As a barrister running your own legal practice, you already wear many hats: advocate, business owner, administrator, and employer. But if you're still operating entirely under your personal ABN — managing chambers, staff, office resources, and all overheads yourself — you may be missing out on a powerful tool used by many legal professionals: the service entity.

What is a service entity?

A service entity is a separate business structure — typically a company or trust — that provides services to your main legal practice. This might include employing administrative staff, leasing office space, managing subscriptions and software, or handling day-to-day operational expenses. The service entity charges service fees to your main practice at market rates, allowing you to separate income-generating legal work from business operations.

This structure is widely used by barristers, law firms, medical practices, and other professional firms where overheads are significant and there is a need to streamline administration and manage compliance issues.

Reasons why more legal professionals are making the shift

1. Asset protection and risk management

Running your entire legal practice under your personal name means all liabilities — including employee claims, lease disputes, or operational debts — rest on your shoulders. A service entity can limit exposure by containing these higher-risk activities within a separate legal structure.

This is particularly useful if you:

• Employ staff, such as clerks
• Sign long-term leases

In short, it’s a way to separate your legal practice from the "business of running the business."

How Claire managed her risks using a service entity

Claire is a Melbourne-based barrister with a growing practice. She recently signed a 5-year lease on chambers in the CBD and employs a full-time legal assistant. She also contracts an IT provider and pays for various operational tools — from legal research databases to cloud storage.

Initially, Claire ran everything under her personal ABN. But after receiving advice, she moved the operational side of her practice into a service company.

The new structure now:

• Holds the lease
• Employs the assistant
• Contracts external providers for tech and admin services
• Invoices her legal practice at market rates for services provided

Six months later, her assistant lodged a formal complaint related to a workplace entitlement dispute. Because the employment relationship is with the service entity — not Claire personally — the risk and liability are isolated. Claire’s legal income, reputation, and personal assets remain protected from the fallout.

The service entity now bears the responsibility for resolving the issue, and Claire’s core legal practice continues unaffected. Had she operated under one structure, she would’ve faced the dispute — and potential legal action — as an individual.

2. Tax efficiency and profit management

When set up properly, a service entity can help you:

• Allocate tax-deductible expenses such as rent, salaries, and administration costs to a separate entity
• Legitimately distribute some profit through a trust or company structure

While the legal services you provide remain within your main practice, much of the operational workload — and its associated tax-deductible costs — can be routed through the service entity.

Is a service entity right for you?

If your chambers are modest and you don’t employ staff, the costs of running a service entity may outweigh the benefits. But once your practice reaches a certain size — or you begin managing enough resources, assets, or staff — a service entity can become a compelling strategic option.

And importantly, this structure is compliant when executed correctly. The key is ensuring that fees, services, and market rates reflect commercial reality — something we help you model clearly and defensibly.

How We Can Help

At Causbrooks, we work closely with barristers and legal professionals to:

• Establish service entities (trusts or companies) tailored to your circumstances
• Structure relationships between your practice and your service entity
• Optimise tax and profit outcomes while staying compliant with ATO guidelines
• Support implementation alongside your legal or accounting advisers

Not sure if a service entity is right for you?

Book a free consultation with our team — no obligations, just practical advice.

Book your complimentary 15-minute strategy call.