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Melissa Shanahan

#206: Understanding Advanced Client Costs with Claudia Revermann

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Did you know that you might be unwittingly skewing the true numbers in your business? Whether it’s client costs, case costs, court filing fees, or other items you might be tacking on to your client’s bill and categorizing as income, what you’re seeing isn’t your real revenue. If this is something you can’t quite wrap your head around, don’t worry because today, Melissa is speaking to an expert in this field.

Claudia Revermann is an attorney and the owner of Revermann Law based in central Minnesota, where she primarily does estate planning, business, and real estate. She’s also a CPA, which means her accounting background combined with her passion for sharing her experiences makes her an invaluable guest when it comes to law firm owners understanding the true numbers in their business. 

Join us this week as Claudia shares her wisdom on figuring out your natural revenue, and why including advanced client costs in your gross revenue not only strays you away from the real numbers, but from accurately planning for the future too. She’s offering her insights on how to establish a strong working relationship with your accountant, and how to partner with them in getting to the real numbers. 

If you're a law firm owner who's thirsty for figuring out exactly what you're aiming for and making a really well thought out, deliberate strategic plan to get there, and then having accountability and coaching along the way so that you can really honor your plans, then join us in Mastery Group.

Show Notes:

What You’ll Discover:

How including client costs in your gross revenue strays you from the true numbers.

Claudia’s preferred method of figuring out your natural revenue.

The difference between cashflow and profitability.

Claudia’s insights on the software law firm owners have access to, and whether they're helpful in getting a handle on their numbers.

Other ways you can understand your balance sheet.

Why getting to the real numbers in your business is the best thing you can do.

Claudia’s advice for establishing a strong working relationship with your accountant.

How to get what you want out of your accountant.

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Full Episode Transcript:

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I’m Melissa Shanahan, and this is The Law Firm Owner Podcast, Episode #206.

Welcome to The Law Firm Owner Podcast, powered by Velocity Work. For owners who want to grow a firm that gives them the life they want. Get crystal clear on where you're going, take planning seriously, and honor your plan like a pro. This is the work that creates Velocity.

Melissa Shanahan: Alright, welcome to this week's episode, everyone. I am here with Claudia Revermann. This is delightful. Welcome, Claudia.

Claudia Revermann: Thank you.

Melissa: Before we dig in, will you tell everyone who you are, where you are, and what you do?

Claudia: Sure. Claudia Revermann, I have my own firm, in central Minnesota, and we do primarily estate planning, probate, that kind of thing. And then also, real estate and business. I am, of course, an attorney but also a CPA.

Melissa: Yes, I tried to get Claudia on like a year and a half ago. I can’t remember, but it was something that I wanted, an accountant on, and you're like, “No, thanks.”

Claudia: I think it's an attorney thing of trying to stay away from being an expert, right? We're not supposed to say we're an expert. And so, that fear of maybe being found out.

Melissa: Yeah, totally. Well, maybe you’ll be found out today; I'm just kidding. I am super glad that you're willing to come on. Because there's something common that happens inside Mastery Group. I guess I'll just go straight into it and we can start chatting from there. Sometimes, unless people have direct feedback, and even if they had feedback, it's like, “Okay, we’ve got to get to the real number.” I'll say more about the feedback that I have given in the past with this.

Basically, if there are costs that are passed on to the client, “case costs” is what I hear it referred to as. You mentioned advanced client costs. That's a term you guys use?

Claudia: Yes.

Melissa: Filing fees. But basically, anything that's getting passed along to the client. There are times where, because that money is coming in, it will be categorized as income, as revenue, that just skews the numbers. And it's not money that you made, it's fees that you're passing along. When this happens, you know I'm not an accountant, I know how to get to the real number. And so, I will advise them to do that. Like, “Okay, well, you got to take your case costs off the top and figure out your real revenue.”

But also, when it comes to setup, I've never felt comfortable explaining to someone how they should have things set up so that this is not a problem. And so, that this is not what they're looking at, when they're looking at their numbers. I mean, they're essentially looking at some inflated number that's not true or not real.

I talked to you about this, partially because you're an accountant. But we chatted about it, and you gave away that from your perspective, that technically it should be handled this way. And so, I wanted to give you the opportunity to give the scoop to listeners. Because I don't think law firm owners necessarily know the best way to think about that money that's coming in. It's basically reimbursing. I wanted to give you the space to share what you thought.

And then, you did mention at the top of the call, before we pushed record, there's a few ways you could do it. You do think there's one way that's really true and right. But there's a few ways you could do it. So, I don't know, I thought I would just let you riff. I'm happy to ask a really direct question. But thoughts upfront?

Claudia: Absolutely. Okay. So, some of this just came from… I joke sometimes that I'm like a voyeur in a Mastery Group, right? Because I listen in the car, as I'm driving and such. And to listen to strategic planning or to calls that are following the strategic planning, as you're breaking down things with your clients.

What alerted me was this concept that people may be including those client fees or there’re client costs, right? There’re court filing fees that you might pay ahead of time, tack them on the bill, and then they pay you your fee plus the court fees. And they're including that in gross revenues. My accounting soul just dropped; my ears bled or whatever.

And it's not to say that that's necessarily wrong. I mean, you can get to the right number. And getting to the right number’s important, obviously, because we're trying to figure out, what are my actual revenues? Actual revenues are, what are you getting paid just for the services you're providing? Not for court filing fees, because that's just built into it.

So, what I think, when I'm putting my accounting hat on, is it's really not an expense. We have a balance sheet and the profit and loss statement, right? And the balance sheet is actually where those client costs should go. And it should be booked to as an asset. And so, you're spending the cash out, and you have to book… I don't know. I mean, the debits and credits, how boring, right? That's not why people went to law school. But yeah, well you're matching.

So, if you are crediting a cash, because cash is going out of your account, you have to do a corresponding debit. Corresponding debit is something on your balance sheet that's an advanced client cost. And so, then when the client pays you, you're getting cash in, so you're swapping, and so then you are debiting the cash in, and you've got to credit something. Well, we'll just credit that advanced client cost, or whatever you want to call it. But the point being, it's a balance sheet item.

It's totally neutral to your profit and loss statement. So, as I did that math, there's nothing going on the profit and loss. The only thing going in the profit and loss are your true revenues. I would say that's the more technical way to do that.

Now, some people might just be going, “Okay, let's look at all revenues, and then we're going to back it out.” Almost as a cost of goods sold, or a cost that's related to generating those revenues. Again, it pains me a little bit, as I'm going, but they're not revenues. They're just not revenues. Okay, fine.

You have your revenues, including your costs, your court fees, minus the court fees, and then you're getting to your true revenue number. So, my concern was that they're setting goals for themselves, or even looking backwards historically, and saying they had revenues of X, which included those client costs. And they're not doing themselves a favor, per se, because they're always trying to get to the higher number. But that's actually including something that they have no control of; what the court filing fee, or the expert fees were. If you all of a sudden had expert fees of $100,000, and you were putting that in your revenues, oh, my gosh, you might not be comparing apples to apples from year to year.

Melissa: I was just trying to do the math. There was one example where the filing fees, the advanced client costs, were really high in terms of revenue, plus those, it really inflated the number. That was the first time I had seen it be so inflated, that it was like, “Whoa, you can say easily, if that's the way you're talking to things, ‘I have a $300,000 business.’”

But if there is 40-50% in the $300K that's actually filing fees or other advanced client costs, you do not have a $300,000 business. You have $150,000 business. And that is a very different business to look at.

So, when I would notice that people struggled with this, I don't know the exact place to tell them to put it. But I always say you have to shave that off. Whatever you're shooting for, when it comes to revenue that you are generating, you have to shave that stuff off the top. And I think everybody gets it, but I end up making them do a bunch of math by hand. Technically, not really, but in theory, to get to the goals that they're supposed to hit.

And what a relief I think that it is to have someone who has a bit of authority. Who's like, “Wait a minute. First of all, fine, I guess you could do it that way. But also, can we just do it the right way and put things where they should go?” But I don't think that's common sense. And I think I remember asking you, did your accountant suggest this? Or did you tell your accountant to do this? And I think you said, “I told her to do this.”

Claudia: I told her to, I mean, it's really not fair, because I hung on to my finances way longer than I should have. Because that's what I used to do. Right? I do the bookkeeping. But the accountant would do that. I mean, there's no questions asked. It's a field that technically should just wash itself out, an account that would wash, right? It's, “I paid the cost. You paid me back.” And as long as you're getting your fees, or those client charges paid back, it's a zero.

But I think if you also said to an accountant that may not be worried about a balance sheet or worried about some more of a deeper consulting type of situation, they might say, “Okay, yeah. Stick it in cost of goods sold,” and there you have it. But in a technical sense, they might push back, right? It's not a cost of goods sold. The cost of goods sold is something that costs you something, as a business owner, to run the business. It's not paying court fees. That's not your cost. That’s the client’s cost.

Melissa: Tell me if this is correct, cost of goods sold is any cost the business incurs, because you took on a client or the client, but not that's reimbursable. That's not what we're talking about.

Claudia: Yeah, right. It's things that, because of the service you had to take on these costs. I feel like you've used that example. You run a workshop, the revenues from the workshop minus the books and the materials you're providing, that can be a cost of goods sold.

If I can, about gross profit, revenues minus your cost of goods sold is your gross profit, right? That term, what it’s referring to, what is it actually costing you to get those revenues in? And what's the percentage there? If you're including court costs in there, again, I just feel like I'm a broken record, but it’s just not including costs that are related to those services.

Melissa: Yeah, yeah. There's just not a place for these things in what we're doing, people.

Claudia: I would say, I mean, that your tax return doesn't necessarily do you any favors. Because your tax return in a lot of these businesses, you don't have much in equipment and all of that, and you may not have a requirement to even keep a balance sheet. And I think there's a good amount of accountants that say, let you off the hook, but don't even push the idea of keeping a regular balance sheet.

And so, again, if you're never even talking about a balance sheet, thinking about a balance sheet, the concept of putting these advanced client costs, that's the term I use, it wouldn't even occur to you. And a little bit, it’s the same as you're talking about the accounts receivable. Some people might know what their accounts receivable is, who owes me what, and be tracking that. But that's a balance sheet item.

We can talk about the difference between cash and accrual accounting. And when you're doing accrual accounting, meaning not what's sitting in the bank, but what is expected to come in, who owes me money. That's not how we always work as we're looking at our finances. We're going, “No, how much money is in the bank? And do I have enough money to pay my bills?”

Melissa: What kind of accounting do you do for your firm?

Claudia: That's a great question. I was thinking about that, kind of preparing my own mind for this. I do cash, because your tax return is cash. Right? So, why go through the mechanics of translating back and forth?

However, if you ask in other industries, what's the best way, like a manufacturing industry for instance, you should always do accrual. So, you know what work is out there, what work is in the hopper, the work in progress, and what do I have potentially coming in, what expenses, what expenses do I pay ahead of time. That's what we're talking about with accrual.

But I think doing the cash is good enough for maybe but more simplistic, we don't have a big manufacturing business, right? So, our more simplistic profit and loss statement. But you always have to have in mind those things in the back of your head, you can't leave those off the table.

How much do I have? How many people are closing a file this month? How long does it take for a file to close? How many people owe me money and haven't paid me? How much is in my trust fund, maybe that I know I'll recoup, those types of things.

So, you don't have to necessarily, in my opinion, you wouldn't have to run an accrual balance sheet, or profit and loss statement, but you better know or have a hint of what's going on elsewhere in the business.

Melissa: Yeah, I went through a phase where I was thinking a lot about this for Velocity Work. And I talked to my accountant about, technically, without being the expert on what I should do, it felt like accrual made more sense for just the happenings of my business. But after talking to her, she's like, “That's introducing a complexity you don't need.” It's kind of like what you're just saying. “You need to know that stuff, but we don't have to manage the books that way.”

And developing the sheets, in order for me to have a really good tab on all the things that you're talking about; work in progress and money I've earned but not yet paid, or vice versa. Just keeping track of all of it, it was a big deal to build out so that I had visibility and I had my finger on the pulse of exactly what's going on from that perspective.

I'm wondering, from where you sit as a law firm owner, is that easier with the software that law firm owners have, and the things that you have at your fingertips? Or is it still challenging to really have a handle on money in/money out and work in progress, things like that? Is it a challenge or should it be straightforward with the tools that you have at your fingertips?

Claudia: Yeah, I think you have to know what you're even looking for. I mean, I think about I had QuickBooks, Desktop QuickBooks, which most people cringe about, but I loved it because it used accounting lingo and all of that. I migrated over to the online QuickBooks, and I hate it, from an accounting standpoint, because it makes zero sense to me not calling things with what accountants call it, right?

But I do think it's generally more intuitive, and it labels those types of things that we're talking about, so you can do some tracking. But I know for my work in progress or my accounts receivable, I use Clio. I can just click my dashboard, and it's right there. So, I think it's there, but if you don't know what you're looking for, how would you even know to gather that information?

So, it makes sense. It's very simplistic sometimes, but some people don't even know what they're looking for. And then also, I would say, even for me, I kind of had an idea, but some of it was just based on a feeling. So, just working with you, I'm going, “Okay, well, feelings, right? We want facts.” And so, now I have more my structured list of this is what I need to know at all times of what's going on.

Melissa: That's interesting. I think one of the reasons I brought it up was when a client prepays for anything, I know that technically, the right way to handle that is to put that in an escrow account and drip it as it's earned. And I don't know if that's maybe not a universal thing, but I had some mentors that said, “Don't ever not do that. You need to do that. It's a responsible way of handling a prepayment,” so to speak.

And that was hard to keep track of, for me, unless I built, what I needed to build, to see that and what that meant for the business. So, that's why I started asking all these questions about cash versus accrual.

Claudia: Got it. What I think is an interesting conversation from that, is the difference between cash flow and profitability; they are not the same thing. And I do think people get them mixed up in their head, right? So, you get that prepayment in from a client. And it's a little different than from attorneys, right? Because we have our trust account, that most times it goes in.

But you get that money in, and so your cash flow is going to look great, because the money's just sitting there ready. But that doesn't mean you're profitable. If you undercut that, and someone paid you way less than what they should have, because you gave them a deal, or whatever that situation would be. So, that's probably a really great example to show how those two things just aren't the same.

Melissa: Yeah. Okay. There are two things that I would love to hear what you have to say on, so we'll dive into whichever one you think we should go to next. One is, what other ways do you see that it could be handled and it doesn't feel unhealthy? Even if it's not the first example you gave, where it's dealt with on the balance sheet, or it's recorded on the balance sheet? That's one question I have.

And then the other is a conversation around your relationship with your accountant. Not you specifically, though, but all the listeners; their relationships with their accountants. Just talking about that a little bit.

Claudia: Yeah. I would say, on the first part, if you are wanting to, just for simplicity purposes, getting cash in and then you book the revenue, please don't just have a lump sum, or one line item, that has “cost of goods sold”. Because you do actually have true cost of goods sold. We do, right? Have a line item. Have your accountant, or whomever, your bookkeeper, create an account called advanced claim fees, court costs, or whatever you want to call it, doesn't matter.

But have that extra line, so you're not trying to pick it out and do the homework on it when you're running the numbers. Because I think some extra math you don't have to do, taking that away.

And then also, you can really drive down to, has everybody paid me? Some of your accounts receivable people who haven't paid you, what if some of that's a huge expert fee that you fronted? I mean, you'd want that out of there, because that number actually should be zero, right? It's a wash account. And again, not saying it's wrong, it's totally fine. You’ve just really got to be careful that you're making it easy for yourself, not making more work. Did that speak to your question on that?

Melissa: It does. I think it's just important that people, if they aren't handling it properly, or if it's really tough to suss out what is the advanced client costs, then I think people think that they have a $400,000 business or $500,000. They think that that's what they have, but it isn't the real number.

And so, getting to the real number is the best thing you can do. Which for so many reasons, planning included which is something that I'm so super focused on in Velocity Work. But it's so much harder to plan if you don't have it separated out. And not only is it not accurate, there's a way to do it so that you can see more accurately the truth of the business. But I just wonder how many people out there don't know. They might have an idea

Claudia: No one's ever told them, to your second point. One other thing too, is I think they could run into a problem with gross margin, right? People talk about gross margin, what's your profit margin? If you're including dollars in there, that are coming straight out, meaning revenues minus, it's going to throw all your numbers off and you're not going to be doing as well as you thought you were. Or you might go, “Why in the world is my profit margin only 20%? It should be 30% or 40%,” or whatever they say industry standard is. Because those numbers are skewed.

Melissa: Yeah, gosh, everything is skewed. Also, if you think about, for instance, oftentimes we will calculate what percentage of your revenue is being spent on people, and what percentage of revenue is being spent on overhead. Those numbers are all off too, if you're using the bigger number. All of it just makes it so much harder for you to really pin down the real stuff. And so, no matter how tight your plans are, because your numbers are online, but they're all wrong, because we've been starting from the top wrong.

Claudia: Absolutely. And I would say, on the relationship with the accountant... I mean, I don't even know, my accountant is a friend of mine, and she does my tax return. We had a really good conversation at tax time this go around, a couple weeks ago. I said, “I need to be more accountable to you. And maybe you need to be more accountable to me,” just because I have a CPA license; I don't do taxes, I don't do tax returns.

And so, she and I need to be more intentional about meeting, about planning, because otherwise it's just happening after the fact. I write the check she tells me to, and it's easy, but it's not good strategy.

But I would say, as far as people's relationship with their accountant, find a good one. I think my state society would be mad if I said it doesn't have to be a CPA, but I don't know that it does. I think there's a lot of accountants that are super burnt out right now.

I'm having clients come to me saying, “Can you take a look at my returns and help me from a planning perspective? There's got to be more to do here, more deductions to have.” Now, everybody thinks that. They hear about these multi, multi-millionaires not paying any taxes. So, they might have pie in the sky ideas.

But I do think there are more accountants that are just going through the motions, getting the numbers in, spitting out a return, and delivering it to their clients, saying, “Pay this amount. You get this refund,” and not truly sitting down.

So, you may just have to take more initiative on your end to say, “No, I want to know. I want to know what looks good. What do you look at in a return? What do you look at, from my books, about what looks good? Did, all of a sudden, my employment tax go way up? And does that make sense? Or did someone book something wrong?” I just think having another set of eyes is always good.

Melissa: I'm going to put you on the spot here, so we'll just see what you come up with. What would be some key numbers that, in your opinion, would be the things to look for to see if things are going okay, as an accountant.

I'm thinking from a law firm owner’s perspective talking to their accountant, they can ask them that question. And what the accountant offers is probably great, but I'm wondering what you would be listening for if you were the law firm owner asking your accountant?

Claudia: I want them to understand my business and how I run things. Right? If I'm really lean. I'd want to understand that they know what, maybe, industry standards are. And when I say, “Is your marketing, as a percentage of your revenues, is it 20%? Is it a ¼ of a percent?” Does that make sense? What are other opportunities, not just always from a tax perspective? But are you coding things right? Are things in overhead, when they actually are related to employees? Those types of things, so you can run a business effectively and make changes where you really need to.

Melissa: Categorize correctly the expenses. It seems to me that the only way to really get that right with your accountant is to be hands on, review, correct and explain. Maybe you need to shape how you're thinking about it, but get simpatico on what the categorization of the expenses are.

Sometimes my accountant will categorize something, I’m trying to think of an example, and I'm like, “That is a no. That is not what that was, at all.” But if I didn't go in and look, I never would have caught it. And they're not sending it to me to review.

So, I just wonder, if to get it right, does it make sense to have set meetings, to review, make sure everything looks good on both sides? If there's work upfront, to establish a strong working relationship? Thoughts?

Claudia: Yeah. I would say, you could have something like your Visa, Amex, etc. fees, and if they just bulk them in with a bunch of general fees, or whatever they're calling them, it's going to be meaningless to you, as you're going, “Oh my gosh, those got out of hand. I should change service providers.” You might not know, because they're lumped in with something else, right?

And so, it's not wrong. If it's a true business expense, it's a true business expense, no matter what you call it. You may have preferences; I have preferences. Maybe it's my cell phone that I use strictly for business. But anyway, you can have your cell phone, but that's different than the business…

We use RingCentral, that's different; I want them coded differently. And the accountant might just lump them in as “telephone.” But no, I want that more for tracking. I'm not obsessive about it, it's pretty small percentage of my budget, but I want to know where all of those things are.

So, someone who's going to, yes, have a good working relationship with them, so you're not just always pushing back. Someone might find that accountant that says, “I will not book a court cost as an expense, because it's wrong. It should be on the balance sheet.” Well, there are those things, those technicalities. And then, they should be able to explain it to you in a way that you can understand.

They always make the joke, “Most people went to law school instead medical school because they didn't like the numbers.”

Melissa: Just fascinating. Seems like the best working relationships are the ones you're willing to put in up front, to just make sure that you're on the same page. Because what you said, you're right, a business expense is a business expense.

But there are times where if I'm first working with someone, it's hard for them to sort out what has been spent where without a lot of work. Because it hasn't been categorized in ways that if they would have just given it some thought beforehand, it would have been categorized much easier. And you would have been able to say, “Yeah, this is what we spent on X.”

I'm just thinking through, for anyone listening, you have an accountant, why not just set up a meeting and go over your categories? Make sure that they’re categories that you want. And make sure that you’re asking the questions that Claudia just talked about. Like, what do you look for to know that my business is doing great?

The more you communicate with them upfront, the easier and more predictable that, not just the relationship will be, but the output of the work, and you guys will be on the same page in the future. It just seems like there's a lot of people that put it off and just assume that the accountant has got it. And it's not that they don't have it, but it may not be as useful to you as if you had taken the reins a bit from the outset.

Claudia: I think about, if you're having a conversation with them and they're not noticing that, through COVID, your gas expense went down, or didn't go down and it stayed the same, for example. They should be pointing those out. Going, “That seems odd, something must be not right here.” I'm just saying, assuming people didn't travel as much, and so your gas or your vehicle expense went down. Well, of course, it should go down.

Or if we're comparing this year's first quarter to last year's first quarter, and your expenses are way off, comparing them to each other. Those are things that you might see, but a good accountant would be able to pull those out.

What does it hurt to sit down with them and go, “Are you seeing anything that's off, here, strange?” Or maybe you just think, “Oh, you're doing great.” You're paying them, right?

Melissa: I had a client recently that has an accountant that's for law firm owners, and she was about to leave them. And I was like, “Wait, why are you switching?” And the more we talked about it… Because it's a big deal to switch. There's a lot that's involved, or can be, with that. And so, it's like, “Why are you doing that?”

And the more we talked about it, basically, she wanted to implement a version of Profit First. Essentially, she wants to implement allocating money on a cadence to different accounts that felt really organized to her. And the accounting firm wouldn't do it with her without having a meeting first. And she was like, “I don't have time for meeting.” And so, she was going to go to a different… “Oh, but you have time to switch?” So, we were laughing about it. Because sometimes you’ve got to put the work in. Switching is not going to be… You're still going to have to have meetings, more meetings, to get all set. So anyway, sometimes we avoid…

Claudia: And you want to make sure that hopefully, they're having the meeting not just to have a meeting, but to actually clarify. They might not be familiar with Profit First and go, “Okay, you really want…” Because it might be wild and crazy to some people. “You really want to take a third of this and push it off to another account? That sounds more complicated.” Nope. It's part of a bigger plan, right?

Melissa: Yeah, absolutely. It made me think of what we're talking, putting the work in. Don't jump ship. Just see what happens when you put the work in. Maybe it's delightful. Thanks for coming on and talking about this.

Claudia: Thanks for having me.

Melissa: One more question. When people are thinking about tax strategy, I imagine that just like any other industry, there's accountants that are really great about thinking through that with you. And accountants that it's just not their strong suit, for whatever reason. Do you find that to be true?

And maybe it's just a meeting specifically about tax strategy, but how can you get what you want out of your accountant? Not what you want, like you want to write everything off. That's not what I mean. But how can you feel like you have a partner there? Is that too much to ask for some accountants? Or should that just be part of the job?

Claudia: I really think that you're going to jive with some people and you're not with others. There's always a spectrum. There's some that will just turn a blind eye, “Give me the numbers, and I'll throw them on the tax return.” And you included your kid’s cell phone on there, and they never ask, and they don't care.

And then you have the other extreme, where they're really ticking and tying everything, telling you shouldn't do this, that, and the other. And they're somehow assuming some audit risk that they don't, in their own professional way, don't need to take on.

Because that's what we're all concerned about. Our tax system is an honor system. And so, we are filing returns under oath and saying that they're effective. And if you're subject to an audit, you're going to have to show proof.

So, I think a good match is someone that is on that spectrum, in the same way that you are. More from a risk assessment, understanding, and also just knowledgeable. Because, again, I said it before, I do think that there's so many burnt out accountants that are just going through the motions; give me your stuff thrown on the return, and I'm going to spit it out. And I think that's doing a disservice to their clients.

My dad is a retired accountant, he had his own firm. And he took on a partner when he was young to transition it to, and they are very different accountants. My dad was probably even more hands-on than he needed to be. Had really close relationships with a lot of his clients, and consulted with them a lot, gave them a lot of guidance. Whereas his partner is more of, “Yep, here's your return. Write the IRS a check,” and that's it. And so, I do think there's a good, happy medium if you can find that person.

But ask around. I mean, if they're not asking you questions, it's just like anyone, right? Finding a coach or finding an attorney or whatever. You’ve got to jive with them. And then, you also have to make sure that they're interested in you.

Melissa: This is great. Thanks, Claudia. Will you come back and talk about more accounting things?

Claudia: Oh, yeah. People really want to hear about this boring stuff. I actually was talking about debits and credits, that's wild. I’m probably giving some people PTSD from the accounting class they had to take.

Melissa: I should tell people too, you said you're a voyeur. But you're a private client, that's why you're a voyeur. She's still involved in Mastery Group. You have a lot of close relationships from Mastery Group.

Claudia: I do. It's great. I found my people. I think you probably hear that all time. People don't really always want to hang out with a lawyer, fellow lawyers. But the people you attract, they're people I want to hang out with.

Melissa: Ah, that's cool. I don't know who all's going. But this September, for the Q4 Strategic Planning Retreat, a bunch of you were getting together. Yeah?

Claudia: Yes. In Minneapolis.

Melissa: They’re coming to you. That's fun. That is going to be so fun. I’ve got to think about something special to do for that. But yeah, that's the coolest. I'm so glad. It's great to know that, in the community, there’s this tight-knit relationships, and they’re professional relationships, but I think many of you would say you’re friends.

Claudia: Yeah, absolutely. Yeah. It a came from a weird way. You come in and maybe a little selfishly, actually. Okay, how do I make more money? Or how do I serve more people? Et cetera. And then all of a sudden, these other amazing people are all… it's birds of a feather flock together.

And so, we all have kind of our eye on the prize, but at the same time, are real people dealing with real stuff. And then, sometimes it has nothing to do with the firm. Sometimes it's our families. Sometimes it’s whatever. So, yeah. It's been awesome to find that community.

Melissa: Yeah. Yeah. Well, you're a pretty special part of it, too. So, thank you.

Claudia: You're the queen of it. You’re the queen of all these people.

Melissa: I’ve got my staff and my throne. Well, thank you. Oh, you're the one that introduced me to Tara Gronhovd. So, for all those listening, they've heard her several times, if you listen to the podcasts consistently, so thank you for that introduction.

Claudia: Oh my gosh, absolutely. If anyone needs any help in leadership, leading their team, pulling everyone together, we had a very bumpy, my team, we had a very bumpy last year. Without Tara's help, I don't know how we would have done it. And we are just cohesive and ready to rock and roll now. So, I give her a lot of credit.

Melissa: Yes, you are in such a solid place with your team. It's awesome. All right. Well, thank you.

Claudia: Thank you for having me on. This was awesome.

Melissa: It was! Alright, see you soon.

Hey, you may not know this, but there's a free guide for a process I teach called Monday Map/ Friday Wrap. If you go to, it's all yours. It's about how to plan your time and honor your plans. So that, week over week, more work that moves the needle is getting done in less time. Go to to get your free copy.

Thank you for listening to The Law Firm Owner Podcast. If you're ready to get clearer on your vision, data, and mindset, then head over to, where you can plug-in to Quarterly Strategic Planning, with accountability and coaching in between. This is the work that creates Velocity.

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