Tax advice as a secret weapon in beauty contests is a neglected strategy, according to this UK tax solicitor. Of interest is her take that your tax department should be more than a transaction support function—an unexciting backwater full of competent drones—and should instead be viewed as adding an ingredient of "alchemy" to a new-client pitch, in the form of: "Hire us and the tax-efficient strategy we've devised for this transaction will save you $X." (And consider setting a portion of your fee to be a percentage of $X, something CPA's have been doing for a long time.)
What keeps firms from doing this? The obvious cultural reason is that tax departments are not traditionally seen as glamorous new-business drivers, but as soon as one recognizes that few things are more "glamorous" to a corporate CFO than hard dollar savings, that attitude begins to soften.
The more tactical reason is that tax advice is typically sought after a the nature and structure of a transaction is fairly well set: At which point optimally tax-efficient strategies may have already been unwittingly precluded.
But the tax department will never in and of itself drive new business wins, right? Well, consider incentive compensation schemes, which are all about tax issues: And what grabs senior management's attention more compellingly than that?
August 11, 2004 3:56 PM
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