Milwaukee-based Reinhart Boerner van Deuren S.C. recently created Reinhart Consulting Services LLC, a separate company that is a new tax consulting arm of the law firm. Reinhart is the first law firm in the state to create a tax consulting arm. State law prohibits law firms from having non-lawyers on staff to provide additional services.
So, Reinhart Boerner van Deuren decided to create a separate company, as a strategic way to get around that rule, said chief executive officer Rick Graber.
In January, four tax specialists, including Reinhart Consulting managing partner Rocky Cummings, were hired to staff Reinhart Consulting. Graber is the majority owner of Reinhart Consulting, and Cummings is a minority owner.
Originally they thought about a completely different name for the new firm, but Cummings insisted on including the Reinhart name so customers would be aware of the affiliation.
Typically, an accounting firm performs an audit and a law firm handles any necessary litigation. However, because the law firm that is selected may have very little interaction with the accounting firm, many issues must be hashed out by both firms, which can result in duplication of work that a client is paying for, Graber said. In a complicated audit, this scenario can occur many times, driving up costs for legal and accounting fees.
Graber and Cummings crafted the strategic partnership between the law firm and Reinhart Consulting to reduce those costs and increase the efficiency of the auditing process.
"We can see many situations where we drive down the number of hours required to complete the project in a really significant manner," said Cummings.
Cummings and his team handle state and local tax consulting, specializing in tax credits and incentives.
"It’s a fundamental shift from the law firm perspective that service lines are typically performed by both attorneys and non-attorneys," Graber said. "Our job at the law firm is to find creative solutions for the business problems of our clients, and what (Cummings) and his team bring is an extremely complementary service with which we can offer to our clients. And now you can go one place and combine that breath and that experience and expertise, and that really becomes a one-stop-shop for our clients," Graber said.
"We can be the arms and legs and do the accounting that the attorneys are really not well suited to do or care to do," Cummings said. "What’s happened, I think, is that companies have started to see the value in looking for the best provider instead of merely sourcing work out like they have in the past."
The partnership between the law firm and Reinhart Consulting will improve the due diligence process for mergers and acquisitions, Graber and Cummings said.
When a company seeks an acquisition candidate, it typically engages law firms, accounting firms and other consultants to go through the due diligence process.
"One of the benefits we see in doing that is that we have the capability to crawl through the tax return information and do all of the accounting due diligence type of work with respect to the tax provision numbers and the tax numbers that are on the returns," Cummings said. "The law firm is able to look at all of the other non-tax areas as well."
The legal and accounting companion companies model could be a recipe for growth for the firms, Graber and Cummings said.
"We don’t have plans to (expand) in the next year, but the year after we definitely have very aggressive growth plans," Graber said. "We’re in a number of other markets already, but we’re focusing on this market place."
"Ultimately we could be in every state. We’re very much in a building phase right now," Cummings said
