At first many of our clients think a CPA and a lawyer are interchangeable advisors to their business.  Especially if they have developed a good relationship with one or the other.  But we have found this practice to be especially problematic.  In this article we examine the role of a business lawyer versus a CPA (Certified Public Accountant).

Core Focus and Expertise

Business Lawyer

• Specializes in legal matters affecting businesses.

• Provides guidance on contracts, compliance, liability, governance, and dispute resolution.

• Focuses on risk mitigation through legal frameworks and protections.

• Ensures the business operates within federal, state, and local laws.

CPA

• Specializes in accounting, auditing, and taxation.

• Provides financial reporting, tax preparation and strategy, and compliance with IRS and state tax laws.

• Focuses on financial health, cash flow, and accurate records.

• Helps businesses maximize tax efficiency while staying compliant.

Typical Responsibilities

Business Lawyer

• Drafting and reviewing contracts (partnership agreements, vendor contracts, leases).

• Advising on business structure (LLC, corporation, partnership) to limit liability.

• Handling mergers, acquisitions, and business sales.

• Representing the business in lawsuits, arbitration, or negotiations.

• Addressing employment law issues such as hiring practices, non-compete agreements, and termination policies.

CPA

• Preparing annual and quarterly tax returns and ensuring compliance.

• Advising on tax planning (e.g., deductions, credits, S Corp elections).

• Performing audits and reviews for lenders, investors, or regulatory bodies.

• Setting up or managing bookkeeping and accounting systems.

• Providing financial forecasting and budgeting advice.

When a Business Typically Needs Them

Business Lawyer

• At formation of the business (choosing entity type, drafting operating agreements).

• During contract negotiations or disputes.

• When expanding through partnerships, franchising, or acquisitions.

• To handle compliance issues (licenses, intellectual property, employment law).

• When facing litigation or potential legal liability.

CPA

• At tax time or when setting up a tax strategy.

• When the business is seeking financing, needing audited financials.

• During year-round bookkeeping and payroll management.

• When evaluating cash flow, profitability, and budgeting.

• For guidance on compliance with financial reporting standards.

Overlap and Collaboration

• Both professionals often work hand-in-hand:

  • Example: When forming an LLC, the business lawyer ensures liability protection and governance documents are in order, while the CPA advises on the tax consequences of different structures.

  • In mergers and acquisitions, the lawyer handles contracts and negotiations, while the CPA analyzes the target company's financial health.

• A business benefits most when it consults both a lawyer and a CPA regularly rather than only when problems arise.

Bottom Line

• A business lawyer is your advocate for legal protections and risk management.

• A CPA is your guide for financial compliance and optimization.

• Together, they form the backbone of a business's legal and financial health.