Banking on KC – John Kennyhertz of Kennyhertz Perry: Building a Modern, Client-Centered Law Firm

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Kelly Scanlon: Welcome to Banking on KC. I'm your host, Kelly Scanlon. Thank you for joining us. With us on this episode is John Kennyhertz, a co-founder of Kennyhertz Perry Attorneys at Law. Welcome, John. 

John Kennyhertz: Thank you. Thanks for having me. 

Kelly Scanlon: You've co-founded Kennyhertz Perry in 2013, so it's been a little over a decade and your mission was a little bit different.

You wanted to blend high. Level legal expertise with real world understanding of what it takes to run a business. Your clients are businesses, and so you've been in the trenches yourself starting a business. Um, but beyond that statement itself, what does that philosophy mean when you put it in action? 

John Kennyhertz: My law partner and I both took different career paths, I think, than most attorneys.

He started out Husch Blackwell, doing white collar criminal defense, then went in-house with a. Commodities and Futures trading commission, the CFTC. And then he was the first in-house attorney at Mariner Wealth. And I met him after I had started doing insurance defense, which was like Groundhog's Day at Wallace Saunders, which was in uh, a firm in Johnson County.

And then I went in-house with a serial entrepreneur here in Kansas City. And traveled all over the world, did all sorts of things and that's really where I kind of cut my teeth or got really interested in the business side of law. I mean, I was always interested in that. I was a kind of a nerd in law school mainly 'cause I was paying for it and wanted to get my money's worth.

I was a teacher's assistant for contract law and, and so that was really where my interest was. But I also thought I might wanna be a trial attorney and so. I had an opportunity to go work for an entrepreneur, really dynamic guy, and uh, did that for four years and then ended up out in California in Newport Beach working for a small private equity family office.

And so when we started our firm, we had both had experience, not just being lawyers, but hiring lawyers. I mean, most small firms are born out of. Lawyers that do the same thing at a big firm, and then they move, they, they take that and start doing it on their own, but they do it the same way that they experience at a big firm.

So we set it up more as a business than the traditional law firm model. Just because we've had this different experience. 

Kelly Scanlon: And what does that entail? I mean, what does, what is, 

John Kennyhertz: I think more than anything, and a lot of lawyers will say this, and a lot of law firms will say this, that they're client focused. I think the meaning is different for us in the sense that we've been the client before and so.

Knowing what that feels like and knowing that lawyers are oftentimes unapproachable in a lot of ways and, and maybe expect that people understand what they do and how they do it and why they do it, and why sometimes it's so expensive. And so we try to approach it, not just how we set up our law firm. Uh, we try to approach that differently, but we also tried, we also tried to approach.

Potential clients differently, and I think, you know, overall it's worked, but just to kind of boil it down into, you know, what does that look like? Braden's experience was on the litigation and regulatory side of things, and mine was more on the transactional side of things. So a lot of our clients. Needed both of those types of practices.

And so as we started, we had a, an approach that was more about what the client was really looking for or needed that, that a lot of times wasn't just legal advice, it was a lot of practical business advice. From a lawyer. So I think when we first started that was, that was a way that we were trying to differentiate ourselves, which included different pricing models and different ways that we could help service a client and their business.

Meaning we would go a lot of times to a client and spend a lot of time on the front end, not charge them for it, just to learn their business. I mean, we had a lot of time when we first started 'cause we didn't have a lot of clients. But it was a way for us to just try to learn more about a potential client and then.

We'd end up being their lawyers for 10, 13 years. I mean, yeah. 

Kelly Scanlon: So they grew with you. Correct. As you built your business, they built theirs. And it also sounds a little bit like they always say that, get a banker before you really need a banker. You know, get that relationship before you can't make your payroll.

And it sort of sounds like you follow the same philosophy as like, let's get to know each other before you really need me in court, or something like that. 

John Kennyhertz: Oh, absolutely. I tell clients all the time that they need three things, bank, an accountant and a lawyer. Now most clients think about it. I need a really cool name.

I really need a really fancy website. Exactly. And I need, you know, some, some people to do the stuff I don't wanna do. Mm-hmm. And sure, all those things are true, but I, I do think the foundation of a business requires those three professionals. 

Kelly Scanlon: And one of the things that you have moved into, again, with a client in mind to try to save them time and in some dollars is ai.

And you recently posted a blog about this. I saw it on your website. And you're using AI now for associate level tasks, um, things like contract review, due diligence, document drafting, and you're not. Trying to replace attorneys. You say you're trying to empower them. So how is using AI not only changing your workflow, but also your approach to your clients and your longer term growth strategy?

John Kennyhertz: Yeah. Well, let me first start by saying I am nowhere near an expert on ai. Nor am I an expert on AI and the legal industry, so I can speak from my own experience and what we're trying to, to do or trying to figure out. There's a lot of, I don't know, kind of undertones about lawyers and other professionals becoming obsolete.

Kelly Scanlon: Mm-hmm. Well, yes, so that there's a lot of that out there. There guess so 

John Kennyhertz: that will drive you to try to figure out, at least it's driven us to try to figure out. How do we use this as a tool to make ourselves more valuable? I've been practicing law for, I don't know what, 20 years now. Westlaw and LexiNexis.

We had those in law school. Right. And they, they give 'em to you, so you kind of get hooked on 'em, and then you pick one and 

Kelly Scanlon: pay for it the rest of your life. 

John Kennyhertz: Pay for the rest of your life. Yeah. So I don't see this as that different. I do see it as an opportunity. To differentiate ourselves because some firms I don't think are, are focused on it.

I mean, lawyers used to practice law without computers, without cell phones, without Westlaw, without all the research tools, which I couldn't imagine doing. Yeah, and I think that we are kind of at a point in time where if we don't figure out how to utilize ai. As a tool, just like all of those things, then we will become obsolete.

Kelly Scanlon: Yeah, and you hit on a really important point there. Uh, people are afraid of it for one thing, uh, or they're not necessarily afraid of the tool itself, but afraid that they're gonna be replaced by it and. Others are afraid or hesitant maybe to use it because of everything that's out there saying, oh, if you use this, you're not really doing your job, you're cheating.

But like you said, graphic designers didn't depend on technology. Uh, you know, max came on the scene, changed everything, and every industry has their tools that they have been using forever. And your point is, is that AI is yet another one of these tools. 

John Kennyhertz: Like, for example, let's say that we've got a lawsuit and there's a million documents that have to be reviewed.

There's a number of different software systems that'll break that down and make 'em searchable. Um, and then there's the AI element that makes that even faster and allows us to, to get through discovery in a much different way, in a much faster way. That's obviously helpful to the client. Also moves litigation forward quicker.

Also can lead to settlement negotiation sooner. The same is true. We do a lot of m and a. And the same is true in like due diligence. Exactly. And if we're not using that, then we will fall behind and we will be slow. 

Kelly Scanlon: Well, your competitors will be using it. 

John Kennyhertz: Yeah, absolutely. And they, and they are. And 'cause we're not, we're a 15 lawyer law firm.

We have always prided ourselves on moving quickly and moving at the speed of business rather than at the speed of lawyers. The legal system moves really slow by design. But the faster that we move, the more our clients come back to us. And, and if, I mean, you know this from owning your own business, sometimes you just need a quick answer, right?

And it's become easier for clients to simply Google or look at chat GPT or pick your AI engine than to call us, right?

Kelly Scanlon: And so the tricky part. I would think is how do you maintain the client relationship with the growing reliance on technology? Somebody might be listening to you and say, well, I really liked being able to go into my attorney's office and, and talk with them.

So how are you gonna maintain those relationships while you're using the new technologies? 

John Kennyhertz: That's a great question. I don't think there's an easy answer to that, but again, back to the original kind of thesis that we founded our firm on, which is we wanna make sure clients are getting what they want. And having been a client, I want to be able to get ahold of my lawyer.

I, it is shocking the amount of people that I talked to that say they could never get ahold of their prior attorney. 

Kelly Scanlon: Wow, 

John Kennyhertz: which we bill for our time. So of course if you've got a problem, I wanna know about it. So to answer your question, I think that a lot of our clients are trying to figure it out at the same time.

And I'll give you some real world examples. We've had a few clients in the middle of litigation that say, Hey, I've drafted a motion using chat, GBT. Here it is. Let's file this. 

Kelly Scanlon: So your clients are coming to you having used GPT Chat? Oh yeah. 

John Kennyhertz: Yeah. You can go to any sort of AI program. And say, draft this contract or that contract and it'll do it in seconds.

Kelly Scanlon: Will it take into consideration all the nuances of state by state types of regulations and so forth? 

John Kennyhertz: Uh, no, not necessarily. And I'm hopping back and forth between litigation and transactions. 'cause we do both. But on the litigation side, there are. It's being called, you know, hallucinations by ai. Yes.

Where they create fake lawsuits. Exactly. And fake case law and lawyers are getting in a lot of trouble for that. And on the transactional side. Yeah, great point. I mean, there's a lot of nuances to, to the law at different levels and I think that. Look for us. If a client wants to use that and they want to send it to us and say, Hey, I came up with this using AI and I'd like to use it, it still requires us to go through it, to read it, to dissect it, and to make sure that, let's say you have a host of documents for a transaction that they all, you know, fit together like a puzzle.

But the part that I think is. Never gonna change. At least maybe not in our lifetimes, is the one-on-one communication to talk through, whether it's brainstorming on the front end to figure out how do I make this work in whatever transaction or litigation. Um, and as well, at every point during that, right, I mean, you get a stack of documents and we have to review them, and then they have to go to multiple other lawyers if there's other parties, you know, multiple other parties in a transaction or litigation.

So I don't think the human aspect is ever gonna go away completely. It's just changing. Yeah. 

Kelly Scanlon: And some could argue you actually have more time for that aspect of it because the AI is doing all of the behind the scenes work that used to consume so much of your time and that frees you up with your client for more strategizing, more preparation perhaps for trial, things like that.

John Kennyhertz: Yeah, I would agree with that. 

Kelly Scanlon: So recently, the Missouri Lawyers Media. Called Kennyhertz Perry, a standout and their words modern adaptive practice management. And it not only highlighted ai, which you've just talked about, but also your custom workflow systems, what they call your lean team operations and your fast turnaround.

So what specific innovations other than ai have you implemented the best support those models? 

John Kennyhertz: I think back to your original question about the difference between our firm and being entrepreneurs ourselves. So about three years in, it was just, it just my law partner and I Braden, uh, in an office kinda sharing resources and practicing law and trying to, you know, make it work.

And then we decided, you know, we can either raise our rates work more, which seemed impossible at the time, um, or figure out how to hire some people. Mm-hmm. There was a, a firm out of St. Louis that wanted to make us their Kansas City office early on, and we said no, but. They had a way that they had kind of organized their firm and we took some elements of that.

And ultimately, every lawyer at our firm is compensated on production. And so it's a certain type of lawyer that survives and succeeds at our firm, and that's a lawyer that generally is not afraid to. Do all of the things, right? A lot of big firms, you've got lawyers that are just there to bill hours, and then you have this huge pool of people, other professionals that are there to assist and it slows things down and I think it creates obviously, a lot of overhead.

So all of our attorneys are very self-sufficient and they're ultimately. In the mindset of an entrepreneur, because the more they work, the more they bring in and the more clients they originate, the more money they make. And so that I think is one of the biggest innovations that that makes us who we are.

Kelly Scanlon: You span several what would be considered high regulation sectors like finance, gaming, commodities, college sports, NIL, cybersecurity. So. What's the through line? Everybody says niche, niche, niche, niche, but what's the through line that unites all those diverse practice areas? 

John Kennyhertz: Well, as part of the structure of our firm, uh, I tell lawyers that I interview and, and then, you know, after they've been with us, I make sure that they're doing what they want to do, which means that we end up looking at emerging industries or areas of law.

As opportunities. So gaming, medical, marijuana, cryptocurrencies, NIL, those are all new emerging industries and areas of law and we are really attracted to that. And the attorneys at our firm are all attracted to that because it helps differentiate them, them from other lawyers. And because at our firm we encourage it.

We're at a lot of big firms. They're slow to get into those types of things. And the through line is really that, it's, it's that it's something new and exciting and we encourage our attorneys to, to do that because I've been in plenty of situations over my career where you're doing the same thing over and over and you end up with unhappy lawyers.

Kelly Scanlon: Talk to us about some of the common mistakes that business owners make. You said that you've grown businesses, your, your, your business yourself. So you've been in the trenches. You understand the challenges that new business owners in particular, and even during growth stages. There's challenges, uh, obviously, but you've been there, you've done that.

And what are some of the more common mistakes that you see business owners make because. They think it's too expensive to go consult a law lawyer, or they just don't even realize they need a lawyer. Um, and you just wish that they would've contacted you? 

John Kennyhertz: Well, there's, there's a spectrum where you've got people that want to go figure out how to do something themselves, and they wait till they're already on, you know, third base to.

Ultimately call a lawyer and say, Hey, I just need you to review this real quick, and I tell people, we're not that firm. Then there are people that realize the three types of professionals that they need, bank accountant, and a lawyer, and they set those relationships up and start having those conversations before they take the first step.

I don't think there's anything wrong with either. I think there are potential problems. On either side of that spectrum, but the self-serving answer is reach out to the professionals first so that you don't, you know, end up having to fix all these problems later. I mean, I'll give you a real life example.

Uh, client comes to me about 11 years ago and they're making a product that is starting to kind of take off. People are buying it, so they're making money and they say, well, I'm not exactly sure what I need, but I think I need to talk to a lawyer just 'cause we're. Starting to experience some success and a lot of what they had done, we had to undo and then redo.

And that can be really expensive. Exactly. So again, it sounds self-serving, but I think that in the long run you're better off talking to an attorney before you get too far down the road. 

Kelly Scanlon: Yeah. Even things as basic as how you set your entity up, whether you're gonna be an LLC or a C corporation, an S corporation, they have so many.

Implications not just from a legal standpoint, but from a tax standpoint. And, uh, and people get that set up the wrong way and then you have to undo it. Right. And that sometimes it's hard, right. 

John Kennyhertz: But yeah, in that example, the uh, individual that started the company had taken money from a few other friends of his, and two of 'em thought they were owners and one of 'em thought they'd made a loan.

And so, and then there were documents that nobody could find that ultimately years later ended up being a problem. 

Kelly Scanlon: That and that is so common. Yeah. I'll give you a couple shares or whatever. Right. 10% for fixing, doing my website. Sure. And, and that that happens all the time. And then when they really start growing, that 10 percent's pretty huge.

Yeah. 

John Kennyhertz: Oh yeah. In fact, that's exactly what we dealt with. 

Kelly Scanlon: Mm-hmm. So let's look ahead a little bit, um, as a pioneer of this law firm model, how do you imagine it evolving over time? And what other emerging tools or industry trends do you see that could influence just the legal industry in general? 

John Kennyhertz: I will say that it has been a challenge as we've grown to not go down the traditional path.

So we only have two partners. Most lawyers think I want to go work at a law firm, spend seven to eight years, do all kinds of work, and pat the right backs for lack of a better term, and hope that I'm invited to purchase some equity. And that means I've made it. And so when lawyers come to us, hopefully they would know how to practice law because we don't generally hire associates and.

They realize that they can get all of the things that they want without having to buy into somebody else's business and hope that that makes them more money. If they bring in clients and they maintain clients in their productive, then they'll make as much or more as most partners at big law firms. So I want to try to maintain that for as long as possible, but I also want this law firm to survive beyond me.

So that's kind of been a struggle to figure out how we're gonna evolve and maintain where we've come from. Still trying to figure that one out. And then, you know, as far as all of the technology that we rely upon and I think makes us more efficient, I don't know exactly where that takes us. I do know that AI is here, and if we're not focused on it, then we'll fall behind.

I'm sure there's gonna be new technology that we'll be talking about in five or 10 years, and I just don't want to get caught. Flatfooted, 

Kelly Scanlon: be an early adopter as often as possible, is what you're saying. Work through the mistakes with your clients. Right, 

John Kennyhertz: right. Another lawyer at our firm, and I had read a couple of articles, a few, well, probably 6, 7, 8 months ago, about creating our own AI model using all of the documents that we have on our system.

So we started down that path. We couldn't move fast enough really. So yeah. And then we'd look at another type of software and they had already done all the things that we were trying to do. 'cause we're still trying to practice law at the same time. Right, right. So sometimes, you know, it's attractive to, to.

Build something by yourself or on your own and say, you know, we did this, but I mean, I'd rather figure out, you know, how to use something somebody else has done better than 

Kelly Scanlon: without reinventing the wheel without Yeah, absolutely. Exactly. John, it's been wonderful to have you come on the show and introduce our listeners to your business model and, and how you work with clients and how you use technology.

Wish you the best of luck and uh, again, thank you. 

John Kennyhertz: Yeah, thank you. Appreciate it.

Joe Close: This is Joe Close, regional leader. Thank you to John Kennyhertz of Kennyhertz Perry attorneys at law for being our guest. On this episode of Banking on KC John and his team have redefined what a modern law firm can look like. Combining deep legal expertise with an entrepreneur's mindset. By focusing on relationships, efficiency, and innovation, they've built a model that moves at the speed of business rather than bureaucracy.

From adopting AI tools to streamlining client communication, John shows how thoughtful adaptation can make professional services more accessible and responsive to today's business owners. At Country Club Bank. We share that same commitment to helping entrepreneurs move faster and smarter by building trusted partnerships and embracing new ways of working.

We're helping Kansas City businesses grow with confidence in a changing world. Thanks for tuning in this week we're Banking on you Kansas City Country Club Bank, a division of FNBO, member FDIC.