In this podcast episode of our Businesses in Texas Divorce series, Jake Gilbreath sits down with the Austin-based founder of the Snell Law Firm, business litigator Jason Snell. Jake and Jason discuss their experience working together in divorce cases involving a shared business.
Your hosts have earned a reputation as fierce and effective advocates inside and outside of the courtroom. Both partners are experienced trial attorneys who have been board certified in family law by the Texas Board of Legal Specialization.
Jake Gilbreath:All right, thanks for tuning into For Better, Worse, or Divorce. A divorce podcast where we provide you tips and insight on how to navigate divorce and child custody situations. I’m Jake Gilbreath. I’m one of the managing partners at Walters Gilbreath and today is our second episode in our Divorces and Businesses series.
We’re joined by Jason Snell, who is the founder of the Snell Law Firm in Austin, Texas. Jason is board certified in civil and business law, and he’s a litigator in town. We felt he’d be a great addition and provide fresh perspective for us on the topic of businesses and divorce for all our listeners. So welcome, Jason.
Jason Snell: I’m pleased to be here. Thank you. It’s my first podcast. I assume that after this drops it’s going to go viral, and I’ll do many more podcasts all over the world.
Jake Gilbreath: You and I will be super famous after this. I gave a little bit of a spoiler like I do with a lot of guests. So tell us who you are, tell us what you do. I said a little bit of it there but tell us about yourself.
Jason Snell: So I’m Jason Snell of the Snell Law Firm here in Austin. It’s myself and four other attorneys, and we are business and commercial litigators. So, all we do is handle litigation matters, usually business disputes and commercial disputes that end up in court.
I’ve been here in Austin for about 16 years, and I’ve had my own law firm for those number of years. Before that I was in New York City, where I practiced litigation as well and then before that in Dallas. I am so pleased be on the show. Thanks for having me, Jake. We’ve been friends for a long time, but this is the first time we’ve done a podcast together.
Jake Gilbreath: Yeah, I was trying to figure out how we met because I think it may have been at the courthouse, or I’m a jerk and I don’t remember if there’s a better story than that. So how did we meet?
Jason Snell:I know we’ve ran into each other over the years at numerous bar events and at the courthouse, but I remember specifically you had just finished trying a case, and I had just finished trying a case. We were both eating lunch at Ranch 616, and you were with Sarah, and I was with somebody else, and we started talking. We agreed during that lunch that we’re going to start trying to find a way to work together. I think that’s when we became good friends and that was probably 10 or 11 years ago. But anyway, that’s at least my memory.
Jake Gilbreath:Well, it’s now my memory too. The litigators always run into each other at the courthouse. And of course, we’re going back in person in Austin in a bit, but at the courthouse or on Zoom or what have you. Tell me about, how did you go Dallas to New York to Austin. I don’t think I’d heard that story before.
Jason Snell: Well, I graduated from Texas Tech School of Law in 1999 and I moved to Dallas where I had already accepted a position as an associate at a larger firm in Dallas. A bunch of really good people at this firm and I’m still in touch with them now. And in fact, I hired two of my attorneys away from that firm.
And I didn’t think Dallas was the right city for me and I didn’t believe that working at a large law firm was the right environment for me. So I moved to a bigger city, to a bigger law firm. I like big cities – I just don’t like big law firms. So, I left Dallas after about three years, and I moved to New York City, and I continued litigation. I took the New York bar and passed it.
And I really enjoyed it. That was a great experience. The best lawyers in the world and the worst lawyers in the world all in one place. And you never know who you’re going to get, but it was a great time and a great experience. And so, I did that for about five years and then moved to Austin.
Jake Gilbreath: What brought you to Austin?
Jason Snell:Well, I met Melissa who is now my wife. Met her on the Upper West Side in New York. And after dating for about seven or eight months she had already decided she was going to move to Austin and I said, “Well, it’s nice to know you, but I’m never leaving New York City. That’s where I’m going to live the rest of my life.”
Well, one thing leads to another. We ended up leaving New York City together in the same moving truck and moving to Austin together. So now we’re married for 13 years with two kids.
Jake Gilbreath: Yeah, well you and I both, our wives are our better half.
Jason Snell: That’s absolutely true. Especially in my case.
Jake Gilbreath: Well, talk to us about the litigation side of businesses versus businesses – or business partners going through litigation, or what have you. Then we’ll talk some about family law, but you come into my world particularly whenever we pull you in on a divorce and have some business aspects. But talk to me first about the bread and butter of your law firm. What’s that look like?
Jason Snell:Well, I get involved when a deal has gone bad. So it’s either a construction deal gone bad, a real estate deal gone bad, or a business relationship gone bad. So I don’t deal with a whole lot of success stories. Of course, sometimes we can resolve a dispute such that it feels like a success story, but we don’t get involved in a situation where everyone is happy.
So as my father-in-law told me one time, he said, “A partnership is more difficult to get out of than a marriage.” And I always think about that when I talk with you, because our practices are similar in the sense that you’re dealing with relationships that have come apart and you’ve got to negotiate or litigate through that. And I deal with relationships that fall apart as well, and come apart, just a different kind of relationship.
So I have business divorces, business relationships gone bad. Not too dissimilar than your practice, Jake. And you’re right, we do work together a lot and we always have the same kind of issues. I know that whenever I need a business valuation expert or a forensic accountant or someone like that, I can call you and you’re going to have five or six names for me – because the issues that you deal with such as those are very similar than what almost every one of my cases involve.
Jake Gilbreath:It’s interesting that your father-in-law said it that way, because I always compare, it’s the property side of it to a business transaction. Obviously, if you have kids things look a lot different in a divorce or custody arrangement. Sometimes we have folks come in and they don’t have kids and they’ve still very emotional just like a business partnership is emotional, but I tell them, “This is a business transaction at the end of the day.”
I think sometimes it helps people to hear that, because it’s trying to step back from the emotional side of it. Your clients too, can sometimes help move forward. But I assume you have emotional clients, just like we have emotional clients. I love my law partner dearly. I would be very hurt if Brian and I, if it didn’t work out between the two of us. I don’t think that would result in us suing each other. Hopefully not. But Brian is family, we’ve been partners for some time and so I assume your clients, it’s probably an emotional and difficult time if there’s been a partnership that’s gone south.
Jason Snell:I have clients that are all over the spectrum on that. So, I have some very sophisticated, very successful clients who will come to me with a business dispute and the reaction can be purely emotional. So the business economic side of it is secondary to the emotional side of it.
And then sometimes the inverse is true, and you never really know what you’re going to get. A lot of that’s based on personality. And a lot of that is based, also on the person’s experience with litigation or experience in the legal world. So, someone who has been through the litigation process before tends to be a little less emotional about it than someone who’s in it for the first time.
Just being sued or being a party to the lawsuit, for a lot of people, probably for most people, especially the first time around is incredibly stressful, emotional, and can be frightening. And those are all emotions that tend to be very negative and gin up a very strong response. So a lot of times on the front end in meeting a client and counseling a client, a lot of it is providing some assurances that I’m going to help them through it. I’m going to give them good advice one step at a time, and there is an end. We are going to get to it, get through all that successfully. And people want to know that and understand it. So it’s a bit of a counselor in the beginning almost always.
Jake Gilbreath: Yeah, that’s a good point. I kind of find myself doing the same, I think you agree with this. The worst advice a lawyer can give at the beginning of it is saying, because we want to say it, but I think the worst thing you tell a client is just go, “Well, everything’s going to be fine. Everything’s going to be fine.” Because it’s not going to be fine. You’re in a lawsuit. That is not a fine situation.
Jason Snell:Or if you say that, and I’m agreeing with you, but one of the reasons why a good attorney should never say that is, you never have any idea what that means to the client. What is everything is going to be fine? What does that really mean? Because success is viewed so differently by almost everyone, or how it should work out looks different for almost everybody.
Jake Gilbreath: Right. I think what they really want to hear is, “We’re going to be there for you.” Because overall, it is going to be fine. You’re going to get through the lawsuit or breakup of the partnership in your world, or if you’re going through divorce, there is light at the end of the tunnel. I always try to be pretty open with my clients. I’ve been through a divorce. I try to be really open with my clients that I agree that it sucks, and it sucks a lot, going through a divorce but we’re going to get you through it and we’re going to be there for you through the thick and thin.
And yeah, like you said, it’s kind of one step at a time, because I’ve been involved, like I said, through a divorce. Then other times when we’ve had to get lawyers involved for various different reasons in the business. Some of the stuff I’ve had to deal with in the business is more stressful than seeing what my client’s go through a divorce or going through my own divorce. It produces a lot of anxiety.
That’s probably why too, in going through my divorce, that’s no fun, but at least I knew the process. For most people it’s their first lawsuit with you, or if they’re in my office, it’s the first custody case or divorce they’ve been through. And you can Google it and read all the horror stories if you want. That doesn’t help the situation at all.
Jason Snell: Yeah, that’s exactly right. And the idea that someone is coming to me or to you in what may be one of the more stressful moments of his or her life is a weighty thing for an attorney. But it’s always an important moment for me to sit down and talk with this person and try to establish the framework of how we’re going to go from A to B, and what it’s going to look and feel like. Establish what a win looks like, or what a probable outcome looks like.
And then one of the things I always try to tell my clients is, “I know you’re going to be super stressed. I know you’re going to have a lot of anxiety. I’m going to bear your stress and anxiety too. And I’m paid to do that. So if you’re doing it and I’m doing it, then I’m not sure that you’re getting your money’s worth. So just let me do it. Let me bear the stress. And you try to put it out of your mind, and that way you’re getting your money’s worth.”
Now, almost nobody can do that, but that’s my way of saying, “I’m going to empathize and I’m going to be there for you.” I don’t know, I hope people understand that I mean that, and it makes them feel a little better.
Jake Gilbreath:Yeah, absolutely. Let’s transition to people coming to you. Let’s say they’re not in a lawsuit yet, no different than somebody comes to me and they’re thinking about divorce, or their spouse has brought it up, or they’re in marriage counseling. They think things aren’t going the way they want it to, and just reducing that anxiety, know what it looks like moving forward. Do people ever come to you before the lawsuit gets filed, where they’re concerned about where things are going with a contract or a business?
Jason Snell: They do, but not as often as one would think. I call myself just a one-off high stakes litigator, so people come to me usually when they need to sue someone immediately, or they’re about to get sued, or they have been sued. And so that doesn’t happen all that often, but it does happen. And you’re right, when someone comes to me, I can talk to them about what to expect. And if they do get sued, what that is going to look like and what they’re going to need to do, and I explain to them the legal process. So in those circumstances, I view that as my job.
And, if someone hasn’t been sued or hasn’t filed a lawsuit, they may need to see some other kind of attorney. And I bet you do that, too. And I know divorce attorneys will often send potential clients to estate planning attorneys, things like that, to work out outside of the divorce or litigation framework.
Jake Gilbreath:Yeah, we always want the call first, but you’re right. We’ll do premarital agreements, post marital agreements, but more complex estate planning, we may be sending that or maybe a consult, and give them a couple referrals. Just depends on the situation, but we always want to be the first call.
And we’re like you though, a lot of times we do those consults where somebody’s thinking about it or planning about it, it’s because it’s time to file or they’ve been sued for divorce or custody situation. And then yeah, we’re like you, a lot of times. Hopefully somebody’s just in my office one time. There are families that, they come back multiple times just because of the nature of things.
Turning to the topic of businesses and divorce, do you get brought in on divorces? I know we brought you in on a variety of different legal matters, but what’s that look like in your practice, that you get brought in on a divorce?
Jason Snell: I do. Yeah. And I have with you on a number of occasions, and I always appreciate that. One of the things that always strikes me every time I get involved in a case with you is A, how effective an attorney you are. You think on your feet as well as anybody I’ve ever seen in my career.
But the other thing that always strikes me is how emotional and difficult the cases that you handle are. And I know that’s got to be tough. I know you’re good at it, but it always strikes me as that. But I do get involved on cases, typically when there is property owned by the marital estate, it’s usually a business or significant asset, so I’ll come in and work on more of a civil peace side.
And for instance, I have a client who was sued in Texas related to a business deal a few years ago and then a year later she filed for divorce up in North Carolina. And intellectual property in the other property of the marriage was worth tens of millions of dollars. Well, in North Carolina you go have a trial on the value of the assets and then to determine how they’re going to be distributed.
And so, I went up and tried the valuation piece of the case over three days and that was really fascinating. It was a lot of fun. But that’s an example of a divorce where I got involved, where really the issues had nothing to do with the marriage or custody. It was truly just about the value of patents, and art, and horses, and all these things. And every issue is contested. So it was expert testimony on every issue. It was witnesses on every issue.
And so that’s a good example of issues inside of a divorce case that really aren’t divorce, if that makes sense. And so that’s an example.
Jake Gilbreath: What’s that look like? Outside the divorce context probably looks a lot like within the divorce context, but litigating business valuation. I always tell clients when they come in, “When we divide a property, we’re just building a spreadsheet, and we’re building a spreadsheet which lists all y’all’s assets.”
And then question one is character, which is a unique family law question, is it separate or community property? But if it’s community, then it’s a value. And value gets litigated in the divorce context, but value gets litigated in your context. So what’s that look like, trying a valuation case from your perspective?
Jason Snell:Not every business is different, but most businesses are different. And the value of a business can vary pretty wildly based on control of the entity. So if I have 10% ownership of an entity versus owning 90%, then likely, if I have 10%, to have a lot less control. And so there’s a lot of factors that one would take into account when valuing a business.
Most businesses that are subject of a divorce or the disputes that I handle are not publicly traded. So the market doesn’t value the business for you. A professional’s got to go do it. And so that is a big part of my practice, is determining the value of whatever it is we’re fighting over. And I know it is for you, too.
And so there’s different kinds of approaches, cost approach, market approach, the income approach, and these are technical terms. The approach we use depends on the kind of business, what side of the dispute you’re on, how you want to litigate your case, basically. And so it can be very, very complex, which is hard, especially if you have a jury or a judge who’s never seen this kind of dispute before.
Jake Gilbreath: Yeah, I wanted to ask you about the jury. But first of all, are you ever shocked, because I always am. How you can have two, and sometimes two very well qualified, sometimes not very well qualified, on one side or the other, but two very well qualified CPAs spit out radically different numbers for the value of something?
Jason Snell:It is shocking. It is shocking, especially if the opposing counsel has a financial expert that I have used in the past. And I look at this person and I think, “Wait a minute, you always get it right. But on this one you seem to be getting it way wrong, and I can’t figure it out.”
But no, it’s always shocking to me. It’s always shocking to me. And I guess for the most part, it’s an art and not a science, although maybe it should be a science, or just math.
Jake Gilbreath: I guess so. I know it’s frustrating for my clients particularly. Because if you’re doing it, it’s a business owner versus a business owner, so he or she knows the business. For me, it’s sometimes difficult explaining to the business owner. First of all, it’s difficult to explain to him or her. They’re not going to just take your word for it, right?
Because I have so many business owners, clients just begging me. It’s like, “I don’t understand. Why won’t she take this deal?” or “Why won’t he take this deal? I’m telling y’all, I know what this is worth. It’s my business and I’m offering you a deal that’s better than it’s worth.” And just to buy out and get done with this god awful divorce, and telling them two things. One, “Sorry you’re going through a divorce, right or wrong the other side just doesn’t trust you right now.” And that’s perfectly natural.
But two, “Look out, because if you don’t do this right and you don’t get the right experts involved, you’re going to see numbers that shock you.” And sometimes it’s from really good experts on the other side. And sometimes frankly, somebody pulls out an expert that may not be as qualified and may be spitting out crazier numbers.
And then this poor spouse, by the way, on the other side is looking at these crazy numbers because they’ve got an expert that just gets it wrong, like you said. And then we got to go fight that. That can be very difficult to do.
Jason Snell:That’s an interesting point and it is almost always true. And the case that I tried in North Carolina last year, we were valuing patents that were either worth numerous millions of dollars or worth almost zero, or somewhere in between. And our expert said, “Well, they were either worth multiples of millions, or maybe a million or a million and a half, somewhere like that, depending on certain factors.” And opposing party’s expert said they were basically worth zero.
And that was an example of an expert being so unreasonable that the person is seen looking so unreasonable and outside the box, that could have been accurate under certain analysis. It just sounded so inaccurate at first blush, that I think that expert lost credibility. So I agree, you can get these experts that seem like, “Oh my god, where did you come up with that?” But hopefully when that happens, and it’s not legitimate, the trier of fact will see through it. In my experience, that’s usually the case.
And Jake, I was going to raise one other point. One of the things that always, my practice is different than yours and why I think yours is so difficult is, when I’m dealing with a business split up, I have partners who are angry at one another typically, but it’s really about money. It is about the relationship some, but mostly about money. In your cases, it’s about everything. It’s about history of a personal relationship, a business relationship. Does that make it 10 times harder, in your view?
Jake Gilbreath:It’s hard to focus for the client. There’s so much more that you’re dealing with. Even a divorce without kids, you’re dealing with the death of a relationship, you’re feeling like a failure, or you’re feeling hurt or attacked or whatever. And that just makes it that much more difficult. People ask me all the time, for example, if I represented myself in my divorce and I said, “No way, because I would be horrible at it. And I think I’m a great lawyer, but I would be horrible at representing myself because it’s very emotional, very difficult.” So we do have that addition.
And as a family lawyer our job is to obviously be empathetic and sympathetic to the client going through that emotion, but then also help them focus on, “I know this is difficult, I know this is emotional. Here’s the really bland, dry business decision that you have to make in dividing up your marital estate.”
I’ve talked about this on other podcast, I tell my kid, “What dad does is, I deal with the legal side of a divorce. There’s lots of things that go into a marriage. There’s romantics, sexual, raising kids, family, everything that goes into a marriage. It’s a commitment. But what dad does is, I deal with the legal side of it. And the legal side can be very dry, as far as what a court or jury can or cannot do.”
And that’s hard to focus on, given everything that’s going on with the relationship. Some clients know, sometimes it’s just, “All right, let’s divide our crap up and we disagree with how it looks, so let’s go figure that out.” And I guess this is to another point that I do think is important to make. I do have clients and this, shocking to a lot of people is, even in custody cases, I have clients that can just have a good faith dispute and not hate each other over it.
They could just have a disagreement about what the value of their estate is, or really even, it’s harder with kids, but to have a good faith disagreement about what they need with their kids and not hate each other over it. That’s particularly difficult to do, and particularly difficult when the other side is doing a lot of hate-able things. But that’s our job, because I wouldn’t be able to do it. But sometimes they can, or at least sort of help manage it.
Because at the end of the day, a divorce can be as bland as a jury being charged with, what is the fair market value of this business? And fair market value is what a willing buyer is willing to pay, a willing seller under no compulsion to buy and no compulsion to sell. There you go. Your whole business that you’ve built up over a 25-year marriage, and the relationship boiled down to a single question that a jury has to answer. And then a judge divides it up, and says, “See you later. Onto the next case.” It adds a complexity to it that you have to be aware of.
Oh, I was going to say too, when you make the point of an expert getting up and saying zero, I always think that’s interesting, because people do that in the divorce context, where a husband or wife will come in and say, “It’s worth zero, it’s worth nothing.” And the fun cross-examination question, or in deposition in court is like, “Well, great. I’ve got a thousand dollars right here, I’ll write you a check for it. You’re up a thousand dollars because it’s worth zero, I’ll take it.”
Jason Snell: Oh, I’m not going to do that.
Jake Gilbreath:Yeah, that sometimes shakes them loose a little bit. How do you find juries following this stuff? I’m always really complimentary of the juries dealing with custody complex business stuff, because I think they try really hard. But what’s been your experience, if a jury’s asked the question of valuing a business, what’s that like?
Jason Snell:Well, my experience with juries is, they work really hard to do a good job, to come to the right and fair result. And they do work really hard. Now, some jurors work harder than others. Some jurors pay more attention than others. But as a litigator, I view my job is to be a sincere person, to just be who I am and then try to explain to the jury the problem of the case or the story of the case, the problem within the story of the case, in an understandable and linear way. So a simple linear way, explain it, and provide texture with witnesses and documents and all the things that we use as evidence. And jurors, I think tend to follow it and try to understand, and do a good job of it.
Now, the inherent fear for a professional in that is that you don’t know what your jury is going to look like until the jury has been seated. You have a little bit of control, but not much. And so you don’t know how these people view the world or how they think and so that that’s very scary for people.
But I have faith in the jury system, and I think it’s a good system, and so I have confidence in it. But a lot of people do find that pretty scary. And that’s particularly true, the more that’s at stake, and the more complex the problem. So if you’ve got a billion dollars at stake in a very complex business dispute, those cases very rarely get tried because there’s just too much at stake and there’s too much risk. But anyway, I’m a big believer in juries. And it sounds like you are too, Jake.
Jake Gilbreath: Yeah, same. And I think that the trial that you had finished up, I think you were outside Laura Livingston’s court now that I’m remembering it, on the third floor. After y’all had just tried. I think it was a jewelry store issue.
Jason Snell:Oh, the antique Mexican silver from Mexico, right.
Jake Gilbreath:You’re right. That is correct.
Jason Snell:I was going to tell you one anecdote. So, my job in that case was to explain to the jury why this Mexican antique silver from the desert was these little, what I consider small trinkets in some cases, are worth a lot of money. Whereas to the average person walking down the street, they seem worthless, like garage sale items. And so that was expert intensive, and a fun one, because who gets to try a case over Mexican silver? But the jury was really attentive and enjoyed it too. So that was the case we met on. That’s right.
Jake Gilbreath: Yeah. It’s all coming back. Well, we have lawyers listening to the podcast, we have people listening to the podcast that may need a lawyer in a business dispute, or family lawyers that need to pull you in and deal with valuation issues. So what’s the best way for people to get ahold of you?
Jason Snell:Well, they can go to the website, snellfirm.com, and all our information is there. Just Google Jason Snell. And it’s a small town. You’ll find us. So that’s the best way.
Jake Gilbreath: Great. We’ll wrap up with that, then. And that’s what we have for today. So if you’d liked what you’ve heard, do us a favor like always, and leave us a review. We appreciate all the feedback, especially any feedback that helps us better the podcast.
And like we said, if you’re interested in reaching out to Jason, he just provided his website. We’re going to provide that in the description as well. And you can always reach out to our firm if you need Jason’s contact.
So thanks for listening, and we’ll be back in a couple of weeks for our next episode regarding divorces with shared businesses.
Jason Snell: Thanks for having me on.
For information about the topics covered in today’s episode and more, you can visit our website at waltersgilbreth.com. Thanks for tuning in to today’s episode of For Better or Worse for Divorce, where we post new episodes every first and third Wednesday. Do you have a topic you want discussed, or a question for our hosts? Email us at firstname.lastname@example.org. Thanks for listening. Until next time.