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- [00:01]
Tyson Mutrix
Are you tired of the marketing guessing game? Does your website feel more like a digital billboard than a client magnet? If you're nodding along, you're not alone. And it's time to stop the uncertainty and start getting real results. Let's talk about your marketing spend. Are you just shelling out money every month and crossing your fingers? Do you ever wonder what impact your marketing is really having on your revenue? Well, it's time to take the guesswork out of the equation with Rise Up Media. We've been working with them for over a year and and the feedback from our fellow members has been fantastic. Rise Up Media is here to take your marketing to the next level. They'll even perform a full audit of your online presence, giving you the good, the bad, and even let you in on what your competition is up to that you're missing out on. And the best part, there's no obligation, no catch, no pressure.
- [00:54]
Mike
If you decide to work with them.
- [00:55]
Tyson Mutrix
Their contracts are month to month.
- [00:57]
Mike
That's right.
- [00:58]
Tyson Mutrix
No long term commitments tying you down. So what are you waiting for? To learn more about how Rise Up Media can transform your firms, visit riseup media.com max law and rise is spelled with a Z. Riseupmedia.com max law.
- [01:20]
Unknown Speaker
This.
- [01:21]
Mike
Is Maximum Lawyer with your host Tyson Mutrix. So Mike, I want to start with alternative business structures. You started Boss Advisors, which is at least my bio of you says it is the first in the United States to provide that's been approved in that it's to provide legal, tax and accounting services under one roof. I think that's awesome. What inspired you to do that?
- [01:49]
Unknown Speaker
Yeah, it's a great question. It's a loaded question. And I'll give you a little bit of my background to kind of tell you how I got there. So I'm a lawyer and a cpa. Got my CPA license right before I started law school. Had the experience already, so got that license done. Then I started law school. And during law school I worked for Ernst and Young, one of the big four accounting firms doing nonprofit work. And then I ended up staying on with them after law school. Bounced around a couple of times between law practice and accounting practice. And by the time I knew I was done at big firms, which is about 2017, I realized I had found a niche that I didn't see many people doing, which was kind of wearing both hats, the JD and the CPA hat. And before I started my firm, I talked to probably five or six other people that were JD CPAs. They all gave me the same advice they said, choose a hat. Don't try to do both. I said, great, I'm going to try to do both. And So I left EY at the end of 17 and I met with the state bar and the Arizona Board of Accountancy. And I told him my plan was to open a law firm and an accounting firm and run them side by side. And I looked at what I thought the ethics rules would be that would apply on both separate set of professional ethics and basically present it to them. And they said, yes, we agree. Here's a couple other things to, you know, consider, but overall your idea is going to work, so go forward with it. The biggest things I had to consider at the time were making sure I had separate, you know, basically running two separate businesses. I needed separate books, separate calendars, separate bank accounts. And it was an administrative nightmare, frankly, to run two firms.
- [03:23]
Mike
What was the reasoning behind having two of everything?
- [03:26]
Unknown Speaker
Basically they want to make sure that we, you know, we're following all the ethics rules, so want to make sure that we weren't co mainly funds. Want to make sure that we weren't soliciting accounting clients for legal work. Some of those other, you know, underlying rules, confidentiality. Because the way I described it was I wanted to grow the accounting business like a business. I wanted to scale it and grow it and leverage staff and tools. And the law practice I wanted to keep as a solo practice, basically just for convenience, right? So when I had to send stuff to an attorney, I could send it to myself instead of having to send it to somebody else. And so I ran things that way for about three years. And I was spending so much of my time on the administrative part of running the firms that I was doing a disservice to my team in order, you know, training them. And my business development wasn't where it needed to be. And you know, my client service, I was always trying to keep up. And so I saw an article somewhere at the end of 2020 that said Arizona is going to waive the ethics rule that prohibits lawyers from sharing fees with non lawyers. I think it's 5.1. I can't remember exactly. And so what that meant for me was I could now bring my not. I had a non lawyer partner who's an accountant in the accounting firm. I could bring him into the law firm as a partner, share fees with him, and then combine the practices. And so we were the first ones to apply and be approved as an ABS alternative business struct. And basically it allows me to now take these two disciplines that again, my vision was always to. I wanted to wear both hats. I wanted to be a lawyer and a cpa because I think that intersection of law and tax is very unique. And that's kind of where I just staked my tent and decided that's where I'm going to live. It's right at the intersection. And so now I can do that formally through one entity. I can bring in CPA partners, I can bring in law partners, and I have one of each right now. And we don't have any ethics. You know, it's kind of took all of the ethics minutia out and we can do everything under one roof.
- [05:18]
Mike
Yeah, I still don't understand. I mean, I understand there's ethics rules and must. There must have been something very specific that prevented that from happening before. That seems kind of crazy. That being said, I guess what would your ideal client then be? Because they are, I mean there is overlap between the two, but they are distinct things. So I wonder what your ideal client is that you're looking for.
- [05:35]
Unknown Speaker
Yeah, so we're looking for, you know, if I get down to the really nitty gritty, what's. Because there's a difference between what's your ideal client? Like who will you work with and won't work with and who are you spending marketing dollars on? Right.
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Mike
And that's really what I'm getting at. Cause how do you market to that person? Because with it being the accountancy firm and then the law firm combined into one. So how does the marketing work?
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Unknown Speaker
So my ideal client is a professional service provider doing, you know, over a million dollars in revenue, ideally, you know, closer to 5 million in revenue. And that needs ongoing services. Right. So tax planning, entity structuring, transactional legal work, estate planning, those type of things that are all, they're all typically code based and they're all things we can do across state lines. So we're not doing any litigation on the accounting side, we're not doing any audits, not anything that would require us to be registered as a CPA firm. So tax prep, tax planning, CFO services, and then transactional legal work, contract review and M and A deals.
- [06:31]
Mike
Interesting. So that's. So you don't have to register as a CPA firm. You're able to kind of work around that.
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Unknown Speaker
Yeah. It's interesting how, you know, just, we see this in a lot of different professions now where you've got the traditional path to licensure. Say for psychology, for example, to be a psychiatrist or psychologist, you've got to go through college, get a degree, take a test and become licensed. And then you can charge, you know, whatever the market rate is or whatever the insurance reimbursement rate is, whereas somebody else can go become a life coach or a, you know, whatever, personal development coach, executive coach and skip out all, skip out on all the formalities. Probably make more money than the licensed professional, have a lot less risk, certainly much less regulation. We see the same thing in both these industries, both in accounting and in law. We see paralegals and legal document preparers who are coming up that can make good money, charge, you know, market rates without ever having to stepped into a school or gotten any sort of credentialing and certainly have no regulation for the most part. And then on the same side, within accountants, you've got bookkeepers and tax preparers. There are paralegal programs. Right, but there's no real paralegal credential in most states. It's just kind of a self proclaimed title. Just like a bookkeeper tax preparer is if you say you're a bookkeeper, you're a bookkeeper and then you can, you know, if you're good at marketing and good at running a business, you can grow that business without ever having even thought about being a CPA.
- [07:52]
Mike
Yeah. In St. Louis, I know this guy, he's a paralegal that has his own business cards. He's like a criminal defense paralegal and he's got his own llc and he, I can't prove it, but I'm fairly certain he probably gives legal advice, you know, like he's. But so you really. It's hard to stop people like that. So it's one of those things where I think we all have to deal with it probably more. So you do more than anything. I'm curious how you manage the firm. Do you call it a firm or do you call it a company? Because I'm curious, how do you like, what do you call it?
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Unknown Speaker
Yeah, I call it a firm. So we are registered with the Supreme Court of Arizona as it's a, it's a type of law firm. The alternative business structure is.
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Mike
Yeah.
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Unknown Speaker
And so we are under a lot of the same rules that a traditional law firm would be. Ironically. And I've actually written a thesis on this basically and presented it to the state board ABS committee. In Arizona, there's very little regulation of the law firms themselves. Most of the regulation efforts are focused on the attorneys themselves.
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Mike
Okay.
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Unknown Speaker
So in Arizona the attorney has to register every year, has to pay their dues, has to report Their clean. In Arizona, if you want to be a law firm, there's no registration. You just, you just report the next time you file your annual affidavit, you report which law firm you work for and you report to that point that you're self employed. But there's, there's no annual registration, there's no initial registration, there's no annual registration and there's no fees to register a law firm in Arizona. There is no registration for a law firm in Arizona.
- [09:12]
Mike
Yeah.
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Unknown Speaker
However, as an ABS, you have to pay $6,000 the first year to apply to be an ABS and then $3,000 per year after that, along with essentially this whole audit process.
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Mike
You still have to keep paying it every year.
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Unknown Speaker
Every year.
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Mike
Yeah.
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Unknown Speaker
And it's really interesting the disparity between the regulation of law firms versus, you know, an abs. Whereas frankly, I could do everything I do, you know, within our abs, I could do it as a traditional law firm. There's nothing that would prohibit me from preparing tax returns or doing bookkeeping through a traditional law firm. So our primary reason for being an ABS is the fact that I can have non lawyer partners, which is a big deal for me. And then, and that's, that's really the only reason I need to be an abs. Secondarily, it's a marketing tool for us to be able to say we're the first ones approved. I just heard a couple of days ago kpmg, one of the big four accounting firms, just applied to be an ABS in Arizona. This is something I've been predicting is going to, you know, will be happening across the country. We're going to see, we see legislation right now in Utah. They've got the sandbox rules. And then I believe Washington state has some proposed legislation allowing the ABS structure. And we're going to see more and more of the big players, accounting firms and other ancillary professional service providers that are going to want to start playing in Arizona. Because you know, if you're licensed as an ABS in Arizona, you can do certain transactional legal work across borders without being licensed there. As long as you're not representing a client in front of a tribunal and you know, basically going to court, there's a lot of stuff you can do.
- [10:35]
Mike
It's interesting that they've got that, that barrier to entry, the 6,000 up front and 3,000. My guess is, and maybe you know better than I do, is that I'm guessing that's just to kind of keep the riff raff out. You know, like there's it's at a certain number that's just high enough just to make sure that some, you know, little bitty dinky firm out of another state that is, that's not very organized, they're not going to come in and pay 6,000 bucks and then pay 3,000 a year to get this set up. That's my guess.
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Unknown Speaker
Yeah, I think that's right. I think it's a little bit opportunistic in some ways too. I think it was. We can. We're the first ones to do this.
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Mike
Yeah.
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Unknown Speaker
And I applaud the state bar for thinking like business owners because if you, if you can charge fees and people will pay them, then might as well. They, and they have costs, you know, that they have to cover to administer the service. There's a committee and there's people that are. All they do is ABS compliance. And so, you know, they have costs that have to be covered too. But I just think the disparity between the regulation of law firms and ABs is pretty interesting.
- [11:29]
Mike
The only thing that surprised me about KPMG coming in is that it took so long. I'm surprised it's taking so long for these companies to come in because it's seems like it would be a cash cow for them.
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Unknown Speaker
Yeah, I think there's. Those are giant ships that are hard to steer. Right. And so having been at big four firms, I actually interned at KPMG when I was a kid and, and then spent, you know, several years at Ernst and Young. And I know how the decision making process is. They're like their own governments. Right. These are very slow decision making. They're not, they're not agile. They can't run like a small firm where you can make a decision and go for it. And it's probably been something they've been looking at for years and then finally got, you know, some committee to approve.
- [12:08]
Mike
What was the ABS application process like?
- [12:11]
Unknown Speaker
I spent about 50 hours on that process. I was very thorough. And I've actually helped other firms become ABS entities since then. So no, not, not wasted time. But I read through every regulation, I read through every page to make sure that we, we were going to meet all the requirements. Because it was. So there was no model to follow. Right. There was nobody that could tell me how to do this. We were the first ones to apply. And so were you the first to.
- [12:32]
Mike
Apply in the entire state, or were you the first ones that combined accountancy and legal?
- [12:36]
Unknown Speaker
So there were two initial applicants. It was us in another firm and the other firm. We sat in front of the Supreme Court together. In the initial meeting, we both were approved at the same time. Theirs is personal injury and unrelated to what we do completely. And then ours, you know, we're the first ones and might still be the only ones that do tax and law. I think there may be another one or two smaller ones, but I haven't kept up with it since we got our regulation. I basically just keep up with the annual renewal and haven't spent a lot of time on it since then.
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Mike
So from the moment that they said, hey, green light, you can start submitting applications to the day you submitted it, how much of a gap was. I'm super curious.
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Unknown Speaker
It was basically fourth quarter of 2020. That's what I did. I spent any extra time I had outside of client work working on this application, reading things. And in January, when the first. When the application process opened, I submitted our application and it took us. I think the first committee meeting actually happened in, like, March, so that's when we were actually approved.
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Mike
Oh, wow. So that's not. That's not that long. That's pretty quick.
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Unknown Speaker
No, and it was interesting being, you know, it was a little bit. Nobody really know what to do. Right. So we're sitting in the first meeting and they're like, well, the rules say this, so everybody's just kind of following the rules. And I'll never forget this. One of the committee members who was the one that actually took our application through, she thanked me for being so thorough in my responses. She said, they're going to update the application to include things that I put in there that they didn't think that should, you know, didn't think of to put in.
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Mike
You ruined it for everybody.
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Unknown Speaker
I did.
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Mike
Absolutely.
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Unknown Speaker
Keep that bar high.
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Mike
That's right. Well, it'll help. It'll protect you, too. That's. That's really good. So what. What sorts of things were they. Were they looking for?
- [14:16]
Unknown Speaker
So, number one is the. One of the initiatives of the program is providing access, additional access to lawyers for the population. Access to justice, really, I think, is the term they use. And so my job was to take these kind of stated initiatives and take our situation and basically justify how the work that we were doing by bringing legal and accounting under one roof would provide additional access to lawyers that the general public didn't generally enjoy. I think that's. That's come to fruition. And I think one of the reasons is there is a stigma for the general public working with lawyers. There's a stigma against that. Right. And so because normally you only Work with the lawyer when, you know, things have hit the fan. Right. In divorce or a personal injury or some other, you know, bad circumstance. We're trying to turn that on its head to where the public sees working with lawyers as a benefit and as a proactive. Specifically, business owners look at working with lawyers as a proactive step they can take to make sure they're structured properly, that they're proactively making sure they don't get in trouble and that their structure, you know, they are doing things efficiently, they've protected themselves against liability and things like that. And so what we found is that because everybody, you know, every business owner needs an accountant. It's almost unequivocally. And so every, every business owner has a bookkeeper. Most have tax preparers. That's just kind of cost of doing business. But most business owners don't have a lawyer that they refer to regularly that knows their situation. And so we've been able to approach our tax and accounting clients and basically tell them, hey, we've got lawyers on staff. Every time a potential red flag pops up, every time a potential issue pops up, we can just bring somebody in from down the hall and say, hey, let's just take a quick look at this. There's no obligation, but let's just get this guy's opinion and see if maybe you have a legal issue that needs to be vetted out here. Sometimes they do, and sometimes the attorney will say, no, everything's fine. You guys are doing everything right. And it'll, you know, if nothing else, it provides them some assurance. In most situations, there is some legal step that needs to happen, whether it's an agreement that needs to be put into place or, you know, some state filing that needs to be made. And so then we've, you know, at a very low pressure situation, have introduced them to a lawyer who can help them without them having to go, you know, through the trouble of engaging a separate firm. Explain the circumstances, trying to interpret what the CPA said.
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Mike
Yeah.
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Unknown Speaker
And. And then, you know, being the go between between the CPA and the lawyer, that all goes away. And we have direct communication. And we even do this because there's a lot of times we'll get referrals from other accounting firms and other law firms. We'll do this in a way where if. If there's a lawyer that refers, say, their business counsel for a company and they refer the accounting work to us, we'll work with them, you know, side by side, and make sure that we're meeting with them every Quarter or every year, whatever, so that the client's still getting the perspective of the accountant and the lawyer, even if we're not serving in both roles.
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Mike
So I think it's an interesting idea, I think it's a great concept. So you, you, you did the research, you pay the filing fee, you submit the application that you put together. Are there documents that they ask you for that go with the application?
- [17:24]
Unknown Speaker
Yeah, a lot of it is just self certifying things.
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Mike
But like what?
- [17:27]
Unknown Speaker
So they want to make sure that you have a compliance attorney, for example. So it's gotta be somebody, top of my head. I believe it's 10%, they own 10% of the ABs. They have to agree to, you know, basically make sure that the firm with regard to the legal services it's providing is complying with all of the rules applicable to attorneys. Right. And so that's where there's interesting gray area where you know, we, we provide non legal services. And so the question arises is whether those services are subject to the legal restrictions. So say like trust accounts, for example, if we're collecting fees for tax planning, does that mean that we have to put it into a trust account? Right. And do we have the same confidentiality? A lot of the confidentiality rules between the county professional and legal profession are similar but you know, certainly attorney client privilege, you know, doesn't apply in every situation. So we kind of have to. What we've done, our approach has been to take the more stringent rule, whether it's under the Rules of Professional Conduct or under the AICPA or Circular 230 rules, whatever is more stringent, that's what we apply for ourselves and we apply it across the board.
- [18:31]
Mike
So it's kind of when in doubt, put in the trust account.
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Unknown Speaker
Yeah, yeah, exactly. Yeah, that's good rhyme too.
- [18:36]
Mike
I did not mean to actually, whenever I was thinking about it I was like, I didn't think it'd be, be a rhyme, but that's, that's some, I think that's, it's probably sound advice just because you don't want to. I mean, what's it going to hurt? You know, I guess, I guess you don't want, you can't put money in the trust account that shouldn't be there. So like there is a, there's a consequence to that, but you have a pretty good excuse for that. So you, you go through, you submit the documentation and is there like a back and forth between the date that you submit everything and then the, the actual hearing date is. So like they're asking.
- [19:06]
Unknown Speaker
Yeah, they asked some clarifying questions. Certainly between those two times, you have a representative at the state, you know, on the ABS committee who will process your application and present you to the board.
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Mike
Oh, interesting.
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Unknown Speaker
And so she, our representative, asked us a few clarifying questions. We had done a pretty thorough job of applying, so she didn't have a lot of questions to clarify.
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Mike
So there's a separate committee and then there's all. And so you have someone that, from that committee that represents you to the board, and then you have a separate board that decides on whether or not you're approved.
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Unknown Speaker
Well, the ABS committee is the, is the board, I suppose.
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Mike
Okay, gotcha.
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Unknown Speaker
Yeah. So within the ABS committee, one of the roles, or maybe more than one, is reviewing applications. And that's the person that kind of presents you to the ABS committee for approval.
- [19:50]
Mike
Gotcha. Are these, are these full time employees of the state?
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Unknown Speaker
I've wondered the same thing. Yes, they are full time employees of the state. I don't believe they're full time employees of the ABS program though, which I think is, which I think is why some of the fees, I think some of the fees goes towards their salaries.
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Mike
I'm guessing whenever you submit that 3,000 every year, are you reevaluated at that time?
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Unknown Speaker
You are? Yes. They, they, the application process is a lot easier. It's probably takes me, you know, a couple hours. And basically what it's asking is things that you would expect. Have there been any significant changes in ownership or purpose, things like that. But then it also basically asks you to reaffirm that you're meeting the committee's organizational objectives. So providing access to justice and things like that.
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Mike
If someone's considering doing it, I mean, are there things that they should look out for, some red flags? Any advice you'd give to people that are considering it?
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Unknown Speaker
Yeah, I would say whoever's doing this, if you're getting, whether you're doing the research yourself or getting advice, you're talking with somebody who's sat through some of these meetings before. And if you're applying for the first time, slow down a little bit, make it a point. Go on the ABS committee website and attend a few meetings just so you can see what they're looking for. Read the applications that have been submitted. You know, you can get a feel for what other types of organizations have been approved and which ones have not been approved as ABS structures. And so if you, you know, like, like with a lot of things, a lot of times we think we have novel ideas, but in reality Somebody's done it before us. I find that to be the case here too is go, go figure out what other ABS structures there are out there and try to model one. Because if you model one that's already done it and been approved, you're. You're most likely going to be approved as well.
- [21:30]
Mike
So is it all publicly available online?
- [21:32]
Unknown Speaker
Yep.
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Mike
Wow, that's. So you can see everyone that's. That's been declined. Everyone that's approved. You just download the PDF, I guess.
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Unknown Speaker
Yeah.
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Mike
Wow, that's. That's. I had no idea that that was a thing. What, what percentage of applicants are denied?
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Unknown Speaker
I don't think it's a very high percentage. I. I don't know off the top of my head, but certainly there are some that have been denied.
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Mike
Are they capping it at all with. With number of abs'not?
- [21:53]
Unknown Speaker
That I've seen. There have been much fewer applicants than I would have expected. I don't know how many there are active now. I think it's. But I think still less than a hundred.
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Mike
Why do you think that is?
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Unknown Speaker
I think people find alternative ways to meet their same goals without formally, you know, partnering with lawyers in these things. There's certainly all sorts of referral relationships and informal business partnerships that you can get into that accomplish the same goals without the cost and additional. I think part of it is the additional regulation, frankly, because you can do a lot of the same things through a contract that's not publicly visible and accomplish the same objectives for us. Like I said, we don't necessarily need this because we could operate as two separate firms, but the convenience of having my business partner who's not a lawyer be my formal business partner and then the marketing part of it is very convenient.
- [22:43]
Mike
So I mean, that's why it would make sense for a law firm to do it because you can bring in that outside money, if that. Which is nice, that is. I mean, so I think for anyone that's. They're wondering why a law firm would do it because you could just. You license in the state or you could, you could hire someone that is a. An Arizona licensed attorney. But if you want to bring in that outside money, that's. That's pretty handy.
- [23:03]
Unknown Speaker
Yeah. And that's what the mo. Most of the ones I've seen are for. Specifically for that reason. PI firms that want to bring in an outside financer without having to go through all the red tape. The more interesting aspect to me is bringing in the outside talent and expanding legal services, expanding your services to go beyond, you know, Traditional legal services. So business consultants, for example. There's plenty of people who have, you know, been real estate developers and done other things in business, you know, taking companies public, things like that, that they don't. It's not law practice at all. But it's valuable services that a law firm can tack on to what they do, you know, expand their scope of operations and services.
- [23:42]
Mike
Given the limited adoption, do you think it's going to be something that is going to spread across the country?
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Unknown Speaker
I still think it is, yes. And the reason I say that primarily is because this is very commonplace outside the US in places like the uk, Australia, Canada. Some of the biggest law firms outside the US Are what we consider the big four accounting firms.
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Mike
Yeah. I'm going to shift gears with you a little bit. Tell me what, tell me about the adhd, if you don't mind.
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Unknown Speaker
Can we talk about that all day long?
- [24:11]
Mike
Okay. Because that is interesting because that one of the things you listed as your personal accomplishments that you're the most proud of is being able to, I guess, overcome that. And so let's hear. I think that would be important for people to hear.
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Unknown Speaker
Yeah. I think it's been an interesting experience for me. I identify as neurodivergent. Those are all new terms for me. Right.
- [24:31]
Mike
I don't know what that means, neurodivergent.
- [24:33]
Unknown Speaker
Basically, my brain doesn't work the way everybody else's brains work. Right. But I think there's a lot of people who do resonate with that. As a kid and as a college student, as a law student, even as a young professional, everything was working properly. Right. I got good grades. I was an Eagle Scout. I served a church mission. I got scholarships to college. I got scholarships to law school, passed my CPA exams, passed my bar exams. All the first attempt. Really didn't even have to work that hard for it. Right. I was top 10% of my class. And that all came very naturally for me. About the time I started my firm, I started to notice that in order to function, I needed more and more caffeine and I needed, you know, to take more walks and I needed to sleep more. And I needed to start making these changes that were like, I've never needed this before. But I figured, okay, I'm in my 30s now and, you know, this is what happens when you get in your mid-30s. But as that, as that leveled up and progressed, I kind of started thinking there's something wrong. Like it's. I'm not just being lazy. I'm not just getting distracted there's something that's blocking my brain from actually, like, functioning properly. And so I started doing a lot of research online and I took an ADHD test and I, like, knocked it off the charts. I 100, you know, seemed to qualify. So I went, met with a psychiatrist and they're like, yep, absolutely, you have adhd. We'll get you on some Adderall and, and some meds and, you know, make some changes in your life and, and this should help. And it has helped tremendously. It doesn't, you know, I can't say the symptoms are always gone, but I can tell you that if I go days or weeks without using my meds, I start to, I start to get really creative, but very, you know, very unproductive in terms of actually getting things done. I start a lot of things and don't finish a lot of things.
- [26:11]
Mike
So it's interesting about the creativity. So let's stay on that for a second. Are you ever concerned that, that it's removing the creativity to a point where it's detrimental on you or the business?
- [26:22]
Unknown Speaker
So the way my brain works, it doesn't operate naturally in a structured way anymore. Right. I can't say that was always the case. This is definitely adult, adult onset adhd. I have to surround myself with systems and processes and, you know, people, personnel that keep me in line, that basically keep me structured. Right. So if you look at my calendar, I have time blocked off on a daily basis to do creative things, to write, you know, write on LinkedIn, for example, to do podcasts, to do think about the firm and kind of work on the firm. And then I have time where it's specifically, you know, to clear email. And I do that 30 minutes a day, twice a day, and that's the only time I spend on email.
- [27:01]
Mike
Do you have anyone that, like. I have an executive assistant. So if I'm not, let's say that I'm not doing some of the things that I'm supposed to be doing on my calendar, I get kind of a nudge, a reminder, you know, do you have anyone else that works for you that. That helps give you that nudge?
- [27:15]
Unknown Speaker
Yeah, and that's probably been one of the best things I've done for myself and for the business is to hire an executive assistant to manage my email and my calendar. And she, she basically manages my task flow. I told her when she started, and I've had an executive assistant, this is my second one for about four, four or five years now. I told her when she started. Judy, your job is to tell me what a priority is, tell me what to work on. I want to feel like an employee of my own business in some ways, because if I don't have somebody telling me what the highest priority thing is, I'll maybe work on something that's like what I believe is important but not urgent. And there may be something that is like pounding on a door that I just completely disregard because I want to work on the thing that makes me feel good, that gives me dopamine. Right.
- [27:58]
Mike
It's interesting what you said about essentially wanting to be an employee of your firm, because I hear so many people saying the absolute opposite. They don't want a job, they want to own the company or own the firm. And I do find that interesting. Do you think maybe some of the things that need being done should just be done by maybe other people instead of you?
- [28:17]
Unknown Speaker
Certainly that's always the battle is allocating my time in so that I'm doing the things that are most important to the firm. But, you know, I don't always get away with that. And you know, sometimes frankly, balls get dropped and I've got to clean them up. Right. And that's the. I'm the only JD CPA in our firm. There's about 12 of us total. I'm the only one that has both professions. And so I can do everything that the firm does, but that doesn't mean I should do everything right. And so I find that the more the firm grows and the more, you know, the fewer hats I wear, the more I want to take off the hat of practitioner and give that to somebody who's really good, a really good transactional attorney, a good tax planner, and just focus on strategic, you know, firm level decisions.
- [29:00]
Mike
Interesting. I wonder, did you, whenever you were going through the whole process, like learning about the ADHD and all that, did you ever, did you ever get blood tested?
- [29:08]
Unknown Speaker
Yeah, absolutely.
- [29:09]
Mike
Because I, the reason why I asked that is I was noticing I was getting fatigued last year and I went and gotten my, my thyroid, I was having issues. So I was wondering if you, if you were able to. Because I don't think you can test ADH from blood. So was there anything else that you were able to identify? Because the reason why this is important, I think is like maintaining our health is obviously really, really important whenever we're running our firms. Otherwise we can't take care of our people, can't take care of our firm, can't take care of our families. So I do. Was there anything else you were able to identify that. That helped you kind of get back on track.
- [29:38]
Unknown Speaker
I've done blood work regularly over the last few years. I just do it as part of my annual smart idea. Luckily, it hasn't been anything that's, you know, completely out of place. Just kind of some pointers, like pre diabetes, for example. You know, I got to that point where I stopped taking care of myself, and that became a concern. And so I had to start wearing a glucose monitor and making some changes around the way I eat and, you know, what I eat and when I eat and things that you wouldn't even consider before.
- [30:02]
Mike
So I want to talk more about that stuff because that is an often thing neglected by legal entrepreneurs. It's, you know, they. They're too busy running the firm. They're too busy, you know, doing the work that they neglect themselves. So. Why do you think that is?
- [30:15]
Unknown Speaker
That's a great question. And it's. It's actually my. My theme this year for 2025 is, is improving my health. And I really like 100%, you know, understand and agree with what you're saying, that if we don't take care of ourselves, we can't take care of anything around us, can't take care of our families and our firms and, and our employees and our clients. I can tell you, in my case, and this was kind of all in one, you know, about five, five, seven years ago when I started, before I got diagnosed with adhd, I noticed my health was slipping in a lot of ways, like, and I felt so much anxiety and, you know, again, separate from adhd, but often very closely related was my anxiety. And so I felt so much anxiety about dropping the ball at work or, you know, with a specific client or, you know, whatever the case might be, cash flow, that I would wake up naturally at 5am and then 4am and the 3am and then some nights I would just lay in bed from 10 to 12. Once I. Once I. In my mind, I decided that I wasn't gonna be able to sleep. I would just go back to the office and just work on things. And so that's when I stopped exercising regularly. It was around Covid, where I kind of, you know, once I got Covid, and then my lung capacity wasn't great, and so I stopped running. That's when, you know, started walking instead of running. And. And that's always the first thing to go for me is when you feel stressed is like, I can. I can afford to not work out today, because if I took that hour back, how much could I get done? At the firm, when in reality, it's those small and simple things that stack up over time that actually improve your health. Whether that's the way you eat on a daily basis, how much water you drink, your sleep, your exercise. None of those in one or two days is going to kill you. But over the course of years, those will sink you.
- [31:55]
Mike
Yeah. When did you start the accountancy firm and the law firm? What year was that?
- [32:00]
Unknown Speaker
End of 2017.
- [32:01]
Mike
So 2017, it sounds like it coincides kind of with the time that you put the health to the backseat.
- [32:07]
Unknown Speaker
Yeah. And I don't know what the chicken and the egg was in that situation, but it's, it's definitely around the time I started my firm, became an entrepreneur that I did start to let my health slide. Before that, I, you know, I was in good shape. I didn't drink a lot of soda. I didn't eat a lot of fast food. And part of that was a function of being a poor student. Right.
- [32:23]
Mike
So, yeah.
- [32:24]
Unknown Speaker
And then once you get a little money and you, you know, decide, I can just eat out, I can just expedite some of these things and, and forego my health, you know, you start to make those decisions and those become habits, and then, you know, before you know it, you eat out more than you eat at home.
- [32:38]
Mike
Totally. Did you notice and, or have you been able to notice since the beginning whether or not your, your health changes have affected your quality of work?
- [32:47]
Unknown Speaker
I would say they affect certainly the effect of my quality of work. Not in that I don't produce a good work product, but it takes me longer to get to that point. I can't, I can't do that very efficiently when I'm not taking care of myself. And at one point I wrote down this little saying that helped me kind of like focus on myself. I wrote down no one wants to hire a slob. And I stuck that on my monitor. I was like, you got to take care of yourself. Because if you don't, like, not only is your work product going to suffer, but your overall presentation and, you know, most of what we do is sales. Right. No matter your profession, your sales are going to suffer because no one wants to hire somebody who can't even take care of themselves. No one's going to trust you to take care of their finances and their, you know, legal problems. When perception is that you can't even take care of yourself.
- [33:31]
Mike
Is that note still on your computer?
- [33:33]
Unknown Speaker
Yeah, it is. N O W T H A S no one wants to hire a slob.
- [33:37]
Mike
Can I Make a suggestion.
- [33:39]
Unknown Speaker
Love that.
- [33:40]
Mike
Would you remove it and then say, I am a healthy man, or whatever you want to say. Because I do think that there is a very negative thought to that. Because that means you view yourself as a slob. I'm looking at you. You're not a slob. And I think that changing that perception of yourself might help substantially.
- [33:58]
Unknown Speaker
I love that. Yeah, that's great.
- [33:59]
Mike
Or I've just made up something, you know, like. Like, instead of like, I am healthy, or you can just say, I'm healthy. You know, like, whatever it is.
- [34:06]
Unknown Speaker
Yeah. It's interesting you say that. I did affirmations recently. I would put in my bathroom mirror. My first one is, I am a healthy person. Right.
- [34:12]
Mike
Yeah.
- [34:12]
Unknown Speaker
Which is saying the same thing, but in a positive, reaffirming way. So 100 agree.
- [34:17]
Mike
Yeah. If you. If. I don't know if you've ever read anything by Jason Selk, but I recommend reading some stuff by Jason Selk. He talks a lot about that stuff. When it comes to mindset, he's great. I can get you his information later. But that's. Yeah, it's one of the things that. When you said that, I instantly was like, okay, we gotta change that. That's. That's something we gotta. Because you. You obviously care. You obviously obviously give a damn. So that's good. That's. That's the starting point. Caring and then kind of going from there. But I. It was funny. I started to touch on something, and then we went to another topic. I want to ask you about management of the. The firm, because you've got the accountancy side and you've got the law firm side. And in my head, managing an accountant is different than managing a lawyer. Like, they're different backgrounds, different beasts, you know, completely. Is there a difference in how you manage your people?
- [35:02]
Unknown Speaker
We centralize all of our task management through a tool called Carbon with a Carbon with a K. It's built for accounting firms. It's a workflow system. Right. And the whole purpose of the tool is to make sure that nothing falls through the cracks. It integrates with our email, integrates with our billing, integrates with our, you know, accounting records and with our CRM. And so we've used that as a central tool to make sure that every task that gets completed, every deliverable that we're engaged to do has to get tracked in there and the status has to be kept up. And so, in a very literal sense, answer your question, we manage everybody the same way. Everybody has to use that system so that we have visibility into what's even happening at the firm. Right? And we can filter by client, we can filter by due date, we can filter by assignee. I can see at any point, as long as the tool is being used properly, I can see everything that is due within this week across service lines, whether it's tax, accounting or legal in other ways, you have to manage people differently, right, Whether they're lawyers or accountants. And, you know, certainly there's different compliance requirements and different, you know, regulatory issues that come up with. With managing a lawyer versus an accountant. But at the end of the day, it's about providing accountability to them. And, you know, we've got different continuing education requirements, certainly, but we have enough overlap in what we do. Today. Before I came to this session, I led with one of our other business attorneys. I led a session on S Corps within the firm. Just we do technical training every month. And this one was all about S Corps election, certifications, qualifications, tax compliance requirements. And that was led by me and our other tax attorney. And so all of our accountants, all of our attorneys, all of our admin were on the call because it's all things that, you know, this is one of those primaries where there are legal implications and there are tax implications, and you can't really distinguish those. And so we, you know, we do a comprehensive training on everything.
- [36:57]
Mike
Training is really, really important. We are from. We're firm. Firm believers in and training. Do you have scheduled regular trainings? How does your training of your employees work?
- [37:08]
Unknown Speaker
Yeah, we do. We haven't always done this, but it was some feedback that I got recently over the last couple of years is that everybody understands the work that has to be done. Everybody, you know, can basically pick up what you give to them and take it to the finish line. But we're not spending enough time collaborating amongst ourselves. And so the training is, you know, maybe. Maybe people learn a few things every time we have one of these trainings. But for the most part, people already understand the basic principles of S Corp, right? If they're a CPA in practice, they should already understand those things. What they don't understand and what we want to do is remove the silo effect from our firm. Because we have multiple practices, right? We've got bookkeeping, we've got tax, we've got legal, we've got nonprofit, and we've got cfo. So five separate departments that we run as, you know, separately. We track all of our income and expenses separately so that we can see profitability per group. Everything is coded under one of those five classifications. But in reality, what we're trying to do is avoid those being siloed firms. And so this cross training is intended to provide the accountants with an attorney's perspective on how things work and an accountant's perspective, you know, providing that to the attorneys on the practical implications of these different, you know, whatever the technical training is about. So it's meant to kind of break down those barriers and break down the walls, because that's certainly one of the things I saw in larger law firms is you may have, you know, 10 different lawyers with 10 different specialties, and none of them ever learn about the other person's specialty, which is, frankly, you know, it's a disservice to the other attorneys, because if they're getting paid on the production and their origination, and nobody has, you never have an opportunity to teach your other attorneys within your firm what you do, what a good client is to you, how you can help their clients. Then you're, you're, you know, you're. You're wasting an opportunity there.
- [38:58]
Mike
I love that. I think that's really smart, because then they all know how the roles affect each other. I think that's. That's really, really smart, especially because they're, I mean, they're. They can be at times, probably drastically different parts of the business. It seems like you got, I mean, quite a good business acumen. Where does that come from? Where did you learn that?
- [39:16]
Unknown Speaker
So thank you. I'm still learning it. I posted the other day on LinkedIn, somebody asked, you know, how much does your accounting and law degree help you in what you do now? And I would say certainly helped, you know, with credentialing and kind of got me to where I am. But in terms of the practical advice I give to clients, I would say 60% of the advice I give to clients comes from running my firm. It comes from very practical. I've been through the situation with this retirement plan. I've been through the situation with hiring or firing an employee. I've been through the situation with the bookkeeping not matching up with the tax return or whatever. And so I can provide that advice not from a book. You know, book smart. This is what I learned in accounting school or law school, but from a very practical. This is running a business. This is what you actually need to know. And by the way, nobody cares about the technically correct answer. They want to know, like, under my circumstances, what would you do? And so that's the advice you draw from, is the more I practice and run a business, the More of the advice that I draw from, from that experience and not from what I learned in school at all.
- [40:20]
Mike
I think that's pretty common. I think a lot of us, we've kind of learned as we're kind of building the ship, which is just how it works sometimes. Do you have any sort of leadership structure like set up for the, for the firm?
- [40:31]
Unknown Speaker
We do. We have three partners and then. So three partners. One's, one is me, obviously, and then the other one's a cpa, the other one's a lawyer. And then we have a leadership team that includes the partnership as well as our. We hire a fractional COO who works with us about, you know, 10 hours a week. And then we have a. We're hiring our first sales director who's going to be on the leadership team as well. And then we have the director of tax who's on the leadership team. So there's six of us, which is kind of funny because half the firm is on the leadership team, but they're strategic hires. And this is, this is meant to get us to the next level. Not. We're not structuring for where we are now. We're structuring for where we're trying to be.
- [41:07]
Mike
Yeah, I've always found the, the coo, the fractional COO to be an interesting concept. I understand the fractional cfo. A lot of that is it's a strategy with the money. There's a lot with that that you can do by looking at the numbers. Coo, I find it harder to do because you really got to understand the business. So tell me about your experience having a fractional COO and whether or not. I want to ask you whether or not you think it's worth it, because that person might listen to this. I'm not going to ask you that. But what is your experience been with the fractional CEO and how long have you had a fractional CEO?
- [41:43]
Unknown Speaker
We've had a fractional CEO for probably about six months sometime last summer. This is our second one. First one, it was a short term contract and we had some specific objectives and then ended up finding somebody who was a little bit better fit. He's been great. He focuses on accounting firms that use our specific tech stack. Right. So he's a carbon, carbon user. He actually does projects for the carbon company. And so what I find is he's best and it's the best use of our money to have him oversee projects and get them to the point where they can be administered by somebody else. Right. So I'M trying to use him at a strategic level so that, you know, for example, crafting project he's working on right now is looking at all of our tax prep work top to bottom, figuring out which clients fall within the acceptable range of fees, which ones are under that range, which ones may need to be adjusted, which ones, you know, frankly we should part ways with because they're no longer a good fit. And then making sure that all of those get assigned into our workflow system and make sure that, you know, every, everyone gets assigned to a specific preparer, that we're doing capacity planning and making sure that we're not over committing and, you know, over promising on these, that they'll be done throughout the year and then that those clients will be communicated to that, hey, you're going to be extended, we're going to work on your return in March. And then we commit to that. Right. So there's these kind of strategic type initiatives that once he's set them up properly, they can then be administered by an admin type person.
- [43:13]
Mike
Interesting. I mean, do you find that he's got a good understanding of the firm?
- [43:18]
Unknown Speaker
He does, yeah. And we brought him in. He's in Texas. Our firm is pretty much remote at this point. There's a couple of us that are old school and like to have an office, but for the most part everybody works from home and we. And that's actually a separate topic. But that's been tremendous for us because we were able to hire nationwide instead of limiting it ourselves to the Phoenix area. But we brought him in to affirm training in November. He met the entire team we've sat through. I gave, it basically gave him full access to our playbook and our systems and said, hey, spend some time, go through our billing system, go through our email system, go through our document management system. Really understand, get into the nitty gritty and I'll pay you to do this. I really want you to understand from a very detailed perspective how we do things and then come back to me with a report and recommendations on how we can, you know, whether big or small changes need to happen. And, and then basically, you know, we gotta trust that what he comes back with is gonna be beneficial for us.
- [44:14]
Mike
Yeah, I don't think people understand the, the advantage you have when you can hire nationwide. And it really is interesting because once you, when you do start to open up the map, the amount of talent you have access to is just so much greater. How long have you been doing that?
- [44:32]
Unknown Speaker
So I had my first business partner left about Two and a half years ago, it was. It's coincided with that. And he and I had built this. Built out this beautiful building. I mean, it was. It was immaculate. It was too much space for us at the time, but it was affordable, and we got a good SBA loan, built it out to our specs, and it was ready for us to grow into. I mean, we had like, a soda machine and all this cool stuff there. Right. But then when he left, we decided to sell the building. And at that point, it just made sense to me. You know, I was. I interviewed everybody on the team. You know, we kind of. He took a few people with him, I took a few people with me, and I kind of just got feedback from my team at that point and said, hey, you come into the office pretty much every day. Tell me your experience about that. You do work from home once a week. How productive are you when you're working from home? And really, just like, at the end of the day, like, what do you want to do? And pretty much unanimously, the feedback was, I like coming to the office. It's fine, but I can be a lot more effective at home.
- [45:26]
Mike
It's interesting. We did a Zappos tour in Vegas when we had our mastermind out there, and they talked a lot about the culture and all the things they had done at the campus for employees and all kind of stuff. And then Covid happened, and then after that, they invited everyone back and they gave everyone an option and no one came back. So I do find that interesting that they spend a lot of time on the culture, and they still do, even though it's remote. But people, if given the option, it seems the vast majority will work from home.
- [46:00]
Unknown Speaker
Yeah. And I think one of the challenges for me was I used, for lack of a better term, but in seat time as a gauge as to people's production. Right. And in reality, there's a lot of inefficiencies that can happen when you're sitting in an office. Where you're sitting, you're going to the water cooler, you know, chatting it up. And, you know, there's really no correlation between the amount of time in the office and your production. So we had to look through that and use our workflow tool to kind of figure out what metrics should we actually be tracking and then find a way to track those. No matter where in the world the person was sitting, that's what they were going to be held accountable to. And that's what, you know, we do now is we look, and that's Our primary role of our COO is to hold people accountable and track the right metrics, report to us and tell us when things are maybe, you know, not where they should be.
- [46:49]
Mike
The button seat time. It reminds me of my first boss as a lawyer. And it was really interesting because me and another associate, he and I would always get there at 7am we'd get really early, boss wouldn't show up till like 9. But the boss wanted us to have that facetime. So that button seat time though. But he, he really liked more like the FaceTime. So we were there later but. Cause we would. He and I would go like seven to five. We'd go up at five. Cause we got there early sometimes, you know, six, seven to six, whatever. But the boss wanted us there when he was there. And so we, it was funny because we were like, okay, we'll, we'll stay later, but we're not coming in at 7:00am then.
- [47:25]
Unknown Speaker
Yeah.
- [47:25]
Mike
So we end up working less just because he wanted button seat time. And it really was, it was more that face time and how he was focusing on the wrong metrics. And it was just so interesting how. How some legal entrepreneurs are that way.
- [47:38]
Unknown Speaker
Yeah, I've definitely worked for the FaceTime. I remember working at a firm, I'll say the name of the firm because they've actually gone under since then as Jennings Strauss here in Phoenix is a regional firm. And I remember one time, it was like 6:30pm I was the same way. I would get in the office by like 5:30, 6 every morning. And it was 6:30pm And I was sitting at the elevator waiting to go down, you know, downtown Phoenix firm. And one of the partners I worked for walked by and he's like, huh? I was like, what does that mean? He's like, it's interesting that you're. You're leaving and you don't have your briefcase with you. Like, okay, I'll go get my briefcase. Message received.
- [48:16]
Mike
Yeah, okay, great. I'll carry a briefcase. Great. That I'm not gonna do anything with it when I get home. It's such, it's such a terrible way of managing people. It does not. They're not focusing on the right behaviors. It's absolutely crazy to me. Speaking of firms going under or splitting, I do want to ask you about the partnership split or whatever you want to call it, breakup or. See parting of the ways. You went through a. You and your partner decided to part ways at some point. What was that like?
- [48:46]
Unknown Speaker
It was, it was challenging. And in some ways I'm really glad I went through it because I, you know, my practice is coaching business owners on forming and ending partnerships. In a lot of ways. Right. Every partnership will end eventually, whether by death, disability, or voluntarily. And so having gone through it myself, just gave me more ammunition and more practical insight as to how I can, you know, coach and advise my clients. It was challenging, for sure. We had a. Luckily, we had a very well written operating agreement, and so we didn't have to answer a lot of the questions that, you know, came up. They were already answered for us because we had thought through things ahead of time. And so in terms of, you know, splitting clients and. And employees and who would take the name of the business, all that stuff was kind of already thought through. And so then it was just. There's an emotional aspect of it, right. That was probably the most challenging part, was the emotional aspect of, you know, hey, feeling like he's abandoning me. Right? And, you know, having some of those thoughts and. But in reality, like, you know, I. I was able to kind of go back and. And be like, all right, well, I started this firm. I was on my own. I started with zero clients, and I built it to what it is, and I can do this on my own. And it was just kind of like reaffirming that confidence that it's nice to have a business partner. And we had a great partnership. You know, there's. I can't say anything about my business partner. He was awesome. For us for the time, it was great. Kind of grew in separate directions, and that was okay. And. And things terminated. And. And we both are now practicing in the areas that we think are best for us individually.
- [50:13]
Mike
Was it an ugly split?
- [50:14]
Unknown Speaker
Not particularly, no. I've seen much uglier. No. We. We remain friends and, you know, keep in contact. And he's moved out of the state. He actually moved across country, so we're not, you know, both of us run our practices nationally, and he. He's just focused on tax only. He doesn't do a lot of the other things that we do. So there's not a lot of even, you know, overlap between our practice areas anymore.
- [50:34]
Mike
With hindsight, was there anything about the operating agreement you would have changed?
- [50:38]
Unknown Speaker
Yeah, that's a good question. I would have put in more specific language around the buyout formula just because that was something we had to negotiate at the time because it wasn't spelled out, you know, very clearly. So what I've learned is, and this is me wearing both hats, right? I'm an accountant and a lawyer. When I draft agreements, I put in, I put in a. Addendums with an Excel file that shows exactly how the calculations to be done. And I run two or three examples so that there's, there's no ambiguity from the language of the contract as to how that's to be interpreted. And if both parties agree by words and by numbers how things should be split or, you know, how, whether it's distributions or allocation of profit and losses or, you know, payment on a, on a breakup, if those are, if the number, the words are supported by numbers, there's really no ambiguity. And so that's something I started doing after my partnership breakup is let's, let's get really nitty gritty with your contracts and make sure there's no room for interpretation here.
- [51:36]
Mike
I think it's great advice. If you were to go back at the beginning, whenever you form the partnership again, this is with the benefit of hindsight. Was it worth going through it for the things you learned or would you have not done it?
- [51:50]
Unknown Speaker
I wouldn't have done anything differently. Yeah, I learned a lot from him, both as a person and as a, a professional. And so I, you know, we, we definitely grew faster and more targeted way than I could have done it on my own. And he and I were really good, just like my current business partners. And I have really good complimentary skills. That was the same way. I was more of the, if you follow, like EOs, I was more of the visionary and he was more the integrator. And those were our natural roles. And so it worked really well.
- [52:16]
Mike
How have you managed that part of things? So if I kind of struggle with the whole concept of I understand what they are, that's all I'm talking about. I struggle with saying there is a visionary, there is an integrator. I don't necessarily completely believe in that. I like the whole scaling up model more. It's more of that leadership executive team approach. It's kind of hard to say, yes, there's a visionary and then there's the integrator. When I took the test, I'm in the middle somewhere, so I'm kind of one of those weird unicorns. If you actually believe in that, I don't. So I do wonder if, do you believe in that? Do you think there is a visionary and an integrator? And if so, how have you dealt with that, with the new iteration of the firm that you have?
- [52:55]
Unknown Speaker
In the same way that my ADHD ADHD test was extremely conclusive, the visionary integrator test was extremely conclusive. For me, I'm 100% a visionary. I'm very good at strategic and this is, I see this in client work and in my strengths as a firm owner and in my personal life. Very good at strategic, high level decision making. At some point I, I learned an executive executes, so you've got to be able to quick, be quick on your feet. And, and so those are my skills when it comes to actually implementing a plan and getting into the nitty gritty details of making sure this gets done initially and then these follow ups happen and this third level follow up I have to pull teeth in order to get myself to think on that level of detail. But I'm very good at the high level. And so to me, I think those that the integrator visionary doesn't necessarily need to define your position within the firm, but when it comes to development of new ideas, I think those are good natural roles to rely on. So I think I probably buy into it more than you do. We don't follow EOS strictly. I've read Scaling up as well and we probably have some sort of hybrid type. We have a leadership team. You know, it kind of naturally fall into our roles of when it comes to coming up with new ideas. That's usually what naturally happens with me is I bring ideas to the team and then my team will tell me great idea, let's do it. And then they take it from me or they tell me terrible idea, we have too much going on already. Why don't you just focus on getting stuff done that we've already thought about and talked about and then let's put that one on the table and you know, and we'll, we'll deal with it later.
- [54:25]
Mike
It's funny because I think that the people that have just read eos believe in all that. I think the people that just have read Scaling up just believe in that. And I think that the people that have read both I guess have some sort of. There's a variation of the two that, that works. It's a melding of the two that's, I think that's very funny because that's a very common thing. The people that have read two have picked from both and put together some. Something that, that works for them that's really interesting when it comes from the visionary standpoint when it comes to your vision for the firm. What is. So if we're looking in 10 years, what does it look like in 10 years?
- [54:57]
Unknown Speaker
Yeah, so I have very specific objectives. We usually, I don't go usually 10 years out. I find that unrealistic. It's hard, it's hard for me to think that far ahead. I usually think in terms of like two, three and five years where I want to be like, you know, in terms of numbers. We're on our way to become a $10 million firm. That's, that was kind of my goal when I started out was become a $10 million firm and put my head down until we get there before we consider, you know, what would, what would things look like next? But, you know, and I'll answer your question not directly, but over the next five years, you know, my, my goal is to start, continue taking off all of these extra 27 hats that I started with and just focus on the few things that I do best. Right. Which is business development and training my team. Those are things I enjoy the most, that I do the best, that probably are going to give us the best returns as a firm. And so I'm trying to take off my practitioner hat completely. I'm trying to take off my business partner that came in. He's a cfo. He runs our fractional CFO team. He took over all the finances and payroll and administration of the firm. So I've been able to take that hat off in the last year and that's been a nice relief. And so I'm just trying to personally focus on the things that I really enjoy the most. And then, you know, as a firm, you know, I'm really working on putting in department heads who are people that can, I can completely hand off that service line to and that they'll take it and run with it and, and grow it. And those are, those are positions where we've done profit shares or other, you know, incentive based compensation for them so that they have some skin in the game. We're not ready to issue equity broadly, but we can do, you know, this kind of in between incentive based compensation and give them some of the profits of what they do and also some of the responsibility to manage cost.
- [56:37]
Mike
I think your answer is brilliant. Whenever you're just focusing on, you know, one hat at a time, removing all the hats. Because I think if you're, if you are, do that in five years, 10 years, I mean, your firm's going to be in a much better place. I think that that's, I think it's definitely a brilliant answer. I think that's good. I do want to hear more about this compensation and how you're utilizing that because I think that's something that other legal entrepreneurs could implement into their Firm. So will you talk a little bit more about what, the things you're doing?
- [57:07]
Unknown Speaker
Yeah, absolutely. I just did a presentation on this at the Intuit Conference and got some good feedback from it. And I didn't realize how few other accounting firms and law firms are doing things like this. I'll give credit to a firm called Radix Law here in Phoenix.
- [57:20]
Mike
Okay.
- [57:20]
Unknown Speaker
And Andy Kvasik there, someone that, you know, I've. He. He's the one that introduced me to the specific model that we're using now. I think it's brilliant. So basically, the way that we do this, we don't offer this to our. Our staff. We offer it to basically the. The service, you know, client. Client managers and above, like. And they have to be distinctly able to service clients on their own without, you know, obviously they have me and my business partner for support, but for the most part, they're autonomous in managing their client load. And so the way it works is we figure out a percentage of the gross profit and we share that with the employees and that there's no base salary. That basically just replaces any kind of fixed compensation. And so it works within our firm because most of the work we do is on a subscription basis. And so, for example, a lawyer who manages, you know, say we have this legal subscription, which is a. Essentially in house counsel or outsourced counsel, they pay us, you know, let's say 1500 bucks a month for that. He can manage 30 clients. That generates, you know, and then that generates the gross profit. We'll reduce that by his compensation. Compensation of paralegals, any other direct costs for, like Westlaw or Wealth Council, that will tell us the gross profit. And then so that. That's what we'll base the compensation on. So it's essentially putting him into. Almost into a contractor role, right. Where he's doing most of the work with supervision and with administrative support of the firm. Right. So he doesn't have to send his own engagement letters and, you know, manage the L2 account and things like that, but he has the ability to go in and earn, you know, 40 to 50% of the fees that are being billed, net of the costs. And again, that part is important, that it's not the. The gross income. Right. It has to be the gross profit because we have to consider those.
- [59:13]
Mike
It might not work.
- [59:14]
Unknown Speaker
It might not work. You have to align your incentives. Right. So we have to align what's important to us with. It's important to him. And once those are aligned, it's a home run and we Saw, we've done this with three of our service lines. We're about to do it with the four service lines here. We've seen production go through the roof, like basically double in a year when we properly incentivize people.
- [59:34]
Mike
So that's interesting. So does that mean that there are. So let's say they can each handle 30. I mean, essentially means that they have a cap, right?
- [59:42]
Unknown Speaker
So that's, this is where they have autonomy in deciding which costs they want to incur because it really appeals to, appeals to a broad range of practitioners. Some that want to operate solo. Right. And those are the ones that want to diy, Right. They don't necessarily not interested in bringing work in, but they'll do the work all day long and they can operate solo. And if they Want to handle 40 subscribers and 20 M&A deals every year and do it all themselves, they can keep more of it. Whereas somebody who's on the other side of the spectrum and says, hey, I can actually handle 60 clients and I can handle 40 deals if I hire two paralegals to help me. And so they're going to make, they're going to incur some costs, right? So it's almost like running a, a small business. Within our business, they can decide and we give them an autonomy to decide staffing and tools. So they can, they can say, I want to hire a junior attorney so I can handle more work. I'm still going to make money off the gross profit, but I realize I'm going to incur more costs, but I can handle so much more if I, if I leverage staff and tools.
- [60:44]
Mike
So would that. Because this is. Now I'm getting really fascinated. Are, are they paying the junior associates or are you paying them?
- [60:52]
Unknown Speaker
We're paying, we're paying everybody. But where their compensation is going to be adjusted based on the cost they incur to provide the service. And one of those costs might be staffing.
- [61:01]
Mike
So this is, this may not be what you do, but I'm curious, like, because. So what you could do. So let's say that they get four. Let's say the person on the top gets 50%. So, so that's the person that's at the very top of their division. And then they bring in a junior associate. So let's say that that person gets paid 40% and 5% gets kicked to, to the person at top and the other 5% gets kicked back to boss. Right? Which is your boss, advisors. Do you do something like that? Because I feel like you could do something like that. Where, like, don't take this the wrong way. It's. I think it's more like financial. You can set up almost like a pyramid scheme in a way, right? Yeah, yeah, yeah. Multilevel. Yeah. So not pyramid scheme, but more of like a multilevel marketing. You could set up something like that where, I mean, ultimately you could make a ton of money.
- [61:46]
Unknown Speaker
Yeah. And ultimately, I mean, you see that in traditional law firms as well. I remember working at Jennings with a guy that he was in his 70s. He spent three months a year at. In Tahoe skiing, and three months a year on the lake.
- [62:00]
Mike
Not too bad.
- [62:01]
Unknown Speaker
And he was. He billed. He told me the most he ever billed was 800 hours in one year. And he made more money than anybody else at the firm because of the firm's incentive, basically, that they basically incentivize him for origination. And so he would spend all his time networking and, you know, doing business development. He would send all the work to the other lawyers at the firm. He barely did any of the work himself, but he made it more money than everybody else. And that worked. That worked for the firm. Firm's happy with it because you got a ton of work coming in. They're still making the profit margin they want. And he's. He's happy because he just decided to make his money through business development instead of through grinding through billable hours.
- [62:39]
Mike
Yeah. So how do you do business development? I wonder how. What you're doing to generate the business for. For Boss Advisors.
- [62:47]
Unknown Speaker
Yeah, it's. I'm not doing enough.
- [62:49]
Mike
Well, you're wearing 27 hats.
- [62:50]
Unknown Speaker
Yeah, it's. It's interesting. It's something I'm learning more and more about. We have not done any formal marketing or advertising campaigns. We haven't done paid ads. We. We have social media, but that just kind of sits there. The only thing that I do, a couple things that I do proactively that I think have helped a lot. Number one is I post on LinkedIn every day. And. And I'm not strict about that. If I miss a day, I don't beat myself up.
- [63:12]
Mike
Sure.
- [63:13]
Unknown Speaker
And I try to write to the audience. So my ideal client, like I said before, is professional service providers. And so I write to other lawyers and accountants. And I got it. Had a business coach once, he's like, hey, if you're setting your niche, why don't you promote yourself as an attorney for accountants and as an accountant for attorneys? Like, it's.
- [63:33]
Mike
Yeah, that is nice. Yes.
- [63:34]
Unknown Speaker
And so that's why I write to. I write you know, my, my kind of the way I write on LinkedIn is kind of a day in the life of a firm owner and I get very real and a lot of times I'll talk about actual things that are happening within the firm. And so that's actually provided a lot of good feedback for me, good networking. But a lot of client work has come out of that. Probably get one or two clients a week from LinkedIn alone. And then I also belong to these different communities. So there's an accounting community I belong to, it's a paid community. And basically they pay specialists within, you know, within accounting, they pay specialists to meet with their community members and advise them. And so I'm the attorney in residence for that group. And so basically, you know, anytime one of these accountants wants to meet with an attorney and ask high level broad questions that aren't going to be specifically considered legal advice for them, they can ask general questions and I can kind of coach them through what, you know, that's a, that's a line you have to kind of draw, you know, tow carefully because I don't want to provide legal advice to them. Engaged. But what it actually for the most part that turns into paid work anyway. And then I've, there's a couple of groups I'm on that are specifically focused on M and A deals and we serve basically I give a presentation every month or two and it's, you know, about the legal side of business transaction. And these are kind of, there's one that's buyer side that they, they basically do all the tax planning for business deals and then they bring us in and we just educate their clients as to the legal implications of business transactions and that turns into paid work. And then there's a business broker group we work closely with and a financial advisor group we work closely with that we send referrals back and forth. So those are kind of the big things I do. We are hiring a sales director. So I'm going to hand off part of that torch to him that's in process. That'll probably happen in the next two weeks and will have a formal CRM and email marketing campaign and, you know, more social media content outside of what I'm doing personally. And so we'll see how that changes things. We're at the point where we, we have a ringing telephone and it's never going to stop. And you know, we've served thousands of clients at this point and the phone will never stop ringing. But the goal is to qualify more and more of those leads to where they're, they're clients that we want to work with. So we're not just picking up the phone and, and regularly saying no, but we're, we're attracting and proactively trying to get the clients that are going to be a good fit for us.
- [65:59]
Mike
I like it. Throwing a salesperson into the mix is going to really light it on fire. I think that's a smart idea. It's something that we have been, we've been talking about in our firm for a while about adding that to the mix. We've, we've not done. So, so I'm curious to check back with you in about a year to see how things are going. Last question I have, I'm super curious is why Boss Advisors?
- [66:22]
Unknown Speaker
Yeah, that's a good question. Well, my, I started off as Pain Law and Pain Financial. Those are my two firms. When my first business partner came in, we used his last name and his last name was a German, of German origin. Nobody could pronounce it, nobody could spell it. And so that was a short lived experiment. And then, you know, we, we decided we wanted to rebrand. The primary reason we wanted to rebrand was because I was sick of clients that, and potential clients that demanded to work with me personally because it just became a problem because my, I was at capacity. Can't scale, can't scale at all. And so I realized part of the reason is, you know, your name's on the wall. And so they're going to, they're going to ask for the managing attorney, they're going to ask for the lead accountant. And so we decided that the firm was bigger than us. It was, I think at the time we had maybe just hit a million dollars for the first time. And so we decided, you know, we want to rebrand to a fictitious name. We want something that will, you know, basically show that we work with the decision makers within a company. Right. And so I thought of boss and I, you know, I'm trying to get real creative. So I was like, it's got to be an acronym. It's gotta be an acronym, right? So came up and boss. It's kind of funny, if you ask somebody within the firm, they'll probably give you a different definition of boss. But the one that we've adopted is Business Owner Systems and Strategies. And so it's an acronym. We wanted advisors in the name because we didn't want to limit ourselves to legal or tax or accounting.
- [67:52]
Mike
Estate planning or not state planning. It could be financial advising. So yeah, yeah, okay. So that's gonna be in the mix at some point potentially yeah potentially right.
- [68:00]
Unknown Speaker
Now it's a good referral partnership we have but but boss you know we, we work with the boss the decision maker and Right and that's what the symbolism that I want to put out there is we help the executives when it comes to legal entity structuring and tax planning will help you make those high level decisions and so we were you know we were the boss advisors.
- [68:20]
Mike
I like it that that explains why bosses capitalize because I had that question too so I like it I like that how you thought it through but I, I really appreciate you doing this this is great I learned a lot from you and this is I I'm hoping you'll be able to listen to this in a year and be like okay this sandwich we've grown since we had that last talk so I'm hoping we can stay in touch Absolutely.
- [68:43]
Unknown Speaker
Tyson, thank you for your time Appreciate it thank.