Do You Need an Attorney For Your Accounting and Payroll Business?

For years, many European accounting firms have expanded their clientele by offering services that were previously only offered by attorneys employed by traditional law firms. Now, many businesses in the United States have begun to follow suit by keeping an attorney directly employed by the accounting firm. According to New York Legal Ethics, the American Bar Association has created a  that has discovered that the primary reason for accounting firms employing attorneys is to provide legal tax consulting services. This begs the question, should your accounting or payroll business keep an attorney on its payroll?

If you were wondering if you need an attorney to set up an accounting or a payroll business, it is highly advisable that you consult with one as dealing with your clients financial situations could possibly lead to future litigation.

If you are wondering if you should hire an attorney as an employee. If your accounting firm has a clientele that includes large corporations or businesses that require solid legal advice regarding their taxes, keeping an attorney on your payroll would be great for business. However, if you have a small bookkeeping business, it may not be economically feasible to keep an attorney employed by your business.

In this article, we are going to closely examine some of the advantages and disadvantages of keeping an attorney on the payroll of your accounting or payroll business. We will also take a look at the many different job duties that an attorney employed by accounting or a payroll business may perform for them.

What Are the Job Duties of an Attorney Employed By an Accounting or a Payroll Business?

The American Bar Association formed the Commission on Multidisciplinary Practices to find an answer to this question. When they investigated the “Big Five” of accounting firms, what they found was that most of these accounting firms kept an attorney on their payroll for tax consulting services. Most attorneys who are employed by accounting firms will tell you that they do not practice law, but rather offer consulting services to their clients. One of the primary reasons for this is to deflect any accusations of unlawful legal practices away from the accounting firm.

Yet another job duty for an attorney who is employed by an accounting firm or a payroll business is to represent the firm’s clients before the Internal Revenue Service, in case they are needed. However, the American Bar Association is currently considering making changes to these rules due to the confidentiality of information, the conflict of interest, and the professional independence of a lawyer section of their rules which currently call for more stringent ethical rules to be followed by attorneys than by accountants.

There are also positions which are known as CPA lawyers, in which the individual is both qualified to practice law, and is also a certified public accountant. Many bookkeeping businesses and accounting firms are now seeking to employ individuals that have both of these credentials. These people usually work on tasks such as estate planning, tax matters, and business issues, where it would be beneficial for somebody to possess a working knowledge of both the inner workings of accountancy and legal matters.

What Are the Advantages of Having an Attorney on the Payroll of an Accounting or Payroll Business?

Perhaps the most obvious benefit to having an attorney employed by your accounting or your payroll business is to be able to expand your clientele by providing multiple levels of service in one firm. After all, having an attorney employed by your accounting firm or your payroll business because financial matters and legal matters often intersect. Having more than one person in your business that can take care of all of your customer’s issues makes perfect business sense.

Another advantage to having an attorney employed by your accounting or your payroll business is that you have the benefit of getting both the legal and the financial perspective for your clients without the possibility of any miscommunication between two separate firms. I’m sure that you are all familiar with the old saying that knowledge is power. Well, this is one case where this saying holds especially true. Having an attorney on your staff will also give your business a more well-rounded and professional appeal to new clients.

Furthermore, having an attorney or two on your staff will help you and your business to avoid any potential blind spots which may arise from complicated tax and legal matters that many of your customers may find themselves facing. When it comes to the world of business, communication is key. If you have clients who have issues that are more complicated than others, having attorneys and accountants in the same building can severely reduce the risk of any wires possibly getting crossed when it comes to their delicate financial and legal matters.

Learn when you should get insurance for your business.

What Are the Disadvantages of Having an Attorney on the Payroll of an Accounting or Payroll Business?

While there are several advantages to an accounting firm or a payroll business employing an attorney, some of these establishments simply aren’t quite large enough to justify hiring an attorney. After all, this is not a service that is needed every day, for every client. For this reason, you will usually only see attorneys employed by much larger accounting firms, and hardly ever buy a payroll service.

 In my opinion, there is only one obvious disadvantage to having an attorney employed by your accounting for payroll business. That would be if your business does not have a large enough customer base for you to justify having to accommodate an attorney’s salary. Let’s face it, some payroll businesses simply aren’t quite large enough to need to keep an attorney on their staff. However, most clients are already aware that they will have to obtain separate financial and legal representation.

Most of your customers are not expecting you to have an attorney on your staff, so if you do have one, it is considered to be a bonus. Granted it could be one of those perks that could secure your payroll or your accounting business extra clients by being able to meet their legal and their financial needs. Still, this is something that you might not want to consider unless you have enough clients on hand to justify adding the salary of an attorney to your current payroll.

Conclusion

 In conclusion, if your payroll or your accounting business is large enough to justify adding an attorney to your payroll, there are many benefits to having an attorney on hand. Perhaps the largest benefit to having an attorney working for your accounting firm or your payroll business is that you will have the opportunity to get both the financial perspective and the legal perspective for any issues your clients may have.

Whether it is estate planning, tax matters, setting up a business, or having a knowledgeable person represent your clients before the Internal Revenue Service, having an attorney on hand can be an asset to your business. However, if you were wondering if you need an attorney to set up an accounting or a payroll business, it is highly advisable that you consult with one as dealing with your clients financial situations could possibly lead to future litigation.

Frequently Asked Questions

How much schooling is required if you want to be a CPA attorney?
While there is no easy route to becoming a CPA attorney, perhaps the path of least resistance is by first becoming an attorney, and then becoming a certified public accountant. According to the Houston Chronicle, an attorney must complete 150 semester hours at the undergraduate level, obtain one year of work experience, and passed the Uniform CPA Examination before they can apply for a license to be a certified public accountant. Once someone has completed all of these steps, they may then apply to be a CPA.

Who is considered to be the “Big Five” of accounting firms?
There are more than 138,000 accounting firms located in the United States alone. Some of these firms are part of a national chain, while others are individual establishments. Of all of these firms, there are five that are generally referred to as the “Big Five” of accounting firms. These firms include:

• Arthur Andersen.
• Deloitte & Touche.
• Ernst & Young.
• KPMG
• PricewaterhouseCoopers

What are the top 10 grossing accounting firms in the United States?
While there are several different methods to ranking the top accounting firms in the United States, this list is composed of the top-grossing accounting firms in America, according to the website bigfouraccounringfirms.com:

1. Deloitte – $47.6 billion (Deloitte Info)
2. PwC – $43 billion (PwC Info)
3. EY – $37.2 billion (EY Info)
4. KPMG – $29.75 billion (KPMG Info)
5. BDO – $10.3 billion (BDO Accounting Firm Information)
6. RSM – $6.3 billion
7. Grant Thornton – $5.76 billion
8. Nexia International – $4.5 billion
9. Crowe Horwath – $ 4.3 billion
10. Baker Tilly – $4.04 billion

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