Transactional Matters

Like other business enterprises, accounting firms are generally organized in various forms of legal entities and are frequently involved in a wide variety of business transactions, such as hiring and firing key personnel and mergers and joint ventures with other professional and non-professional firms.  In many cases, these transactions require a knowledge of accounting regulation as well as an expertise in transactional law.  The Vedder Price Accounting Law Group is therefore frequently called upon to assist accounting firms in drafting their partnership and shareholder agreements which typically contain buy-sell arrangements which are affected by the accountancy laws. They also typically contain covenants restricting firm owners from servicing firm clients after they leave the firm, which restrictions are only enforceable under certain conditions. To assist accounting firms in drafting their partnership/shareholder agreements, the Accounting Law Practice Group has created a questionnaire which can serve as a useful drafting checklist, a copy of which may be downloaded from this website.

The Accounting Law Practice Group also regularly assists CPA firms in creating joint ventures under which they may provide specialized services requiring expertise not customarily found in an accounting firm. In many cases, these arrangements may involve the receipt of compensation which might be characterized as referral or contingent fees in violation of the profession’s ethical standards. The Accounting Law Practice Group has had significant experience in crafting such arrangements in a manner in which the profession’s ethical standards are not breached. In fact, one of the Group’s members was an author of PPC’s Guide To Providing Commission and Fee-Based Services. Not every accounting partnership was made in heaven, with the result that it is not unusual for accounting partners to leave their firms or for entire firms to break up. These are never pleasant experiences and often take on the flavor of a marital divorce. Nevertheless, it is important for the parties to resolve their differences amicably as it is rarely economically feasible to litigate such matters.  Accordingly, it is always preferable for the parties to be represented by attorneys who not only understand accounting practices but who have also had experience in handling firm break ups and who can keep their respective clients focused on the important issues and not permit their clients to be carried away by their emotions.  The Vedder Price Accounting Law Practice Group has represented a number of accounting firms in these situations and bring a wealth of experience in handling these emotionally charged negotiations.

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