This article is a continuation of ''Small but mighty'' from the January 2017 issue of Canadian Lawyer magazine.
Tax boutiques may be small, but they are mighty.
Existing in a competitive market, facing off with large law firms and accounting firms over a share of that market, tax boutiques are constantly assessing how they fit in the grand scheme of things.
Michael Colborne, a partner at Thorsteinssons LLP, says a tax boutique is “a little bit different in the sense you fulfil a role not picked up at large transactional firms and one that is distinguishable in some facets from the advisory services provided by advisory firms.”
There’s an important difference between how a tax boutique practises and how a tax group at a big firm would practise, says Byron Beswick, partner at Felesky Flynn LLP in Calgary.
“We have direct relationships with our clients and have to maintain those continuously,” he notes.
Both Colborne and Beswick predict the focus of their practices over the next couple of years will be managing the development and the direction of international tax policy.
“The fact that we in Canada are being impacted so significantly by OECD initiatives, by European initiatives, by U.S. initiatives — all of these international developments have a direct impact on what we do,” Beswick says.
It’s challenging from a tax boutique perspective because they have to deal with different rules without the benefit of necessarily having close relationships with firms in those countries, Beswick says, adding “we don’t have that in-house network to always manage those things.”
Colborne says there is a continuing perception by the Canadian government there are “significant issues with Canadians improperly keeping assets offshore or not reporting income earned offshore,” but in a way, that’s good news for business.
“As lawyers for taxpayers who get the call from the CRA or another tax authority, the next call is to guys like us who sit down, examine the situation and sort it out,” Colborne says.
One challenge Beswick identifies is growing the practice with new talent. It can be tricky to find young lawyers who want to practise in this very complicated area for their career.
“That has to do with the demographics generally in the nature of what we do,” Beswick says. “While we are successful at that, I think that’s a challenge all of us are facing and think very deeply about on an ongoing basis.”
For Colborne, the issue is not as pressing. He says over the last few years, the firm has “stumbled into a group of extremely ambitious, smart, hardworking and talented young folks.”
“It’s injected it with a bit of youth and vigour,” he says. “With smaller-sized law firms, that matters a lot.
It’s more magnified in a smaller place.”
Being based in Alberta, Beswick says his firm is impacted by quantity prices and the current downturn in the resource industry, but he sees it as the normal ups and downs of the practice.
“One nice thing about a boutique is we’re more flexible in managing changes in the market and in the economy,” he says. “We can move very quickly to change our services or change the types of clients we target. That’s an important advantage.”
Top 5 Tax boutiques
Barsalou Lawson Rheault Barristers & Solicitors
Barsalou Lawson Rheault, a 15-lawyer law firm founded in 1994, provides tax advice to multinational corporations doing business in Canada. Its practice covers all areas of taxation, with a particular emphasis on transfer pricing (planning, audits, competent authority) and tax dispute resolution. It has been involved in a number of the largest audits and objection matters in the country. Pierre Barsalou, a former governor of the Canadian Tax Foundation, Sébastien Rheault, a current governor, McShane Jones and Stephane Marcassa are the firm’s partners. Its clientele includes leaders in various industries, including pharmaceuticals, e-commerce, mining and telecommunications.
“Outstanding service to clients, particularly in transfer pricing and tax litigation,” enthuses one respondent.
Deloitte Tax Law LLP
Toronto, Vancouver, Calgary, Montreal
Deloitte Tax Law LLP provides advice to domestic and international clients on all aspects of Canadian tax law — including tax litigation and controversy, tax advisory, customs and global trade and commodity taxes. Its lawyers have experience in large and complex audits and disputes involving corporate reorganizations, cross-border transactions, transfer pricing, SR&ED credits and the general anti-avoidance rule. Its tax litigators have appeared at all levels of court. Services include developing tax planning strategies and tax-efficient corporate structures and advising on the income and commodity tax implications of a wide variety of transactions. Deloitte Tax Law also helps clients resolve customs and international trade disputes, minimize duties and taxes and manage compliance concerns.
One voter cites the firm’s “sophisticated, creative advice,” while another mentions its “depth of specialization” and “exceptional client service.”
Felesky Flynn LLP
Calgary, Edmonton, Saskatoon
Felesky Flynn LLP was founded in 1978 and, as a tax boutique with offices in Calgary, Edmonton and Saskatoon, has become a recognized leader in Canadian and international tax matters providing tax planning, representation and litigation advice to clients throughout Canada and internationally. The firm’s lawyers are very active in their community through teaching, publishing and participating in professional organizations.
One voter mentioned several things, including the firm’s “exceptional service to clients; deep understanding of the area of law and its intersection with clients’ objectives; contribution to the area of law by way of presentations and publications.”
KPMG Law LLP
Toronto, Vancouver, Montreal, Calgary, Vaughan
KPMG Law LLP assists domestic and international organizations with transaction planning, risk assessments, tax reporting and statutory compliance. The firm was established with two tax lawyers in 2003, expanding to more than 40 tax lawyers and offering services in tax litigation and dispute resolution, indirect tax, tax incentives, U.S. tax and trade and customs.
“Have always received great results when working with them,” says one voter.
Thorsteinssons LLP was founded in Vancouver in 1964 by Pat Thorsteinsson. In 1990, the firm expanded to Toronto in order to better serve its national client base. For more than 50 years, the firm has provided tax advice to clients around the world and is recognized for its work in highly complex matters. The firm has a long history of work in the resource sector, and provides advice in personal, corporate and international tax advice, estate planning, sales tax advice and has been involved in a number of tax litigation matters at all levels of court.
One respondent cites the firm’s depth and breadth of tax knowledge — “Thorsteinssons is Vancouver’s ‘go-to’ tax firm.”
Drache Aptowitzer LLP
Ottawa, Calgary, Toronto
Clients include not-for-profits, charities and non-taxable entities
Moodys Gartner Tax Law LLP
Calgary, Edmonton, Vancouver, Toronto, and Buffalo, NY
17 lawyers (also 14 chartered accountants/certified public accountants)
Clients include Abreezio LLC and Petrograx, as well as other real estate, financial, technology, oil and gas and agriculture companies
Millar Kreklewetz LLP
Clients come from oil and gas, automotive, financial institutions, non-resident importers, direct selling
Dwyer Tax Law
Family-owned enterprises, estate planning, Canadians moving offshore, immigrants moving to Canada
Clients represent a variety of industries, including manufacturing, real estate development, technology and financial services, ranging from a billion-dollar multinational software company and a U.S. pension plan to software and financial services startup entrepreneurs.
Wills, Trusts and Estates Boutiques
As the baby boomers age, it impacts society at almost every level — but in some areas more than others.
“Dealing with the aging client or older adult is the most significant trend right now,” says Kimberly Whaley, founding partner at WEL Partners in Toronto.
In many ways, this area of law is the most personal, dealing with family dynamics, intimate issues such as planning for care and trying to discern if the client is well enough to make decisions or if someone — usually a child — is pulling the strings.
“What are our professional obligations? The law presumes capacity, but we also have a moral and ethical obligation to ensure we’re serving our clients in accordance with our rules of professional conduct,” Whaley says. “If there are red flags our clients may not have the requisite cognitive ability or functioning, how do we approach it?”
Genevieve Taylor, principal lawyer at Legacy + Trust Lawyers in Vancouver, calls it “tricky” to balance getting the business side done while managing the emotional side.
“At a high level it’s about how we get wealth from one generation to the next,” Taylor says. “But there are a lot of questions that aren’t about that specifically — they’re more about how do we strike a balance between the financial planning side of it and the preservation of quality of life and all those kinds of things.”
There are also more disputes stemming from somebody’s incapacity, not necessarily their death, says Taylor.
People are suffering from a loss of capacity either earlier in life or are living longer after, Taylor says, and what she sees in her practice are “tensions that build up in a family over who runs the show, who runs the assets and also the personal and health-care issues are becoming more important because it’s lasting longer.”
“That’s changed some of the practice and also changed the way people who deal with disputes are dealing with those disputes — sometimes they’re being litigated before the person has actually passed away,” she says. “It’s accelerating things.”
Another challenge both lawyers face in their practice is clients’ multi-jurisdictional lives.
“People are so mobile — even for people who don’t have huge wealth they can still have complicated estates and how do you deal with those complexities without the cost just ballooning and having them not do the planning?” asks Taylor.
Whaley says she sees abuse most often at the hands of family members. It’s usually children stealing from parents because they are no longer capable, which goes back to the capacity dilemma.
“How do I know a client has the wherewithal to commence litigation even though they’re disgruntled or upset or suspicious that something’s happened?”
This issue is compounded again by complex family structures, including second, third or even fourth marriages, common-law partnerships, same-sex unions and the children, stepchildren, adopted children or in some cases genetically procured children, who all have to be considered in wills, trusts and estates planning.
Along with these sophisticated personal arrangements, people increasingly have complex assets in the sense that they’re carrying on in their businesses for longer and in different ways than the generations before them.
“They’re not necessarily people who have worked as an employee in one job their whole lives and that’s it,” Taylor says. “They’ve got business interests, they’ve got all sorts of sophisticated kinds of arrangements.”
The real estate market, especially for Taylor in British Columbia, is also bringing its own challenges to the practice.
“There’s been a lot of rapid law reform in the last couple of months, certainly in B.C.,” she says. “We’ve had all these issues about chilling the real estate market, so they’ve changed rules about property transfer tax, they’ve also changed the federal rules about principal residences, so dealing with that when you’re trying to plan into the future adds to the challenge.”
There is also the wealth generated by people who bought their homes in the 60s and it’s appreciated significantly in value. Taylor says these families often didn’t have a lot of wealth, because it was tied up in the house, but all of a sudden clients have to consider large sums and how they want to plan for that, and wills, trusts and estates lawyers are tasked with helping transition that wealth in a way that is going to allow people to learn about the ways you manage wealth.
“People are dying with their multi-million-dollar homes,” Taylor says. “They have a steep learning curve as to what to do with it.”
Top 5 Wills, trusts & estates boutiques
Bales Beall LLP
Founded in 2005, Bales Beall LLP’s practice, with three partners and four associates, focuses on all manner of wills and estates work, from estate planning, including powers of attorney, to litigation involving wills, estates and guardianship matters. Bales Beall acts both as advocates and personal legal advisors for its clients. Karon Bales is a certified specialist in estates and trusts and family law. She and Jessica Feldman (associate) are members of the Society of Trust and Estate Practitioners. Bales is a fellow of the International Academy of Family Lawyers and conducts mediations in estate and family law matters.
“The firm is well run and very professional — Karon Bales is no-nonsense and results oriented,” says one voter.
Hull & Hull LLP
Hull & Hull began when the late Rodney Hull and his son Ian hung their shingle in the early 1990s.
Rodney received the Ontario Bar Association wills and trusts section’s award of excellence in 2005 and the Law Society Medal in 2007. The firm, now led by Ian and managing partner Suzana Popovic-Montag, lists 16 lawyers under its banner.
One respondent says the firm has a “good reputation and [is] on the cutting edge of the practice.”
Legacy Tax + Trust Lawyers
Four of this boutique’s seven founding principals still practise at its Vancouver office 15 years after its 2000 launch. Of the three who have departed, two were appointed to the bench of the British Columbia Supreme Court and one recently retired. The firm has grown to 20 lawyers, with a focus on tax, trust and succession planning (including some cross-border U.S. planning) for individuals and family-owned businesses, estate litigation, tax litigation, estate administration and acting for charities and not-for-profit organizations.
One voter says that “we’ve worked for decades with several lawyers at this firm. They have the tax planning, tax, estate administration and wills drafting talent at a variety of levels of expertise and decent hourly rates.”
Schnurr Kirsh Oelbaum Tator LLP
Toronto, Durham Region
Established in 1992, this estate litigation boutique’s lawyers specialize in estate, trust and guardianship litigation, and have chaired conferences, taught and authored two texts in estate law, Estate Litigation and The Annotated Ontario Estates Statutes. The firm acts as counsel to lawyers throughout Canada. The firm’s lawyers conduct mediation in all areas of estate and power of attorney disputes. In addition to its Toronto office, the firm has recently expanded and now has an office in Durham Region.
“Consistently great — smart and conscientious lawyers with practical advice,” says one respondent.
This litigation boutique was founded by Kimberly Whaley in 2005. In 2016, the firm added a second partner, Lionel Tupman, and now includes a total of 12 lawyers, an articling student, two accounting law clerks as well as a team of litigation support and management personnel. WEL Partners, the new firm name, derived from Whaley Estate Litigation Partners, focuses on opinion, dispute resolution, litigation and mediation of estate, trust and related matters including guardianship, capacity, power of attorney, fiduciary representation and accounting, end-of-life decisions and elder law proceedings throughout Ontario.
“Excellent results, talented staff, on top of current issues, contributor to education and willing to go the extra step,” says one voter.
Click here to read Part 1: Top 10 Insurance Defence boutiques.