Archive for April, 2006

Other people’s stories

April 28, 2006

If you aren't able to talk to someone about your plans, it's good to read about what others have done to achieve their goals.

JD Bliss is a blog about work/life balance and personal growth. It features regular profiles such as the profile on attorney Joanne Sternlieb who operates a trusts and estates practice out of her home . The practice employs four lawyers and two assistants who also work out of their own homes, on their own schedules, whenever they want. There are no set hours, no billable-hour requirements, no guaranteed hours, and no guaranteed pay.

Finding confidence at 4am

April 25, 2006

It's 4am and you're looking for some confirmation that your ideas about going on your own aren't impulsive, irrational and high risk: open up your web browser and have a look at My Shingle. The author is a sole practitioner who gives a solo's view of the world: confident and independent but willing to share and learn.

One of the original features of My Shingle was the Online Guide to Starting a Law Firm. Even though the regulatory bits are for US lawyers, sections like Do You Have the Head and Heart to Hang Out? and Plan for Big Success will give you plenty to think about.

And then if the F Word is still worrying you, read Curt Rosengren's article on fear in Worthwhile magazine:

Fear is a dream killer. It’s the biggest and most common obstacle I see in my work helping people create passion-filled careers. Fear paralyzes, and it magnifies failures. Worst of all, it brings an acceptance of the status quo, however unpalatable that might be.

Starting a new firm

April 22, 2006

There are so many issues associated with the decision to start a new firm (before we even discuss the mechanics) that I expect this will be an ongoing series.

For this first post I will simply link to 3 writers from different backgrounds who will stimulate and provoke you:

Discuss and comment!

ATO issues ruling on service companies

April 22, 2006

The Australian Tax Office has issued a final ruling
and guide to help professional firms determine if fees paid under a service arrangement are tax deductible.

The ruling confirms the Tax Office’s long standing view that service arrangements are acceptable provided they are entered into for commercial reasons – and that the fees charged are not grossly excessive.

The Guide includes indicative commercial fees for typical services provided by service entities (at pages 15 and 16) and, by way of case studies, indicates what arrangements would be likely to attract a tax audit.

Higher risk cases which will continue to be subject to the ATO audit program include those where:

  • service fee expenses are over $1 million;
  • service fee expenses represent over 50% of gross fees or business income earned;
  • net profit of the service entity (or service entities) represents over 50% of the combined net profit of the entities involved; and
  • those which raise serious questions as to whether the services were in fact provided by the service entity.

Professionals have until 30 April 2007 to review their arrangements in light of the final ruling and guidelines by the Tax Office.

How many small firms and solos are there?

April 21, 2006

Let's start with some facts: the NSW Law Society December 2005 Profile (pdf) says that of NSW's 20,276 solicitors 48.5% were under 39, 41% were female , 81.8% worked in the City or suburbs and 84% of firms were sole practitioners, with a further 13.2% of firms being 2-4 partners. 67.5% of solicitors are in private practice with 63.7% of those working in firms of 21+ partners.

The only other Law Society that publishes member profiles is the Queensland Law Society whose figures are generally similar, allowing for differences in the size and decentralisation of the State: of the QLS's 6000 members, 37% are under 39, 34% are female, 65% practice in Brisbane and the suburbs, 75% of firms are operated as sole practitioners.

So where is the profession going? The NSW Law Society has the answer: it has published a report entitled The Solicitors of New South Wales in 2015 (pdf).

It forecasts that :

"Sole practitioner firms are projected to grow from 81.5% of all firms in 2003 to 86.3% in 2015.
The total number of sole practitioners would grow from 3,036 to 3,824 over this period.
Firms with 2 to 4 partners are projected to fall from 15.6% of all firms in 2003 to 11.5% in 2015;
the number of firms in this category would drop from 582 to 511."

So even though most solicitors work in big firms, most firms are small firms and solos: that gives us plenty to think about! And what about the other professions?

About this blog

April 20, 2006

This blog has 2 initial goals which I am sure will be modified as it develops:

1. To start a discussion about small firm and solo professional life (whether as a lawyer, accountant or any other service professional)

2. To link to resources for small firm and solo professionals in Australia.