All Our Practice Tips
Create Your Own Personal Pension Plan
2019 is here and rather than lament about funds you already spent in 2018, now is the time to get back on track and set savings goals. Statistics say the average millionaire saves at least 20 percent of what they earn. Are you on track to create real wealth for yourself in 2019? If you are an incorporated professional pay close attention to this tip: There are still ways to save for retirement using your corporation even with the recent tax changes. Consider the benefits of creating your very own personal pension plan.
WHAT IS AN INDIVIDUAL PENSION PLAN ?
An Individual Pension Plan (IPP) is a defined benefit pension plan. If you are a legal professional who owns a professional corporation, an IPP offers maximum tax relief and a maximum retirement pension. The result is an owner of a legal corporation no longer has to rely on Registered Retirement Savings Plan’s (RRSPs) performance to provide for a long and happy retirement. That’s because IPPs also offer guaranteed lifetime income and any surplus in the plan belongs to you.
WHY ARE IPPs SO POPULAR?
Incorporated legal professionals like the fact that the pension they will receive is known well in advance of their retirement date. They also like that at age 50 the maximum contribution to an IPP is $7106 dollars higher than a traditional RRSP and is also creditor protected. They can also include past service to an IPP for years they did not contribute all the way back to 1991. This can significantly increase what can be contributed to the plan along with increasing their tax deduction. IPPs can also be set up for the legal professionals spouse if the spouse is an income –earning employee of the corporation. Set up Fees are also tax deductible to the corporation.
WHAT IS THE TAX SAVING OPPORTUNITY?
High Income Earners
Legal professional corporations who have income over $130000 will pay taxes over the 46 percent rate for each dollar they earn over that amount. If your income is over$220,000 you are now in the highest tax bracket of 52 percent. If you plan to maximize your RRSP contributions anyway this is an excellent vehicle to provide additional tax deductions and save for retirement while making the most of your tax bracket.
Sale of a Business
Most law firms are sold to family members or partners. The proceeds from these types of asset sales are treated as taxable income. By setting up an IPP now using terminal funding, a deduction can be created against this income.
Legislation requires funding projections to be based on a retirement at the age of 65.
However, anytime after attaining age 60, a member of an IPP can retire and supplement the benefits provided in the plan by adding unreduced early retirement benefits, cost of living increases and bridging benefits. These early retirement benefits can provide a significant additional tax deduction for the company.
- Legal professionals who own a professional corporation
- Individuals age 40 or older
- People who earn employment income reported on a T4 of at least $132,300 from the company sponsoring the Individual Pension Plan
—Jackie Porter (@askjackieporter)
Build a Business Development System
The last thing any busy lawyer wants to add to their already overflowing plate is business development.
The last thing any busy lawyer wants is the pressure to come up with a ‘winning’ new idea for business development and then to work on implementing that idea on an urgent basis.
Here’s the problem. While you may be too busy to think about marketing today, you may not be headed for quite the same level of activity in the foreseeable future.
So, avoid setting yourself up to have to figure it all out while you’ve got your hands full with billable work. Build a system. A turnkey business development system that moves along at a steady pace, busy or not. That way, you’re always doing something to feed the pipeline.
Never too much. Never too little.
If you take the time to consider your business development system and build it strategically, you won’t need to come up with fresh, strategic ideas when your attention is, rightfully, placed elsewhere. You will already know what you (and others at your firm) are supposed to do, when and why.
And even better, when you finally do get some downtime, you won’t have to throw yourself into marketing just to get caught up. You will actually be able to enjoy your well-deserved break… guilt free!
For more reading on business development, see these past articles on Slaw:
Also, see the following related articles by Sandra Bekhor at Toronto Marketing Blog:
– Sandra Bekhor, Toronto
Find a Great Job (Or a Great Candidate) With Slaw Jobs
In case you missed the big news, there’s a new addition to the Slaw family!
Slaw Jobs, a new Canadian legal job listings service, launched earlier this month with listings for positions across the country. From lawyers to marketers to professors to content managers, there’s already a good variety of positions and employers on the site.
By using Slaw Jobs, you’ll be getting your listing in front of a large and targeted audience and at the same time, supporting the high quality, original legal commentary at Slaw.ca.
Learn a bit about the genesis of Slaw Jobs here, and the benefits of using our job portal here.
There’s a New Group in Town!
These days, a lot of lawyers are wondering how to make the most of LinkedIn. Some are wondering if they even can. So, for this week’s tip, we’re sharing news about a new group which may prove to be an easy entry point to greater participation on the site.
‘Keeping it Social: Practice Development for Lawyers TORONTO’, a collaboration between Bekhor Management and Toronto Lawyers Association is the antithesis to all social media groups! Of the various LinkedIn groups targeting Canadian lawyers, it is the only one that’s actually social.
The group will meet in-person to learn practice development tips and to network once every quarter. Each event will be focused on a different topic. The first 15 minutes will be dedicated to a formal presentation. The next 15 minutes will allow for participants to ask their questions or to practice the tips through exercises, templates or role-play. The second half hour will be dedicated to networking.
Given that this is a practice development group that offers live events, it is restricted to practising lawyers and articling students in the Toronto area. Lawyers in other cities can use this group as a model to set up similar groups in their area.
To learn more about Keeping it Social: Practice Development for Lawyers TORONTO:
– Sandra Bekhor, Toronto
Check Your Email – at Scheduled Times Only
I would hazard a guess that one of the very first things you do when you sit down at the office is check emails. Of the 5, 10, 50, or 100 emails you are reviewing, are any of them urgent? I suspect you already know what absolutely must be done on any given day. And if something is absolutely urgent, there’s a good chance your client has called you about it already. My tip here is to set aside a time (or times) to check your emails – and that time doesn’t have to be first thing in the morning. I’ve written about decision fatigue before, the cognitive bias that you have a limited tank of decisions per day. You may want to make sure your most important decisions are made at the beginning of the day while your tank is full. A better strategy is to get to work on the most important task of the day, or, as they say, “eat the frog”.
Suppose in the middle of the day you are working on a big memo, deep in thought. You notice a slight change in the background – you have a new email! You click over and start reading it. You have to make several decisions: is the email urgent, it is important, where to file it, what to do with it, when to do it. That’s a lot of decisions for each and every email. Studies have found that after an interruption it takes about 20 minutes to return to the same state of concentration and focus you had before.
With emails constantly coming in and interrupting your work day (let alone when you are not working!), turn off your notifications and stop the interruptions. Then take control of your emails by only looking at them at set times.
—Ian Hu (@IanHuLawpro)
Three Letters = One Powerful Question
Who could help me with this?
One of the biggest mistakes a lawyer can make is not asking for help.
Help can mean many things.
It can mean getting advice on a file. Many lawyers the mistake of going it alone, only to realize too late that turning to another lawyer for guidance would be the best course of action.
Help can be about forming a relationship with a senior lawyer in your practice area for support and guidance. I recently connected a junior lawyer seeking to develop a new practice area with a senior lawyer from a small firm. They are writing articles together now, and the senior lawyer is providing some valuable mentorship.
Sometimes help is getting external support on a practice challenge. It might be that you want to improve work efficiency, or you want to get better at business development, or you are wondering if it is time to make a transition to a different firm or practice. Whatever the challenge, getting confidential assistance is the quickest path forward. The Law Society practice advisors are there to answer your questions, and there are specialized lawyer coaches available to provide guidance.
Don’t go it alone. Whether it is simple advice on how to deal with managing clients expectations or a complex practice challenge, don’t take too long to get help. I frequently hear – I wish I had contacted you sooner – and I never hear I wish I hadn’t asked for help.
— Allison Wolf (@thelawyercoach)
Sometimes You Have to Spend Money to Make Money
As a lawyer, you identify with being a professional. Strongly and consistently. Perhaps, not as much with being a business person (even if you play a leadership role at your firm)?
Most of the time, that’s just fine. Some of the time, it’s not.
If you don’t see yourself as a business person, not meeting practice goals can become frustrating:
- We used to get a steady stream of referrals. Where have they gone?
- We have a good reputation among our network. Why aren’t we receiving more resumes from talented recruits?
- We hired good people. Why isn’t morale higher?…
You may need help with marketing, leadership, operations, human resource management… But you may not be sure which issue is the most pressing. Or how to even get started. Do you need to embark on a planning exercise? Hire a consultant? Bring new skills in-house?
While it may be easier to simply focus on your work and your clients, good business people know that’s simply not enough. Sometimes, you need to spend money to make money.
So, this week’s tip is about remembering that you aren’t just a lawyer. You’re also, from time-to-time, a business person. And if your firm needs some assistance, it’s your job to investigate what, how and who can help. You don’t need to have the answers all of the time. You just need to find people that do, get through that initial learning curve and set up systems that will allow you to monitor… progress!
– Sandra Bekhor, Toronto
Think Twice About Free Services From Google
So I belong to this listserv of mostly attorneys and everyone is talking about how they use Google for this and Google for that and all I can think is … is it just me?! Why would anyone wish Google to be scanning and indexing their business records and documents – let alone a bunch of attorneys?
*start of rant*
Of course, you KNOW – any time your data touches a Google server it is being scanned and indexed. Right?
Seriously – you are giving every keystroke/word <-as best as speech recognition can figure out the words I imagine – to Google just by using it. Oh and Google = not just search but, of course, gmail, chrome, anything done on a chromebook. All are collection points. Google was built to scan/index and it’s doing that to your and your clients’ info.
As for those using Google Voice – are you sure you’re getting all your calls? Who are you going to call if you realize, 3 days later, that your phone has stopped ringing?? See – it’s not when tech works that you have to worry – it’s when it doesn’t. Pay the $20 per month to have a business VoIP line or use unified messaging to work your cell as a business AND personal mobile device and stop using a free service, especially Google, for everything!
*Jumps off soapbox*
Note: the above is much more amusing when you read it like Edna Mode , dahling! #justsayin
Andrea Cannavina (@AndreaCan) helps law firms organize, automate and implement business process improvements to create efficient workflows and happier staff.
The Delegation Dilemma
You’ve had an up and down year, and suddenly when it rains, it pours. Clients are coming in by the bucket, tasks are piling up, and you have got to delegate your work. Your articling student ambles up to your office with a gentle knock, asking, “Hi – just wondering if you have any tasks I can help out with?” You make a mental note that this is a keen student, maybe a keeper. You hand her over a file, spend a few seconds explaining the task, and off she goes. That should do it, right?
But the articling student comes back a few days later with a barrage of questions, at just the wrong time. In the middle of drafting a big document you’ve been interrupted. You sigh and turn around, your body and your mind, to answer the questions. Before you know it you’ve spent another “0.5” explaining a task. Could you have done it sooner if you had done it yourself? Will the job turn out the way you want?
The delegation dilemma is this – you want to delegate your work but you also have to teach, give feedback, and occasionally handhold. Will the task be done better? Have you actually saved any time? Perhaps not this task. But the good news is, the better you delegate, and the better you train, the better your student/law clerk/assistant will be. And, with good work put in, you eventually will have that well-trained helper. Here’s some delegation tips.
Explain the whole file, every time. It may not be enough to say, “go look at my interview notes” and write that statement of claim. A good explanation means you can highlight what’s important and what the priorities are. You can point out the pitfalls before they’ve been fallen into, and you can hammer home the points that need support. It will take more time initially, but presumably the pay-off is a better work product. Similarly, explain in detail the task at hand. It may be necessary to provide precedents, to explain the formatting you desire, to paint a picture of the end product. If you want a well-written memo in full sentences, then say so. And if you want a short one-page note-form memo, say so. Give a sensible deadline to avoid last-minute calamities. Give enough time for your helper to complete the work, and give yourself leeway to review the work. And finally, determine the level of client contact you want to delegate. Is this a task that won’t require any client contact? Is the client too important and sensitive to delegate? Answer these questions before you hand off the work.
Good delegation can greatly improve your ability to take on more files and do good work. Make sure you review work that goes out in your name – you are still responsible for clerical mistakes, which account for some 6% of malpractice claims. Dedicate time up front to train well, and thereby resolve the delegation dilemma.
—Ian Hu (@IanHuLawpro)
Get More Mileage Out of the Friday Afternoon Doldrums
What’s the most productive day of the week? Most HR directors report that Tuesday has that honour. And the least productive? You guessed right! Friday.
Monday is a contender for most productive day of the week but what tends to get in the way of the doing are the meetings and planning that tends to get jammed into the Monday slot.
To help you get more out of your Fridays and to turn Monday into a productivity zone – try a Friday afternoon planning session.
A Friday afternoon planning session accomplishes three great things:
- It sets you up for starting Monday morning with a deep dive into work, as you will have your priorities set out.
- It helps you get a head start on delegating. You can see what you need to involve a junior or assistant on and can hand that off before the weekend so they can get a running start on it Monday morning.
- You get more peace of mind because all your outstanding To Dos are out of your head and onto your list and you have a plan of attack all worked out.
Once you get in the groove of Friday planning I think you will find you never want to give it up!
— Allison Wolf (@thelawyercoach)