Service sector trends (legal, accounting) – Economic trends

Last updated on May 13th, 2019 at 02:23 pm

Industries such as the accounting and legal professions were not hit as hard by the recent economic downturn as other industries, so trends in these service sector industries focus less on economic responses.
Within the next year, certified public accountants should see a continued emphasis on consulting services and estate and succession planning, said Karin Gale, a partner with Vrakas, Blum and Co.
"Over the years, routine accounting has increasingly been done by computers, and as businesses expand, business owners are looking to CPAs for assistance on how to use that technology," Gale said.
In terms of estate planning, the emphasis is driven by the Baby Boomers.
"Baby Boomers are starting to hit that critical age in which they are planning for the future and retirement, both personally and professionally," Gale said. "If they own a business, now is the time in which they are considering issues such as who will take over the business, whether it will be passed down within the family and whether or not to sell it."
The economic downturn did not have a major effect on the accounting industry, largely because as long as there are taxes, there will be a need for accountants.
"Firms are in a bit better position because, regardless of the economy, businesses still need to have their tax returns done," Gale said.
Furthermore, harder economic times have made banks become more interested in companies’ financial status. A bank which may not have required an audit of a company in the past now might want much more detailed financial records, Gale said.
Recent fraud issues, including situations such as that of companies like Enron, have caused more scrutiny of accounting firms, Gale said.
"People now are looking at CPA firms and saying ‘you’ve been paid by these organizations, but why are there these problems?’" Gale said.
While consolidation of accounting firms appears to have subsided, the legal profession is experiencing consolidation in order to create one-stop legal shops for clients, said Jim Page, executive director of the Milwaukee Bar Association.
In addition to mergers among law firms, recent discussions within the legal industry have focused on mergers with accounting firms or banks to provide a variety of services for clients, Page said.
"This is a positive change for business owners in that they would only have to manage a relationship with one firm instead of with a number of different ones," Page said.
Like accountants, the need for lawyers is not disappearing regardless of the economy, and therefore the economic downturn did not affect the legal industry as significantly as it has other industries, Page said.
"The complexity of laws and regulations makes it almost impossible for a lay person to not get into hot water at some point without the help of an attorney," Page said. "Lawyers are such an important part of managing a company. Companies need them."

Jan. 18, 2002 Small Business Times, Milwaukee

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