Latest / MaxValue Podcast / Evolve or Dissolve: The Future of Accounting & Professional Services Ft. Jessica Levin

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Evolve or Dissolve: The Future of Accounting & Professional Services Ft. Jessica Levin · MaxValue Podcast

• 0:00
  SPEAKER_01: We're people who like to break things.
• 0:01
  SPEAKER_01: We like things that are fixed and balanced.
• 0:04
  SPEAKER_00: The world is changing, business is changing, professional services is changing, probably even faster than some other industries.
• 0:10
  SPEAKER_00: If you keep doing what you were doing, you're not gonna be able to survive in the next year, 10 years, 5 years.
• 0:18
  SPEAKER_00: Change and evolution is required.
• 0:19
  SPEAKER_01: It really depends on who you end up partnering with.
• 0:23
  SPEAKER_01: That could mean private equity, so due your diligence.
• 0:26
  SPEAKER_01: That could mean selling to a larger firm.
• 0:28
  SPEAKER_01: That could mean taking on new partners just because somebody is a huge investment fund.
• 0:35
  SPEAKER_01: It doesn't mean they can't be the right partner.
• 0:36
  SPEAKER_00: People still want to be difficult.
• 0:38
  SPEAKER_00: They think that some of their talent doesn't want to leave, and it's not that.
• 0:43
  SPEAKER_00: It's that they don't want the ownership, they don't want the stress that comes with the ownership, that nobody wants to work 100 hours, nobody wants to work 60 hours.
• 0:50
  SPEAKER_01: Profit definitely looks like money, but it also looks like being able to go to my kids' hockey games when I need to.
• 0:56
  SPEAKER_00: Human beings are not productive, they're not productive for more than six hours a day.
• 1:00
  SPEAKER_00: Having your people work normal hours, letting them have a light, letting them refresh and recharge and come back, and they're gonna be able to serve the firm better, they're gonna be able to serve the clients better.
• 1:10
  SPEAKER_01: What about the use of core values, maybe in decision making?
• 1:14
  SPEAKER_01: How does core values play into that and drive value?
• 1:17
  SPEAKER_00: Marketplace did such a good job in adopting this trusted advisor philosophy.
• 1:23
  SPEAKER_00: People believe it.
• 1:24
  SPEAKER_00: It's like one of the best marketing campaigns ever, and accountants don't find taking advantage of that.
• 1:46
  SPEAKER_01: With business valuation, exit planning, strategy, and maybe even defining what values really mean to you.
• 1:52
  SPEAKER_01: I'm your host, Ben Town, and today I'm joined by Dr.
• 1:56
  SPEAKER_01: Jessica Levitt, an organizational leadership pro with two decades helping professional services firms grow.
• 2:04
  SPEAKER_01: Jessica serves as Chief Operating Officer and North America Regional Director at Abacus Worldwide, or the Abus Abacus Group, a global association of independent accounting and law firms.
• 2:17
  SPEAKER_01: She runs seven degrees LLC and has recently published a book, Accounting for Times, with her co-author, Rachel Onewski, about the changing environment for accounting firms and how to navigate it.
• 2:27
  SPEAKER_01: Dr.
• 2:28
  SPEAKER_01: Levin, thank you very much for coming on.
• 2:30
  SPEAKER_00: Thanks for having me.
• 2:32
  SPEAKER_01: Well, I'm sure I didn't do you enough justice, frankly.
• 2:37
  SPEAKER_01: So why don't you give us a little bit more background and tell us how you got to where you are now?
• 2:43
  SPEAKER_00: How much time do you have?
• 2:45
  SPEAKER_00: I'll I'll give you I'll give you the short version.
• 2:47
  SPEAKER_00: Um I've been um I do a lot of different things.
• 2:51
  SPEAKER_00: Um, all that I've realized are connected to one another.
• 2:55
  SPEAKER_00: But I've been in professional services for over two decades, uh, working in-house uh as a marketing director and working for several associations of law and accounting firms, including Abacus and also consulting to the accounting profession, speaking on the accounting profession.
• 3:14
  SPEAKER_00: Um, and my doctorate, as you mentioned, is um not just in organizational leadership and development, but my capstone was on strategies to recruit and retain accountants.
• 3:26
  SPEAKER_00: And uh as mentioned, the book Accounting for Times.
• 3:30
  SPEAKER_00: So you can say that I live and breathe the world of accounting.
• 3:34
  SPEAKER_00: Even though I am not an accountant, I like to say I play one on TV, but um I I'm very immersed in this.
• 3:40
  SPEAKER_00: Um, I do actually have some other hobbies too.
• 3:42
  SPEAKER_00: I forget what they are, but um, I am uh I'm in the world.
• 3:49
  SPEAKER_01: Well, I tell you what, the uh the well, the world of accounting is uh speaks the language of uh of business.
• 3:56
  SPEAKER_01: So uh I I think it gives you a tie back into to all businesses from that standpoint.
• 4:02
  SPEAKER_01: Um the I'm a CPA, but gosh, I don't do any any real accounting anymore.
• 4:09
  SPEAKER_01: And at the same time, uh, you know, gosh, maybe you're maybe you're more of an accountant uh these days than I am.
• 4:15
  SPEAKER_01: You work with professional firms, and you know, I do want to broaden it out from you know just accounting firms to law firms and you know, and possibly even beyond.
• 4:24
  SPEAKER_01: And you know, all the time you're looking at navigating uh, you know, big threats, uh navigating just kind of the tumultuous changing environment that professional firms have to operate in.
• 4:35
  SPEAKER_01: We were talking about that book you just wrote, Accounting for Times, uh, with uh with Rachel Nevsky.
• 4:41
  SPEAKER_01: I read it, by the way, really good.
• 4:43
  SPEAKER_01: I would recommend it.
• 4:44
  SPEAKER_01: Thank you.
• 4:45
  SPEAKER_01: Uh and we can put a link in the in the notes about that.
• 4:48
  SPEAKER_01: Um but when somebody like me, a professional services firm owner, is reading this, what is the big takeaway that we should get out of the book?
• 5:03
  SPEAKER_00: Well, so the um the subtitle is Evolve or Dissolve.
• 5:07
  SPEAKER_00: And that that is the takeaway that um the world is changing, business is changing, and professional services is changing probably even faster than some other industries.
• 5:18
  SPEAKER_00: And that's not just from a work standpoint, but culturally and um from a talent standpoint.
• 5:25
  SPEAKER_00: And if you keep doing what you were doing, you're not gonna be able to survive in the next year, 10 years, five years.
• 5:34
  SPEAKER_00: Uh, really change and evolution is required.
• 5:39
  SPEAKER_01: Well, and that's really interesting that you're saying it's it's moving faster than uh other industries, potentially, other professions.
• 5:48
  SPEAKER_01: Although, you know, I would argue that it's just our time in a certain certain sense to change.
• 5:53
  SPEAKER_01: And we're, you know, having to do more catch-up, if you will.
• 5:56
  SPEAKER_01: Uh things like say, you know, what one of one of my uh uh pet topics being uh outsource and offshoring, uh, that's something that we're grappling with now.
• 6:07
  SPEAKER_01: But you know, if if you were a software development company, you you did that 20 years ago.
• 6:13
  SPEAKER_01: Uh and we're we're now grappling with that, you know, that same idea.
• 6:17
  SPEAKER_00: Yeah, exactly.
• 6:18
  SPEAKER_00: So it's not it's not so much that I would not say that the accounting profession is ahead, it is just moving fast because it's catching up to some of the things that we're not necessarily paid attention to because it's a regulatory environment.
• 6:32
  SPEAKER_00: The work has been coming in, and you know, there's a little bit of just being on um autopilot and realizing that all of a sudden, wait, if we don't, if we don't play catch up, we're we're gonna be in big trouble.
• 6:46
  SPEAKER_01: And and hubers can play into that, right?
• 6:49
  SPEAKER_01: That thing it's not like we're uh we're people who like to break things.
• 6:54
  SPEAKER_01: We like things that are fixed and balanced.
• 6:57
  SPEAKER_01: Uh and you know, again, I'm gonna lump my uh lawyer friends into this as well.
• 7:01
  SPEAKER_01: They're they're not going to necessarily be the people who are saying, let's try something completely new and break things and move fast and see see what happens, because that doesn't work so well in you know in law and in accounting where you need to have reliable information, et cetera, et cetera.
• 7:16
  SPEAKER_01: The the stakes are too high uh to want to just break things.
• 7:19
  SPEAKER_00: Yeah, and first of all, I I am a breaker.
• 7:22
  SPEAKER_00: So um in fact, uh if you uh Rachel and I, when we did our photo shoot for the book, uh we actually went out on a golf course and started smashing bottles.
• 7:33
  SPEAKER_00: Um we really, you know, we were really trying to exemplify breaking breaking the mold is is really how we we have we have framed it.
• 7:40
  SPEAKER_00: But um sure, um you don't want to break your clients' financials or do anything like that, but um from a structural standpoint, from a how you treat your employees, how you look at how you do business, there's a lot of things that happen, can happen that have positively impact your work without h having any risk um to the actual quality of the work on law and accounting.
• 8:10
  SPEAKER_01: Absolutely.
• 8:10
  SPEAKER_01: And heck, breaking things is not a bad thing if what you are getting rid of is already broken.
• 8:22
  SPEAKER_01: Uh working a hundred hours a week is not something that is well sustainable, and that's something that we've had to uh as a as professional service providers have had to uh realize that maybe our talent pool is a little shallow because nobody wants to do that or get divorced three times or whatever it takes to become partner these days.
• 8:44
  SPEAKER_01: Um or I guess no longer these days, yesterday.
• 8:48
  SPEAKER_00: Yes, um, and you know, uh people don't want to become partner anymore.
• 8:51
  SPEAKER_00: Um so we we have a chapter in the book called Partnership is not the end game.
• 8:56
  SPEAKER_00: And it really stems from the fact that people still want to be in leadership roles, and sometimes firms confuse that, thinking, well, I don't I I was just at the advocates meeting last week, and um we were we had talked a lot about this, and they said, you know, we just don't understand because this is how we brought up, we're brought up.
• 9:14
  SPEAKER_00: We we entered the profession and partnership was what you did.
• 9:18
  SPEAKER_00: And they think that some of their talent doesn't want to lead.
• 9:23
  SPEAKER_00: And it's not that, it's that they don't want that ownership, they don't want the stress that comes with the ownership.
• 9:29
  SPEAKER_00: Um, and that's outside of the fact that nobody wants to work 100 hours, nobody wants to work 60 hours.
• 9:34
  SPEAKER_00: And human beings, no matter how much we think we could have done it, and we say, well, that's what we always did, are not productive.
• 9:44
  SPEAKER_00: They're not productive for more than six hours a day.
• 9:47
  SPEAKER_00: There are exceptions, but not those are really the anomalies.
• 9:50
  SPEAKER_00: Humans, you might have somebody in the office on those 12-hour days, but what you're getting from them is not going to be better productivity.
• 10:00
  SPEAKER_00: It's just not, there's lots and lots of studies that have shown that.
• 10:04
  SPEAKER_00: And so this is a mindset change.
• 10:06
  SPEAKER_00: Um, and obviously we talk about technology and AI, um, and the fact that so technology is allowing us to do more faster, significantly faster, right?
• 10:19
  SPEAKER_00: Significantly faster.
• 10:20
  SPEAKER_00: Um, and for a mindset thinking, okay, well, now we can just we work those same hours, just getting that much more done.
• 10:30
  SPEAKER_00: You still lose your people, you still burn your people out rather than taking advantage of of what the environment is and having your people work normal hours, letting them have a life, letting them refresh and recharge and come back, and they're gonna be able to serve the firm better, they're gonna be able to serve their clients better.
• 10:50
  SPEAKER_01: Well, gosh, and I I have so much reaction to all of that, uh, most of it positive.
• 10:57
  SPEAKER_01: But I'm on I'm so much on both ends of that, uh both sides of that argument, right?
• 11:01
  SPEAKER_01: As a as an employer, I'm like, I'm thinking, gosh, I really hate the fact that you just told all my staff that they should only work 30 hours a week.
• 11:09
  SPEAKER_01: On the other hand, actually that kind of aligns with our our values, uh, taking care of our people.
• 11:15
  SPEAKER_01: And so, yeah, I yeah, as long as we're making money, profit can look like different things.
• 11:21
  SPEAKER_01: Uh, and in in my case, personally, you know, profit definitely looks like money, but it also looks like being able to go to my kids' hockey games when I need to, and that sort of thing, and having uh having freedom along with the financial stability, uh, whereas I I'm sure I could have even more financial uh result, financial profitability if we did things differently, but I don't want to.
• 11:46
  SPEAKER_01: Uh going going to that, one of the things that has been changing in and going right back to accounting is private equity uh coming into accounting to enable some of the uh retiring generation to to get out and and enable the uh the exits to happen that need to happen.
• 12:05
  SPEAKER_01: And of course, you know, as we all know, the the the the next generation i i there's fewer people in it, period.
• 12:14
  SPEAKER_01: Let alone enough people to you know be able to support the you know the the the exiting partners because you you actually do need a uh a leverage model to make that happen.
• 12:25
  SPEAKER_01: So PE is coming in to kind of fill the gap in in some ways.
• 12:29
  SPEAKER_01: I'm just gonna stop there and invite your your comments on that.
• 12:34
  SPEAKER_00: Sure.
• 12:34
  SPEAKER_00: So and I I have a lot of thoughts on it.
• 12:36
  SPEAKER_00: Um I you know, even though I'm only 25, I uh I've been at work in the accounting profession for like 25 years um since I was since I was born.
• 12:45
  SPEAKER_00: Um and I remember uh you know, some of my first accounting conferences, everybody was talking about succession planning.
• 12:51
  SPEAKER_00: Every session was succession planning.
• 12:54
  SPEAKER_00: And admit naively, I think I thought, well, everybody is focused on succession planning because that's what we're talking about.
• 13:01
  SPEAKER_00: And the truth is, is that they went to these sessions, but then nothing ever happened.
• 13:07
  SPEAKER_00: And so you come to this point where we have so much retirement in the profession, and they didn't take care of it.
• 13:14
  SPEAKER_00: They didn't set themselves up for literally for succession or success.
• 13:18
  SPEAKER_00: Um, so what do you do?
• 13:20
  SPEAKER_00: You close your firm, you have clients, you have staff.
• 13:23
  SPEAKER_00: So, you know, what do you do sustainable?
• 13:25
  SPEAKER_00: In comes private equity saying, Oh, I can save the day, um, or at least I can buy you out so you can have your retirement and have that life that you didn't have because you were working a hundred hours a week for your whole career.
• 13:36
  SPEAKER_00: Um so it's it sounds great, right?
• 13:40
  SPEAKER_00: But you know, things that are too good to be true usually are.
• 13:46
  SPEAKER_00: Um, a vast majority of the investment from private equity is going into technology, which which makes a lot of sense, right?
• 13:53
  SPEAKER_00: And that's probably where firms need it.
• 13:56
  SPEAKER_00: And not even so much from a capital standpoint.
• 13:58
  SPEAKER_00: Yes, they need it from a capital standpoint, but it's almost like they need the private equity to push them to make the technological changes that they may have been afraid to um do before, where private equity is saying, no, I want I want my money to go to this.
• 14:14
  SPEAKER_00: Um so those are good things, but there's a lot of downside to it, right?
• 14:21
  SPEAKER_00: And and depending on the type of structure that you have and and the the deal, um, you know, what what are the expectations of the private equity firm?
• 14:30
  SPEAKER_00: Um, certainly it impacts culture.
• 14:33
  SPEAKER_00: There's lots of conversations about how it impacts ethics, right?
• 14:37
  SPEAKER_00: And and trying to meet a bottom line, meeting profitability goals to serve investors, um, that might push, might push the bounds on on some ethical issues.
• 14:50
  SPEAKER_00: Um, I know lawyers have talked a lot about that.
• 14:53
  SPEAKER_00: They're they're much more um, they push back a lot more on the idea of it.
• 14:58
  SPEAKER_00: Um, you know, the firms, so the private equity firms, right?
• 15:02
  SPEAKER_00: There, there's some good theories behind it, right?
• 15:04
  SPEAKER_00: The ones that can come in with a management company model, which we see a lot, uh, we see a lot in the medical space, where right you have a management company come in and lets doctors be doctors, let's dentists be dentists.
• 15:18
  SPEAKER_00: Um and to some extent that works.
• 15:22
  SPEAKER_00: The problem is when you are trying to differentiate yourself to your employees, you're trying to recruit.
• 15:29
  SPEAKER_00: And now you have somebody coming in that doesn't know your culture, that is coming in with something that might not completely align, and they want you to adapt because that's that's how they're funding it.
• 15:40
  SPEAKER_00: Um, and I don't think that firms are doing as much due diligence from a cultural standpoint as they would if they were doing a merger.
• 15:48
  SPEAKER_00: Um, listen, I we've seen lots of mergers where they didn't do it and you know they don't end well.
• 15:53
  SPEAKER_00: Uh, but on the private equity side, I think they're doing a lot less of that.
• 15:56
  SPEAKER_00: Um, and you know, does this investor make sense for me and my firm?
• 16:03
  SPEAKER_00: And it's it's an interesting position because a lot of times the people who are making the decisions, they're on their way out, right?
• 16:09
  SPEAKER_00: And it really depends on how much they care about their legacy and how much they care about the people that they're leaving, um, leaving behind.
• 16:17
  SPEAKER_00: Um, you know, I said I I think it could be good, but I don't think it's the only alternative.
• 16:23
  SPEAKER_00: Um, and you know, there's some firms who have um have done ASOPs um and are doing pretty well in terms of you know keeping keeping it within the family, so to speak.
• 16:34
  SPEAKER_00: Um, I understand that there's not a lot of alternatives when you're when you haven't you when you haven't planned well, right?
• 16:41
  SPEAKER_00: Um, but then that brings us back to the changing structure of um, you know, not everybody wants to be a partner and firms looking at saying, well, maybe we should switch to a more corporate model, give people anybody, right?
• 16:55
  SPEAKER_00: It kind of like sell stock um to whoever wants to buy it, um, operate from a management perspective, really truly from a corporate model, that is developed within your culture, right?
• 17:07
  SPEAKER_00: Versus there's a difference between growing your own culture and just having somebody else come in and kind of take over and flatten what you have, and some cases some cases might bring some very good things, but um they don't private equity doesn't tend to be people first.
• 17:28
  SPEAKER_00: And in a profession where talent is such is in such demand, you need to put your people first.
• 17:36
  SPEAKER_00: I'm a big believer in in the um the Wegmans model, right?
• 17:39
  SPEAKER_00: You put the you put your employees before your customer and you're gonna have happy customers.
• 17:43
  SPEAKER_01: Yeah.
• 17:44
  SPEAKER_01: All of those things, all of those things I I I uh totally agree with you.
• 17:48
  SPEAKER_01: In a lot of ways, the professional model is an old one.
• 17:54
  SPEAKER_01: And some of that's by design, I I think.
• 17:57
  SPEAKER_01: Some of that is by uh just lack of momentum, uh friction.
• 18:05
  SPEAKER_01: And and and some of that really uh we should retain, I do I do believe.
• 18:10
  SPEAKER_01: I mean, I think the you know it's it's really hard to be a truly independent professional if you're answering to somebody for your bottom line.
• 18:18
  SPEAKER_01: Although you're always answering to somebody for your bottom line, really.
• 18:22
  SPEAKER_01: So who are you answering to?
• 18:25
  SPEAKER_01: I mean, one of the things that I that came out of what you were saying, uh uh what I heard, was it really depends on who you end up partnering with, which that could mean private equity, so do your diligence.
• 18:40
  SPEAKER_01: That could mean selling to a larger firm, that could mean taking on new partners, whatever.
• 18:46
  SPEAKER_01: And just because somebody is a huge investment fund doesn't mean they can't be the right partner, but you better damn well know that they are or are not.
• 18:58
  SPEAKER_01: Uh it it's it's not a it's not a panacea.
• 19:02
  SPEAKER_01: You you there's only a few of those those people who are you know riding away into the sunset with their with their big checks.
• 19:09
  SPEAKER_01: Uh everybody else has got has got to live with it for uh some period of time.
• 19:13
  SPEAKER_01: And from my perspective, I I've seen both.
• 19:17
  SPEAKER_01: Right?
• 19:18
  SPEAKER_01: I've seen uh people be very happy with private equity transactions, and I've seen people be extremely unhappy with private equity transactions as well.
• 19:27
  SPEAKER_00: So I don't think we're here to vilify it, but it depends what you ask within an organization because the the owners um might be very happy, but the people, the staff might be very unhappy, right?
• 19:40
  SPEAKER_00: So even within a single firm, you might get very different reactions and emotions.
• 19:47
  SPEAKER_01: Yeah, absolutely.
• 19:49
  SPEAKER_01: You have to you have to align interests, risks, and rewards the the the way that you want the uh transaction to happen.
• 19:59
  SPEAKER_01: So we we're talking about exit planning or the lack thereof.
• 20:07
  SPEAKER_01: And a lot of your research in the past has been about values, and exit planning is all about value.
• 20:15
  SPEAKER_01: Obviously, we're using those terms slightly differently, but yeah, but but tell me tell me how uh tell tell me about your work in the values area.
• 20:26
  SPEAKER_00: So it's funny, I don't even know how I started along this path.
• 20:30
  SPEAKER_00: Um, because I I started on this path before I formalized the the research on it, um, but I've developed a system um of really using core values as the determining factor for all decision making in any type of organization.
• 20:49
  SPEAKER_00: Um, and these core values are not the kind that your marketing department comes up and slaps on a website.
• 20:55
  SPEAKER_00: Uh, they really have to be things that leaders believe in and act.
• 21:02
  SPEAKER_00: And they have to be very specific, right?
• 21:05
  SPEAKER_00: And I've love lots of examples and lots of stories where people say, right, we're innovative, right?
• 21:12
  SPEAKER_00: Our core value is to be innovative.
• 21:13
  SPEAKER_00: And then you ask them how, and they're like, Well, we have one partner who's on TikTok.
• 21:20
  SPEAKER_02: Okay.
• 21:21
  SPEAKER_00: Um, yay.
• 21:24
  SPEAKER_00: Um, so not being able to really articulate what that means and say something like, okay, we're innovative, and that means that when we're faced with a client problem, we have a detailed process to go through the pros and cons and you know, those wild ideas and the breaking things to come up with a solution, right?
• 21:45
  SPEAKER_00: And having that process is part of our innovation plan, right?
• 21:49
  SPEAKER_00: And that's truly a core value.
• 21:51
  SPEAKER_00: If you can't say why and you can't be specific, it may be a core value, but it might just be something that looks good on a website.
• 21:58
  SPEAKER_01: Hey everybody.
• 22:00
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• 22:04
  SPEAKER_01: These episodes are for my business colleagues out there running professional firms and serving clients with the same commitment and integrity that we do.
• 22:12
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• 22:20
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• 22:23
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• 22:34
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• 22:41
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• 22:51
  SPEAKER_01: It's certainly not well enough understood to employ it in practice well enough.
• 22:55
  SPEAKER_01: That's if you can't say it, then you can't do it.
• 22:58
  SPEAKER_00: If you can't say it, you can't do it.
• 23:00
  SPEAKER_00: And you know, if you if you have strong values that are really well defined, you can use them to make every single decision within your organization.
• 23:10
  SPEAKER_00: So I started my business almost 17 years ago.
• 23:13
  SPEAKER_00: But I mean I'm only 25, so I said it's just a baby.
• 23:17
  SPEAKER_00: Um and um so one of my friends asked me, you know, so what kind of clients are you looking for, right?
• 23:25
  SPEAKER_00: Which your ideal client?
• 23:27
  SPEAKER_00: And my answer just naturally I said, nice ones.
• 23:31
  SPEAKER_00: And to this day, um, it's on my website that that's a core value.
• 23:35
  SPEAKER_00: And I have walked away from clients who don't that they're just not nice.
• 23:41
  SPEAKER_00: Even if they're paying a lot, it's not worth it.
• 23:44
  SPEAKER_00: And that that is to me very important.
• 23:46
  SPEAKER_00: And I feel like it's very specific, right?
• 23:48
  SPEAKER_00: Like core value is work with nice people.
• 23:52
  SPEAKER_00: Uh, right, it's just end of story.
• 23:54
  SPEAKER_00: Um, another core value of mine for my company is learn something new every day, right?
• 24:00
  SPEAKER_00: Like it's very specific.
• 24:02
  SPEAKER_00: Um, and I can use those things to make decisions.
• 24:07
  SPEAKER_00: Um, work hard, play hard is one one of mine, right?
• 24:11
  SPEAKER_00: So that can help me make a decision in terms of, you know, do I give my team off, you know, for the holidays?
• 24:19
  SPEAKER_00: Yes, because there's a lot happening and we, you know, we there's a lot of year-end stuff, but our core value is you know, is to play hard.
• 24:28
  SPEAKER_00: And what else are you gonna do that than the holidays?
• 24:31
  SPEAKER_00: So there's so many different, those are mine, right?
• 24:34
  SPEAKER_00: But firms can look different.
• 24:36
  SPEAKER_00: They don't have to be cookie cutter and they don't have to be one word.
• 24:38
  SPEAKER_00: I think a lot of people get stuck into this again, that we need to put it on a chart on the wall.
• 24:44
  SPEAKER_00: Innovation, family, uh community.
• 24:50
  SPEAKER_00: And those those are words, right?
• 24:53
  SPEAKER_00: What is what is the actual meaning behind them?
• 24:55
  SPEAKER_00: And if you if you go through this, um, your your culture comes from that, right?
• 25:00
  SPEAKER_00: And culture is fluid, but your core values shouldn't really change that much.
• 25:04
  SPEAKER_00: Um, they might change if you have a significant change in leadership.
• 25:08
  SPEAKER_00: Um, but they should be understood and and bought into, not just from leadership, but from everybody, you know, even through your hiring process, making sure that the people you're hiring align with who you believe you are and what's important to you.
• 25:25
  SPEAKER_01: Yeah, and one example that you'd give me was kind of uh the reverse of one of the things you said.
• 25:31
  SPEAKER_01: A good example of a value is no jerks.
• 25:34
  SPEAKER_01: We don't work with jerks either inside or outside the company.
• 25:37
  SPEAKER_01: Uh yeah, one one for us, uh kind of the guiding principle, guiding uh guiding value is is this good for the team?
• 25:45
  SPEAKER_01: That's kind of the epic question for us.
• 25:47
  SPEAKER_01: Is it good for the team?
• 25:48
  SPEAKER_01: If it is, then we do it.
• 25:50
  SPEAKER_01: If it's not, then we don't do it.
• 25:52
  SPEAKER_01: And and that becomes a uh pre-decided decision because we already know what the outcome is going to be once we analyze the problem, basically, or the analyze the question.
• 26:03
  SPEAKER_00: Yeah, I mean it works.
• 26:05
  SPEAKER_01: Yeah.
• 26:06
  SPEAKER_01: Uh so what about the use of core values, maybe in decision making, that would help drive the value of a private business?
• 26:19
  SPEAKER_01: Because hey, this podcast is all about max value, maximizing the value of a business, eventually getting towards exit.
• 26:26
  SPEAKER_01: So how does core values play into that and drive value?
• 26:30
  SPEAKER_00: Um, I certainly think it it ties into the brand.
• 26:33
  SPEAKER_00: And I have a marketing background.
• 26:35
  SPEAKER_00: Um, and you know, branding can sometimes be this woo-woo, but you know, the brand, brands have value, right?
• 26:42
  SPEAKER_00: And um you're doing valuations, I'm sure that you're you're calculating what that is.
• 26:46
  SPEAKER_00: And I think that's a really important one.
• 26:49
  SPEAKER_00: Um, you know, how are you, how are you perceived in the in the marketplace?
• 26:55
  SPEAKER_00: Um, and right, you can you can tie actual numbers to that.
• 26:59
  SPEAKER_00: Um, but even more so, like using your core values to develop a strong culture, the cost of losing one single employee is about equal to their salary.
• 27:12
  SPEAKER_00: You take the cost of recruiting, the cost of time lost, trying to train somebody, that's a lot of money.
• 27:19
  SPEAKER_00: Right?
• 27:20
  SPEAKER_00: Let's say you take a you know a mid-level CBA who's making about$100,000 a year, certainly in California where you are.
• 27:27
  SPEAKER_00: I'm in New Jersey, that's you know, a very reasonable or likely salary.
• 27:32
  SPEAKER_00: Um, let's say you lose three people.
• 27:34
  SPEAKER_00: That's$300,000.
• 27:37
  SPEAKER_01: Well, gosh, and and let's not even think about the you know exp expanding that out.
• 27:43
  SPEAKER_01: I mean, you're you're absolutely right.
• 27:44
  SPEAKER_01: You know, we sometimes look at the cost of assembled workforce as as the value of of what you've put together.
• 27:51
  unknown: Uh uh.
• 27:52
  SPEAKER_01: And I don't know, let's take those three say mid-level CPAs using the rule of three.
• 27:59
  SPEAKER_01: Well, what's what about that$900,000 or a million dollars worth of client revenue, client fees that they're not able to pursue that year, or the replacements that you have to find so expensively and train up are not going to be as good at uh deriving that uh that same revenue.
• 28:24
  SPEAKER_01: There's gonna be ramp up time where they're not you know not as effective or not effective at all.
• 28:30
  SPEAKER_01: Um and then of course the impact on the client.
• 28:32
  SPEAKER_01: So there's there's even the of course the the downstream and indirect uh outcomes, the the uh the externalities even of that, in addition to all the the very direct costs that you do actually have.
• 28:47
  SPEAKER_00: Yeah, and you can't, you know, you you bring up the point about clients, um, but you can't discount the fact that your core values uh impact your clients.
• 28:55
  SPEAKER_00: And we we won't get into a whole political conversation, but what I will say is that a lot of people, especially in this turbulent political times, care about what you what you support politically.
• 29:11
  SPEAKER_00: And I know in the old days in the past that was a taboo, and why would it ever come up?
• 29:16
  SPEAKER_00: And I've spoken to lots of CPAs who said, well, like that shouldn't matter to my clients, but it does.
• 29:22
  SPEAKER_00: Not to all of them, but to a lot of them, it does.
• 29:25
  SPEAKER_00: And that comes down to values, right?
• 29:28
  SPEAKER_00: And there's kind of that cross of personal and professional values, but um, it's just an example of how it may be an extreme example, but but timely of how how you show up um and and what you value can impact the type of client that you attract and keep.
• 29:46
  SPEAKER_00: And right, we've seen we've all seen people who have posted, done something stupid on social media, and what happens?
• 29:54
  SPEAKER_00: They lose their clients, they lose their jobs.
• 29:57
  SPEAKER_00: Um, and it's it's yes, people do stupid things, but sometimes it's just about what they believe.
• 30:03
  SPEAKER_00: And if you don't believe what I believe, um, right, there's fundamental more it goes like some like those moral issues, right?
• 30:10
  SPEAKER_00: Versus um, right, we can argue about like, you know, tariffs, right?
• 30:15
  SPEAKER_00: Which could be a I I like to call that like a true political topic, right?
• 30:20
  SPEAKER_00: Um you can argue what economists say, but that's a little bit different than morals.
• 30:25
  SPEAKER_00: And uh, and I'm I'm saying this not to be political, but because I've seen lots of people who have um said, like, I don't want to work with the service provider because they don't align with my values.
• 30:36
  SPEAKER_00: Um and I think it's just important and I think it's something that firms need to think about.
• 30:41
  SPEAKER_00: And um, I had this conversation actually at the advocacy meeting where we said, all right, like maybe you don't totally buy into that, but you should at least be talking to your staff about that.
• 30:52
  SPEAKER_00: How do they know how to have those conversations if if they come up?
• 30:56
  SPEAKER_00: Um and I think it's we can't pretend like that doesn't happen because it's all about part of who you are.
• 31:02
  SPEAKER_01: Oh, you certainly can't pretend that the issue doesn't exist just because it doesn't you wish it didn't.
• 31:10
  SPEAKER_01: Uh and and frankly, hell, I wish it didn't.
• 31:13
  SPEAKER_01: But at the same time trying to connect with a client on a deeper level uh is is often is is often something that you know uh I try to do, you know, whether I'm talking to somebody who's you know politically, you know, right, left, center, whatever.
• 31:31
  SPEAKER_01: Um, because uh of course we actually agree on more than we disagree on usually.
• 31:38
  SPEAKER_01: And we all want what's best for our family and kids and workforce and you know the people the people we work with closely and in all those things, you know, such that you know the we can disagree on policy all you like.
• 31:55
  SPEAKER_01: And and and yes, I there there are things out there that are non-trivial, and I don't want to mean to trivialize anything, but you don't I I'm not your you know, I'm not your pastor, your therapist, your whatever.
• 32:09
  SPEAKER_01: Um that's not you know, that's not the role.
• 32:12
  SPEAKER_01: I can still be, you know, your your uh your good professional advisor, and so can you.
• 32:16
  SPEAKER_01: Uh yeah, no, I think I think that's really good.
• 32:19
  SPEAKER_01: And I and I think being clear on the things that are truly important, maybe like showing up authentically.
• 32:26
  SPEAKER_01: Maybe that's super important.
• 32:27
  SPEAKER_01: I mean, it should be.
• 32:28
  SPEAKER_01: Maybe that's a super core value, like it is uh for our company.
• 32:32
  SPEAKER_01: You'll know what we think, period.
• 32:33
  SPEAKER_01: And if you don't like that, then we're then you're not gonna enjoy working with us, and and vice versa, we're not gonna enjoy working with you if we feel like we have to uh not be who we are.
• 32:42
  SPEAKER_01: Um and at the same time, who we are hopefully isn't too obnoxious and in your face, and mostly just means we're gonna be honest, even if you don't want to hear it, rather than you know, being a jerk about something.
• 32:56
  SPEAKER_00: That's interesting.
• 32:57
  SPEAKER_00: Um I you talk about like showing up and like the relationship part of it, and I feel like the accounting profession and the AI CPA did such a good job of instilling this trusted advisor mentality into people, into the public.
• 33:20
  SPEAKER_00: And I taught I'm in a lot of groups with entrepreneurs, and when everybody asks a pretty complicated question or even a simple question, everybody always says ask your CPA.
• 33:33
  SPEAKER_00: And I will tell you how many CPAs I've spoken to who are like, why would my client ask me that?
• 33:40
  SPEAKER_00: Because the marketplace did such a good job in adopting this trusted trusted advisor philosophy that people believe it.
• 33:52
  SPEAKER_00: I mean it's it's like great, right?
• 33:54
  SPEAKER_00: It's it's like one of the best marketing campaigns ever after the DARE program.
• 34:00
  SPEAKER_00: And accountants don't aren't taking advantage of that, I think.
• 34:05
  SPEAKER_01: Horrible.
• 34:06
  SPEAKER_01: We're uh I'll I'll I'll speak for my uh profession on that point.
• 34:12
  SPEAKER_01: It's most of us are mostly horrible most of the time.
• 34:16
  SPEAKER_01: And the and it and it's showing up.
• 34:20
  SPEAKER_01: I will say the there are more non-CPA accountants out there than than ever before.
• 34:27
  SPEAKER_01: And there's a there, I mean, there's always been a role for that, absolutely.
• 34:31
  SPEAKER_01: Uh but more people are deciding not to be CPAs than they used to be.
• 34:36
  SPEAKER_01: And the this this episode wasn't really supposed to be about CPAs, per se, but uh yeah, there's a missed opportunity there, and it's it's been missed and being missed.
• 34:47
  SPEAKER_01: Uh and yeah, we're kind of a victim of our own success in a certain sense.
• 34:51
  SPEAKER_01: Uh we should be the people who are the the financial therapists, if you will.
• 34:58
  SPEAKER_01: And we should be the people who are, you know, I I always say like we should be the arbiters of financial truth.
• 35:04
  SPEAKER_01: Uh I really frickin' believe that.
• 35:08
  SPEAKER_01: Um so far I've been done a really good job of not swearing on the podcast uh and keeping that going.
• 35:14
  SPEAKER_01: But tell you what, we should be able to be the best referral partners out there because we're looking out for our clients.
• 35:23
  SPEAKER_01: And again, even though I don't have uh clients that like tax clients who are you know coming back every single year, I do have some close relationships with clients and I do look out for them uh as much as I you know as much as I would with you know with with with any friend or you know or teammate.
• 35:40
  SPEAKER_01: And that's the way it's supposed to be, I think.
• 35:44
  SPEAKER_00: Um no, I I agree, but I take a step further.
• 35:47
  SPEAKER_00: Um yes, uh, you know, the arbitrary of financial truth, but also like steering the ship.
• 35:52
  SPEAKER_00: And I think that's a missed opportunity.
• 35:54
  SPEAKER_00: Like you're not gonna be the sole service provider, right?
• 35:58
  SPEAKER_00: Companies need lots of service providers, but who's gonna be the one steering the ship in terms of those relationships and bringing in the law firms and bringing in the insurance companies and the banks and the marketing people and any other professional that a company needs, who is who is steering that ship?
• 36:15
  SPEAKER_00: Because I get work from my CPA clients who refer it to me because they get right, like they go to their CPA and say, well, who should I hire?
• 36:26
  SPEAKER_00: Because they trust them, right?
• 36:28
  SPEAKER_00: And it's a role that you should embrace, uh, because not everybody's in that position.
• 36:36
  SPEAKER_00: Um, and like a lot of us have to work harder to become the trusted advisor, simply because I mean, you know, I I believe that I am the trusted advisor to my clients.
• 36:45
  SPEAKER_00: Um and I have it taken me a long time to to build that relationship and it's how I show up and and why that works.
• 36:53
  SPEAKER_00: But um, but I don't have a I didn't have that huge marketing arm behind me that was saying that, you know, seven degrees business consulting is your trusted advisor, right?
• 37:05
  SPEAKER_00: It's business consulting is kind of this like arbitrary category, right?
• 37:10
  SPEAKER_00: Um accounting firms, nope, like that's the you you you get you get that label.
• 37:17
  SPEAKER_01: Well, and I'll just say we earn that label.
• 37:22
  SPEAKER_01: Um I'll just let me uh let me say that.
• 37:25
  SPEAKER_01: But um but no, but no, truly.
• 37:28
  SPEAKER_01: Um it's it's something that you know we the there there should be an inheritance with you know a profession where we you know we pass down a a legacy.
• 37:37
  SPEAKER_01: Ooh, getting a little model in here, but um but yeah, it it it's gotta mean something.
• 37:43
  SPEAKER_01: So I I think uh on that note we can uh you know stop the uh the hard-hitting questions, if you will.
• 37:53
  SPEAKER_01: Um but I do have a couple of things I wanted to, yeah, I wanted to ask you, uh, really just to get to know you a little bit.
• 37:59
  SPEAKER_01: Um, you know, the the first one being w tell me something that's not on your LinkedIn profile or your website profile, maybe one of those hobbies that you've forgotten about.
• 38:11
  SPEAKER_00: Oh, that's a good question.
• 38:13
  SPEAKER_00: Um so I have a cricket.
• 38:15
  SPEAKER_00: Do you know what a cricket machine is?
• 38:17
  SPEAKER_00: Uh so I call myself the world's worst crafter because I really am like the world's worst crafter.
• 38:22
  SPEAKER_00: But so I have I have like diagnosed ADHD, so I do like smart a lot of crafts, but I do like like making things, and I know I'm bad at it, but it's therapeutic.
• 38:34
  SPEAKER_00: Uh I started making bracelets and jewelry, like just costume stuff.
• 38:38
  SPEAKER_00: It's good for my brain.
• 38:39
  SPEAKER_00: Um and I just accepted that I'm not good at it, but it's just it's just a way for me to get away from the technology, put the phone down, and just re-recharge.
• 38:51
  SPEAKER_01: Oh, I am with you.
• 38:52
  SPEAKER_01: That only in my uh deeper into my career have I decided that I actually do need hobbies for real.
• 39:01
  SPEAKER_01: You know, not okay, reading's a hobby, but that's not quite the same.
• 39:04
  SPEAKER_01: Um, like I I do wood carving because although also I am bad at it, it's uh gets your gets your brain, it it accesses a different level of your brain that you is not functioning the same way while we're, you know, well doing a podcast or something.
• 39:21
  SPEAKER_01: Uh so that's nice.
• 39:22
  SPEAKER_01: Um okay, but I brought up reading a couple times and reading reading your book.
• 39:27
  SPEAKER_01: What what are you reading?
• 39:30
  SPEAKER_00: Um I'm actually so I listen to a lot of books, um, partially because of the ADHD, partially because I just don't have time.
• 39:36
  SPEAKER_00: So I'm actually listening to Dan Brown's new book.
• 39:39
  SPEAKER_00: Um, so I think I've read all of his books.
• 39:41
  SPEAKER_00: Um, and I had to wait like two months because it was like I get them from the library.
• 39:44
  SPEAKER_00: That's like a really good tip for people.
• 39:46
  SPEAKER_00: We're talking about value.
• 39:48
  SPEAKER_00: Like your library is online in an app, and you don't have to actually go and you can listen to audiobooks and in and read a lot ebooks.
• 39:57
  SPEAKER_00: Um, but I am listening to I am listening to the Dan Brown book, um, which I'm I I'm enjoying.
• 40:02
  SPEAKER_00: Um, and I I'll tell you, I used to only listen to nonfiction and used to like try to read fiction.
• 40:07
  SPEAKER_00: And then I realized, just again from a timing perspective, that I was missing out on some of the stories and that imagination that comes with fiction.
• 40:14
  SPEAKER_00: And so I've been listening to a lot more of it.
• 40:17
  SPEAKER_00: And again, it's like that brain break.
• 40:19
  SPEAKER_01: Absolutely.
• 40:20
  SPEAKER_01: I I haven't read uh I haven't gotten that uh new Dan Brown, but he he is pretty good.
• 40:26
  SPEAKER_01: Um okay.
• 40:27
  SPEAKER_01: Well, cool.
• 40:28
  SPEAKER_01: Is is there any uh any area of study or anything that you've learned recently that's kind of the just blows your mind?
• 40:38
  SPEAKER_00: Well, um I mean I so I'm a geek and I um I I do a lot of consulting, Zoho, uh, CRM uh ERP systems.
• 40:48
  SPEAKER_00: Uh I I like technology, so I've been paying attention to the to AI, right?
• 40:53
  SPEAKER_00: And um say what blows your mind.
• 40:57
  SPEAKER_00: It blows my mind.
• 40:58
  SPEAKER_00: And I've I've tried to invest more time in learning a little bit beyond just like Chat GBT, um, and really trying to understand all the capabilities.
• 41:11
  SPEAKER_00: And I mean it's it really is amazing.
• 41:14
  SPEAKER_00: And what I really try to think about is um how like how quickly it is going to replace things, and maybe some people don't so I read a lot about that, right?
• 41:27
  SPEAKER_00: Like the the impact that and people not paying attention to that, and not not from a fear perspective, but just from a um like a sociological perspective.
• 41:38
  SPEAKER_00: Um, to me, that's it's just really interesting um to go down those rabbit holes.
• 41:43
  SPEAKER_00: I do tend to go down rabbit holes.
• 41:45
  SPEAKER_00: Um, I mean, it's a I think you probably could tell that um I am interested in politics a lot.
• 41:52
  SPEAKER_00: Um, and so a lot of that blows my mind.
• 41:55
  SPEAKER_00: Um, but I'm a huge believer in like say, oh, you know, you're you're biased.
• 42:00
  SPEAKER_00: No, I I mean maybe I am, I have my beliefs, but I am huge into fact-checking.
• 42:05
  SPEAKER_00: Like I will go down a fact-checking rabbit hole.
• 42:08
  SPEAKER_00: And to me, that's really important, but you learn so much.
• 42:11
  SPEAKER_00: Um, you know, we were talking about like tariffs, right?
• 42:13
  SPEAKER_00: And so I educated myself on the history of tariffs.
• 42:17
  SPEAKER_00: I also I like economics.
• 42:19
  SPEAKER_00: Um, I also listened to the free economics podcast.
• 42:22
  SPEAKER_00: Um, so like I went down that rabbit hole.
• 42:25
  SPEAKER_00: Um, this isn't really so much about mind blowing, um, but it was just about learning the history of it, um, and not just from a headline.
• 42:34
  SPEAKER_00: Um, so I do that, right?
• 42:35
  SPEAKER_00: I I I like to learn.
• 42:37
  SPEAKER_00: Um, I said that's from core value, learn something new every day.
• 42:41
  SPEAKER_01: Well, it sounds like you might might fill up your quota pretty easily uh once a day.
• 42:47
  SPEAKER_01: Um smoot Holly Act.
• 42:49
  SPEAKER_01: That was the tariff one, right?
• 42:51
  SPEAKER_00: Yeah, uh, I think so, yeah.
• 42:53
  SPEAKER_00: Um yes, uh originally um during like the you know the Great Depression and the this truth this it didn't work then, it doesn't work now.
• 43:02
  SPEAKER_00: But this so I'll tell you the interesting thing that I discovered was that um economists don't always believe like or agree on things.
• 43:11
  SPEAKER_00: It's one of those things that most of them agree on.
• 43:13
  SPEAKER_00: Um and I again going down my rabbit hole of research, finding um not only just like nonpartisan, but bipartisan information on it, which you don't actually see uh bipartisan information that agrees, right?
• 43:25
  SPEAKER_00: On um like there's things from like the the Bush Library talking about you know tariffs, and um it's one of those things that that was mind-blowing that there's so much consensus and something that usually economists don't always agree on things.
• 43:42
  SPEAKER_00: And I love I actually love reading about um economists disagreeing on things because it's they're not emotional, right?
• 43:50
  SPEAKER_00: That's like that's the cool thing, is that they're not really emotional, um, like some other other things, uh, but they're coming at it from different perspectives.
• 43:57
  SPEAKER_00: And I think that's how I try to approach things.
• 44:00
  SPEAKER_00: I know that was like very long-winded.
• 44:02
  SPEAKER_00: Um that is I said that is the ADHD in me, um, which you know, I have to know about things.
• 44:09
  SPEAKER_01: So um well, hyper focus is is definitely part of that uh that that part of the spectrum too.
• 44:19
  SPEAKER_01: Um okay.
• 44:21
  SPEAKER_01: Well, where can people find you if you want to be found?
• 44:26
  SPEAKER_00: Um, so I am on LinkedIn as Jessica Lee Levin.
• 44:31
  SPEAKER_00: Uh I am on Threads as Jessica Levin Sullivan.
• 44:37
  SPEAKER_00: Uh that is where you can see my political nonsense.
• 44:40
  SPEAKER_00: Um those are I'm on Facebook too as Dr.
• 44:44
  SPEAKER_00: J Lev, uh, but I'm pretty accessible.
• 44:46
  SPEAKER_00: I'm also um, as you mentioned, I'm the CEO of Abacus Worldwide.
• 44:51
  SPEAKER_00: Um, so you can find me there or and also CEO of Seven Degrees.
• 44:56
  SPEAKER_00: So I'm I'm online, so I'm very accessible.
• 44:58
  SPEAKER_00: And I love I love when people reach out and I love having conversations.
• 45:02
  SPEAKER_00: So I really do encourage your listeners to uh if you have a question for me, if you just want to chat, if you want to share something, if you want to debate tariffs, uh I'm around.
• 45:15
  SPEAKER_01: Uh okay.
• 45:16
  SPEAKER_01: Actually, I I now do have another question for you, and is can I call you Dr.
• 45:20
  SPEAKER_01: J Love from now on?
• 45:22
  SPEAKER_01: Because that's awesome.
• 45:27
  SPEAKER_01: Alrighty.
• 45:28
  SPEAKER_01: Well, cool.
• 45:29
  SPEAKER_01: Dr.
• 45:30
  SPEAKER_01: J Love, I've really enjoyed having you here on the podcast.
• 45:34
  SPEAKER_01: Uh and it's been a great episode.
• 45:35
  SPEAKER_01: Thank you very much.
• 45:36
  SPEAKER_00: Thank you.
• 45:37
  SPEAKER_00: It's fun.
• 45:39
  SPEAKER_01: That's a wrap.
• 45:40
  SPEAKER_01: You've been listening to Max Value Podcast.
• 45:42
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• 45:48
  SPEAKER_01: I'm Ben Town with Detrant Advisors.
• 45:51
  SPEAKER_01: Catch you next time.