THE LINE BETWEEN loving and hating a client must be a thin one at times. We learned that yesterday from the testimony of Mary-Ellen Field, a former expert on intellectual property for Chiltern - the tax advisers acquired by BDO in 2007.

She was at the Leveson Inquiry into media ethics giving evidence about suspected phone hacking and her run-in with former supermodel Elle Macpherson.

Field was advising Macpherson in 2005 when the model became suspicious about information leaked to the press. Field claims the model believed she had been the leak, concluded it was because Field was an alcoholic and insisted she check into rehab if she wanted to keep her job.
Denying she was the leak or that she suffered from alcoholism, Field eventually acquiesced in the face of Macpherson's demands and attended a clinic for a few days at the back end of 2005.

Field, admitted she was an "idiot" for doing it and that she submitted to treatment even in the face of advice from lawyers that she should resign and sue for constructive dismissal. The clinic concluded she was not an alcoholic - though she may have been suffering from stress. She was eventually made redundant at the beginning of 2006. It was later that year Field became suspicious Macpherson's voicemail may have been hacked.

These events are gripping on so many levels. As the Guardian pointed out this morning the Chiltern episode forms a satire on the cult of celebrity that's almost impossible to make up.
But it also has something to say about the relationship between advisor and client.
Field and her employers clearly feared losing the supermodel as a client. Indeed, the head of Chiltern was enamoured of Macpherson and had allowed her to set up office in the firm's building.

And yet in forcing Field to go through rehab when there was precious little to prove she was either the leak or an alcoholic speaks of a relationship that had become so radically misshapen that Field's employers had lost their grip on what was reasonable to tolerate from the client and what was fair to expect from its key employee.

High profile clients like Macpherson are flattering and, in this case, seductive. Advisers can quickly develop the idea that having them on their books and servicing their every whim is of far more value to the firm than it really is. Field suggested in testimony that billings to Macpherson were insignificant and that big corporate clients were, in money terms, much more valuable. And yet the firm seems to have been blinded to what we might assume were empirical facts. So blinded indeed they did not see the damage it would do to one of their own highly valuable members of staff.

Firms who pay such little regard to their own star players do so at their own peril. Reputation is on the line here and reputation is critical not just with clients but with the highly skilled staff a firm needs to keep succeeding. If the big guns don't want to work with you, you're dead in the water. And for what? The vanity of boasting that you have a celebrity client? There is a moral case for protecting employees from such abuse, there is also a business case. It beggars belief that anyone would not see it.

CIMA members out there will no doubt have followed with interest the disciplinary brought by the institute against one of its own former council members, Margaret May.

The hearings concluded this week with a reprimand for May for "failing to act with integrity and professionalism". In the process CIMA has racked up a bill of £179,000, some of which (£55,000) May has been ordered to pay in costs. In total May will face a bill of almost £100,000. May, as you might expect, has reacted with disappointment at the outcome and plans an appeal.

The claims against May revolved around a consultation paper and what authority she had to circulate the paper. Separate charges against her were in relation to remarks she made about CIMA CEO Charles Tilley about his role as a non-executive director of Great Ormond Street Hospital following the Baby P scandal, and passing on to other CIMA members a private letter he sent to May.

May was charged with misconduct in relation to the Tilley issue, but the disciplinary panel decided she was entitled to raise the subject, although it found against her on circulating the letter.

The whole disciplinary process has lasted more than a year and looks like it will rumble on for much longer. Given the charges revolve around who had authority over a fairly innocuous consultation paper, CIMA members would be forgiven for wondering whether they got value for money out of the process and whether it could have been put to better use.

Neutral observers might wonder why the affair warranted a disciplinary procedure at all. It has the ring of an internal issue that could have been dealt with behind closed doors with a few choice words between the parties concerned. A conflict such as this with a senior member was never going to be good for CIMA.

They are time consuming, costly and potentially divisive. It’s difficult to see how the affair could not have been disruptive for the institute and its remaining council members who must be considering the outcome and what it might mean for their own behaviour. CIMA now faces the prospect of the affair running on for some time to come.

May clearly believes the institute has damaged her reputation and her job prospects and believes, after 17 years on council, she has much to lose if she rolls over. It’s hard to see how this process is benefitting anyone.

IS THERE much to learn from HMRC’s apparent cock-up over the Goldman Sachs tax bill.

You’ll remember that the taxman has admitted a mistake which cost £8m in lost tax revenues while negotiating with the investment bank over tax on an employee benefit schemes. So far the taxman has refused to disclose what the error was for confidentiality reasons.

Firstly, there is a public interest in knowing something about the error. There must be ways the taxman can manage this. The bigger picture appears to be emerging however is the unwillingness to renegotiate the deal once this error was known.

This will send a poor message out to taxpayers everywhere who will have suffered at the unyielding hand of the taxman over much smaller sums. Even now taxpapers are once again expecting letters saying they more tax because of PAYE coding errors.

It will be the issue of fairness that rankles with taxpayers worsening their perception of HMRC competence. Of course, the only this could only be cleared up if we understand how the error came about. Especially as senior figures appeared to have received legal against renegotiation. Difficult times indeed for HMRC. 

LORD SHARMAN's conclusions on going concern are to be applauded. The system we have has long since been problematic and not nearly nuanced enough.

In a report this week Going Concern and Liquidity Risks he concludes that the current system is too “binary” – a company is a going concern or it isn’t.

That doesn’t nearly cover all the possibilities. After all, a business may be deemed a going concern for the purposes of reporting, but may indeed face serious difficulties that stakeholders should know about. Hence the need for more information and in different forms.

A more nuanced approach should also mean that disclosures can be made without becoming the killer blow that causes a company to collapse. This is why the all or nothing approach of the current going concern regime is inadequate. The International Accounting Standards Board has to listen because accountants and company directors really do need a better system.

TESCO is to lose one of its most highly respected executives yesterday when Andrew Higginson, the former FD and man in charge of Tesco bank steps down from the board.

The departure is amicable and needless to say Higginson will leave quite a wealthy man, by senior executive standards. And yet it’s interesting to ponder Higginson’s departure against all the recent chatter about finance directors becoming chief executive.

When Sir Terry Leahy stepped down as CEO of Tesco it was Phillip Clarke, the international director, the board turned to. In effect they turned their back on the FD’s potential and plumped for a man steeped in the Tesco way - since he joined the business as a graduate trainee.

How much Clarke’s appointment has affected Higginson’s career decision is an interesting question to consider. He was touted as a possible CEO for Tesco and he may feel he still has a top post left in him. At 55 though, and without the top job, he may well have considered it time to call it a day – especially if the Clarke way wasn’t in tune with the Higginson's view of the future.

But the Tesco board is full of former FDs now working as non-execs and Higginson may see that as a more entertaining way of spending his time. Higginson is a strong but steady personality with financial expertise and commercial experience second to none. He would be a calming influence on any board as well as bringing a keen commercial instinct.

Higginson is a graduate from Birmingham Poly and worked as FD at Laura Ashley and Burton Group and never seemed like he had a passion for being an accountant.

In an interview in 2008 he told Accountancy Age: “My internal debate when I was offered the Tesco job was not 'Do I want to be FD of Tesco, or do I want to be FD of Burton Group?' - that was obvious because Tesco is massive in comparison. The debate was whether I wanted another FD job at all. Did I not want to look around for a chief executive role?’ he recalls asking himself after four years with the then-listed fashion retailer. But Terry persuaded me at the time that he could fulfil those aspirations at Tesco. I’m very glad he did because I’ve loved every minute of it.”

But clearly it's time for something else and the rush to sign him up must be on.

THE Supreme Court has agreed to hear the claim that accountants should be just as entitled to legal privilege as lawyers.

The news came yesterday and renews hopes that accountants will shortly be on an equal footing with lawyers when offering tax advice.

Interesting that this should be happening at the same time as Australia is about to enter into another round of thinking about privilege and tax advice.

Back in 2007-2008 the Australian Law Reform Commission had a look at this and concluded that no one should be coerced to give up tax advice documents as long as they were created by a 'professional accounting adviser'. And that was defined as a registered 'tax agent'.

The Australian financial services minister has now released a fresh discussion paper on extending privilege making it look quite likely that accountants Down Under are not far from coming on terms with their legal colleagues.

Interestingly, the original discussion grew out of a debate about protection individuals should have when dealing with Australian regulators which have particularly aggressive powers for investigation.

This is worth bearing in mind in the UK as HMRC becomes increasingly bold in its pursuit of tax revenues.

The Australian process is unlikely to affect what happens in the UK, but what a strange outcome it would be if Canberra decided to support accountants and the UK did not.

It could well be worth following both arguments.

EVENTS at Baker Tilly are interesting. 14 partners have swapped their equity position for salaried roles.

The firm offers reassurance that the position for clients has not changed. But so many partners changing their status is difficult to ignore. Privately observers say such a number making a move all at once is quite exceptional.

The big question people are asking is what does it mean? Or does it mean anything at all?

There are a number of reasons a partner's status might change. They may simply no longer want the risk of being partner. The firm may believe profits are too diluted and want fewer partners. In fact there may be a number of reasons why a firm could make that kind of decision.

So far the indication from Baker Tilly is that the moves are innocuous. But it's certainly got people among the firms talking.

SOCIAL MEDIA - love it or loathe it, our readers are talking and debating it. More importantly, they are wondering just how it fits into their business development plans. How does it integrate into their marketing and communication strategies?

It all started with an article from marketing expert Kevin Wheeler, who aired some doubts last week about the role of services like Twitter, Facebook and LinkedIn. While conceding that they had some part to play, the thrust of Wheeler's argument was to suggest that the smarter route was to take the well trodden path through face to face events, dinners and seminars, writing white papers and getting published in the trade press.

The response was a barrage of comments claiming he's missed the point. Not least among them Heather Towns, author of a forthcoming Financial Times book on business networking.

In magazine publishing, the issue is to identify the changing habits of readers - knowing how they consume their news and media.

It's becoming clear to us that increasingly people are using services like Twitter as an access point, but also to engage directly with us as writers and reporters for the profession.

We haven't stopped reporting, we haven't stopped asking difficult questions and digging. But the way we disseminate our content is changing.

Perhaps the more important issue here is that the argument over Twitter has got pracitioners thinking about their marketing. How do they professionalise it, capitalise on it and turn it into a coherent plan rather than passively waiting for clients to walk through the door begging for help.

Marketing in many firms is a long overlooked element of running the practice, ignored and left to lone individuals.

Whichever way you go, tweet or eat, marketing is what the modern practice needs to be thinking about.

Kevin Wheeler and Heather Towns will be appearing at the Accountancy Age Best Practice conference on the 23 June. Click here for more information.