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Welcome to a new series from Leapfin. It's called Undisclosed. It's brand new. It's a big experiment, as we've been saying for the past week. I'm excited you're here. My name is Dave Bor. I am here on the Leapfin team, and I'm joined today by Alex MacGillivray, VP of Finance at Clio. Alex is going to get to answer some questions today. But real quick, I just want to let you know we're going to do things a little bit differently here, right? This is a 15 minute session. Folks are probably more used to a 30 or 60 minute webinar. This is an unwebinar. I can't imagine we're the first people to use that word, but we're having some fun with it. 15 minutes. We're going to get you in. We're going to get you out. We're going to talk with somebody that is living and breathing finance and accounting, for many years and still today, and get you some good knowledge and let you get back to your lives. So, without further ado, thanks for joining us. And we're going to dive in. Today's session is called a spectacularly bad job, how the industry is failing future accounting leaders. And we're going to get to that in a second, but I've got to start celebrating some really exciting news for Alex's company, Clio. Alex, you guys just closed a massive 900 million dollar round of private financing. Keep me honest here, but I believe it's the largest raise ever in legal tech anywhere, and the largest in all of Canadian tech across all industries. On the private side, yes. I think I might've been in larger IPO, but yeah, otherwise nailed it. Congratulations to you and the team. I want to ask you in your role specifically as VP of finance, and I know you've been with Clio for a bit, so maybe you've had a little bit of a time with, in your role as controller as well, but in your role, what would you say was the most daunting part of getting ready for that that funding raise? Yeah, sure. Happy, happy to talk through that. And I'm just gonna say, folks, I just got out of our annual user conference. So my voice is totally shot. So please bear with me here. I think the most the most daunting process or part of the process was that we knew we were going to be subject to really deep financial due diligence by multiple parties. I think every one of the big four wanted to sink their teeth into, you know, everything we've been doing for the last three to five years. So gearing up for those multiple hour long calls, digging through several years of records, re familiarizing ourselves, that was pretty stressful. But the good news is, is we place a huge emphasis here on Clio, around accuracy and completeness of our records. So, you know, we were able to knock it out of the park. Awesome. Well, full disclosure, Clio is not a customer of Leapfin, so we didn't help you guys with any of that. But that's kind of the point, right? We're trying to bring operators here who can, can talk about being, being deep in it as it were. So Alex, thanks for that perspective on what was daunting for you. If you had to say what members of your Accounting team would say as what was the most challenging part for them, what do you think they would offer up? Sure. So maybe some context here is that the way that we approach this financing was that, for the most part, myself and my Controller worked with the investors and the bankers while the accounting managers and team, for the most part, kept the lights running. So, I think if you were to ask them, you know, the biggest, the biggest challenge and, you know, what I think is a huge testament to their abilities is that for about six or seven months, they were able to work independently without getting any of my time or guidance, and getting very little of our, our Controller's time. You know, I think it's a really great lesson for all of us as leaders that just reinforces how important it is to build independence and self reliance on your team, because when you have these like major once in a lifetime opportunities come up, you have to rise to the occasion. You're not going to have the time to, to coach and manage your teams. You have to be able to trust them and lean on them and know that they can keep kicking ass even without you. So right on, love it. In the process of again, getting ready for that round, is there anything that you learned about your accounting or finance at large, about your team, your process, your tech, your data, anything you learned about, your org that surprised you? Yeah, sure. Maybe I can. Yeah, yeah. Talk about the biggest surprise of this whole thing for me, which is how critical and important actual non GAAP measures became to the overall process. So just expand on that a little bit. We worked really closely with KPMG to build out a quality of earnings report. And through that process, we were able to make some really substantial improvements to our financial metrics. By identifying and removing, you know, one time occurrences or adjusting for specific business decisions that we knew we could or even would be changing in the future. So to be clear, you know, through this process, we probably improved our EBITDA by more than 20%, which is, you know, incredible. Incredibly substantial. But to be able to do that, you have to have really robust records and documentation. you know, we were able to rely on some working papers and memos that were written years ago, some without even my knowledge, in order to substantiate some really material and large adjustments. You know, I think we have time I can do like a super quick example. On the revenue side here at Clio, we have a ton of different discounts and refunds that go out to our customers. And our, our systems don't do a great job of keeping records of which discount was which. And so through this quality of earnings report, what we were able to do is say, you know, hey, discount B was one time or we're super targeted. We can actually back that out and take that revenue back into our reporting. you know, in our systems as they were, we can't tell if it was discount. A B or C or whatever. So we would have been hooped Fortunately, my accounting manager Jordan had the foresight to build a really strong Excel records that we were able to provide straight to the auditors and ended up having a really material impact on the revenues we were able to report. So this illustrated to me, you know, it was a big surprise, just how critical that was to the valuation that we ended up getting, but it also illustrated to me how important a really strong RevRec system is, for, for record keeping. So, you know, we're, we're now looking really deeply. I think Dave actually, our teams might even be talking around where Leapfin might fit into that. But it's clear to me that we can't rely on these enormous complex Excel workbooks to track all this data. Is operating things, these things that frankly don't matter for GAAP accounting, ended up materially moving the needle for the valuation. That's awesome. Well, shout out to Jordan. Good job. Last one on this topic, Alex. I'm going to kind of put you on the spot here, right? But if you had to give yourself a grade, your team and yourself a grade, scale of 1 to 10, you know, 10 being exceptional, 1 being a whole lot of work to do. How efficient would you say the process was of getting the numbers in order to prepare for the round? Okay, yeah, I guess, I guess I would say around a 7. The reason I say that is, as I said before, we, we keep fairly strong records, and again, shout out to Jordan, he'd kept records of things I wasn't even aware of, which was, which was really super, and allowed us to work closely with these investors and, and give them the support they needed to get comfortable with those higher valuations. The inefficiencies, I think, came up because we weren't specifically aware of or tracking all of those non GAAP adjustments that we ended up making for the quality of earnings. We had to go out and discover them. And that was a tremendous amount of time. Obviously, incredibly well spent time. It had a huge impact on the value, but it was a real eye opener for us and something that now we're proactively keeping track of and keeping records of. so, yeah, 7 out of 10. Strong, strong room for improvement, but strong. All right. Let's shift gears, to the title of today's session. I actually I named the session after a direct quote that you provided when we first started workshopping this. And you said that the industry does a spectacularly bad job of getting accounting and finance pros ready for leadership to be that VP to be that Controller. Let's start off with this, Alex. Can you think of two specific things that accounting operators today aren't learning that they should be? Yeah, for sure. yeah, let me, let me, yeah, split this into two major themes. So, the first one, just to give some background, is accountants, I think, are exceptional operators and executors. I think we'd all agree that we, as a profession, have a really well earned reputation for getting things done. It really sets us apart from a lot of other professionals, but it's a double edged sword. You know, all too often, I think accountants and finance professionals end up getting stuck in the details in the weeds. So how does that show up? For example, accountants are really good at speaking about what numbers changed, but not how or why. You know, once you reach a VP level, a lot of your reporting, a lot of your job becomes storytelling, which requires that you're extricating yourself out from the details, to see, and in fact, you know, shape that bigger picture. You know, the other thing I'll say about being excellent operators is it's really easy and common for us to just slide into a comfortable routine, which blinds us to, to upcoming changes. And so in other words, I think we're as a profession, you know, largely very reactive rather than proactive. And to be successful at a VP level, you got to change that. So, so one example I give Dave is that, you know, I meet with my management team every six months and we set out an 18 month plan at that meeting. And a huge part of that is trying to predict what the rest of the company is going to look like, and not just accounting, but all the other various different departments, what it's going to look like 18 months from now that lets us plan for and build, you know what we're going to need on a capacity headcount, complexity, sophistication and tools framework in order to continue being high performing and highly executing, you know, at that 18 month mark. And this is especially important for identifying issues that can only be solved by tools, you know, which often take 6 to 12 months to put into place. You know, I find that it's very easy to fall into the trap of preparing your documentation manually or through Excel and like we're guilty of this too at Clio as I've already talked about. But as your company 10Xs over years or doubles its product suite, you know, those early Excel band aids are going to fail you. They're going to become a handcuffed around your wrist. So it's your job as a leader, especially when he wants to become a VP, to be looking forward and spending the time on that planning, not just reacting to the punches as they come in. So that's sort of the first pillar. The second one, Dave, I would talk about is that a lot of accountants are really comfortable and seek out perfectionism, you know, putting everything in so little correct box, you know. And look, our accounting standards force us to have this mindset. You know, and many of us are audited, many of us have requirements, you know, maybe from our banks to do GAAP compliant statements, but again, as I was saying earlier, once you're at the VP level, your focus needs to change. It needs to change to how's our business operating, what's the story, what's the value that we're driving here. You know, because, because frankly, folks, investors aren't interested in amortization expense or deferred income taxes, you know, or, or even one time costs and how they're recorded. You know, they're focused on what the true ongoing operating quality of your business is. Of your business is, you know, what is your business's true ability to generate cash and grow? And so I would say for many of us, we we've lived our whole lives in the strict framework of accounting standards you're going to need to transform your financial results and be able to report them as a VP You know from the true story of your business. So I guess just like I'll super quickly to summarize, I know we're running low on time here. The Complexity in our ability to execute and our, you know, commitment to perfectionism, these are all what make us so successful as, as ICs or managers, but they actually end up holding you back once you get to the VP level. You know, so, so for those of you that, that want to get there, you should be self reflecting on these gaps and deliberately start working on those blind spots. That's great. Thanks for that, Alex. So one more question on this, and then we're going to get to a lightning round to bring us home some rapid fire questions. But you've now had some time in the hot seat, so to speak. You you moved into VP Controller role now VP of Finance at Clio. if you as you reflect on the last year or so, what is you know, what's a piece of advice that you'd love to pass on to those next accounting and finance, you know, directors and managers that are looking to ascend into leadership. Got it. Okay. super quickly, because I know we're, I'm sorry, I'm too talkative. Number one is, you need to become a storyteller. And a great way to build that muscle and strength is to start reading the disclosures that other companies in your space are doing at the public level. So I would say you, if you, you have ambition to be a VP, you need to be reading quarterly financial statements, quarterly MD& A, and annual financial statements statements that the companies, the public companies in your industry are pointing out. You need to start learning how they frame things, how they tell their stories, so you can start to incorporate that into your practice. The other thing I'll say is that you need to be focused strongly on building, robust and trusting relationships with leaders outside of Accounting. If you're going to be able to truly tell the story of the business, you know, follow your own curiosity and understand the why behind the numbers. You need to work with folks and leaders outside of Accounting and Finance. I find that really difficult because I've got a huge amount of Excel work and math and things I need to review and do. So it's hard for me to prioritize a lunch or a coffee with another leader. But what I've learned is that that should actually be my, my biggest priority, because when I need to truly understand our business, you know, I'm not actually finding that in the numbers. I'm finding that in discussions with other leaders and then drawing the connection to our numbers and then telling the story of our business and how we're creating value. Love it. Awesome. All right, let's get to a lightning round. I know we're already quarter past. Like I said, this is a big experiment, so we're feeling it all out. If folks have to drop, have a great afternoon. This is going to be recorded. We'll send it around. But if you can hang, we're going to do a quick lightning round with Alex and, and real quick. Also, I want to make a plug. you mentioned a moment ago that, That balance of being in the weeds with all the details in the process, but also trying to, you know, get that 10, 000 foot view of strategic thinking and planning 18 month views or so. That's an awesome topic. And it's actually going to be the topic of our next Women in Accounting and Finance session. That's coming up in a couple of weeks. We're going to send some emails out, put it up on LinkedIn. So be on the lookout another fantastic session in that series. All right, lightning round time, quick hit, quick, rapid fire. And, just whatever's off the cuff. You let us know Alex who is your MVP, your most valuable player or teammate that's outside of accounting and finance. IT. IT for sure. If you could add one new headcount tomorrow to your finance and accounting team, what would they do? Well, I just hired a SOX manager, so that's very top of mind for us. If not them, more folks in IT to build automation. Right on. What's more important if you had to choose for monthly close, that it's fast or that it's accurate? Accurate. If your team, your Finance and Accounting team were a car, what kind of car would it be? A very reliable 20 year old Toyota Corolla, I think, that gets the job done. With a CD player, maybe even an old, tape, tape deck. What emoji, pick an emoji that best describes your team's current month-end close process? I'd love it to be the robot, but I think I'll go with the exploding head right now. All right. so maybe, maybe I know the answer to this one, but maybe not. If I asked your Accounting team, the number one thing that they would love to automate next to be more efficient, what do you think they'd say? It'd be revenue, revenue and billing. All right. Let's do a little gambling here. Over under, Over/Under in the next 12 months, what are the chances your team is using AI to assist in rev and rev in the revenue accounting process? 85 percent over 85 percent or under 85%. Over 100 percent over. All right. do you have a side hustle? I wish I had the time for a side hustle. no, I, I, I kept pretty busy here between, Clio and, and taking care of the dog and the family. But, you know, if I could, I'll just say, I would love to get more into, you know, doing, doing accounting, education and training. I'm, I'm really passionate about what we do here. So I'd love to find more time to do things like this. Awesome. Love it. All right, we're gonna get you out of here on this one. do you have a favorite way to connect with colleagues or peers in the industry? No, and I think that's a big thing that we need to work on as a, as a industry. So, you know, LinkedIn is probably the best way to get a hold of me these days, but it can't be the, it can't be truly the best way. There's got to be something better out there. I hear ya. I hear ya. Well, we're working on our, on our end. We're trying to do what we can, but Alex, that's our time. Thank you so much for being here, helping us kick off the inaugural episode of Undisclosed. If you want to learn more about Alex, he's on LinkedIn. If you want to learn more about Leapfin, we're accounting automation software, by the way, go to Leapfin. com. We've got some cool stuff up there. Alex, you're the man. Thank you so much for being here. Congrats again to you on your success and to Clio and hope you keep going to the moon. Thanks, Dave. It was a pleasure. I hope we can do it again sometime. Thanks everyone for being here. We'll catch you for the next one. So long.