Reference no: EM131662351

Qusetion: At some point, most business owners will need the assistance of a professional, such as an accountant, attorney, architect, or engineer. Some businesses hire these professionals as employees. Others contract with outside professionals or firms. For example, through a retainer contract with a law firm, a business could have the firm's legal services available should a need arise. Quite often, however, a business waits until it develops a need before contracting with a professional for his or her services or seeking bids from professional firms. Liability and Standard of Care As discussed in the chapter, professionals are potentially liable to their customers and to third parties. Therefore, when hiring professionals, it is important to review the width and breadth of their potential liability. For accountants in particular, liability can range from breach of contract and negligence for unintentional acts, to fraud and misrepresentation for intentional misconduct. Failures, omissions, and false statements can also lead to civil or criminal liability under state and federal securities laws. An accountant (as well as a business) can have criminal liability for violations of the Internal Revenue Code, and any professional who files false or fraudulent reports, alters documents, or destroys financial records can be held liable for violations of state statutes. As a business owner, the key is to hire the best-qualified professional at the best price. The contract formed is very important in establishing the performance expected and the time period within which the contract is to be performed.

A professional may hold herself or himself out to be a specialist in a certain area. If so, the standard for that individual's performance is higher, reflecting her or his special expertise. The higher standard of care should be reflected in the language of the contract. Although there are numerous remedies available for a professional's breach of contract, the cost of litigating a breach can be overwhelming to a business. Certification or Licensing Requirements All hired professionals are subject to standards of conduct established by the particular profession's governing organization, state statutes, and court decisions. Initially, these professionals must be certified (such as a certified public accountant) or licensed to practice (such as an attorney). To continue the certification or license, a professional must keep current with the profession by attending various continuing education seminars or programs and receiving a specified number of credits. For example, attorneys must obtain continuing legal education, or CLE credits, each year in an amount set by the licensing state. It is important to hire a properly certified or licensed professional and to know that the individual retained is keeping up to date on the issues affecting the profession. Before hiring a professional, it is therefore wise to check with the governing organization to make sure that his or her license or certification is current and "in good standing." Many state bar associations, for example, have Web sites that allow you to check on the status of an attorney within that state. Some Web sites even allow you to check to see whether any complaints have been lodged against that attorney

CHECKLIST OF FACTORS TO CONSIDER WHEN HIRING A PROFESSIONAL

1 Choose a professional who meets your specific business needs. Remember that some professionals hold themselves out as specialists, such as tax accountants.

2 Make sure you contract to hire the most qualified professional for the best price and that the contract specifies the performance expected.

3 Check that your professional meets all the necessary certification and/or licensing standards for his or her respective profession.