High Rock Accounting Is A High Growth Firm

In this episode, I'm talking with Liz Mason, Founder, and CEO of High Rock Accounting, Rachel Fisch, High Rock's Chief Global Development Officer, and Megan Genest Tarnow, High Rock's Nonprofit Industry Lead about High Rock's acquisition of The Mobius Group, High Rock's non-traditional culture, and High Rock's biggest challenges, and their plans for accounting "world domination."

[00:00:03] Preview
Liz: Yeah, so, effectively right now, we're hitting a scaling moment. We've been growing very quickly. Our average growth rate since inception has been 70% year over year; we've had bigger years; we've had smaller years. Year to date, we’re already at 62%, so this year has been a growth year.

Blake: And for those who don't run a practice, that's an incredible growth rate-

Liz: Average growth rate of accounting firms right now in the U.S. is 4.2%.

Blake: And a really high growth firm might be 20%–30%. You said 60-

Liz: Yes. 62, year to date-

Blake: That’s a lot.

Liz: Not including acquisition.

[00:00:41] Welcome to Earmark

Blake: You're listening to The Earmark Podcast. I'm Blake Oliver. Sometimes, it feels like the big accounting firms get all the attention, but why? It's not like that's where the greatest innovation is happening. Sure, they have fancy blockchain, and AI teams that you read about in press releases, but I'm not just talking about technology, when I use the word innovation; I'm also talking about culture.

When it comes to culture, big firms are usually the slowest to change. Small high growth firms lead the way, and High Rock Accounting is at the vanguard. High Rock’s motto is, “Accounting done differently,” but it's not just accounting that’s different at High Rock. Everything can be questioned on Team World Domination, as founder, Liz Mason likes to call it.

Join me for this episode in which I sit down with Liz Mason, Rachel Fisch, and Megan Tarnow to talk about High Rock’s latest acquisition, the non-traditional culture at High Rock, the challenges they are overcoming and, of course, plans to grow.

[00:01:43] Introductions

Blake: Hi, everyone.

Megan: Hi, Blake.

Liz: Hello.

Blake: Oh, my gosh, there are so many voices in this room! I feel like I should set the stage for our listeners.

Liz: I'm always on stage-

Blake: It's not your turn yet, Liz. Hold on [CROSSTALK] We are in Scottsdale, Arizona- beautiful Scottsdale, Arizona! It is October. The weather has gotten cool.

Liz: It’s November.

Blake: Oh, yes, it is November already! Amazing.

Rachel: It was the shortest October ever.

Megan: Oh, man

Liz: It was 31 days, as it always is.

Blake: And we are sitting on a couple of couches in a room in a hacienda. Who are we? What are we doing here? Liz, you go first – who are you? Why do our listeners care?

Liz: I'm Liz. We are Team World Domination, and your listeners should care because we're taking over in the most productive, and good-willed, and best way possible!

Blake: And just a little bit of context, you are Liz Mason.

Liz: I am Liz Mason of High Rock Accounting, Founder and CEO; also of Rebel Rock Accounting, and a few other brands.

Megan: And I am Megan Genest Tarnow, most recently- well, fairly recently, the Founder, and Principal of The Mobius Group, and as of Monday, the Industry Lead, Nonprofit for High Rock Accounting.

Blake: Woo hoo!

Megan: Yeah! Right? [CROSSTALK]

Blake: So, we're here to talk about the merger. I'm very eager to hear what's been going on. I don't know anything other than-

Megan: We did a really good job about keeping that- like I was just at Scaling New Heights, and we did a fabulous job of keeping it completely on the down low.

Blake: Before we get into that, your turn, Rachel.

Megan: Oh, right.

Blake: Introduce yourself.

Rachel: Hello. I'm Rachel Fisch. I am Chief Global Development Officer for High Rock. Basically, my whole job is finding best-of-industry skill, and talent and teams and inviting them to join the High Rock family-

Megan: Collective. Families are too dysfunctional.

Blake: Collective [CROSSTALK]

Rachel: Yeah, I like collective better.

Blake: That makes me think of the Borg collective, but ... A good version of that.

Liz: Resistance is futile?

Blake: Sometimes, I feel that way, Liz. Sometimes, I do feel like resistance is futile, especially since I moved here, and you are also here in Scottsdale.

Rachel: She was here first.

Blake: She was here first. I, as always, am Blake Oliver, CPA, your host here on this podcast. So, Rachel, Megan, Liz, thank you so much for joining me today.

Liz: Thanks for having us [CROSSTALK] Well thanks for coming to our retreat site, I should say. You made an effort.

Blake: Yes ... So, you're all here together, the High Rock team. The- is it the Mobius team?

Megan: My whole team is here, but now, we are a part of the High Rock collective.

Blake: The whole collective is here. Let's put some numbers to this. So, before the merger, what did High Rock look like, Liz?

Liz: In terms of ...?

Blake: Employees; whatever you want- whatever numbers you want to share.

Liz: We had 27 employees We added three with Megan's group coming on, and then, we have a bunch of contractors that we work with, as well, so our team is around 40 people.

Blake: 40 people now ... And Megan, your group- what did your firm look like?

Megan: We were, at this point, fairly small. We've been as large as four employees. We were down one, so we were at three.

Blake: And you specialize in not-for-profits, is that right?

Megan: I do.

Blake: And where are you geographically?

Megan: Geographically, I am based in St. Paul, Minnesota, and the rest of my team is also in Minnesota. We, last year, had an employee who was down in Mesa, who I've never met, and we are going to meet for the first time later this evening.

Liz: That’s fantastic!

Megan: And exciting!

Blake: And Rachel, your job at High Rock is to put these kinds of deals together.

Rachel: Yes.

Blake: So, you made this deal happen. Congratulations.

Rachel: It is a team effort, 100% top to bottom; o=it's just my responsibility to have the conversations and to make sure that we're moving in the right direction, for sure.

[00:05:34] How did the merger/aquisition happen

Blake: How did this all come to be? Can you take me back to the beginning of this? I imagine you've been talking for a while. Usually these deals don't just happen overnight.

Megan: Correct.

Rachel: So, not only do they not happen overnight, and I'll actually get Megan to tell the story because I think she's a little clearer on the details, but in terms of kind of what she was feeling and what the timing looked like for her, the ... What was the question?

Blake: When did it start? When did y'all start talking?

Rachel: So, what I would like to say before Megan answers that question is we have known Megan for a while, and what I'm finding is that the best conversations are happening with those that we've known in the industry for a while. So, Megan and I actually met- Accountex in Boston. We think around 2017, or so-

Megan: Something like that, yeah.

Rachel: And, of course, we were like internet besties before that, but we ran in the same circles.

Megan: Exactly, exactly.

Blake: When did somebody say the word “merger?”

Megan: I think it's- officially, we're calling it an acquisition because we got ... Sucked into the larger High Rock ... We were dominated by the High Rock collective-

Liz: Hey! In a good way.

Megan: In a good way.

Rachel: In the best possible way.

Megan: Absolutely.

Liz: In the requested way.

Megan: I think the conversations probably started February, or March. Rachel had put out job postings. High Rock was hiring, and I think I kind of, in the comments, went, “Hmm, some days, that looks really appealing,” and like five minutes, later she's in my DMs.

Rachel: I did. I totally slid into her DMs. I would say, though, from my perspective, I get the busiest incoming when we post jobs, and they're like, “I actually really want to work for you guys. I happen to have a business. What might that look like?” So, yeah, it's a job posting that started all of it ...

Megan: I think the time was right. I've been, for a while, maybe moving in that direction ‘cause I didn't ... There's people- Liz, you're one of them, where you set out to make an accounting firm, like, “This is my dream. I'm going to grow this thing.” I was accidental from the beginning, and I sort of ... Obviously, it went well. It survived for 21 years. I've had employees; everybody kept getting paid, but it sort of felt like I had built this thing that had become a cage in a way.

Last year, 2020, I did thrival, you know, for entrepreneurial accounting firms, and I walked away from that with really clear realization that I do not want to grow an accounting firm, but I also felt really trapped, and I felt like I have developed this really peculiar skill set, and I couldn't imagine any job that I could do that I would actually be interested in doing. I didn't want to go work for a company as their CFO. It just felt really limiting and really boring. This was the sort of light at the end of the ... Like, what? You mean there might be a thing?!

Blake: You felt stuck. You didn't want to go grow your own practice. So, what about being part of High Rock now unsticks you, or what was the word you used? Trapped. You felt trapped, right?

Megan: I mean, I think the parts I loved about it ... I really love the work I do, and I love the clients I do it with, and I love my team, and yet, the part I did not love was running a business, and the administration, and all of the nitty gritty; like, you’ve got to figure out what the phone lines are ... Having to choose all of the things ... What I'm super excited about at High Rock is getting to work with and grow a really phenomenal nonprofit team and also having the resources of a tech team, and an HR department, and other really, really smart people to brainstorm with and get to hang out with. My job gets to be both bigger and not everything.

[00:09:45] What is Megans Dream Job?

Blake: And so, now that you're not dealing with the phone lines and all that, what is your dream job?

Megan: My title is going- I guess the title is, and then we're working my way to it- is Industry Lead, Nonprofit, and it is- it's a combination of like how do we train people up in the nonprofit sector so that they have the skills they need to really service that niche? How do we educate and bring people ... I mean, a lot of education, a lot of innovation, a lot of getting to think, and almost like evangelize for the wonders of that niche, I think-

Liz: And how do we take Megan's excellence and broadcast that? So, how do we elevate her from firm owner doing all these other things into, if you could just focus on that industry and build up goodwill in the industry, give out that information that elevates non-profits across the board that you do so amazingly well, and then also build that team internally ... How do we get that, and how do we make sure that, at High Rock, we're building industry teams that are best in class? In my opinion, we find people like Megan who are best in class, and definitively best in class, and bring them into the collective and give them that platform, and that support, and that investment, and the ability to truly take that to the next level.

[00:11:02] High Rock - NFP Services

Blake: Is this a new service line for High Rock or has High Rock served not-for-profits?

Liz: We've served not-for-profits since the beginning, and I have to say, with Megan on board, and her team, we’ll do it better. So, I've been fact checking myself behind the scenes over here. I was wrong, actually, on our employee count. I’m gonna hand my phone over to you, Blake, so you can verify this.

Blake: Okay.

Liz: We’re at 47; 13 of those are contractors, as of today.

Blake: I’m looking at your Gusto dashboard right now.

Liz: You’re looking at my Gusto dashboard, and you have full access, so please don't press [CROSSTALK]

Blake: Oh, boy! Let's take a look. Bulk edit ... That's dangerous, Liz. Thank you. I love it. I love the fact checking on the spot. That's great.

[00:11:41] What is this retreat about?

Blake: What are y'all up to here at this retreat? You've been here since Monday. Everyone is here everyone, or everyone who can be, I take it. It’s now Wednesday. What's been going on?

Liz: A lot of fun stuff. So, the point of this retreat was partially to bring together our remote team, partially to welcome Megan's team, and partially to reset where we're at as a team. And I think, you know, the pandemic created a lot of really interesting human-relations issues across the board, across the country, across the world, and we are no different. We've been suffering from that screen fatigue, the inability to see humans on a regular basis, and also forgetting that we're all human, right?

And so, what better way to remind our team that we're all human than to bring us together in person to sit down, to be able to have those one-on-one conversations, the bonding, the learning; go over team items; make sure people are actually paying attention because I swear to God, you can't do that on Zoom-

Blake: I'm the worst. I'm the worst at that.

Liz: -and just bring everyone together in a really strong way. I have to say, we've been exceptionally careful on the COVID front. We did multiple levels of testing, and I think that our team really appreciates being here, and we rented the super-cool estate for it ...

Megan: It’s amazing-

Blake: Yeah, it's pretty nice. I mean, our listeners obviously can't see this, but, you know, picture the stereotypical Phoenix hacienda kind of ...

Liz: Old adobe-style estate grounds; beautiful pool; fountains, and the weather is gorgeous. I mean, the high today was 83 degrees ...

Blake: Can't beat that. Are you planning any fun things while you’re here?

Megan: It's all been fun, Blake.

Blake: Well, not ... Non-work things?

Liz: Well, I mean, we had a really cool happy hour on Monday, and all of our local team members brought some appetizers in, and we hung out. I think-

Blake: I’m asking because I'm looking for an invite, guys ... [CROSSTALK]

Rachel: We've got leftovers. We've got pizza in the fridge. You're welcome to it.

Liz: I mean, there's tequila in the fridge, or the freezer, in fact ... You're welcome to stay, and hang out, and just pretend you're part of the High Rock collective; kinda test it out, see what it feels like; see if it's in your future.

Megan: I would say that some of those conversations we've been having later at night, you know, just sitting outside ... In that area that's near the pool, but not around the pool have just been fantastic. It's like the dream conversations you want to have at a conference, and then getting up the next day and getting to have more of them with the same sort of small group of people has been really, really fascinating.

[00:14:19] Culture difference between traditional firm and High Rock

Blake: Yeah, the culture at High Rock is definitely very different than a traditional accounting firm. I think that might be an understatement.

Megan: There's more swearing, I think.

Blake: I don't know [CROSSTALK] Probably. Well, it's hard to say-

Megan: Even though I haven’t worked [CROSSTALK]

Rachel: I think that’s accurate.

Blake: I mean, I think it's different – you're not being yelled at, as much, right, with the swearing? It's more communal [CROSSTALK]

Megan: It’s conversational swearing ...

Blake: Conversational, rather than anger-induced. It’s hard to describe it. Maybe we can describe it for people listening who have just never experienced a different kind of firm environment. Rachel, you have been in the Big Four-

Rachel: I have.

Blake: Now, you're in High Rock. They're like complete polar opposites.

Rachel: Yes, absolutely.

Blake: When you're talking about High Rock to people, how do you describe it? Because it can be so hard to explain the difference, I guess, in these cloud firms versus traditional accounting firms.

Rachel: So, that's difficult because however different I feel High Rock is, so much of it can only be shown and not told. It is experiencing the culture, or the conversation that happens, or the level of innovation that you see among your coworkers ... I'm only challenged because we can say, “We use cutting-edge technology ... We’re not your dad's accounting firm ...” All of these incredible things – and I do want Liz to speak to what this actually is; I'm just trying to speak to the feeling of it – the challenge is that people who are not as innovative and are not using cutting-edge technology ... The wording is all being the same, so the message itself is getting muddled, and that's why I say, yes, we can talk about that, but so much of it is in what you feel.

To me, that was just reinforced with this time with everybody this week. So far, the most touching of the whole week was seeing Megan leading the nonprofit. We've been in team breakouts all week, as well, so Megan actually had a chance to ... Remember, this was only effective Monday [CROSSTALK] On Tuesday, she was holding a team breakout session for Team Nonprofit and basically envisioning the future of what this industry vertical looks like here. Did you want to talk to-

[00:16:39] Core of High Rock

Rachel: Liz, did you want to speak to the core of who High Rock is? ‘Cause you can do it better than I can.

Liz: Thanks. I appreciate that. One day, you'll be better than me. I think the core of what you were saying around innovation is very, very key to our culture. Right now, our team is doing a hackathon, actually – right now – hacking together, problem solving-

[00:17:10] What is their Hack-A-Thon - and culture continued

Blake: I can verify that. I walked in the building, and there were clusters/groups throughout, and they had their laptops open. I had a question for Rachel; maybe you can answer this, Liz. Who’s doing the hacking? Do you have developers here? Are you guys using NoCode tools? What are you hacking?

Liz: It's our team hacking together whatever problem they came up with. Some of it is Zapier; some of it is finding tools. I think the team I was just assisting, we were building a slack workflow app and making that happen. So, really, it's about encouraging everyone on our team to think differently about the tools and how you can solve both internal, and external problems with whatever tech we have at our hands and encouraging them to think about it with their teams, ideate, create, think creatively, and differently, and bond in a way that's not normal – bond, in a way, over innovation.

I think that is core to our culture is that innovative thought process and the creative problem solving that is not found traditionally. We encourage that from the bottom up. We encourage that from the top down. We encourage that in the middle; all around. Every piece of this culture is encouraging people to think for themselves and to come up with ideas and work together to create something better.

The other piece, I would say, of our culture that's incredibly important and powerful is the human aspect; it’s remembering that we're people. What we do is a professional service. We are professionals, and we are people that perform that profession. We cannot be completely replaced by technology, however, we'll use that technology to our benefit all day long We will advise our clients and we'll create that culture of advisory internally in a way that gets our people out of task orientation and more into how do we help? How do we build? How do we create a bigger picture? How do we influence the economy, and what different industries can we do that in?

Rachel: What I'd also like to say is you had mentioned me being at Deloitte, part of the Big Four. One of the things that I also think has been really interesting about this time together is that where we've got team members who have joined High Rock quite early on in their career, by having us all together and having these discussions, they, for the first time, are actually realizing how innovative High Rock is because, for them, that's normal.

Us, as leaders, or for more experienced professionals that have worked elsewhere, we can look from the outside in and talk about how mind-blowing some of this stuff is, and how our strategy is completely different from the way that traditional firms strategize. But with these other team members coming in, earlier on in their career, they don't see the difference. They just think that this is what accounting is. I love that, and I would love that for every new, and young CPA coming into the industry ...

Blake: Yeah, it's wonderful to hear because in my brief experience in a big firm, the innovation was not – I was innovating, but I was not asked to do so, and when I did, it was met with resistance, constant resistance, and pushing for change. This idea that your asking your staff, Liz-

Liz: Team.

Blake: Your team ... We have to change the terminology here, right?

Liz: Yes, we do.

Blake: Your asking your team to innovate is pretty refreshing. It's great to hear.

Liz: Thank you.

[00:20:29] What are their biggest challenges

Blake: What about challenges? What are your biggest challenges at High Rock over the next, let's say, 12 months? What are you worried about? What are you eager to solve?

Liz: That's a great question, and I don't think we have enough time to go over all of it. However ...

Blake: We’ve got five minutes.

Liz: Great. I'll talk really, really fast-

Blake: We don't need solutions, just problems.

Liz: Effectively, right now, we're hitting a scaling moment. We've been growing very quickly. Our average growth rate since inception has been 70% year over year; we've had bigger years; we've had smaller years. Year to date, we’re already at 62%. This year has been a growth year.

Blake: For those who don't run a practice, that's an incredible growth rate.

Liz: Average growth rate of accounting firms right now in the U.S. is 4.2%

Blake: And a really high-growth firm might be 20%–30%. You said 60-

Liz: Yes, 62, year to date, not including acquisition. Thinking about that from the perspective of we're scaling very quickly, we're building new team members, our biggest issues right now are making sure that we have really good processes; really good functional, operational charts; understanding who goes where; getting the right people into the right seats; making sure we're further integrating Megan's firm; making sure that we're giving her team the best experience possible, and we're able to push forward all of these big initiatives that we're working on at the same time.

Operationally, we're working on better systems, better processes. Rachel's actually undertaken a super cool practice management project in dynamics that will give us the enterprise-level tech that we need to scale. We also have our teams working on how are we recruiting, how are we training; what are we missing? Where are the gaps, and how do we fill those?

There's a lot that we're working on, and the one thing I can say about all of it is I don't feel like any of this is overwhelming because our team has a culture of Kaizen, which is continuous improvement and putting together the brain trust of, okay, it doesn't have to be perfect, it just has to be better than yesterday. Tomorrow, we say the same thing, and we continue doing that every day until we get something that is top, best, perfect.

Megan: Is it ever perfect?

Liz: No, never-

Blake: But that's not the point, right? It's continual improvement. I love that word “Kaizen.” I think it's a Japanese term?

Liz: Yes, sir.

Blake: Yes, wonderful.

[00:22:53] Closing / Where to reach them at

Blake: Well, anything else you all would like to add before we close things out?

Liz: If you hear this and you go, “I want to be part of the High Rock collective,” you can contact Rachel at rachel@highrock.co.

Blake: Rachel@highrock.co

Rachel: Or slide into my DMs, as I did with Megan ...

Megan: She’s on all the socials [CROSSTALK]

Rachel: @Fischbooks.

Blake: @Fischbooks – F-I-S-C-H books?

Rachel. That’s right.

Blake. Liz, if folks want to get in touch with you online, where do you like to go?

Liz: Twitter. @LizzyNorMa.

Blake: How about you, Megan? What's your preference?

Megan: Also on Twitter – @MeganTarnow

Blake: And I am @BlakeTOliver. Liz, Megan, Rachel, thanks for this fascinating conversation.

Liz: As always, thank you, Blake [CROSSTALK]

[00:23:40] Sign up at EarmarkCPE.com for free podcast CPE

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High Rock Accounting Is A High Growth Firm
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