Lessons from a Maverick: Finding a Better Way with Mike Payne

Mike Payne, founder and CEO of BOSS Advisors, had an atypical path into his career as he holds both a CPA license and is a member of the State Bar of Arizona. On Episode 27 of CPA Life, Mike talks to John Randolph about his unique educational journey, and his experience working at a Big Four firm, before striking out on his own. Mike had a number of experiences that highlighted the need for change in public accounting, and he has built a firm focused on client service, that breaks from the traditional billable hours model. Part 1 of this conversation offers practical guidance and inspiration for anyone seeking to strike out on their own and build their own firm that does things better.

Transcript:

Hey everybody! Welcome to another episode of CPA Life podcast, where we spend time talking to firm leaders and industry insiders across the country who are really passionate about disrupting the accounting industry: Leaders who place an extreme high value on their people, leaders who are seeking a way to show the next generation of CPAs that you can have a great career in public accounting without having to sell your soul at the altar of your job.

And today, we’re going to dig into some of the specifics of how one of those firm leaders has been working on building a firm just like that. Today, we’re joined by Mike Payne, who is the founder and CEO of BOSS Advisors, which is based in Phoenix, Arizona. They are a one stop shop for accountants—or of accountants and lawyers, and focus on supporting business leaders, business owners that are for profit and not for profit organizations. Mike, thanks for joining us today.

John, I appreciate you having me on. I’m a big fan of your podcast, and I was looking back through some of the people you’ve had on recently. A few of them, I had the opportunity to meet in person at the recent QuickBooks connect conference. I’m honored to be among great leaders in our industry. So I appreciate you.

Well, I know that you and I’ve been trying to nail this down for probably six to eight weeks, which kind of goes to speak to our personalities of trying to herd cats at times, right?

Yeah, I’m the number one cat that I’m trying to herd, so.

Well, I appreciate you joining us today. And we’re gonna dig into some of the things that you’ve done in building BOSS over the last few years into the firm that it is today. But you know, one of the things that we typically do on our podcast is we try to give listeners a quick snapshot of where you came from, and how you ended up on this path of firm ownership. And your journey is a little unique because you’re not just a CPA—apparently, you’re a glutton for punishment, because you’re also a J.D. So tell us a little bit about that and how you came to the point where you’re at today?

Yeah, so basically, John, I was indecisive, really. I didn’t want to stop going to school because I didn’t know what I wanted to do yet. And so I just, I talked to one of my professors at Northern Arizona University where I did my accounting degree, and he was a Cornell Law grad, and basically said, “Hey, you did pretty well at this business law course, you’re doing well in your tax classes—why don’t you consider going to law school and pursue a career as a tax attorney? That’s a specialized area.” And probably halfway through college is when I started seeing how my career would shape up and ended up taking the long route, like you said, to a few extra years in school.

Got my CPA license, started working for Ernst and Young, and I was working in their nonprofit organizations group, and so I got really deep specialty working with tax exempt organizations. And then I went and worked at a law firm for a bit, went back to Ernst and Young, and then right about the time I was approaching senior manager, I had a couple experiences that kind of led me to the conclusion that I had started college with—my aspiration was—to be a business owner someday. And you know, it took me over 10 years in industry before I decided that I was going to actually do that.

And so I broke off and end of ’17, I started a law firm and a CPA firm in Arizona, and I met with the State Bar, I met with the Arizona Board of Accountancy, to make sure that I was able to do two conflicting—kind of conflicting or complementary, I guess you might say—professions and run these firms side-by-side. And there was a lot to work through. I had to keep two separate sets of books. I had to keep two separate entities separate EINs, separate calendars, separate billing system, separate emails. And I did it that way for three years, ran these firms side-by-side. And really, my strategy was to scale the accounting firm, and keep the law firm as a kind of a solo practice.

And so fast forward a little bit, 2021, Arizona became the first state in the nation to allow lawyers to share fees with non-lawyers, which meant that I could now partner up with—my business partner in the CPA firm was able to own part of a law firm. And so we joined these two firms together and now we have the first as far as I’m aware, the first firm in the nation to be approved to practice law, accounting, and tax all under one roof. So that’s kind of how I got to where I am—a series of somewhat unintentional career decisions, but got me to a place that I’m really happy now.

You talked about the necessity to keep separate books, separate calendars, separate everything. Was there ever a point in that process where you thought, “Man, this is just way too much red tape. I need to focus on one thing and only one thing?”

Yes, lots of times I had that thought. But I saw a vision, and at the time, you know, before 2021, before Arizona did this, there were rumblings that something like this would happen eventually in our industry. And actually, if you look outside of the United States, it’s very common for lawyers and accountants to practice under one roof. I believe that’s the case in the U.K., and in some places in Canada, and maybe even Australia. I’m not sure about that. But I know some of the countries that have kind of similar rules of law as we do have allowed this for years. And that’s why the actual, the largest law firms in the world outside the U.S. are big four accounting firms, because they practice law and accounting under one roof.

And so we knew it would be coming to the United States at some point. I happen to live in a state that’s very business friendly. Governor Ducey at the time supported this and ended up making it happen. And luckily, I was watching the journals, and as soon as I saw that that was a possibility, I spent probably about 100 hours preparing for our application to go to the Supreme Court of Arizona.

Wow.

And that ended up being approved, and worked out well.

So do you find wearing dual hats—and I’m not only speaking about you personally, but as a firm—do you find that as a significant advantage in the marketplace today, when you’re either talking to current clients or prospective clients?

Absolutely. I was at a networking event last night with Michael Ly, who’s an accountant here in Tempe. And I had a business owner who was telling me her frustration—she’s developing a medical device that she’s going to take to market, and her frustration with her lawyer was that, you know, in her words, right when it started to get interesting, he would have to stop and say, “I can’t provide tax advice.” And as soon as she got into a conversation with her CPA, and as soon as it started to get interesting, he would stop and say, “I’m sorry, I can’t provide legal advice.” And so you get—the clients get to this point where they get frustrated, and a lot of times—because we haven’t done a tremendous job cooperating as lawyers and accountants—a lot of times the client ends up being the facilitator or the translator between their professionals. Whereas, you know, in our firm, we’re now able to flip that on its head, and if I’m sitting in a meeting, where we’re doing some tax planning, and a legal issue comes up, obviously, I wear both hats, so I can switch back and forth seamlessly.

But even someone on my tax team, who has no legal background, can say, “Hey, can you hold on a second? Let me join in one of our lawyers. They can answer this question right now,” and vice versa, which makes it very convenient. And the byproduct of this that I didn’t necessarily anticipate was that our legal professionals have become very proficient in the tax rules, and our tax professionals are starting to really understand the legal implications of the tax strategies they’re implementing.

Well, you know, if you hire the right people that are passionate about learning—we’re encountering a generation or two of people that don’t want to just have a job, they want to learn. And I think if you bring those kinds of people into an organization, they’re going to see that they can expand their tool chest, so to speak, albeit, they’re not going to be a lawyer, or maybe they decide to go to law school, or go and get their CPA if they’re not already. While that may not be the end desire of that person, there is the desire to learn and grow and gain more knowledge, and speak more intelligently to the situations you’re with. So, you know, I can see where the people that you’re hiring will see that as a plus to their careers.

Yeah. I have a practice manager—she’s managed law firms in the past, she can run a consult meeting, John. She can sit in front of a client, and you know, she doesn’t have the CPA credential or the J.D. credential, but she’s able to speak from a perspective of “this is what the firm does, here’s the needs you identified.” She can really run that meeting very effectively, just from what she’s learned from our formal firm trainings and then osmosis by sitting through a lot of these other meetings that we’ve conducted.

That’s been a very efficient tool for me, and something we’re looking to do more going forward, is take the partners—take the highest billing people out of the consults—and bring in someone who can run that discovery meeting efficiently without having to take attorney time or CPA time, and can kind of, you know, do the dirty work and weeding out potentially good clients versus bad clients, and also representing the firm in a way that, you know, provides confidence to the clients that are looking hire us.

Absolutely. I want to talk about kind of where you guys are today with BOSS—how you’ve ended up down this path. And I always hate using the phrase “ended up” because it sounds like you just woke up one day, and this is where you were, and I know that that’s not the case. So first of all, number of FTEs—how many employees do you have in the firm total, and then kind of break that down to the law side and the tax accounting side?

Yeah, so we’ve got ten on our team, a couple are contractors, but I’ll just kind of walk through the positions and the roles. So I’m a CPA and a lawyer. I’m the founder and CEO of our company. I spend most of my time working with new clients and training my team. Those are my primary roles. And then you know, administrative parts of running the firm. I have two Administrative Professionals—a practice manager and an administrative assistant. And I’ve got on the tax side, we have two tax managers and a tax preparer. We also have a full time bookkeeper. And then on the legal side, we have two other attorneys, each of whom are tax attorneys. One has experienced the Big Four, the other has an LLM, which is a Master’s of Tax. And then, we have two consultants that work with us regularly. One’s a nonprofit professional, and the other one is a law student who serves as a law clerk with us.

Okay. So 10 FTEs, 10, 11 FTEs. You spent 10, 11 years working in traditional public accounting firms with a big piece of that being at EY. At what point, Mike, did you not necessarily step away and say, hey, I want to build something on my own. But at what point in the journey did you say, hey, not only do I want to build something of my own, I don’t want it to look like where I’ve been—because where I’ve been, it’s broken. As several people have put it, that we’ve talked to not only on the podcast, but also as candidates on the recruiting side of our business, it’s the number of nights you walk out at 11 o’clock, drink beer with your buddies at happy hour—not necessarily happy hour, but just you know, a bar before you head to the house and get two hours of sleep. But it’s that—

You call it “numbing hour.” You numb yourself.

Exactly! And inevitably the conversation that comes up in there of simply put—man, there’s got to be a better way. At what point did you step away and say, not only is there got to be a better way, I think I have that?

Yeah. I can think of three distinct times where I had realizations that the way that the firm was doing things—EY being the firm—wasn’t necessarily the way I wanted to serve my clients. And this was at the point where I had been a tax manager for a few years, and I was the primary point of contact with the clients. And they were all different perspectives. One time, we had a, you know, a $50,000 tax return that we we’re working on. And we’re required to bill all of our time. And so I had a client that picked up the phone, called me, I was able to answer the question on the spot—we spent about 15 minutes. So I billed a 0.3.

And then when it came time to turn in our billing, you know, the partner would look at the time and make adjustments, write things up or down. And I noticed that they were billing, you know, $175 for this 15 minute question. And so I approached the partner and I was like, hey, do you think that maybe we should just include that as part of our $50,000 tax return? Because in the client’s mind, you know, we are their tax people, and this is a question related to the tax return. Can we not just eat that little bit of time, even though I wasn’t directly working on the tax return? It was for the benefit of the client.

Right.

And he agreed. But really what that sparked in my mind was Isn’t there a better way to do billing than tracking our time and, you know, looking at every minute we spend and encouraging the clients to essentially not call us because they don’t want to incur charges.

Another experience I had was working with a partner who, during my annual review, I was a second year senior accountant, and I brought in two clients—which was a big accomplishment for me. It was pretty much unheard of at that point in anybody’s career. And I remember sitting in the meeting and he called it a fluke. He basically said, he used the exact word, he said, yeah, you know, I appreciate that you did that, but that was a fluke, that won’t happen again. And that was probably the turning point where I said, okay, I’m gonna do this better on my own.

And the third one was just the amount of administrative garbage. I’ve used another word, but I’m not sure how many of your listeners are driving their kids to school, but let’s call it bull garbage that we had to do.

Yeah!

And it just seemed like, the vast majority of my time as I approached senior manager was internal budgeting, and planning, and capacity planning, and required trainings. And I spent, you know, maybe a third of my time actually working with clients and serving clients, and I just had this overwhelming feeling that that’s got to be flipped—we have to be client focused, we have to be client-centric. Clients should come first. I know the firm is important, but if you’re not taking care of your clients, there’s no firm to run.

Absolutely. You know, Mike, one of the things I’ve said for years is there’s a lot of parallels in the public accounting space and in the recruiting–executive search space. They’re both service based businesses, we don’t manufacture a product, we typically don’t have inventory. We don’t have facilities. It’s intellectual capital and relationships: Those are the two things we have.

You talk about being removed from the customer—I can’t tell you how many times I talked to people in the public accounting space, or I talked to peers of mine in the recruiting and staffing industry, and they work for large firms in very senior level positions. And when we start talking about client interaction, there’s virtually none. Virtually none. They spend the majority of their day managing business, training people internally, and dealing with problems—and not client problems—internal issues.

Yeah.

And I think you’re right. I think that one of the biggest challenges that most people face when they step out on their own, if they’ve been sitting in a seat like that, for such a long period of time, is you’ve dealt so much in theory, you haven’t been in the trenches, and in the battle enough to understand what are the things impacting your customer right now, today?

Yeah—among other things. I absolutely agree. One thing that became very apparent to me when I started—not only was that false mindset kind of prevalent, and I had to go through a transition period where I had to change my mindset about client work—but also, there were so many essential skills that I didn’t develop at other firms. Things like, you know, the economics of running a business, and knowing how to sell. And maybe I wouldn’t have left if a partner had pulled me aside and said, hey, I want to bring you to these sales meetings, I want to show you how to provide value to a client to the point where they can’t say no, because I want to show you that—here’s how you do it. You get to know the client, you ask probing questions, and then ask more questions and more questions until you fully understand their issue. And then you tell them how you’re going to solve their issue. And then they hire you. That’s pretty simple.

Yeah. It’s something though, that we just assume that people intrinsically know, hey, this is how you go about doing that. And I can see early in your career, if somebody says, “Well, that was a fluke,” you know, either one of two things happen, somebody is either going to shrink from that, and, you know, potentially, the firm has squashed some abilities that somebody has by making a statement like that, or they’re going to lose a good employee—in your case—because there’s a part of you, there’s a part of that ENFP that does come into play in situations like this, where somebody says something, and there’s a little bit of you that bows up and says, “Really? I’ll show you!”

“Challenge accepted, my friend!”

Yeah, it’s one of those things that you have to understand, you gotta be able to read the room. And if one of your people in your room is somebody that’s gonna bow up, you need to be able to make sure that you’re not doing that to them, because that’s a great way to escort ‘em out the door.

One thing that I’ve learned running my firm and leading people is that there’s ways to determine if you have the right people on the bus. And the way you do that, you know, we’re talking about the “Entrepreneurial Operating System,” EOS, has a tool called the people analyzer, where you basically look to see, are they living the core values of your firm. If they are, then you have the right person on the bus. And then you’ve got to look at, do I have this person in the right seat? And looking back, it was very apparent to me that I wasn’t ever going to be the very best technician. I was a good technician, but I had people skills. I’d like to think that someone could have recognized that in me early in my career and put me into a position—put me into the right seat to where my job wasn’t cranking out widgets. But it was, “let’s put this guy in front of clients, let’s put this guy in front of potential candidates, because people relate to him.” And I would have been thrilled to take on a sales role and a recruiting role in that firm—that would have been a great fit for me. But you know, my job was to generate tax forms, and we did a lot of those.

Which I think speaks to some of the challenges that the industry is facing today, in a, “we’ve always done it that way” mindset. There’s a cookie cutter methodology to the process of bringing people in, having them grind, take them to the next level, have them grind, take them to the next level, have them grind, get them to a level where, okay, now we’ll start giving them a little bit more face time with customers. And it’s just a stereotypical world that’s been in place for over a century.

How do you go about as a leader—in not only your firm, but in the industry as a whole—how do you go about building an organization that recognizes the accounting world is not only changing from a technical standpoint, but it’s changing because it’s attracting people that want more than just sit me in a corner, and let me only crunch numbers all day? How do you do that in today’s world—not only in your firm—but get the word out in the industry, hey, this is this is a place where you can build a career, and it’s not necessarily a career sitting in the coat closet, doing tax returns for five years?

Yeah. That’s a really good question, which honestly, I’m still working on that question! But one thing that, it’s a principle that I’ve always believed in and tried to instill in our firm is, if I hire you, I trust you enough to be in front of a client, day one. And so I do not limit my team members’ abilities to talk to clients—whereas I know at other firms, larger firms especially, you’re seven years into your career before you have any face time with a client. I’ve got an accounting student who is a tax preparer for us who’s on the phone with clients every day.

Wow.

And you know, he’s not necessarily doing advanced tax strategy, but he is on the phone with clients, following up on information, reminding them of deadlines, you know, doing some of those things that are starting to develop interpersonal skills—and I’m not afraid to put him in front of clients—and because we started doing that early on, before he knew better, he’s not afraid to do in front of clients.

Mmm hmm.

And so that’s one thing that I’ve done. The other thing is with our model. We’re moving to a model where we recognize that at our firm, we’re not going to be the best incubator for one-to-three year accountants or attorneys. There are other firms that will provide formal training and work to get you to the point where you’re proficient, and you’re able to advise clients. We’re interested in picking up people after they’ve been through that, call it an apprenticeship really, with their first or second firm, and they’re ready to come to us with a consulting mindset, where they’re able to stand alone, take their own book of business, take their own client list, and be the advisor, be the primary point of contact—certainly lean on me and our other team members for any problems. But that’s what we’re looking for, is people who are ready to just jump in and take care of their clients.

And we realize that we don’t have to be the firm that trains brand new college graduates, and gets them to the point where they’re ready to advise. We’re just much better off finding those type of people who are already ready to go, plugging them into our system, and letting them build their own career, letting them fail. That’s a big part of growth, is I encourage failure, because failure is learning. If you’re so protected that you never have a chance to fail, you’re not going to grow. But I guarantee when you make that first or second mistake, the pain associated with that will ensure that you don’t make that mistake again. And fortunately, we’re not emergency room surgeons, so, you know, we try to put together a high quality work product every single time, but when there are mistakes made, it’s not the end of the world—we can fix those things.

Yeah. It goes back to the mindset of creating an environment that is free to fail. And the leader has to understand what we do is not life and death, you know? It’s critical, it’s important, but if we don’t do it 100% right, someone doesn’t die.

Yeah! There are no accounting emergencies.

Yeah. Now obviously, mitigating the level of the risk involved with those decisions, you know, a decision that has million dollar implications is probably not going to sit on the desk of a three to four to five year associate.

Sure.

Because if it is wrong, you know, the client could stand to lose some money. But the flip side of it is, we do want to put people in positions where they are going to have to react and learn from those mistakes. Like you said, there’s always something on the other side of that failure. And recognizing and realizing that you’re a firm that is not going to really be able to give someone what they need to succeed in that one-to-three year window, I think is a huge win, not only for you guys, but for the people that are knocking on your door, because there’s a lot of firms that don’t realize that.

Yeah.

There’s a lot of firms that think that, well, if we can bring people in at that one-to-three year level to just do busy work, just crank out returns, just, you know, hey, we’re gonna give this person all the 1040s year one, so that nobody else has to deal with them, well, the challenge with that is year two, they don’t really know how to do anything else. But the other thing is, have you really set that person up to succeed for you in year two, and year three, if you didn’t train, mold, and give them the knowledge they need? And it sounds like you guys have realized that’s not who we are. There’s other firms that do that better.

Yeah, we prefer to work with people like you so that when we’re ready to hire, you can help us just pick off the people who are already bitter and angry at their current firms, and come work with us!

And we do talk to several of those people on a daily basis!

We hope you enjoyed part 1 of John Randolph’s conversation with Mike Payne. Be sure to subscribe to the podcast on your favorite app to make sure you don’t miss part 2. Visit our website for links and shownotesat CPALifePodcast.com, and we’ll see you next time on CPA Life!

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BOSS Advisors

Mike Payne on LinkedIn

Lessons from a Maverick: Finding a Better Way with Mike Payne

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