Sutton Douglass, a specialist tax firm founded by Mark Douglass and Judith Sutton, joined accountancy referral network Walker Wayland Australasia earlier this year.
Mr Douglass told AccountantsDaily’s sister publication Lawyers Weekly the membership was an opportunity for the firm to deepen its relationships in the accounting sector but also to improve collaboration with accountants on complex matters.
In his view, clients facing complicated tax questions frequently benefit from having a lawyer brought in at the right time.
"The Legal Profession legislation (Legal Profession Uniform Law) precludes accountants giving legal advice," he said.
"You can have an understanding of how tax is administered from an accounting perspective but the legal considerations are entirely different. That's where it becomes quite difficult and where accountants may require legal support."
The key, in his view, is creating a solid collaborative platform between accountant and lawyer.
"We can then say ‘yes, you're right to run this, we don't need to be involved', or we can get involved at the outset and manage it," Mr Douglass said.
"Quite often, that will involve a brief back to the firm to say that their work for the audit is done under legal privilege."
He believes this is a particular strength of Walker Wayland, with members tending to be "very good at being able to identify situations where it's in their interests, and their client interests, to not venture too far down the legal path".
"Many other firms don't – that's where they potentially compromise their own PI policy, but more importantly they put the client at risk."
Some accountants fear that seeking advice from a lawyer could make their clients look guilty to the ATO – a myth Mr Douglass sought to debunk.
"They don't realise we'll work with them to help the clients' interests," he said.
"After an audit has commenced, depending on the complexity of the issue, there is always the risk of prosecution, heavy penalty or a continuation of the audit because it's not properly managed – that's the difference between having a specialist tax lawyer involved."
Yet Mr Douglass expressed scepticism for the model of accounting firms expanding into legal services, such as the recent expansion of PwC.
"I think there is a fundamental difference in how lawyers and accountants think, and their approach to matters," he said. "But the work is very different as well."
In particular, he suggested clients tend to have more trusting, embedded relationships with their accountants than their lawyers.
"We've seen over the years that there is something about presenting all the details of your financial worth that in some ways goes deeper than other relationships," he said.
"Usually, the first port of call for a lot of issues is the accountant."
Nonetheless, he has found larger businesses tend to seek out legal help at an earlier stage.
"It depends on the size of the client and the sophistication of the client. A more sophisticated client is more likely to come directly to us if it's a complex tax issue."