Strategy, Specialization, and Scaling with Emil Abedian

Welcome to studying law around the world I'm Claudio Claus in each episode, I talk with lawyers, law students, and professors from different parts of the world to talk about legal education, careers, and what the profession looks like in real life we talk about the hard parts, the surprises, and the decisions that shaped their paths whether you're planning. To study abroad. Thinking about working in another legal system or just curious about how law works around the world? This podcast is for you. So many of the guests on this podcast have talked about how important it is to have strong writing skills as a lawyer. It's true, written communication is essential in this profession, but it can also be one of the trickiest skills to master. If you find your writing feels a bit clunky, or you're getting a lot of edits on your work, or perhaps you're breaking into an English speaking jurisdiction for the first time, Grammatica International can help. I'm Rebecca Lockwood, the lawyer, mediator and educator behind Grammatica, and we help lawyers and law students to write more sharply, speak more clearly, and advance their careers with group training and one-on-one skills coaching designed just for legal professionals. I have worked with so many lawyers like you who are exceptionally smart, qualified and capable, but need a bit of guidance to stand out in a competitive legal market. And I get it myself, having lived and worked in five countries during my 17 years in law and education. Whether you're looking to sharpen your writing skills generally, refresh your CV, or draft an application for a law program, Grammatica can help. Visit gramatica.co to learn more. Today, I have the opportunity to host Emil Abedian, who founder and CEO of an accounting firm that is specialized in law firms. Thank you so much for joining us today. Very happy to have you today here. Thank you so much, Claudia. Thank you for having me. Appreciate it. And to start off our episode, I'd love to hear a little about you. Would you be able to introduce yourself to your audience please? Yeah, absolutely. I'm, I'm a male Claudio, as you know, I'm a, I'm a CPA and CPA for for many years starting my career back in Sweden where I grew up. That's what I was raised and graduated from university in Sweden, worked there for a few years at Ernst and Young at the Stockholm office before I decided to move out to California in 2007. So about 18 years ago when I moved out here and I started my career at the larger firm in in Los Angeles area and gradually moved over and started my own practice a few years later in So that that that's a little bit about me. I don't know how much how much more you want to know, but the professional background is where that it is. And we started when I first started my practice, it was just the general practice without really knowing what my nature would be. But we got into doing accounting and taxes for anybody who wanted my services, which we pretty soon realized that that was not did that was not the the way to grow business. My well, I, I guess we'll talk a little bit more about that down the line here. No worries. Well, you, you just censored, you know, the first question I was thinking about asking you about this, this transition from EFI to funding your own firm. So if I may go into I guess the next step then. So what motivated you to move into a practice that is focused on lawyers? As I mentioned when I first started, when I first started my own practice, the reason really I started my practice, the main reason was because I always wanted to do that. You know, I, I could see myself working initially gotta work for a firm obviously to get some experience and know what you're doing, but that was never my intention. I couldn't see myself being at the firm, larger firm like that than just be a part of a bigger organization and just follow what that organization is doing and want us to do. Back on my head, I always had it in my bed. I need to open up my practice. But in 2009, the reason I really did it at that time was because I got laid off. So I was brand new into in, in in the country here about two years brand new, not really brand new, but but two years into the country and about a month before I was getting married, we got laid off me 526 people of us at the firm at the same day. You're probably too young, but 2008, seven, 8-9 was not good years, especially here here in the in America. So the firm let let a lot of us go. And that really triggered, triggered me to really push it and decide to open up my own practice at that time. And to answer your question now, why law firms? When I first thought I was here for two years, I didn't go to college years. I didn't know people from university. So my my connections were really limited. I didn't know there are people and was obviously that made it a lot harder for me to get clients that I wanted to work with. For that reason, I, I took on whatever client that wanted to work with me anywhere from individual tax preparation clients to larger businesses, which why had they experience with from both Ernst and Young and the firm I was working with here in California. But to get those kind of clients was not as easy because of my limitation in in relationships. So that said, you build a practice and pretty quickly the practice is growing. As professionals, we needed out there, as long as lawyers, CPA's, as long as you provide good service, the need is out there and it just comes back to you on how you really provide that service and how you provide that service in combination with the firm that you want to build. Those are two different things. You can grow firm significantly, which I was doing at that time, but not the way I wanted to build the firm. I was building it because I had to build it. I needed money, I needed to survive. We just got married and all that. But you realize that this is not, at least for me, this is not the firm I wanna build. I want more structured firm. I want to be able to provide value to my clients more than just prepare tax returns or give them a set of financial statements. That's not exciting. At least for me, that was not exciting. So after thinking through it long and hard enough, I decided to get into the law firm industry partially because it was a coincidence. When I started working with lawyers and lawyers saw that we were providing good service, they were start they start referring us other lawyers. So the book of business of law, law firms increased significantly. So and with that, the more you do something, the more you learn that industry. Obviously, we started learning small nuances and small details that lawyers need that not necessarily doctor or dentist or an architect or contractor needs the same way. So we got into the law firm industry and kept kept on developing our skills within the industry and provide more and more services with lawyers. But at the same time, I still had my regular general practice. So I was kind of going hand in hand. I was doing both law firms and non law firms client until last year, about over a year ago where I decided to cut the strings totally. It took me a long time to really cut the string, but I did it right now for the past over a year now we are only working the law firm. So if any other client knocks on the door would not working with them. We're not taking them on unless there's a direct relationship to a law from client to ours. Obviously if your lawyer and your spouse is a dentist, we help you with your spouses accounting and taxes also because the planning goes kind of handy hand. But we would not work with the dentist if they knock on the door right now. And the reason for that, Claudia, in my opinion is it's been, it's been absolutely phenomenal to do it by the way, to actually pull the trigger and just do one thing and one thing great is to be able to provide a value. The reason is to be able to provide value. And when you do provide value, clients come. There is no way you would not grow a firm within the legal industry, accounting industry, whatever, whatever work you do. But if you provide value to your clients, the clients will come 100%. And it feels, feels just great to have done that in the past, past year here. Fantastic. Taking all of that into consideration and as you look back into your experience, if I may ask you, was there a big turning point as well in your career that that helped in any way the way you advise your clients nowadays and especially focusing on law firms? Now you know, the, the way that the business world is going and moving forward, people are there, they need advice. You know, we're getting more and more specialized with whatever we do. I know their softwares out there just doing specific little small thing for your specific industry. Same with professionals. You go to a doctor, for example, if you're, if you're, you have heart problem, you're not going to go to dentist. You're not going to go to knee knee surgeon. You go to heart doctor. Same way should apply to us as lawyers and CPA. And I talked to lawyers and CPA's as us because in my world, it's the same kind of business. We just happen to offer accounting services and lawyers are offering law firm services, but in theory, the same kind of operation, same kind of business, same type of clients. So that's why I keep saying us when I refer to CPA's and lawyers. But we should see it the same way. Like why would a client come to an accountant working with millions of different industries where they can go somewhere else to get work with someone that really knows their industry and knows their pain points and can really guide them in the right direction rather than just offering them compliance work. So that that's the that's the idea. And that's the turning point for me that the more time goes, the more we need to get specialized because the, the industry or the, the, the business world is, is asking for it. And if we don't follow that, I think we'll fall behind. We'll fall short. Amazing. So I think that there's a few points that are interesting here, first of you're experiencing entrepreneurship, but then also your experience specifically advising in tax and all that. So I would say that many lawyers graduate knowing how to argue cases or or maybe that's something we learn on the go, even not even learn it in school. But anyways, but we don't really learn how to run a business in law school, right? And I wanted to know from your perspective, are there a few you know most common mistakes especially on the financial sense when you see, you know, small or mid sized law firms? I mean, yeah, you have a great point there, Claudia. Law firm, I mean law school or accounting industry, accounting department, accounting schools are not teaching students how to run a business then they're just not doing it. Whether it's a limitation in time or limitation resources. I don't know if it was me that the first thing I would talk teach to our students how to run a business because majority of lawyers that comes out, yes, lot of them go to big law firms, lot of them stay there. But at least where we are in California, a lot of a lot of students that come out and work few years open up their practice and without having the knowledge and experience, we'll experience comes, but the knowledge of running an operation, running a business, it becomes very, very difficult for these young attorneys to actually scale their operation. They get stuck. They get stuck with their own little world. They're fantastic, as you said, they're fantastic attorneys. They're aggressive and courtroom, They're settling cases, they're drafting agreements, they're helping divorces go through, but they don't know the back end of it. So we see a lot of that. And the main number one problem that I see with professionals, CPA is also, by the way, not only lawyers, but Cpas and lawyers see their their practice as a practice and not as a business. That's my number one thing that I see. We're professionals. We built like that, we trained like that would be professionals and our professional mind is totally different from the entrepreneurial mind, the business owner mind. And in order to really drive in your law firm, your own law firm, if you if you decide to open up your firm, not everybody wants to do it and it's not a good fit for everybody. But if that's what you're looking for to open up your firm, you have to train the other side of the brain to become a business owner. Otherwise, you might be better off just working somewhere because you will spin your wheels. You will work a lot longer hours than you were at the firm. You will not make as much money as you were at the firm. And if you think that you get flexibility as a business owner without having structure in place, you're wrong. There's no flexibility. You gotta work your butt off. But that's to be clear also, that's not the only way of running for him. There are there far better ways of running for. But we gotta train us. We gotta train that side of the. Amazing. No, that's great. I, I was looking through a few of the interviews you've given in the past and some of the content you've written. And I think there is something about here regarding an investor had something that you've said before, you know, how lawyers should be putting on that investor head on. So I wanted to ask you a little more about that. Can you explain what does that mean in, in more practical terms, especially for those who are managing their business And, and if I understand it correctly, you, you've written a book on, on that? Talks a little. More about that right, council to council. Can you tell us about that? Yeah, absolutely. So this is my first book, So now you can call me author also. So it's the first book I wrote. It's called Council to Council. The reason of the topic is or the the title is, my firm's name is council CPA's and we offer services to lawyers charge council. So that's where the council, the council comes from. We offer service to our law firm, but not only that, our law firm partners our councils to their clients. So it's a combination of what we offer to our clients and what our clients offer to their client. That's where the title so the council comes to from. And we're talking about how to really build and scale a law firm. And it's, it's from my perspective, really, it's a very easy read. If you want to pick it up and read it, you probably read it in a few hours. That, that was the idea. It's not meant to be very technical. It's meant to be for me to share my experience working with lawyers for the past 15 plus years and what I see with my law firm clients success stories. Why some law firms are driving and others are not. We're talking about some success, success stories, some less success stories. There are no failures. Nobody is failing. By the way, I hate that word. So we don't fail, but we have less success stories in our in the book. And also I'm comparing my CPA firm to other law firms. Also, as I mentioned before, I see CPA firms and law firms being a same kind of business. Yes, Ioffer accounting and tax services, lawyers offer legal services. The business itself is the same. This is the entrepreneurial part of the brain that needs to come in. What is the business? What business are you offering? So in this book, we're talking a little bit about that. And to your point, I'm talking a lot about the, the business part, converting your practice to business, because that's after all, I would assume you open up a business, your own firm to have a business. Otherwise you will just go work somewhere if, if that's what you want, which is perfectly fine, by the way, there's no one, no one that says that running a business is better than working somewhere. But if that's what you want, if that's what you're looking for to have a business, then you have to change your mindset and put the investor hat on. That's when it comes in. You put the investor hat on at the same time, you must have your professional hat on because we are professionals. You can't take that away from us. You have to keep providing excellent service, helping your clients, but that's not enough. Unfortunately, to have a successful business, that's not enough. You must put your investor hat on. And an example that I typically draw with with this in mind, with the investor hat on is for example, if you are, if you wouldn't be a lawyer, you would go out and open up a restaurant, let's say, right, you buy a restaurant, that's an example. You've got to invest a lot of money into that restaurant. Whether you start from scratch or buy an existing business, you need to invest a lot of money into this restaurant. If it's a new business, you need to buy equipment, You need to pay rent for several months until the business picks up. If it's an existing business, then obviously you got to purchase that business from the, the, the seller. So it's an investment either way. But professionals such as lawyers and CPA's as well. When we open up our firm, we don't see our firm as a business, therefore we have a hard time investing, putting some money up front, including myself. I do not believe this is exactly the mistake I did, which I wish I didn't back then, but I didn't know any better and I'd done millions of mistakes throughout this 1520 years. But we live and learn and that's when if you would see this as a business from day one and invest some capital into your business and structure it in a way where it's a lot more scalable because alone it's just so much you can do. What can I do? I can't do marketing, offering services, go out and do networking, do my accounting, answer the phone calls, be the IT person in the firm. Like it's just your time is just limited. And I wish we could do all of it and not have to invest the money. But that's what I mean with the investor health on Claudio, you unfortunately have to invest some some money into the business if you want to build that business again, some firm, some lawyers just opened up. So you know what, I'm just tired working somewhere. I just want to be me myself, Just run my practice. Very small ownership, very small practice. I don't need to have a higher people. I don't need to have millions of clients or grow firm. Those cases. It's perfectly fine. You can just gradually grow your firm and you don't really necessarily need to put the investor hat on, but you still need to put put the business owner hat on the investor hat. And the business owner had this different thing. Investor puts money into an operation and expects return in return from that investment. The business owner is the operator, the professional is the professional who provides services. So there are three, three kind of hats that we need to consider. The professional 1, the business owner one and the investor one, which a lot of time people think the business owner and investor is the same. In my opinion, it's not. It's an investor. You could as well put $100 into Apple stock and expect return in dividends and expect the value of the Apple stock to go up. The business owner, you're actually in the business and doing the work involved, managing and growing the firm and as a professional are actually providing the services yourself. Does that make sense, Claudio? I'm curious now that you that you tell me that's different hats and and how you know people have different goals, right? But you could say it's a fair assumption should say to business once you have a profit. So I also wanted to know in your, in your experience and, and from all of that, are there a few things specifically that you've seen that separate firms that then have that growth sustainably from those that might struggle your after year? I know you said something very interesting about putting in the the investment up front and all of that, but are there some other things that you notice to some maybe trends in the sense of how do you grow firm? Absolutely. It comes back to being a professional. Again, as professionals, including me, I'm talking about myself as well here when I'm talking about professionals, because I'm a CPA, I was trained to be CPA, but I've been working on myself to kind of train my brain to be a business owner also. But it's, it's hard. It's very easy to go back and slip back to become a professional because that's where where we feel comfortable as a, as a professional. Biggest, one of the biggest thing that I see is the lack of delegation trust issue. We think we can do something better than anybody else. Nobody else can do it the way I do it. Yeah, that's, that's very true. Possibly nobody can do it the way I do it. But what is who am I to say that this is the best way of doing it? What if I bring in Claudio as my, let's say in this example, as a young CPA graduated, has few years experience, I've been in the business for 20 plus years. I've been doing the same things over and over. Just because I'm doing the same thing over and over doesn't mean that's the right way of doing bringing Claudio with his new way of thinking, new mentality. Yes, I might not like that we're changing ways of doing it, but I think that's a very, very crucial to be able to evolve your practice, to bring in new mindset, new kind of thinking, to change the way you're doing. Specially now with AI, like I'm pretty positive I know for a fact that the younger generation are a lot more AI driven than I am, even though I'm forcing myself to learn it. But someone that's 20 years younger than me right now would be able to implement AI a lot better than myself. So why not use that talent? Why not bring them in and let them develop the new way of doing business? So delegation, delegation, delegation. That's kind of goes hand in hand. It's kind of mindset and delegation. And Claudio come into my office or my practice. Claudio, this is your department. I want you to build new processes around implementing AI. Just as an example, how can we utilize AI to make our practice more efficient? That that's a problem that I see. Firms that are thriving are not scared of delegating. And in order to not be scared of delegating, it cannot be scared of making mistakes. Yeah. Maybe Claudio make some mistakes around, you know, that that that's part of it. I've made millions of mistakes. Why shouldn't Claudia make mistakes? We should encourage miss mistakes, actually. And by the way, talking about that, that's not only in, in in the business world. I think we should encourage mistakes in life. I'm talking to my kids all the time and I want them to make mistakes sometimes. I'm kind of setting him up to make mistakes because they learn. That's what we learn. And yeah, it sounds rude and cruel to set up your kids to make mistakes, but I think, I think that's how we learn. I think. And that will train their brain that it's OK to make mistakes. It's OK to be creative, to try new things. One out of 10 will stick. And that would be fantastic idea. A lot of people are telling me by the way, about making mistakes. A lot of people when I let go of all my non law firm clients because it was a pretty successful firm at about 2020 employees working at my at that firm. And I let that go and have someone else run it. A lot of people tell me like, you're, you're crazy. I mean, why would you do that? You've been building it for over 15 years, almost 18 years, and now all of a sudden you let it go. It's because I can see trying new things. Be brave. Will I make mistakes? It's absolutely this past year I made even more mistakes, but different mistakes from when I did with my other firm. I'm not going to make if I'm going to make the same mistakes I did with the other firm, then it's me to blame. But if it's new mistakes, which will take me to even higher, higher levels, I'll make the mistakes. I take that. So to answer your question, I'm going off track here. Once in a while, Claude, you gotta, you gotta bring me back. Answer your question. The ones that are delegating with systems in place. We need to have systems in place. Very important to delegate. I can't just hire Claudia and talent Claudio get it done. You can't do that. Claudia just have a couple of years of experience. For example. I'm just bringing you as an example Claudio, but and throw him out there. If we don't have systems in place, Claudia get will get frustrated. Very likely that he will leave within very quickly the firm because a meal as the owner is not supporting him. Has doesn't have systems in place. System does not mean control. You don't have to be control freak to have systems in place. You put systems in place to be able to measure and monitor what's happening and allow allow some room for mistakes. So that that's a key. The firms that are thriving my my clients that I see, the biggest ones are just in the background with the bird as we looking at the firm and making sure everything is working and when it's not, they're stepping in and trying to solve those problems. Amazing, that makes a lot of sense. And I, and I really appreciate you sharing that. I've also really liked what you said about, you know, raising children and teaching them how to make mistakes. I think that's always a nice caveat that we get here in the podcast, listening parenting tips and, and all kinds of things. And I think that that really makes our conversations even more rich. But moving forward here, I, I wanted to ask you about something very specific. So I'm just personally completing my, my law degree here in Canada. And, you know, a lot of the the listeners in this podcast are either lost students or junior lawyers just getting into the the workforce. And all of them listening today are are usually preparing to be, you know, in a future practice that that could mean even, you know, preparing all the financial side, being either a law firm owner or some kind of manager. So I wanted to know if you have a piece of advice that you give to this law students were starting today. Yeah, yeah, absolutely. First of all, you got to think of what is it that you want just because it looks sexy, to have a big firm, just because it looks cool, you know, people will talk about you and Meal or Claudia has a huge firm that doesn't mean crap. You got to feel see what is right for you based on your situation and what's right for you today might not be right for you 10 years from now. That that was me when I first started 2009. My idea was, you know what, I just wanna build a firm, help law firms, I mean clients in general at that time and I make a living. But thereafter you're, you're evolving, you are growing up, you are evolving, your ideas are evolving or it might not, but you got to see what's right for you. And do not be scared of making mistakes. I would just talked about you will be making mistakes. That's part of it. You have to do that. And do not be scared to change your route down the line. That happened to me. I changed my route because you evolved. You learn new things through your mistakes and you change your route towards something bigger and better. Why do you know that? Once you know what, what is it that you want? You got to again see this. If you want to build a firm, as you mentioned, most of the listeners are eventually gonna open up their own practice or become partners. You gotta see it as a business and do not only think through your professional, professional hat. That that's my biggest, biggest, biggest, biggest advice because I see that a bunch of clients that do not do that doesn't matter how much we talk to them, they still a professional without the business owners or investors have done and they get stuck. Those are getting stuck, but that's it. You cannot lose your professional hat because that's what that's who you are, that's what brought you where you are. You still have to be professional. You still have to treat your clients with a professional mind, but train the other part also if that helps. Amazing. Well, thank you so much once again for taking your time to be in the podcast today e-mail. I think those are some really valuable lessons and thank you all for listening. Thank you so much Claudia for having me. This was amazing. Thank you.