International law firm McDermott, Will & Emery has recruited ex-PricewaterhouseCoopers senior tax partner, Guy Madewell, into its London tax practice. Madewell's appointment gives McDermott what it believes is the first multidisciplinary tax group of its kind in a London City legal practice.
Madewell joins the firm as senior director, Tax Services, due to Law Society rules that prevent his appointment as a partner. He will bring to seven the number of practitioners in the London Tax Group, joining partners Peter Nias and Tim Sanders, and associates Justin Hamer, Sylvia Choi, Nicola Purcell and Dipa Vadher, who was recently recruited from Herbert Smith.
Madewell has significant experience advising international clients on a broad spectrum of financial, tax and business matters across a diverse range of industries. He advised Unigate on litigation and worked on the tax structuring of the merger between the Beecham Group and SmithKline Beckman.
It was Madewell who first approached McDermott with the idea of joining. ?At the time, PricewaterhouseCoopers was restructuring so it was the ideal opportunity to leave on excellent terms and create something new. I was attracted by the very high technical standards at McDermott and I was hugely impressed by the degree of energy with which the partners here go about things.?
According to Nias, head of the firm's London tax practice, the move is partly in response to a realization that lawyers need to be more aware of how accounting standards impact business activity and tax legislation. ?I can think of a number of statutory provisions where the tax result is dependent on what the accounting treatment is going to be. As advisers, you find yourself giving advice on the law but then you end up saying ?well, this is as far as I can take it, we now need to speak to the accountants'. So you feel you're not doing as complete a job as you'd like,? he explains.
?We're also responding to the way clients are organizing the provision of tax services. We think that the under-one-roof concept will assist them.?
The firm believes that this initiative is much more than the recruitment of a senior tax accountant to assist a legal practice in its provision of tax advice. Rather, it believes that it is the launch of a new kind of tax service, which in one place combines the talents and skills of the accounting and legal professions when providing tax services.
?It has always been accountants who have been able to get in to see clients and talk to them about opportunities and planning. As lawyers, we often end up being called in after the event, which can be frustrating. What also sometimes happens is that accountants come up with an idea that sounds great on paper, but when it comes to structuring it, a lot of things come out of the woodwork which act to delay and possibly affect the end result, and the lawyer is blamed for frustrating the process,? says Nias.
?By having it all under one roof we have the ability to go to the client knowing how something can be structured and also able to deal with the legal aspects of the transaction and the documentation.?
Whilst this approach may be new to law firms, it is one that the big five firms have been trying to implement for some time now. ?The accountants are aiming for the same objective but starting from a different angle. The realization is gradually dawning as more and more legislation comes through that you need both disciplines. I think we may see other law firms adopting this approach too,? McDermott partner Sanders says.
But, says Madewell, the success with which this has been achieved by the big five is questionable. ?In effect, although they have law practices, they're keeping them at arm's length. There is a separation there, so the service that they provide, whilst they advertise it as a one-stop shop, isn't really much better than a client having a separate firm of accountants and a separate firm of lawyers. What we're doing here is delivering a truly cohesive service, really working cheek by jowl in advising the client.?
As far as feedback from other firms goes, Nias says that people have noticed it ?but nobody said they were going to rush to emulate it, nor did they rubbish it?.
Speaking of future expansion of the London practice, Nias emphasizes that it is not about numbers but about strength. ?A tax practice needs to cover an increasingly large and impossible range of subjects and so it is necessary to have a sufficient number of practitioners to cover a broad range of skills and also offer specialist expertise. However, if you get too large, the dynamics and efficiency of the team can suffer. If in a year's time we've added another two or three professionals, I think I'll be happy with that growth. I'm delighted with what we've got now and the immediate challenge is to make sure it works well.?
