The following is an excerpt from Practice Perspectives: Vault's Guide to Legal Practice Areas.
Bradford E. LaBonte is a tax partner in the New York office of McDermott Will & Emery LLP. His practice focuses on cross-border mergers and acquisitions, dispositions, and internal restructurings, as well as matters relating to international tax issues, including the foreign tax credit, subpart F income and global intangible low-taxed income, and tax treaties. He also regularly advises on financings and capital markets transactions.
Michael J. Hilkin represents clients in all aspects of complex state and local tax matters. He has a particular focus on tax controversy and transactional issues relating to state and local income, franchise, sales and use, gross receipts, and other business taxes. Michael has extensive experience handling state and local tax issues before U.S. administrative and judicial systems. Michael is the current chair for the State and Local Tax Committee for the New York City Bar Association and frequently speaks before the Council on State Taxation, Tax Executives Institute, the New Jersey State Bar Association, and Interstate Tax.
Describe your practice area and what it entails.
Bradford: I advise clients on international and corporate tax planning. This can include structuring cross-border M&A transactions, post-acquisition integration, internal restructurings, and day-to-day advice on technical international tax matters.
Michael: As a state and local tax (SALT) attorney, I help my clients understand the variety of tax consequences of their day-to-day business. For example, for state/local income tax purposes, I help companies understand how to determine their taxable income under specific state/local laws, while for sales tax purposes, I help companies understand which products they sell or services they provide are subject to tax—requiring the client to collect sales tax from their customers. I also advise my clients regarding nationwide legislative changes that may impact their tax responsibilities. And if my clients are assessed tax on the basis that they miscalculated their liabilities, I represent them before administrative and judicial bodies to defend their originally claimed positions in their tax filings.
What types of clients do you represent?
Bradford: I represent U.S.- and non-U.S.-based multinational corporations and investment funds.
Michael: I represent numerous Fortune 500 companies (with a focus on the technology, healthcare, and financial sectors) and high-net-worth individuals.
What types of cases/deals do you work on?
Bradford: Most of my matters involve cross-border aspects of M&A transactions and internal restructurings.
Michael: In the tax controversy realm, many of my cases involve challenges to the application of a jurisdiction’s tax law to my clients, applying principles of the U.S. Constitution and federal law. The Commerce and Due Process Clauses of the U.S. Constitution have been interpreted by the U.S. Supreme Court to place limitations on a state’s ability to require businesses to pay taxes. For example, under these principles, a jurisdiction may only tax the income that may be treated as having been earned within the taxing jurisdiction. While states/localities have a lot of leeway to create their own rules under these principles, sometimes a jurisdiction’s law oversteps constitutional boundaries—I help my clients present their constitutional cases to administrative and judicial bodies.
How did you choose this practice area?
Bradford: I found my first two tax classes in law school to be very engaging, so I decided to take a tax-focused internship at the California DOJ. That led to more tax classes, an internship at the IRS Office of Chief Counsel, and volunteer work at a low-income taxpayer clinic. Tax law is incredibly interesting and complex, and seeing talented lawyers apply concepts in practice made it clear that tax was the choice for me.
Michael: I started as a federal transactional tax attorney because my tax classes were my favorite in law school. I made the transition to state and local tax because I competed on my intercollegiate speech team and I missed the opportunity to engage in formal argumentation—at the time I made the transition, there were excellent opportunities to join SALT practices focusing on litigation/controversy (and there still are today!).
What is a typical day like and/or what are some common tasks you perform?
Bradford: A typical day involves a combination of meetings, research, and drafting tax analysis. Planning for major transactions involves a significant amount of coordination among clients and advisor teams (legal, tax, accounting, finance, etc.) across multiple jurisdictions, and external calls and meetings will include some combination of client and advisor team members. Internal calls and meetings focus on coordinating our workstreams and working through technical issues. I also keep up to date on new tax developments; my clients expect me to understand these developments and explain the implications.
Michael: On any particular day I am likely to work on at least a few different matters, meaning I always have something to keep me engaged. Much of my schedule is driven by the time of the year and the matters before me. During the first months of the year, many of my days include a review of new tax legislation that may be relevant to my clients, and calls/discussions with those clients about how such legislation may impact them. Depending on where any of my tax controversy matters stand, I may have to work on discovery requests, help prepare settlement proposals, prepare witnesses for trial, or draft legal briefs. And depending on what questions arise among my clients, I may have to draft memoranda or opinion letters outlining tax consequences of certain activities/lines of business/etc., and/or complete multistate legal research to find the differences in tax laws across jurisdictions. And like most attorneys, I almost certainly will be discussing my matters with my clients on a number of calls. I also regularly travel to tax industry conferences to discuss tax law developments and visit clients.
What training, classes, experience, or skills development would you recommend to someone who wishes to enter your practice area?
Bradford: Take tax courses to build up your technical skills before starting to practice. Also, try to get meaningful feedback on your legal writing.
Michael: Other people will tell you to take specific classes, consider an LL.M., write as much as you can, etc. They are all right. But the best thing I did was compete on my intercollegiate speech team. My competition experience taught me how organize thoughts and arguments in an easily comprehensible fashion—and having focused on impromptu and extemporaneous speaking, I learned how to do these things fast.
What is the most challenging aspect of practicing in this area?
Bradford: Keeping up to date with new developments is always challenging. As an example, the recent OECD “Pillar Two” project has been a major focus, and I need to monitor these developments at the OECD and in jurisdictions around the world.
Michael: I have to deal with the law in all fifty states and scores of localities. While there are patterns, jurisdictions typically have their own unique laws, regulations, or practices. Juggling all of them is a lot of fun, but it can also be tough.
What do you like best about your practice area?
Bradford: I always learn new things from my clients about their business strategy and how their organizations operate.
Michael: The variety of work. I get to deal with tax questions all across the country, and my practice entails everything from analysis of the law as it is being written (i.e., during the legislative process) to the defense of clients’ tax positions from administrative bodies to some of the highest courts in the land.
What misconceptions exist about your practice area?
Bradford: Most tax lawyers do not cover all areas of tax. Instead, most tend to specialize in a few areas—it would be very rare for a person to be an expert in, say, cross-border M&A tax, employee benefits, and estate tax planning for wealthy individuals.
Michael: You need to come from a math/accounting background. I majored in general communication in college. And that is perfectly fine.
As a junior attorney, how did you learn the ins-and-outs of the tax code so that you could hit the ground running on your clients’ complex issues?
Bradford: I tried to take every project as an opportunity to really learn the subject matter and grow as an attorney. Also, business development and other non-billable projects, such as drafting short articles and giving internal presentations, provide great opportunities to become the “expert” on new guidance as it is released, which in turn will help make you indispensable to senior attorneys and clients.
Michael: In my spare time I read the entirety of Walter Hellerstein’s State Taxation treatise. It was a one-year endeavor, but it helped me grasp the concepts of multistate tax law far more quickly than I expected to when I transitioned from a federal transactional tax practice.