Episode Notes

In this episode, Stephanie talks with owners of BOSS advisors, Lawyerist Lab member Mike Payne and non-attorney business partner Chad Huebsch, about how they found streamlined success through an alternative business structure.

Links from the episode: 

Lawyerist’s Quarterly Planning Retreat

Discounted Ticket to Clio Cloud Conference

BOSS Advisors

The Small Firm Roadmap

  • 8:48. Benefits of coupling tax experts and attorneys
  • 15:46. Addressing nay-sayers
  • 25:54. Subscription Model
  • 31:28. Value to clients

Transcript

Announcer:

Welcome to The Lawyerist Podcast, a series of discussions with entrepreneurs and innovators about building a successful law practice in today’s challenging and constantly changing legal market. Lawyerist supports attorneys, building client-centered, and future-oriented small law firms through community, content, and coaching both online and through the Lawyerist Lab. And now from the team that brought you The Small Firm Roadmap and your podcast hosts

 

Zack Glaser (00:35):

Hi, I’m Zack Glazer

 

Jennifer Whigham (00:36):

And I’m Jennifer Whigham. And this is episode 407 of The Lawyerist Podcast, part of the Legal Talk Network. Today, Stephanie talks with one of our Labsters, Mike Payne, and his business partner, Chad, about alternative business structures and what it can look like for people who aren’t lawyers to own law firms.

 

Zack Glaser (00:55):

Today’s podcast is brought to you by Albatross Legal Workspaces, Postali, and Posh Virtual Receptionists, we wouldn’t be able to do this show without their support. So stay tuned and we’ll tell you more about them later on

 

Jennifer Whigham (01:07):

Zack. We have some fun events coming up, so I thought we’d talk about ’em here. Is that okay?

 

Zack Glaser (01:12):

Yeah, that sounds good. That sounds good. I like fun events. 

 

Jennifer Whigham (01:16):

It would be weird if you didn’t. I mean, I guess it would be weird. It’s fine to not like events, but what if you liked bad events like boring events, that would actually be really interesting. If anybody likes really boring events, just let me know. I’d like to talk to you. But the first event we have coming up is in our Lab community, that we also extend an invite to people who aren’t in Lab yet, and it’s called our quarterly planning retreat, QPR. It’s kind of a mouthful. We do it at the end of each quarter. And what it is is a full-day virtual event with our lawyer as team and our coaches and our community, where we look at the previous quarter to see what went really well, do a little analysis, see what we could have done better and what lessons we can take from that.

 

Jennifer Whigham (02:00):

And then we help you prioritize the next quarter with action steps and implementation plans. So you don’t have that scrambling feeling. You might have every quarter. Our Labsters use it as their team retreat. We really think most people, at least at the leadership level should have a quarterly team retreat. And if you don’t have time to organize that, come hang out with us. It will be on September 28th. It’ll be 10:00 AM to 4:30 PM central. And yes, if you are not in our coaching program Lab, you can join. We will put a link in the show notes for how you can join. It does cost some money because it does. But if you’re in Lab, at our highest tier it doesn’t. But I would really encourage you to do that. Especially if you were curious about what Lab is like, or if you just really want your last quarter of the year to start fantastically and then fantastically, and you can work with all of our experts, it’s a whole lot of fun. You’ll be with other people. Like-Minded lawyers like you who are doing similar things. It’s just great. I would highly recommend it. So September 28th, put it on the calendar, register in the show notes. And we hope to see you there.

 

Zack Glaser (03:08):

Yeah. I, I enjoy that and I don’t even run a law firm anymore, but it, it is a good place to do another touchpoint. Yeah. And be forced to a lot of times, you know, run in my practice. I needed something that said, Zack, this is on your calendar. You have to go to this place. Otherwise something like a quarterly retreat planning I’m gonna put off, I’m gonna push off. So this is a great thing to say, I’m going there this time period this day, and we’re gonna do this thing. So,

 

Jennifer Whigham (03:34):

Right. And it’s all planned for you. You don’t have to do anything. And I forgot to say, all of your team members are invited to join under that same price. And we encourage, we want your team members to join you for this. It is a team retreat.

 

Zack Glaser (03:47):

Yeah. That’s the point. Great. Yeah. Well, other things that are planned out in the future that are, that are fun is Clio con con con con con. So that’s coming up October 10th to 11th and Stephanie and I will be there. I am going home. I’m from Nashville. ClioCon is in Nashville this year. I had a friend that used to say, I ain’t bashful. I’m from Nashville.

 

Jennifer Whigham (04:09):

Wow. And that’s a friend of dad.

 

Zack Glaser (04:11):

That’s how we say it. No. Now he’s not, he’s

 

Jennifer Whigham (04:13):

Not, not a dad joke. Okay.

 

Zack Glaser (04:15):

But that’s how we say it. There Nashville. That’s October 10th to the 11th. So if you don’t use Clio as a law practice management system, it’s still a great conference. They have wonderful speakers. They have wonderful programs that are related to just running a small business. If you are a Clio user, it is a great place to get a lot of information on how to use Clio, how to use it as a, you know, superuser. And it is also just a phenomenal place to meet people to glad hand, but to, to see, see people, you know, shake babies’ kiss hands. But to see people that are kind of in the same position you’re in same boat or people that are, are in a boat a little further down the, the river or whatever,

 

Jennifer Whigham (05:03):

How many boats are at ClioCon? I had no idea.

 

Zack Glaser (05:05):

Well, you know, Nashville’s on a river, so hopefully, hopefully you can get yourself onto the general Jackson river boat cruise.

 

Jennifer Whigham (05:12):

You get so much more Southern all of a sudden

 

Zack Glaser (05:14):

Eat some dinner. Yeah. That’s that’s what happens. I, I leave South Dakota. You go back to Memphis and the draw just comes out. Oh yeah. But more importantly, Stephanie and I will be there. So you can, you can meet us in person. I would love to see a ton of people. I’m I’m looking forward to hugging everybody’s neck.

 

Zack Glaser (05:34):

I’m just gonna get more Southern as it gets closer, closer to October 10th, but we have a coupon code that we can share with our community. I believe the coupon code is Lawyerist pretty simple, but we have a link to that in the show notes here. So would love to see you, there would love to hear about your experiences. So yeah, ClioCon is coming up. I believe this is the first one in person in a while. So really looking forward to that.

 

Jennifer Whigham (06:05):

Cool. Well, two good events we hope to see you at, I don’t know. Hope so them. Why not? Yeah, just go wild. And next we have Stephanie’s conversation with Mike and Chad.

 

Mike Payne (06:18):

Hi, this is Mike Payne from boss advisors. Stephanie, thank you for having us on the Lawyerist podcast. We’ve we’ve been listening for quite some time and following what you all do over there. Quick introduction, I’m a CPA and a lawyer. Our firm was one of the very first and only firms to be approved as an alternative business structure, which means we’ve combined a, an accounting firm and a law firm. And we focus on transactional business and tax work.

 

Chad Huebsch (06:47):

Hello everyone. This is Chad Huebsch also at boss advisors. I’m all the credentials that Mike isn’t. So I’m an enrolled agent and a certified tax coach. So together we, we meld pretty well. It was very interesting to come an alternative business structure coming from a, you know, a CPA counting from background focusing mostly on, on the tax world, but it’s been awesome to overlay our practice areas and really find new ways that we can collaborate on our clients.

 

Stephanie Everett (07:15):

Yeah. Welcome to the show guys. So Chad, how does it feel? You’re the non-lawyer that owns a law firm?

 

Chad Huebsch (07:22):

I, I quickly realized it feels good, but I quickly realized that a lot of the same ethical rules apply across all, all credentials. So in most areas, very similar, but really excited to offer our clients the opportunity to not have to tell their story twice that they can come in and be served from multiple practice areas.

 

Stephanie Everett (07:43):

Yeah. So maybe to kick us off, I mean, I’m curious, what, what brought you guys together? Were you working before, or did you see this opportunity when the rules changed? Like tell me a little bit of that backstory.

 

Mike Payne (07:54):

Yeah. So Chad and I met at a big four accounting firm. Ernst & Young, he was a specialist in state and local taxes. I was working primarily with nonprofits at the time. We both kind of went our separate ways. Chad went into a national company, was working in house there and I eventually broke off for emergency young and started my own practice. It wasn’t long after I broke off on my own that Chad and I reconnected, we realized that he was also serving clients on the side and it just kind of made sense for us to, to join up. And so by the time we joined up, I had established both a CPA firm and a law firm in Arizona prior to doing that, I met with the state bar, met with the ethics committee, and they’ve got the, this special kind of section that you can go talk with them and make sure that what you’re planning on doing is ethical.

 

Mike Payne (08:48):

You know, basically I had it lined out. They kind of gave me some suggestions on a couple of the rules re regarding solicitation and things like that. But the overall conclusion was lawyers are permitted to own a non-legal business even while they’re practicing law. And so that’s how I had it set up. I had to do some things that made it administratively inconvenient. I had to have two websites, two phone numbers, two email addresses, two separate bank accounts. Everything really had to be separate. And then, you know, once we started growing Chad joined, we partnered up with the CPA firm, but at the time he wasn’t allowed to own any interest in the law firm. And so we had this kind of awkward dynamic that we worked through regarding which services could be done through the CPA firm and which ones had to be done through the law firm because, you know, we, we live at that intersection where tax and law, you know, join up and there are arguably, you know, some things that could be done by lawyers or non-lawyers are not clearly law practice or not clearly, you know, anything else.

 

Mike Payne (09:54):

And so we worked through that and did that for a few years. And then we figured out I think in, in the COVID year 20, 20 Arizona had announced that it would be the first state to waive rule 5.4, which prohibits lawyers from sharing fees with non-lawyers and by doing so that essentially allowed non-lawyers to come in and own equity in a law firm. And so we were, we were on top of it. I mean, I probably spent 40 hours reviewing the rules, drafting our application. We turned the application in pretty much right away when, when we could, and we were in the first group to be approved and it just made our lives easier because we no longer had to conduct ourselves through two separate business entities. We just can do everything under one roof. Now

 

Chad Huebsch (10:45):

It was really beneficial, especially on, on the side where we’d have to do this awkward kind of cross referral. Oh yeah. Well, we can talk to you about tax services, but let’s take my lawyer hat, put it back on, take my CPA, head off and say, yes, we, and so ultimately became this administrative burden of sending out two engagement letters. The client would get the first one and, and sign it and then they’d realize, well, why aren’t we starting on, you know, the legal services? And we have to remind him, yes, there’s two separate engagement letters. Ultimately with the abs, it became much easier for us to engage with our clients and, and work with them and not have to kind of do this dance around to follow the rules that are in place for, for a reason. But Arizona was on the cutting edge.

 

Stephanie Everett (11:33):

Yeah. It makes sense. Probably to most people thinking about it and listening that tax and law, like those two intersect a lot. And so I think that seems like a natural partnership or combination, right? That those two things you would wanna go to one place and get both of those types of services. What’s the reaction been from your clients and from the people that you’re working with or do they even care?

 

Mike Payne (11:59):

Is, yeah, I think the onus is on us to make them aware. Initially we didn’t do a good job of that because, you know, one example, we had a client preparing to sell a $10 million firm, construction company, rather, not a firm cause Chad’s client. They had been tax clients for some time, but they weren’t aware that I do transactions. I do M and a work and that’s the, the bulk of what I do normally. And so they approached us for some tax advice on the transaction and I, I called them and said, Hey, do you have representation on this? And I said, yes. And, and then I told him, you know, if you need additional legal representation, this is something that I do. And he is like, okay, great. I had no idea. We’ve since shifted some of our practices recently. We decided that, although it, it takes more time for every new client consultation.

 

Mike Payne (12:50):

We would have a representative from the tax side and the legal side. And normally that’s Chad and I are joining for every new client call. The purpose is, is not to try to cross-sell. And if, if someone comes in with tax planning needs, it’s not to try to cross sell them on entity structuring or, you know, any legal contracts. It’s rather just to make them aware that, Hey, if these questions come up, which you know, they always do. There’s always legal things that, you know, even if they don’t proactively bring them up a good transactional lawyer, doing some basic issue, spotting will identify them. There’s always some cleanup that needs to be done on the legal side. And vice versa. Anytime we’re talking about a transaction or structuring a legal entity or writing a contract, there’s always tax implications. And so we try to approach it from, Hey, we are gonna look at this from both angles. You may choose not to engage us to be your lawyers where your tax people and that’s okay, because at least we’ve, we’ve done, you know, enough to make them aware that there’s an issue. And if they want to use their existing lawyer totally fine. We’ve, we’ve provided value to the client that way already.

 

Stephanie Everett (13:59):

Yeah. That makes sense. And I mean, you’ve kind of already hinted at this. I mean, I think Chad, you did a good job, but you know, my question was, what do you think some of the biggest benefits are to you guys having this joint structure? I mean, it sounds like one is, it’s just administratively a lot easier

 

Chad Huebsch (14:15):

For sure. You get to cut down on how many times you have to send the email back and forth from different emails. We talked about the engagement letters, but then also it’s a much easier and smoother conversation to say part of our model is a subscription based service. And we check in quarterly with our, our clients. And maybe during one of those calls, we might mention estate planning or, oh yeah. I’m looking to buy a property. I needed a new LLC formed. It’s much easier for me to just quickly message. One of my, one of my employees have them jump on the video call and talk through those issues without saying, hold on, let me refer you to this third party. They’ll be able to talk through with those issues. And really our lawyers get a much better understanding of the tax and our, our tax professionals get a much better understanding of what the, the legal implications so we can issue spot and then bring in the, the right people, the serve the client.

 

Stephanie Everett (15:09):

Yeah. I mean, at the end of the day, the client’s benefiting cuz they get all the expertise they need in the room at the time they need it without bouncing around, which also would be more expensive, right. When you have to bring this person up to speed and you know, it just overcomplicates things. I know there’s been lots of naysayers out there. There’s a lot of attorneys that hear things like alternative business structure and that makes them really nervous and really scared. And maybe some of that fear comes from the uncertainty, but here’s your chance. I wanna give it to you to address those folks. And is it as terrible as everyone is worried, it will be

 

Mike Payne (15:46):

I don’t see anything terrible about it. It’s interesting. I just read a, an article in the Arizona Attorney Magazine basically recap the law firm alternative business structures. And so there was this panel. One thing that was interesting that they talked about was in Arizona. We don’t regulate law firms. We regulate lawyers. And for that reason in Arizona, law firms are not required to be registered. They don’t register, they don’t pay a fee. Whereas an alternative business structure is licensed by the state bar through the power of the Supreme court or whatever powers that be. And we’re voluntarily subjecting ourselves to not only a significant fee, it’s a $6,000 application fee for most firms. It can be more than that, depending on your size and then $3,000 per year to renew it. But we’re also subjecting ourselves to some pretty stringent rules. Every ABS has to have a compliance attorney and that has to be somebody with enough managerial authority to, to actually, you know, have some power to make decisions.

 

Mike Payne (16:50):

And that person is responsible for making sure that all of the ethical guidelines have been followed for any legal services provided. You know, I think some of the fears that people had were, you know, some of the same fears that we have around things like legal zoom or legal document preparers, you know, the general unauthorized practice of law that clients won’t get good service. Maybe that fees will be discounted to where lawyers can’t charge, what they’re worth. I think what we see with everything is you pay for what you get. And so I think it’s appropriate at times for clients to use legal zoom when they have enough sophistication and understanding of their situation, where all they need is a proper form and they don’t need advice from a lawyer. I think there’s times where that’s perfectly fine. I’ve done that before I’ve used it myself. Other times, the value that lawyers provide is, is analyzing a situation, applying the legal rules and providing advice and doing that under the lawyer/client privilege. And so any of these other arrangements that don’t allow for that are not going be on par with traditional legal services.

 

Chad Huebsch (18:01):

And I would add to the, to the, as a non-attorney in the room, it all of the ABS requirements, whenever they potentially conflict with other professional designation rules and responsibilities as an ABS, we’re voluntarily, as Mike said, subjecting ourselves to the higher code of conduct with the, the Arizona state bar. So we’re under the same kind of restrictions and expectations as far as business goes, being able to work with Mike hand in hand on all aspects, instead of saying, actually I have to stop the conversation there. Let me send you over there to talk to, to Mike. And it literally is just over there a couple offices down. So it’s not like they have to go around the street or set up another appointment, but it just makes it much easier to serve our clients.

 

Mike Payne (18:46):

Yeah. And I know you have other questions, Stephanie. I wanted to make a point on Chad’s remark. And this is one of the things that I pointed out in our, our renewal application that we recently turned in to be renewed as an abs, that aspect, the fact that we can so easily bring a lawyer in to offer a quick oversight, just knowing if we have an issue right, without providing you legal advice, just knowing if we need to seek legal advice on any particular matter. It’s huge. And I think there’s a, a barrier and a kind of a stigma against lawyers in the world, you know, from maybe from actual bad lawyering or maybe from media and, and TV, but people are scared to hire lawyers. And I would ask the audience listeners, if you’ve ever had to hire a lawyer yourself, what did that feel like?

 

Mike Payne (19:41):

I did that before starting my firm. I hired a lawyer to help me analyze a CPA firm that I was looking at buying. And we sat there and it was a $350 consultation fee. And the first 20 minutes, we got to know each other and talked about my family. And I’m like, look, dude, I don’t care about any, I don’t care where you’re from or where you went to high school and paying you for your advice. And the clock is ticking and this is expensive. You know, after that, I didn’t, I kind of took his like consultation and build in the rest myself because I didn’t wanna pay him $2,500 for a memo. And I think people are much more likely to get access to lawyers with this type of structure, because it is just such a, it’s a soft introduction and they can see that they already trust us. Right? Both lawyers and accountants have that relationship of trust with clients. And so bringing somebody in knowing that, you know, they’re within our same firm, which you’ve already established a relationship of trust with, it’s a huge advantage for the clients and for us.

 

Stephanie Everett (20:43):

Yeah. It all makes perfect sense to me. And as you, you guys know we’re a big advocate. We think this change is needed. We think it solves a lot of problems. And it seems like with what Arizona’s done with these extra regulations, they’ve been very thoughtful in thinking through the potential ways it could go wrong and said, Hey, we’re gonna, we’re gonna actually overregulate this business and make sure we’re protecting against that. And I think at the end of the day, what we all should care about is the clients that the clients are getting the representation, they need the expertise they need at a price that they can afford. And I think that’s sometimes lost in the discussion around what we as lawyers wanna see in our profession, which, you know, I get why we wanna be protective of that. It’s scary. But at the end of the day, if the clients are being well served by the, at a price that they can afford, not everyone can afford the top level services and we gotta do better. It’s just not working.

 

Mike Payne (21:41):

Yeah. And I didn’t say props to Stephanie and your team, what year did you write the, The Small Firm Roadmap was that like 18 or 19?

 

Stephanie Everett (21:50):

It was published in 19. We had been talking about it for a while in on the site and things. But yeah,

 

Mike Payne (21:54):

There’s a chapter in there that’s prophetic talked about didn’t use any of this terminology because Arizona, at that time, I don’t even know if it had been announced that they were looking at something like this, but you, you really called that out that in the near future, we’d be seeing something like this lawyers combining their business with non-lawyers and, and of course we’ve seen that overseas. That’s already the case in a lot of countries, US is, is slow to adopt, but you’ll see, this has already been working very well in places like the UK and Australia and I believe Canada.

 

Stephanie Everett (22:27):

Yeah. Well, let’s take a quick break and hear from our sponsors. When we come back, though, I wanna dig in a little bit up to your subscription service and how you guys are actually working with clients, cuz I think there’s some good lessons there.

 

Zack Glaser:

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Stephanie Everett (25:55):

All right. We’re back with Mike and Chad and they have started one of the first, if not the first alternative business structure in Arizona, offering tax and legal services in a combined setting. And you guys are primarily doing this, offering your services on, on what we would call a subscription model. Is that right?

 

Chad Huebsch (26:14):

That’s right. I think when I got started, even before I joined Mike, I, I start, I looked at what is all out there in the market? How can we price effectively and efficiently? And over time, I figured out the things that from a tax perspective, business owners need entrepreneurs need throughout the course of the year. And it is not a here’s all my paperwork. And then you get it a couple months later saying here’s the good news or here’s the bad news. And then they, you wait a year and you do it all over again. So when I talk to prospective clients, I tell them, we’re not your dad’s and I’m using air quotes, but we’re not your dad’s CPA. We wanna make sure that we’re available on call. So we formulated this subscription based model, which includes the very basic compliance needs, a tax return, but then also regular checkins via quarterly meeting, as well as on call advice.

 

Chad Huebsch (27:07):

We know there’s questions that pop up throughout the year. We tell our clients routinely, don’t Google it, just call us. And we will be able to answer your question. So it’s worked really well because it gives our clients a very budget friendly monthly fee. And frankly, for us, it’s not as bad as well, cuz that’s reoccurring revenue, but it, it creates this also this ancillary benefit of clients. Aren’t afraid to call us to Mike’s point earlier in the podcast. Like we’re not on the clock, so it please reach out to us. And we, I think we’ve done a good job of pricing it in such a way where we know that upfront, we’re gonna put in a lot of work, develop that relationship. But then over time we are really involved in our clients’ lives so that they can come to us when needed. And there’s no here, let me tell my whole story again while we, we probably check in once and then now we’re gonna check in again, but here’s this quick question. Yes, I’ll answer it.

 

Stephanie Everett (28:00):

Yeah. I think a lot of people are always worried. I get this question all the time. If I give this idea of unlimited phone calls and emails, it scares everyone cuz they think, oh, then people are just gonna call me all the time. And you know, I feel very strongly. I don’t think that’s the case. I think they’re really busy. But since you guys are doing that, what has been your experience?

 

Mike Payne (28:22):

There’s definitely some that I would say probably have more anxiety that, that call more frequently than we would expect. But what we’ve also noticed is that the more touch points we have with the client, the stickier, our relationship gets with them and it’s actually better for us. It’s more opportunities for us to, to prove our worth. It makes them more likely to want to engage us for additional services. And that’s one thing that within our services, if they’ve been taken care of from a tax perspective and in, in a conversation or they read an article or see something on TikTok and realize, oh my gosh, I probably need a trust. Once they become aware that we’ll prepare a trust or, or a nonprofit corporation for them, it’s an obvious they, they won’t even go anywhere else because they’ve, we’ve had such a relationship with them.

 

Mike Payne (29:11):

They’re already under our care and they know our, our prices are gonna be reasonable. And so they’ll come back and, and you know, the ones that, that do abuse, it typically, if we are planful, I’ll say about what’s happening with their businesses, we can anticipate that and we can kind of project and know that, you know, we had one that they moved basically a, you know, eight figure business from California to Arizona. There were multiple aspects to that. And that’s been an ongoing one of our busiest clients that we’ve provided services to under this subscription. But that’s just because they were going through a lot of changes. I mean, they were for the first time adopting payroll, they had, they needed, you know, worker, you know, classification analysis. They needed state tax nexus and they wanted to do a merger and there was all these changes, but after all that kind of cleared up and plus Chad, when initially initially reviewing their file, identified some missed opportunities and was able to go back and amend several years of tax returns, got, ’em like another, a hundred thousand dollars of refunds that they weren’t expecting.

 

Mike Payne (30:20):

And so, you know, there was a lot of work, but now that things have kind of settled down, they fall under our normal, Hey, I’ll contact. We we’ll meet quarterly and maybe one or two questions a month pop up that we see all the time. So we can very efficiently address those.

 

Stephanie Everett (30:36):

Yeah. Chad, can you do that for me?

 

Chad Huebsch (30:39):

Of course, what I found to be very successful is a free consultation up front. I had to learn the hard way that as an accountant and an a tax expert that I’d love to give away free advice and clients and perspective clients especially love that as well. Right? oh, well here’s my quick question. But really it gave them the opportunity to send us a couple years worth of tax returns ahead of time, where I’m able to review ahead of the call, kind of map out all of my observations, have the call with them. Talk through what’s working with boss advisors looks like what sets us apart where, you know, a hybrid accounting and law firm, but we all also can lay, outline all those potential savings and missed opportunities. And luckily, I mean, the Iris doesn’t let us go back too far, but three years we’re able to go back typically and get, get the money missed.

 

Stephanie Everett (31:28):

Yeah. I mean, I think though the, the larger point, I mean, yes, I’d love for you to find some money for me, but I know that we had Ron Baker on this show recently. In fact, I reached out to Mike cuz I knew Mike had read his materials and we, we talked. I said, Hey, if you have any questions before I interview Ron, let me know, because I know you guys were doing this. I think the big takeaway here though, is that you guys really rethought about the value that you’re offering to clients. Like Mike said, it’s not just a bunch of documents, you know, once a year or as Chad pointed out, it’s not just the tax filing. It really is a different way of thinking about your value and what that is that you’re packaging and selling to your clients. And that seems to have been pretty successful for you guys.

 

Mike Payne (32:12):

Yeah. one thing we talked about at the, the recent Lawyerist LabCon conference was how we, we kind of profiled our clients into the most common four buckets and that allowed us to uniformly within our firm, every staff member, every lawyer, CPA enrolled agent or administrative staff member can very easily identify the type of client based on the predefined attributes. And once we know who those clients are, we know exactly what their needs are because a single member S Corp looks a lot different than a, a sole proprietor or a real estate investor or a complex partnership. But we, we already pre-identify what the needs are, so that there’s really not a lot of surprises. And there we can be very predictable with our fees because we know exactly what state and federal filing obligations they are gonna have. We kind of know the pace and the cadence of their businesses.

 

Mike Payne (33:16):

And then it allows us to be competitive and, you know, clients like that certainty, they like knowing that they’re gonna pay every month, but they’re not gonna get a big surprise bill when tax time rolls around. They’re not gonna get a $3,000 bill because we’ll, they’ll have already, essentially prepaid that. And then the tax return is just like one box that we check as part of their overall service. I think the biggest value add is this ongoing access to tax professionals where we teach them, we inform them, we educate them and then going forward, we can see year over year that that knowledge builds upon itself to where, you know, our clients really understand what’s happening in their tax situation. And that’s a big jump from where most business owners start, which is tax is scary and it’s uncertain and I don’t wanna deal with it. So I’m gonna pay somebody now. It’s yeah, I get it. I understand my tax situation. I understand when I pull this trigger in my business, this is what could happen from a tax perspective, but I’m prepared for it because I know that I have a strategy for it.

 

Stephanie Everett (34:20):

Yeah. If somebody’s listening and they’re in a state that isn’t as progressive as Arizona and they see the natural, there’s so many, I think natural relationships that blend nicely with law firms. What advice or thoughts would you give to someone that’s listening right now that was like, gosh, I could see a lot of benefits from what Mike and chat are doing, but I’m not allowed to do it yet. What would you tell those folks

 

Chad Huebsch (34:45):

Move to Arizona? No, I’m just kidding. We have a lot of people moving here anyways. But I think when we’ve seen this, even outside of this industry of ABS it’s, we have, we work with a variety of financial advisors. There’s a, there’s an automatic synergy between accountants and lawyers and financial advisors where we don’t have a formal relationship with one, but we’ve gotten to the point where we’ll sit in on each other’s discovery calls, consults, so that maybe it’s a, a client of ours that we’re referring to them or, or vice versa. And it just creates this synergy of I’ve got two experts in the room, different practice areas, but both have like key and provide key advice to different parts of parts of my life. So it’s kind of aligning with like-minded professionals that are in supporting, supporting roles and, and finding a way that either formally and in most cases it has to be informal, but a way to, to collaborate together.

 

Mike Payne (35:42):

Yeah. So I, I would say the, the keyword here is affiliation. We’ve talked about referral relationships and those are strong, but we’ve tried to go beyond that. And we’ve tried to loosely affiliate ourselves with other professionals and we’ve, we do a lot of vetting. We meet different advisors, insurance providers, et cetera, just through the normal course of business. When we find the ones we like, we may, we take time to get to know them. And then we, you know, we try to create this affiliation where sometimes you can do referral fees back and forth, depending on the rules. And there’s not just legal rules, there’s other regulated industries that have rules around referral fees. But most of the time other advisors are just wanting to, to look good. And the way that they look good is by correctly identifying the right service providers when those opportunities come up.

 

Mike Payne (36:35):

So the more that you can familiarize them with your business and the more that you can get to know their business, the better that relationship is gonna be. And there’s nothing like a soft referral from an insurance provider who has already worked with us and can already kind of prepare the client, Hey yeah, this, this firm boss advisors, this is how they do their billing. This is what they do. This is what you can expect. And that insurance provider knows that because we’ve worked so much together and they’ve sat in, in our, on our meetings. If you are a lawyer who forms LLCs, an insurance provider would be a great one and maybe even a marketing person, because those are typically elements that new business owners need to start thinking about. And so you could do a multifaceted approach where your first meeting, you have them, you know, be wary of lawyer, client privilege and having non-lawyers there, but maybe it’s a outside of legal counsel. Maybe there’s a, an introductory meeting and you say, Hey, here’s my team of preferred providers. And these are the ones that I sent to, they know how to do this correctly. I’ve made sure of that. And so those guys get a warm referral. They’re much more likely to refer back to you. If you start feeding them.

 

Stephanie Everett (37:47):

Yeah. Something you said, it really struck me and I don’t want it to get lost because that you actually are seriously vetting the people that you’re gonna refer business to. And you had told me previously, you do that with lawyers as well. Other law firms. In fact, you really what’s the right word, flattered me, because you said that you have them read the small firm roadmap as part of that process to see, like, do you align with these values that we talk about in the book, because those are the kind of firms that you wanna work with. So to our listeners, you don’t necessarily have to make sure all your referral sources have read The Small Firm Roadmap, but I would not be upset if that was one of your requirements. But I think the point is that sometimes we just meet people and we say, oh, sure, I’ll send you work.

 

Stephanie Everett (38:34):

And instead, if you got really serious about it instead, I mean, I feel like we could do a whole episode just on this issue, you know, like, no, I’m gonna actually take time to get to know, you know, you, your business and your core values and how you approach business. And then, and same, you get to know me as well. And now we feel really comfortable sending each other work. I mean, it seems like that’s gonna be a relationship that also is really sticky and works over time versus what we tend to do, which is go to like a bar association networking event and try to pass out some cards and hope for the best.

 

Mike Payne (39:08):

Yeah. There’s some benefits to vetting. One thing is obviously trusting that they’ll take care of the client, you send to them and, and also won’t step on your toes. If they have, you know, some of the same practice areas, they, they can stay in their lane because they value the relationship. We have. The other thing is, you know, we want clients who follow the path and, and kind of the pattern of that’s laid out in The Small Firm Roadmap. We want clients that are thinking they’re growth minded. We want them to be modern in their practices. And so if we align ourselves say with a financial advisor or CPA firm who, you know, works only with paper and only does in person meetings and doesn’t use S Corps because, you know, they’re stuck in the eighties and they only use C corporations, right. That they’re gonna send us the type of clients that we’re gonna have to then spend extra time trying to get them to get up to speed and use cloud-based software and, you know, pay our bills electronically instead of mailing us checks and always demanding in person meetings.

 

Mike Payne (40:12):

So we want other providers that have already kind of set the tone for how to work with professional service providers. And I think the other thing on that when we’re betting our clients, we wanna make sure that they’re the type of people that use professional service providers, because we have a specifically identified a DIY client is not a good fit for our firm. If we ask them as part of our intake, you know, who do you use for currently for legal services? Who do you currently use for bookkeeping and tax prep and all these other things? And if they’re DIY across the board, that’s probably a client that’s looking for a transaction instead of a relationship. And we want with our billing structure, it it’s really geared towards business owners and specifically professional service providers like lawyers, CPAs, and financial advisors and medical professionals who want an ongoing relationship and who have a need for ongoing support and not just a, gimme a quick look at this transaction, then I’m gonna disappear. That’s not our, that’s not our style.

 

Chad Huebsch (41:12):

Mike, you bring up a really good point about that as identifying your ideal client. I’m, I’m a huge advocate to find finding your niche because it makes it very clear to a prospective client about who you are. And then you can clearly identify who isn’t or would be an ideal client to your point, Stephanie, about kind of finding these relationships outside with another financial advisor or, or CPA. If they know exactly the type of client you’re looking for, they’re not gonna send what we call garbage referrals that have no idea or, and vice versa. We, we can find what, what they’re looking for, but if you haven’t looked at a niche or a specific industry that you, one love, love serving, and, and two there’s an abundance of you can certainly do that. And we’ve found all the success

 

Stephanie Everett (42:00):

Awesome. Such gold in those last statements. Thanks guys. I’m so glad we got to have you on the show today. I know our listeners will get a lot out of it too. It’s always a pleasure to hang out and talk to you both.

 

Chad Huebsch (42:12):

Thank you, Stephanie. Thanks for having us. Thank you. Have a good one.

 

Announcer:

The Lawyerist Podcast is edited by Britany Felix. Are you ready to implement the ideas we discuss here into your practice? Wondering what to do next? Here are your first two steps. First. If you haven’t read The Small Firm Roadmap yet, grab the first chapter for free at Lawyerist.com/book. Looking for help beyond the book? Let’s chat about whether our coaching communities, are right for you. Head to Lawyerist.com/community/lab to schedule a 10-minute call with our team to learn more. The views expressed by the participants are their own and are not endorsed by Legal Talk Network. Nothing said in this podcast is legal advice for you.

 

Your Hosts

Stephanie Everett

Stephanie Everett is the President of Lawyerist, where she leads the Lawyerist Lab program. She is the co-author of the bestselling book The Small Firm Roadmap and is a regular guest and co-host of the weekly Lawyerist Podcast.

Featured Guests

Michael Payne Headshot

Mike Payne

Mike Payne is a transactional lawyer and CPA. Mike helps professional service providers start, buy, and sell businesses, structure their business entities and contracts efficiently and with controlled risk, and scale and grow their businesses. Mike also works with nonprofit organizations to ensure compliance with federal and state laws and to use philanthropy as a tax planning strategy.

Chad Huebsch Headshot

Chad Huebsch

Chad Huebsch is an Enrolled Agent and Certified Tax Coach. Chad works with professional service providers, including lawyers, to create and implement tax strategies. Chad and his team meet with his clients each quarter, allowing them to outsource the accounting, tax, and payroll functions and focus on their businesses. One of Chad’s specialties is tax due diligence to support clients selling or acquiring a business and planning around real estate transactions.

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Last updated September 22nd, 2022