By Bob Glaves | CBF Executive Director
When I started down the road on my 2020 Resolution for the Legal Profession to look at how we can learn from our counterparts in other professions and industries to make law better, it never occurred to me that we’d be facing a situation like the one brought on in recent weeks by the coronavirus. But as our legal community and justice system continue to respond in earnest to the challenges and disruption caused by this crisis, the importance of this undertaking has become even clearer. And the next stop on this journey—the tax and accounting profession and related businesses—offers some particularly useful lessons for our present and future times in law on the key issues of remote services and remote access.
Three lessons stand out for our consumer and small business legal market: (1) a continuum of resources and solutions that in most instance can be accessed from anywhere, starting with free and low-cost online self-help resources and gradually works up to more intensive, expert professional services depending on the situation; (2) a range of professionals to serve the varying needs; and (3) a variety of business models that have fostered innovation and significant increases in access.
Tax Resources and Services
No one likes paying taxes, but in recent years it has gotten a lot easier to do it with a range of free and affordable help available for the average consumer. The continuum of options available gives consumers a lot of choice and a feeling of empowerment in determining what is best for them.
For starters, the IRS has a central, user-friendly resource center on their website to help taxpayers get basic information and find the appropriate level of assistance for their needs from an approved list of providers. The resources start with free online options and a network of community-based tax counseling programs and clinics across the country for people of more limited means.
For the many people who don’t qualify for those free resources but still have relatively uncomplicated tax situations, there are great technology-based solutions like TurboTax that are recognized by the IRS and offer a range of assistive services for affordable, fixed prices. I am a happy TurboTax customer myself—my wife and I both work on salary and we don’t have any side hustles that would complicate our situation.
On TurboTax, we and the millions of others who use it can do our taxes online with the very user-friendly guided interview. For a modest additional payment, we can live chat with or talk to a CPA about any issues that come up. And at the end, we can buy insurance for an additional modest price that covers us and provides the necessary professional assistance if there is ever a dispute with the IRS.
If someone wanted to get this same kind of help that TurboTax provides in person, there are a number of companies approved by the IRS where they can do that in their community for an affordable fixed price.
For the many people and small businesses who have more complex tax circumstances, there are good accountants, CPAs, and lawyers throughout the country who provide the level of service necessary to meet the client’s needs.
And whatever assistance someone may have received, at the end of the process the IRS (along with most states) has enabled a relatively simple and seamless e-filing system to complete the job.
It’s not just at tax time that the accounting profession and related services offer some good food for thought for us, particularly in the range of professionals who are recognized and available to assist depending on the level of complexity and need.
A small business or nonprofit can use a technology-based solution like QuickBooks to get started, and can supplement that with advice and periodic assistance from an accountant.
As the business or organization grows, they can hire a bookkeeper to help keep the finances. It does not require a professional degree to serve as a bookkeeper, but with some training and support bookkeepers play an integral role in the day to day financial transactions and record-keeping.
Bookkeepers are typically supplemented by an accountant who provides more advanced services and oversight for the small business or organization on a part-time basis. As businesses and organizations grow, they will have one or people serving in these full-time roles.
And finally, for more complex tax and accounting matters, a CPA with an advanced professional degree and license provides more advanced services. Among other things, the CPA can represent taxpayers before the IRS and sign off on tax returns.
As is true for tax services, a variety of recognized professionals and resources give consumers and small businesses a range of options they can choose from to suit their level of complexity and need.
A Range of Business Models
A common thread for both tax and broader accounting services is that the professionals and entities delivering these resources and services utilize a variety of business models to do so. They range from the neighborhood solo or small firm practice, to nonprofit and for-profit entities of varying sizes, to huge companies that provide the technology-based services, often in affiliation with outside tax and accounting professionals.
As is true in the medical and dental professions, so long as consumers are getting the right information and resources and the level of good service appropriate for their needs, there is no evidence that they care what kind of business model the professionals or entities are practicing under.
Lessons for Law
The overall lesson here is that there is a lot more innovation, choice, and accessibility for consumers in the tax and accounting professions, and a much more well-functioning market.
Of particular note for our current times are the variety of good technology-based resources and remote service options that are available to consumers and small businesses and are recognized and regulated by the IRS. The ability to relatively seamlessly e-file tax returns and related filings makes these services even more accessible from rural and remote locations.
Why don’t we see more of this in law? For starters, our Rules of Professional Conduct still artificially restrict the business models that lawyers can utilize to provide legal services. In addition, with very limited exceptions, the Rules also do not recognize the other professionals and technology-based solutions that can play a much greater role in increasing access and affordability in the legal services market. And we remain a long way from the words “seamless” and “e-filing” being used together today.
We can do much better, and the remote environment that most of us are forced to operate from for the foreseeable future should spur us to make these issues immediate priorities for our legal profession and the courts.