Is it more important to hire an attorney or an accountant?
March 19, 2018 - Posted by: admin - In category:
Yes. In other words, this is probably the wrong question to ask. Perhaps a better question would be something like “what things should I ask my attorney to do and what items are within the realm of my accountant’s expertise?”
I saw an article online recently addressing the question about the importance of an attorney vs. working with an accountant. As with so many situations like this, the appropriate answer can be very fact-specific and dependent on your particular situation. Let’s take a few examples below:
- Many of us are currently the process of getting ready to file our state and federal tax returns. Tax preparation, in general, is the job of an accountant. While there may be situations when the client and the accountant may consult with an attorney as part of the tax preparation and tax planning process, the attorney should not be preparing tax returns. So this one is a situation where the accountant is “more important” for the task to be accomplished.
- For the business owner who is hiring a new employee and needs to have an employment agreement and some other related contracts drafted, he or she will want to retain the services of a qualified attorney for this job. This is an example of a fairly obvious choice to working with the attorney. Even so, the input of the accountant might be needed on several related business tax and accounting matters (i.e., involving salary, benefits, payroll, etc.)
- Someone who is starting a new business venture and therefore forming a new business entity will be wise to consult with both the attorney and accountant in all aspects of the proper choice of entity, correct formation steps, tax elections (if applicable) and several other related matters. Unfortunately, we sometimes see both accountants and attorneys who feel that they are qualified to advise the clients on all such matters. But this is incorrect and rather foolish when done by either professional. Clients are always going to be better served by the collective wisdom of both types of professionals, as the accountant and the attorney each have unique training and expertise that can work together in a symbiotic manner to provide the client with the best possible sum of professional advice.
But isn’t it more expensive to pay two professionals to be involved? Sometimes, yes, at least in the short term. Even so, that is still the wisest course of action in many instances, especially matters which involve business operations. Preventative planning is always better and less expensive in the long-term than emergency and remedial work done later because of mistakes made in the planning process.