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.