#41 – From the Trenches: Lawsuits, Lessons & a Copier-Dealer Exit (David Prince – Data Branch)

In this episode of From the Trenches on the BMK Vision Podcast, Josh Peterson sits down with David Prince (Data Branch) for a grounded conversation about something most MSP owners underestimate until it lands in their lap: the leadership cost of unmanaged risk. David shares the experience of being served with an unexpected lawsuit after acquiring a distressed IT business—and why the “real bill” wasn’t the attorney fee. It was the distraction, the emotional toll, and the slow erosion of attention that makes an MSP fragile at exactly the wrong time. If you’ve ever felt how one unresolved issue can hijack weeks of decision-making and weaken operational focus, this episode connects directly to BMK’s view of why service agreements that hold up under pressure are not “legal hygiene”—they’re operating discipline.

The conversation then moves from surviving shocks to building an exit-ready business on purpose. David explains why arbitration clauses and clearer dispute-resolution language became non-negotiable, why he shifted toward organic growth after that acquisition lesson, and what it took to double profitability over several years while building leadership beyond the owner. That last point matters more than most founders admit: “exit readiness” is usually just operational maturity with a deadline. It shows up as clean financial visibility, durable recurring revenue, and a management layer that can run the business without the founder carrying the worry. David’s sale to a copier dealer reinforces a strategic reality BMK has been calling out for years—copier dealers often bring stronger sales process and recurring-revenue instincts than many MSPs expect (see why copier dealers are stronger competitors than many MSPs realize), and disciplined financial operations can materially change both growth and valuation (see strategic MSP financial consulting). If you want the broader operating framework behind these conversations, explore Vision.

A lawsuit is rarely the problem. The operational drag is.

Most owners hear “lawsuit” and immediately think about legal fees. David’s story clarifies the more dangerous layer: attention theft. Service businesses are built on cadence—dispatch rhythm, clean handoffs, consistent client communication, and decisions made quickly with incomplete information. When leadership attention gets trapped in a long-running dispute, the business doesn’t fail dramatically; it degrades quietly.

That’s what makes this episode useful. It’s not a cautionary tale about bad people. It’s a leadership case study about designing agreements, dispute pathways, and partner decisions in a way that keeps the operating system intact when something unpredictable happens.

The MSP problem this episode solves

Many MSP owners say they want to “scale,” but what they really want is stability—stability that isn’t dependent on the owner being constantly available to absorb conflict, calm clients, and patch operational gaps with personal heroics.

This episode addresses three recurring MSP constraints:

• Risk blindness: contracts and dispute language treated as paperwork instead of operational protection.
• Owner-centered resilience: the business can survive surprises only because the owner carries the cognitive and emotional weight.
• Exit fantasy: hoping valuation will “show up” someday without building the leadership depth and financial discipline buyers actually pay for.

David and Josh explore what changes when an owner stops thinking of protection and preparedness as pessimism—and starts treating them as stewardship.

Exit readiness is operational maturity with a deadline

David’s exit story wasn’t a single moment—it was a multi-year plan. The insight is straightforward: buyers don’t buy your story; they buy the system that produces repeatable outcomes. That means clean numbers, consistent margins, durable recurring revenue, and a business that can run without the founder being the primary router of every important decision.

One of the most practical takeaways in this episode is leadership depth. David describes hiring a key lieutenant and building a management layer that made the company transferrable. That’s not “organizational neatness.” It’s enterprise value.

Copier dealers aren’t “bad at IT.” They’re optimized for recurring revenue.

David’s sale to a copier dealer reinforces why MSP owners should take this category seriously. Many copier dealers have long-held client relationships, mature sales management, and a deep instinct for recurring revenue. Even when they’re still learning the operational nuance of managed services, they often have the commercial engine MSPs struggle to build.

The strategic implication is simple: if an MSP wants to remain defensible, it must become operationally disciplined and commercially intentional—not just technically capable.

Episode highlights

• 00:06:00 – David shares the shock of being served with a lawsuit after acquiring a distressed IT business.
• 00:10:35 – The true cost wasn’t legal fees—it was distraction, emotional strain, and leadership drag.
• 00:12:52 – Why arbitration clauses and clearer dispute-resolution language became non-negotiable.
• 00:17:26 – Selling to a copier dealer—and what that revealed about copier dealers as serious MSP buyers and competitors.
• 00:25:36 – The multi-year process of doubling profitability and systematizing the business for exit.
• 00:33:48 – Navigating deal uncertainty as COVID-19 emerged—and why the transaction still came together.
• 00:41:31 – Life after the sale: staying engaged while letting go of day-to-day worry.
• 00:45:10 – The shift from money as the motivator to purpose, impact, and meaningful work.

Frequently asked questions

What should an MSP owner do first if they’re served with a lawsuit?
Protect operating focus immediately: involve qualified legal counsel, stabilize the team, and prevent the dispute from becoming the “second business” you unintentionally run for months or years.

Why do lawsuits feel so destabilizing for MSP owners?
Because MSPs run on attention and cadence. When leadership bandwidth is hijacked, decisions slow down, the team escalates more, and clients feel uncertainty—creating operational drag that far outlasts the legal event.

Are arbitration clauses actually worth it in MSP agreements?
They can be. The practical benefit is speed and cost containment, plus a clearer path to resolution that reduces the chance of multi-year distraction.

What makes an MSP “exit ready” in the real world?
Consistent profitability, clean financial visibility, durable recurring revenue, and leadership depth beyond the owner—so the business can operate without founder dependency.

Why are copier dealers credible MSP buyers and competitors?
Many have strong sales management, recurring-revenue muscle memory, and deep account relationships. As they strengthen their managed services operations, they can scale quickly in local markets.

About the guest: David Prince

David Prince is the former owner and CEO of Data Branch, a respected MSP serving Western New York for decades. Over nearly forty years in the industry, David helped evolve Data Branch from hardware-centric IT to a stable, profitable managed services model. In 2020, he sold the company to a copier dealer that retained the Data Branch brand and team, and today he continues to support the organization in an advisory capacity while mentoring the next generation of MSP leaders.

🌐 Connect with David on LinkedIn →

About the host

Josh Peterson is the CEO of Bering McKinley and host of the BMK Vision Podcast. Through the From the Trenches series, Josh highlights MSP leaders who redefine growth through creativity, resilience, and genuine client connection.

🌐 Connect with Josh on LinkedIn →

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Want to continue the conversation?

If you’re an MSP owner thinking about risk, contracts, leadership depth, or what it takes to build a company that can survive surprises—and eventually sell well—Vision can help you put structure around the same operating disciplines discussed in this episode.

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