The Soul of Enterprise … and the future of the professions

Many would be aware of our passion for up front, guaranteed fixed pricing rather than the traditional time-billing model of most law firms – previous posts explore this in more detail http://blog.viewlegal.com.au/search/label/fixed%20pricing.

Much of our inspiration in this regard comes from the VeraSage Institute, a revolutionary international think tank which, for many years, has been challenging professional services firms to price their services other than with reference to the Marxist derived labour theory of value that is time billing.

The VeraSage Institute founder (and LinkedIn Influencer) Ron Baker and fellow VeraSage Senior Fellow Ed Kless host the popular weekly iTunes radio show ‘The Soul of Enterprise’ – see - https://itunes.apple.com/au/podcast/soul-enterprise-business-in/id893874169?mt=2

Together with 2 leading Australian based members of the VeraSage community John Chisholm (see - https://www.linkedin.com/in/chisholmjohn) and David Wells (see - https://www.linkedin.com/in/david-wells-a27a2011) I was fortunate enough to appear on the show, exploring the excellent Richard and Daniel Susskind book from 2015 ‘The Future of the Professions’ – see - http://www.amazon.com/The-Future-Professions-Technology-Transform-ebook/dp/B010N9QJ5M.

A link to the podcast is as follows –
https://itunes.apple.com/au/podcast/soul-enterprise-business-in/id893874169?mt=2#episodeGuid=http%3A%2F%2Fcdn.voiceamerica.com%2Fbusiness%2F011449%2Fbaker021916.mp3%2F90565.

We began the journey to address many of the challenges the Susskind’s have identified over 10 years ago. For many, the journey has started more recently and we believe it important to share our learnings. Our upcoming roadshow (see - http://viewlegal.com.au/roadshow-interest/) is another example of this.

The Soul of Enterprise interview explores many aspects of the book, including:

1. The likely impending end of ‘The Grand Bargain’ – meaning the monopolistic markets enjoyed by the professions will cease to exist;

2. The absurdity of the incumbent time billing business model in the new normal;

3. Technology and its re-writing of the rules of the professional services game;

4. How the ‘AI Fallacy’ lulls professionals into inertia – meaning that whether artificial intelligence performs human tasks better than humans is irrelevant; the only question is ‘does the job get done’;

5. What’s next and what’s now for professional service firms – by starting at the start and choosing a business model that sells value; not hours chalked up.

‘Fixed’ Pricing

As most will know, all work we do is on an upfront agreed scope and guaranteed fixed pricing.

Last week, I was reminded of the difference in our approach, compared to the vast majority of advisers.

An accountant that we work closely with referred a client to us who had been given a fixed cost estimate.

This ‘fixed’ cost estimate had already been exceeded by more than 100% of the initial quote and at the accountant’s best guess the job was only two-thirds complete.

Understandably, the client was concerned that any price that we might provide may in fact only be an estimate as opposed to a fixed price contract.

Fortunately, having worked with the accountant before, she was able to confirm to the client that our fixed prices were just that – fixed; and money back guaranteed. We are now working with the client and the accountant to bring closure to the outstanding steps.

Image credit: Simon Cunningham cc

Clark v Inglis and Trust Splitting

As set out in earlier posts, and with thanks to the Television Education Network, today’s post addresses some of the key issues from the Clark v Inglis decision (please email me if you would like a copy of the case) and trust splitting in a ‘vidcast’ at the following link - https://vimeo.com/143343257.

As usual, an edited transcript of the presentation for those that cannot (or choose not) to view it is below –

Clark v Inglis was focused on an estate planning exercise.

As part of that estate planning exercise, there was a standard family trust under which the main asset was listed shares sitting inside the trust that overtime had grown significantly in value.

As part of that estate planning exercise, there was an asset revaluation reserve undertaken by the trustee of the trust.

As part of that asset revaluation reserve, and as part of the overall estate planning exercise, there was a distribution on paper effectively of that increase in value of the shares to the person who was actually making their will.

Glossing over some of the facts and the key issue as it relates to trust splitting, what happened under the estate planning exercise was that firstly, the trustee company, and therefore the control of the trust went to the kids of the willmaker from his first marriage (i.e. marriage No.1.).

However the big debt that was outstanding between the trust and the deceased person went to wife No.2.

The core issue was - was it a valid exercise of trustee’s discretion to revalue those assets and then notionally distribute them out?

If that was valid, what was the terms of the loan whereby the willmaker effectively was lending that money back into the trust and was that loan repayable by the trustee company into the estate and therefore passing to the second wife? Obviously, there was quite a lot of tension between wife No.2 and kids from the first relationship. The key take outs in the context of the trust splitting exercise were that yes, the arrangement was entirely valid; yes, the loan was outstanding and formed an asset in the estate; and yes, it was repayable on demand to the second wife.

Latest View app release – estate admin

Following the successful launch last numerous previous View Legal apps (in areas such as estate planning, business succession and SMSFs), we have now developed and launched another Apple and Android app.

The new app is in relation to estate administration and can be downloaded via the following links –

1. Apple – https://appsto.re/au/yweP_.i

2. Android – https://play.google.com/store/apps/details?id=view.legal.estate.admin

The administration of a deceased estate is a heavily regulated area and there are many aspects that can cause irreversible damage if misunderstood.

The View Legal Estate Admin app is designed to allow the user to narrow down some of the broad areas that might be relevant in relation to the administration of any deceased estate.

Depending on the answers provided, the app generates a free white paper containing general information about the key issues that are often relevant. All 7 of the View apps can be downloaded via our website – see - http://viewlegal.com.au/download-our-latest-apps/