Appraisers who educate are most likely to earn the affection of their lawyer clients
BVWire was in Las Vegas last week covering the first annual AICPA Family Law Conference (a great success judging from the buzz of conversations and jam-packed session rooms!). We had the chance to sit down with Tom Burrage (Burrage & Johnson CPAs) during one of the breaks. He described a recent analysis he had done on his client database and engagement history: “I found that only 10% of my divorce engagements end up in the courtroom. And when I introduce a neutral expert into the mix (either court appointed or one shared between the two attorneys), that percentage goes down to about 5%." Tom and BVWire wonder whether other practitioners would see similar results? Share your stats with us at firstname.lastname@example.org and as always we will report on the findings.
And on the role of financial experts in educating attorneys and judges, Tom Burrage and Michelle Gallagher (Gallagher & Associates CPAs) described themselves as the translators of the numbers for the word smiths.
Michelle gave a great example of how experts can endear themselves to attorneys. During a recent divorce engagement that involved a restaurant franchise, the attorney asked why she wasn't using the market approach. "I gave him 10 pages from BVR's Guide to Restaurant Valuation that discusses in detail that very topic. He told me he loved me." Tom and Michelle concurred that aside from translating, experts do well to take their educational role as seriously as possible.
How important are BV credentials when testifying in family law matters?
Differing opinions surfaced at another session during the AICPA Family Law Conference. In his presentation “Key Considerations in Family Law Engagements,” Tom Hilton (Anders Minkler & Diehl) told the audience “in my humble opinion, without specialty credentials you are at a distinct disadvantage.” Hilton used a case study in which a judge took into consideration that the opposing expert didn’t have a specific business valuation credential–a fact pointed out by the expert. Because Federal Rule of Evidence 104 sets forth preliminary questions concerning the qualification of expert witnesses and the court’s gatekeeper role regarding the admissibility of evidence, “credentialing is extraordinarly important,” Hilton adds.
Gary Leeman, CPA approached BVWire during the break after the session. He mentioned that while the AICPA encourages its members to become an ABV, not having the designation doesn’t mean the CPA is not competent to perform a valuation. Though the AICPA’s distinction may be lost on opposing counsel, Leeman believes those litigators:
may attempt to show an opposing expert is not qualified because of the lack of a designation offered by the AICPA. This is exactly the opposite of the AICPA’s position….the engagement output is what is to be attached – not the expert.
Fundamental trends in professional services firms are creating opportunities for BV
And, at a third session at the AICPA Family Law Conference last week, Ron Seigneur (Seigneur Gustafson) told the audience that professional services firms, such as accounting and law practices, are in a state of transition. Professionals have made money over the years, are getting older, and are now asking themselves: Who are we? Where are we headed? Who is along for the ride and who is driving?
“We’re seeing a huge issue in the Denver market with law firms– a lot of upheaval,” he says Seigneur. “This month two large and established law firms are dissolving, and there are disputes over partnership agreements. Lawyers never quite want to resolve buy sell agreements because they want to keep their options open. And law firms are litigious and fight over things, which present opportunities for us.”