Finance & Fees

Profitable Practice

For general information on running a profitable practice visit our Practice Management page. For information targeted at financial issues:

• ALA Resource Centre collection of articles and resources on the topic of "Financial Management".
• The Canadian Bar Association collection of articles for guidance on how to: balance receivables and payables; finance growth; compensate associates; bill on time and on target; handle bad debts. (Not all links available to non-members).
• ABA Finance for Solo and Small Firms
• LawBiz Collection of Articles

Tax

The Australian Tax Office has general information pages for Individuals and for Businesses, as well as calculators.

They have pages for legal practitioners dealing with your own obligations.

In Foolkit's humble opinion, a little bit of knowledge is a dangerous thing in the tax area. Seek expert advice. This is why there is nothing on this page about Service Trusts, Incorporated Practice.

Financial Calculators & Tools

• Tripartite Deed for securing costs when a file is transferred to another practitioner (NSW Law Society)
• Financial calculators and tools
• NAB Cashflow Management Tool - change scenarios
• Search BSB's

Loan Calculators (12)

How Much Can I Borrow? Calculator How Much Can I Borrow? Calculator
This calculator provides an estimate of the maximum you can borrow, taking into account your monthly income and expenditure and current interest rates. This calculator also builds in a buffer for interest rate rises.

Income and Expenditure Worksheet
Use the income and expenditure worksheet to calculate how much you can afford to borrow.

Basic Repayment Calculator
Enter the interest rate, the term of the loan and the amount you are borrowing to get the minimum monthly repayment and the amount of interest paid.

Fixed vs Variable Interest Rate Calculator
This simulator allows you to analyse the choice of a fixed or variable rate by modeling changes in the variable interest rate and comparing the amount repaid during the period and the outstanding loan balance at the end of the period.

Mortgage Broker Checklist If you're planning to use a mortgage broker to help you find the perfect home loan, there is some information you should find out from your broker before you start.

Loan Repayment Calculator - Work out what your minimum weekly, fortnightly or monthly loan repayments would be for any borrowed amount.

Extra Repayments Calculator - Find out how much you can save in interest and shorten your loan term by making additional repayments over and above your current monthly repayment.

Lump Sum Repayments Calculator - Find out how much you can save in interest and shorten your loan term by making a one-off lump sum repayment on top of your current monthly repayment.

Split Loan Calculator - Splitting your home loan into fixed and variable rate portions can provide insurance against future changes in interest rates that we can't predict. Use this tool to calculate your repayments and total interest under different fixed and variable rate scenarios.

Loan Comparison Calculator - Select any two home loans on the market for a direct cost comparison. Determine which is the cheapest in total fees and interest over the life of the loan.

Stamp Duty Calculator - Work out how much stamp duty will be payable on the purchase of your new home.

Principal & Interest Calculator - Work out what portion of each monthly repayment is principal and what portion is interest.

Costs of Buying (2)

Lenders Mortgage Insurance Estimator
In nearly all cases, if you borrow more than 80 per cent of what the lender considers to be the value of the property they will ask you to pay their mortgage insurance. This handy estimator determines how much this is likely to cost you.

Home Cost Estimator
This calculator allows you to estimate the total cost of purchasing a property including all those nasty hidden costs.

Buy or Rent or Invest (4)

Rent vs Buy
This tool allows you to compare your estimated financial position after seven years of renting with your estimated financial position after seven years of home loan repayments.

Buy Then Sell or Sell Then Buy
This estimator provides an indication of the costs you will face depending on the order in which you sell your old home and buy your new one.

Relocation Timeline
This calculator takes your specific moving details and produces a customized timeline. This can then be printed out in the form of a checklist to tick off tasks as they are completed.

Can I Afford An Investment Property?
This tool provides an estimate of how much an investment property will cost. It combines the cash operating revenue and the cash operating expenses with the change in the amount of income tax paid to measure the net change in the investors income due to the investment property.

Banking (12)

Search & Compare Savings Accounts and Term Deposits
Small Business Loans
Small Business Calculator
Compare credit cards - The small business calculator that lets you enter set-up costs and running costs to establish a comprehensive business financial summary.
Debentures comparison page
Compare Homeloans
Transaction Accounts
Personal Loans
Small Business Loans
Business At Call Accounts
Business Credit Cards
Business Term Deposits

Investment (3)

Margin Lending Calculator - Gearing Simulator
Margin Lending Calculator - Stock Lookup
Find and compare brokers

Planners (3)

Savings Calculator

Budget Planner - Try our Budget Planner. Enter your annual income and expenses to assess your financial position.

Statement of financial position. Check your financial position and overall financial capacity.

Retirement / Superannuation (6)

Retirement planner
Could your super and the age pension be enough to give you the income you would like to have when you retire? Ask the FIDO retirement planner to crunch the numbers and show you.

Account-based pension calculatorAccount-based pension calculator
An account-based pension or annuity is one of the products you can buy with your super when you retire. Account based pensions are also known as allocated pensions.

Superannuation calculator
Works out how much super you'll have when you retire and how fees affect your final payout.

Reverse mortgage calculator Reverse mortgage calculator
See how your reverse mortgage debt builds up and may affect how much of your home you still own as time goes by.

Centrelink Rate Estimator

Super vs mortgage calculator

Federal - Tax, Help and Others (16)

Rates

Income tax
Individual income tax rates - Shows the percentage of tax payable for each income bracket, for individual Australian taxpayers, for the financial year 2009-10 and 2010-11.
Individual income tax rates for prior years - Shows the percentage of tax payable for each income bracket, for individual Australian taxpayers, for prior financial years.
PAYG withholding
Students and graduates

Calculators

Income tax
International
Families
Medical
PAYG withholding
Payments
Seniors
Students and graduates
Superannuation
Work related expenses
Other calculators
Other tools

Insurance Guides (5)

Car Insurance Guide (MoneySmart)
Health Insurance Guide (MoneySmart)
Home & Contents Insurance Guide (MoneySmart)
Life Insurance Guide (MoneySmart)
Travel Insurance Guide (MoneySmart)

Trust Accounting

The Professional Standards Section of the Law Society of South Australia conducts training on Trust Account issues and is responsible for monitoring and inspection of Trust Accounts. Queries about Trust Accounts, workshops or to see their list of resources contact:

Professional Standards Section
Law Society SA
Phone: (08) 8229 0229
Fax: (08) 8410 5688
Law Society web site

Topics of Interest

• PrivateHealth.gov.au allows you to compare private health care insurance and find a policy that suits you and your family.
• Rate City Compare interest rates on credit cards, home loans and savings accounts.
• Canstar research, analyse and rate loans, credit cards, insurance, rewards programs, savings and term deposits.
• Finance: Splitting the pie with profit sharing among partners
• Top 10 Financial Errors

Billable Hours

• The LegalBizDev Guide to Alternative Fees
• CBA Alternative Fees Collection of articles
• Time & Billing Software Comparison Chart (ABA - American)
• Alternative Fee Arrangements - The Time Has Finally Come - a report by Altman Weil
• LegalBizDev's collection of information on alternative fees

Legal Pricing

Articles on more traditional legal pricing:

• What lawyers need to know and why
• The cost-plus approach
• Price competition, discounts, and loss leaders
• Value pricing basics

Outsourcing

1. 20% of overall law firm workforce (27% practice support; 15% legal work) will be offshored by 2015.
2. Legal outsourcing will shift from onshore to offshore, driven by cost savings and talent availability.
3. The move offshore, however, can be complex, with law firms concerned about data protection, vendor reliability, and loss of control
4. Over 50% of respondents believe that commoditized legal work will be offshored within 5 years. Moreover, about 25% believe even "specialist legal work" will "move outside the firm" in this time period. Already, 10% and 5% of respondents respectively have offshored commoditized and specialist work.
5. Over 20% of respondents have already outsourced lawyer support such as word processing or research.*

Canadian Bar Association Collection on Outsourcing has articles on how law firms in NOrth America and Europe are dealing with this. 

*From "Legal Industry Outsourcing Trends 2008," (Prince OMC advisory group)

Financial Planning

www.fido.asic.gov.au

Fido, published by ASIC, has a lot of independent advice on a wide range of Financial Planning Topics.

• Work out where you are at financially, where you need to get to and what it will take to achieve this. It gives suggestions on how to get organised.
• Explains the pros and cons of various financial products. It looks at different ways of investing and different ways of borrowing.
• Getting advice and assessing if they meet your needs.
• Calculators and other resources.

• Investing between the flags (safe and successful investment)
• Choosing your financial adviser
• Canstar research, analyse and rate loans, credit cards, insurance, rewards programs, savings and term deposits.

Valuation of a Practice

Altman Weil have a series of articles on Law Firm Valuation..

"The exercise of valuing a law firm is more art than science, and a universally accepted approach to law firm valuation does not exist. The appropriate valuation methodology to use depends upon the objective of the valuation."

They discuss a range of situations and methods that can be used.

Top 10 Financial Errors

Business is the art of extracting money from another man’s pocket without resorting to violence
As listed by SlawTips

• #1 Cash flow
• #2 Rely on total billable hours
• #3 Using accounting software without financial modelling and reporting
• #4 Failing to regularly reconcile your trust accounts
• #5 Don't track your time
• #6 Think you don't need a fee agreement with each client
• #7 Put off dealing with underperforming lawyers
• #8 Always assume more risk than needed
• #9 Avoid having a a written office-sharing or partnership agreement

Cash Flow

Money is better than poverty, if only for financial reasons.
As listed by Slaw Tips

• #1 Overall and projected monthly billings
• #2 Projected billings versus cash flow needs
• #3 Compare your Actual versus your Budgeted Costs
• #4 Work In Progress: Is your WIP increasing or decreasing?
• #5 Unbilled Disbursements
• #6 Aged Accounts Receivables
• #7 Realization Rate
• #8 Unbilled Fees and Disbursements
• #9 Daily Time Summaries are a must
• #10 Client trust balances