Advisory Services 101

Welcome to Accountants LawPod, where accounting professionals and law firms converge. Hosted by Lynda Artesani, Sarah Prevost, and Stephen Libhardt.

Well, welcome back everyone. Hi Steve, I've missed you.

Hi Sarah, I've missed you too. I'm having Sarah withdrawal.

I, I, I felt—

Sarah and Lynda withdrawals.

I felt that way actually on this one because we, we hadn't seen each other for a couple weeks and, um, I know that you've been busy traveling and we were busy traveling as well.

So I just got back from a bluegrass concert in Colby, Kansas, out on the— the name of the, the bluegrass festival was Pickin' on the Plains. I mean, if you can imagine, it was great. And then I leave next week for another event, the Summer Solstice at a music festival in Rangely, Colorado. So it's just, it's been busy, busy already.

Yeah. Yeah, we were, we were in San Diego at a conference, Carbon Next. Actually. So, uh, what's interesting about that is it's a really— it's a great practice management tool. Um, and they, they have some crossover with some Clio-esque style because some of the Clio individuals also participate on that board. So it's pretty neat. Um, it was definitely, um, let me see here. It's— it was very Agenda-esque in the sense of like a lot of AI. Roadmap information. It's balanced with yoga, walk, run. You pick your group.

Oh, cool.

Do those things. But it was definitely like an architecture form of what does AI look like in our everyday lives right now.

Chaos.

Yeah, chaos. Well, and the other big thing too is our topic today on Advisory Services 101 and how AI has impacted our profession and how it's evolving this profession and, and what does it look like for us in, in these, um, these roles essentially. So it was an interesting—

I was sharing that story with you before we started recording. I, I sat next to a person the other day whose job is repairing those beverage machines in fast food restaurants, you know, where you get all the beverages come out of one place Yeah, and he was telling me that the AI is in those machines. They're putting programs in there that AI manages, and if the machine has a challenge, um, something is mis— you know, is not functioning correctly, it can diagnose itself and order the part and have it shipped to the restaurant. And then they're training the managers in these restaurants to use the key to open the door on the machine and change the part themselves. Therefore not needing this repair person, these repair, repair people to drive around anymore and fix the machines. And I thought, oh wow, that—

I— who's—

who does that? I mean, who's everywhere?

Who's cleaning the machine?

I think they're doing the rest of that.

Yeah, but who also— I mean, there's cleaning that needs to happen more than just your standard, right?

Right.

Also is looking at all the other components because there's only so much, which I feel like this is a great sort of segue into the, the topic of advisory, or what I look at through the lens of a trusted individual, trusted partner for a business. You could have tools in place to do things, but who's double-checking it? Who's ensuring that its health and barometer is intact? Who challenges it and understands how to challenge it.

Right.

Like that repair person. Okay, so maybe components of the job changes, but that person's still valuable because they have the longevity and history of how this particular machine goes. It's not going to diagnose a compressor going out.

Well, and you shared with me a relative of yours said that in an IKEA they went to, there no longer are employees checking them, checking you out. It's all computerized, which is AI. And, you know, I go a step further with this beverage machine example. So let's say they finally get these— they don't use human beings to take your order anymore in the fast food restaurant. It's all done AI and computerized. Who is going to— AI can't go over and unlock that machine and fix it.

Yeah.

You know, there's these confusing things. There's so much confusion with AI right now.

Yeah. Yeah.

And what does what and who does what and how it's going to happen and—

And the price and are you effectively managing it well? Is it integrated well? Is it—

Right. Or is it all trial and error? Is it the Wild West?

Yeah, it is definitely. I feel in some ways it is. In other ways, I feel like it's— if you are the right person in the right seat, it can be a good partner. It does need to be challenged.

It's definitely a yes sir kind of, uh, uh, telling you what you want to hear.

Yeah, type of thing. But I feel like the role of what we see, and we were saying this earlier, we see so many things. We're business owners ourselves. We have a specialized, uh, attribute of accounting and the profession. We have a bird's eye view of how many other firms do things. Not that we're trying to make everyone look the same, because every firm has a different—

they're all different, right?

So how do you become that trusted source and that individual who you can basically get through the noise of what's being presented to you? And I feel like that's going to be a truthful moment for us as we move ahead and understanding, you know, okay, so we don't have to labor over what might have taken days for us to compile a set of metrics, but ensuring does those— does that metric align correctly? Is it right? Is it right for this firm? Is it helping this person move forward what they want to move forward? And, um, in the advisory role, a lot of times— and I'm sure you, you feel this way, Steve, so I'd be loved to hear what your points are— but I My sense is, is we've become a sounding board. We've become a trusted kind of listening individual in the sense of like, okay, I have these questions. I'm not sure how to put these thoughts together. What do you see in my numbers? How can you help guide me? There, there's so much available in the trusted advisory level.

You know, one of the, we talked about this before we started recording, and I think this is a great way to segue in. Gone are the days in our industry where you just generate the numbers and send the reports. And, you know, you might follow up or you might not follow up. I strongly encourage people now, send those reports and then follow up with the client. And even if they say, I'm too busy, or what have you, still follow up with them. Show them that you're concerned, that you care. And there's many, many things, a Pandora's box of things that can be opened up to show them that you are really entrenched in their business because we see the back end of that business operating. They see the high-level numbers and what makes sense to them and what might not make sense to them. And, you know, they quite often think, well, the accountant took care of it, I'm safe, everything's wonderful. But, you know, there's things that you can open up like cash flow forecasting, you know, letting them know that you're their outsourced CFO, that you are valuable to the firm. You should be put in— even though we're out here in the world, we're not in the office, Yeah, yeah. We should be considered senior financial leadership in the law firms. Um, we, we can bring new implementation for workflows and the correct accounting software, bill payment softwares, all those sorts of things that we know about that they may not.

Yeah.

Um, getting them ready for mergers and acquisitions, due diligence, complex transaction reviews, loans, maybe buying a building, all these things. Benchmarking. All these things can come into play that we can open that box and take a subject out at a time.

Can we go back to the, the apps, the different apps?

Oh yeah, sure.

I feel that you're the app queen. Well, it's interesting because the, the world of all of these apps, right, and, and what's going to work well for your business is evolving as it is now, because that— I mean, we all saw it. Now it's what, 4 years since AI has really come into existence. And what are we seeing now? We're seeing basically in every tool in some form, some kind of app, AI application. And so what I'm thinking of in the advisory space is which ones have done it well and what does their roadmap look like in that evolution of testing that?

Oh, sure. Sure.

Forward. And which ones are, as I've seen recently, I've been inundated with one particular app that I ironically just this morning I was sitting on. I sit on a council board for an app and I opened the door to this question of like, what is the comparison between this product and that? And I got a great overview of what the differences were. And it strongly really leaned into what I had my hunch was. It's great marketing. Does it do it the way it says currently in its full stack? No.

Right. Well, we— how many times have we said there's no one size fits all?

There isn't. And do you Where do you put your time and your money, especially with migration of information? And when we're looking at firms that are legacy firms that need to move off of antiquated systems or have moved into a system, and we've seen this a lot, my paralegal mentioned this was great, and so we moved into it and we're using that much of it and hate it because we didn't adopt it, or it doesn't actually fit us. It's not working for us, or it's easy. I've seen this true. I'm sure you've seen this as well. It's true within staff. It's change is hard, so we're not going to really adopt it. We're going to already poo-poo it and like, eh, it's not going to work well for us. And that's challenging because really, I mean, it's a lot of money and time that gets spent evolving into this. And so you really have to help an owner our, our roles from accounting have gone to like such extreme uniqueness. Um, to your point, we're managing numbers, we're looking at data, we can answer fiscal pieces and, and, you know, benchmarking and so forth, but we really have to adopt a further operational view. And what to a human scale view is, does this look like, and what key adoptions do you need to make with certain apps, or what is it that you have currently that needs to be retooled? Our advisory roles are shifting.

They are. Well, you know how much I love KPIs, and I think about this quite often. We can put a labor cost KPI into AI and have it tell us what it sees. Now, let me finish.

Yeah.

Because I have the same grip as you have.

No, I'm thinking like you're thinking.

The owner could read that and go, OK, well, my labor cost is high and move on with their day. But if we're not in their face telling them this is what could happen if you continue to grow or not grow in the way you've been going, maybe it's a downturn right now, but you've got this labor cost that's, that's where it's at. I just don't see AI coaching people that way and having the same impact as a face-to-face human interaction would. That's one example right there.

Well, what you could do is if you were to flip it around, there would be ways that you, as the— this individual who has the numbers and the understanding, be able to ask it and help it formulate and retool so that the dashboard view of what this looks like could be a contextual conversation you have with this business owner to understand, okay, This is what we're seeing. This is the metrics. Here's some areas that we can look at. Let's go back and sort of, what are your goals? What is it that you're looking to do?

What does this mean to you? What do you want to do with it?

Yeah, yeah. So yeah, there's blind spots and positivity in both segments. What I feel like you can take away from it is a partnership. So basically it's just like a tool in a tool belt. It's a partnership.

Correct.

I wouldn't, in my purview of working, and I'm sure you're the same way, is we wouldn't go in and start asking it all this legal jargon and then pretend that, oh yeah, that makes sense to us.

Correct. Yeah, yeah, yeah.

Because we've all seen what it's done to that, even with the smartest people using it, and it still spits out things that you question, right? It's a tool. I do feel though, in the advisory services role for us, is we will have to take steps in a different way to— because the field is changing, right? It's changing a lot. So I feel like we're going to just have to take steps in a way that It doesn't— we just have to look at it through a lens of the partnership and not this overarching taking my job away.

Correct.

How do I work with it? How does it help me? Um, the difference is, again, we're the expert in what we know, so we know how to challenge it. Nobody else has that that's outside this profession.

Well, and in many ways, try to think of this crazy wacko idea I'm going to tell you right now. Or scenario. We are, you and I sitting here today, we're mini AIs. Because we are in so many, we touch so many different businesses from where we sit. And we are this database of information and experience for our clients that is true. It's not a subjective thing or not subjective thing coming out of an AI program. Number one, telling you what you want to hear, or number two, just spitting out the answers.

Yeah.

And you still have to sort through them and filter them and have them make sense to you. We are, we are live AI, if you will, follow-up. And, you know, we need to train our attorneys, you know, on what they should be asking us about.

Yeah.

Meet with us.

I was just curious about that too, what your thoughts are, because there are things that when we're left out of the conversation and a new individual is brought in as a consultant and you're sort of like, what? Why? What happened? Why did that decision get made?

Right.

This decision.

And why didn't you include me?

Yeah, exactly. So I understand we're all busy. It feels even more hectic at times. You know, at certain intervals of the volume, the work, the, the just the general working sense. But if at bare minimum we have a way to have a quarterly moment where we can touch base, or if it's a monthly, or hey, I, I do this, I do a mind dump. This is what's been on my mind here, I'm just going to put this out here. If you were to send that over, volley that over And I'm looking at it, I'm like, okay, great, this is helpful insight. What are your numbers saying to me? What is it that you're thinking about? And coming up with a plan to understand. And then maybe when we come back together, that meeting agenda is super tight because it's very finite. And it's like, he, you know, of the things you brought to my attention, and it could just be, I'm just, these are the top level things I've got in my brain. I just want to move past, or a Loom video, whatever you want to send over.

Sure.

Helps us understand. Because Steve, you said this, you've worked with clients where they work with you, but then they'll strategically bring you in because maybe it's a 401 or a partner needs to leave, or—

I have a great example that just happened.

Someone needs to move on.

It just happened. I was so excited about this.

Tell me.

There's a bank, a big banking company that's merging with another one right now.

Okay.

And the big banking company, for all of you people that do accounting work out there, you probably know who I'm talking with, starts with an F, and they do a terrible job. Their bank feeds break all the time. They don't handle trust accounts correctly. It's a giant mess, and they're merging with another banking company. And fortunately, one of my clients, a big one, At the same time was like, no, we don't want a bank like that anymore. We need something more personable. We need something where we can really get attention when we need it. And I'm like, I've got the bank for you. But I happened to jump in after I found out. They didn't tell me they were going to switch banks until they already had the ball rolling. And so I said, these are the two banks I recommend, and this is why, and this is the one I really want you to go to. And they didn't have the best experience personally at a branch when they just walked in and wanted to talk about the accounts. I said, that's not the way to do it. I picked up the phone and called the senior vice president of the bank, and I said, this law firm needs your services. Go. Because I have that relationship with that bank over many years, and I know to go right to the top when something needs to be done with an account like this particular one. Long story short, they ended up going with that bank and I was like, hallelujah, because it's going to make a huge difference for them in how they can spend less time dealing with the bank and more time practicing law. And on the back end, we can get cleaner data quicker and the bank feeds aren't going to break all the time.

Yes. Oh, yeah.

That example of that personal touch that a machine like AI couldn't have done for them, but advisory service-like. Here I was, and I was able to move them through that process in about a week. So yeah, it took a lot more time, but guess what? It's going to have a backdoor effect on the type of work that we do for them. Yeah, it's going to be cleaner, quicker, and a lot less time struggling with the existing bank.

Well, and you have to look at it— I mean, it's the here and the now, so we've been all working with it in some format, in some way. So I feel like what we do is how do we use it to our advantages of support in, you know, their models are shifting, practice, you know, practices are shifting and how compensation is working and how information gets disseminated and who's doing what and how it all flows together. And so to your point, it's where the relationships that are strongest, which would be people in these key roles ourselves, and how to navigate this space. And I feel like in these roles we can help with, you know, like the example, you know, this bank change, right? This moment of— and, you know, sure, you could go query, and as it is now in all browsers What do we have? Our AI friends are in our browsers, so it's going to tell you. But how do you know? How do you contextually have the experience?

Right.

So, and it's similar in the sense of like, we've been working together for some time. How does this rebalance? How do we move into a space? And maybe there are accounting firms out there that don't even have these types of relationships. So how do you move into the space?

Because how do you— yeah, how do you develop that relationship at the bank? And that's what we're here to help with. Yeah, let's look at another one. This is a very incestuous industry, the legal industry. Um, attorneys are always hopping from one place to another. There's a high, high volume of that that goes on.

Yeah.

And how many times have you seen a solo attorney then join a mid-sized firm, you know, or partner up with another solo attorney and so on? Again, because we're the trusted advisors here we can walk you through the pitfalls and the, you know, things to watch out for and to avoid and all of that as you move into that new arena. Because as a solo attorney, you didn't really have to worry a lot about labor costs. You probably paid yourself when you paid yourself, you know. Whereas when you start partnering up and, you know, if you end up in an eat what you kill situation type firm, or if you're trying to grow into one that's more of a business model of salaries and, you know, set salaries and things like that, we can definitely advise and walk you along through all the nuances of that. You know, what type of corporation should you be, you know, and when should you switch from an LLC to an S corp and do payroll, and, you know, all of those things that we can personally advise on that you're not going to get again why we give guidance.

I mean, ultimately your tax professional does the other side of it. They do the other side of that planning, right? Because your entity structure needs to fit. There's so many variations in that, and it changes all the time. And it— and, and that advice would definitely be a tax person. But conversations about what does it look like, how does it work, you know, like how does payroll work in something like this? Okay, well, I can explain it to you, but Does that fit you? Um, if you ask point-blank some of these questions, and there's tools out there that, you know, any of the AI tools, you can ask any questions, do these searches. But it's kind of like when, when we went back and had— it was so sad, but you had the Yelp ratings and the Amazon ratings, right?

Right.

And then you're kind of like, how authentic are these? And then you find out bots are creating ratings, like that you have to sift through that noise.

Yeah.

And how to understand it. So I do feel that the role of who we are, are— there's such a deficit in the number of accountants in general, um, available from bookkeeping all the way up, right? And with that is going to be probably another wash of change because it is hard to navigate these tools, the costs associated with it, how to become that individual that you can advise and seek out and be relevant. And so with all of these changes, there's so much opportunity. And I guess that's kind of what I'm saying is what used to be— we were so pressed upon for years, like almost 10 years, be the advisor, be the advisor. No one understood what that meant. To me, it's being that trusted partner. I have relationships. Accounting is a service, right? But the— it goes beyond that when you have the partnership, right? It's— and when you look at what I was going to say earlier, is when you look at businesses that scale and like, oh, I'm one person to 500 servicing. Yeah, but are you, are you advising them? How relevant is that, right? It's the same thing. Like, I don't know, I'm just gonna use it at eye doctor for a minute. I could— there's a plethora of eye doctors out there. I could go to any one of them, but is somebody gonna understand my, my metric of like what my eye health is and like what I've been down that road? No, I'm looking for that trusted person I've been seeing over and over. Because I know that they can help me.

They're going to advise you human to human. They are your trusted advisor for your eyes, right?

They're not gonna— I'm just using it as an example of like so many things because you hear it and it's coming through in so loud ways, in so many ways. But I do think, Steve, this has been such a healthy conversation about how do we move into this role, how— what are the tools that we can use Your example of the bank thing was awesome.

And thank you.

How do we even like, what's the next step? Maybe we have to do a part 2 to this.

Maybe we do. I mean, I shared with you a software that I came across this morning. I learned about this morning. Yeah. That helps accountants with cleanup work on, you know, accounting files and in the AI that they use, they mask the name of the client. So let's say you're a law firm that needs a cleanup and you hire, you know, you use this software through an accountant. The name is masked, but your vendors and customers and all that are not masked in the AI. And I'm like, well, right there, that just stops me. You know, that's not, that's not cool. I would rather— I especially on a cleanup, there's so many things that come out on a cleanup that are highly confidential. And especially with trust accounting and lawyers and things like that, that I just, you know, I like different tools that I can use, but not one that is so deep into the business and has all that data. To me, it reminds me of all the stories we've read about attorneys who go out and have their briefs written by AI and then get in trouble when they go to court. We even had a guest that we discussed that situation with, but Gotta be careful, folks. I mean, your trusted advisor, which is us, we are confidential. We are human. We are going to share with you what we see. Again, we're part— we are, we should be a senior financial person in your firm, even though we're, we're not on the payroll of the firm. We're still here. You pick up the phone and call us. The trip I was just on, I got called by two clients. I sat down and got their information. You know, it's—

here's the thing though, here's what's interesting to me. What you're saying is we— I, I don't— whether we're in the firm or not, like, we're, we're a partner to you as a client, right? You're a client and it's a partnership. I've always said that. And we sit in a very treasured spot in the sense of we have an agnostic view. We have a view that We don't— uh, Tierra said this really well, and I can't remember the key words, but we are not in there for our selfish reasons. We're in there to be a partner and help and advise you. Our tools are our tools. I feel strongly about that, just as yours are. Um, but to your point is what you utilize and how you utilize it And what you're going to do, you know, as a firm owner, that's something you need to kind of examine through. I don't want to say one tool is better over another because every practical application has its means and needs for it. We have a lot of colleagues out there that examine these and like rate these and give their opinion. I just feel that what you do as in your role as this individual is we are in a space that we just have to listen and guide and filter through the noise and make sure that whatever tools we're using is laying this out as cleanly as possible.

Well, and you know, if you're a bookkeeper or an accountant out there who is an introvert, because we have a lot of people in this industry that are introverts and you're listening to this and you're like, okay, now I really have to go to this next level. Or should go to this next level as the trusted advisor. And here's a lot of ideas we've given you today. Don't become overwhelmed with them. Just dip your toe in the water one at a time. Pick up the phone and call them. Follow up on those reports. What do they mean to you, Mr. Attorney? How can I help you with this information? How can we disseminate this? And what would be something you'd want me to focus on for the next time? We meet and start that dialogue that way, and you'll be amazed how much fun you'll have with it.

Yeah, I am. To me, it's human relationships. It's always been, um, I, I love— I like when someone is interested in doing business with me and I'm interested in doing business with them. And a lot of people I work with, um, clients, I'm really invested and interested in what it is that they're doing, what their lives look like. My professional colleagues, I feel the same way, like with you and people that I just saw recently. I'm like, oh, what's going on in your life?

Well, I'm glad you said that because after this episode, I'm replacing me on the podcast with an AI agent. Just thought you'd want to know.

No. Yeah, that's not happening. So we'll conclude with that, friends. Thank you.

We'll conclude with that. Great conversation today.

It is.

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Well, you know who our trusted advisor is? It's Tiara.

It is.

She keeps us so organized and tells us what to do and how to do it and why and She's awesome.

Yeah. And I don't have to figure out what questions to ask to figure that out. Right.

Right.

So thank you.

Oh, there goes a little heart up the screen.

Bye-bye, everyone.

Bye.