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Growing demand for mix of services lends favorable outlook

Rochester Business Journal
September 20, 2013

Rochester-area law and accounting firms are experiencing growing demand for services related to a broad range of issues, from government regulation to the need to outsource particular functions.
 
The growth has prompted the firms to hire or redeploy attorneys and accountants to meet clients' requirements.
 
At Hiscock & Barclay LLP, prosecution and litigation related to intellectual property are "hot these days," says James Grossman, managing director of the law firm's Rochester office.
 
Companies needing those services run the gamut.
 
"We've represented some very, very large Fortune 100 companies, for instance, in patent matters ... but some are smaller companies also," Grossman says.
 
The firm recently handled a federal case involving the design of and utility patents for snowplows.
 
The number of energy cases at Hiscock & Barclay also has risen.
 
"The cost of energy has gone up pretty much tenfold over the years, and energy companies tend to have regulatory matters they need us to deal with," Grossman says.
 
Much of that work for energy generators, oil and gas drillers and pipeline companies relates to regulatory filings. The firm also handles work related to energy companies' property taxes, ensuring they are not paying too much, Grossman says.
 
Renewable sources of energy also have sparked work for the firm, particularly on payment-in-lieu-of-tax agreements or other incentives.
 
Hiscock & Barclay recently hired an attorney who specializes in patent infringement litigation and had been working in Washington, D.C., to join its intellectual property practice area.
 
Rising demand for services related to energy and intellectual property appears to be a long-term trend for the firm.
 
Regional law firms have gained on their larger competitors by offering lower billing rates.
 
"We see the market here, especially for firms such as ours, to be robust and growing," Grossman says.
 
At Underberg & Kessler LLP, work involving labor and employment law is increasing, says Paul Keneally, head of the law firm's labor and employment law practice group. Discrimination statutes, the

Family and Medical Leave Act and the Fair Labor Standards Act-also known as the overtime law-are prompting cases.
 
"There continues to be a lot of activity on the state and federal level in the employment area," Keneally says. "So it's constantly changing, and lots of questions arise."
 
Health care laws recently enacted, as well as statutes that have been on the books for years, continue to bring work to the firm.
 
The number of whistleblower lawsuits the firm handles also has risen because of various federal statutes, Keneally says.
 
The Affordable Care Act, for instance, protects employees against retaliation by an employer for reporting alleged violations of Title I in the statute.
 
The law also protects employees who receive a health insurance tax credit or cost-sharing reductions as a result of participating in a health insurance exchange or marketplace.
 
In connection with the Dodd-Frank Wall Street Reform and Consumer Protection Act, Congress created the Securities and Exchange Commission's Whistleblower Program, which provides monetary incentives for individuals to come forward and report possible violations of federal securities laws.
 
Eligible whistleblowers are entitled to an award of 10 percent to 30 percent of the monetary sanctions collected in actions brought by the SEC and related actions brought by other regulatory and law-enforcement authorities.
 
"There's a national interest in protecting people who report wrongdoing, and the legislation has followed that, and therefore we're seeing some litigation," Keneally says.
 
Demand for commercial litigation-related services has remained strong at Underberg & Kessler since the onset of the economic downturn. Some cases have involved businesses breaking up after falling on hard times, while others have stemmed from business partners fighting over their share of a recession-reduced pie.
 
"Hopefully, we're seeing a turnaround in the economy," Keneally says. "Perhaps that will lead to a little less commercial litigation, but that's tough to say."
 
Underberg & Kessler has recently hired attorneys to work in growth areas at the firm, particularly in the labor and employment group.
 
At Insero & Co. CPAs P.C., demand for outsourced accounting services has been huge lately, says Vincent Leo, partner in the Rochester-based firm. The arrangement entails full-time Insero employees working at local companies on a temporary basis or longer.
 
"And I think so many companies now, with the turnaround coming back, they're afraid to add the long-term and fixed payroll commitments that they had a few years ago, before all the cuts came," Leo says. "So they're looking for unique ways to try and do that."
 
Another growth area at Insero is the federal-contract compliance group.
 
"There's been a lot of pushdown from the federal government to the ... main contractors, down to the next Tier 2 and Tier 3 subcontractors, really beating them up on the Federal Funding Accountability and Transparency Act," Leo says.
 
The statute requires full disclosure to the public of all entities or organizations receiving federal funds. Because compliance problems could result in monetary penalties or the loss of contracts, Insero has hired highly skilled former government employees to handle those matters, Leo says.
 
Demand for services related to international, state and local taxes also has heated up at the accounting firm as governments ratchet up enforcement to collect more revenue through use tax or by other means.
 
Mengel, Metzger, Barr & Co. LLP has seen an upswing in services related to assisting startups, says Mark Kovaleski, managing partner of the Rochester-based accounting firm. The newest fledging businesses to sign on with the firm operate in high-tech, professional services and retail industries.
 
The firm's core accounting business also continues to grow, Kovaleski says. Car dealerships, as well as agribusiness and manufacturing companies, are among the new clients seeking those services.
 
Mengel, Metzger, Barr does not do public-company audits. Still, the firm has attracted a great deal of work preparing tax returns, providing consulting services or handling other matters "that the auditing firm wouldn't be able to do because they would be conflicted," Kovaleski says.
 
The firm's recent growth areas appear to be a source of recurring revenue.
 
"So we're hoping that there's a long-term demand, especially as the economy here in Western New York hopefully continues to improve and the business climate is more attractive for startup entities to be formed," Kovaleski says.

Sheila Livadas is a Rochester-area freelance writer.

9/20/13 (c) 2013 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email service@rbj.net.


 


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