by Choo Dee Wei
Published October 28, 2018
There will come a moment in a practitioner’s life where the following questions will weigh on his/her mind:-
Do I practise in a firm?; or
Do I practise on my own either as a sole proprietor or as a partnership?; or
Do I just leave the profession?
There is no right answer. Each comes with its pros and cons.
This author’s focus is on option 2. Undoubtedly starting one’s practice (for purposes of this article, this author shall call it the “New Firm”) is daunting. The ultimate worry is whether one is able to sustain the running of the New Firm. In other words, would the New Firm be able to have a healthy stream of clients. The fees from whom ought to be more than the running costs of the New Firm.
The running costs (which is not exhaustive but only the bare minimum) of the New Firm can be summarised as follows:-
(a) Rental of premise - First and foremost, the New Firm needs to have a location to operate from. Without a location, the New Firm would not exist. Depending on the premise, sometimes renovations are required which would be additional costs.
(b) Furniture - Upon securing a location for the New Firm, the next step is to consider the type and price of furniture to populate the premise.
(c) Working Materials - A practitioner would require at the very least a word processor, a printer, photocopier, scanner and reams of paper. Aside from that, if the practitioner’s area of practice involves courts, the said practitioner would then need to subscribe to be a user of the e-filing system.
(d) Utilities - Lest one forgets, the basics such as electricity, water, telephone line, facsimile line and internet need to be factored in.
(e) Employees - In the event an employee is needed be it as a receptionist, a secretary etc, therein comes into play the payment of salary as well as contributions to the Employees Provident Fund and the Social Security Organisation.
With the basics in place, the practitioner ought to be ready to step into this new chapter. However, in order to practise law legally, the practitioner needs to factor the mandatory yearly payments to the insurers, Bar Council as well as the State Bar.
With that, the practitioner ought to be able to commence his/her practice smoothly. As the practitioner approaches the 1st anniversary of his/her New Firm, the practitioner would then have put aside an allocation for an accountant to ensure that his/her accounts are in order. If the practitioner has a client’s account then the accountant is certainly required in order to prepare an Accountant’s Report (for purposes of renewing his Sijil Annual and Practising Certificate).
In a nutshell, that encapsulates the necessary payments in the running of the New Firm. If one factors all the above and believes that it is feasible, then it is perhaps worthwhile to embark on that journey to realise the New Firm.