- PROFESSIONAL PRACTICES AND FAMILY BUSINESSES are attractive consulting niches, and Michigan CPA Judy Trepeck has built a blossoming solo practice by concentrating on these clients.
- TREPECK LAUNCHED HER CONSULTANCY by creating profit enhancement assessments especially adapted for professional service firms. Although realization rates were low on her first assignment, the practice soon turned profitable.
- FAMILY BUSINESSES AND LAW OFFICE PRACTICES FACE similar challenges: Personal ties get in the way of business issues.
- TO MARKET HER FIRM AND EXPAND her own knowledge, Trepeck joined relevant associations, read industry newsletters and publications and attended conferences. She held a constant focus on marketing.
Professional practices and family businesses are prime candidates for consulting engagements. When Michigan CPA Judy Trepeck wanted to establish niches in both practice management of law firms and family business consulting, she hit the books and started an active networking campaign. The result has been a blossoming solo practice serving two highly lucrative markets.
A BREAK WITH TRADITION
Trepeck began laying the ground-work for her move away from traditional services and into consulting in 1991, when she was a partner at a regional firm. Research was the key. I read like crazy, she says. She combed through periodicals about law firms and law firm management newsletters, joined the American Bar Association and its law practice management section as an associate member and attended meetings of the Association of Legal Administrators.
Trepeck had been involved in a program provided by the State of Michigan that consulted with successful start-up companies that had trouble getting past the growth stage. She used what she learned from that experience to create a profit enhancement assessment specially adapted for professional service firms. To market her service, she purchased a client newsletter on law firm management from Practice Development Institute, customized with her logo, chosen colors and a list of service offerings. Her group then bought a mailing list of lawyers in law firms of 10 to 50 lawyers, and verified its accuracy before using it. Today, her firms mailing list of lawyers, legal administrators, referral sources and media has grown to 925 in number. An influential contact who did marketing consulting for lawyers and CPAs knew about the profit enhancement assessment she had created and referred her first client.
Our realization rate on that first assessment was horrible, Trepeck says. We did $18,000 worth of work and we charged the client $6,000. Trepecks process is ongoing, however, and she was able to bill over $100,000 in the first year and between $50,000 and $100,000 in each of the following years. Not every job turns out to be that big, but theres always work to do for years afterward.
Trepecks consulting practice grew and in 1994 she left the firm in which she was a partner to launch her own practice, devoted entirely to law firm management issues. Six months into her new business, the managing partner of her largest law firm client referred a family business client who needed management help. I want you to do for them what you did for us, she recalls him saying.
The combination of the two niches worked well, Trepeck found, citing comparable problems in family businesses and law firms. Families are related by blood, but in law firms many times the partners went to law school, even elementary school, together, she says. As a result, the businesses face similar challenges; and personal ties often get in the way.
To learn more, Trepeck joined the Family Firm Institute, an association for professionals serving family companies. She also joined a local family business council, but found it underutilized. To help it grow, and to learn more herself, she volunteered to perform a study assessing the groups growth potential. She organized focus groups from family businesses to examine issues of importance. Trepeck now chairs the councils executive committee and its board of directors.
The law firms with which Trepeck works have from 10 to 50 lawyers and 20 to 100 total employees. Her family business clients range in volume from $1 million to $40 million in sales. Trepecks engagements for law firms address issues such as
Name: The Trepeck Group, LLC.
- Profit enhancement. This process is the one she used to start her practice. Trepeck gives a customized survey to all firm members, from those in the mailroom to the managing partner, covering operations and other issues. She conducts focus groups with the staff, one-on-one interviews with partners and performs financial analyses. Her work culminates in a written report of 20 to 25 pages and a presentation examining several areas of the firm such as management, administration, technology or the associates groupstaff attorneys who arent partners. The report summarizes current challenges, offers recommendations and contains an action plan arranged in priority order. I dont just give firm members the action plan and leave, Trepeck says. I help them work through it to make sure all the steps are accomplished. Because Trepeck has already interviewed everyone in the firm and included their opinions in the recommendations, they buy into the process and will help you accomplish things throughout implementation, she says.
- The executive committee. Trepeck helps partners learn how to make decisions, stick to an agenda and improve, streamline and minimize meetings.
- Administrative issues. Trepeck will streamline billing processes; revamp internal accounting departments; create performance-based compensation programs for partners and associates; examine staff salary administration; recruit legal administrators; facilitate mergers; consult on strategic planning and cash flow enhancement; and train staff to work in teams to solve common problems. In addition, her retreat facilitation helps law firms achieve consensus and learn to work together as a group.
- Functional financial statements. Trepeck generates statements that categorize expenses by function so the numbers are easier to understand and use. Her statement might show, for example, how much associates cost in total, not just in terms of salaries but including benefits, dues, travel and expenses.
Many similar services are appropriate for family businesses. For those clients, however, the first task usually is to facilitate communications among family members. In family businesses, there are three overlapping circles: One is family, one is management, one is ownership. The problem is that when a family gets together to meet about the business, they end up in the middle of all the circles, so they drag in ownership and family issues instead of focusing on management. The consultants goal is to separate the circles and get them to focus on business in their meetings, so they can make decisions. Trepeck facilitates annual family meetings devoted entirely to family issues as one way to ensure more personal concerns are addressed outside the business sphere.
In approaching families, CPAs need to be aware of a common misconception, Trepeck says. Family business management is a niche most CPAs can get into easily if they understand the difference between being a family business consultant and merely doing the tax work, she says. When many CPAs say they specialize in family businesses, they mean tax planning. They may do some succession planning, but its not management succession planning; it involves ownership of stock within the family. They stay on the tax side as opposed to the business management side.
In her family business engagements, Trepeck does no accounting or tax work, sticking instead to consulting issues. In acquisitions, most CPAs work with a lawyer to put together a buy-sell agreement, but I work with the family to be sure that the accountant and the lawyer understand the familys wishes, she says. To enhance her credentials and effectiveness, she has formed an alliance with a nationally known family business therapist who lives in her area.
|Here are some of the tools Trepeck recommends.|
Professional service firm management
THE VALUE OF EDUCATION
Because no degree programs or certificates are offered in these areas, tenacity is vital to understanding either niche. Education can be an expensive investment, but its well worth it. Trepeck has attended two-day law firm management conferences sponsored by the Business Development Association in Washington, D.C., in which she was the only accountant in a room full of 60 law firm managing partners. Although the travel and the conference were expensive, she found the exposure to the problems and solutions of these legal heavy hitters invaluable.
Trepeck employs only a part-time secretary who works from home. Because of the skills and experience necessary for these engagements, it is difficult to delegate work to lower level staff. She has tried to mitigate the problem by teaming up on some engagements with more seasoned practitioners in a Canadian accounting firm and by hiring former legal administrators on a contract basis. The administrators enjoy consulting, she says. Many have worked in law firms for years and gotten burned out, but now they can go in and really solve problems. People listen to them because they come from the outside.
To enter either law firm or family business consulting, its important to develop a presence in those markets and to establish credentials that demonstrate depth of knowledge. Join the relevant associations and other professional groups, read up on the field, subscribe to relevant newsletters. Theyre the same steps that can work in any niche. Other marketing activities for Trepeck include speaking for the local and state bar associations, writing for legal publications and conducting surveys of groups such as the Association of Legal Administrators, then speaking and writing about the results.
A consistent marketing effort is paramount, Trepeck says. The biggest mistake I make is when I stop marketing. When you work as a consultant, you always have to have irons in the fire. If youre a sole practitioner and you have 10 active clients, youre a busy person. How are you supposed to market on top of that? (Trepeck works with between 6 and 10 clients at any given time.) Her advice is to combine different activities with marketing. When you join something like a local family business council, youre really learning and marketing at the same time. When you have the opportunity to do both things at once, consider it a privilege. Her advice to those interested in consulting in these or other areas is to choose a specialty and stick to it. She has not performed traditional services since she went solo. Its fine to think of yourself as a general consultant; but if you want to get away from tax and accounting, remember that businesses today want to hire consultants who are experts. That means you have to pick a niche and get very good at it.