Should I Ask My Attorney or My Accountant? A Practical Guide for Business Owners

Should I Ask My Attorney or My Accountant? A Practical Guide for Business Owners

A client sends over a contract on Friday at 4:30. Payroll runs Monday. Your CPA is asking for year-end items. You’re also considering adding a partner, buying a competitor, or switching to an S corporation election. You don’t have time to run point on all of it, but the decisions still land on your desk.

This is where many CEOs and firm owners get stuck: should you ask your attorney or your accountant first?

In plain terms, accountants help you understand the numbers and report them correctly. Attorneys help you understand your rights, obligations, and legal risk. Many business problems have both a money side and a risk side, so you often need both, just in the right order.

If you’re dealing with steady growth and recurring issues, fractional general counsel can be the missing link, ongoing legal support that pairs well with a trusted CPA. Below is a simple decision guide, plus real-world examples for professional service firms.

A simple rule: ask your accountant about the numbers, ask your attorney about the risk

When you’re deciding who to call, sort your question into one of two buckets:

• Numbers and reporting: What will this cost, how does it hit cash flow, what does it do to taxes, what needs to be filed, and when?

• Rights and risk: What are we agreeing to, what happens if it goes wrong, who is liable, what does the law require, and how do we protect ourselves?

This is general information, not legal or tax advice. The right answer depends on your facts and on state law (especially in Pennsylvania, New Jersey, and New York). Still, this rule gets you to the right starting point quickly.

What an accountant or CPA is best at

A solid CPA is your translator for financial reality. They see patterns early, they keep you compliant with tax reporting, and they help you plan for cash needs.

Here’s where a CPA usually shines:

Bookkeeping and financial statements: Clean books are the base layer for every decision. A CPA can help set up a chart of accounts, review monthly statements, and spot gaps that create surprises later.

Tax prep and filings: Income tax returns, estimated payments, extensions, and filing calendars. They also help you understand what documents you need to support your numbers.

Payroll and basic payroll tax compliance: Setting up payroll, tracking withholdings, and handling required filings. Payroll is a frequent source of small mistakes that turn into expensive letters.

Deductions and credits: A CPA can tell you what’s deductible, how to document it, and whether a credit might apply to your situation.

Cash flow and budgeting support: What can you afford to hire, what happens if revenue dips, and how much cash you need on hand for taxes.

Entity tax elections support: CPAs often lead the modeling for choices like an S corporation election, including the likely impact on take-home pay, payroll taxes, and compliance workload.

CPAs also tend to spot exposure early, such as messy books, missing 1099s, or untracked sales tax obligations. The key is knowing when numbers turn into legal risk. If the issue touches contracts, ownership rights, worker status, a dispute, or regulated conduct, it’s time to pull in counsel.

What a business attorney is best at (and why it protects you)

A business attorney helps you avoid the “it seemed fine at the time” problem. Contracts read differently when a deal sours, a team member leaves, or a client refuses to pay. Your attorney’s job is to reduce those weak spots before you sign.

Common attorney-first topics include:

Contracts and negotiations: Master service agreements (MSAs), statements of work (SOWs), vendor terms, NDAs, licensing terms, and payment clauses. Attorneys help you define scope, limit liability, and clarify what happens when things change.

Liability and risk allocation: Who pays if there’s an error, a delay, a breach, a data incident, or a client claim? Attorneys build the “seatbelts” into your agreements and policies.

Employment and HR issues: Offer letters, handbooks, discipline, terminations, restrictive covenants, and state law rules that vary across PA, NJ, and NY.

Disputes: Demand letters, negotiation strategy, settlement terms, and litigation planning. Many disputes are won or lost by what you do early.

Intellectual property basics: Protecting your brand, your work product, and your firm’s confidential methods.

Compliance and deal structure: How to structure a relationship, partnership, or transaction so it is enforceable and fits your goals.

A quick note on confidentiality: legal advice with your attorney can be protected by the attorney-client privilege. If you copy a third party on those emails, including your CPA, you can weaken that protection. It doesn’t mean your CPA can’t be involved. It means you should be intentional about how you share communications.

If your company needs steady, practical legal input, explore Fractional General Counsel services as an alternative to one-off legal projects.

Common business questions and who to ask first

Professional service firms move fast, and the same themes come up across agencies, consultants, IT providers, architects, engineers, and medical and dental practices.

Use this as a quick sorting guide:

Next, let’s make these real with examples.

Contracts, clients, and getting paid (MSAs, SOWs, retainers, collections)

If a contract is on the table, start with your attorney. A contract is not just paperwork; it’s your risk map.

An attorney helps with:

• Scope control: Clear deliverables, change order rules, and assumptions.
• Payment terms: Retainers, milestones, late fees, suspension rights, and collections costs.
• Limits of liability: Caps, excluded damages, and allocation of responsibility.
• Dispute terms: Venue, mediation, arbitration, and attorney fees.
• Personal guarantee requests: Whether it’s appropriate, and how to narrow it.

Your accountant still matters here. They can weigh in on pricing, the cash impact of payment schedules, and how revenue timing affects tax planning.

Example: the late-paying client

A marketing agency has a client that’s 75 days past due and keeps requesting “one more revision.” The attorney can review the contract, confirm whether work can be paused, and draft a demand letter that matches the required notice terms. The CPA can confirm what’s outstanding, whether to charge late fees, and how to track the receivable.

Example: the “small” change order

An engineering firm starts a project with a clean SOW. Halfway through, the client adds site conditions and wants new deliverables. An attorney helps you tighten the change order process and avoid “free” scope creep. The CPA helps you see how the changes affect margin and staffing.

If your contracts keep growing in volume or complexity, consider ongoing legal support through aflat-fee legal partner for growing businesses, rather than waiting for a contract to become a crisis.

Hiring, firing, and paying people (employees vs contractors)

This is one of the most expensive areas to guess.

Ask your attorney first when the question is about classification, policies, or termination risk. Ask your CPA first when the question is about payroll setup and routine payroll reporting.

Attorney-first issues:

• Contractor vs employee classification risk
• Offer letters and key terms (at-will language, duties, confidentiality)
• Handbooks and workplace rules
• Restrictive covenants (non-solicit, non-compete where allowed)
• Terminations, severance terms, and release agreements
• Multi-state teams (common when you have staff in PA, NJ, and NY)

CPA-first issues:

• Setting up payroll and benefits deductions
• Withholding and payroll taxes
• Quarterly payroll filings and W-2s

Why the order matters

Misclassification can trigger back taxes, wage claims, penalties, and audits. A CPA can calculate exposure, but your attorney helps reduce the legal risk before it lands.

Example: the “1099 for everyone” plan

A consulting firm wants to move all new hires to contractor status to cut payroll costs. The CPA can estimate the savings. The attorney should evaluate whether the plan is lawful for the roles involved and how to structure contracts and practices to match reality.

Picking an entity and setting up ownership (LLC, S corp election, partners)

Entity choice has two sides: tax and legal. You want both aligned.

In many cases, start with your CPA to model the tax impact. Then bring your attorney in to form the entity and set the rules.

CPA-led contributions:

• Comparing LLC vs corporation tax treatment
• Evaluating S corp election timing and payroll needs
• Estimating tax payments and compliance workload

Attorney-led contributions:

• Formation filings and governance setup
• Operating agreement or bylaws
• Voting rights, profit splits, and capital contributions
• Buyout terms and what happens if a partner leaves
• Personal liability boundaries and how to preserve them

A tax-smart choice can still become a legal mess without strong documents.

Example: the handshake partnership

Two architects agree to “split it 50/50” and form an LLC online. A year later, one partner wants to reduce hours but keep the same share. The CPA can show what that does to cash distributions. The attorney can fix the root problem by setting clear decision rights, compensation rules, and exit terms.

Buying or selling a business, bringing in investors, or taking a big loan

These are moments where time pressure and paperwork collide. Bring your attorney and CPA in early, even if the deal feels “friendly.”

Attorney-first items:

• Letters of intent (LOIs) and term sheets
• Due diligence requests, what to share and what to hold back
• Deal terms, reps and warranties, and indemnity clauses
• Loan covenants, guarantees, and security interests
• Closing documents and post-close obligations

Accountant-first items:

• Financial statements quality and cleanup
• Quality of earnings work or profitability review
• Tax basis questions and deal tax structure
• Purchase price allocation
• Forecasts to test whether the deal is affordable

Example: the big loan with hidden hooks

An IT services firm takes a bank loan to fund growth. The CPA can model debt service and covenant ratios. The attorney should review the guaranty, default triggers, and reporting requirements, because the wrong covenant can put the company in technical default even when cash flow is fine.

How to use both advisors so you get faster answers and fewer surprises

The fastest way to waste money is to ask the right person too late. The second fastest way is to send partial facts and hope for a “quick take.”



Treat your CPA and attorney like a two-person cockpit. One reads the instruments, one watches the airspace. You still need both, but you’ll get better results when you set roles and share information cleanly.

Share the right facts, in the right order (and avoid common mistakes)

Before you call, send a short packet. It lowers back-and-forth and keeps advice focused.

What to provide:

• The current agreement or draft (not just the signature page)

• Any key emails or messages that changed the deal

• A simple timeline with dates and deadlines

• The business goal in one sentence (what you want to happen)

• The “must-haves” and what you can compromise on

• For money questions, the relevant numbers (price, margins, payroll, expected timing)

Two common mistakes cause problems:

• Signing first and asking questions after. Once you sign, you negotiate from a weaker spot.

• Adding extra people to legal emails without thinking. Broad forwarding can affect confidentiality. If your CPA needs context, your attorney can help you decide what to share and how.

When a fractional general counsel makes the most sense

Many firms don’t need a full-time in-house lawyer. They do need someone who knows their business, their contract standards, and their risk tolerance.

A fractional general counsel model fits well when you have:

• Frequent contract reviews and vendor negotiations
• Recurring HR questions and multi-state hiring
• Ongoing compliance needs tied to growth
• Regular client disputes or payment problems
• Plans to add partners, open locations, or acquire a competitor

The difference shows up in daily operations. One-off legal work is good for isolated issues. Ongoing counsel helps you build repeatable systems, such as standard contract templates, a clear approval process, and a clean way to coordinate with your CPA or fractional CFO.

If you want to understand who you’d be working with and the firm’s approach, see About Company Counsel.

Conclusion

When you’re stuck between calling your attorney or your accountant, use the simple rule: ask your CPA about the numbers, ask your attorney about the risk. Many decisions require both, and the best results come when you loop in the second advisor early, not after a document is signed or a deadline has passed.

If your firm is tired of one-off fire drills, consider building a fractional general counsel plan that works alongside your CPA. Book a discovery call through Company Counsel’s fractional general counsel page, or contact Company Counsel to talk through what ongoing support could look like for your business in PA, NJ, or NY.