Big4 Transaction Tax to Big Law Forum

[CanadianWolf]

Interesting observation that: "The Washington National Tax people oversee the work of the ground level folks...".

My understanding differs in that to the best of my knowledge the Washington National Tax offices serve as a resource for the field offices, and typically do not act in any supervisory capacity over the field offices.

Of course, as you noted above, experiences differ.

Another important difference that I hope you will address:

Do you see biglaw tax attorneys as generalists who handle a wide variety of tax document drafting responsibilities versus Big 4 WNT attorneys who are subject matter specialists (i.e., M&A federal tax specialists, SALT specialists, International Tax specialists, transfer pricing specialists, etc.) prohibited from drafting and filing legal documents ?

Whatever happened to PwC's Wash DC law firm which was started in 2017 to practice foreign law for US based clients ? Is this law firm still in existence (ILC Legal, LLP) ?

Thank you in advance for your response.

[jdkale]

I think the extreme emphasis on WNT may be a bit outdated. The people in the Big 4 specialized consulting groups such as M&A, international, etc. (i.e., the tax LLMs) are doing work that is not so categorically different from big law. It varies, of course.

Also, the people who get hired by WNT could have done big law already (and probably did). Or they were/are tax professors (which is even harder to get). Saying you would only hire people from WNT at a law firm is like saying you would only hire people from the eastern conference of the NBA to play in the western conference. Even if it were true, it gets no one anywhere.

[Anonymous User]

Can we discuss big4 salaries for WNTS? Whats the range for a manager and whats the range for senior manager?

Can a manager pull more than 225? How much (well-credentialed) senior manager typically make in WNT ?

[Anonymous User]

Would also appreciate if anyone could shed light on the pay ranges for Washington National Tax (WNT) manager and senior manger.

Also how much better are the hours than BL what does a typical day in WNT look like and what about weekends?

[Anonymous User]

My friend was a manager in WNTS. Got an offer for $295k to lateral to another one as a senior manager.

Ended up going to biglaw at a firm that made him start as a fourth year ($295k). He doesn’t like the type of work the firm is doing so he may go back to Big 4 WNTS.

[nealric]

Interesting observation that: "The Washington National Tax people oversee the work of the ground level folks...".

I don't think WNT "supervises" in the sense that they act as direct manager or review all the work product of other offices. Rather, WNT is typically responsible for the institutional position of a firm on various issues so they can effectively serve in the role as decisionmakers.

Firms want to be taking consistent stances on tax issues. They don't want the NYC office to give an MLTN opinion on an issue that that the LA office wouldn't. So it's fairly common for a partner in another office to consult WNT before issuing an opinion or signing off on a client's position during audit.

[cooljon525]

If you are interested in this in LA (and have a very impressive resume), message me.

Still hiring?

[cooljon525]

Agree with the above that I see more examples of exec comp being a more natural landing spot but if you have no experience there, then probably not worth trying to make that transition. My firm's hiring for tax FTW and I've talked to tax folks there who have expressed openness to candidates with Big 4 backgrounds. Feel free to DM if you want to chat.

Still hiring?

[jdkale]

Sorry, not at the moment. We did hire from an accounting firm. Best of luck.

[Anonymous User]

Equity partner from above.

Peoples’ experiences may vary, of course, but in my experience:

I would split accounting firms into two groups. The “ground level” people do (a) most of the diligence grunt work (going through a target’s tax returns, tax provision, state and local tax compliance, etc) that associates handle in other areas (I‘ve only been in a data room maybe a dozen times in my career); (b) almost all of the numerical modeling (I.e., figuring out the numerical consequences of a transaction etc), with the only real exception being occasional stuff in respect of debt issues that are really easy to run (frankly, in my experience, the corporate people do more in excel than we do working through deal waterfalls, warrant dillution provisions, etc.); (c) almost all of the actual work involved with putting together and filing tax returns and tax accounting work papers (this is one of the reasons it can be somewhat harder for a lawyer to go tax in-house than an accountant—it obviously happens but there is significant retooling involved); (d) more of the internal to the company tax planning stuff (I.e., much of the footwork people in the press grumble about regarding transfer pricing and similar), though some firms do more of this than others; (e) much of the administrative-level work in terms of dealing with irs audits and assessments, though lawyers do get involved at this stage for big enough issues; (f) some tax opinion work.

The “Washington National tax” people oversee the work of the ground level folks and also do more of the tax opinion/etc stuff. Lots of private letter ruling work. These folks are often highly specialized and know the law in their particular area better than many law firm people. Most of them have JDs, and this is where former irs and treasury people tend to land, more often than law firms.

For law firm folks, as noted above, there are some places where you get into internal company tax planning and such, but not as often (partly because a lot of this requires economic analysis that accounting firms can do in house but law firms have to outsource, which increases fees in a way that it’s hard for in house tax folks to justify). Mostly it’s m&a/funds formation/restructuring transactional work, on one hand (with people often developing more expertise on either the funds or transactional side), and tax controversy, on the other hand. There are some tax folks that do both transactional and controversy work but that seems to be largely phasing out with the newer generation of lawyers. We handle all of the tax stuff in actual legal documents—accounting firms are not allowed to do that, yay for cartels. We review the work the accounting firms did in terms of modeling, the due diligence report, etc., again, to ensure things are being properly dealt with in the documents. We do tax opinions for really substantial positions where in house folks will often have a preference for a law firm opinion. We do private letter rulings for really substantial positions.

In general the billing rate for law firm tax folks is multiples of the billing rate for accounting folks, and the accounting firms just have a huge number of people along with internally-developed proprietary modeling solutions. So, bottom line, in house folks tend to have the accounting firms do everything they can, with the law firm roles tending to be a bit more targeted.

Again, experiences may vary, this is just my own insight. Would be interested in nealric’s view. I’ll admit that I often have a hard time justifying my own existence in some ways because, at the end of the day, without the cartel limitations accounting firms could completely wipe out law firms’ tax practices. But as it stands we do tend to have fairly distinct roles.

This is a very helpful insight. I just started working at a big4's DC's office in the international tax group. I went to a top 3 llm and finished with honors, was on a top tax journal, and had cum laude in my JD. I am hoping to make the jump to biglaw as soon as possible. How would you recommend I best approach lateraling over?

[nealric]

In general the billing rate for law firm tax folks is multiples of the billing rate for accounting folks, and the accounting firms just have a huge number of people along with internally-developed proprietary modeling solutions. So, bottom line, in house folks tend to have the accounting firms do everything they can, with the law firm roles tending to be a bit more targeted..

I realize this is an old post, but I thought I would add some insight as someone who reviews bills for both. This is for a F500 company big enough to have the capacity to do compliance and all but the higher-level planning/M&A work fully in-house.

At the partner level, you are going to see pretty comparable billing rates between biglaw and big4 (and indeed you will find plenty of partners who've been at both at various points in their career). The difference is we'd typically hire big 4 for a project that's also going to require quantitative analysis, and the billing rates up to the manager level (i.e. all the folks who would do most of that quantitative work) are below that of biglaw associates.

We'd typically expect biglaw to be the lead for the M&A deal with big 4 mostly used as a supplement if we need something like a valuation model or basis study put together. For internal planning/structuring transactions where we might be asking for a memo or opinion, we've used both. I think biglaw tends to be cheaper for those sorts of projects because most of that work can be done with one partner working one associate (while big4 will want to staff a dozen people). Big 4 does have a competitive advantage in foreign jurisdictions where they can do legal work. That allows them to be more of a "one stop shop" since they can also prepare things like financial statements.