Learn Some Accounting

Litigators who say they specialize in “business litigation” ought to know something about business. Unfortunately many don’t. Accounting or other business courses are not found in traditional humanities-based undergraduate “pre-law” curricula. And while most law schools offer rudimentary accounting and business electives, these are often under-enrolled.

For example, in recent months, we’ve come across counsel (on both sides of litigation) who’ve had no grasp of:

How a balance sheet “balances”

The difference between a cash flow statement and a profit & loss statement

Accrual versus cash methods of accounting

Payments due in advance versus due in arrears

Amounts “realized” versus “recognized” under the tax code

The concept of “aged” receivables

Earth-shattering? No, of course not. It’s more embarrassing than anything else, and not likely to lead to repeat business. Yet it becomes more on-the-job training (make that: on-my-invoice training).

Google tells us that in 0.11 seconds one can get several pages of search results for the query “accounting basics.” This seems like a reasonable investment of time for any lawyer whose practice depends on resolving business disputes.

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