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Jonathan recently wrote with a common question: How does one find a good lawyer or accountant?
I’ve heard from several sources — including The Millionaire Next Door — that wealthy people generally have an accountant and a lawyer that they trust. I’ve been asking friends and family members, but none are very confident in their recommendations. How do I go about finding these people?
I’m fortunate. I didn’t need to search for competent help: I was friends with both my accountant and my lawyer before I ever needed their services. (I play poker with my accountant. My lawyer and I were best friends in grade school.) But what if you don’t have these sorts of easy connections?
In September 2006, accountant Brian Brown shared a guest post about how to find an accountant. A brief summary of his tips:
Contrary to popular belief, accountancy expands far beyond taxes. As an individual or business owner, you should engage the services of a CPA based upon your specific needs as matched with the expertise of the CPA. With the proper match, a CPA can serve as a valuable resource. The following items can serve as a starting point in the process of engaging a CPA to assist with your individual or business matters.
- What are your needs? You should seek a CPA who meets your needs. Are you looking for tax compliance and planning? Looking for an audit, review, or compilation? Maybe a business valuation?
- Ask for referrals. Once you know what you need, seek out referrals from others that you trust. Ask friends, business associates, and other professionals.
- Ask questions. When you find a few CPAs that appear to match your needs, start asking questions. Make a list of the matters that are important to you. Such questions can address education, experience, specialties, and business philosophy.
- Assess communication and comfort. Now that you feel confident that the CPA is appropriate for your specific circumstances, assess how well he communicates and evaluate your comfort level with him.
- Don’t be concerned with location. Location may be important for selecting a house; however, location should not serve as a criterion for selecting a CPA. By focusing only on location, you are foregoing the consideration of other selection criteria such as those mentioned above.
A CPA can serve as a valuable resource in the growth and efficient use of your financial resources. Seek one who is open and honest about both their qualifications and limitations. Feel confident that you are engaging a qualified professional for your specific circumstances that seeks your best interests.
This advice also applies to finding a lawyer. Don’t just dig through the yellow pages; ask for recommendations from people you trust. But what if you can’t find somebody based on recommendations? What then? What are some good ways to find legal and accounting advice?
Addendum: In the comments, crazypumpkin has a great follow-up question: “I know so little about CPAs that I don’t even know what questions to ask them to know if they fit my needs. This is the first year that my taxes are complicated enough that I’ll probably need help doing them. But I haven’t a clue of what to actually ask of professionals to see if they are a good fit for me.”
This article is about Ask the Readers, Basics, Choices Friday, 2nd November 2007 (by J.D. Roth)
November 2nd, 2007 at 9:04 am
If you are a LinkedIn member, you should consider searching your network. This will allow you to find professionals who are “friends of friends,” but if there are any recommendations that may prove particularly helpful to you.
A corollary of this, if you are a professional, is to cultivate contacts on LinkedIn who are able to provide helpful recommendations.
November 2nd, 2007 at 9:33 am
The best way to find a lawyer is to go through a friend or acquaintance. Ideally the lawyer should be a close friend or business associate of your contact. Why? Because you want the lawyer to have a strong social incentive to work hard for you.
You don’t need to find a Harvard graduate or con law scholar to incorporate your business or handle your divorce. You just need someone who will do the work. Finding this person is harder than it sounds! The number one complaint clients have about their lawyers is not that the lawyers are incompetent. It is that their lawyers don’t return their phone calls.
So imagine your best friend has a family friend who’s a lawyer. That family friend won’t want to blow you off, because she is accountable not just to you but also to her friend.
Disclosure: I am a lawyer who hired a bad lawyer! It is really tough to be sure that you’re hiring someone good.
November 2nd, 2007 at 9:33 am
You could always just marry an attorney like I did
November 2nd, 2007 at 9:37 am
Lots of people pick lawyers based on who has the cheapest rates or biggest advertisements. But just like one doesn’t go around bragging that they found the cheapest surgeon in town, this is an area where value is much more important than dollar cost. Keep in mind that lawyers can often discuss fee arrangements or give you a referral if they can’t meet your needs, so if you find a lawyer that you like but who is outside of your price range, be honest and up front about that.
November 2nd, 2007 at 9:41 am
Jeremy
Wish we all could do that! Unfortunately the law says you can only be married once at a time!
November 2nd, 2007 at 9:48 am
What I’d love to see you talk about is what questions to ask. I know so little about CPAs that I don’t even know what questions to ask them to know if they fit my needs.
This is the first year that my taxes are complicated enough that I’ll probably need help doing them. But I haven’t a clue of what to actually as of professionals to see if they are a good fit for me.
November 2nd, 2007 at 10:11 am
RE: LAWYERS
One of the best ways to find the “right” lawyer is through personal recommendations of other lawyers. So first, get in contact with an attorney you can trust. If you don’t know someone personally, chances are that at least one of your close friends or family members does, and will facilitate an introduction. Because attorneys are usually very specialized (and, if they’re not, you should be very weary of hiring them), this lawyer will likely not have the expertise you seek. (It is also important to note that you make your request very specific, e.g., “I’m looking for an attorney who specializes in tax law to help me out with a new LLC that I want to start.”) Lawyers (like other professionals) know a lot of people in the field — lawyers generally know a lot of lawyers (and their reputations) and can therefore steer you to the right person.
Second, interview the candidate, and ask lots of questions. E.g., What is your speciality? How long have you been practicing? Will you personally be doing the work, or will you have another lawyer/paralegal/investigator be doing it? How many other cases/situations have you handled like mine? Most of these questions are common sense. It is helpful to remember that you are hiring someone to work for you, so think of it like you’re conducting a job interview.
A few other resources:
* Each state has a licensing agency known as the Bar Association. You can go to your state’s website, which will likely have tools for people looking for a lawyer.
* Check out your local law school. There may be resources for finding a lawyer generally. Also, if you are brave, you may try contacting a professor who specializes in the area — using the example from above, a professor who teaches tax courses — and asking for a recommendation or for local resources to finding a competent person.
November 2nd, 2007 at 11:13 am
We didn’t have much luck finding a lawyer through personal recommendations either (although references for good accountants were easy). In the end it turned out my employer, a medical center, subscribed to a plan that offers a screened list of lawyers. Only three of those claimed to specialize in estate planning, and after some calling it turned out only one was really concentrating on it. He has been fantastic, and now serves as our reference for any other legal needs. He mentioned in passing that he is very committed to helping the people who come through my employer’s reference service because it has such a huge potential effect on his firm. So finding a connection like this (maybe even using a friend who works for a large company where benefits like this are common) would probably work. I also think the idea of contacting a law professor is a good one.
November 2nd, 2007 at 11:16 am
I too would be be interested in what questions to ask.
I got a personal recommendation for an attorney, and ended up with a dud. She would not finish my paperwork. Every time I called her to request she complete it, she charged me more time on my account. Finally I had to call in a favor from a friend who’s husband is the only judge in the county. I don’t know what was said, but magically my paperwork was completed in a few hours.
November 2nd, 2007 at 11:45 am
Re: a CPA — you could go to daveramsey.com and then fill out a short form to find the CPA in your area recommended by Dave Ramsey’s team. These so called “endorsed local providers” have to meet certain professional requirements set by Dave Ramsey as well as agree to help clients based on Dave Ramsey’s principles. I was unsatisfied w/ my CPA, so I found the “elp” in my area and had a terrific telephone conversation w/ her, and plan to use her re: my ‘07 taxes.
November 2nd, 2007 at 12:16 pm
For attorneys, it’s usually best to retain one through referrals. Referrals can better assure that the attorney has experience in the subject matter and familiarity with people involved.
-Raymond
November 2nd, 2007 at 12:59 pm
“So first, get in contact with an attorney you can trust. ”
This kind of reminds me of the Steve Martin joke about how to become a millionaire - “First, get a million dollars….”
It seems most of the responses are still centered around personal recommendations of friends/family. But the whole point of this post was:
“But what if you can’t find somebody based on recommendations? What then?”
I like dorthy’s repsonse #8 - check your place of employment and see if they offer any referral services or maintain a list of preferred legal/accounting providers. That seems like a good starting point.
JD - Can we expect to see a post in the future that summarizes the best ideas put forth here? I think that would be great and it would be a very useful list to have.
November 2nd, 2007 at 2:22 pm
In Australia we have professional associations that list all registered professionals so you can search based on location (sometimes it helps since our states are massive ;)), expertise or other criteria.
Another technique I have chosen is linked to personal recommendations, but requires a bit of creative thinking. Do you know a professional who’s NOT a CPA or lawyer? A financial planner? A real estate agent? A business coach?
Through a friend I found a management consultant who was able to steer me to the people I needed. Not exactly a personal recommendation though.
As for questions to ask a CPA, why is your tax complicated? What is your tax likely to do in the next few years? Do you want someone to just do your tax, or for future business and investment advice? I’m currently looking for a CPA with a financial planning registration so in the short term they can help with tax, but in the longer term can help set up investments. I’m also looking for a lawyer to set up other legal structures for the future. Chances are, when I find one, I’ll find the other.
It can be a long process to find the “right” CPA or lawyer for you, but it’s worth it to take the time NOW rather than later.
November 2nd, 2007 at 2:42 pm
I would recommend that you ask if the lawyer or accountant has completed all their client files on time.
On my last house purchase I had the same problem that ClickerTrainer described in post #9. The lawyer I used was recommended both by a friend and by my employer’s relocation service. When the day came to close on my house purchase, however, the lawyer’s assistant told me that they were three months behind on completing files and would not have my copies of the documents ready for several months. I politely but very firmly told her that this was unacceptable and she completed my file the following week. I’m not sure how the lawyer’s other clients made out though.
November 2nd, 2007 at 2:43 pm
I have worked for a couple large companies, both with extensive benefits program. If you look carefully many provide group leagal services. I pay $6 out of every pay check and I have a large network of lawyers to pick that practice almost ever sort of law.
I am purchasing a house as we speak and found a great lawyer that is taking care of my contract review, titling, and closing - it is costing me no more than the $6 I pay out of my paycheck. In this one transaction, I have piad for the premium multiple times over. I even ran into a problem with the seller and didnt have to worry about calling my guy to write a letter - I knew it would cost me nothing.
I highly recommend it to anyone who has the option.
November 2nd, 2007 at 2:46 pm
I’m a lawyer in NY in a very well-respected firm. You can always contact me if you would like. If the issue is outside my specialty, I might be able to refer you (either to someone in my firm or outside).
As far as questions to ask a lawyer, it’s hard to answer because some of it depends on your legal needs. But generally:
1. How long have you been practicing law?
2. What are your areas of specialty?
3. How long in each of these areas?
4. Where do you fit in to the structure of the law firm? (e.g. is this a partner, associate, counsel - what is their place in the hierarchy?)
5. How many lawyers in your firm?
6. Who else would be responsible for my case? How many people?
7. What is your billing rate and the rates of those who would be working on my case?
8. Have you ever worked on any matters similar to mine? how many? in what way were they similar? in what way were they different? what strategies did you use on those cases? what were the outcomes?
9. Do you have any philosphy regarding the role of the lawyer and the provision of legal services? What is it? What do you do to fulfill or meet that philosophy?
10. If I retain you, how can I be assured that I will be able to contact you when I need?
11. Will you provide regular updates on the case and in what form?
12. How important is it to you to minimize costs to the client?
13. How do you do that?
You should also have specific questions about the case itself that you can ask the lawyer. In a perfect world, what I would do is draft a memo describing the matter or the case in as much detail as possible - include a chronology of events if possible. Then provide a list of questions to be answered. Provide this to the lawyer before the meeting and tell him/her that you want him to address, at least preliminarily, the questions in the memo, based on the information you provided.
If the lawyer actually reviews the memo and provides answers to most of the questions, you probably have a keeper.
The first consultation should be free.
November 2nd, 2007 at 3:00 pm
I would try handleonthelaw.com. He recommends lawyers from all overthe country.
November 2nd, 2007 at 8:33 pm
If you need a recommendation for a lawyer and don’t know where to start, usually the state bar association of each state has an attorney referral service. If the state bar doesn’t have one, then check the county bar association for the county where you live. You can do a search online for your state and “bar association attorney referral” and get a website or telephone number. Usually it’s a toll free number. Tell the person what kind of attorney you need or what kind of service you need, and they can lead you in the right direction. For example, if you need a divorce attorney, they will refer you to someone who specializes in Family Law. Usually you will be referred to someone who has a lot of experience in the specialized field that you need.
Even if you are referred to someone who has the experience you want in the field you need, you need to have a conversation with them to make sure they are a good fit for you. You should feel comfortable with them; if you don’t, then you should hire someone else. Ask Nicole’s questions to get a feel for how they will handle your case.
State bar associations also list which attorneys have had ethics violations and complaints. You should check that out also.
I’m a lawyer in Nevada and also licensed in Maryland. I hope this is helpful.
November 3rd, 2007 at 7:47 am
If you need an Estate Attorney, i would highly recommend you seek one that’s a member of the “wealth counsel”, an organization of estate attorneys, adhering to a strict code of ethics and standards. Our independent financial planner (and our estate attorney) directed us here for finding an attorney for our inlaws
http://www.wealthcounsel.com/memberdirectory.aspx
If you need a great estate attorney in the PHX AZ area, look up David Harowitz.
http://www.harowitz.net/
I have not interest in recommending Dave, other than the satisfaction of referring someone to an outstanding attorney that really cares about your needs as primary.
November 3rd, 2007 at 9:19 am
Nicole’s list of questions is a great starting point. One thing that I would flag is if you have a complicated issue (particularly any litigation) is that you should definitely find out the billing rates for the attorneys that will be involved and how the work will be divided up. You don’t need or WANT the named partner to draft the motion to dismiss - the first year associate can do the same thing, it will be 90% as good, and be 50% cheaper. I’ve known a lot of people who have been upset to learn that the lawyer they have direct contact with isn’t the one handling every aspect of the case, and usually it’s a good thing that they’re not.
November 3rd, 2007 at 3:30 pm
Most people probably don’t need one. That is, you don’t need a lawyer and CPA that you consider “my CPA” on a continuing basis. Buddies are probably the exception.
But it is good to know how to find one if something does come-up. Generally you will probably find only a few situations in life ( hopefully) where you need a lawyer for a specific circumstance.
Maybe I’m a bit ignorant/arrogant, but I can’t see why many people would ever need a CPA. To clarify, I mean for “regular” people who have W2 jobs without any complications- probably the majority of people. Even though the US tax code is complicated, most personal tax filing is pretty simple. So when someone mentions going to “their CPA” just to have “taxes done” I always wonder if the person is just trying to sound important ( like the phony types who talk about their “power team” of lawyers, accountants, metors,etc). If you are self-employed, very wealthy, and/or utilize complicated business structures- well that’s different.
November 3rd, 2007 at 4:29 pm
It’s hard to know where to find referrals you can trust. One tip for finding a lawyer with tested competency: ask your bank manager.
Banks have a lot of steady, time sensitive and detail oriented legal work. Because of this, banks require a relationship with a good lawyer, and good lawyers find themselves attracted to banks. (In a few small towns here in Kansas, you’ll even find the lawyer’s office on the second floor of the main street bank).
Now, the bank’s lawyer might not have any time or specialized knowledge for your issue, but he or she will know who is good in the area, and give the best recommendation for your needs.
November 4th, 2007 at 7:58 pm
[...] -How Do I Find a Good Lawyer or Accountant? @ Get Rich Slowly [...]
November 5th, 2007 at 6:35 am
Perhaps my phrasing — “get in contact with an attorney you can trust” — was not helpful. Here was my point: A person should first make every attempt to get in touch with a lawyer who (1) he (or his family and/or friends) has a personal relationship with and (2) will not be doing the work. Finding someone who is known on a personal level is important for obvious reasons — e.g., is she generally responsible, etc. Finding someone who will not perform the work herself (but instead recommends someone in the proper field) is also important. It reduces the chance for a “sales pitch.” It eliminates the potential problem of taking a project outside her area of expertise, or merely out of a personal commitment. And, it gives another layer of expert/informed analysis — similar to the medical field, e.g., asking your GP (whom you know and trust) for a referral to a cardiologist.
I make this recommendation based on my past experiences. I am an attorney and have been asked by numerous friends and family members to help them out with legal work. These requests have been somewhat varied, but generally have been outside my expertise — e.g., divorce, real estate sale, DUI, etc. I referred each of these people to an attorney who (1) I know personally or who I know his/her reputation, and (2) specialized in the area they needed. It took five minutes of my time, and has always worked out.
If neither you nor your close friends or family members have such a personal relationship, you can look to the referral services recommended above (or ask a law professor, as I previously suggested, or an employer, as was suggested by others). Many of these services are not all that helpful — an attorney simply pays money or elects to be listed among practitioners in a certain discipline. But, they do provide a first step, and (at the very least) a list of individuals to interview.
November 5th, 2007 at 9:52 am
The suggestion to find a lawyer through your friends and family is fine, but you may find yourself paying for advice later if the lawyer is more adept socially than legally. My brother is an economist and actually has a published article that pretty much states that recommendations of this sort are a bad way to access true skill of a professional.
Here’s a trick I use. I contact a lawyer that I trust personally who does not practice in the area that I’m interested in. Then I ask for a recommendation. Call a divorce lawyer you know and ask for three sources to set up business documents for example. The trick is to make sure they do not practice in that area. As a general rule, lawyers know who the good lawyers are better than your Uncle Bob or college buddy.
November 5th, 2007 at 11:45 am
I ask my dad. He’s a cranky perfectionist who thinks he knows everything…if he has good things to say about a CPA or a lawyer, they must be a saint.