By Blake DuBose and Mike DuBose
We have heard many horror stories from unprepared business owners who lost time and money when they were sued needlessly. Complex laws, unexpected liabilities, and failing to have the right financial and legal systems in place can allow threats—though entirely avoidable—to escalate into major problems. These headaches can distract staff, drain valuable resources, and damage or shut down healthy organizations. Leaders need ongoing advice from the right, competent mix of experts to prevent trouble.
For 30 years, many legal and financial experts have helped us plan our personal and business futures and safeguard against threats. Our philosophy: “Hope for the best and plan for the worst!” We have faced IRS audits, litigation lawyer attacks, and Equal Employment Opportunity Commission complaints. Fortunately, we had sound procedures in place that allowed us to prevail. Many businesses have not planned for threats, leaving them vulnerable to losing huge amounts of time and money on legal proceedings.
We utilize an accounting business with a variety of experts, along with several excellent lawyers from three firms, to protect our businesses. We interviewed this team of experts to harvest their wisdom and avoid future mistakes in finding and working with the right professionals.
Lawyers and accountants have supported our four businesses by: helping us design and maintain correct business structures; recommending succession and estate planning tactics; providing advice as financial or legal situations present themselves; developing contracts and loan agreements; ensuring our financial systems and tax preparations follow correct accounting practices; reducing tax liabilities; valuing our business assets; working with bankers to help obtain loans; protecting us from impending dangers; and defending us against legal action.
Determining Your Needs: Business owners should build relationships with experts before problems occur because established customers obtain attention more easily. Your team of professionals will also have an understanding of your history. To ensure you identify and prepare for future issues (which will impact whom you choose for your team), we recommend developing a strategic plan (including a SWOT analysis that identifies strengths, weaknesses, opportunities, and threats). Business leaders should conduct annual assessments with outside experts and staff to keep up with changing business conditions and models. Occasionally, we assemble our accountants, lawyers, and insurance agents in one meeting to review our circumstances and obtain different perspectives on future strategies.
Making Inquiries: As in any industry, the quality of lawyers or accountants varies within the field. Successful business leaders who you trust can recommend competent experts. Avoid selecting experts based on advertising or office locations. If you have no contacts, visit the SC Bar Association and SC Association of CPAs websites for referrals. There are hundreds of specializations and services that lawyers and accountants provide, and it’s important to find the right ones for your specific needs.
Frank Thomas of Kirkland, Thomas, Watson & Dyches said, “Just because someone has CPA or JD behind their name doesn’t guarantee competency in your area of need. A good auditor or financial analyst may not be knowledgeable about tax law. It’s best to work with firms whose staff members have different specialties such as auditing, tax law, or business valuation.”
Ask Questions and Assess Comfort:Interview professionals to determine if you feel comfortable with their personalities and qualifications. Prepare questions that will probe competency and reveal any conflicts of interest. Attorney John Koon with Koon & Cook recommended, “In the initial consultation, ask the attorney if they have experience with your matter. Many attorneys handle a wide variety of cases, so ask if they can handle your issue. If not satisfied, ask for names of seasoned attorneys.”
Costs: Once you have described the support you need, agree upon charges in writing before services begin. “Ensure retainer agreements clearly detail what services will be rendered by the attorney and the billing costs,” suggested Koon. We prefer fixed amounts so we avoid hidden expenses (telephone consultations, copying, faxes, travel, etc). Prestigious, well-known firms with luxurious offices charge more than lesser-known experts in modest settings, but remember—you get what you pay for! Pursue experts with solid experience in your issues who charge reasonable fees.
You can save money by doing some of the work yourself. We recently developed our own contract based on experience and examples we found on the Internet, and only had to pay lawyers to edit it for legal soundness. During a court case, we typed detailed event notes for attorneys. Another way to cut costs is to think through conversations in advance before meetings. Make a list of questions that cover important issues and stay focused on it—their billing clock is running!
Working with Experts: How do you get the most out of your team of experts? Our team has several recommendations. “You achieve the best results when working with an expert who listens and cares about you or your company, and then seeks to use every legal means to create the best result,” stated Frank Thomas, CPA.
Alex Weatherly, attorney and former CPA with Moses Koon & Brackett suggested, “Always provide your attorney complete understandings of your issues to receive the best service.” (We employ Alex for wills and estate planning advice because he provides both legal and accounting suggestions. On real estate and loan agreements, we employ attorney Ken Hanson of the Hanson Law Firm). Hanson suggested staying in touch throughout the year.
If you are considering a business, real estate, or investment transaction, call your accountant and inquire about tax consequences. You may be billed for the conversation, but it could save thousands in taxes. Bottom line: involve your team of experts before making decisions!
Accountants’ and lawyers’ offices are busy, and it’s easy to get lost in the shuffle. Alex Weatherly said, “Attorneys handle many cases at one time, so avoid getting upset if you don’t receive immediate responses. Often attorneys respond quicker by e-mail and many questions can be answered by other staff in your attorney’s office.” It is important to keep your situation before them (in an organized manner). We suggest having regular meetings with planned agendas to keep you and your experts connected, make sure that your issue is kept alive, and avoid frustration and miscommunications.
As the saying goes, it “takes money to make money,” so employing the right accountants and lawyers should be viewed as an investment. Make it a priority and avoid IRS penalties, audits, or even a litigation lawyer grilling you in court one day. Remember Ben Franklin’s saying: “An ounce of prevention is worth a pound of cure!”
