when my wife passed or during that time, Mara was traveling to South Florida basically every week for three to four days and I make a joke about it now that wasn’t funny. Before I went to the hospital every day before I went to hospice in the end, Mara was there to hug me and wipe my tears by the coffee pot every day. Then her husband would come in on weekends and finally, it just ended.

Mara: Jay, in that time, it was really like a weird transitional time for our family and for the businesses so just like you said the medical practice closing stores effective immediately.

Jay: We had negotiated, and I’m not going to mention the doctor’s name. But we had negotiated a sale, with one of the larger pleasant surgical practices here in South Florida. It was a negotiated sale, we had all the terms and conditions he had his consultants and very well-known consultants in this industry of origin that they are very well respected consultants and we had a deal. I would then become a 49% partner, this was before they would become a 51% partner. We would be a southern division of their already existing practice and then when my wife went into hospice, she was basically mentally incompetent to be able to sign an agreement. All right, and it all blew up. Now it all goes into the ugly. A seven letter word called probate and that is a nightmare, in and of itself, which I was not prepared to face because I didn’t know anything about it. I heard other people have gone through it but it can’t happen to me and man was I so unprepared.

Fast forward. I had three or four clients in my side hustle business that I would go and I would help them with and I just decided that I didn’t know what I wanted to do. Hence the vultures came in, and the vultures meaning, they’ll buy the business though I ended up having it done under an asset purchase agreement because they didn’t want to buy the stock sale because now there are skeletons in the closet because of creditors.  All right, and we negotiate stuff but you’re never going to get what you think it’s worth because obviously millions of dollars you can’t sell it for that because now the last eight months you’re not making a brilliant locum tenens, you’re just trying to survive.

Fast forward, I ended up selling it as an asset purchase agreement, I sold it with real estate, I own a real estate Corporation, I sold the real estate I sold the assets. I stopped the bleeding is basically what I did because I was bleeding, the cash burn rate was terrible but I broke even and I’m okay with breaking even. All I did was recover what I had lost over those years.

Then Mara said, why don’t you continue this year let me know when you’re ready, and in those next several months after her passing. Honestly, people will not believe this, I got tired of fishing and golfing three or four days a week and was waiting for several months, but I really got tired of it.  I felt that I was becoming depressed. I wasn’t able to do what I thought I was set out to do and that’s helping people whether it’s in medicine or whether it’s in business. Mara started putting the word out to conferences and it became one conference to arithmetically progressed for a while we started writing and I said, I want you to come and join me but I can’t afford to pay you anything. We’re very small but I’ll give you 10% of the business. We started to grow. I’ll give you a little bit of money, stick with me I’ll give you 25% of the business, a couple $100 a week, and I knew she could make a lot more money on her own but she was doing it for dad.

Then we started to grow and I wanted to put more in and get a website and I said Mara, stick with me I can’t afford to pay too much but I’ll tell you what lets draw up a partnership agreement, 50/50. You get 50% of the losses, and the percent of the gains but now we’re starting to make money. That began the journey of Shorr Solutions to where we are today.

What Can You Do To Prepare?

Brad: What did you have in place, what kind of documents were in existence?

Jay: My late wife had a power of attorney which was me, as a health care surrogate. I was not the trustee of her estate, which was a mistake. I was getting very poor advice and I don’t want to get into that because there was a pending lawsuit with the state attorney coming after me because I wrote an article on preparing for the unexpected. I wrote what they felt was disparaging comments, which I later retracted we negotiated settlement out of court. That would not have prevailed.

Anyway, but it was a matter of how far did I want to take it sometimes. The biggest gain is the minimal loss. We had IRAs, and because legally I was not an owner of the business but it really was a partner, alright because we’re at the end of the day I had a salary and we brought home these millions of dollars to the house and all that into one account. All right, but because it was an MPP I was not a legal partner by the Secretary of State now the Internal Revenue said I am because as a sub s, all the money that came in when we file a joint return. Now, I will warn everybody that when you do that, you make sure and I guide clients, every day to make sure that you have life insurance trust. You make sure that you are named and nothing can be changed. All right, because then the lawyers are going to fight it out between them. Also, you make sure that you have in place in writing, that if you have filed joint returns throughout the marriage an attorney cannot step into shoes, even though they can, and then file a mattering file, single for the year of death. Here’s why, in our particular case we paid a lot of money, extra in federal wage, federal withholding taxes so that, since we were profitable, depending upon the section 179 that we took from the equipment when it was profitable we would get money back because we paid a boatload of money. The year of her death she filed the lawyer filed an extension and then an extension a joint. I did not get the benefit of return, and I’m telling you, it was a boatload of money. I’m not disparaging anybody, I’m just giving a fact of what to look out for. In my article, I had made some comments about a personal opinion of an adjective of specific types of attorneys and accountants, and they felt that it was disparaging them.

Mara: That is a good example of why we need to be careful what you’re putting out there about what, when, and can it be found online. That’s why I tend to err much more on the side of caution and tend to hold back more information than looking out for that reason when it comes to the opinion.

Jay: What happened is they ended up deposing me, and they ended up having an interrogatory and they went deep to try to get files from the computer of the publisher where my article was to see what additional potential disparaging comments were made that may have been in the files of the computer. Hence, I have to share with you I ended up getting suspended from one of the conferences for that year because they didn’t want any part of the legal entanglement. Everything was later adjudicated and I was on the faculty again.

How Shorr Solutions Helps You Prepare:

Brad:  Maybe we can move on to some good parts of the story. That’s so powerful I’m so grateful that you share it because not all bad things have this redemption story at the end and as it relates to the practice it didn’t. What you got out of that were some amazing life lessons which I’m sure are instrumental and the advice that you guys give down and Mara love to hear you just talk a little bit about Shorr Solutions. What you guys are doing and how you’re using those experiences to help others?

Mara: Yes, absolutely. The ripple effect was absolutely tremendous and as far as how we really took the dumpster fire I think there’s no way around it. While Jay took the time to read, I, on the other side, connected with conferences. Unfortunately, I went to conferences and submitted speaking topics for conferences that weren’t going to take place for another year. He said look I think over the next month I can write an article to get our name out there.

At that point, when we started our company we would joke about departments. We were two people that worked from home, you know in our sweatpants and sometimes didn’t even leave the house. We work exclusively with the cosmetic industry and practices that have an elective component to them that is, that’s just our jam that’s what we know that’s what we love.

We have gone from a two-person maybe two or three clients, maybe two different conferences, to having team members right now all of our team members are located here in Florida. We have team members in Central Florida, team members in South Florida, and our clients are across the country. Normally, we’ll go and participate in all sorts of things this year, obviously, you know, over the past 12 months we’ve shifted to podcasts and webinars and virtual conferences. We really bring it down to helping clients through their transitions, and whether they’re transitioning their finances they need to know how to save more money on negotiating, how to open up their practices, how to close their practices and create that exit strategy, how to make sure that they’re more profitable than they’re bringing in more patients, etc. We really have a tight focus on helping practices on the business side.

Questions? Contact Us

[gravityform id="3" title="false" description="false" ajax="true"]

Trusted Expertise