Both public accountants and lawyers in private practice depend on new entrepreneurs defying the odds to try and establish new businesses. However they are only too aware of the risks that anyone will face as an entrepreneur. In fact a key role is to understand the nature of these risks and to help mitigate them to some extent.
Lawyers practicing commercial law will help with legal structures and contractual arrangements much of which is designed to protect the business owner from his or her partners, other shareholders, suppliers, customers and even the government in the form of the taxman.
Similarly public accountants help ensure that financial systems are properly designed, that financial information is accurate, that the appropriate, tax-efficient legal structures are put in place, that tax and regulatory compliance doesn’t become a problem. They also use their experience to understand risk and opportunity found in financial information.
Since entrepreneurs depend on professionals to identify risk, they shouldn’t be surprised when lawyers and accountants seem somewhat negative. From the professional’s perspective there is almost no risk to them in recommending against making an investment. If you don’t make an investment, you cannot prove how it ‘would have turned out’ . If someone else succeeds with an investment there are always factors that differentiate their situation from yours.
The alternative situation – recommending an investment – is fraught with risk for the professional. The entrepreneur can expect a large number of caveats from the professional to limit their (the professional’s) risk.