Since the very first day we were in business, we have had to deal with outside attorneys and accountants to support our company. We don't employ an in-house attorney because we need various attorney specialists in so many areas around the world. Our CFO is a Certified Public Accountant; but we must still must use Accounting firms in various countries to file our tax returns and advise us on numerous tax issues. There is no one size fits all attorney. Instead, we have our attorney's in various countries that specialize in Corporate Law, Real Estate and Mortgage Law, Employment Practice, Trade Marks and Patents, Franchise Law, Immigration Law, Litigation and to support our newest business, Health Care Law.
On a monthly basis, issues arise that require some type of legal counsel in one of our country locations. And, sometimes, the issues we face are country specific so we need to work with a law firm, in country, rather than the United States, where we are headquartered. Our size company probably spends about 2% of gross revenues annually to buy legal and tax services, which is a fairly substantial amount of money. In addition, I spend about 5% of my time, as company President and CEO, dealing with legal issues in particular. Specific to accounting issues, I sign lots of tax returns every year for numerous countries.
Both Attorneys and Accountants always provide the most conservative advice possible, which is to be expected. Sometimes we are given options as to course of action. When all is said and done, in many cases, we must make business decisions as to course of action weighing risk to our company. Our bottom line rule is that we never do anything that is not legal and ethical. Even so, we have been audited by the IRS several times, since our founding in 1991, because of the complexity of our global business. Even though we have never really had any substantial IRS judgement against us, every audit cost thousands of dollars that are not recoverable.
I am asked to sign numerous tax returns every year, for several countries, that are incredibly complex. There is no way I can possibly understand every line item in these tax returns; yet as the President and CEO of the company, I am held responsible for their veracity. As such, I must trust both our CFO and our accountants to get it right. Specific to legal issues, things are sometimes more gray, requiring business decisions to take one approach, or another.
We would always exercise "prudent risk" in making those decisions, based on all factors and my 33 years of business experience. A company President/CEO must be pretty good at seeing the train coming, so as not to get run over by it. Since we have been in business for many years, it would appear that the decisions we have made have been right most of the time. While other companies in our industry have come and gone in the last 20 years, we are still standing because we run a very tight ship, based on sound, professional legal and tax advice.
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