Categories:Tax

Top firms open new front in war for specialist tax talent

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  • This sounds very good but the strategy is flawed as it requires a far more extensive network than any law firm possesses and the people they have hired or are talking to are not names in the market - rather the reverse - I am sure they will do some work but it is far from being a big growth area and the idea that there will be a lot of litigation is fanciful in the extreme

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  • Err ... US firms have been doing this for years. Why is this now making headlines?

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  • Baker & McKenzie has had this strategy in place for a long time. Because this area is in direct competition with the Big 4 Accounting Firms, it will take a long time for the strategy to pay off.

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  • spot on - the US firms do litigation and outsource the analysis to economists - not I think a european model

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  • $3.4bn tax settlement by GSK to IRS and recent £52m adjustment in DSG Retail v HMRC have made the headlines, both specifically relating to transfer pricing, and would indicate a potential growth market in terms of materiality of tax charges. On the back of successful cash collection exercises like this the bullish attitude of tax authorities will inevitably increase litigation as opposed to the more usual arbitration route. In both cases the legal documentation and contractual aspects of the transfer pricing were identified as fatal flaws, a technical element the traditional accounting firms are often unable to service appropriately. Expansion of high-level tax capabilities in law firms seems a pretty practical response given the current market

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  • Also tax authorities do not have the resources (physically or financially) to bring more than 3-4 cases of litigation per year....

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  • Presumably an interesting indicator is that HMRC have recently instructed Lovells for a pilot litigation contract, anticipating a lot more tax cases

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  • There have been a number of the "magic circle" that have looked at expanding their tax offering to take on the Big 4 firms in a number of areas, Transfer Pricing being the main one.
    The interest in expanding their reach generally rises when the mainstay of their work load, all things "transactional", is thinner on the ground. As we eventually move onto an upward curve it will most likely be back to business as usual for the tax departments of law firms - it is not that tax lawyers are not capable of carrying out the work, it is more that their internal clients/work providers (corporate/PE/Funds/Real Estate teams) want to have the tax department at their beck and call, rather then heading off and doing their own work

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