Making the move to flexible working as a Cognitive Law Consultant is exciting, but you may well be unsure and anxious about what this means in practical terms. We have produced this guide, written by consultants, to give you an idea of what arrangements you need to put in place and some of the practicalities of working for yourself.
Firstly, although you have the support from the Cognitive Law team, you may well be used to having an administration team looking after things for you. Unless you are in the lucky position of being able to afford to hire such a team at the outset, there are going to be a number of things that you are now responsible for.
Prior to Joining
Cognitive Law consultants contract on behalf of their service company with Cognitive Law Ltd to provide legal services to Cognitive Law. In practical terms, this means that your company can provide legal services to your clients by making use of Cognitive Law’s SRA authorisation, professional indemnity insurance, case management system and compliance oversight.
So, you need a company. Here is a link from gov.uk with guidance notes on how to form and register a company. It guides you on the process all the way through to formation. It costs only £12 and can be done online.
You may wish to set up a cloud account (such as Dropbox) in which to save your articles of association, memorandum of association and the letter you will receive from HMRC with your Corporation Tax Unique Tax Payer Reference (UTR).
You will also need to opt out of any Practising Certificate bulk renewal at your previous firm and register your new details on mySRA. It may be helpful to diarise your Practising Certificate renewal on an annual recurring basis so you don’t forget.
Any other subscriptions or accreditations will also need to be updated so there’s a seamless transition to your new role.
It is important to keep a distinction between your company activities and those of Cognitive Law. If you do not keep this distinction, HMRC may wish to advance the argument that you are not a consultant and are, in fact, employed. So for instance, it may be wise to ensure that your address details for HMRC & Companies House are home based, rather than using the Cognitive Law address.
You will next need a bank account in your company name, although you will only be able to do this once you have received the Incorporation Certificate for your company. Shop around – most banks will offer an introductory period without fees, whether service charges or transaction fees.
It would be wise to have a debit card for your main company account and to open a second deposit account, ready to accept money set aside for Corporation Tax. It’s really important not to place money set aside for Corporation Tax in a personal account as this will be treated as either a salary or a dividend, and taxed accordingly.
For your personal banking, you might then wish to set up a further savings account in which you will set aside money to meet your personal tax liability.
Next, you need a decent accountant – one who can assist with your personal and company tax, company accounts (if necessary), payroll and general advice and assistance. They will be able to provide you with bookkeeping spreadsheets, calculators as to what income should be treated as pay, dividends, corporation tax or personal tax and advice on expenses.
Properly recovering your expenses is really important and your accountant can advise you on exactly what you can recover and how. They will no doubt give you an expenses spreadsheet and you may wish to use Dropbox to upload digital copies of your receipts, rather than keeping reams of paper copies.
Your accountant will need to know what your likely turnover will be in order to advise on whether or not to register for VAT. The current threshold is £85,000.
You will also need to work out what you need to earn (and bill) in order to, at least, maintain your standard of living. Using your current pay as a baseline (if that’s appropriate), you can work out what you need to bill per month in order to simply meet your needs, having taken into account the fee-split with Cognitive Law and provisions for Corporation and Personal Tax. You can then work out how many chargeable hours you need to achieve this minimum, which is significantly less than you might think…! As a result, anything you do beyond this minimum will directly benefit your bank account in a way that working in a ‘typical’ law firm doesn’t.
You will need stationery, but don’t go mad, at least not at first. Shop around for stationery and ask your co-consultants where they get theirs – Amazon, Wilkos, Viking etc.
Value your current office equipment – furniture, IT (laptop, printer, phone handset), books, stationery can all go into the company accounts and are recoverable.
Consider changing your mobile contract to a business contract – these days they are pretty much like for like with personal contracts in terms of data, minutes, texts etc.
If you can, start ‘warming up’ trusted referrers, but beware of anything that might cause you to breach any restrictive covenants with your current firm.
You may wish to think carefully about your charge out rate (as above) and what work you can do on fixed fees. You know your market, but it may help to ring around local firms to find out what the competition is charging. Remember that your overheads will be lower than local firms, so you may not need to charge so much, which can be attractive to the cost conscious. If you want, you can consider an introductory discount to get clients through the door. That said, the more you bill, the better off you will be.
One of the biggest benefits to self employed consultants is around expenses. Get good advice on what you can claim and then get into the habit of doing your admin housekeeping regularly – expenses, mileage records etc.
Joining Cognitive Law
There is an induction pack and process which will walk you through internal systems, our case management etc.
You will want to get on quickly with promotional material for the website, and, if you can, producing a supply of blogs will keep your profile raised during this change-over period. If you have managed to do a few, you can save some for when you’re too busy to spend time away from fee earning and administration.
You will need to have a careful eye on ‘quick win’ work and longer term ‘pipeline’ work. You will need quick cash flow, but be careful to balance this with longer term, better paying work further down the line.
If you have never worked from home full-time before you will need to bear in mind that it might be quite a change for you. You may wish to think carefully about your working space and how to manage your day, being sure to interact with clients, colleagues, contacts etc so you don’t get lonely. However, the day is yours, so you can work around the things that you want to do.
Most consultants publicise their mobile numbers and take up Cognitive’s offer of a local number that gets routed through to your mobile. This offers maximum flexibility, but also gives a sense of your being local.
The administrative team here can assist with calls in and take messages if clients call Cognitive’s main number, but we encourage you to use a personal touch wherever you can, as this tends to appeal to clients the most.
Everything is done through the firm-wide case management system, ALB. Given consultants’ remote working, it is essential and required that all consultants commit to working this way so your files can be properly supervised. All the usual programs remain available and are used in the normal way – Outlook, Word, Excel etc, but they are accessed and saved via ALB.
We do not currently have a CRM add-on for ALB though, so you may wish to keep a separate record of referrals in and out, key referrers, dates etc.
We’ll provide your business cards and suggest you be termed ‘Consultant Solicitor/Chartered Legal Executive’ to further ensure there’s no confusion as to your employment status. We’ll also ask you to prepare a capabilities documents which shows your areas of expertise. This can be useful document to send to potential referrers, but also enables us to internally refer to you too. Remember that we do run a referral scheme so you can financially benefit from fees a colleague bills due to your introduction.
Prospective consultants can be concerned about the reduction in administrative support when they move away from a ‘firm’ environment. For a start, we tend to encourage paperless working. A complete electronic file is essential, as above. However, not having to deal with paper can be liberating.
If you are used to dictating, there’s nothing stopping you arranging secretarial support, remote or otherwise. However, we tend to find that consultants work very well by without, or by making use of dictation aids. The most popular is Nuance Dragon; voice recognition software which is easy to set up, is very accurate and learns quickly.
We get together with all of the consultants quarterly, for a meeting and then lunch. In our meetings we will introduce new team members, cover issues arising, receive compliance training and generally seek to develop a collegiate atmosphere. We find that our consultants are very willing to share their time and experience with others on concerns or ‘mental block files’. This applies in meetings and generally – make use of working with like-minded and experienced colleagues.
This non-exhaustive note is a means to answer some of your questions and give you things to think about. Please ask any of the Cognitive Law colleagues if you have any queries and talk through their experiences. In due course, if you have anything to add please let us know so we can make it even easier for future colleagues.
Take a look at our join us page to find out more.