Episode 89: Selling Expert Services to Attorneys with Dan Ramey
In this season of the Data Sleuth Podcast, join Leah Wietholter as she discusses the business of forensic accounting with successful professionals who have done just that! As part of this series, Workman Forensics and podcast guests are providing free resources and tools to accompany each episode to help you with your practice whether you’re just starting out or wanting to take it to the next level. Make sure to listen to the end of the episode to find out how to download! Lastly, during the last episode of the season, we are going to answer all of your questions - so if you have any questions about the business of forensic accounting, send them to Leah via YouTube, LinkedIn, or by emailing us at podcast@workmanforensics.com.
Today’s episode with Dan Ramey is about how to sell to clients - specifically attorneys. In this episode, Dan and Leah discuss:
Types of services that fall under forensic accounting
How to sell forensic accounting service to attorneys
How to avoid the sales-y feeling
Considerations when starting a forensic accounting practice as a solo practitioner or within a public accounting or consulting firm
GUEST BIO
Dan is the Founder and President of Houston Financial Forensics, LLC, and Dan T. Ramey, CPA, LLC. His professional certifications include CPA/CFF/CITP/ABV, CFE, CVA, CIA/CRMA, CISA/CISM, and CMA. He is a past President of the Houston Chapter of the Institute of Internal Auditors and formerly a member of the Board of Governors. Dan previously served as Chairman of the Houston CPA Society's Forensic and Valuation Committee and served two terms as the Treasurer of the Houston Chapter of InfraGard. Dan is also an adjunct professor at the Hankamer School of Business at Baylor University – Accounting and Business Law Department and the C. T. Bauer School of Business – Accounting Department at the University of Houston, where he currently teaches Forensic Accounting and previously taught Enterprise Risk Management. Both courses are graduate level in the Masters of Accountancy programs.
Dan graduated from Baylor University with a BBA in Accounting and from Houston Christian University with an Executive MBA.
Dan was awarded the Certified Fraud Examiner of the Year award by the ACFE Houston Area Chapter in December 2019. In 2020, Dan was awarded a Lifetime Achievement Award by the ACFE Houston Area Chapter. In 2018, he was recognized by the ACFE at their Global Annual Conference in Las Vegas as Educator of the Year.
Houston Financial Forensics, LLC is a professional services provider in the areas of fraud investigation, cyber security / cyber fraud risk assessment, forensic accounting, and litigation support.
RESOURCES MENTIONED IN TODAY’S EPISODE
To access the downloads discussed in this episode, visit: datasleuthpodcast.com
To learn more about the Investigation Game Education Edition, visit: workmanforensics.com/tig-educators
Order your copy of Leah’s book, Data Sleuth: Using Data in Forensic Accounting and Fraud Investigations today on Amazon!
CONNECT WITH WORKMAN FORENSICS
Youtube: @WorkmanForensics
Facebook: @wforensics
Twitter: @wforensics
Instagram: @wforensics
LinkedIn: @workmanforensics
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Transcript
Leah Wietholter:
Hi, I am Leah Wietholter, your CEO and founder of Workman Forensics in Tulsa, Oklahoma, and this is The Data Sleuth Podcast. As part of this series, Workman Forensics and our podcast guests are providing free resources and tools with each episode to help you with your practice, whether you're just starting out or you're wanting to take your practice to the next level. Make sure to listen to the end of the episode to find out how to download. Lastly, during the last episode of the season, we're going to answer all of your questions, so if you have any questions about the business of forensic accounting, send them to me via YouTube, LinkedIn, or by emailing us at podcast@workmanforensics.com.
In this episode, I talk with Dan Ramey about how to sell to clients, specifically attorneys. In this episode, Dan and I discuss the types of services that fall under forensic accounting, how to sell forensic accounting services to attorneys, how to avoid the salesy feeling by just being yourself and asking questions, people hire people they like and want to work with. And then we also briefly touch on considerations when starting a forensic accounting practice as either a solo practitioner or within a public accounting or consulting firm.
Dan Ramey is the founder and president of Houston Financial Forensics, LLC and Dan T. Ramey, CPA, LLC. His professional certifications include, and it's quite the list, CPA/CFF/CITP/ABV, CFE, CVA, CIA/CRMA, CISA, and CMA. That's a lot. He is a past president of the Houston chapter of the Institute of Internal Auditors, and formerly a member of the Board of Governors. Dan previously served as chairman of the Houston CPA Society's Forensic and Valuation Committee and served two terms as treasurer of the Houston's chapter of InfraGard. Dan is also an adjunct professor at Baylor University and University of Houston, where he teaches courses in the graduate level of the Masters of Accountancy programs. Dan graduated from Baylor University with a degree in accounting and from Houston Christian University with an executive MBA. I'm so excited to have Dan on the podcast today, and I know you're going to enjoy this conversation as well.
Hi, Dan. Thanks so much for joining me today.
Dan Ramey:
Thank you, Leah. It's an honor to be here with you.
Leah Wietholter:
So excited. I'm surprised it's taken us this long to have this conversation.
Dan Ramey:
It's taken a while, but we're here.
Leah Wietholter:
Yeah, we're here. You are another individual that we've become friends through LinkedIn. We met over LinkedIn.
Dan Ramey:
And at conferences. We went to Joe's conference the first year.
Leah Wietholter:
Yes, in Joe's conference. Exactly. Yeah. All right, I'm going to jump into the topic today because we're going to be talking about selling services to attorneys. Of course if we touch on other types of clients, that's fine too. But, I want to first start with what services do you consider forensic accounting?
Dan Ramey:
So forensic accounting, it's more broad than what I do, so there's certain things I will not do. I have entertained, but I have yet to take on a family law case. Okay?
Leah Wietholter:
Okay.
Dan Ramey:
I know you do, but I want at least one side happy with me. I feel like in those cases, neither side is happy with the forensic person, so I'm like, "I want out of that one."
Leah Wietholter:
You are not wrong.
Dan Ramey:
I have talked to some, but it's really got to be in my wheelhouse on what I'm looking for. If there's a fraud going on within a corporation that falls more in line, if it were family loss, I'm pretty particular with that, but mainly fraud investigations. I do some cyber risk assessment. I'm not the technical guy that can go in and dig through everything, but I can fill out an IC3 form and talk to the client and see where things have gone and look under the covers a little bit. I do a lot of litigation support, so that's cases ... When you think of forensics, that's a legal issue somewhere, there's a legal matter in there. So in some form or fashion, it's a claim, it's a dispute, whatever it may be, kind of falls under forensics. Business interruption, when you've got hurricanes and tornadoes down in this area, that's something that pops up a lot. Financial commitment fraud is another one. Yes?
Leah Wietholter:
Yeah, I was just going to say on that business interruption, quantifying the losses due to that business interruption.
Dan Ramey:
Correct.
Leah Wietholter:
Like those damages.
Dan Ramey:
Yes.
Leah Wietholter:
Yeah. Okay.
Dan Ramey:
Sometimes that can get very picky, and of course the client wants A, and insurance offers B, and you work through that and the attorneys and stuff. Valuation is another one. Now, I've got valuation training and certifications, but keeping up the databases, and that is a very active field of what gets applied, and it's tax and there's methodologies involved. So I know it, I can talk it, I teach it at school, but I just don't do it anymore. Keeping up the databases was way too expensive for the volume that I had, and there are people out there that do valuation that are literally rock stars in this, so I'm going to leave that one to them. And then economic damages around contracts or disputes also, I fall into. And then the area that I've been working in the last couple of years is also bankruptcy.
Leah Wietholter:
Oh, yeah.
Dan Ramey:
There's a lot of fraud going back and forth in bankruptcy. And that's actually one of my bigger cases right now, is a bankruptcy case. The defendants decided they wanted to potentially, we're making assumptions at this point, move some money after the bankruptcy judge told him not to, and the investor who is the plaintiff is challenging that. So that's what we're working on. So that's kind of the area of forensics to me.
Leah Wietholter:
Yeah, I would agree with that. And I think your work and my work, we overlap. We kind of fall more into that fraud space for sure, maybe some damages. I think the damages I end up calculating are really more related to there was a fraud, and so then resulting the images of that. But yeah, I stay out of that business valuation space. I'm going to have a business valuation guest on. But, I stay out of that space because you're right, I think it's just a different skill set and has its own set of, like you said, rules, methodologies, and you got to know that stuff.
Dan Ramey:
I love the modeling. I love to sit there, learn the business, calculate everything, but I will be very honest, I hate writing the reports. A minimum report for valuation is about 100 to 120 pages. I'm out. That just doesn't ... I can do a fraud investigation in 5 or 10, whatever we need. That's very factual. But the valuation stuff, I'm glad I know it, if I could just do the learning and the modeling, I'd be good, but unfortunately, that's half of it, so I'm out.
Leah Wietholter:
Right. Yeah. Yeah. So I'm curious, how did you end up working in this forensic accounting space?
Dan Ramey:
So it's been a long ride to get here. Started out an internal audit long time ago, and within our internal audit group at this company, we were broken into financial statement, internal audit. And I'm not a strong FASB person. I'm not going to argue. I do not know pronouncements. I can still do debits and credits, but I have to look sometimes. I do have cheat sheets for T accounts that I've worked through. Okay?
Leah Wietholter:
Hey, that's fair. Me too.
Dan Ramey:
But I did operational IT and all of our fraud there, and I got into that and absolutely loved it. This was about the same time that ACFE was created. I joined that, got my CFE, got my CIA. So my background to here has been a lot of internal controls, running professional service firms, and doing forensics in some form or fashion, whether it's valuation or investigations, whatever it may be.
So one of the things, and I learned this from a client, I went out to meet with them, it was a board member, and he said, "You are the most unique person that we know of and you can do the two things that we need. You do the fraud investigation and you can do the remediation on the controls." He said, "We know people who can do the investigation, we know people who can do the internal controls, but you're the only one we have found," and they searched, "to do both with one engagement." I was like, "Thank you." And that kind of resonated with me, and I've used that as the internal audit, strong controls with accounting, running accounting shops, et cetera, and then also being able to do the fraud investigation. So I've just kind of married those together. To me, it's okay to do the fraud investigation, but if you don't fix the problem, they're going to call you back in a year.
Leah Wietholter:
Right.
Dan Ramey:
So help them fix the problem with it. So that's how I get there.
Leah Wietholter:
I love that. So that's really interesting that that's your story. This last week I spoke at the Dallas IIA Fraud Summit.
Dan Ramey:
Okay.
Leah Wietholter:
And as I was preparing for this and just thinking about the internal auditors I've met or people in the internal audit space, I just started noticing, I think internal audit is going to end up owning fraud investigations for corporations. Right? I think it's kind of on the rise. So the CEO for the IIA was giving the state of the profession, and he said internal audit is going to be owning this fraud space. And then I was a keynote speaker to talk about how do you take your internal audit findings and turn that into an investigation that can be prosecuted. That's kind of my, you take what you found and then let's package it, investigate it, use best evidence, and then sell it to your prosecutors or even in a civil suit. So I think that what you're describing is just going to keep growing, like what your experience has been. I think this is the trend.
Dan Ramey:
I think the key is that internal auditors understand controls. And in most of the cases, at least on a fraud investigation, not always litigation support, but on fraud investigation, there was a breach of the internal controls. So with a lot of experience, old, I can go in and talk to somebody and they go, "Well, we do it this way, we do this, we don't have this, we have this." I go, "There's your problem right there." Because I know where the breach is and where they probably have a problem, not a hundred percent, but most of the time, whereas accountants know controls, but they probably know it for their little process that they're focused on, whereas internal audit is much broader on the controls.
The other thing that has helped me is, I've been teaching graduate level forensic accounting for 10 years, and that keeps me sharp on the new stuff that's coming out, the books, the controls, all of the different pieces of forensic accounting. That was not something I ever planned to do. They asked, they go, "Hey, we've had a teacher that is ill, would you teach? And I said, "Okay, we'll try. I'll do it in the fall." And I thought, "Okay, this is a one semester gig." And I'm at 10 years at University of Houston and three years at Baylor, and it is literally the hell out of my week.
Leah Wietholter:
Yeah, that's awesome.
Dan Ramey:
Unless it's a good-
Leah Wietholter:
I know, and then you try to ... Yeah, well, then you try to convince everybody else they should do the same.
Dan Ramey:
They should.
Leah Wietholter:
That was the first conversation I had with you in person.
Dan Ramey:
There you go.
Leah Wietholter:
Oh, that's so funny. Hey, I have a bunch of students that listen to this podcast. That's my contribution.
Dan Ramey:
Okay, that works.
Leah Wietholter:
For right now. Yeah. Okay. So if you will, just tell all of us how you started your practice, Houston Financial Forensics.
Dan Ramey:
Okay. So I was at a firm. They decided to, and we kind of knew this was coming, they eliminated three practices all in one week, and mine was one. What my responsibilities was as partner there was to do all the forensic accounting, all of the M&A, internal control, internal audit kind of stuff. And they go, we are just ... And CPA firms are a little notorious for this, especially the middle size and the smaller ones, those practices do not have an even flow of revenue. So I might have a $250,000 fraud investigation, and I may be sitting around for a couple of weeks or a couple of months, and I can do it all by myself or I need staff. Well, when I needed staff, it was an audit busy season, so I was stuck.
Leah Wietholter:
Always.
Dan Ramey:
Always. I mean, the timing is always horrible. So the ups and downs on the three practices that they eliminated were giving them heartburn. And they can plan and cash flows. When I need staff is in January, when I didn't need staff was in August when we had time on our hands. So they said, "We'll eliminate all your non-compete." I was working on a couple of projects. I literally stayed in the office for about another six months and finished those for them. And then I'm like, "Okay, I've got to come up with a name." I didn't want Dan Ramey investigations or anything like that. So I go, Houston Financial Forensics. I don't have to explain that to anybody. I mean, that's a key.
Leah Wietholter:
There we go. Yep.
Dan Ramey:
I previously had been at a firm that we had to explain the name, and that was part of the conversation, and I didn't want to do that ever again. So I said, "Okay, we're going to start. This is what we're going to do. And I'd always wanted to, at some point, get to that point where I could have my own firm. That was a little push, but it was enough push that I made it work, and I was blessed to have some good projects right up front, so get it cash flowed, get all the equipment, subscriptions, and everything that I needed. So it worked very, very well. I can't promise it's always going to work. There's always ups and downs in this business. You think I don't have anything to do. And then you'll get two phone calls come in and you're covered up.
Leah Wietholter:
Yeah, I've told my staff in the past, I would say, if it feels "slow," we finish everything we have even if people aren't pushing us for a deadline, we finish that, but then that's when we go and, I don't know, go to a spa one day or whatever because a couple weeks later, we're going to have a whole bunch of stuff to do.
Dan Ramey:
It's coming.
Leah Wietholter:
You need to just enjoy the rest and then it's going to pile up again.
Dan Ramey:
That's right.
Leah Wietholter:
Yeah. So we already kind of covered the types of cases that you're hired for, but where does your work come from? How do people find out about you and contact you? And then what's that referral source, I guess?
Dan Ramey:
So there's multiple ways. One is, I was blessed at the firm that we had a relatively robust business development group and they got us in front of lawyers and stuff. So I had several years of that. I've just got a pretty broad network here in Houston, which is nice. I mean, we're obviously a big town. We've got tons of lawyers and friends from church and social and school and everything else. So I know them and I continually reach out to them. I've got a couple of lawyers that I have lunch or breakfast with frequently. Those continue to develop. Speaking to groups, I've had controllers and CFOs and CEOs come up and go, "We need you for such and such," like a risk assessment. Or they call in six months and go, "Hey, I saw you speak at this conference." I'm speaking at two conferences this summer. One is the IMA Global Conference, the other one is the ACFE Global Conference.
Leah Wietholter:
Oh, that's great.
Dan Ramey:
The one for IMA is going to be like, "Let's stop the fraud." I'm not going to give you the topic name because I'm still building it. But, how do we stop fraud? Let's get it stopped. So we're going to talk about data analytics and internal controls and getting the fraud stopped before it happens, because it's very, very disruptive to businesses.
Leah Wietholter:
Yes.
Dan Ramey:
The executives want to stay involved, and I'm very forceful about, "Let me take care of this. You run the business, otherwise everything's going to collapse. So let me take care of this. I'll keep you informed." Then there's attorneys, there's bankers sometimes, but once you do a good job with an attorney, they will keep using you. The referral problem with attorneys, at least in my opinion, is the firms are very, very siloed. So you could work for attorney A and sitting next to him is attorney B, and they have no idea about you. It's not like you get the big law firm and you've got all of it. No, you've got that attorney, and maybe if they meet in the coffee bar or he sends out an email, I need a forensic expert on this, somebody goes, "Hey, call Dan."
Leah Wietholter:
Right.
Dan Ramey:
But when you meet with one lawyer, you meet with one lawyer, you do not meet with a firm. And that is a challenge for us as a profession to get more business out of these firms. The call they make or the referral they make is the last person they talk to. If I met, I get the work. If you were it, you get the work.
Leah Wietholter:
Yep.
Dan Ramey:
So it is a little bit of a challenge. I've got a few attorneys that I think I'm probably top of mind with. I hope I am. I think I am. So that work continues, or somebody will ask and they'll refer over. I've had people say, "Hey, you ought to market in this directory or that directory," and I've never really seen the benefit of that because I'm not sure people are reading those, and that's not a hit on them. But the attorneys are busy, they're billing, they're handling cases, and I'm just not sure they're looking at directories and magazines and all of that. So I think word of mouth, personality. And they hire people they like. I mean, they don't hire XYZ firm. They hire Dan or they hire Leah because they like us and they think we do a good job.
Leah Wietholter:
Yeah, I want to get into more of the details of this, but let's take a quick break.
Speaker 3:
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Leah Wietholter:
Welcome back to my conversation with Dan. So Dan, I want to get a little bit more into this, how do we approach selling to attorneys. Especially I feel like just from some of the hires I've made in the past, people are so nervous, and I think in this accounting world, especially when we're dealing with accountants, they're thinking, "Oh, just give me the numbers." Somebody else needs to make that sale. And I had to personally learn how to do this. So I'm curious, how have you developed these relationships with attorneys? What does that look like? What is in your comfort zone of selling your services?
Dan Ramey:
Okay, that's a great question. So my first response, and this is what I even tell all of my graduate students, everyone is in sales. So I don't care what you're doing, I don't care if you're a cost accountant or you're an auditor; you are selling yourself, you're selling what you do all the time. So you just kind of take that up a level. The worst thing that can happen, Leah, is you get a no.
Leah Wietholter:
Right.
Dan Ramey:
Okay?
Leah Wietholter:
Right.
Dan Ramey:
And I don't know anyone who's died from a no yet. We might die a little bit, but we're not yet. You rise up and go again in the next day. So you propose on projects, you tell them what your experience is. Maybe it works, maybe it doesn't. Maybe they don't like it. People buy from people they like, and if they like me and we have a great conversation, I probably get the work. If for some reason they don't like me, I'm not going to get the work anyway, and I probably didn't want to work with them.
Leah Wietholter:
Right.
Dan Ramey:
So sometimes-
Leah Wietholter:
It goes both ways.
Dan Ramey:
Yes, it does.
Leah Wietholter:
It goes both ways.
Dan Ramey:
Real quick story, no names, but I had an attorney meet me for breakfast one day. He came in, he had a flash drive, we're supposed to have breakfast, but he said, "I've got to go do something." He said, "Here's the information you need from the client," because the client said, "Y'all have to work together." And he goes, "I don't like working with experts." He said, "My job is to tear them up in court, so good luck," and gave me the flash drive and turned around and walked off. We made it. We survived. But that's the way he thought of experts and forensic accountants. We got through it. Most of the work was for the client, not for the attorney. In the end, the attorney got cut by the client later and they hired another law firm, not because of me, but just because of some other things that had happened.
Leah Wietholter:
Yes.
Dan Ramey:
But I think you have to sit down and have a meal. In Houston, and this may not work everywhere, if you buy someone a meal, lunch, breakfast, whatever, there is probably work coming. In Houston, the business environment is great. It always has been about this. But if I can get in front of you, then you'll probably at least give me a shot at something. Maybe I get a little project and we do it well, and then they trust you and they bring you on a bigger project. But just having a personality and just talking to another person one-on-one. What are they doing? What kind of cases are they seeing? What are you looking for? You don't have to say like, "Hey, let me tell you the 50 things I can do." They're going to get that through the conversation.
Leah Wietholter:
Right.
Dan Ramey:
But what are you doing? What's going on? Stay in touch with them. LinkedIn is huge. That's another way that I get connections. But the speaking is huge because you're in front of so many people multiple times a year if you do this. And I don't know, I heard this several years ago, if you stand up in front of a group and you're willing to talk, you're an expert because most people will not stand up in front of a group of, the largest group I probably have had 500. Every week I'm in front of 20 to 30 graduate students that are firing questions back and forth all the time. So you really get very comfortable with being in front of people like that. So I'm kind of blessed with a few great breaks to do the teaching and people asking me to speak and et cetera. So some of the speaking is virtual and some of it's live. I prefer live.
Leah Wietholter:
Yeah, yeah. Oh, gosh. Yeah, me too.
Dan Ramey:
But just going in, just developing a relationship with them. Now, sometimes it's hard to get attorneys out of the office. Now, I have not done this because I haven't needed to, fortunately, but my thought is, one of the best ways to market to them is to do lunch. Do a lunch and learn in the office. They don't have to leave. They just have to come down the hall. And if you can provide CLE, they will come. So if you've got lunch and CLE, they will come. Tell them who you are, tell them what you do, tell them a couple of the cases, finish their sandwich, get their CLE, and go right back to work. I still think that is probably one of the maybe second best to having a one-on-one meal because you can get several attorneys that way, but I have not had to use that yet. So that one's kind of been my back.
Leah Wietholter:
I've had that kind of idea for a while myself. But you're right, I've never needed to use it. And actually, you talking about this reminded me that several years ago I was trying to teach someone how to do this, like how to meet attorneys, where are you going to start from. So what we did was, my assistant went on the state court network for our area and looked for fraud cases that were out there, then found the attorneys who were representing the parties, and then we found contact information from them. And then we sent emails, very personal emails. We never said where we found their information. We never said, "Hey, we know you have this fraud case."
But what that did was take this ... Because there's so many attorneys. I mean, even in Tulsa is much smaller than Houston. But there's all these attorneys, and I did this for Tulsa in Oklahoma City. So then we just started sending these emails and we'd send out maybe five a week. They were very personal, it was not a mass email, but just inviting them to go to lunch or breakfast, coffee, and meet up. And I think I had two attorneys respond out of the five. We were going to do this every week. I was trying to lead by example, so I would send out my five and encourage my staff member to do the same. And they ended up with at least one meeting, and I ended up with I think two or three.
Dan Ramey:
Out of all of them.
Leah Wietholter:
And that resulted in speaking engagements. But the worst thing that happened was that they just ghosted me. They just didn't even respond to the email. I didn't even get no.
Dan Ramey:
Right.
Leah Wietholter:
But if I'm sending out so many emails a week to do this-
Dan Ramey:
You're going to get it.
Leah Wietholter:
... someone's going to say yes.
Dan Ramey:
And to stay busy, we only need a couple of those to hit.
Leah Wietholter:
Right, yeah, especially if you're a solo firm.
Dan Ramey:
Yes.
Leah Wietholter:
I mean, I've got too many cases at the moment because that's going to be the struggle, is getting too many cases. But I mean, it turned into speaking engagements, it turned into coffee, it turned ... I sent five emails and I ended up with multiple cases and speaking engagements.
Dan Ramey:
There you go.
Leah Wietholter:
And then when I'm there, when I'm there, I have pre-planned, in my head, I just have some notes, like I would for a presentation, of things to ask that person about themselves, about themselves. So how did you start this practice? What are your specialties? I mean, just asking someone those questions and having those teed up. But they're going to have a bunch of questions for me too. So just to keep the conversation going. If I'm concerned about lulls or anything, I just have a list of questions, just plan for the meeting a little bit.
Dan Ramey:
And I never go into those with brochures and anything else. I give them my business card and then we're through. I'm going to go, "Do you mind, when we get through, if I send you," and it's just a PDF, "brochure of what I do?" And they're like, "No, go ahead and send it to me." Because I want them to have that leave behind. Now, I don't know where it goes. It may go in delete, but that's okay. But they could forward it to somebody else so it could be a reminder to them, et cetera, et cetera. So you do that, but I am never hard sell about, "Let me tell you everything I do and how I do it and how great I am and all of my clients." That just doesn't happen because I really believe people buy from people they like versus not necessarily not skilled, but I like you, I can work with you versus here's all the skill sets.
Leah Wietholter:
There was an attorney that told me once, because when I started my business, I was 26, and this was my very first client-
Dan Ramey:
So that was a year ago?
Leah Wietholter:
Yes, it was a year ago.
Dan Ramey:
Okay.
Leah Wietholter:
Yes, thank you. Yeah, he told me one time ... Actually, this story is so funny. I get a phone call the night before. This attorney, I had done a little work for him or several cases for him, and he calls me and says, "Hey Leah, I need somebody to come testify about receive receipts. You've worked on a couple, you've been a receiver. It's small town Oklahoma. Can you just come to my office at 7:00 AM. We're going to drive over there." I'm like, "Okay." So I get in the car, but then I'm thinking, "Oh, my gosh, I have to ride with this person for an hour and a half and talk?" And then also come back. So I actually wrote out questions in my phone, just in case, right? Because obviously this is a great time to get to know this person as well, even though we had worked together. But still an hour and a half-
Dan Ramey:
That's a long time. That's a very long lunch.
Leah Wietholter:
That's a lot. Plus, we had to do-
Dan Ramey:
Fortunately, for lunch, you're kind of within an hour timeframe so you can handle that conversation.
Leah Wietholter:
Right. Yeah, it was going to be three hours round trip. We're going to have to eat lunch. I mean, it was a lot.
Dan Ramey:
Ooh.
Leah Wietholter:
So we did that. But as part of this conversation, first of all, it was probably one of the most valuable conversations I've ever had, I just learned so much. But also, he said that the reason that he took a chance on hiring me on the first case was that he could tell that I was someone that didn't feel like I had to know all the answers, but that I was intelligent enough to ask questions and that I was looking to solve a problem instead of just prove that I was smart essentially.
Dan Ramey:
There you go.
Leah Wietholter:
And this was so early in my career. I mean, I was probably 27, 28 at the time, and I thought, I mean, that just gave me so much confidence that somebody would know this, but really he just knew that from talking to me a couple times. I mean, no brochure could communicate that. It was just having a conversation.
Dan Ramey:
Well, because you weren't pushy with them about, "Hey, here's why you need to hire me. Boom, boom, boom." You were asking legitimate questions. I have, I guess the police call it an intake form, but I have an intake form with about 30 questions on it, that if someone calls, I can walk through. And I should know all of those questions by memory, but sometimes I don't or we get sidetracked. But I've got a list of what's the accounting system and how did you find it and what's this person, bunch of questions so that I can kind of really analyze, is this a case I want to take and do they really have a problem? So no, I think some general questions and asking questions is a lot more important than saying, "Hey, here's what I can do."
Leah Wietholter:
Right. Because they're going to know, they're going to feel comfortable with that. Yeah, exactly. So before we wrap up, I've got a couple more questions. One, so you've worked in the public accounting or consulting firm space, but then you've also run your own business. So I'd like to know if somebody was wanting to start a forensic accounting practice in the public accounting or consulting firm, what advice would you have for them?
Dan Ramey:
So I think the first thing, Leah, is that you've got to have executive support. And I referred to it earlier that that sales revenue, whatever you want to call it, engagement, billings are up and down in this business. You know, CPA firms management normally, unless they're really committed to it, is uncomfortable with that going up and down. Now, if you look at big four and they've got a whole litigation practice, that's another thing. They've got enough to keep them busy and they realize there's ups and downs. Valuation is the same thing.
But if you're in a smaller middle market or a smaller firm, you've got to realize there's going to be a lot of business development time that's not billable, and then you're going to be really, really crunched, just like you and I get, and you need help and it's going to be at the wrong time of year. So you really need to have a conversation with the management team and be honest and go, "This isn't going to be like audit clients that they call me every year, or tax clients." Because while I've had obviously repeat business from lawyers, I don't think I've had repeat business from a client because I mean you hope they don't have a major fraud every year. It's not like an audit.
Leah Wietholter:
I was just about to say that.
Dan Ramey:
So you've got to rely on other people, but it's not like, "Okay, once I get that audit, we're going to audit them for 10 years, I hope, if we provide good service." And you know you've got steady revenue. Our revenue's only as good until we finish that last report and maybe testifying court or whatever that you have to do for sentencing. So you've got to be sure they're on board, have some extra skills. When I started the forensic practice, I had M&A, internal audit, and all of the forensics, and I developed the valuation expertise while I was there. So I had multiple things. And even with that, you're not always a hundred percent busy. Because our job is not in compliance, it's in litigation. So compliance means we're going to do it on and on and on. Litigation comes and goes. Like I said earlier, you don't get the entire firm, you get lawyer A. Lawyer B doesn't even know about you.
So I think the network is important. I think getting out in professional associations is important. And this doesn't happen in six months. You can put a business plan together, but it doesn't happen in six months. And that's the key, is that there's got to be some patience within the firm to be able to do that. I cannot tell you how many times I've had to answer that question, because how do I get started in forensic accounting or how do I start it in our firm or whatever? It is a challenge. I mean, I'm not going to lie. It's easier when you're on your own. You don't have the overhead, and you don't have all of the pressure, and everyone's not looking at the financials and the billings and all of that. As you mentioned earlier, if you need to go do spa day, you can go do spa day and it's okay.
Leah Wietholter:
Right.
Dan Ramey:
You can play golf, you can go to the range, you can do whatever you need to do sometimes and not always worry about the billing. But then on the flip side, you may work till midnight, two nights in a row or three nights in a row. Not that public accounting doesn't either, but you've got that. So several of people that I kind of mentor have all got their own firms, and some of them are like one or two people, people on the outside. As you know, you and I and several other people network with each other. And if we get on overload, we can call the other and get some help and what do you think about this and etc.
So I think you need a very strong network. At least within the firms, you need to realize that it's not going to be a smooth stream of revenue, which creates problems with payroll and everything else that's involved in that. So while it's normally high billing rates higher than tax and audit, it's not consistent, and they've got to be okay with that. And that's not every firm. They're just not comfortable with that ups and down on the revenue. So that would be it. Their alternative is to start their own firm and network and connect to all of us that do this.
Leah Wietholter:
That's right. Yeah. When I started my firm, I had three months of no revenue. I had no network whenever I left public accounting. I was a staff member, and they were trying to start teaching me how to do business development, but I left before I really met anybody. So I had to figure out a way to fund my life for three months, which was kind of tricky. But I would also say that within a public accounting firm, just from the experience I have, you have to build your external network, but also internally in the firm.
Dan Ramey:
Yes.
Leah Wietholter:
So that whenever they get a call, they say, "Oh yes, we can help you with this, and Dan can help you, or Leah can help you." So that's kind of tricky. You have to network both places.
Dan Ramey:
And they have to have you kind of top of mind when stuff shows up. I know one situation, I'm not going to name the firm, but a very good client call them and said, "Hey, we've had a problem." And the tax person that took the call from the client said, "Yeah, I'll send out one of our accountants that can help you with the internal controls." And it was a major fraud. I mean, it was in the newspaper and people knew about it.
Leah Wietholter:
Oh, my god.
Dan Ramey:
But they didn't think through that to go, "That's an investigation." They go, "Yeah, we'll send somebody out." And it was going to be like gratis, like, "Just go help them figure out their controls and then come back to the office. They're such a good client." No, like, "Whoa, time out."
Leah Wietholter:
No.
Dan Ramey:
This is called cross-selling. Okay?
Leah Wietholter:
Yeah.
Dan Ramey:
And you're right, it getting other people on board, it's huge.
Leah Wietholter:
Yep.
Dan Ramey:
I have been blessed with good networks. When I left, I still had some work at the firm and then I had two or three big engagements up front, like all within that same timeframe. So I was blessed with the right level of work, and that's not always the case. So I'm thankful.
Leah Wietholter:
Mm-hmm. Yeah. One other thought, this was not on our list of things to talk about, but if someone is struggling to get a case, networking with people like us would be very beneficial because it is very often that I could use an extra set of hands, and I'm sure you've had that as well. So just knowing that, "Oh, somebody would like some experience." Now, I don't take volunteers, but I'm happy to put you on as a temporary employee so that we can work a case together, that type of thing.
Dan Ramey:
You can do that. I've even had CPA firms call because they're conflicted out or their team is too busy, and sometimes they've got smaller ones. They want the big, big cases, and they've referred. I'm happy with a small case. I mean, I work it in with everything else I'm doing. So that's also another source, is CPA firms that are conflicted or don't want to touch that stuff. I guess, the worst thing is CPA firms that think they can and shouldn't ever touch a forensic case because I mean, you and I both, there's lots of issues with these and you've got to be careful and you've got to understand where we could be sued or how to get to where you need to. I mean, interviewing suspects is not for everybody.
Leah Wietholter:
Right. No.
Dan Ramey:
Just because you have a CPA or you work for a firm, doesn't qualify you to do that. You've got to be prepared and ready to go and et cetera. So while you and I can do that, we would, I know you would too, mentor any of the younger generation that want to do this or people who want to start out on their own.
Leah Wietholter:
Right. Yeah, exactly. Well, great. So as with all of our episodes this season, we've asked our guests to provide a download for our listeners. So will you tell us what your download is that you'll be providing?
Dan Ramey:
So mine is, I am a huge believer in data analytics can find and prevent a lot of fraud.
Leah Wietholter:
I agree.
Dan Ramey:
You don't have to have Tableau and all tricks and Python and R and all this stuff. You can do it in simple Excel, and Excel has gotten so powerful recently with what you can do. Literally, just sometimes a sort of payroll or accounts payable will give you the answer. And if you look at some of the big frauds, I'm not talking like Enron level, but even as Collin Street Bakery, $14 million, take the checking, dump it and look, do a sort, and all of a sudden you've got a bunch of voids. Red flag, case over, done, fraud stopped. And it's not hard.
Like I said, you don't have to have a degree in data science to make this work. You just need to dump out of whatever subsystem you're looking at and do a sort or a quick pivot table, something elementary, and fraud caught. So I'm going to give you a PDF that has a bunch of recommended data analytics tests that you can run, and all of it can be done in Excel and very simple. You can expand it to Tableau and everything else if you've got those skill sets in-house. But if not, every shop has got Excel capabilities in it.
Leah Wietholter:
Right. Yeah, that's awesome.
Dan Ramey:
That's what I'm going to provide. I want people to use it. Look for fraud and try to get it stopped before it becomes a big issue that you and I have to get into.
Leah Wietholter:
That's right. That's right.
Dan Ramey:
That's right.
Leah Wietholter:
Although if it happens, we can solve that problem.
Dan Ramey:
We will do it.
Leah Wietholter:
Right, right.
Dan Ramey:
If they don't run the data analytics, you and I can take care of it.
Leah Wietholter:
That's right. All right. Well, Dan, this was so much fun.
Dan Ramey:
I've enjoyed it.
Leah Wietholter:
Thanks so much for joining me today.
Dan Ramey:
I've enjoyed it. Thank you for asking me to be on the podcast.
Leah Wietholter:
It was a lot of fun.
Thank you for listening to this episode of The Data Sleuth Podcast. The resources discussed in today's episode are available at datasleuthpodcast.com, also available in the show notes. If you have any questions you would like answered in the Q&A episode of this season, make sure to send them to podcast@workmanforensics.com, or the Workman Forensics YouTube, page or the Workman Forensics LinkedIn page. The Data Sleuth Podcast is a production of Workman Forensics. Thank you for listening.