A Virginia firm uses a virtual office arrangement to combine the convenience and ...




A small firm can present an impressive front by using technology to implement a virtual office.

The Virtual Multioffice Firm


By   Anita Dennis
 
Anita Dennis is a Journal contributing editor and the author of Creating a Virtual Office: Ten Case Studies for CPA Firms
EXECUTIVE SUMMARY
  • BROWN & BROWN IS A TRADITIONAL services firm made up of two partners plus part-time, temporary accounting employees and administrative help. The partners work out of their home but retain two small office locations in downtown business districts.
  • WHEN THE PARTNERS DECIDED in 1996 that they didnt need all of their existing space, they downsized to small offices in suites they shared with others. They now perform almost 90% of their work from a basement office in their home. They also use the existing secretarial staff when they need it.
  • OFFICE RENTAL OVERHEAD DROPPED over $2,000 per month as a result. Clients were largely unaware that anything had changed.
  • THE FIRM S GOALS are to enhance remote processing and communications capabilities so it is easier to work from remote firm or client locations.


I s it possible to operate and be perceived as a multioffice firm when both of the partners actually perform the bulk of the practices services in their home? One Virginia firm has proven that it is. Brown & Brown is a traditional services firm made up of two partners who are married to each other, plus part-time accounting employees and administrative help who work as needed. The firm performs tax, accounting and audit services. The partners work out of their home but retain two small office locations in downtown business districts.

The firm has not notified clients of this change, so they have been completely unaware of the 1996 switch to this virtual office arrangement. The change has enabled the partners to cut overhead substantially and better juggle their personal and professional lives.


THE FIRM
Steven and Beth Brown opened their own firm in a 1,200-square-foot office in Tysons Corner, Virginia, in 1981. They later bought another practice in Arlington with 1,200 square feet and three staff members. At that point, we had the two of us as partners and two offices, Steven Brown explains. The partners decided that was too much office space, so an attorney friend took over the Arlington lease and the firm continues to rent a small office from him and use his secretary in order to retain a presence there. This allows for continuity with clients and offers clients a convenient location to drop off work.

Problem: How to maintain several convenient locations for clients while lowering overhead costs.
Solution: Switch to a virtual office.

When they downsized the Arlington office, the partners also decided they no longer needed the large Tysons Corner suite. The majority of the rent was going to house file space and underused lobbies and conference rooms, Brown says. The partners closed their existing large office in Tysons Corner and rented space in a shared office suite in the high-rise office building across the street, which has become the firms official address. The firm has a 150-square-foot office, plus use of three conference rooms. The two partners moved into a finished basement suite in their home in Great Falls, Virginia, and now perform 85% to 90% of their work at home (or at clients offices). The change has saved more than $2,000 in monthly rent (although the electricity bill at home increased $150 per month).


A NEW HOME
The firm has made the shared office suite in Tysons Corner its main home away from home. We do all our tax season meetings at Tysons Corner, bringing client files to that office as needed (all paper files are now stored in the basement home office).

The arrangement offers cost savings in several areas. The move from the large suite in Tysons Corner cost under $500. The firms rent has dropped from around $3,000 to $650 per month for the shared office suite in Tysons Corner and for the shared space in Arlington. In addition, secretarial help is available in the shared suite for under $25 per hour. We get help as needed; when the secretaries arent working for us, we dont pay them.

All phone calls are routed to Browns home. The firm has two lines in each location, all connected by a local phone companys Centrex system. If one partner is at a different locationsuch as the office suite or a clients officeits easy to set up a conference call with a few keystrokes on the phone pad. If the partners are not home, a voice-mail system picks up after three rings. Both Browns carry pagers and cell phones and are able to return calls in minutes. The partners retrieve their mail from Tysons Corner daily. They have a copier in their house, plus use of the attorneys copier in the Arlington office and of a copy room in Tysons Corner.

Brown says the partners dont hide their arrangement from clients, but they dont broadcast it either. Clients rarely came to the old, large Tysons Corner suite, and when they do drop in expecting to find the partners at either office, the explanation the receptionist gives is that they are out of the office or working at home that day. That really cuts down on unannounced walk-ins, Brown says. I want clients to get used to dropping off their material and meeting the secretarial staff. I want them to understand that were accessible, but they need to make appointments.

Brown obtained zoning clearance for a professional office in the home as soon as the couple moved into it because he anticipated someday working there. The partners office insurance policy covers all three locations. One drawback to working in a residential area is the isolation from the business district.

When we had an office outside the house, we could call an attorney or banker and hop out to lunch. Although we can do that now, we have to travel.


TECHNOLOGY
The firm has upgraded all its computers to Pentium 200s running Windows NT and buys only Compaq professional workstations for reliability and onsite service. Our new server is fault-tolerant, with a Raid disk controller and redundant power. That way if a power supply or hard disk fails during tax season, the server will continue to run until the failed part is hot-swapped with its replacement. We also bought a seven-tower CD server this year to house our RIA tax research and tax forms CDs so we no longer had to toss the CDs across the room to each other. Installation of the CD server was a snap. After I attached the network cable, our server automatically assigned it an IP address from its DHCP service and the Windows NT network neighborhood was able to see all the loaded CDs.

To access their computers from remote locations, they have moved from PC Anywhere to combine the capabilities of Windows 95 and Windows NT, making use of the Windows peer-to-peer networking capability. The firm uses a Windows NT SBS server, for small businesses, and has installed an ISDN dial-up connection in the home office for faster access to the Internet. The Arlington office has a T1 line, which can handle up to 24 voice and data channels, paid for by the firms neighbor in that location, and the Tysons Corner office building is installing one, which will cost the partners about $100 a month to use. Once this line is functional, the partners hope to achieve even easier communications among the three offices.

We are shooting for remote processing, Brown says. I hope to put small workstations in both the Arlington and Tysons Corner offices that can access the main server hard disk, now in our home office. Ultimately, I would like to enable myself and some added staff people to spend most of our time out in the field. I find generally that if I bring a clients work into the office, it doesnt get completed as quickly as if it is done onsite at the clients location, because of phone calls and other priorities that come up. However, right now, I dont always have all the tools I need at a clients site. Invariably, you dont bring the file you need. With swift access to these tools through a technologically unified group of offices, work will be completed more efficiently, he hopes.

The firm has set up Windows NT remote access server on at least some clients systems so the partners can call in and either operate their systems and print reports or download e-mail and data to work on in the home office. The firm first used its existing 486 computers when it moved to the virtual office but has since given away the last of its pre-Pentium machines.

The firm has always looked for power in its technology. Generally, weve had more muscle than any of the clients, which at times could be frustrating. The firm has purchased a wide variety of softwareeven to perform the same applicationsin order to mirror clients software. We find its easier to take their data disks and work in our offices in order to do their taxes than to ask them to do reports or to spend time at their offices ourselves. Usually, the computers at their offices dont have enough memory to print the reports we need, even if theyre on Windows. When a client has an older version of a software package, Brown imports and upgrades their data to his firms level.

When the firm upgraded to Pentiums, the partners were frustrated in an attempt to salvage some of their old PCs. We took our old 486 100the best of our 486sand converted it to a Windows 95 workstation, thinking we would do that with all our old 486s if that worked. I will never try that again. Brown did the conversion himself, and it took about three days to get it configured and operational, and we had to replace two or three cards and locate current software drivers. The financial cost seemed minimal, since it was under $200 for a Windows 95 CD and about $100 for a new sound card, but the toil and trouble werent worth the results. The machine does function, but because it couldnt do all Brown had hoped, it will be set aside for use by his children and for specialized firm functions.


DUAL BENEFITS
For tax season, the partners use the office in the shared suite to meet clients, so clients experience with the firm is little changed. To Browns surprise, he has been very disciplined in the new environment. I thought Id never get to the basement in the home office. Instead, what I find is I dont particularly come home from work. At quitting time I eat dinner, play with the kids, then go downstairs and finish something. The Browns have two children, ages 7 and 12, which he says is old enough for them to understand the difference between work and family time.

The Browns maintain a professional demeanor in their home office. Every morning I dress in coat and tie before going down to the basement, Brown says. This helps me go to work and gives me discipline. Dressing in business clothes is helpful if a client calls and needs to meet me either at Tysons or at the clients office.

Brown believes the virtual office arrangement has both personal and professional advantages. He notes that staff are praised for being away from the office in some businesses. When I was with a bigger firm, if you were in the office, you werent being productive anyway.

And while he is certainly being productive in his new setup, it also gives him more time for his family. When Im doing taxes at night, its so much nicer doing them at home. My kids get to see me.



SPONSORED REPORT

How to make the most of a negotiation

Negotiators are made, not born. In this sponsored report, we cover strategies and tactics to help you head into 2017 ready to take on business deals, salary discussions and more.

VIDEO

Will the Affordable Care Act be repealed?

The results of the 2016 presidential election are likely to have a big impact on federal tax policy in the coming years. Eddie Adkins, CPA, a partner in the Washington National Tax Office at Grant Thornton, discusses what parts of the ACA might survive the repeal of most of the law.

QUIZ

News quiz: Scam email plagues tax professionals—again

Even as the IRS reported on success in reducing tax return identity theft in the 2016 season, the Service also warned tax professionals about yet another email phishing scam. See how much you know about recent news with this short quiz.