What Legal and Tax Marketers Get Wrong About ITR World Tax Rankings

[00:00:00] John Harrison: One of the oddities with tax is some of the most complex work doesn’t actually always have to be in the biggest deals

[00:00:10] Announcer: Welcome to Spill the Ink, a podcast by Reputation Inc, where we feature experts in growth and brand visibility for law firms and architecture, engineering, and construction firms. Now, let’s get started with the show

[00:00:27] Michelle Calcote King: Hi, everyone. I’m Michelle Calcote King. I’m your host, and I’m also the principal and president of Reputation Inc. We’re a public relations and marketing agency for B2B professional services firms, including law firms. To learn more, go to rep-ink, that’s ink with a K, .com. So law firms compete for a lot of rankings and awards, but tax is its own world, with its own dedicated global rankings body separate from the big name legal directories.

Today’s guest, Jon Harrison, calls it the tax sandbox, and as the head of research for ITR World Tax, he spent years figuring out how law firms find their place in it. So welcome to the show, Jon.

[00:01:09] John Harrison: Thank you so much for having me.

[00:01:11] Michelle Calcote King: Yeah. I’m excited to, to dive into this. So tell me, what is ITR World Tax, and how does, uh, the rankings and awards process work?

[00:01:21] John Harrison: So ITR World Tax is the preeminent, uh, rankings platform and directory for tax practitioners globally. So we do a form of research that’s conducted around the world that dives deep into tax practices at the advisory level, indirect tax, customs, transfer pricing, disputes, to better understand how these different law firms and tax advisory firms, uh, compare in the market.

We rank them in a series of tiers, and then, uh, once a year we also have a, an awards program in each region that we operate.

[00:01:57] Michelle Calcote King: Okay. Great, and so why is it valuable for a tax practice to be included?

[00:02:05] John Harrison: It can be hard for tax practices to really be differentiated in the market. We can see some law firms that offer advisory services get ignored in favor of accountancies or traditional professional services firms.

Or then we hear the exact flip of that from the professional services firms that when a dispute comes and they need to start dealing with an, a tax authority, sometimes they’ll be told, “Oh, well, we’ll just go to a, uh, a law firm to get that done.” Where realistically, they all kind of play, uh, similar roles within the market.

So it helps them be able to stand out and be able to see where their services are compared to other, uh, benchmarks inside of the, the global tax market.

[00:02:49] Michelle Calcote King: Okay. Well, tell me a little bit about how the tiers work. I think, um, you told my producer that they’re, they’re not based on s- uh, like the firm size or deal value.

What actually separates, you know, a tier one firm from a tier three firm, for example?

[00:03:05] John Harrison: So the… Our tiers are not a podium, which most people like to think of them are. Uh, they’re not a gold, silver, bronze sort of thing. Instead, we look at traits that firms that are, we’ve put into, say, tier one typically have, and that will be usually doing high volumes of cross-border advisory and representative business.

They’ll usually be sitting on panels or providing direct responses to issues and subjects brought up by tax authorities. They’ll be doing direct advice to the authorities and governments on that. Usually, they’re helping write policy, uh, at a national or international level if they’re working with organizations like the UN or the OECD.

And then going down through the tiers, there’s maybe a little bit less, uh, in terms of their work being cross-border and international, more national-focused. Where tier three we see as kind of the top of the national advisory market. Mm. So they don’t, they don’t always do a lot of cross-border work.

They’re, they have some thought leadership that they publish, but maybe not extensively to, uh, the globe to inform them of what’s going on with major updates, things like that. But they’re the top, and they usually work with, uh, upper mid-market firms, uh, and, and clientele. And- Then below that is just, uh, more simplified, uh, shouldn’t really say that, uh, less complex types of work.

[00:04:29] Michelle Calcote King: Got it. Okay. That makes sense. So tell me… So let’s talk about the submission process itself. Um, so, uh, how do firms, uh, get on your radar? I assume it’s not a pay-to-play type, uh, process. Tell, tell me more about the process.

[00:04:46] John Harrison: We’re definitely not pay to play. We rank everybody. Uh, uh, the joke I tend to tell the market is where other directories or rankings groups are a little bit more selective, we’re kind of the Hufflepuff of directories.

We’ll take in everybody that does tax advising, whether you’re a, an economics firm or all the way up to the Big Four. Um, the process, we talk with the market and doing interviews every year in every country that we provide rankings and awards in, so we get to know more and more of the new players. We have players contact us through our research team, our editorial team, and then the submissions process is pretty straightforward.

In the fall, I’ll start running a webinar about what needs to be done, how we’re doing it, any updates to our research, and then we kick it off in January with an open on the website as well as directed marketing to firms that are interested in what we do and how we do things.

[00:05:40] Michelle Calcote King: Great. And so you’re making judgments about the firms by, I guess, their submission, but are you also doing interviews?

Are you interviewing clients? Tell me about that.

[00:05:52] John Harrison: Yeah. So our research kind of sits on three, uh, main pillars. Obviously, direct, uh, submissions from firms about the work they’re doing and what they’re… what other areas of their, um, advisory or representative business is happening, uh, in the market. We also do what we call market sounding interviews, where we reach out to as many of the different firms in each market that we work with every year to learn a little bit more of what’s going on behind the curtain with them, to understand where they’re trying to position themselves and where they see themselves in, uh, the national, uh, tax market.

But also then hear a little bit where they see their competitors and understand how they see themselves compared to other people. And then chiefly amongst things, we do, uh, a survey every year with client referees. So we ask firms just to supply us with referees that would be open and willing to provide feedback, and then whether they complete a survey or talk with myself or one of my, uh, research analysts to get feedback on the firms and to have a better understanding of what the real end user of those tax services are getting.

And that’s key and very important to understanding the firm.

[00:06:58] Michelle Calcote King: Got it. And so with the submissions, um, tell me about the kind of level of detail you’re looking for and what, you know, what are some of the things you see for mistakes firms make, or what are, what are some of the common advice you’re giving firms about those submissions?

[00:07:14] John Harrison: Sure. So we, we ask for a, a bunch of information. Sorry, we do. Uh, it starts out with simple things like, uh, has there been any movement in your, uh, in your staffing for the last year? Did you bring any new good, uh, talented people on? Did anyone, uh, depart to retire or anything else? Then we want to know more about the individual practitioners.

Who on the team are key to making sure the department’s able to run and the team’s able to function? What roles they play? Are they, uh, long-term partners? Are they rising stars within the practice? And then we ask for a general overview of where they see, the firm sees their practice to be, uh, in that given country.

Uh, if there’s been any special wins that they’ve done, if they’ve been involved in any of tho-those, uh, panels with the, uh, tax authorities and things like that. Any, any, any fun things that they want to talk about. And starting this year, we’ve actually a-started asking about a bunch of other ancillary things that firms tend to do as part of their practice, but maybe aren’t always given consideration.

It could be everything from tax policy, uh, work, pro bono work, uh, helping to design and develop new tax and transfer pricing technology, uh, services, and offerings to the market to help with compliance, with reporting standards, everything like that. And then we finally ask you, what was the work that you did in up to seven different specialisms that we know that tax firms tend to work in.

[00:08:39] Michelle Calcote King: Got it. And what… So what are firms, are, are firms, uh, getting wrong when they do these submissions, and what are they getting right?

[00:08:47] John Harrison: So firms that are newer to ITR tend to fall into one of two, uh, categories. They either under-share or over-share. And we love them both, but it’s a little bit easier for us to work with the over-sharers.

The under-sharers are used to some of the other types of directories where what they wanna know about is who, who did you do work for, how big was the transaction, all that sort of stuff, and that’s all great information, and there’s a slew of different publications that cover that. We’re a unique tax publication.

We’re all tax nerds, and we like to actually understand what was the tax work. So if you had a transaction, were there any major, um, battles you had to deal with to get the, the tax handled for it? Were there new Pillar Two or side-by-side issues that came in for the reporting to get it approved so that way the transaction could happen to help your client win the business that they’re trying to win, right?

And that tends to be the one that most people are running into when they first work with ITR. The other guys are really nice, but they give us extreme modeling examples and show us some very detailed things that it’s great to know, but we don’t always need that level of detail, um, like a pitch, like a napkin- Got it

presentation, right? Yeah.

[00:09:56] Michelle Calcote King: So you’re looking for a little bit more on the substance of how they do their work, what their approaches were, rather than just what the work was and the deal size.

[00:10:07] John Harrison: Yeah, because one of the oddities with tax is some of the most complex work doesn’t actually always have to be in the biggest deals.

[00:10:13] Michelle Calcote King: Mm.

[00:10:13] John Harrison: You’ll see it. If a deal size helps us both understand scope, so if you have a, a £3 billion deal, but then it also is covering over 30 different countries, you have 30 different types of tax laws and jurisdictions you have to deal with. But some of the more unique ones that happen at a national level, the, the valuation on the, on the deal or the matter itself may be only in, in the hundreds of thousands.

[00:10:36] Michelle Calcote King: Got it. And I know there was some sort of form change, like it used to be, uh, in two, two different systems, and now it’s in one. Can you tell me about that change?

[00:10:45] John Harrison: Sure. So, um, basically when COVID hit, we had a bunch of firms asking if we could have a separate system for doing awards because some firms were doing less, some firms were doing more business at the time.

So we separated our, uh, our system into having an online s- uh, submission for the awards that was separate from the rankings. So people that wanted to do the rankings just kept doing their usual submissions, or the people that were interested in the specialty awards would then do this online form.

Basically af- af- or is it the last couple years, firms have been telling us, “Listen, we’re, we don’t have the same time and the same type of restrictions that we had. We have different ones, and we really don’t wanna be doing multiple systems to just get, uh, in front of ITR for recognition.” So we took a lot of the awards category information that we had asked for on the online form and put it into that ancillary secondary section of information that we ask about instead, and then we can draw from there to, uh, adjudicate for awards.

[00:11:45] Michelle Calcote King: Got it. And tell me about those, uh, market and peer interviews and the client referees. Uh, how, how much do those, what’s the weight that those carry versus the submission?

[00:11:58] John Harrison: They’re all kind of equal, and I have, I have to say that with a grain of salt in my mouth, obviously. Um, we, we very much love seeing the submissions because it helps us better understand the peculiarities of the work that’s being done.

Whereas the peer and the peer review and, uh, market sounding interviews help us again get that deeper detail into the firms themselves, what’s going on, where they’re trying to grow at. And client feedback is excessively important because they really lay into whether something was successful, right? Most firms, when they give us a referee, they’re gonna give us a referee of someone that they thought they’d done very successful work for, and 95-plus percent of the time, that will be the case when the referee provides feedback.

But because it is a f- uh, an open place for referees to provide feedback without being identified, occasionally we will get very truthful responses where, “Well, actually there’s some areas that they could have done better at, that we were struggling to work with them.” And things that we can find out and then, uh, help, help work with firms to, uh, to change or improve on.

[00:13:05] Michelle Calcote King: Right. And is there any, any way firms can influence, uh, sort of who you speak with or, you know, helping to get in touch with those referees that you, you advise firms on?

[00:13:18] John Harrison: So the, all the referees are people that are supplied to us, uh, during the submissions process. Uh, we do not hound them. We’re not, like, cold calling them up and being like, “Tell us what this firm was like.”

Uh, instead, we do gentle touches with them during the, the client feedback portion of our research. Um, they can always send messages to their referees reminding them, “Hey, did you get the, the, uh, correspondence from ITR about this?” You know, “Have you completed it?” And ask, ask those sorts of questions. Um, and then occasionally when there are slips because of IT security systems maybe not allowing our emails to go through, they help facilitate and connect us with those referees so we can actually reach out to them and either get them to complete the survey or, uh, engage with our conversation with myself or one of my team.

[00:14:11] Michelle Calcote King: Got it. Okay. So if a firm is brand new to ITR, um, they haven’t submitted before, they’re worried they won’t, won’t land in a tier right away, what, what is your, uh, advice to those firms?

[00:14:25] John Harrison: Uh, I will advise you, most firms don’t land in a tier right away. So we actually have a ranking called other notable, that if we do not have enough information about a firm, and that could be someone that’s maybe thinks they’re very well-known in a market or someone who’s very new or a boutique, uh, and a new, a new business.

If we don’t… If we’re not able to get enough data to support putting them in a tier with, with their peers, for the first couple of years, we may have them ranked as other notable. But after that, if we have more than enough, and we have had that with even boutique firms in, throughout Europe and even in the US, where there was just copious amounts of information from peers, and their clients all provide really great referee feedback, we can actually, uh, properly place them in their correct tier.

[00:15:11] Michelle Calcote King: Great. Well, is there anything else you think is important for firms to know before we wrap up?

[00:15:17] John Harrison: Yeah. Uh, I would say just that whether you’re, uh, a boutique practice looking to raise your profile or an established firm aiming to stand out in the market, ITR and World Tax provide the platform for tax firms to showcase their expertise and achievements.

[00:15:32] Michelle Calcote King: Great. Well, thanks so much. So we have been talking to John Harris of ITR World Tax. Thanks so much for your time today.

[00:15:40] John Harrison: Thank you.

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