Attorney Client Relationship

There are many important qualities in maintaining relationships that clients need when hiring a law firm.  Clients are looking for confidence, trust worthiness, respectfulness, active listeners as well as excellent negotiations.  The law firm needs to be a strong advocate for their legal issues.  Attorneys need to keep their clients updated on a regular basis, with strategies and plans of action.  Together the attorney and the client can achieve a resolution to their legal needs.

When should you do taxes on your own or hire a Tax professional?

Taxes can be stressful, especially if you have a business, investments or IRS issues. Most people want to get through the tax season with little out of pocket or worrying about an IRS audit. The expense of filing taxes can be costly depending on what you own (businesses, Investments, Rental Property etc...). In determining, whether you do your taxes yourself or hire a tax professional here are some things to consider.

When to hire a Tax professional

• ·         Taxes are complicated
• ·         Owning your own business
• ·         Rental property or taxable investments
• ·         Foreign income
• ·         Life changes ( Marriage, divorce, retirement, inheritance ,birth ,property sale)
• ·         New tax Laws
• ·         Tax Planning

When to do them yourself

• ·         You understand the Tax laws
• ·         You don’t have any property or investments
• ·         Your taxes are straight forward with the usual deductions (normal W2)

Keep in mind, having a tax professional has its Pros. A tax professional can represent you with the IRS and generally insures your returns are prepared correctly.  The next time you want to prepare your own tax return remember there are options that should be considered.

Movie to Watch

If you get tired of the same old action hero or cartoon character movies, why not look into viewing the best courtroom legal drama ever made.  Many best of lists have this film at the top.  It is, To Kill a Mockingbird.  It is an old movie, 1962, and it's filmed in black and white. Gregory Peck portrays a Depression-era lawyer in the South.  The courtroom scenes are very powerful.  He is also a widowed father of two and the bond with his children is wonderful.  Give it a chance and I know you'll agree, it's one of the best.

Happy Halloween!

Cash Vs. Accrual Vs. Modified Cash Accounting Methods

Starting a new business involves a lot of planning.  The accounting is a very important part of managing your business.  You must consider the accounting method.  There are three options to choose from.

The Cash Basis Method
This accounting method records income and expenses as received and paid out.  Expenses are recorded only when bills are paid.  This method is advantageous for smaller businesses as it is a simple method that accounts for cash paid or received.

The Accrual Method
With this method, income is accounted for when it is earned.  You may deliver a product or service to a customer and not have been paid for it, yet consider it income. Expenses are recorded the day you receive the bill or goods from a vendor or supplier.  Accrual method does include accounts receivable and accounts payable on the balance sheet.

The Modified Cash Basis Method
This Modified Cash Basis combines elements of the above two accounting methods.  It is not accepted on official financial statements.  Income is recorded as received but expenses are put into two categories.  Long-term liabilities are treated as accounts payable as in the accrual method.  Short term expenses are recorded as paid, as in the cash method.

Litigation Pitfalls

Time:  Contrary to what is portrayed on television, the litigation does not typically begin and end in a matter of days and weeks.  One of the surprises many clients face when involved in litigation is a great deal of time it takes to get through the legal process.  It is not uncommon, for example, for a case to two or three years to take a case from its beginning to final judgment.  Even then, an appeal can be taken to a higher court and the process begun again.  Once the appeal is complete, it is not uncommon for the higher court to send the case back to the original court for further proceedings, consuming even more time and resources.

Expense: Linked to the amount of time a case takes is the expense involved.  Generally, lawyers bill for nearly every moment of the time they spend working on a case.  At $400-600 an hour, this can quickly add up to a lot of money.  Litigation costs, in fact, can exceed tens, and even hundreds of thousands of dollars, some, or all, of which may not be awarded by the court, even if the client is victorious.

Legal fees are not the only expense that might be incurred during the course of litigation.  Most cases will require that depositions of the parties, key witnesses and experts be conducted, all of which will involve the expense of the attorney on an hourly basis, as well as that of a court reporter who will attend the deposition, and later provided a written transcript of the testimony.  

As stated, it is also not uncommon for attorneys to enlist the help of an expert witness.  These are oftentimes professionals, such as doctors, or engineers, or accountants who can help the judge or jury clarify certain key questions in a case.  While experts are extremely helpful, they are generally very expensive and will demand payment for the time they spend testifying, conducting their analysis, and providing a written analysis.

It is also important to realize that just because you are the prevailing party, does not mean, typically, that your opponent will simply bring their checkbook to court on the final day and write you a check for the amount the judge or jury decides.  Many years can be spent just trying to collect money awarded in a case.  

For the reasons stated, the decision of whether or not to take someone to court, should be one made only after careful consideration is given to the considerable time and expense involved.