This episode of the Grow Your Firm podcast includes a ton of good information, with Brian Baum as our valued guest. He is the president of the Pittsburgh Exit Planning chapter. He’s also a financial advisor at a very credible institution. 

In the podcast, he offers an illuminating perspective about partnerships and how to leverage who is on your bench. According to him, this crisis has been putting a lot of pressure on partnerships, and if your partnership fails, you need a core team on your side to help you pick up the pieces.



Related Links


  • Partnerships: Being There in Moments of Crisis
  • Unifying the Double Life
  • Expertise
  • Cultivating Partnerships
    • The Vetting Process

Partnerships: Being There In Moments of Crisis

In the podcast, Brian reflects on the lessons of the COVID-19 pandemic. He notes that many small business owners who have trusted their advisors often feel betrayed and “burned.” Whether their advisors were overloaded with work or they were handling their own crises, they left these business owners with a nasty taste in their mouths.

While some partnerships fail in a glorious blaze for good reason, there are others that separate prematurely. The sting of separation, in these cases, often causes harm to employees. How do you find excellent allies to work with your business?

What Brian has been advising is that there are always people present in the periphery that can help. Maybe you haven’t talked with them recently, but they were there at a time whenever a particular resource was needed: a core bank, a core attorney, a core accountant, or even a core CPA.

Brian reminds listeners that there is always a core team ready to jump in that has expertise, knowledge, and more bandwidth to advise you when partnerships go sour.

Unifying the Double Life

Sometimes the block preventing a business owner from recognizing their allies is the imagined separation between the business life and the personal life. 

Brian takes a firm stance, stating that the second you try to pull those apart, one or the other falls apart. There isn’t a separate business world or a protected personal world: they are intertwined. Brian even goes as far to state that when you apply a holistic vision of these two sectors of life, allowing for the overwhelm of ideas to run over, “all the strategies, all the tactics, all the best ideas really come to life.” The business owners that Brian works with are people who are fluid in adjusting between business and personal matters.  

This may seem rather esoteric, but Brian gave a grounded concrete example for readers and listeners to follow.

In 2019, this separation cost an owner $17 million when he went to sell his company. The owner went to two very reputable firms, a law firm and an accounting firm in Pittsburgh to assist with the sale. Neither of them was proficient in ESOPs.

The client was a disregarded entity, single-member LLC. In the ESOP world, that allows a business to convert to a C-corporation for one day and take advantage of what’s called the 10-42 exemption, which allows a business owner to defer all of his capital gains, at least federally, in perpetuity and potentially forever. There’s a very specific way that you have to structure an investment portfolio so that whenever he spends the money, he’s not getting taxed at a capital gains rate. This is the “business side” of this situation.

On the “personal side,” he reached out to Brian about a month later, complaining about how everything had become messed up. The accounting firm said that he was worth 54 million, but when the ESOP trustee came back with their valuation firm, one of the best investment banking ESOP firms in the country said he was worth 28 million. That’s a pretty big disparity!

Because the business owner had the wrong people on his core team, and because he held a dualistic mindset about business and the personal, he missed out on $17 million. His loss could have been prevented with a moment of vulnerability from any of his core team members.


In the previous example, neither of the partners were willing to admit that they weren’t an expert. Furthermore, even in this admission, they could have referred him to partners who were. Instead, the accounting firm was adamant that there was no way to get around the capital gains issue.

Brian’s advisors informed him that with proper planning, he could overfund the ESOP in year one. Since he was selling 100% of his company to it anyway, it doesn’t matter if he over-invests people. It will eliminate all or most of the built-in gains tax. Every roadblock that his team had put up caused him to lose out on significant revenue.

Having expertise in areas like capital gains is a lost art, but it’s a place where firms can gain their edge. That level of expertise is usually reserved for only the top clients because firms are generally overloaded with work. Brian says that leaves a giant opportunity right in the middle for many businesses, even large, robust ones.

Cultivating Partnerships

A lot of the great partnerships that Brian has built were born out of necessity. He eventually took it upon himself to connect business owners with trusted partners who had solutions for the business owners’ problems. When he identifies a problem he can’t answer, Brian says, “I don’t know, but I’m sure that somewhere in my network, someone will point me in the right direction.”

However, he doesn’t just refer any client to any of his partners, and Brian doesn’t haphazardly connect people from his network with clients. He also doesn’t just accept anyone into his network. Brian says, “I really try to find people that are doing things differently. I make sure that they’re not just… saying, ‘Hey, we’ll do the bookkeeping’… I want to find their special sauce.” Going a step farther, Brian tries to find a great reason for how the tentative partnership with the client will contribute to value their family and company. 

The Vetting Process

Brian has an extensive vetting process where he talks openly with partners about his needs. 

He explains the task and notes whether the partner feels confident in completing it. He establishes clear expectations at the beginning before even introducing the partner to the client. If the partner says they can perform the task, Brian trusts them at their word and arranges a 30-minute call. 

After gathering information and data, the partner again assesses if the task is in their wheelhouse. Ultimately, Brian leaves it to his client to make the ultimate decision, but he will advise them based upon who he understands will do the best job, both in the near future and the long term.

The meet-and-greet process takes a significant amount of time, but it’s better to think of it as a client retention mechanism. This interview process is a long-term strategy, increasing the lifetime value of the client. 

Brian offered even more wisdom in the full episode. Listen to the podcast, and reach out to Brian on LinkedIn

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