Accountants are trusted advisers and often a first point of call for many of their clients. It’s a wonderful position of trust, but it can come with burdens and risk. It is here that having another adviser’s input can be particularly helpful.

Achieving the best outcomes for clients frequently involves legal and accounting professionals working together to ensure client advice is well rounded, considered and effective.

So here’s the thing. Involving legal professionals at all stages of your clients’ business life cycle could save them time and money.

The legal team, like you, will have valuable insights and will be able to provide advice at all stages of the development and growth of a client’s business, including succession and exit plans.

Accountants and legal teams working together

It may be a good idea to offer the client a combined meeting with a legal professional at the beginning of a new client engagement or when embarking on a new business opportunity within an existing business.

This can help everyone get on the same page, discuss issues and solutions and assist to formulate a strong plan of what needs to be achieved for the client and how best to serve and protect them to achieve those outcomes.

In addition, any potential red flags and risks can be identified and eliminated before they become bigger issues.

When all advisers are aligned from the outset the service delivery to the client will be superior, more streamlined and efficient. The client will also have confidence in all their advisers.

There would be few things worse than an accountant providing advice and a plan, then a lawyer being introduced to the matter who has different views on the best pathway, so the client then has to “decide” whose advice is correct or superior. Such a situation can cost time and money and fatally erode client confidence and relationships.

What are the benefits?

Collaborating with lawyers on client matters can also provide accountants with a safety net, especially when a client is seeking an opinion on issues that venture into legal advice.

Having a lawyer on your referral team can also provide more confidence and value to clients. Your clients will appreciate that you have various experts on hand to help with any issues that arise. You become that true “one point of contact” adviser with options and recommendations as and when required.

I saw this recently when an owner was selling their business and their accountant had identified significant savings to be made by selling shares rather than the business assets.

Thanks to an early engagement, the lawyer was able to walk the parties through a sale structure and a plan for dealing with additional risk issues. Following the early advice, the parties ended up restructuring the deal to how it was originally proposed. The result of that restructured deal was an additional six figure net gain for the client.

Another example was when an overseas client had purchased a building in a trust but misrecorded the entity on the title and subsequently been through a number of changes of trustee. Their accountant had always been recording it correctly but discovered the error on the property title.

The team reconstructed the trust history, obtained notarised documentation and statements and fixed the title so nothing needed to change in accounts nor incur any duty or other negative financial consequences from rectifying the issue.

Unfortunately, in a negative example, a group of accountants that had been friends for a lengthy period joined their businesses together under a “handshake” agreement. When one party failed to fulfil their obligations an expensive and difficult unravelling had to occur.

If they had documented their arrangements properly the valuation and exit process would have been significantly more streamlined, less stressful and less costly to all involved

Further professional opportunities

Apart from client matters, there may be other ways you can work together with a legal firm. There may be joint marketing activities that can help promote both firms to potential client or sectors.

Often the accounting and legal work intersects so perfectly that there are opportunities for joint presentations or client events where we both have something to offer to clients from different perspectives, leading to potential new client opportunities.

Building a strong working relationship with a lawyer or legal firm will take the onus off you as the accountant to have all the answers. Our legal clients also need accountants’ input.

Picture: Zac Herps, Hillhouse Legal Partners.

“Building a strong working relationship with a lawyer or legal firm will take the onus off you as the accountant to have all the answers.”

Part of your role is to be aware of issues that may become legal problems; having easy access to a lawyer who is trained to identify risks and problems where additional advice is needed can greatly assist in this process. A good lawyer will also ensure their own clients can seek relevant advice from a trusted accountant.

Finally, don’t forget to seek legal advice for your own business. Far too often we encounter accountants without shareholders agreements or buy-sell agreements, or who have negotiated leases for themselves and run into problems.

Being under continual pressure to deliver client outcomes, it can be common for accountants to “not find the time” to implement best practice within their own business. We can help.

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