Tough times can cut two ways for accounting firms that provide services to struggling industries. While many companies tend to pull back on their use of consulting services, economic uncertainty also tends to prompt businesses to make sure they have a good handle on their finances—and on any tax-law changes coming under a new presidential administration.

That two-way pull might be felt especially at Seattle-based Moss Adams LLP, whose big Spokane accounting office specializes in serving just a few industries, including the particularly hard-hit financial and manufacturing sectors.

While most CPA firms are geographically based, with clients routed to the nearest office for services, Moss Adams structures its business in industry groups, says Tom Stevenson, its managing partner here. It keeps its employees focused in one, or perhaps two, industries, so they develop a depth of knowledge in the field.

"It lets them really 'get' the clients' issues," he says.

While he asserts that such a structure has helped Moss Adams set itself apart from other firms and weather economic dips, it also means quite a bit of business travel for the firm's employees, since about 40 percent of the work the Spokane office handles is for clients located outside the Spokane area, from Alaska to Hawaii, and internationally, in places such as the Marshall Islands, in the South Pacific.

The operation here became part of Moss Adams 10 years ago, when Spokane-based McFarland & Alton PS merged with the Seattle firm. It retained its offices on the 18th floor of the Bank of America Financial Center downtown, and now also occupies the 17th floor there as well, Stevenson says. Overall, the company, which Stevenson says is the 11th largest accounting firm in the nation, has 18 offices—in Washington, Oregon, California, New Mexico, and Arizona—and 2,100 employees, including about 250 partners. Moss Adams had about $300 million in revenues last year.

The firm's Spokane office had revenues of about $20 million last year, and while Stevenson declines to project 2009 revenues, he says that so far this year the firm is having a "good busy season." The Spokane office employs 115 people, including 14 partners. In addition to being managing partner here, Stevenson also is on Moss Adams' executive committee of eight elected partners.

The Spokane office has about 2,200 clients, about 1,200 of which are located here.

In addition to the financial and manufacturing industries, the Spokane office primarily serves telecommunications, distribution, and construction businesses, as well as nonprofits. Financial institutions and rural telephone companies probably are its biggest focus, Stevenson says.

Although he can't disclose the names of the firm's clients, due to confidentiality rules, he can say that the office serves about half the financial institutions in Idaho and rural telephone companies scattered from Alaska to Hawaii, Stevenson says. It also counts among its clients a number of higher-education institutions in Washington and Idaho. Though many of its clients are family-owned businesses, it does some work for publicly traded concerns that must meet U.S. Securities and Exchange Commission rules.

Across the industries it serves, the Moss Adams office here offers a broad array of services, from accounting and tax work to internal audits to consulting on everything from estate planning and business-owner succession to technology. It also offers wealth-planning services through an affiliate named Moss Adams Wealth Advisors LLC.

A large part of what Moss Adams does is compliance work, which includes financial statement audits and federal tax compliance, says David Green, a tax partner here who heads up Moss Adams wealth services here.

The firm has four employees here with backgrounds in engineering who do what's called cost segregation, Stevenson says. They study buildings, poring over blueprints to see if part of a structure's cost can be depreciated faster because it is used as equipment. For example, cold storage in a building can be considered equipment, so the portion of a building it occupies can be depreciated more quickly than the rest of the building, he says.

The company has a group of employees that does Internet security work, primarily for banks. It also has a partner here who specializes in valuations.

A client that hires Moss Adams is assigned to a branch office that specializes in the client's industry, rather than to the office the client is nearest. Out of 18 Moss Adams offices, for example, the Spokane office is one of just two that does telecommunications-industry accounting.

While assigning work that way can cost more in terms of travel, it also can pay dividends, Stevenson says. He says Moss Adams once made a proposal to provide service to a rural Montana telephone cooperative, which had been using a local accountant for some time. When the co-op's board heard that Moss Adams' fees would be double what it had been paying the local accountant, largely because of travel costs, "you could see the board members closing up their notes" and getting ready to leave, Stevenson says.

The Moss Adams team asked the board to wait a few minutes, then pointed out that it had reviewed the co-op's three previous tax returns and could amend two of them to get the organization an additional $800,000 in refunds. The team added that it also had reviewed the co-op's long-distance billing system, which it found to have produced errors, and could set the system up properly, resulting in an additional $1 million in annual revenue.

After that, "the travel became a non-issue," Stevenson says.

Just as computer technology has decreased the use of paper, reducing Moss Adams' need for rows of filing cabinets and a large library of tax-related books, technological advances also are helping it to curb some travel costs, Stevenson says.

Moss Adams has set up conference rooms in its office here that it uses for what it calls "virtual" travel, he says. Clients upload all of their pertinent documents to the Moss Adams' secure server, and a Moss Adams team accesses them from the Spokane office, much as it would at the client's site. The team then can work in the conference room for several days before ultimately having meetings with clients at their offices, saving time and money for its clients and causing less personal disruption for employees.

Due to the tough times, some Moss Adams clients are cutting back on their use of consulting services especially family-owned ventures that are struggling right now, Green says. On the flip side, uncertainty also makes some companies want to be attuned to their financial situations, Stevenson says.

"It's a good time to be sure you're running a solid business," he says.

Green, the wealth services manager, says that despite the caution caused by the economy, having a new presidential administration tends to spur some additional activity for Moss Adams.

"People get motivated to come in and talk," when the political winds that affect tax law shift, Green says.

For example, if taxes on earnings of more than $250,000 a year are raised, as President Barack Obama has proposed, a fair amount of planning work will be generated by that change, he says.

Further, there is the possibility that with upcoming changes in the gift tax and estate tax likely, some family-owned businesses might look at transferring shares to the next generation, which would require accounting work, Green says.

Another issue on the table in the new administration is possibly raising the top tax rate to 39.6 percent, but limiting allowed deductions to what's permitted at the 28 percent rate, with a focus on limiting home mortgage and charitable-giving deductions, Green says. That could spur people to look at strategies such as "prefunding" charitable contributions.

Work and life balance

Moss Adams encourages employees to try to balance their work and home lives, Stevenson says. It offers incentives to employees who ride the bus to work or exercise at a fitness center near its offices, and hosts employee events about once a month. It also encourages employees to do volunteer work.

"It's important to us to have people active in the community," he says.

The firm's partners set the example. Green currently serves as board president of the Martin Woldson Theater at the Fox, and Stevenson, who is on the board of Spokane County United Way, bikes to work most days.

The company recruits employees from northwest universities, and offers internships to college students. Last year, it hired about a dozen college graduates. It has hired three this year so far, and expects to hire another six or so this spring.

One of its female partners, Cheri Burnham, recently started a professional development group for the company's female employees, called Forum W, Stevenson says. More than 50 percent of the company's hires are women, and four of the 14 partners here are women, while nationally, about 10 percent of accounting firm partners are women, he says.