Practice vs in-house: A quick guide
4 Eyes Process
This means that every piece of work written, from any level of advisor, MUST go through two other reviewers' hands before being allowed to leave the firm and go to the client. The final reviewer is usually a partner, and this reduces the liability of wrong advice being sent out, leading to all sorts of disasters, both for the firm and the client. It has been known to happen, but this should reduce any risks.
Within this process, be prepared for your work to be changed each time it is reviewed – do not take this personally, as changes can be made purely due to style rather than content and technical ability. It can be pretty demoralising, but I have seen my work changed radically by one reviewer, then the next changed it again radically, but back to almost exactly the price I wrote to begin with! It isn't very pleasant, but it is what you will get used to.
Timesheets
This is the one everyone knows about and either hates or is indifferent to. I never had a problem with them; it's all about being organised and keeping notes of client work. In the Big 4, every 6 minutes of time generally needs to be recorded. Now this serves a very legitimate purpose; when you are working in practice, you could be working on multiple client accounts daily, so there must be some way of recording the time spent on that account for billing purposes across multiple advisors at different charge-out rates.
There is usually a BD code and a misc code to put other time to, which generally gets written off. The more junior you are in a firm, the more chargeable time you are expected to put down, but as you progress in your career, BD becomes more important, although client advice is always great to work on, no matter where you are in your career.
Billings
Another area that is particular to practice firms. At any level, billing is important to understand and be able to work out. The time on the code, put there by partners down to analysts, must be sent to the client and billed as time worked on their account. However, the charge-out rate is different from what is billed, as there is always time written off the code. Sometimes clients only pay 40% of the amount on a code, often as an agreed amount has been negotiated before the work commenced, so ideally, recoverability is more like 60 – 80%, and this then becomes a skill of writing off time, or maybe not adding so much to the code in the first place.
Also, don't ever let others put their time on your codes, or it then looks like your client account is not profitable. Often juniors work this out first, and then a manager reviews it before a more senior member approves the amount to be invoiced. It is an annoying and frustrating part of the job, and trying to determine what the partner wants to bill becomes an art.
Advice Emails
There is a specific format of advice that goes out to a client, usually in email form, which is essential to learn. The advice is often very long, full of technical legislative clauses, and also often case law references. The opening will be a recap of what the client told us, our understanding of the issue to be addressed, and the relevant part of the legislation covering this issue. Then refer to the client and that law, followed by any relevant cases that should be quoted, including the opinion or conclusion that supports the advice.
Then refer back to the client's issue with a conclusion based on all the supporting evidence previously laid out. There is no easy yes or no here! Also, you can never commit to advise before it has been reviewed, either on the phone or by email with the client; the response can be this could be our initial thoughts, but we will need to check this is correct before advising on this matter.
Technical Learning/ CPD
When in practice, this is all dealt with for you, as in there is always something technical that is happening you can join and use as CPD points. Training sessions and technical updates from internal teams are commonplace. Make the most of these while you can.
When in industry, you are more responsible for working through technical updates on your own to get enough hours to keep CPD hours up to date. Practice firms have things such as 'VAT Clubs,' so I tended to go along to as many of these as possible to get hours in.
Stakeholder Management
Not something that you usually get involved with in practice. However, you may have spent time working or liaising with other teams, such as other areas of tax, Corporate Finance or Management Consultancy, in which case this is an invaluable bit of networking that will help if you want to move in-house. It is a key skill lacking from time in practice, so if you want to move in-house, get as much exposure to other teams as possible, and learn networking skills, it will really help when you leave. When in industry, it is important to make sure that everyone in the business you are working for knows who you are and what you do. Now that might sound odd, but often in organisations, tax can be taken for granted and not given the importance it deserves. This is changing, but it is an important part of being in-house.
It is also a great way to integrate into the business, learn more, and enjoy more about where you are and what you are all working towards. For example, I often trained with team members at Expedia to keep awareness of the products and any promotions to ensure they knew how this could impact the business. This is the fun part of being in-house. Still, you must also be reasonably sociable and able to explain technical and complex tax issues and scenarios in a basic and understandable way. It's a skill.
FAQs
When is the right time to make the move?
Answer: When you feel ready, although generally, it seems to be around the Manager grade, people move out into industry. At that stage, you know whether you are a practice ‘lifer’ and want to get to partner, and you will also have an excellent grounding of technical knowledge to help you in perhaps what might be a more standalone role.
Can I go from industry to practice with no previous practice experience?
Answer: Yes, but do consider all the points noted about process, timesheets, billing etc., but if you can understand and accept all those things you will need to do, then there is nothing stopping you. Going into practice is rewarding; you collaborate with many clients, work across different areas of tax, and are part of a larger team with clear career progression and support.