Book Review: <i>The First Myth of Legal Management Is That It Exists</i>
Written by our new Board of Editors member, Ed Wesemann, and published in 2004 ' with profits donated to the ALA ' this collection of skillfully crafted essays provides illuminating observations and pithy advice on a wide range of challenges facing law firms and lawyers. The book's first chapter, on profitability problems larger firms have with small clients, was the springboard for this month's roundtable discussion
Tax Shelters: New IRS Disclosure Requirements Carry Serious Penalties
Touted as one of the most substantial overhauls of the Internal Revenue Code in years, the American Jobs Creation Act of 2004 was signed by the President on Oct. 22, 2004. Like any number of omnibus Congressional tax bills, the "Jobs Act" is a broad-reaching collection of miscellaneous tax provisions. <br>Title VIII of the Act, in Subtitle B ' "Provisions Relating to Tax Shelters," contains new provisions that limit the benefits of tax shelters. Among these new provisions are requirements that govern how certain transactions must be reported to the IRS. While reporting rules existed prior to the Jobs Act, these new requirements carry substantial penalties to encourage compliance and curb participation in abusive tax shelters.
New Tax Rules May Affect Payments To Retiring Partners
One of the most important provisions of the American Jobs Creation Act of 2004 establishes a new regime for taxing deferred compensation. Newly created Section 409A of the Internal Revenue Code likely will affect every arrangement now in place or hereafter adopted that promises the payment of deferred compensation to current and former employees, directors and other service providers. Such an arrangement may well include a partnership's unfunded retirement program for its partners.
Can Your Firm Serve Small Clients Profitably?
In one chapter of his 2004 book, <i>The First Myth of Legal Management is that It Exists</i>, Ed Wesemann argues that small clients disproportionately drain the resources of law firms while providing a disproportionately small contribution to firm profits. He proposes ways to help firms focus on serving larger clients, while also improving the profitability of small clients who stay with the firm.
High Court OKs Double Tax on Some Contingent Fees
In a pair of cases with potential pocketbook impact on lawyers and their clients, the Supreme Court ruled on January 24th that the contingent fee portion of lawsuit settlements and awards is taxable to the client, even if the money goes directly to the attorney. But initial reaction to the 8-0 decision was more muted than expected because a law passed by Congress last fall limits the ruling's implications, and the decision won't doom the contingent fee system, which fuels a broad range of private litigation.
Development
Recent rulings of importance to you and your practice.
Index
Everything contained in this issue in an easy-to-read list.
