The days when tax advisers were commissioned for every tax-related matter are over. The more complex the world becomes as a whole, the greater the demands placed on tax advisers by businesses. With the wave of digitalisation, law firms and tax practice must also embrace digital transformation. But what role lies ahead for the chartered tax adviser? Consultant and successful speaker Sebastian Thalhammer sees one possible path as that of a sparring partner. In conversation with Paul Liese, the discussion also turns to the question: how do law firms find the necessary staff to cover new areas of business?

Sebastian has been self-employed for seven years and, through his agency, advises companies wishing to focus on digital transformation. The Austrian got in touch with Paul via LinkedIn. He has long been, and continues to be, preoccupied with the question of how the tax consultancy sector is addressing digitalisation. In which direction will tax consultancy firms develop, what are the trends, and how do they intend to maintain their relevance?

Paul responds by saying that these issues do not lie solely with the law firms. Of course, what the clients want is also a crucial factor. Are clients demanding digital processes from law firms? Is the law firm willing to implement them? Progress can only be made if all parties involved work together. The key factor is how law firms position themselves.

Law firms must specialise

A few weeks ago, Sebastian organised a think tank for tax consultancy firms. One key insight was the need for positioning and specialisation. After all, the traditional firm that tries to cover everything will be virtually non-existent in the future. The issues are becoming increasingly complex, which is why tax advisers are required to have ever greater expertise. According to Sebastian, this is leading to a problem with recruiting new talent. Today, tax advisers are expected to deal with many issues that cannot simply be learnt during their training. The profession is becoming ever more demanding, yet the necessary knowledge must first be imparted.

In Paul’s experience, many firms are often overwhelmed by demanding requests from their clients. This is because the tasks required often cannot be handled by traditionally trained tax advisers. The service is aimed at such firms. hsp Academy’s Continuing Professional Development Course in Digitalisation Consultancy. Here, Sebastian cites a study by Deloitte which suggests that, these days, a single person cannot cover all the required areas on their own. Consequently, law firms will need an increasing number of different professional groups in future. This is the only way a law firm can prevent itself from becoming a bottleneck for its clients’ development.

One approach adopted by some law firms is to recruit staff from outside the sector. This involves recruiting young professionals who are digitally savvy and keen to learn – and who do not necessarily have a background in tax. Sebastian also sees this as a sensible approach. After all, sector-specific experience is gained one way or another in the day-to-day running of a firm. Curiosity and a thirst for knowledge cannot be taught, but almost everything else can.

A wait-and-see approach is not sustainable

The big trap lies in routine. Usually, things have been running perfectly well for years: clients are being served and the processes are working. But this routine prevents a law firm from making progress. After all, the market inevitably evolves, driven simply by economic, regulatory and social developments. If the firm fails to keep pace, a rude awakening is inevitable. In contrast, digitalisation can suddenly trigger entirely new developments within the firm.

At this point, Sebastian Thalhammer emphasises that the way the tax consultancy sector communicates must also change. In the past, tax consultancy firms hardly ever had to concern themselves with intensive marketing strategies and client acquisition. In future, tax advisers will have to learn to engage proactively in communication. Paul agrees with this one hundred per cent. Very few tax advisers are good salespeople, simply because they have never had to sell anything. Sales and presentation training can help here. According to Sebastian, tax advisers must move away from the role of simply following instructions. In his experience, tax advisers are often people who want to help but do not believe they are capable of taking on this role. It is therefore a question of mindset. After all, tax advisers have far more control than they often realise.

It’s all down to communication

And what about the debate over pricing? Sebastian says: ‘Anyone who can clearly demonstrate the benefits against the costs won’t have to face any arguments.’ Paul adds that tax advisers, in particular, have an insight into the figures. They can therefore present a case based on clear savings and the impact these will have. Not to mention that, thanks to their knowledge advantage, they can provide far better advice than external third parties.

How are law firms dealing with the situation where they wish to charge for work that has previously gone unaccounted for? Sebastian emphasises that this is a question of self-worth. A law firm must engage in dialogue with the client on this matter. Firstly, otherwise the client will come to take these pro bono services for granted. So forgoing payment does not even bring any real benefit to the firm. And secondly, most clients want tax advice from a firm that is always there for them. This is something they are willing to pay for, but it should be agreed upon jointly.

Conclusion: Tax consultancy firms must position themselves clearly so that clients are aware of the services on offer and make use of them. Sebastian cites the example of a firm that generates most of its revenue through strategic consultancy. Bookkeeping and standard tax consultancy work tend to arise more as a by-product. And that is the direction the industry should generally be heading in.

Repetitive tasks such as bookkeeping will be automated in future. Anyone who fails to keep up in order to make way for new areas of business will find it difficult. On 1 October, on „hsp live at 11“, Andreas Hausmann will be talking about how to get started with automation – and what you need to bear in mind.