Allocatur

The 5 Most Bizarre Tax Deductions Around the World | MintLife Blog | Personal Finance News & Advice

2009-12-23T21:14:00+11:00

On the Mint Blog, a post about The 5 Most Bizarre Tax Deductions Around the World is fascinating for what the tax deductions say about the culture/philosophy of the relevant country.

In summary:

Bribes - Germany

Mama's Boys - Italy

Whiskey - Japan

Witches education- Netherlands

Culturally British computer games - Britain.

The article explains the rationale behind each tax. Seems to me you would be brave to claim the bribery tax deduction!

One of the most bizarre taxes from history is the urine tax which gave rise to the saying "money does not smell". In the time of Nero, urine was collected from public cesspools for use in tanning and laundering. The tax was charged on the purchase of urine.

A client focused law degree?

2009-12-16T20:43:24+11:00

Slyvia Hodges, a law professor at Fordham College in Boston has published an article in AmLaw Daily recommending the introduction of a general business course in a law degree.

"To give future lawyers an idea of their future clients' and future law firms' points of view, the course needs to be a blend of business and management. Students should learn how legal decisions fit into the larger business framework that clients are confronted with every day. They need to understand that businesses face many challenges, legal problems being one of them, but certainly not the only one. They need to develop a level of common business sense: Is it a good idea to initiate litigation that will potentially cost the client over $100,000 in legal fees on an issue worth $75,000? Obviously, not."

Some years ago, I contacted my old alma mater, Melbourne University, about the lack of training of law students in practical skills, even in the basics of the Legal Profession Act, which is the regulatory of the legal profession. I received no response. So I have had another look. The closest the Melbourne University JD comes to educating their future lawyers in business aspects is the course on ethics, where the skills outcomes are:

Skills in identifying and resolving a legal problem;
Skills in considering a range of options in response to a legal problem and in identifying those which are sound, principled, and best meet the needs of the client or other audience;
Judgment and diplomacy skills;
Interpersonal skills in relating to a client or other audience (actual or hypothetical) and in providing advice attuned to that person’s needs and interests;
Skills in policy analysis;
Skills in the avoidance, mediation and resolution of disputes;
Skills in being open to new ideas and the perspectives of others;
Skills in the critique of received wisdom;
Skills in confronting unfamiliar problems;
Skills in comprehending complex concepts and expressing them lucidly;
Skills in speaking out against prejudice, injustice and abuse of power.

Not exactly practical business skills.

On the other hand, look at the UNE Diploma in Law Practice Management where the skills outcomes are:

Understand legal, financial, marketing and client service issues
Manage practice staff and themselves
Develop and implement financial management strategies
Manage practice operations
Determine the feasibility of a new practice opportunity
Develop a business plan for the practice
Review the performance of the practice
Acquire the tools necessary for the practice to stay competitive and profitable

I have to confess this is another of my alma maters as it is a course I have completed. Although I have practised law for more than 20 years, this course has had far more practical application both from the point of view of running a business and understanding the needs of a client than anything in my actual law degree.

The Law Society of New South Wales requires a practitioner to complete a law practice management course before being granted an unrestricted practising certificate. The objectives of the course are:

The Practice Management Course aims to improve:

the managerial skills and job satisfaction of solicitors
the efficiency and cost effectiveness of practice
client satisfaction through the use of quality practice management procedures.

Hopefully there is an increasing recognition amongst law schools of the need for such a focus.

Mini skirts, leggings and the judiciary

2009-05-22T17:29:48+10:00

A colleague yesterday drew my attention to the female barrister striding past the Supreme Court, wigged and gowned, in her mini skirt, stilettos and leggings. We can both recall the days when another of our colleagues was asked to leave the court because she was wearing brightly coloured spotted tights and we both wondered whether now days leggings would cause any issue.

The question of attire came up again last night when watching the wonderful "Boston Legal" with Alan appearing before the US Supreme Court complete with electronic tie that flashed red when his speaking time was up. Unfortunately, it malfunctioned and drew the ire of the Chief Justice.

Yet again the question comes up, this time in an article from the American Bar Association Journal, which reports that a conference of judges discussed female lawyer's attire in court, with one judge stating

Some women come to court wearing "skirts so short that there's no way they can sit down and blouses so short there's no way the judges wouldn't look"

I have other colleagues, both male and female, who refer to this attire as a "Master Blaster" outfit - very descriptive of the attire adopted by Melbourne lawyer Zara Garde-Wilson, (see here and here for examples).

One would hope that the decision making capacity of the judiciary would not be impacted in any way by the dress sense of those appearing before them, but the reality is that, even on a subconscious level, appearances count. I'd prefer my lawyer dressed in the traditional dark suit, lending that air of credibility!

Wilson’s Little Gift to the World

2009-05-18T21:08:16+10:00

In perhaps what is Richard Susskind's legal world of the future, now a reality, the Wall Street Journal reports in Wilson’s Little Gift to the World about an on-line do-it-yourself Venture Financing Term Sheet being offered by a US law firm, Wilson Sonsini Goodrich & Rosati.

Having worked my way through the pages of on-line options, and admitting that I have no background in venture financing or the like, I come to the conclusion that it is probably a smart marketing tool to make any smart do-it-yourself-er realise that it probably would be wise (and easier than reading all the disclaimers, options and explanations that accompany each question) to just engage Wilson Sonsini Goodrich & Rosati.

But it is an interesting concept and certainly highlights the possibilities. In the end, if you work through the 45 web pages of questions, you generate a thirteen page document. Quite impressive!

There are many far simpler areas where such interactive document generation could be used. Increasingly firms are using on-line questionaires to take initial instructions from clients, more frequently in areas such as family law, wills and estates, conveyancing, trademarks, incorporation and personal injury. The Australian site Lawlive, has hundreds of documents available for purchase on-line and download, but again with a disclaimer about legality.

Third party payers - a warning to commercial lawyers!

2009-05-05T23:09:09+10:00

The Legal Profession Acts now enacted in the majority of Australian states, have the concept of "third party payers", of which there are two types, associated and non-associated.

Associated third party payers are those who are not the client of the law practice, but have a direct responsibility to the law practice to pay the client's costs. Examples are insurers, companies paying the costs of an employee or director, a father paying the costs of a child.

Non-associated third party payers, do not owe a responsibility to the law firm, but rather have a responsibility to the client to pay part or all of the client's legal costs. Commonly, this liability to pay costs arises out of contractual obligation, examples being mortgages, leases, and other commercial documentation.

Yet it appears that the draftspersons of such documentation fail to take the provisions of the Legal Profession Acts into account when drafting the costs clauses. This is highlighted in the decision of

The simple facts were that Boyce (law firm) was seeking to recover legal costs from McIntyre (non-assocaited third party payer) who was responsible for payment of Boyce's client's "reasonable legal costs" pursuant to the terms of a lease between client and McIntyre.

There was a cost agreement between Boyce and client which provided for paymet of a fixed fee of $3000, and Boyce advised McIntyre that the estimated legal fees were $3000.

McIntyre sought to have the fees assessed and on assessment, the cost assessor held that, as there was no cost agreement between Boyce and McIntyre, the costs should be assessed on the basis of what was "fair and reasonable" and not by reference to the provisions of the cost agreement. This approach was affirmed both by the Costs Review Panel and by a single judge of the NSW Supreme Court.

In jurisdictions where there are scales of costs (i.e. all other States and Territories other than NSW), the costs would be assessed by reference to the relevant scale of costs or remuneration order. This is something which needs to be addressed by the draftspersons of commercial contracts. It may be necessary to have the third party payer enter into a cost agreement with the law firm, but this then makes them an associated third party payer, with all the associated rights of a client to disclosure, to negotiate a cost agreement and to challenge costs.

Many clients could be substantially out of pocket due to the differential between actual costs and what would be recoverable on a fair and reasonable, or scale basis.

Perfection is an aspiration not a goal

2009-05-04T14:07:09+10:00

Perfection is an aspiration not a goal - should be a standard direction for many clients to their lawyers. Yet many lawyers, particularly young lawyers would not understand what it means. To put it another way, "you don't need a Rolls-Royce when a bicycle will do", a quote from Rio Tinto's General Counsel.

It's all about proportionality - whilst in a perfect world, you would interview every potential witness, review every document, not matter how limited the relevance, and conduct endless interlocutory applications to compel the other party to also produce every shred of evidence, it is a rare matter where this level of work is proportional to the the issues involved.

In Australia, this statement is also now the mantra of the judicial system. Judges and other judicial administrators have recognised that the system cannot support a perfect world. Courts do not have the resources to allow every case to be run as the "perfect" case. Discovery is becoming so enormous, that judges must intervene and limit the categories of documents to be produced. In the Federal Court, the "rocket docket" recognises that parties can't have unlimited time to get their acts together in compiling and examining evidence. The combined goals of ensuring parties get a fair hearing, whilst also ensuring disputes are finalised in a speedy fashion, mean that no case will be conducted as the perfect case.

So, it's a matter of focusing on what it most important and for clients, on where there money is best spent. Unless you plan how you are going to conduct the matter, and therefore what work you will focus on, you are in danger of doing the following:

Reinventing the wheel (a recent example - I was asked to advise on cost orders to be sought, and pointed out that I had given exactly the same advice, on the same matter, about 18 months ago)
Chasing rabbits down burrows but not the rabbit who is the target (example - researching a point of law that is not in issue)
Finding the weakness in the evidence or the law too close to trial and only after very considerable costs have been incurred

Case planning and early case assessment, when undertaken which a clear understanding of what the client sees as necessary for the case, are what is required.