National impact: at 10, CalCPA Litigation Sections lead the nation.

As CalCPA's Litigation Sections celebrates its 10th anniversary, its services to the profession, roster of experts and national influence continues to grow.

"Interest in the committee was always strong, but it really exploded about 10 years ago. We were too popular for our own good and couldn't welcome every interested CalCPA member," says Everett P. Harry III, CPA, the 1993-95 chair of the Litigation Services State Committee and owner of San Francisco-based Harry + Torchiana.

"When we started, the committee was really a resource-sharing opportunity among a small group of practitioners. I never imagined it would become the national force that it is today."

As the original state committee became standing-room only with a growing waiting list, CalCPA explored forming common interest member sections, now called sections, to bring together groups of practitioners with a common focus. The state committee saw this as an opportunity to open the doors and involve more members--and fill a growing need for services, communication and networking opportunities.

The group formally changed its name to the Litigation Sections in 1996, becoming a separate dues paying section of CalCPA and CalCPA's first and only statewide member section. A steering committee was formed, along with five practice area sections: Alternative Dispute Resolution, Business Valuation, Economic Damages, Family Law and Fraud. The ADR Section has since been folded into the other sections.

"The Litigation Sections are a great service to the profession and a great value to CalCPA members," says Michael G. Ueltzen, CPA, former chair of the Litigation Services State Committee and a partner of Sacramento-based Ueltzen and Company LLP. "The sections have developed an innovative approach to providing technical services to the courts and practitioners, and have positioned themselves as one of the nation's leaders in this area."

Litigation Sections membership has grown from the initial 40 to more than 400. Members who join the Litigation Sections are automatically enrolled in a section of their choice. For a small fee, members can join any or all of the remaining sections.

THE EARLY DAYS: GROWING THE DIVERSIFIED RANKS

Benefiting from a sound foundation and guided by a strong and successful steering committee that regularly rotates leadership, the Litigation Sections has been able to continually increase the quality and sophistication of its offerings as well as its impact on the profession.

"In the past, only the [members serving on the] Litigation Services State Committee had the opportunity to engage dialogue that focused on where the practice area was headed," says founding member Don Gursey, CPA, partner at Los Angeles-based Gursey Schneider & Co. LLP. "The advent of the sections afforded all interested members this opportunity, and to say it was well-received would be an understatement."

The individual sections held their first meetings in February 1997, offering a daylong session with three hours of CPE. As meetings continued, the sections quickly realized that it was not necessarily the prospect of attaining CPE that compelled members to attend, but the opportunity to network and discuss compelling issues facing the practice areas.

The discussions provided a blueprint for the sections' future and eventually evolved into discussion papers; authoring AICPA practice aids and professional standards; ongoing case-law monitoring; and outreach to the California judiciary. The sections' open membership and diversity of professionals has helped to enrich the resources and services they offer.

"The involvement of more women and a more diverse age group and expertise has been instrumental in the work the Litigation Sections has been able to accomplish," says John Costello, CPA, former chair of the Litigation Sections and a director at Los Angeles-based Gursey Schneider & Co. LLP.

Costello encouraged me to apply for a position on the steering committee and I was asked to serve as editor of the Litigation Sections' newsletter, The Witness Chair. Of the 12 individual section officers for the 2006-08 Litigation Sections year, six are women, including three of the four individual section chairs.

A COMMUNITY OF EXPERTS

The sections' Steering Committee focuses on subject areas, issues and items that transcend all practice areas--from bankruptcy to valuation, family law to lost profits, and fraud detection and prevention. The committee doesn't only look at the largest cases, but at case law set by large and small damages cases alike. If it affects litigation and forensic accounting practitioners, the steering committee will tackle the project.

This professional focus can be grueling. Reviewing standards and practice aids can mean five or six conference calls to gather information and discuss the issues--and that's only for starters. Subsequent meetings look to build and reach consensus on a particular position, which is then drafted in a comment letter, reviewed and finally issued.

"The volunteers do it because it's the right thing to do for the profession," says Ann E. Wilson, CPA, chair of the Litigation Sections 2000-2002. "But what you might not expect is the friendships and camaraderie that exists in the group."

Wilson notes that the Litigation Sections members are sometimes fierce competitors outside of CalCPA, often serving on opposite sides of a case where the outcome of multimillion-dollar awards rests on their testimony. But once inside the sections, the members pull in the same direction. "And when you ask someone why they continue to give so much of their time to the sections, friendships and camaraderie are common responses," Wilson says.

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GIVING BACK TO THE PROFESSION

The Litigation Sections began its diligent rollout of services and resources almost as soon as it was formed, and more professional contributions are under development every day.

The Business Valuation Section published The CPA's Role As A Jointly Retained Business Appraiser only a year after its formation, followed by Business Valuations Under California Corporations Code Section 2000 (March 2000). Both discussion papers remain in use by practitioners today and set the stage for the work the sections would do in the future.

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Meanwhile, the Family Law Section developed the Flowchart to Determine Deductible Support (March 1999) and Innocent Spouse Relief Flowchart (April 2000), which have been sold nationwide, distinguishing the Family Section as a preeminent national resource.

The Family Law Section also worked with CalCPA's Amicus Curiae Committee to file an amicus brief (friend of the court), petition to depublish In Re Marriage of Rosen (2003 DJDAR921), in which the Litigation Sections agreed with the ruling, but disagreed with the comments on the use of averages, compensation surveys and survey data in determining compensation for owners. The amicus brief was heard by the court and a modified opinion was issued, which now provides guidance and caution on the use of surveys, not their prohibition--one of the main components of CalCPA's petition.

Successes continued to roll in. In family law courts there is an increasing trend to employ experts under Evidence Code Sec. 730, but there was no formal guidance explaining the use of experts. So, the Family Law Section helped create the Downtown Los Angeles Family Law Court form, Stipulation Appointing Evidence Code Sec. 730 Expert, which can be found on the court's website at www.lasuperiorcourt.org/familylaw.

The sections also helped many California practitioners unsure of how to handle the differences between federal domestic partnership laws and the California Domestic Partner Rights and Responsibilities Act of 2003. When the IRS was slow to issue guidance on domestic partner tax treatment, the section stepped up, requesting guidance in December 2005. The request prompted the IRS to issue guidance in February 2006 (Chief Counsel Memorandum 200608038).

The sections also have worked with the State Bar of California to develop a list of questions that need to be addressed in cases when the Act applies, so that the judiciary can be well-versed in how the intersection of accounting, tax and family law issues and standards interact with the Act as cases come before them.

TECHNICAL RESPONSE TEAM

As AICPA practice aids and standards proliferated, the sections' leaders realized that if they were to have a positive impact on behalf of California CPAs, a proactive, organized approach was needed. Enter the Technical Response Team, comprised of eight to 10 steering committee members who represent all practice areas and review and comment on practice aids, standards and case law from a global perspective rather than from a single practice area. One of the team's more long-term projects has been reviewing and commenting on the Proposed Statement on Standards for Valuation Services.

"The modifications to the standards are largely due to the efforts of this group," says Ueltzen.

The Technical Response Team also has helped write or has commented on A CPA's Guide to Family Law Services; Discussion Memorandum: Forensic Services, Audits and Corporate Governance: Bridging the Gap; Consulting Services Special Report 02-01; Litigation Services and Applicable Professional Standards; the recently issued Intellectual Property practice aid; and the soon-to-be released Lost Profits practice aid.

"The strength of the Litigation Sections has been instrumental in having at least one member of the sections serve on all practice-related AICPA committees and task forces and helping guide the profession at the AICPA level," says former CalCPA chair D. Paul Regan, CPA, 2002-04 Sections chair.

THE WITNESS CHAIR

The Sections have heavily promoted the use of CPAs as expert witnesses, bolstered by case law.

After the Daubert v. Merrell Dow Pharmaceuticals, Inc., [509 U.S. 579 (1993)] and Kumho Tire Co., Ltd. v. Carmichael, [119 S.Ct. 1167 (1999)] cases--which set precedents for the admissibility of expert testimony--and increasing Daubert challenges to expert witnesses, the steering committee began promoting CPAs as expert witnesses to the California judiciary.

The flagship of that promotion has been the Lit Sections quarterly newsletter, The Witness Chair, which features updates on news relevant to each section, as well as an AICPA Alert, and is distributed to approximately 5,000 judges and attorneys.

The thrust behind the promotion of CPAs as expert witnesses is the underlying financial and technical skill set that CPAs have combined with experience in the judicial process. The response has been overwhelmingly positive, mostly from judges who e-mail or call when they move to a new court just to make sure they will continue to receive The Witness Chair.

HELPING TO EDUCATE

Just six months ago, when an updated AICPA class on business valuation standards was delayed, the sections' steering committee members, working with the California CPA Education Foundation, wrote, published and taught a new series of classes. The classes not only prepare CPAs for the ABV credential exam, but also cover the many rules and nuances of business valuation in California.

The first round of classes had record attendance and the authors/instructors were well received. Litigation Section members drive the Education Foundation's fraud, family law and damages conferences and Advanced Litigation Institute as well as numerous practice area-related courses.

"Andy Mintzer recently was awarded the Education Foundation's Conference Volunteer of the Year, a testament to his commitment as Litigation Sections chair, and I'm proud to follow the many leaders who have come before me as we begin the next decade of the Litigation Sections," says Mark Luttrell, managing director of CBIZ and Mayer Hoffman McCann P.C. and current Litigation Sections chair.

FUTURE

While the technical work of each section, such as reviewing and commenting on standards, or authoring practice aids, continues, the sections are gearing up for the future with a special focus on growing membership. Getting more practitioners involved through more focused educational opportunities is one of the sections' key action items going forward.

"Growing the membership of the sections will only strengthen the breadth and depth of the resources we can provide, and makes the group more proactive" says Luttrell. "Plus, getting more practitioners involved enhances the pool of leaders we can draw from."

Heading into its second decade, the Litigation Sections will build on the momentum of its first 10 years and continue to help shape professional standards; provide news and information; and author and distribute leading-edge, practice-specific articles, case reviews and development tools for each section.

For more resources or to join the CalCPA Litigation Sections, visit www.calcpa.org/lit.

Susan P. Bleecker, CPA is a Pasadena-based sole practitioner and the editor of the Litigation Sections; newsletter, The Witness Chair. You can reach her at [e-mail].

BY SUSAN P. BLEECKER, CPA

CaICPA Litigation Sections Leadership

Officers

Chair: Mark S. Luttrell

Vice Chair: Ronald Durkin

Treasurer: Daniel W. Ray

Secretary: Peter A. Salomon

Section Chairs

Business Valuation: Cindy V. Craig

Economic Damages: Colin A. Johns

Family Law: Tracy F. Katz

Fraud: B. Marie Ebersbacher

STEERING COMMITTEE

James A. Andersen

Richard S. Barnes

Susan P. Bleecker

Brian P. Brinig

Peter W. Brown

John J. Costello

Troy A. Dahlberg

Leslie Dawson

Michael Dever

B. Marie Ebersbacher

Neill W. Freeman

Steven C. Gabrielson

Donald A. Glenn

Donald L. Gursey

Terry M. Hargrave

Everett P. Harry III

Tom Hunt

Ted Israel

Karen J. Kaseno

Tracy F. Katz

Jeffrey H. Kinrich

John M. Lacey 

Martin G. Laffer

Bjorn L. Malmlund

Andy Mintzer

Donald Miod

Robert W. Peck 

D. Paul Regan

Stephen M. Reiss

Mike J. Richard

Thomas W. Rimerman

Roger B. Shlonsky

Michael S. Spindler

Henry Stotsenberg

Brian A. Sullivan

R. Davis Taylor, III

Mark R. Torchiana

Christian D. Tregillis

Michael G. Ueltzen

Ann E. Wilson

Jennifer Ziegler

CaICPA STAFF:

Maria Nazario

Barbara Nochenson