The Taxman Cometh -- But No Need to Fear
For more than 40 years, Miller, Canfield, Paddock and Stone ( www.millercanfield.com), an international law firm headquartered in Detroit, has been a dominant player in the public finance arena. The 300-lawyer firm pumped up that market position still further by creating its Rebate Calculation Service more than a decade ago. In doing so, it become one of the first law firms in the country to figure out how to comply with IRS rebate requirements for issuers and obligers of municipal bonds.
The Rebate Calculation Service, which is offered through an annual contract, helps clients determine when IRS rebate reports are due, calculate rebate amounts, prepare the reports and handle the recordkeeping. Another element is rendering an opinion about the client's compliance with the IRS code. A lawyer and a legal assistant do the computations with the aid of a proprietary computer program specifically designed to run the calculations.
According to partner Jeff McHugh, the impetus for the service was both defensive and offensive. In the first instance, the rebate program would provide existing clients with a value-added service and ensure they didn't go elsewhere for it. But in addition, the firm could offer the service to non-clients, allowing it to position itself before an even wider audience of municipalities.
Originally, the marketing plan called for a standardized offering to be performed for a flat fee. The service, however, has taken a slightly different direction over the years. McHugh reports that the "vanilla, cookie-cutter" types of projects initially envisioned represented only a small minority of the projects. Nearly each engagement, it turned out, had different issues. As a result, the service's pricing now varies based on the specific project's complexity.
The results have been impressive. Not only has the firm made solid money on the service, it has also reinforced Miller, Canfield's market position and brought fresh clients in the door, enabling McHugh and his colleagues to secure new business.