Tax season is officially here, and because “draining the swamp” in Washington has not yet included a shift to the Estonian method of submitting tax returns, Americans of all stripes are working with their accountants to prepare their tax filings for 2016. While we do not yet have the luxury of submitting pre-made forms online and dispatching with our taxes in five minutes as they apparently do in Estonia, there is no doubt that a good accountant is of value for time-starved lawyers who need to prepare their sometimes complicated returns. Partners in small firms in particular have to pay attention to tax season, and perhaps benefit the most from a good business accountant who can close the firm’s books properly, while also teeing up the partners’ personal returns with accurate Schedule K-1 statements. Accordingly, money on a good accountant is usually money well-spent for small-firm lawyers, irrespective of any tax preparation deductions someone may qualify for.
As with any service profession, retail customers looking for a tax preparer are spoiled for choice. The market is saturated with tax preparation franchises like H&R Block, online options like TurboTax, and accountants in firms of all sizes. Kind of like today’s legal market. The competition in the industry places a premium on effective marketing, with each type of tax preparer choosing different ways of trying to reach their target customers. Unsurprisingly, around tax time the television commercials start for the national brands, exhorting customers to accelerate their refunds or offering on-demand service at any franchise location. Likewise, the online tax preparers often make their own media buys, supplemented with frequent banner ads on popular websites, and strategic partnerships with banks and brokerages to cross-sell tax and investment services, for example. These large entities have the resources, and are not shy about trying to buy market share with broad-based and pervasive advertising precisely at the time most people are thinking about their taxes.
This approach obviously has been effective for the large players. But what about the smaller accounting firms, or even the sole proprietor? As with small law firms, many of these service businesses rely on referrals for a good portion of their business. The marketing they do is often focused locally, and tries to draw parallels between the cookie-cutter service a client may receive at a national franchise versus the personal service a direct relationship with an accountant can provide. Similarly, smaller firms may try to distinguish themselves from the do-it-yourself online offerings by highlighting the additional convenience of having a personal accountant, and the extra peace of mind of having one’s return endorsed by a professional. At the same time, it does seem like many small-firm accountants are associating themselves with the online preparers as added-value providers, thereby supplementing their own workloads and the offerings of the online providers in a mutually favorable way. It is no different than a lawyer who answers questions on LegalZoom, or who takes advantage of the built-in network of some online platform as a referral source.
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That is not to say that smaller service firms can’t take interesting marketing approaches. On a recent subway ride, I saw an older woman, with a binder in hand, intently reviewing the contents. From her dress, she appeared to be a working-class woman, probably heading home from work. She was sitting across from where I was standing, and when she closed her binder, I was able to get a look at the cover. I was curious, because it did not look like she was a student, and the binder she was holding looked more official than one that someone would bring home from work. When the cover closed, I was able to read the gold lettering across the top. It said something like “Prepared by Tax Return Professional,” underneath her name and the words “2016 Personal Tax Return.” I was impressed. Some Google searching afterward revealed that these binders are sold as “Tax Return Folders” and come in a variety of shapes and sizes, just like business cards.
Besides being impressed by the presentation of this particular woman’s binder, seeing that these types of client materials are commonly available suggested to me that they were recognized as effective customer retention tools for small-firm or solo accountants. We should consider why that would be true, as we think about what types of tangible things could have a similar impact on our own small-firm legal clients. These binders are representative of a clever marketing approach used in other industries that could be of value to small law firms. While that type of approach does not seem applicable to my own firm, with our mostly corporate clientele and national reach, I have seen Biglaw IP groups send collectible items to clients. For example, one of the patent prosecutors I used to work with would send plaques to clients when their patents issued — a small touch, with potential benefits that far outway the cost. Small law firms with a retail clientele could likewise find opportunities to emulate their accounting brethren in this regard.
I recognize that the cynical side of us may scoff at the value of such transparent marketing touches. Or find ourselves challenging whether or not an accountant is truly a professional, in the truest tradition of the legal skeptic. But we would we be remiss in not considering the feelings of the customer who was looking at that binder on a crowded subway train. Her tax return may have been of a simple nature, and she possibly could have saved money by doing it herself online. But she had her binder, a physical token of her relationship with someone she trusted as a counselor and professional. We should take care before dismissing the value of that binder to her, or the impact it has on her relationship with her accountant. And when we can find ways to use our own physical tokens demonstrating our legal work with clients, we should consider doing so.
Please feel free to send comments or questions to me at [email protected] or via Twitter: @gkroub. Any topic suggestions or thoughts are most welcome.
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Gaston Kroub lives in Brooklyn and is a founding partner of Kroub, Silbersher & Kolmykov PLLC, an intellectual property litigation boutique. The firm’s practice focuses on intellectual property litigation and related counseling, with a strong focus on patent matters. You can reach him at [email protected] or follow him on Twitter: @gkroub.