Serving the Mutual Client: Lawyer and Accountant, or Lawyer vs. Accountant

Avoiding friction between high-skill professionals requires maturity, self-confidence, the ability to see things from others’ perspectives, a sense of security, and old-fashioned courtesy

Andrew D. Pappas, CPA

In an era of dauntingly complex commercial transactions, business without borders and a sharpened competitive and regulatory environment, the professional expertise required by a single client today may be spread over a variety of firms, professions and even geographic locations.

Collaboration among high-level, credentialed advisors who have never worked together is no longer uncommon. It has almost become the norm for increasingly demanding and sophisticated clients to form their own virtual professional-service “firms.” These law/accounting/risk-management/financial advisory teams must be uniquely tailored to satisfy clients’ diverse needs, even if it takes cherry-picking the best individuals from several different service firms.

The task requiring such multi-disciplinary assistance typically involves a business transfer (acquisition, disposition or some variant), compliance or regulatory matter, or business planning challenge.

At the same time that unacquainted lawyers and accountants are now being thrown together to work on a mutual client’s project, competition between these proud professions, both in the macro and micro sense, has heightened. Big Six firms have challenged even the largest multinational law firms in the quantity and quality of lawyers employed. And, beginning in Europe, they have begun boldly to solicit legal work from major corporations, seeking to supplant senior-level lawyers in the role of business advisor and confidant. On the individual level as well, lawyer-CPA tension, always at least latent, is further fueled by competition for fees and client relationships. The situation can be further complicated by the presence of other outside advisors on the project - investment bankers, insurance consultants, financial managers and the like. A volatile mix, to be sure.

In such an environment, friction between high-skill professionals serving the same client can flare, with fallout inimical to the client’s interests. Avoiding this will require maturity, self-confidence, the ability to see things from others’ perspectives, a sense of security and old-fashioned courtesy. It will also require people with the client’s needs and goals fixed firmly in mind, in order to forge a smooth working relationship. Such people can become a team, characterized by mutual respect and regard, engaged with their client in a truly joint enterprise. The need for this applies whether the project be huge or modest, the client a multinational or a small business.

It is essential that there be advance agreement on ground rules and unambiguous assignment of roles, including that of quarterback/team leader, based on individual skills and the respective advisors’ own history with the client: knowledge of its business, operations, systems, culture and management (and in the case of work on a client’s personal financial matters, knowledge of the client’s total economic picture, personality, working style and family relationships). While rules of the road - working etiquette, so to speak - may seem elementary, failure to lay them out at the start can be a prescription for unprofessional behavior, unintended slights, the perception of an “end run” stemming from something as simple as failure to copy a colleague on a routine letter. Resentment, the desire to even the score and engage in one-upmanship, frequently follow.

Accordingly, policies governing such subjects as notification of and presence at face-to-face client meetings, “cc-ing” on client communications, briefing on third-party contacts, document management responsibilities and a procedure governing when and how disagreements should be resolved or brought to the client are as necessary as those assigning responsibility for substantive investigations, analyses, evaluations, drafting, presentation of alternative courses of action and recommendations for choosing among them, negotiations and preparation of compliance documents, reports and returns.

Such basic understandings are essential where there is commonly a substantial overlap of skills and experience. Will the lawyer or the accountant, for example, judge alternative methods - stock, cash, notes or a combination - for structuring the sale or acquisition of a business? Which will choose the best form of new-business entity? Select the appropriate method for reporting a transaction and prioritizing the arguments to defend it before the government? Identify the right risk-management tool? Who should present the options to the client and have the lead role in recommending one in light of the client’s particular circumstances? In the absence of other considerations, the “default” setting for principal advisor would seem to be the one with better or longer-term knowledge and understanding of the client, the business and its operations. That person will likely be the one best able to tailor the advice, and how to present it, to the client’s individual circumstances, needs and personality.

Fundamental principles of courtesy must be observed throughout the relationship as well. For example, don’t be a ball hog - know when to pass off; give credit where it’s due; make full disclosure to teammates of problems, issues, opportunities and creative solutions. Learn the client’s business and affairs, not simply by reviewing documents and interviewing people from your desk, but by thoroughly touring the client’s facilities, observing people, processes, products, systems and equipment - even office and factory decor and ambiance.

The extra time, effort and perhaps cost that might be needed to ensure a smooth lawyer-accountant relationship will serve the client well. It will end up providing him with better information, choices and advice, which can save the client money and aggravation. In a multi-million dollar transaction, with significant exposure and assets at stake, an extra few thousand dollars in professional fees to facilitate team play can be a wise investment.

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