Starting your practice checklist

Starting your practice checklist
In addition to brief guidance, the checklist provides links to numerous Queensland Law Society resources and external sites.
Key action
Notes and resources
Compliance and notification
Apply for a Principal practicing certificate
To establish a practice by yourself, you need a principal practicing certificate.
Application for upgrade to principal practicing certificate.
To apply for a principal practicing certificate, you will need to complete or meet the
requirements of the Practice Management Course.
Organise trust account(s)
If you are planning to operate a trust account, you should read the Trust accounting
guidelines and the Guidelines for opening a Trust bank account.
Notify the Queensland Law Society
The Queensland Law Society Administration rule (s18A) requires solicitors to notify
Queensland Law Society if they are changing employment or starting a new practice.
Incorporated Legal practices (ILPs) should use Form 23 to notify Queensland Law Society
of their intention to offer legal services through a corporation.
Get Professional Indemnity Insurance
All practices (other than some national practices) are required to obtain the compulsory
level of professional indemnity insurance through the Queensland Law Society insurer,
Lexon Insurance. Check the levy model, complete the Queensland Law Society/Lexon
Professional Indemnity Insurance questionnaire or contact Queensland Law Society
records department on [email protected]
Top-up insurance is available from a number of providers. One of the leading brokers for
solicitors in Queensland is Aon: please contact [email protected]
Register with Australian Tax Office
A new practice must meet the requirements of the Australian Tax Office, register for an
ABN/ACN and tax file number and make arrangements regarding GST, payroll tax, BAS,
superannuation etc.
Adhere to practice obligations
Reacquaint yourself with practice obligations in the Australian Solicitors Conduct Rules
and Australian Solicitors Conduct Rules.
Business planning and budgeting
Write a business plan
A basic practice business plan should address the practice’s goals, market analysis and
SWOT analysis, marketing plan, operational plan, and financial plan. See the Queensland
Law Society Business plan template and budget templates.
More tools and information are available from the Queensland Government business site.
Prepare profit/loss and cash flow budgets
See the Queensland Law Society budget templates. See Queensland Law Society guide
to costs, billing and profitability’ for tips on improving cash flow.
Set fees and billing procedures
Read ‘Queensland Law Society Guide to Costs, Billing & Profitability’ for guidance on fees
and billing.
Set Key Performance Indicators (KPIs) and benchmarks
Key performance indicators (KPIs) and benchmarks can be very useful in managing your
practice. Read the articles by Graeme McFadyen and Sam Coupland, and see how the
Queensland Law Society/FMRC Legal Business Monitor can help.
Practice structure
Decide on structure
Incorporated legal practices - read the Queensland Law Society ILP information kit before
deciding to structure your practice as an ILP.
Multi-disciplinary partnership - read the Queensland Law Society MDP information kit
before deciding to structure your practice as an MDP.
Queensland Law Society Law Practice structures factsheet
‘Practice structures, tax and asset protection’, by Chris Davis
You should seek professional advice on structuring your practice.
Partnership agreement
Calculate the initial start-up costs
How much money do you need to establish your practice?
Prepare your personal and practice cash flow
‘An effective partnership agreement’, by Peter Lynch and Graeme McFadyen
Business plan template
Budget templates
Practice cash flow – Even after allowing for start-up costs, you will likely be spending
significant sums on operating costs before you can recover the fees related to these costs.
Use the budget templates to estimate the time between incurring costs, billing of fees and
receipt, and estimate what additional finance is needed to cover this gap.
Personal cash flow – Even allowing for start-up costs and practice cash flow, it may be
some time before the practice generates sufficient profit to pay you a salary and return a
profit. Make plans to manage your personal cash flow.
Source funding
Law practices commonly use a mix of three main sources of finance: partner equity, loans
(short, medium or long term) and leasing. ILPs can also seek external financing. Seek
professional advice from your chosen bank or accountant in relation to practice funding.
Practice name
Name your practice
You should ensure that there is nothing in your chosen business name that is false and
misleading (see Australian Solicitors Conduct Rules).
You should consider whether there are any existing legal practices – either in Queensland
or Australia – who already use your preferred practice name, as this could be a future
cause of conflict and possible legal action.
Register trading names
You need to register a business name with the Queensland Office of Fair Trading if you
trade under a name that is not your natural or corporate name.
Insurance and additional cover
Queensland Law Society Limitation of Liability Scheme
Read about the Queensland Law Society Limitation of Liability Scheme, and as
appropriate, complete the application form.
Workers compensation insurance
All Queensland employers must have workers’ compensation insurance. Most employers
insure with WorkCover Queensland, while a small number of large organisations have their
own insurance.
Succession risk and other insurances
Would your business survive if you or a co-owner died unexpectedly, experienced a
serious trauma or became totally and permanently disabled?
Should you consider: income protection, practice overheads insurance, life cover, trauma
cover, total and permanent disablement (TPD) insurance, key person insurance, equity
protection insurance, income protection
Future-proofing: managing your succession risk, by Don Pilcher
Succession planning strategies, by Graeme McFadyen and Garry Moore.
General account
Even if firm is one person, you will need to have (a) practice account(s) separate from
personal account.
Overdraft facility
Again, keep clear division between personal and business. Consider your cash flow needs
and negotiate with your bank.
Trust account(s)
If you are planning to operate a trust account, you should read the Trust accounting
guidelines and the Guidelines for opening a Trust bank account.
Staff costs
Read the Queensland Law Society/Hays Legal salary survey and the Proctor article by
Graeme McFadyen and Peter Lynch – ‘It’s not just about the money’.
Employment agreements
IR assist is an industrial relations and human resource advice service for Queensland Law
Society members with reduced costs for developing employment agreements. Read also
the Queensland Law Society Guide to the Legal Services Award in relation to terms and
conditions for employing administrative staff.
Read about your Superannuation obligations arising from the Legal Services Award.
Legalsuper is one of the leading providers of superannuation services for the legal
Workers compensation insurance
Every Queensland employer must have workers’ compensation insurance. Most employers
insure with WorkCover Queensland, while a small number of large organisations have their
own insurance.
Clients and Business Development
Existing clients and contacts
What constraints are there on contacting or marketing to clients or contacts from previous
employments – check any employment or partnership agreements, take advice where
necessary, and negotiate as required.
If/when you are free to do so, contact all former contacts and clients and advise them
about your new practice
Marketing and business development
See the Queensland Law Society Guide to Marketing and Business Development for
information on developing and growing your practice.
IT and Communications
Consider installation, training, warrantee, support
Software choice
Assess your needs in relation to precedents, client management, matter management,
accounting, time recording, productivity reporting, office automation, document
management, integration.
See Legal Practice Management Software Solutions Review and develop a shortlist of
potential providers and software solutions.
Consider implementation, training, support.
Hardware and system. Consider off-site back-up solutions.
Phone provider / mobile provider / internet service provider / website hosting / installation.
Premises and peripherals
and peripherals
Consider your likely premises requirements in both the immediate short-term and also
medium-linger term.
Location? Layout? Term? Furniture package? Occupancy date? Upgrade terms?
Flexibility? Termination & renewal?
Can you work from home or use part-week serviced offices to reduce your overheads and
Furniture, printers, scanners, faxes, filing systems, safes or safe custody arrangements.
Cards, letterheads etc. Find a supplier who can help you with all your design and print
This checklist was adapted and developed from an earlier checklist developed by Peter Lynch of dcilyncon.