Key Takeaways
  • GST, income tax and super obligations as a self-employed professional require proactive management — engage an accountant before you start
  • Cash flow forecasting is the most important financial discipline for independent practitioners
  • Superannuation is often neglected by independent lawyers — it should be treated as a non-negotiable expense
  • Company structures offer significant tax planning advantages from approximately $200,000 annual revenue

Financial planning for independent lawyers is fundamentally different from financial planning for employed professionals. Irregular income, self-managed superannuation, more complex tax obligations and the absence of employer-funded benefits require a proactive, structured approach to financial management.

The Cash Flow Challenge

Cash flow management is the most critical financial skill for independent practitioners. Gaps between engagements, invoice payment delays (30–60 day payment terms are common) and front-loaded expenses can create serious financial stress without adequate planning and reserves.

  • Maintain 3–6 months of personal and business expenses in a liquid reserve account
  • Invoice promptly — invoice on the last day of each month, not when convenient
  • Follow up on overdue invoices on day 31 without exception
  • Use a cash flow forecast model and review it monthly — at minimum
  • Build payment terms into your engagement letter (30 days is standard; push for net-15 where possible)

Tax Planning: What You Need to Know

As a self-employed legal professional, your tax obligations are significantly more complex than as an employee. Key considerations include quarterly BAS lodgement (if GST-registered), PAYG instalment obligations once your tax liability reaches a threshold, and deductible business expenses.

$75,000
GST registration threshold
11.5%
Super guarantee rate (2024–25)
$30,000
Annual concessional super cap

Engage an accountant with specific experience working with independent legal professionals before you commence practice — not after you receive your first ATO assessment. The upfront cost ($2,000–$3,000) is trivial compared to the cost of getting it wrong.