Ten Advices

Far be it for me to think about 2008 already but what are you doing about your taxes, wills and money? People tend to look for accountants, lawyers and investment advisors too late in the cycle. Accountants have NO time for you come January 15 given they go into tax season and investment advisors are in the same boat since its RSP season. Having once been a lawyer, I find the process of how people look for professionals to be completely random, scattered and, at times, completely wrong. Once they retain them, I also find the process of how most people deal with professionals is well-intentioned but completely open to abuse from the shadier members of any profession which leads to outrageous bills, self-serving advice and frustration.

Today is the first of two parts on professionals. This post addresses finding a good professional for you and tomorrow’s post addresses how to deal with them once you have retained them. I am going to start with the proposition that one is looking for a long-term relationship with their professional. If you want a one-off thing done then please stop reading and hire any old accountant/lawyer/advisor. But I am one of those people that wants to grow old with my professionals so that I get meaningful advice. I also note that in the book the Millionaire Next Dollar, most millionaires profiled in the book spent more than the average person on professional advice so there may be some correlation between good professional advice and net worth (since I no longer practice, I can write this without sounding self-serving!).

If you are looking for a professional or want to replace yours, here are some tips to help you:

1. Find a really busy one. Or to put it another way, the professional that advertises may not be the one you want to retain. If someone is good they will eventually be found and hired- a lot. If they are busy, there will be little need to advertise which is not to say that a professional that advertises is a bad one (they may be just starting out, relocating to a new city etc.) but hiring a busy professional is tantamount to the saying “if you want something done, find a busy person.” Think about the lawyers who advertise- typically personal injury lawyers (aka ambulance chasers) or immigration lawyers- or accountants that advertise- the H& R Blocks of the world- they specialize typically in “one off” transactions and are not really in the business of knowing you that well. They also tend to work on volume business and you’ll be nothing but a file # to them.
2. Ask for a referral but with people in a similar context as you. Word of mouth is by far the best way to find out about anything from a trusted source but I would go one level deeper and suggest that the people you ask a referral for are in a similar life situation as you. My parents and I have different lawyers; my parent’s lawyer is winding up her practice and has more of a real estate/immigration practice than my lawyer who is more of a tax/corporate lawyer and approximately the same age as me. My parents have different needs and wants from their professionals than me so I tend not to ask my parents who they would refer me to for professional advice; they are in a totally different life context than me and their professionals (assuming they are happy with them) tend to give advice with that context in mind. The other tip is to ask for a referral from someone already in the profession but who may not want you as a client (they may work for a huge firm, practice in another city, have a different specialty than what you are looking for etc.)- professionals look at other professionals differently and they may be able to give real insight into whether a professional is right for you.
3. Ask your referral about your experiences with them. “Nice” is the most over-used word in the English dictionary. An investment advisor being “nice” is not the same as an investment advisor being good with your money. I would drill down on the questioning (if its not too much of an invasion of privacy)- is the advisor returning above market? Does he only sell funds or recommend stock? Does your accountant invest money or does she hide it under her bed (don’t laugh- I knew an accountant who had his entire life savings in a bank account; could not tell you one thing about how to invest all your tax savings)? Does your accountant have a lot of self-employed clients or are they all employees (entrepreneurs really need an accountant who knows some tax planning, little-used deductions etc.)? Is your lawyer expensive (most bar associations now have “recommended” fees for certain types of transactions posted on their websites- although they tend to always be on the low side)? Is your lawyer give you advice or merely an order-taker?
4. Interview them. When I practiced, I use to find it strange that people would interview the band or DJ playing at their wedding for a longer period of time than their professionals. People use to hire me after 10 minutes talking to them-even when I suggested they should interview around to make sure I was the best fit! Most professionals give you a free 30 minute consultation. Use the entire time to find out about their clients (do you zig while all their clients zag), their life experiences, hobbies etc. You are entrusting a lot of private information and, perhaps, your life savings with them. Make sure you really trust them as people first and professionals second.
5. The lunch test. A colleague of mine left a mega-firm to join a really small law firm. They have a test for admitting new lawyers- assuming you have passed all your interviews and the interviewers like you, if you had lunch with all the partners and could carry on a good conversation during this time then you are hired. I think it should be the same thing with professionals. If you cannot have a one hour lunch with a professional that is enjoyable then find one that you can have lunch with. Some of the best advice I get from my professionals are over coffee, drinks, at basketball games, at the gym- the real insight comes when everyone’s guard is down. If your professional is a stiff collar who’s really formal, you may not get good grounded advice (unless you like stiff-collared people…

Best of luck finding a good professional!