Articles & Alerts
Optimize Your Law Firm’s Finances and Focus on Growth with Anchin
As 2024 gets under way, many law firms are looking for ways to optimize their financial performance.
Some of the key challenges faced by law firm management include a reduction in billable hours/demand, continuing increases in associate base salaries & bonuses, and navigating remote employee issues throughout various tax jurisdictions.
Here are a few areas our team focuses on through their unique expertise as The Accounting Firm for Law Firms:™
- Tax Planning and Optimization: We will work closely with your leadership team to identify and capitalize on tax-saving opportunities, minimizing your tax burden and maximizing your profits while considering cash flows so that you can meet your financial objectives.
- Identifying Enhanced Depreciation Opportunities: For law firms that are considering a buildout of their leased space, there are several options that are available to accelerate depreciation (or, timed to debt repayment) and provide tax savings. Our team has deep experience in helping law firms understand the many opportunities available to them and ways to avoid the tax traps within some tenant buildout allowances. We specialize in working alongside decision makers to develop a strategy to match the expense to cashflow.
- State and Local Tax Considerations: If your firm is hiring remote employees, it is important to understand the tax implications of having personnel in various states and/or international jurisdictions. If you are allowing personnel to work remotely, nexus implications need to be thought out not only for income, non-income and sales taxes, but also for state payroll withholding taxes and unemployment insurance. Both physical and economic nexus must be thoroughly analyzed for all potential state taxes when undergoing a state and local tax (“SALT”) study to understand and better manage risk. Our team has deep experience in SALT issues and specializes in helping law firms reduce their tax exposure and minimize the administrative compliance burden.
- Pass-Through Entity Tax (PTET) Guidance: It is important for your firm to consider the benefits of electing into the respective state’s PTET regimes, and to be aware of the related deadlines in order to avoid penalties, costly fees and missed tax-saving opportunities. We are well versed in the differences between PTET regimes and will work with you to address withholding from partner/shareholder distributions to facilitate estimated payments to be made throughout the year, and look at minimizing cash flows resulting in taxable refunds.
- Operational Reviews: We work directly with our law firm clients to manage risk at a strategic and operational level. We provide reviews to determine the effectiveness of their overall business processes in three key areas: operations, information technology, and financial management. These comprehensive reviews of a firm’s personnel, business processes and infrastructure uncover and correct inefficiencies within or between these areas, while extending to interactions with suppliers and feedback from customers or clients.
But beyond our expertise, what truly sets us apart is our commitment to partner-level, personalized service and building strong relationships with our clients. As The Accounting Firm for Law Firms™, we take the time to understand your unique needs and goals, and we’re always available. What we have learned in Anchin’s 100-year independent history is that, no matter how many law firms we handle, each law firm is unique!
Please let us know if you would like to set up a call to discuss how we can help you achieve your financial objectives.
We look forward to hearing from you!