Modern Law Magazine issue 13 by Charlton Grant

01 August 2014 | Issue 13 | ISSN 2050-5744

The Business of Law

An elegant solution: Peer to Peer lending is fast becoming a viable alternative to traditional funding routes for law firms and, as Ivor Freedman explains, it is here to stay. Nicholas Bevan talks news: Nicholas Bevan explains why, if properly understood, Delaney v Secretary of State for Transport [2014] EWHC 1785 (QB) is nothing less than a game changer.

Modern Law Magazine | August 2014 | Issue 13

“The multi-disciplinary offering presents such a huge advantage to the client in particular circumstances and the introduction of more varied models, offering the client greater choice, can only be good” Shirley Brookes

SIR MICHAEL PITT “I agree with the idea that there should be a single regulator and it is interesting that there is a convergence of idea’s around this; the system we have at the moment is not ultimately sustainable”

Supported by

Sponsored by

Charlton Grant

E C L I P S E

ML // August 2014

Now is the time for... Integrated practice management software for modern law firms

Your people work better together... shouldnâ&#x20AC;&#x2122;t your software? Case Management

Legal Accounts Workflow Client Web Services

Digital Dictation

Find out more

WELCOME T

his issue of Modern Law is full to the brim with an exciting array of interviews and features from a pan-sector selection of experts. I’ve been extremely busy in preparation for this edition and went to meet the new Chairman of the Legal Services Board, Sir Michael Pitt, to find out how he is approaching his time as Chairman of the legal sector ‘super-regulator’ and how they are working collaboratively with other regulators as well as the Government (full coverage from page 11). I also spoke to the Senior Partner of PwC Legal (the ABS licensed legal arm of auditing giant, PwC), Shirley Brookes, about what their license means to her and how realistic opportunities for innovation are in the newly-liberalised legal sector (from page 15). We have a real mixture of features in this edition, which is thanks, in no small part, to proactive members of the legal market embracing change and doing things differently. The new President of CILEx, Frances Edwards, answers my questions about plans for her tenure and thoughts on the future of the legal profession in England and Wales (page 45). Modern Law also conducted a cross-industry analysis of changes within the family section of the legal market; speaking to Mediator, Laura Clapton; Barrister, Julia Nelson and Solicitor, Marilyn Stowe to bring you up to speed with

legislative developments and profession-wide concerns (page 46 onwards). Ivor Freedman, of alternative-funding business, Freedman & Partners LLP, also explains how Peer to Peer lending is fast becoming a viable alternative for law firms (page 51). Aside from working on the magazine, we have also been incredibly busy here at Modern Law Towers in preparation for the second Eclipse Proclaim Modern Law Awards. Nominations for this year are now closed and the Shortlist will be announced week commencing 25th August, so I urge you to keep an eye out! To register your interest in attending, please call 01765 600909, as tickets will be on sale from 1st September. The ceremony will be taking place on 15th October 2014 at the Hilton on Park Lane, London. I hope you enjoy this issue of Modern Law and if you have any feedback, comments or suggestions, please get in touch with me via: charlotte.parkinson@charltongrant.co.uk or call 01765 600909.

Charlotte Charlotte Parkinson, Group Editor, Modern Law Magazine.

Issue 13 – August 2014 | ISSN 2050-5744

Modern Law Magazine Project Director Kate McKittrick Accounts Director Karl Mason Events Director Julia Todd

Group Editor Charlotte Parkinson IT Crowd Consultant Editor Charles Christian Production Victoria Lang-Burns

Business Development Manager Martin Smith Head of Sales Rachael Pearson Design Matthew Phillis

Contact t: 01765 600909 or e: info@modernlawmagazine.com

Modern Law Events: www.modernlawevents.co.uk Modern Law Awards: www.modernlawawards.co.uk

All material is copyrighted both written and illustrated. Reproduction in part or whole is strictly forbidden without the written permission of the publisher. All images and information is collated from extensive research and along with advertisements is published in good faith. Although the author and publisher have made every effort to ensure that the information in this publication was correct at press time, the author and publisher do not assume and hereby disclaim any liability to any party for any loss, damage, or disruption caused by errors or omissions, whether such errors or omissions result from negligence, accident, or any other cause.

ML // August 2014

CONTENTS 07 INTRO & THE NEWS

07 Nicholas Bevan talks news

Nicholas Bevan explains why, if properly understood, Delaney v Secretary of State for Transport [2014] EWHC 1785 (QB) is nothing less than a game changer.

11-16 THE INTERVIEWS 11

Interview with... Sir Michael Pitt Charlotte Parkinson, Modern Law, sat down with the new Chairman of the Legal Services Board (LSB), to find out how he is approaching his time as Chairman of the ‘super-regulator’ and how they are working collaboratively with other regulators and the Government.

15 Interview with... Shirley Brookes

Charlotte Parkinson, Modern Law, spoke to the Senior Partner of PwC Legal to find out what the ABS authorisation of the auditing giant’s legal arm means to her, and realistic opportunities for innovation following the liberalisation of legal services.

19-41 THE VIEWS

21 Regulatory reform progress Crispin Passmore, SRA

23 Beware of Fraudulent

“Vishing” Phone Calls

Steve Arundale, RBS/NatWest

23 Good intentions?

David Bott, Bott & Co

25 A serious challenge? Tony Brown, AGB Legal

25 In their shoes...

Rayne Tompson, Law League

27 Always on...

David Kempster, Legal Eye

27 The after effect... Colin Taylor, Willis

29 Where to for PI Cover?

Eddie Goldsmith, Goldsmith Williams Solicitors

29 Supply and demand

Noel Inge, CILEx Law School

31 Breaking the mould Dez Derry, mmadigital

31 Accident claims – historical footnote

Trevor Gilbert, Trevor Gilbert & Associates

EDITORIAL COLUMNISTS Alex Bagnall Head of Commercial Litigation Costs Lawlords

Crispin Passmore Executive Director Solicitors Regulation Authority (SRA)

Andy Poole Legal Sector Partner Armstrong Watson

Darren Gower Marketing Director Eclipse Legal Systems

Barry Talbot Managing Director Informance Limited

David Bott Managing Partner Bott & Co

Charles Christian Editor-in-Chief The Legal IT Insider

David Kempster Consultant Legal Eye

Chris Hendry Head of Advanced Media Thomson Reuters, Legal UK & Ireland

Dez Derry CEO mmadigital

Colin Taylor Executive Director, Legal Services Practice Group Willis

ML // August 2014

Eddie Goldsmith Partner Goldsmith Williams Ivor Freedman Senior Partner Freedman & Partners LLP

Jitendra Valera Chief Marketing Officer Advanced Legal

Nicholas Bevan Simon Pinner Solicitor, Legal Services Consultant, Director Mediator, Legal Trainer Box Legal Limited

Jo Hodges Head of Sales & Marketing Redbrick Solutions

Nick Hodges Managing Director Oyez Professional Services Limited

John Dobson CEO SmartSearch

Noel Inge Managing Director CILEx Law School

Justin Selig Legal Director Landlord Action

Phil Snee Development Director Linetime

Lisa Beale Head Checkaprofessional.com

Priti Mehta Group CEO Acuutech Ltd

Michael George Davidson Head of Business Development Parabis

Rayne Tompson Director Law League

Nagib Tharani Richard Burcher Director of International Expansion Chairman Clio Burcher Jennings

Steve Arundale Head of Professional Sectors and Financial Institutions, Business and Commercial Banking RBS & NatWest Tony Brown Owner AGB Legal Trevor Gilbert Chairman and CEO TRG Group (Trevor Gilbert & Associates)

33 ‘Digital by Default’ or ‘Analogue by Accident’ for Law firms?

Nick Hodges, Oyez Professional Services

33 Staying safe

John Dobson, SmartSearch Limited

35 Understanding the risks

Simon Pinner, Box Legal Limited

35 Can Digital Signatures benefit law firms?

Jitendra Valera (JV), Advanced Legal

37 What clients really value...

Andy Poole, Armstrong Watson

37 Here to stay

Michael George Davidson, Parabis

38 A Juggling Act

Chris Hendry, Thomson Reuters, Legal UK & Ireland

38 Informed choices

Lisa Beale, Checkaprofessional.com

39 “You can have it any colour you like, as long as it’s black”…

Richard Burcher, Burcher Jennings

39 The evolving market Alex Bagnall, Lawlor

41-54 THE FEATURES 41 An innovative blend

Justin Selig explains how and why Landlord Action, the Original UK Eviction Service, acquired its ABS license.

43 Flooding: Worse than ever myth or reality?

Planning Practice Guidance from the Department for Communities and Local Government has raised awareness of the need to take flooding seriously, as Mark Fermor reports.

45 A window of opportunity...

Charlotte Parkinson, Modern Law, spoke to the new President of the Chartered Institute of Legal Executives (CILEx), about how she is approaching her new role and her thoughts on the future of the legal profession in England and Wales.

46 Sea Change: Riding the waves

The Family Law section of the legal market has experienced seismic changes over the last few years; Charlotte Parkinson, Modern Law, spoke to three experts, to find out how the changes are affecting the entire sector.

48 The Future: in your hands?

Charlotte Parkinson, Modern Law, spoke to three legal experts about their view on App technology.

51 An elegant Business Funding solution

Peer to Peer lending is fast becoming a viable alternative to traditional funding routes for law firms and, as Ivor Freedman explains, it is here to stay.

53 Fuel for growth...

Charlotte Parkinson, Modern Law, spoke to Andrew Stenning about challenges faced by search companies in light of the boom in the conveyancing market and how client care and support should remain top of the tree.

54 A New Set of Challenges

Charlotte Parkinson, Modern Law, spoke to Darren Gower, Marketing Director at Eclipse Legal Systems, to find out how the right type of support is fundamental to the success of any law firm.

55-62 IT CROWD 57 Tech Procurement – Does the Cap (Ex) fit anymore?

Our resident IT guru Charles Christian explains what sort of technology law firms and legal service providers should be buying and how best to then handle the rollout.

59 The Perfect Fit

Jo Hodges, Redbrick Solutions

59 The building blocks

Darren Gower, Eclipse Legal Systems

60 All aboard

Priti Mehta, Acuutech Ltd

60 The prized apple Phil Snee, Linetime

61 Five Winning Practices for Case Management

Nagib Tharani, Clio

61 It’s not rocket science... Barry Talbot, Informance

62 5 minutes with... Michael Napier QC

62 Chadwick Lawrence implements Proclaim

Eclipse’s Proclaim Practice Management solution selected in 6-figure deal

51 ML // August 2014

We work with law firms to ensure compliance and optimise best practice and risk management. Our extensive and thorough knowledge of the Code of Conduct and other regulations will ensure your law firm is compliant and your processes sound. The advice we offer is clear and practical, and we pride ourselves on our exceptional customer service and unbeatable work quality. Legal-Eye Specialises in • Best Practice • Risk Management • Compliance of the Code of Conduct, Equality Act 2010, EU Commerce Directive • Lexcel Accreditation • CQS Applications • Completion of tender responses to win new work • TCF (Treating Customers Fairly) programmes / training • Training: AML, Equality and Diversity, Data Protection, Conflict of Interests, Lexcel, The Bribery Act

Tel: +44 79 2177 4548

www.legal-eye.co.uk

Nicholas Bevan talks news

NICHOLAS BEVAN TALKS NEWS Nicholas Bevan explains why, if properly understood, Delaney v Secretary of State for Transport [2014] EWHC 1785 (QB) is nothing less than a game changer.

n 3 June Mr Justice Jay delivered a judgment that has profound implications for anyone vetting or handling motor accident claims. Firstly, it confirms in one particular instance something that the author has been arguing for many years: namely that our national law provision for guaranteeing the compensatory entitlement of victims is peppered with unlawful exclusions and limitations of liability that unjustly favour motor insurers at the expense of innocent victims whom the scheme is supposed to protect. Secondly, although not directly in issue, its reasoning reaffirms the comprehensive scope of compulsory third party motor insurance cover. This means that subject to the single permitted exclusion of liability against a passenger whom the insurer can prove knew the vehicle was stolen, once issued, a policy must provide full cover for third party victims; come what may. Any other breach of policy is to be confined to the insurer/ policyholder relationship. Thirdly, it exposes the Department for Transport for ineptitude of a very high order for failing to transpose into domestic law the minimum standards of compensatory protection required under European Community law. Finally and perhaps most significant of all, it demonstrates that when it comes to interpreting the meaning and scope of the minimum standards of compensatory protection required under Community law, the superior and binding authority of the Court of Justice of the European Union (CJEU) provides a complete answer. This effectively renders to obsolescence a recent train of erroneous decisions such as the Court of Appeal’s ruling in EUI v Bristol Alliance Partnership Ltd [2012] EWCA Civ 1267. Here Ward LJ ruled (wrongly) that motor insurers are free to exclude or limit their liability to compensate third parties in the cover provided under Part VI of the Road Traffic Act 1988, save to the extent that they are expressly precluded from doing so by the 1988 Act. All this from one judgment; not a bad achievement for a recently appointed High Court judge!

‘Subject to the single permitted exclusion of liability against a passenger whom the insurer can prove knew the vehicle was stolen, once issued, a policy must provide full cover for third party victims; come what may’ ML // August 2014

Nicholas Bevan talks news

‘When one compares the European comprehensive cover principle with the qualified cover conferred under our national law provision, as exemplified by the EUI v Bristol Alliance case, our national law provision is found seriously wanting’ The first action; Delaney v Pickett & Tradewise Sean Delaney’s original claim arose out a road accident back in November 2006 in which he sustained a serious head injury. It was common ground that Shane Pickett, his driver, was entirely responsible. The expensive Mercedes sports car in which Delaney and Pickett were travelling was insured with Tradex Insurance Services Ltd. Unfortunately the case was complicated by the discovery of substantial quantities of cannabis tucked away in the clothing of both the unconscious driver and his passenger, Delaney. When Delaney sued Pickett and his insurers, his claim was dismissed by Judge Gregory, at first instance. He gave two reasons: • Firstly, he ruled that as the accident was so closely connected with the commission of a crime it was barred by ex turpi causa non oratur actio. • Secondly, he also found that even if the claim were not barred by public policy, it was an excluded liability under clause 6(1)(e)(iii) of the Uninsured Drivers Agreement 1999 (the 1999 Agreement). This might at first encounter seem to be a rather anomalous finding, as the Mercedes Pickett had been driving that day was covered by third party insurance. Why Pickett was treated as an uninsured driver Pickett accepted sole responsibility for the cannabis: enough for 1,376 spliffs! He claimed that he needed it as an analgesic and to help him cope with emotional problems. Although that avoided a much harsher penalty for dealing, it provided Tradex with the opportunity to argue that the policy was vitiated. His medical records revealed that he was suffering from depression and, like millions of other drivers, he was a diabetic. These facts and his addition were all material particulars that should have been disclosed to Tradex in the insurance proposal but weren’t. So Tradex lost no time in applying to the court for declaration under section 152(2) of the 1988 Act that the contract was void. The first instance decision The learned judge’s line of reasoning appears to have run along familiar lines: • That as Tradex had successfully obtained a section 152 declaration, the policy was void as presumably, it had also served Pickett with the requisite notice of its intention to rely on this under section 152(3)); • That made Pickett an uninsured driver and consequently Delaney’s entitlement to compensation was now governed by the terms of the 1999 Agreement; • Clause 6(1)(e)(iii) of the 1999 Agreement excludes the MIB from any liability to compensate a victim who is a passenger that knows or ought to have known that the vehicle in which he is being carried and which is responsible for his injury is being used in connection with or furtherance of a crime. Delaney v Pickett & Tradewise [2012] EWCA Civ 1532 Pickett appealed but this failed in June 2011 when the Court of Appeal ruled that although the trial judge had been wrong to dismiss the claim under the ex turpi causa principle (because the underlying criminal objective of the journey had nothing to do with the cause of accident), the judge’s secondary finding was upheld (albeit by only a majority). With no prospect of recovering against Tradex or the MIB, Delaney was left with a hollow victory. Pickett lacked the resources satisfy his extensive liability. It is an extraordinary fact that it does not seem to have occurred to anyone involved (neither the claimants solicitors, the learned QCs, the trial judge nor even to the three lords justices of appeal) to question whether section 152 or clause 6 are compatible with the comprehensive cover principle required under the Motor Insurance Directives.

ML // August 2014

The European dimension Both Part VI of the 1988 Act (which imposes the duty to insure and which defines the scope and extent of third party insurance cover required) as well as the 1999 Agreement (that governs the MIB’s duty to compensate victims of uninsured drivers) are both intended to implement the European Motor Insurance Directives (the Directives). The sixth consolidating directive (2009 /103/EC) was not in force at the date of the accident and so the relevant Community law provisions requiring member states to implement laws and rules that ensure that third party victims of motor vehicle use are covered by civil liability insurance is set out in the first three directives (72/166/EC of 24 April 1972; 84/5/EC of 30 December 1983 and 90/232/EC of 14 May 1990). Suffice to say that a line of CJEU rulings from 1996 onwards has interpreted the combined effect of these three Directives as imposing a mandatory obligation on every member state to ensure that motor insurance policies issued under article 3(1) of the First Directive provide comprehensive cover to any third party injured by the use of an insured vehicle (see: Bernaldez 1996 Case C-129/94; Ferreira Case 2000 Case C-348/98; Candolin 2005 Case C-537/03; Farrell 2007 Case C-356/05; and more recently in Churchill 2011 Case C-442/10). Furthermore, according to these CJEU rulings, only one exclusion of cover is permitted, whether by operation of law or within the policy document itself. This single exception is stipulated in article 2 (1) of the Second Directive and it concerns a passenger victim who knows that the vehicle is stolen. The CJEU has also ruled that the compensating body (i.e. the MIB) can only exclude its liability to compensate a victim of an uninsured driver (where the insurance obligation applies) in one instance, namely that expressly provided for in article 1(4) of the Second Directive. This also applies to a passenger victim but one who knows the vehicle is uninsured. It is also beyond doubt that the Directives, all six of them, act as our primary source of law because under the European Communities Act 1972, not only are their objectives directly effective against the state but in 2004 the CJEU ruled in Pfeiffer (Case C-397/01) that the duty of our courts; “is to consider the whole body of rules

Nicholas Bevan talks news of national law and to interpret them, so far as possible, in the light of the wording and purpose of the directive in order to achieve an outcome consistent with the objective pursued by the directive”. This applies equally to the 1988 Act as it does to the 1999 Agreement. When one compares the European comprehensive cover principle with the qualified cover conferred under our national law provision, as exemplified by the EUI v Bristol Alliance case, our national law provision is found seriously wanting. Take for example the four passenger exclusions of liability under clause 6(1)(e) and the exclusion of subrogated claims under clause 6(1)(c)(ii) of the 1999 Agreement: none of which comply with the Directives. Only clause 6(1)(e)(ii) is capable of being construed consistently with article 1(4) of the Second Directive. In White v White & MIB [2001] UKHL 9 the House of Lords had put a blue pencil to the constructive knowledge provision. Returning to Delaney, by the time the claimant’s legal representatives were eventually alerted to the European dimension it was far too late to appeal to the Supreme Court. The second action: Delaney against the Secretary of State for Transport Delaney’s final recourse was to bring a fresh claim, this time against the Secretary of State for Transport seeking Francovich damages on the ground that he had been denied compensatory relief because the Minister had failed to fully implement the Motor Insurance Directives. No doubt for good tactical reasons Delaney’s new legal team limited its case to arguing that clause 6(1)(e)(iii) did not conform with the single permitted exclusion in article 1(4) of the Second Directive. The compatibility of section 152 of the 1988 Act to vitiate third party cover was lawful, was put to one side. Consequently, the court did not examine whether this claim had been properly allocated as an uninsured driver claim. It is interesting that no mention was made of the EUI v Bristol Alliance ruling that had sought to confine the comprehensive cover principle propounded by Bernaldez to its own facts. Mr Justice Jay had no hesitation in finding the Minister liable for a serious breach of the Directives. The Directives meaning as ‘close to being selfevident’ and the CJEU case law ‘unequivocal’. He also held that the breach was neither inadvertent nor excusable and then continued: “the Defendant is guilty of a serious breach of Community law in circumstances where its room for manoeuvre under the Directives was closely circumscribed. It did not have a wide discretion. Its obligations under the Directives, and their relevant confines, were quite clear, and - in the absence of knowing the actual reason for this policy decision - the best that may be said is that the Defendant decided to run the risk, which was significant, knowing of its existence”. Appeal underway The Minister is appealing the decision. Perhaps this is a tactic designed to buy a little more time to contend with an ongoing investigation by the European Commission into his defective transposition of the Directives.

Regulations 2002 and both MIB Agreements, it reveals numerous defects that conflict with the basic comprehensive cover principle required under Community law. The writer has identified over forty instances where our national provision for third party victims have been unlawfully compromised. These range across a continuum from the arguably excusable to the flagrant and clearly inexcusable. Nicholas Bevan is a Solicitor, Legal Services Consultant, Mediator and Legal Trainer.

Points to take away • Practitioners need to wake up to the fact that we cannot take any of our national law provision in this area at face value. It must always be construed in the light of the Directives and the relevant CJEU rulings interpreting them; not just when the meaning is unclear. • Whenever an insurer or the MIB claims to be entitled to avoid or restrict liability this should be tested by comparing their contentions with the Community law provision. The 1999 Agreement contains numerous unlawful limitations and exclusions of liability. • The MIB’s proper role is confined to the dwindling number of cases where there no insurance in place at all or where the driver cannot be identified. The CJEU has explicitly asserted this in Churchill and more recently in Csonka in 2013, Case C 409/11. • Numerous claims are being inappropriately assigned as article 75 insurance claims and run under the highly prejudicial terms of the 1999 Agreement. • Motor insurers can only exclude liability to compensate a third party claimant in one instance (see article 1(4) above; now article 13(1) of the Sixth Directive). A necessary corollary of this is that once a policy has been issued, that single exception excluded, the insurer has a legal obligation to satisfy a third party claim. The cover is good for any use or misuse of the vehicle, no matter who is driving it; regardless of any policy breach, exclusion or restriction in liability. • Whether the section 152 declaration process is inimical to the Community law comprehensive cover principle is something that has yet to be determined; it probably is. • Although successive Ministers are responsible for bungling the transposition of the Directives into UK national law, we lawyers must also accept our share of the blame for not identifying and challenging these infractions more often than we do. • If we don’t raise these issues, then we cannot assume that the courts will pick these points up independently. • Urgent training is necessary to ensure that every claims handler is equipped with the necessary knowhow to identify when an insurer’s purported rejection of a claim is unlawful and how to successfully and profitably challenge these long established but wholly misconceived practices. • A working knowledge of EU law is now an essential requirement for competency in RTA practice. We are all European lawyers now!

The wider implications Although Delaney concerned itself with just one of the many exclusion clauses within the 1999 Agreement, it is abundantly clear that when the same Community law comparative approach is applied to interpreting Part VI of the Road Traffic Act 1988, the EC Rights Against Insurers

ML // August 2014

Can you afford not to? Stay in regular contact with your clients through your own effortless mobile app Reduce incoming client letters, emails and calls Save thousands of pounds in unrecoverable WIP Deliver a unique client experience inCase™ is the first mobile application of its kind to offer bespoke legal solutions for law firms and clients. Specialising in the personal injury and conveyancing sectors, inCase™ can be integrated into your case management system and provide ‘real time’ updates to your clients.

Call us now to beneﬁt from inCase™

0161 956 3840

e: enquiries@lavatech.ltd.uk w: www.in-case.co.uk

Offering Legal Firms Quality and Value at Preferential Prices

We’ll help you source affordable, reliable products & services for your practice including:  Office Products & Stationery  Utilities and Telecoms  Archive Storage For Further Information call Kieran Walsh on 020 7556 3290 or email kieran.walsh@officeteam.co.uk

 Furniture  Oyez Legal Forms Software  Digital Dictation & Transcription

Interview with...Sir Michael Pitt

Interview with... SIR MICHAEL PITT Charlotte Parkinson, Modern Law, sat down with the new Chairman of the Legal Services Board (LSB), to find out how he is approaching his time as Chairman of the ‘super-regulator’ and how they are working collaboratively with other regulators and the Government.

Q A

Should the legal profession be regulated by non-lawyers?

This current system was created as a result of the Legal Services Act, as a result of this, non-lawyer regulation was borne and this is certainly a good thing. It gives the profession the opportunity to take a view on how legal services are functioning in England and Wales and compare it with other parts of the economy.

Q A

Do you plan to be the last Chairman the LSB; is there a plan in place to replace you after your tenure as Chairman is completed? I am in agreement with the Lord Chancellor’s proposals in terms of the role of the LSB being a ‘task and finish’ organisation. There is still a big job to be done and we know that to make the sort of changes some of us would like, it will require primary legislation and the likelihood is that this will happen after the election; this would mean a period of at least 3, possibly up to 5 years before any legislation would be implemented or changed. As far as I’m concerned, there is a job to be done now which is about making the best we can of the Legal Services Act. The Act was remarkable in the sense that it got the sector moving but there is a lot more to be done.

Q A

How do you view the idea of a single regulator of legal services? I agree with the idea that there should be a single regulator and it is interesting that there is a convergence of idea’s around this; the system we have at the moment

Sir Michael Pitt

Sir Michael Pitt was appointed as the second Chairman of the Legal Services Board (LSB), which started on 1 May 2014. The appointment was made by the Lord Chancellor and Justice Secretary after consultation with the Lord Chief Justice. Mike graduated from University College London with a first class honours degree in Engineering. During the first half of his career he was involved in the planning, design and construction of transport and other infrastructure in this country and abroad, working for the private and public sectors. He has held Directorships in the country’s largest local authorities. From 1990 to 2005 he was Chief Executive of Cheshire and Kent County Councils. More recently, he has worked on a wide range of consultancy assignments, including a year-long appointment as independent Chair of the Government’s review of the 2007 floods. He has also been Chair of a number of other organisations including NHS South West, two companies and a charity. He continued as Chair and Chief Executive of the Planning Inspectorate until he took up his new appointment as Chair of the Legal Services Board on 1 May 2014.

ML // August 2014

Interview with...Sir Michael Pitt

is not ultimately sustainable. In the engineering sector, for example, there is one engineering council which is a regulator for 235,000 engineers in 54 different specialisms, the whole sector utilises a 50 page rule book comprising of ethics and standards. Engineering is a highly complex sector working throughout the world, yet most people working in this area would describe this system as rational and effective. I am not saying this would translate exactly to the legal sector, as they are different, but there are certainly things that can be learnt. The idea of a single regulator broken down into a number of divisions is an interesting one and might well provide an initial framework. This is something the profession and regulators need to work on this in the next few years.

Q A

Are the LSB working collaboratively with the Government? One of the jobs of the LSB over the next 3 years is to work with the Government to understand exactly what a single regulator would look like in practice and the LSB will be providing a degree of leadership in relation to those conversations. I will also be giving my role the time it requires, the official 70 days a year is feeling quite pressured but as I get to know the sector and individuals better, I think the job will become easier. There is a blurring of the edges in terms of cross over within the profession; solicitor advocates are now doing a very similar job to barristers and barristers can now go directly to the consumer. Current market conditions are likely to drive this further, whether we like it or not. The LSB and I are making it our business to ensure we are listening to all the other organisations and regulators concerned with the legal sector and the conversations I have had to date have been positive. It is however, impossible to deal with the small regulators in the same way as we might with the SRA or the Bar Standards Board so there might be discrepancies there but otherwise our approach will be the same.

Q A

What are your views on the regulation of will writers?

There is compelling evidence to suggest that the will writing profession should be regulated and it is disappointing that the Government decided not to take that forward. We will not let this drop from

ML // August 2014

the agenda and we will continue to try and push it forward; at some stage in the future, this issue will be picked up again by the Government.

Q A

What is your view on the position of the Law Society and the compulsory contribution to the practice certificate fees? We will be undertaking a major review of the cost of regulation in the coming months (with a view to publishing the findings at the end of 2014 or early in 2015). This will mean looking both at the direct cost of regulation and the burden it places on the profession but also the impact that regulation as a whole has on the sector in terms of additional costs.

Q A

Should other organisations, such as the Bar Standards Board, be working more on releasing diversity statistics? It is important that we, as well as the profession, can see the data and that it can be tracked; this must be a high priority issue for the regulator. I can already sense from the conversations I have been having that they are taking that very seriously. It is also important to value the importance of diversity in terms of the profession itself. The public, individual firms and individual chambers have a right to access official statistics. Procurers of legal services are also beginning to ask more demanding questions and organisations which already have strong diversity policies, which then contract work, are asking why providers arenâ&#x20AC;&#x2122;t operating to the same standards. There should be a natural tendency within the profession to better organise itself in this regard; diversity is one of the things that firms ought to be competing on.

Q A

Are there any areas of the profession where you think consumers are particularly at

risk?

From the consumer point of view, the biggest point of concern is those people that need legal services but canâ&#x20AC;&#x2122;t get access to them. In terms of risk, the main areaâ&#x20AC;&#x2122;s I am worried about are issues around children, families and immigration, where the highest level of advocacy is vital due to the nature of potential high risk. The consumer seems to be less well informed than they should be about their choice of legal services and how to make comparisons with

potential alternatives. It is also key that complaints data is monitored and accurate, so as to allow for maximum transparency for the consumer. The Legal Ombudsman (LeO) is sitting on a rich sea of data in relation to complaints and we need to work with them on exploiting that data, to provide strong evidence about whether complaints are being handled effectively.

Q A

Finally, is the SRA doing enough to speed up the Alternative Business Structure (ABS) licensing process? There is a great deal of evidence that the SRA has sped up the licensing process significantly and they are now clearly meeting the statutory 6 month deadline. Prior to January 2013, the average time for an application and licensing approval was 7 months, those submitted after that date took an average of 6 months and the SRA are now moving to a figure of just over 3 months. The SRA is moving ahead in a whole series of directions now, not just with the licensing of ABSs.

The Online MARKETING REVOLUTION FORLEGAL SERVICES

Brought to you courtesy of our sister company

Today, clients are looking for an informed choice when choosing a legal service and Checkaprofessional’s new online service is providing just that.

ESTATE AGENTS MORTGAGE BROKERS FINANCIAL ADVISERS LEGAL SERVICES SOLICITORS COSMETIC SURGEONS SURVEYORS HAIR & BEAUTY ACCOUNTANTS THERAPISTS

OPTICIANS DENTAL VETS IT

Δ Δ Δ Δ Δ Δ Δ Δ Δ Δ Δ Δ Δ Δ

The Checkaprofessional website will give instant access to all legal service providers who have agreed to be vetted by us and continuously monitored by their clients, who can post verified feedback on the site. It will provide a FREE one-stop shop to finding the right legal professional for a client’s particular needs. Find out about the unique advantages Checkaprofessional membership could provide for your online marketing.

Membership Enquiries:

0808 901 9042 www.checkaprofessional.com IS PROUD TO ANNOUNCE THAT OUR WEBSITE HAS ASSESSED ITSELF AGAINST THE LEGAL SERVICES CONSUMER PANEL’S STANDARDS FOR COMPARISON WEBSITES.

weigh up the evidence for yourself…

print and document strategies for the legal sector AS AN APPROVED SUPPLIER TO LEGAL FIRMS ACROSS THE UK, WE HAVE DEVELOPED SPECIALIST DOCUMENT SOLUTIONS THAT MEET THE NEEDS OF THE LEGAL SECTOR. We offer great savings and guarantee that our print, copy, document management and workflow systems meet the most stringent specifications and demands, so that you can be sure that your data security will not be compromised.

To find out more about Altodigital call 0845 504 5353 email learnmore@altodigital.com or visit us at www.altodigital.com

P A R T N E R

Y O U

C A N

R E A L LY

T R U S T

WHAT WILL YOUR FIRM

DISCOVER?

See us at the Alternative Legal IT Show, 16 & 17 September 2014

With QlikView Business Discovery your firm could consolidate multiple data sources into one user-friendly application for instant answers and unprecedented business insight.

BUSINESS DISCOVERY

• Better financial control • Complete business agility • Improved operational efficiency • Increased profitability • Strategic decision making • Dynamic dashboards Drive business growth with a QlikView application from Informance.

informance.co.uk ®

Informance Ltd, Warwick Technology Park, Gallows Hill, Warwick CV34 6UW Telephone: 01926 623456 Email: info@informance.co.uk www.informance.co.uk

Partner ELITE SOLUTION PROVIDER

SBT1273 charlton Grant informance ad.v6 August 2013.indd 1

15/08/2013 14:17

Interview with... Shirley Brookes

Interview with... SHIRLEY BROOKES Charlotte Parkinson, Modern Law, spoke to the Senior Partner of PwC Legal to find out what the ABS authorisation of the auditing giant’s legal arm means to her, and realistic opportunities for innovation following the liberalisation of legal services. Shirley Brookes Shirley Brookes is Senior Partner of PwC Legal in the UK. The main focus of Shirley’s work is corporate structuring and M&A. She practice’s in the mid tier helping privately owned businesses with their corporate structures (reorganising companies and partnership structures, buying and selling businesses, extracting cash for shareholders and advising on arrangements between shareholders). Shirley has been with PwC Legal for 14 years having joined from Stephenson Harwood. She spent most of her career focused on mid-tier private company clients and is also an expert on limited liability partnerships, advising clients on how to integrate them into their corporate structures and operate them on a day to day basis.

Q A

You head up PwC Legal, what are your current and future visions/ambitions for the business?

The primary consideration for us is to develop and grow some of the key areas in which we already operate, as well as considering new areas. Whatever new opportunities we do consider, we nearly always collaborate with the wider PwC group. Prior to doing this, we consider what is happening in the economy and what is happening in the market and then look into where we see big growth or big issues as well as considering and anticipating how changing legislation and changing commercial practises may affect the market. Communication with the wider PwC group is absolutely fundamental to our strategy. If they tell us where the next big growth area or area for investment is, we then consider whether there is a legal angle we could apply to it, if it is the right thing for our practice to do. We are constantly doing this and keeping an eye on where we may need to make new investments to develop over the next few years. We have just started our new financial year on 1st July so we are currently looking at the investments we made last year and bedding those down. We are also integrating some

of the senior hires that we have made, as well as focusing on getting some of our new business areas off the ground.

Q A

What did the authorisation of PwC Legal as an Alternative Business Structure (ABS) mean for you?

Externally, it was fantastic, we have been waiting for this in the 18 years or so that we have been in existence. We always thought the legislation was absolutely made for us. Internally, in terms of how we approach our business and how we approach the market, it hasn’t made an enormous amount of difference because we were already working collaboratively anyway. A major difference is that we now have a PwC Partner who sits on our executive board so I work very closely with him in

‘There is absolutely still room for much more diverse businesses to obtain ABS licenses’ ML // August 2014

Interview with... Shirley Brookes

particular. We consider new practice areas and look in depth at our current business offering. We also have greater ability to invest in the complementary services that we see our clients demanding, for example we are building a cyber security practice.

Q A

One of the key purposes of the liberalisation of legal services was to enable opportunities for innovation; what are the innovative features of your business model? There is a key difference between innovation and differentiation and the big differentiator for us is clearly to be able to go to market with a joined up offering; this is something which is still fairly unique in the market at the moment. In terms of innovation, we use innovative technology in some practice areas such as immigration

PwC Legal is part of the PwC international network; do you anticipate other ‘Big Four’ auditors to follow in your footsteps and branch out into legal offerings? If so, what could this mean for the sector? I have read in the press that both Ernst and Young and KPMG have recruited lawyers into their business models into the UK. I don’t know anything about their business models or how they may or may not be integrating legal offerings but clearly they are anticipating being able to offer legal services in one form or another. In terms of what that would mean for the sector, it would be nothing but good. The way clients buy legal advice and what they expect is changing and advisors must keep up with that. The multi-disciplinary offering presents such a huge

‘The multi-disciplinary offering presents such a huge advantage to the client in particular circumstances and the introduction of more varied models, offering the client greater choice, can only be good’ and entity governance. Otherwise, the innovative approach is more to do with our structure and governance being different, rather than anything else.

advantage to the client in particular circumstances and the introduction of more varied models, offering the client greater choice, can only be good.

Q A

Does PwC Legal have any plans to undertake an acquisition trail in the legal market, or do you anticipate the business to grow organically? We always keep an eye on the market so we are looking at the development of individual partners as well as teams. Organic growth is really important to us because the PwC philosophy has always been developing people and making them rounded, we would not want to start making acquisitions at the risk of neglecting to promote people internally, it is important there is a balance of the two. Having said that, we do always keep an eye out for potential acquisitions and if something comes along that would really fit with our culture, position in the market and business model, we would look at that very seriously.

ML // August 2014

Who do you think will/is benefit(ing) most from the introduction of ABSs; the consumer or entrepreneurs? Do they drive fair competition in the legal market? The customer has to benefit more; otherwise something has gone seriously wrong with the model. The whole point of the introduction of ABSs was to make access to legal services easier and to provide a more varied base of legal services; if it is advantaging the investor at the expense of the client then there is clearly a problem. In terms of whether there is fair competition in the legal market, I think there is because there are so many different models providing different legal services.

Q A

Will/are multi-disciplinary partnerships especially between lawyers and accountants work(ing)? They have always worked for us and we have never had an issue, it works for our clients and people and it is key to get the strategy right so that you understand what your clients need. It is imperative to find the right people and develop them; have the right strategy (so everyone in the business understands what it is trying to achieve) and deliver the best quality to the best clients. If all of these elements are in place, these types of partnerships will work and it does work for us.

Q A

Is there any more room in the legal market for new models or will the peak of new entrants into the market subside? It won’t subside any time soon; we haven’t even seen the real burst of it yet. The vast majority of licensed firms are small or medium sized, although there are now a number of bigger entrants, as well as a more diverse range of new entrants emerging. There is absolutely still room for many more diverse businesses to obtain ABS licenses.

Q A

What are your future predictions for PwC Legal?

My hopes for PwC Legal are to maintain good, profitable growth, continue to attract quality clients and continue to develop our people into well rounded business advisers. We will spend the next year strengthening and deepening our specialisms. We are looking to ensure we are positioned at the top of the market in areas we think we are or could be the best.

KNOW YOUR CUSTOMER?

WHEN IT COMES TO SANCTIONS & PEPS WE DO! BUSINESS & INDIVIDUAL AML

SANCTIONS & PEPS

DAILY MONITORING & ALERTS

ENHANCED DUE DILIGENCE

ADVERSE MEDIA

RETROSPECTIVE PROCESSING

INTERNATIONAL SANCTIONS & PEPS

BROWSER, API & SINGLE SIGN ON

‘ALL IN ONE’ BUSINESS & INDIVIDUAL AML CHECKS SANCTION & PEP CHECKING:

DAILY MONITORING & ALERTS:

When you use SmartSearch you will never need to worry about checking Sanctions or PEPs again. We host over 1,100 Worldwide Sanction & PEP lists and we update these on a daily basis. The SmartSearch AML platform automatically checks every Business and Individual name entered against our Sanction & PEPs Database so you don’t have to worry. When we find a name match we inform the user immediately and we automatically alert your MLRO by email. It is very important to perform comprehensive Sanction & PEP checks as we typically find between 3% and 5% name matches for a typical client, although the majority of these are false alerts.

Once you have checked your customer against our Worldwide Sanction & PEP Database, SmartSearch continues to monitor all of your Clients on a daily basis. If a match is found SmartSearch will immediately send an email notification of this occurrence and change in status. At the same time SmartSearch will also collate all the necessary Biography, Adverse Media and Photographic Evidence to enable you to quickly and efficiently fulfil your Enhanced Due Diligence obligations. If you input your Client’s date of birth, SmartSearch will execute your Enhanced Due Diligence automatically and simply advise you of the outcome. All of these functions happen in real time enabling a business check to be fully completed in under 2 minutes and an individual check in less than 3 seconds. Our new SmartSearch technology will dramatically reduce the delays, disruption and risk when taking on new clients, at the same time minimising the cost of the AML verification process. It will also ensure your business remains fully AML compliant and protected at all times.

SMARTSEARCH SAVES YOU TIME & MONEY AND YOUR CUSTOMERS INCONVENIENCE & COST

To arrange your demonstration please call 0113 238 7660 or visit smartsearchuk.com Award Winning

After The Event Insurance for

Clinical & Dental Negligence We Challenge you to Find Cheaper! Client Pays...

Claims Under £10k

Stage 1 = £400 Stage 2 = £780 ------- Or -------

plus IPT

For more details, contact Kirsten Arnold 0870 766 9997 | kirsten@boxlegal.co.uk | www.boxlegal.co.uk

Supplied by Solicitors...for Solicitors

The Views

19-41

THE VIEWS

The Views

Regulatory reform progress As the SRA outlined in the last edition of Modern Law Magazine, a reform programme was launched in May aimed at reducing the burdens for law firms while maintaining important protections for clients, Crispin Passmore reports.

e published a policy statement (www.sra.org. uk/reform) that set out our approach to regulation and its reform. The reform programme will:

• remove unnecessary regulatory barriers and restrictions to enable increased competition, innovation and growth to serve the consumers of legal services better • reduce unnecessary regulatory burdens and cost on regulated firms • ensure that regulation is properly targeted and proportionate for all solicitors and regulated businesses, particularly small businesses Reducing the burden At its meeting at the start of July, our Board made the first raft of decisions on three consultations that ran in the spring and which support the programme. These should be the first of many. The decisions made by the Board are hopefully the first of a number that should reduce the regulatory burdens on law firms. The proposals we made were aimed at making life easier for firms - they are not something that benefit the SRA in any way. We genuinely believe that firms will benefit from this programme, and that these benefits will in turn be passed on to consumers. Because of the feedback we got in the consultation exercises, not all of the proposals put forward were agreed to by the Board. This shows we are listening to what we are told and if we believe there is merit in the suggestions we have received, then we will act on them. A number of further proposals have been made around professional indemnity insurance, for example, and we will be issuing a call for evidence from those that made them so that we can investigate further. Taking heed As we have also said, if there are other areas you think we should be looking at then we are happy to take suggestions. The reform programme continues with further decisions on the licensing of multi-disciplinary practices and stopping the Keeping of the Roll exercise as an annual event, which were also consulted on in the spring. These will be considered by the Board in the autumn. Also on the agenda are compensation arrangements rules - including the scope of arrangement and their funding - and handling client money. We have already announced plans to look at the regulation in-house solicitors and Rule 4, and how we want to make it easier for smaller firms to comply. At the Board meeting, members considered consultation responses, the outcome of further engagement with stakeholders during the consultation period and analyses

‘The proposals we made were aimed at making life easier for firms - they are not something that benefit the SRA in any way’ of the impacts of the proposed changes. The majority of responses to our consultations agreed with our aim of reducing the burden of regulation. However, some stakeholders disagreed with the proposals we made. We have taken this feedback on board and, where we feel respondents have a valid point, we have either decided to take a fresh look at the proposals, or look for more information. The changes made by the Board were: •

Minimum terms and conditions for indemnity insurance: The SRA is introducing a requirement on all firms to ensure they have an appropriate level of indemnity insurance cover, and reducing the mandatory minimum level of compulsory cover to £500,000

•

Residual balances: The SRA is increasing the amount that may be withdrawn from residual client balances and donated to charity without SRA approval from £50 to £500

•

Changes to accountants’ reports on client accounts: the Board has deferred a decision on this until its next meeting to allow for further analysis of the consultation and consideration of the options.

•

Until final proposals have been agreed, firms are required to comply with the current rules, specifically Rule 32 of the SRA Accounts Rules, and deliver an accountant’s report to the SRA within six months of the end of the accounting period.

•

Compensation Fund eligibility: The SRA is changing the eligibility criteria to only consider applications from individuals and small businesses, charities and trustees where turnover, annual income and trust value do not exceed £2 million respectively.

These are still subject to Legal Services Board approval. If agreed to, the changes will be made in time for the 11th version of the Handbook, which is due to go live in October. Anyone with suggestions on other areas that could be included in the reform package can email reform@sra.org.uk. Crispin Passmore, SRA Executive Director for Policy.

ML // August 2014

The Views

Beware of Fraudulent “Vishing” Phone Calls

raudsters have been targeting solicitors and other professional sector businesses using a telephony scam known as ‘vishing’ (“voicephishing”). The amounts involved can be significant, as the criminals will often try to steal money you hold on behalf of your clients. This scam is not unique to RBS and NatWest customers – solicitors in account with all of the major UK banks have been targeted. The banking industry is working with the UK authorities to combat vishing, but it is important that you understand the threat and how you can protect your firm. Vishing: what is it? Vishing is when a fraudster telephones your business, pretending to be from the bank. These fraudsters will undertake research on your company in advance of making the call, so that they sound knowledgeable and credible. The fraudster uses compelling and urgent language to convince you that your account has been compromised. For example, claiming that there are fraudulent transactions pending and that you need to take immediate action to terminate them. They will then pressurise you into disclosing confidential information, such as the log-in password for your online banking service, as a means of resolving the problem. However, the information that you provide will be used to access your account(s) and transfer money illegally. Protect your firm from vishing • Be suspicious of any telephone calls requesting online banking information such as log-in PINS, passwords and payment authorisation codes • End any such calls immediately • Report the incident to your bank using a telephone number that you know and trust, but use a different telephone handset, as the fraudster may try to keep the line open (i.e. by not terminating their half of the call), meaning that you may inadvertently reconnect to them when you attempt to dial-out.

Good intentions? The Solicitors Regulation Authority has decided to go ahead with cutting the minimum compulsory cover for indemnity insurance from £2m to £500,000; what impact could this controversial decision have on the profession?

“T

he road to hell is paved with good intentions”, best sums up how I feel about this decision by the SRA.

I cannot believe that the SRA has not put some thought into this decision, but I am at a loss as why it has decided to allow the figure to be so low and why, with all that is going on in our industry, is now the right time to do it? Clearly for some firms £2m is vast over insurance and they might well be the majority. However if you are under insured, it will be the partners of the law firm who will have to fund any top up. Is it not more prudent to pay extra in insurance than to pay out a potentially unlimited sum via under insurance? Also what about the client who is on the wrong side of the triple whammy of negligence, under insurance and partners with no assets? So under insurance leads to client unhappiness and partner unhappiness as personal wealth may well not cover the shortfall. How is this a step forward and how was the figure of £500k alighted upon? I have always slept better by being remarkably over insured, and viewed the minimum insurance as exactly that. But what, in my view, are the likely consequences of this decision? In the short term it may lead to a lower premium for some who only want the minimum cover. But this is far from a given as asking for the minimum might well be an insurance risk indicator in itself. In the longer term, lack of insurance could lead to more firms hitting the wall as personal liability and maybe even bankruptcy visits those for whom a cheaper premium was all they wanted and could afford, but still ran the firm without any systems in place. David Bott, Senior Partner, Bott & Co.

Refer to your bank for further information about the best practices you can adopt to stay safe when using Internet banking, and also visit the www.getsafeonline.org website, which is the UK Government’s preferred channel for online security advice. If you are concerned that your business has been affected by vishing or other scams, contact Action Fraud, the UK’s national reporting centre for fraud and internet crime on 0300 123 2040. Steve Arundale, Head of Professional Sectors & Financial Institutions, Sectors & Specialist Business, Royal Bank of Scotland /NatWest Commercial & Private Banking.

ML // August 2014

Regulatory Compliance Consultancy

Alison Matthews Consulting Ltd provides training, compliance and regulatory services, specialising in anti money laundering, anti bribery, data protection and professional conduct.

• Are your staff complacent about money laundering risks? • Have you lost client data? • Are you at risk of non – compliance with the Bribery Act?” • Are you at risk of breaching the Code of Conduct? • Are you at risk of breaching outcome (1.1) ? • Are your employees poorly supervised?

If any of the answers are “yes”, contact Alison Matthews Consulting Ltd for practical and expert help.

Please contact Alison Matthews Consulting Limited by email: alm@alisonmatthewsconsulting.co.uk or by telephone 07803 398 146 for further details and pricing.

The Views

A serious challenge?

In their shoes...

Portions of the legal sector are beginning to argue that the growing presence of global accountancy firms in the legal market place will present a “very serious” challenge to traditional law firms, do you agree and if so, why?

The Legal Services Consumer Panel announced in May that nearly half (44%) of consumers are dissatisfied with the service they receive but do not complain. How can we work to lower this figure?

t’s hard to argue a case that suggests the likes of KPMG or any global professional services business, be it accountant or insurance company, wouldn’t pose a challenge to traditional Law Firms post reform act, advent of the ABS etc. Do I agree it presents a serious challenge to traditional firms is another matter and at the risk of getting splinters from the fence I will sit on the answer is yes and no. Free trade, competition and an open market has a tremendous benefit to the consumer who ultimately has a choice; does that make it a challenge? Yes. However creating a market for services you haven’t offered in the past takes time to establish both as a brand and reputation for excellence. No, not a serious challenge, yet! More of an issue is we continually talk about the threat of new entrants to traditional firms, yet those under threat take an absolute age to respond to it if any response at all. Times have changed and let’s be honest; it’s not as if the sector couldn’t see it coming. Traditional firms must take a long hard look at their own business first using this brave new world as the catalyst for change. Understanding the true competition is a key aspect, for example will you in all reality be competing with the likes of KPMG directly? Possibly, but do you know what business the competition is likely to be targeting to determine if the threat is real or are we simply jumping on the bandwagon of it must be a threat. Back here on my fence the answer remains yes and no but my challenge to all firms, irrespective of size or specialism would be do you truly understand the nature of the competition, do you truly understand the strengths (and weaknesses) of your own business and most importantly what do you need to do to be able to compete? There are still far too many firms procrastinating over this aspect instead of focussing on making their business fit for the next 20 years with the majority of traditional firms, whatever the size or sector, having some way to go in embracing the open market. A number of high profile industries in the 70’s and 80’s perceived themselves to be beyond external competition. Where are they now?

et’s put ourselves in the consumer’s shoes. Who would take on their own lawyer? Lawyers are instructed because they know the law inside out; they argue to their advantage; they’re always looking for that contradictory piece of information. How could a consumer hope to reach an agreement in their favour and who should they complain to, anyway? Additionally, many consumers with grievances may not have the impetus, funds or time to commit to raising a complaint. How can we identify these individuals and encourage them to air their complaint? Firstly, firms need to recognise that resolving a complaint increases the chance of converting that disgruntled consumer into a loyal client. In many cases fee earners can detect if there’s an issue within the client relationship. As they become increasingly responsible for their own business development it is essential that lawyers adopt the adage of “if in doubt, front it out”. Communicating effectively with clients so that they feel they can voice concerns is critical to a quick resolution. Secondly, partnerships need to be genuine in their request for feedback, assuring each and every consumer that their opinion counts and will be acted upon where possible. Some lawyers may be cynical, but so are many of the people who pay the legal bills. Thirdly, legal entities need to put measurable processes in place to demonstrate that engaging with clients provides a discernible business advantage. Including a Net Promoter based recommendation/referral question on a feedback survey provides an assessment of the percentage of clients who are loyal to the firm. This group will recommend your services to others, give you repeat business and, yes, forgive the odd mistake because you’ve proven that your service can live up to their expectations. Complaining is hard for a consumer so, as a profession, making it a straightforward process and providing clear guidelines as to what can be expected will reap benefits. Clients who feel they’re being dealt with fairly and openly will take a different view of the profession than those who are intimidated by the very people they retained to represent them.

Tony Brown, Owner, AGB Legal. Rayne Tompson, Director, Law League.

ML // August 2014

Legal market – entry options The legal market is valued in excess of £30bn. Over 60% of UK consumers have indicated they would consider purchasing a legal service from trusted consumer brands. ABS formation, joint venture, contract for services, panel member... Whatever the solution Parabis can work with you to supply a wide range of legal services. Contact Us To find out how Parabis can help you, please contact: Michael George Davidson Head of Business Development – Consumer, Parabis Group T: 0787 280 7138 E: michael.davidson@parabis.co.uk

T: 0844 245 4000

www.parabisgroup.co.uk The Parabis Group is neither a legal entity nor a trading name or division of a legal entity, it is merely a description ascribed to a group of legal entities with common ownership.

Modern Law Advert - Issue 8.indd 1

06/06/2014 11:08

The Views

Always on...

The after effect...

Are Smartphone Apps a useful commercial tool for law firms, or simply a gimmick?

What do the SRA’s new minimum PII terms mean for your business?

he trouble with apps is that they do seem like a gimmick for many law firms but that is only because, culturally, partners have just not made the paradigm shift to the value and benefit of digital marketing and done more with the medium. Take for example, the average practice’s website. The vast majority are still static “calling card” type formats – flat, one dimensional, some stock images, a few pages on who they are, what they do and how to contact them. Not only is that predictable and dull, but it presumes many people know they are there and are reading the website avidly. Traffic stats will tell you otherwise. In a recent survey by Google, 35% of all legal services searches were undertaken from a mobile or tablet device. Those law firms that had converted their sites to mobile compatible receive the higher search ranking and are, by definition, more visible than others. Apps go that one step further in that they distil the firm’s messaging, service and content offering into a simpler, clearer navigation that gets the user to a response page and enquiry form as quickly as possible. Smartphones now dominate the market and apps have now cemented themselves into the consumer’s everyday life. Some things lend themselves better to apps than others, but from a legal services perspective, they are a great tool to provide free valuable advice and content as a hook to accessing paid for support. They are not as complex or onerous as partners may perceive and practices of all sizes can develop an impressive app at relatively low cost. Our own Legal Eye app has been downloaded by in excess of 350 law firms. It is a good example of how complex content can be made accessible and ensures that we have a vehicle that provides regular updates and engagement to users in a convenient format. But compared to other adjacent markets, like the property portals, law firms just haven’t put themselves out there to the consumer in the same integrated way. Apps are part of a multiple communications channel strategy that partners need to think about. If you want to demonstrate you are “always on”, providing imaginative content and better ways to stay in touch while you engage with them, then the relatively modest investment in converting web content and workflow to an app needs serious examination. David Kempster, Consultant, Legal Eye.

hilst the decision made by the SRA in early July came as no surprise to many in the insurance industry, there has been some speculation by insurers, insurance intermediaries and solicitors as to what the reduction in minimum terms is going to mean in reality.

What the change in minimum terms means The ability to reduce your minimum coverage to £500k (down from £2million) will provide a benefit to solicitors in the form of flexibility; however this option may only be available to solicitors operating in specific sectors. Solicitors operating in spaces with traditionally large claims (like conveyancing) may struggle to find reputable insurers willing to offer lower coverage terms. Whether or not your firm “qualifies” for a reduced limit will primarily depend on your area of expertise, your claims history and your risk management. PII claims are nearly always unexpected and it must be borne in mind that with an aggregation clause within the policy it is possible that an insurer may add up a number of claims and treat them as one claim (in certain circumstances). A £500,000 limit may be too low in this event. Will you see your PII premium reduce? The SRA have stated that the decision was reached off the back of research that suggests a 5% reduction in premium would be expected from a reduction in minimum terms. Whilst we can’t say how the outcome to this research was reached, we have been in contact with numerous insurers on how this will affect their pricing. Generally speaking, renewing your existing insurance (with your current limit) is not likely to have a dramatic effect on pricing. For those that opt for a lower limit (and assuming an insurer is willing to offer these terms) a marginal reduction may be forthcoming. Whether this is in line with the actual value of the product and the protection it provides you, will depend on the construction of your policy and understanding of your risk profile. The 2014 Renewal Our advice has been that no solicitor considering early renewal should be dismayed by the prospect of pending regulatory change. For those that genuinely believe their current limits are too high, speak to a specialist. An experienced broker has the knowledge and expertise to discuss issues involved in choosing the right level of cover. Colin Taylor, Executive Director, Legal Services Practice Group, Willis.

ML // June 2014

PROFESSIONAL INDEMNITY INSURANCE PUT YOUR FEET UP, WE’VE GOT IT COVERED... With one of the largest teams in the UK, Willis has access to the insurance market that most other brokers don’t. n We represent firms of all sizes and specialisms n Have EXCLUSIVE facilities (with A rated insurers) for 1-10 partner firms n And are the preferred SPG broker We’re also here for you all year round: at renewal, when exploring merger opportunities, taking on lateral hires, start-ups and those seeking run-off. To find out more contact: Robin Bayly Robin.Bayly@willis.com 020 3193 9415

Jake Fox Jake.Fox@willis.com 0113 283 2970

www: willisfinexglobal.com Willis Limited, Registered number: 181116 England and Wales. Registered address: 51 Lime Street, London EC3M 7DQ. A Lloyd’s Broker. Authorised and regulated by the Financial Conduct Authority.

23608/05/14

23608_ADVERT_WillisPrime.indd 1

23/05/2014 10:59:14

LEGAL SOLUTIONS FROM THOMSON REUTERS LEGAL RESEARCH MEETS INTELLIGENT TECHNOLOGY Westlaw UK is an innovative legal research system which allows you to carry out fast and reliable legal research.

SEE A BETTER WAY FORWARD westlaw.co.uk

• Vast, authoritative databases of case law, consolidated legislation, journals and business news, all updated daily • Suite of intuitive time-saving tools including Status Icons; Case and Legislation Analysis Documents for the key facts; and Alerts so you’re notified when the situation changes • More than 130 Sweet & Maxwell books, available online to add on to the core service

The Views

Where to for PI Cover?

he recent decision (yet to be approved by the Legal Services Board) of the SRA to reduce the minimum PI cover from £2m/£3m to £500,000, was made against very strong representations by a number of stakeholders in the industry, not least the Law Society and the Consumer Panel of the Legal Services Board. The rationale behind the decision is laudable and as according to their Consultation on this, some 98% of cases are settled under the £500,000 band, together with the new Outcome of regulated bodies needing to consider themselves the appropriate level of cover for their businesses. On the face of it this does seem to make sense. Unfortunately, there is no real evidence so far of what reductions (if any) this change is going to make to the cost of insurance and indeed some commentators have described this change as a disaster waiting to happen. The issue here is that this change has been made and is to be implemented within a very tight timescale and there have been no pronouncements so far from the PI industry of what their views are in terms of the level of premiums for the next renewal date. There is a view that insurers will be wary of reducing premium at this stage until they are aware of the findings of the SRA review next year when other -potentially more significant - changes could be brought in - including excluding institutions such as lenders from being able to claim and run off cover reducing from 6 years to 3 years. Consequently, this is likely therefore to have little effect on premiums but more importantly it is creating uncertainty in the market and the risk is that some insurers may review their percent share of the market and consider whether they really want to be involved in a market where a regulator (not the market itself) sets the minimum terms on criteria which is not necessarily up to date nor transparent. As in so many other areas of practice these days - we will have to soldier on as best we can with one hand behind our backs and a patch over one eye! Eddie Goldsmith, Founding Partner, Goldsmith Williams Solicitors.

Supply and demand Does the legal profession provide enough opportunities and careerclarity for paralegals?

o answer this question and counter the considerable confusion surrounding this area of the legal sector, CILEx is launching a major research exercise into paralegals. Its paralegal enquiry will, amongst other things, research future skills requirements, the role of professional bodies, employer attitudes, future market needs, career progression, training and support. CILEx’s initiative will build on the research that formed part of the Legal Education and Training Review, and as part of the project it is inviting employers to get involved. Employers can register their interest at paralegal.enquiry@cilex.org. uk . Fuller information on the scope of the project can be found at http://www.cilex.org.uk/about_cilex/paralegal_ enquiry.aspx It is understandable that employers faced with ever increasing demands to deliver more value to clients turn to paralegals rather than admitted staff. Often these paralegals will be LPC graduates who are desperate to gain legal work experience in the hope that this will lead to a training contract. While this is superficially attractive to employers, the downside is that it can lead to a group of less committed, restless employees who are not necessarily fully committed to the organisation. The alternative is to develop a group of staff through legal apprenticeships. There are several advantages to this route, not least because it can provide a technician level or higher level paralegal with a great opportunity to gain legal experience without the gamble of committing to an expensive law degree and LPC. The current legal apprenticeship scheme incorporates part of CILEx’s professional Level 3 qualification, and adds an element of work based learning which assesses the candidate’s competencesacross a range of tasks. CILEx Law School is the leading provider of legal apprenticeships, and has seen significant interest in this area as an alternative to recruiting from the pool of LPC graduates. Early adopting employers with legal apprentices have already experienced advantages associated with developing talent through this route. Typically these include increased loyalty and flexibility. And while apprentices initially need nurturing in the workplace, employers find that after 3-6 months they become a valuable and productive member of staff. Moreover, the economic case for a hard-pressed employer is particularly attractive, with free training for the under 19’s and apprentice minimum wages starting at £2.73 per hour (from October). Noel Inge, Managing Director, CILEx Law School.

ML // August 2014

THE NEW HOME OF SAFER INFORMATION Proofpoint leverages the power of cloud to enable the world’s most successful companies to better understand, defend and govern their critical information – inside and outside their network. NETprotocol is the premier technology solutions provider to legal and financial institutions, already trusted to design, deliver and support key infrastructure to top 100 law firms nationwide through diverse deployment models, covering Data Centre to Desktop. Together we represent the UK’s leading partnership in delivering complete information security and governance.

WHAT DOES 1 MEAN TO YOU? Whether the breach of confidential information by 1 successful targeted attack, the 1 untraceable message or 1 smoking gun email – ‘the 1’ can have a colossal impact on your organisation.

Protection. Can you identify today’s advanced targeted attacks before it’s too late? With Targeted Attack Protection’s clicktime defence technology, you get a new protection that follows email through the organisation – on-site, off-site, on every click. Which means when something originally safe turns hostile, you have unique visibility and ultimate actionability to find and neutralise it before it’s too late.

Archive. Can you find that 1 critical piece of evidence when it matters most? Proofpoint’s Enterprise Archive technology gives you Big Data-powered parallel searching to deliver results in seconds – instead of days or weeks. And our fully automated data ingestion, retention management and legal holds, give you the assurance of a new level of discovery readiness. Gartner, Inc. positions Proofpoint in the Leaders Quadrant in its 2012 Magic Quadrant for Enterprise Information Archiving. Find out why – download the report at proofpoint.com/gartnermq

The Views

Breaking the mould Are Smartphone apps a useful commercial tool for law firms, or simply a gimmick?

martphone apps have revolutionised the way many of us interact with each other and the statistics for app usage are staggering. Portio Research found that in 2012 1.2 billion people (29% in Europe) were using mobile apps. They’re still carrying out research for how app usage looks now but if growth continues at the forecasted rate then by 2017 there will be 4.1 billion app users worldwide. It’s clear that apps are not a gimmick but then are they really the right choice for a legal business? In our experience it’s all down to how you develop them. It’s difficult to find a reason for a law firm to issue an app that can provide something above and beyond what your website can. Our experience has shown that so long as you have a website that is fully optimised for mobile use then there’s little need for an app, unless you’re trying to promote a specific service that an app can be easily applied to. Let’s say for example you’re trying to promote a sliding scale of legal services for those looking to buy a home. An app explaining the process and its potential costs could well be a good idea. Then again apps can be expensive to build, so why not simply add this feature into your website anyway, or create a mobile ‘micro-site’ so that you can still reach people on the move? This would be much more efficient. While the ‘leisure side’ of the internet lends itself very well to apps, 33% are games, there is strong research to support mobile web over apps in business. Nielson found that retailers’ mobile optimised sites were twice as popular over the Christmas shopping period than apps. Google’s own research also backs this up. They found that 65 percent of US smartphone shoppers preferred to use mobile web to mobile apps for shopping. For those who think these retail sector stats aren’t important to lawyers, don’t forget the legal sector is being moulded by client behaviour. The legal sector will need to develop more retail style tactics to attract future clients and if you find your clients prefer to use mobile websites rather than a smartphone app, then the answer is simple. Give them what they want.

Accident claims – historical footnote

ersonal injury has been big business for many years and ‘slip and fall’ can be traced back to the last quarter of the 19th century in America where it was common for someone to say they slipped on a banana skin whilst alighting from a train. One such person was Anna Strula, more commonly known as Banana Anna who apparently made around 17 claims. Another banana peeler gang, as they were known, were the Freeman family and one of the children, Fannie, had made several claims against railroads, one of which was that she was partially paralysed as a result of a banana peel slip. However, Chicago detectives who were keen to put an end to this family’s run of claims, rented a room above the Freemans’ and drilled a small peep hole in their floor (Fannie’s ceiling) and with reporters from the Chicago Tribune observed her actions for 5 days and nights in 1895. It seems she was observed indulging in a hurdle race over all the chairs in the room, and dancing and not least practising her ‘paralysis’ to the extent she could have pins stuck in her by doctors and not feel them. ‘Slip and fall’ claims started as a result of real personal injury claims resulting from sometimes horrible accidents which were settled in cash by the railroads. Coincidentally, the American accident faker came on the scene at much the same time as the Great Train Robbers including the Daltons, Reno brothers and Black Bart (English born) but instead of gunfire this new type of criminal complained of aches and pains incurred as a result of their accident. The trickster would perhaps use a banana skin in his back pocket rather than a gun; wore no mask, just a pained expression – and complained a lot. There were earlier scams before the 1890s, notably Mr and Mrs Wheelwright in 1870 who were slipping and falling their way around the nation and amassing a sizeable fortune. Claims were often in the range of $10,000-$20,000. But nothing is new. History is littered with beggars who affect injury from accidents in order to provoke pity and get a little cash. It’s just become more sophisticated. Trevor Gilbert, Chairman at Trevor Gilbert & Associates.

Dez Derry is CEO of mmadigital, online marketing for modern law firms.

ML // August 2014

Next Generation Practice

and Financial Management Two seamlessly integrated solutions, delivering everything needed by the modern law ﬁrm.

• • • • • • •

Increase fee earning and proﬁtability Client and Business Accounting Billing and Productivity Management Financial and Analytical Reporting Financial disciplines and controls required by the SRA Manage risk and compliance easily and eﬀectively Structured, comprehensive reporting and information management

0845 166 2629 | redbricksolutions.co.uk

• Extensive workﬂows for Conveyancing, Probate & Immigration ‘out of the box’ • Generic workﬂows can be customised to suit any type of legal discipline • Lexcel and SLC recommended • Complimented by the full suite of all legal forms • Document management, CRM & time recording • Outlook integration (mobile & tablet compatible!)

The Views

‘Digital by Default’ or Staying safe can law firms ensure they remain compliant when ‘Analogue by Accident’ for How utilising date capture methods? Law firms? ata Capture Compliance is

he government Digital by Default strategy launched in November 2012 was designed to make doing business with government much more straightforward and convenient. For Law firms transactions such Land Registry, HMRC, and Companies House, Court of Protection could be expected to become increasingly digitised, potentially leaving more traditional firms out in the cold. In a recent survey by Oyez, firms were asked to rate the priority given to e-submission in various areas. Whereas 73% of larger firms rated Land Registry e-submission as a priority, only 39% of smaller firms gave it the same rating. With around 50% of title registration still in paper format these results may be alarming, but not entirely surprising.

Responses showed that although some smaller firms are genuinely interested, others still need convincing that e-submission delivers the promised benefits of being quicker, cheaper and less risky. Is it lack of foresight and planning in these firms, or is there a genuine reason for the slow take up? One way is to transform the traditional paper method directly to electronic submission, the solution chosen by Oyez, with law firms being able to use their existing forms system, click ‘submit’ and receive an almost simultaneous acknowledgment; the benefit, minimum change, minimum fuss and very little to learn. For larger firms registering charges at Companies House the issues are different, with concerns about the risk of moving away from tried and tested procedures. Firms do not allow staff to act on their own without close supervision. The answer here is to adopt a commercial solution; an example is our own Oyez Gateway, which allows firms to manage risk by incorporating workflow authorisation procedures linked to their document management systems. Perhaps a key weakness in e-submission is dealing with the absence of a traditional ‘wet-ink’ signature as proof of authorisation. This has lead to receiving authorities requiring the attachment of scanned documents, which have to be reviewed, reducing any possible cost savings over the paper method.

primarily about capturing accurate information, independently verifying it is correct and retaining the said information for an appropriate time in a secure and safe environment. If we consider the performance of Anti-money Laundering Verification, this is a good example of collecting, verifying and storing client data. The main regulatory umbrellas that are involved in overseeing these practices are the Office of the Information Commissioner in respect of the Data Protection Act and The Law Society in respect of the Money Laundering Regulations 2007, soon to be revised either later this year or early next. If you satisfy the later you are most likely to satisfy the former. Electronic AML verification platforms address many if not all of these concerns: Most products provide multiple electronic validations of your client input data, such as name, address and date of birth information and they provide multiple checks on this key data from a number of independent sources. The important element here is to ensure that the service providers validation data sets are updated regularly, they are from reliable sources and they provide complete market coverage. A good example of this is the Electoral Roll as some providers use the “edited register” which contains less than 50% of UK voting residents whereas the “full register” contains all adult individuals who are registered to vote. Another example of complete information is the checking of Sanctions & PEPs, some AML service providers will only check the HM Treasury Sanctions List when there are actually over 100 countries around the world that hold their own Sanction Lists. Comprehensive validation would see service providers accessing all these Sanction & PEP lists.

Finally, the failure of lightweight PKI e-signature solutions to gain widespread acceptance has also lead to ID checks filling the void for client authorisation. These can require sensitive personal information to be gathered and entered as part of the submission process. Due care is required when storing such data. If the identity requirement is for the submitting agent, the Solicitor’s usual solution of ‘signing for the practice’ is ignored and an individual employee is ‘put on the spot’ and must produce their identity.

Most AML providers will also securely hosts this data for you in the longer term providing you with instant recall services in the event of a regulatory inspection or audit. The more recent systems will also continue to monitor your clients daily for any changes in scenarios like Sanction & PEP lists changes giving you an alert to this effect and providing you with all the information to complete enhanced due diligence. Additionally, most systems will provide further background financial information which also enhances your KYC due diligence process. If you want to stay safe and compliant with minimal effort and cost then SmartSearch is definitely worth looking at.

Nick Hodges, Managing Director, Oyez Professional Services.

John Dobson, CEO, SmartSearch Limited.

ML // August 2014

The Views

Understanding the risks... Are Solicitors negligent if they don’t offer their clients After the Event Insurance protection?

olicitors who are already charging 25% of their client’s damages are sometimes reluctant to advise their clients to incur the further cost of an ATE insurance policy. This tendency is exacerbated in personal injury actions where solicitors sometimes feel they need not recommend ATE insurance because their client is protected by QOCS. But what are the solicitors’ professional obligations? The SRA Code of Conduct (July 2014 version) requires solicitors to protect their clients’ interests (Outcome 1.2), and sets out the appropriate steps for a solicitor to take. They include: discussing the risk of the client having to pay someone else’s legal fees and warning about payments which the client may be responsible for, as well as explaining the implications of a CFA and discussing the possibility of insurance. (Indicative Behaviours 1.13 to 1.17). Clearly, at the very least, the client must be offered the opportunity to purchase an ATE policy. The existence of QOCS is of little help - when faced with a client complaint, a solicitor would have to argue:

Can Digital Signatures benefit law firms?

igital signatures are still to take hold widely in the legal market but a rethink is needed by law firms about a technology already established in other verticals. Now more than ever law firms are looking to provide visible differentiation to their clients, streamline their business processes and reduce their costs of service delivery. For an industry that is so document centric, digital signatures can benefit a law firm in a number of different ways. Firstly, increasing demands for immediacy means that clients expect their suppliers to have the ability to provide signed documentation in the same timeframe it takes to send an email. The increasing official acceptance of email means that clients are less inclined to wait a day for documents to arrive. Before long using postal and courier services will be seen as a negative aspect of a law firm’s service delivery. Law firms need to review every aspect of the services they provide to ensure there are no gaps in their service portfolio.

When put this way, the solicitor’s justification is obviously unsustainable. A successful complaint by a client may of course lead to an order for compensation, and a breach of the Code will be prima facie evidence of negligence.

Secondly, the true cost and time in sending hard copy documentation is higher than firms realise. This is not just the cost of a first class stamp but the process of printing, approving, signing, and sending, a process empirical studies have shown can take days to complete. These costs are further exacerbated when dealing with bulk, larger documentation, multiple recipients, and international and time sensitive delivery requirements. Digital signature services, remove most of these steps and tangible costs which, when numerous documents are produced, can equate to significant cost and time savings.

But solicitors need to go further. A client who is simply offered the opportunity to purchase an ATE insurance policy (perhaps in a client care letter) and who declines but then faces an adverse costs order, will probably argue: “I know that you offered me an ATE policy and I opted not to purchase it, but rather than simply leaving the choice to me, your professional obligation was to have strongly advised me that I needed an ATE policy to protect me in the situation which has occurred.” If the client complains to the SRA, they may well take the view that when faced with a client who risked losing a large sum, the solicitor’s obligation was to meet with the client, ensure that he fully understood the risk he was taking and to strongly recommend a policy purchase. In the light of the above, many solicitors are now reluctant to act unless their client is prepared to purchase an ATE policy.

Frequent feedback from law firm management teams is that they are unclear where digital signatures are applicable and/or compliant. The European Union’s eIDAS regulatory update further endorses that fact that digital signatures are applicable in a court of law. However, the true benefit to law firms is not just using digital signatures for contentious/contractual documentation, which accounts for only a proportion of the documents produced, but across the wider business. The use of digital signatures can replace any requirement where currently a “wet” ink signature is used, be that employee offer letters, business process approvals, HR documentation etc. Of course for the time being digital signatures won’t totally replace the need for wet signatures totally but their intelligent use will clearly benefit a law firms brand and bottom line.

Simon Pinner, Director, Box Legal Limited.

Jitendra Valera (JV), Chief Marketing Officer, Advanced Legal.

“Adverse costs of £10,000 were awarded against my client but QOCS applied so my client only lost all of his £6,000 damages, and therefore my failure to recommend an ATE policy wasn’t negligent.”

ML // August 2014

tga puzzle ad 2014

17/2/14

12:33

Page 1

Standing out from the crowd…. We are different and we make a difference. Employment experts of choice, our success as leaders is built on a formidable reputation and a robust business model.

• Twice winners of the prestigious Eclipse Proclaim Personal Injury Awards. “Influential in calculating loss for claimants” - 2012.

And of our Chairman; “a true expert in an area where he has made a significant impact on the world of personal injury” – 2013

• ISO 9001 accredited – the quality assurance system for service industries

• APIL TIER 1 approved experts • Sweet & Maxwell checked • Jackson compliant Form H total estimate of costs provided with each enquiry

Our reports are tightly focused on the claimant and really do make a difference. Check out our testimonials on our web site, they are not only from lawyers but claimants.

Can you afford to place your trust in anything less? www.employmentexperts.co.uk

call 01473 288 018

email info@employmentexperts.co.uk

fax 01473 288 863

THE

EMPLOYMENT

EXPERTS

The Views

What clients really value

Here to stay

Is the legal market becoming commoditised and if so, what could this mean for the consumer and for law firms?

Are Smartphone apps a useful commercial tool for law firms or simply a gimmick?

any law firms are understandably worried that pressure is being applied to their top line income as commoditisation drives down price. However, it is not the commoditisation itself that is driving price down, commoditisation is a result of the market pressures of supply and demand, and it is those factors that impact on the price which suppliers are able to charge. There is a move in the general economy towards demand from the public for remote service, online service and nonbusiness hoursâ&#x20AC;&#x2122; service. As suppliers are able to meet this demand, particularly if they do so in bulk, they find that their unit costs fall since the delivery methods are more cost effective. They can, therefore, pass these savings to their customers with the aim of competing for a larger share of the developing market. As customers become more used to these lower prices, they use those prices as a benchmark for the amount that they expect to pay to all suppliers delivering what they believe is the same service, something that the online price comparison sites have encouraged. Looking towards the legal sector in particular, there are some firms that have changed their delivery methods to match the changing demand from clients. Those firms have found that they have been able to reduce their charges and move towards fixed fees. That has, in turn, put pressure on other firms to do the same. Price is always going to be an important factor to clients. However, it is not the most important issue to all clients. At the end of the day, clients will be looking for the lowest price for the service that they require. It may well be that they are prepared to pay a higher price when they know that they will receive that required service. If demand in the marketplace is changing, then suppliers should evolve to meet that demand or they will ultimately perish, that is unless they can educate the market of the benefits of their service â&#x20AC;&#x201C; i.e. differentiate themselves somehow. In my view, firms should be re-assessing the way in which services are delivered to clients and focus on what the clients really value. In many cases, that could be delivered at a lower cost to the practice and therefore protect profit margins despite falling income levels. Andy Poole, Legal Sector Partner, Armstrong Watson.

ith more than 7 in 10 (72%) of us now owning a smartphone in the UK and growing by 14% over the last ten months alone smartphone applications are clearly helping shape the digital future of the modern day consumer. The most likely group owning a smartphone has been the 25-30 segment with 89% device ownership. One of the most interesting recent trends to emerge is the rapid growth within the 54-65 year old populace with 54% now owning a smartphone device. There are now over 1.6m applications globally, with the two dominant platforms being Google Play and the Apps Store. This certainly presents a challenge in itself for new entrants to the marketplace in terms of gaining any tangible recognition and being able to demonstrate differentiation. One of the most documented customer benefits of using mobile over another communication means is the efficiency of data entry and minimal repetition. Using the smartphone and tablet functionalities of autofill means customer can quickly and accurately convey information and with the help of cookies make the ongoing application experience personal and less onerous. The use of applications as a commercial tool indeed can be very useful especially for law firms however, their use to date has been sporadic to say the least with only a few embracing the digital challenge. As a B2B-C operation, digital delivery for our brand partners and their customers is critical in ensuring the optimum customer journey and value enhancement we therefore invest heavily in our digital development for the following application functionality: 1. Document review and uploading service including digital signature 2. Real time tracking of all cases and enquiries 3. Quotations 4. Communications link e.g. call back requests, email link, instant messaging; and video 5. Helpline triage also used for FNOL services including photo capture for claims 6. Data capture and client location 7. Secure payments 8. Personal document library access and vault. The above list is by no means exhaustive and works in synergy with various other technology platforms. So, are mobile applications a gimmick? Yes, if their only creation is to leave a soft marketing footprint without any genuine value enhancement for the user. However, the use of smartphone/mobile applications is certainly here to stay and those who embrace the digital challenge and differentiate themselves from the crowd will benefit in the long run. Michael George Davidson, Head of Business Development, Parabis.

ML // August 2014

The Views

A Juggling Act

Informed choices

Are Smartphone Apps a useful commercial tool for law firms, or simply a gimmick?

The Legal Services Consumer Panel announced in May that nearly half (44%) of legal services consumers are dissatisfied with the service they receive but do not complain. This figure is significantly higher than other professional services sectors; how can/should the profession/regulators be working to lower this figure?

obile computing is transforming the way we work and live and the legal profession is not immune from its impact. In 2013, global App downloads rose 51% to 102 billion (Source: Gartner). A Smartphone with access to the web and great Apps is an invaluable professional tool and can be used for an ever increasing range of tasks. Apps enable you to work smarter, quicker and wherever you happen to be. With effective use of a Smartphone, lawyers can improve service delivery to their clients and better juggle work-life balance. They can better manage and record their time, communicate with colleagues and clients, keep abreast of developments in the law and in the broader news, retrieve legal information and know how, access and review documents and undertake a host of other tasks. So, should law firms be producing their own Apps to showcase their knowledge and add value to their client service delivery? That depends. A fantastic App might well achieve a firm’s commercial objective, but fantastic Apps are few and far between. Ask yourself: why are you building an App? From a development perspective, it really only makes sense to produce an App when a website just won’t do. So, if you’re simply delivering information, you may be better off with the web. An App should meet a very clear need and must be designed to execute on that task elegantly and effortlessly. Even when you’ve created such an App, it may sit undiscovered in the App stores and you may struggle for downloads. Once installed, it will be hard to get repeat usage unless there is something of real utility and value about your App. A rarely used or quickly discarded App will be little value to your brand. If you do produce a successful App, you might achieve your marketing objectives, but it will come at a price. Apps are expensive to build and maintain. To satisfy all your clients, you may have to build it for iOS, Android, Windows and BlackBerry, so the cost multiplies. A great App can certainly be a great marketing and commercial tool for law firms – so long as you have a brilliant idea and the budget to back it up. Chris Hendry, Head of Advanced Media, Thomson Reuters, Legal UK & Ireland.

t is a known fact that we often complain about the things we don’t understand. They say, we should seek to understand first, but are we made to feel we are not worthy and should not ask questions, as surely qualifications speak for themselves! If this is how we, as prospective clients are made to feel, then we purchase Legal Services on expectation rather than an informed choice. If the thoughts in the Legal Services industry are that choice is purely down to pricing, then a price war is soon to follow along with more complaints. It would appear that many in the Legal Services sector sit back and rely on local trade, or they await some enquiries/sales leads, which they purchase from a company whose website encourages prospective clients to place their personal data onto a website. The prospective client’s personal information is then sold onto an awaiting buyer, or buyers, who then contact the client and offer their services. The client at the receiving end, has very little or no knowledge about the firm calling them, who will be concentrating on sealing the deal. How ethical or informative is this for the client? Should a prospective client feel comfortable with parting with their personal information, not knowing who this is being sold to, or anything about the company this ends up in the hands of! Websites say exactly what the owner of that specific site wants them to say. It is vital that businesses have digital presence now, but it is important to remember, the most powerful marketing tool of all, are previous clients, who will have tried and tested the services. By visiting websites, or the high street, prospective clients are already comparing, so why be afraid to let them compare? When informed choices are made, people feel more empowered; they feel more comfortable with their choice, which leads to fewer complaints. Most consumers nowadays like to purchase products and services using previous client testimonials, especially when they are verified and collected via an independent third party. At Checkaprofessional.com, we understand that our users are searching for an informed choice in quality, on a site they know is marketed to clients, as well as marketed to consumers. Over 94% of the Checka brand users surveyed said having access to previous client testimonials, which had been independently vetted, was important to them and aided in the decision process. Lisa Beale, Head of Checkaprofessional.com.

ML // August 2014

The Views

“You can have it any colour you like, as long as it’s black”… In a recent interview with Modern Law, Karl Chapman, Riverview Law said; “Those that claim fixed pricing leads to poor service are as naive as those that claim ethics are under threat because non-lawyers can own law firms.” Do you agree?

would certainly agree with Karl that it is nonsense to suggest that fixed pricing is synonymous with poor service. Clients can be the recipients of poor service regardless of pricing methodology. That is not the issue. For me, the real issue is one of pricing choice. While I commend Riverview Law, Quality Solicitors and a number of other standalone firms on their initiatives around fixed fees, they continue in my view to miss the point completely. Market research clearly shows that price quantum is nowhere near as important as people think it is and that in fact, what clients are really looking for is price predictability and manageability, price transparency, and pricing that is better aligned with the client’s perception of the value that they are getting. The ability to deliver on those expectations is a function of two things, both of which the profession has little understanding of or ability to implement at the moment. The first is to undertake a pricing diagnostic. In this regard, I’m not talking about a legal diagnostic but rather, a pricing diagnostic. How can you possibly come up with an optimal pricing solution for a client if you have not gone through a structured diagnostic process at the beginning of the matter? Just like doctors’ patients, no two lawyers clients pricing symptoms are precisely the same. Secondly, offering clients fixed fees addresses only one of the client’s pressure points and is therefore an inadequate approach. Moving from hourly rate pricing to fixed fees is still a case of telling the client (with reference to Henry Ford and his mass-produced Model T) “you can have it in any colour you like, as long as it’s black”. The future of legal services pricing lies in what I refer to as pricing customisation. The real alchemy occurs when, having undertaken the pricing diagnostic, then drawing upon an extensive suite of 15 to 20 pricing strategies and tactics, the lawyer crafts a bespoke, perfect fit pricing solution for that client on that file. Richard Burcher, Chairman, Burcher Jennings.

The evolving market Is there now a real danger that untrained, uninsured and unregulated ‘practitioners’ will emerge to fill the gap for people who can no longer access proper legal advice and representation, following cuts to legal aid?

he Legal Aid, Sentencing and Punishment of Offenders Act 2012 (“LASPO”) has had a significant impact on access to justice. LASPO is not the first Act that restricted the scope of Legal Aid. The Access to Justice Act 1999 (“the AJA”) heralded the end of publicly-funded legal advice in areas such as personal injury, boundary disputes and defamation. However, the AJA counterbalanced these cuts by extending the legality of CFAs. The AJA did not legalise CFAs in all areas of law but, crucially, where CFAs remained illegal, Legal Aid continued to be available. LASPO contains no such counterbalance. Indeed, ending the recoverability of success fees and ATE premiums further-restricted access to justice. Whilst it is still possible to enter into CFAs in most cases, they remain illegal in areas such as family law. This has created a situation whereby litigants involved in certain disputes who earn modest incomes cannot obtain Legal Aid and they cannot afford to pay lawyers. It is these litigants which are targeted by the untrained, uninsured and unregulated practitioners. McKenzie Friends are the most commonlyencountered of these practitioners and a study was recently completed by the Legal Services Consumer Panel (“the LSCP”) into their role. To the surprise of many, the LSCP concluded that fee-charging McKenzie Friends can improve access to justice and should be recognised as a legitimate feature of the evolving legal services market. The LSCP went as far as recommending that self-represented litigants should be educated about the use of McKenzie Friends. Although several risks of using McKenzie Friends were identified, it was concluded that self-regulation through a trade association would be more appropriate than external regulation. One particularly surprising finding in the report was the fees which were reported to be charged by McKenzie Friends: an average of between £35ph-£60ph, and sometimes as much as £89ph. One would hope that savvy Legal Aid lawyers who are used to turning a profit on similar (or even lower) rates should, with a bit of targeted marketing, be able to compete with McKenzie Friends by providing a better service at a comparable cost. Alex Bagnall, Head of Commercial Litigation Costs, Lawlords.

ML // August 2014

PLP Modern Law Advert 135x190mm 7.14_Layout 1 24/07/2014 16:19 Page 3

Northern Base National Presence

The Family Team at Parklane Plowden Chambers Parklane Plowden Chambers offers 22 expert barristers who practise exclusively in family law. We have a broad range of talent and experience to suit your budget in all areas of public and private child law, matrimonial law and finance, and arranged marriages. For more information on how our barristers can assist you, please contact our senior family clerk Mark Williams on 0113 228 5043, email:

“this set occupies an enviable position in terms of strength, depth and recognition among practitioners.” Chambers and Partners 2014 Follow us on

clerks@parklaneplowden.co.uk or visit our website: www.parklaneplowden.co.uk

Leeds

Newcastle upon Tyne

19 Westgate, Leeds, LS1 2RD

4-8 Lombard Street, Newcastle upon Tyne, NE1 3AE

Fax: 0113 200 1018 DX: 26404 Leeds Park Square

Fax: 0191 221 2122 DX: 61062 Newcastle

Email: clerks@parklaneplowden.co.uk

Web: www.parklaneplowden.co.uk

Marketing... it shouldn’t be like pulling teeth

www.charltongrant.co.uk 01765 600909

Publishing | Events | Design | PR | Marketing

41-54

THE FEATURES AN INNOVATIVE BLEND

Justin Selig explains how and why Landlord Action, the Original UK Eviction Service, acquired its ABS license.

ack in 1999, a group of professional landlords set up an eviction service as an alternative to using a solicitor. Under written advice from a QC, the UK’s first specialist service called Landlord Action was introduced, which originated the 3-step fixed-fee eviction process and has since assisted in over 28,000 cases and fielded over 200,000 calls via their free helpline. However, in October 2013, more than a decade on from inception and in a move the firm says highlights their commitment to cleaning up the lettings industry, Landlord Action acquired status as an Alternative Business Structure (ABS) authorised and regulated by the Solicitors Regulation Authority. Redefining the process... When Landlord Action started out, it was revolutionary. It redefined the legal eviction process, providing simplicity for landlords and letting agents to a previously complicated and costly burden. As the buy-to-let industry grew, an eviction industry sprang up, all following the Landlord Action model. The internet created fertile ground for a whole raft of copycat services, but not all use the same legally qualified personnel to do the work, which can put both landlord and agent at risk when things go wrong. From the start, Landlord Action always used external solicitors to review every case, issue at court and brief advocates, and they have always used advocates at court. Over the years, they used a panel of solicitors firms that, for the most part, served their landlords and letting agents well, but ultimately Landlord Action did not have complete control over what was going on. They were reliant on third parties and when timeframes were not met, this impacted the reputation of the company as a whole. In order to improve standards and provide a better service, myself (as Director of The Law Department) and Landlord Action joined forces to bring solicitors in-house. We recruited a whole new legal team of experts in this specific area of law and after 10 months, Landlord Action acquired the status of a law firm, enabling myself and my team to focus on the legal side of the business whilst Founder Paul Shamplina, as a non-legal professional, focuses on the management

and development of the business. We still only specialise in Housing Law and still only represent landlords and agents – never tenants, but our new position is recognition of our expertise and clearly differentiates us from those internet services that have tried to copy. The benefits to us as a business and subsequently to our clients are numerous. The Landlord Action business model was the perfect example of how being an ABS can create an innovative blend of legal and non-legal services. We now have complete control of the end to end process from the moment a landlord or agent calls us, to the moment he/she regains possession of their property. Other advantages include:- Faster Service - Our service is now so quick that almost all notices are served within 48 hours and some hearing dates are gained within minutes. - Minimise Errors – We’ve cut out the middle-man and regained controlled. Our trained professionals eliminate compliance errors which can cause a case to be thrown out at court, the result of which would cause the whole process to have to start over. - Greater Protection - Because of our ABS status, we now hold comprehensive professional indemnity insurance to cover all risks relating to the services we provide. - Specialist knowledge – Other solicitors will carry out a variety of different types of work. Landlord Action is a specialist in possession and debt recovery and therefore has greater knowledge in this area than most traditional law firms, meaning we pick up on things that others may not. Assessing the options... It is possible that non-legal businesses gaining ABS status will affect high street law firms, particularly those multi-disciplinary firms which offer traditional services such as conveyancing, wills and housing. However, it could also provide greater financing options for smaller firms through flexible ownership and the rise of more specialist alternative businesses could also mean new solicitors will have broader options to progress their careers. Landlord Action did not become an ABS with the intention of competing with law firms offering similar services. We simply recognised that our original idea had spawned an entire internet industry that now endangers the very landlords and agents we set out to protect. We’re part of the letting community and we’re dedicated to providing landlords and agents with a high quality specialist service tailored to their specific needs. Whatever we can do to improve that and protect the wider public interest, we will. Justin Selig is Legal Director at Landlord Action.

ML // August 2014

Do you need to review matter-profitability and reduce operating costs? Are you rethinking your staffing structures? We are working with many organisations to develop learning and development schemes to fulfil their financial objectives. To find out how you can benefit from our expertise in the education and training of paralegals and support staff, including the new legal services apprentices, please contact our Business Team on 01234 844326 or email j.pelling@cilexlawschool.ac.uk .

CILEx Law School, College House, Manor Drive, Kempston, Bedford MK42 7AB www.cilexlawschool.ac.uk

Development of Talent Award

04517 Modern Law Magazine Advert v 2.indd 1

Specialist Accountants for the Legal Profession The Legal Sector is undergoing an unprecedented period of change with the Legal Services Act, Legal Aid Reform, Regulatory Reform, Personal Injury Reform and difficult trading conditions. Armstrong Watson has a specialist team focusing exclusively on the legal profession that understands the issues and provides proactive advice including: • Formulating strategy • Benchmarking • Law firm mergers and acquisitions • Limited company and LLP conversions • Lock-up reviews to free up your hard earned cash • Partnership disputes • Training courses There are many other ways we can help improve your business, contact us to arrange an initial meeting: Andy Poole, Legal Sector Partner Email: andy.poole@armstrongwatson.co.uk www.armstrongwatson.co.uk/legalsector Armstrong Watson Accountants and Financial Advisers is a trading style Armstrong Watson Audit Limited is registered to carry on audit work in the UK and Ireland by the Institute of Chartered Accountants in England and Wales. Registered as a limited company in England and Wales No. 8800970. Registered office: 15 Victoria Place, Carlisle, CA1 1EW

11/07/2013 14:13

The Features

FLOODING: WORSE THAN EVER – MYTH OR REALITY? Planning Practice Guidance from the Department for Communities and Local Government has raised awareness of the need to take flooding seriously. Understanding the degree of risk is key, and as Mark Fermor reports, quality of information makes all the difference. because of the impact of prolonged saturation. ESI estimates that up to one third of flooding problems in the UK are due to groundwater, however the Environment Agency is yet to include this data in its maps, so we can’t put the risk into the same context as the mapped five million properties at risk of fluvial and pluvial flooding. However, the Environment Agency reported that last winter 24% of flooding was caused by groundwater, and so this information is vital to overall understanding.

andmark Information Group has invested in in-depth, reliable data, and uses the statistics as the basis of its flood mapping reports, which are used by developers and planning consultants to support property purchases. There are many different flooding mechanisms, but flooding typically results from the interplay of different variables. While it is common sense to avoid purchasing a property in a flood risk area, with careful consideration and accurate assessment it might be that risks are minimal and can be managed. Six types of risk 1) River (Fluvial): Usually impacts low-lying properties. The Environment Agency estimates that, combined with coastal flooding, 2.4 million properties in England are at risk. 2) Surface water (pluvial): Usually associated with extreme rainfall, but also when rain falls on saturated or impermeable land. The Environment Agency estimates that a further 2.6million properties are at risk in England. This may affect your garden and the street, and features as simple as a raised kerb can provide protection. 3) Groundwater: Occurs when the water table rises and may last for weeks, leading to more damage

4) Coastal: Caused by high tides and/ or inclement weather breaching sea defences. It can affect property in tidal rivers some distance in land if floodwater is forced up tidal reaches. 5) Sewer: Sewers are generally not sealed and during extreme rainfall can overflow. Groundwater can be the decisive factor, and typically the cause is too much water entering from storm runoff, or where rising groundwater infiltrates the network. Many water companies have access to the ESI national groundwater flood risk data, helping them to implement sewer infiltration reduction plans. 6) Reservoir: The UK has approximately 5,000 reservoirs, and flooding can occur if there is a failure of a wall or embankment. Fortunately this is rare in the UK. Is flood risk increasing? 1) Some risks such as groundwater have been largely ignored, but new data has demonstrated the extent of the problem, leading to increased recognition. This enables risk management action to be taken and problem locations can be avoided or mitigated. 2) Climate change is leading to rising sea levels, thereby increasing coastal flooding. However, it is largely predictable, so problems can be managed.

3) Climate change is leading to different rainfall patterns, with longterm averages showing a 5% annual increase from 1961-1990 to 1981-2010. 4) Catchments are changing. Urban development has increased the amount of ‘impermeable surfaces’, leading to more runoff. Sustainable urban drainage systems are intended to return catchments partly back to their natural state. Although we have seen an increase in certain risks, the biggest change is increased access to better data, helping us to more accurately identify risks that have always been present. A flood risk map such as that provided by Landmark Information Group can form part of a structured risk assessment, enabling those advising on property purchases to decide whether to take the next step towards site-specific risk assessment, risk mitigation measures, or withdrawal. What if your proposed purchase falls within a mapped flood zone? This doesn’t automatically mean the property will flood. Risk is based on the probability that a flood will occur based on environmental setting and climatic conditions. If a property is classified as being “at risk”, it simply means it’s located in an area considered to be hazardous, but the risk isn’t present unless the correct environmental and climatic conditions occur. There are a number of features, including property level protection that may prevent a real risk arising, so the best response is to discuss the matter with your legal advisor and, if appropriate, consider the next level of detail in a desktop mapping report to identify the true extent of the problem. Mark Fermor is Managing Director at ESI Limited.

ML // August 2014

Natwest FP AD

The Features

A WINDOW OF OPPORTUNITY... Charlotte Parkinson, Modern Law, spoke to Frances Edwards, the new President of the Chartered Institute of Legal Executives (CILEx), about how she is approaching her new role and her thoughts on the future of the legal profession in England and Wales.

‘It is important that any potential changes in Wales are highlighted in England; before considering whether a separate legal jurisdiction should be considered, there should be research and discussion into the best way forward’

Q A

Frances Edwards Frances became a CILEx member in 1998 and a Fellow in 2000. She is currently employed by Caswell Jones Solicitors in Caerphilly where she has worked since 1995 and she is a member of the Family Team. She was one of the founder members of the CILEx South Wales Branch when it was re-launched in 2004, becoming Treasurer. She was Chairman of the branch in 2005 and remains actively involved in the branch. Frances was the first Chartered Legal Executive to be appointed President of a local Law Society when appointed President of Rhymney Valley Law Society in 2008/09. Frances has been a Council Member for Wales since July 2008.

Q A

How are you approaching your new role as President of CILEx? I am very proud to be the first Welsh President of CILEx, there are a lot of challenges ahead and I look at these as an opportunity which I am taking on with some determination. There is a lot going on in the market currently, so it is an exciting time to take up the role.

What are your key focuses/ ambitions for your tenure? One of the main focuses for my year as President is raising awareness of the differences in the law making powers in England and Wales. Wales is also going through some interesting times in terms of legislative change; the Welsh language commissioner has introduced new standards and there are talks of moving from a conferred powers model to a reserved powers model. It is important that any potential changes in Wales are highlighted in England; before considering whether a separate legal jurisdiction should be considered, there should be research and discussion into the best way forward.

You are the first female, Welsh President of CILEx; is the legal sector moving to embrace opportunities for women in the law or has it done so already? There has already been a move in this direction and CILEx has always championed fair access to the legal profession. The organisation has supported this for the last 50 years and 74% of our members are women.

The legal sector is – broadly – still a male-dominated environment; do you think the profession/law firms are doing enough to improve equality and diversity? Professional law firms have certainly embraced Apprenticeships and last year CILEx launched two, a Level 3 and Level 4 qualification. There are currently more than 40 law firms involved with Apprenticeship schemes,

employing about 140 people. As the interest in this type of qualification grows, CILEX hopes that this number will double in the next year. Once CILEx have been granted the full practice rights that we have applied for (which is currently in line to be approved by Parliament in September) and, if entity regulation comes into place, many of our members are likely to want to practice independently as solicitors. In turn, that should drive healthy competition in the market, which will benefit the consumer.

Do you think the legal market is effectively nurturing young talent and does the future look bright for young professionals wanting to begin a legal career? The Apprenticeships will certainly widen the talent pool and those who are not wishing to go to university will have other options in their journey to becoming lawyers. The number of jobs are a concern as some firms have lowered or stopped their intake of new recruits, due to the recession and legal aid cuts. We must continue to look for new ways of introducing young talent into the profession and, particularly since the implementation of LASPO there has been a huge impact on the public and the profession. It is imperative that the issues surrounding legal aid stay front of mind, and as a family legal aid lawyer, I have firsthand experience of this. CILEx have also launched an enquiry into the role of paralegals in the workplace, which we are asking all stakeholders to get involved in as we are keen to gauge the views of the wider legal sector.

Frances Edwards is President of CILEx for 2014-2015 and is a member of the Family Team at Caswell Jones Solicitors.

ML // August 2014

The Features

SEA CHANGE: RIDING THE WAVES... The Family Law section of the legal market has experienced seismic changes over the last few years; Charlotte Parkinson, Modern Law, spoke to Mediator, Laura Clapton (LC), Barrister, Julia Nelson (JN) and Solicitor, Marilyn Stowe (MS), to find out how the changes are affecting the entire sector.

What are the major changes to family law over the last few years and how are these affecting your area of the sector?

LC: The family law legal market has experienced significant changes over the last 3 years, which have fundamentally altered the playing field for family law practitioners. The first major change came about as a result of the New Family Procedures Rules 2010. The 2010 rules introduced a preapplication protocol for applicants bringing proceedings in relation to private family law matters. It was expected that an applicant would, first of all, attend a mediation information and assessment meeting (MIAM) before issuing Court proceedings, subject to a number of exemptions. This new pre-requisite was expected to have a major impact on family law proceedings. In reality however, applicants’ were still bringing proceedings without having attended a MIAMs often using the ‘any other reason’ exemption as a get out clause. JN: The combination of the 26 week time limit in Care Cases and the Judgment in Re B-S (Children) [2013] EWCA Civ 1146 has marked a real sea-change in the approach of Judges who now genuinely consider in non-consensual adoption cases whether ‘anything else will do’ and as a result family placement outcomes in care cases have increased massively. There are still however teething problems with the huge amounts of time consuming and unnecessarily repetitious standardised documentation that needs to be filed. This emphasis on paperwork massively increases

ML // August 2014

the Local Authority advocates workload leaving little time to actually get to grips with the evidence in the case. MS: Probably the most revolutionary change in the sector is The Marriage (Same Sex Couples) Act which came into force on 13th March. Then there are the sweeping changes introduced by the Children and Families Act 2014, most of which came into force on 22 April. Proposals to legalise marital agreements have been made by the Law

whilst the demand and need for representation remains. Most of the barristers I know are undertaking cases pro-bono on a regular basis for those who are vulnerable and cannot afford representation. There has been a knock-on sudden surge in increase in demand for Direct Access representation as it is considerably less expensive than Private Law Solicitor rates. This increased business and the pro-bono work does, for the Bar, bring its own significant challenges: cases are often booked at short notice

‘As anticipated, the cuts to legal aid are causing wholesale chaos and injustice’ Marilyn Stowe Commission and potentially will become law, but no overall reform of the ancillary relief system is recommended in its lengthy report published in February. They call instead for more clarity, given the huge influx of litigants in person into the courts. The President of the Family Division has also called for administratively handled uncontested divorce, removing divorce in most part from the supervision of the court. If it happens, I can see similar problems arising to those of “sham marriages” which are growing substantially in number. A gimlet eyed judge applying the law really has no substitute.

Q A

How has the implementation of the Legal Aid Sentencing and Punishment of Offenders (LASPO) Act impacted the sector? JN: At the Family Bar the net effect of LAPSO is that paid Private law children work has contracted massively,

immediately before a final hearing when a party suddenly panics at the thought of self-representation. Referral is often referred from solicitor firms who no longer have a Private Family Law department. Such cases are often taken on from a client who is ill prepared and not ready for a final hearing to take place. The other side is usually a litigant-in-person with no idea of how to conduct their case or awareness of its merits. Litigantin-person cases take considerably longer than represented cases ever did: they rarely settle and time estimates are impossible to predict. LC: From 1st April 2013, many individuals who would have previously benefited from Legal Aid in relation to a private family law dispute would have to pay privately or go it alone. Perhaps unsurprisingly, the Court has seen a huge decline in the number of applications within family proceedings over the last 16 months.

The Features

‘There was always talk of a fused profession but I never expected today’s trajectory of the Lawyers function being replaced by that of the Judges. The pool of Lawyers of today provides the Judges of tomorrow’ Julia Nelson

Q A

How damaging have the Government’s cuts to legal aid been, to date?

MS: The government’s cuts to legal aid have resulted in a noticeable increase in people representing themselves in family disputes. With so many people going without legal representation, there are fewer people being encouraged to seek mediation as an alternative. In 2012 there were 13,609 cases of mediation compared with 8,400 in 2013. As anticipated, the cuts to legal aid are causing wholesale chaos and injustice. LC: Despite the cuts to legal aid for legal advice and representation, legal aid remains available for mediation. Initially, this was to many mediators delight, however the problem that then faced both the public and family mediators was the gap that legal advisors had once filled. How was the public going to know about mediation if they didn’t have a solicitor to advise them? Consequently, a number of mediation services who had previously received legal aid referrals from solicitors saw a massive drop in referrals and offices had to close.

Q A

What are your predictions/ thoughts on the future of the family area of the legal market?

JN: Judges now seem to expect that if a Barrister is involved, even on a probono or direct access basis, that they will still assist the court in all sorts of ways: prepare the bundle; open the case; draft the orders etc. Judges are themselves, in unrepresented cases, taking on the role of Judge, Advocate, Mediator and Educator. The Bar and the Judiciary are learning fast. There was always talk of a fused profession but I never expected today’s trajectory of the Lawyers function being replaced by that of the Judges. The pool of Lawyers

of today provides the Judges of tomorrow. I remain unconvinced of the size of this future pool if this trend continues. MS: The government continues to push mediation as the only alternative to going through the courts, yet arbitration guarantees an outcome. Once couples agree to engage in that process, they cannot back out. There will be an award come what may and it will be enforced by the courts. The process can be done faster and cheaper than incurring two sets of fees in court where the assets and incomes involved are not complex. But there is a problem. There are cases which will need legal aid in order for arbitration to be suitable, such as where the house will not be sold but a legal aid statutory charge could be applied to the property to ensure the costs are at some point repaid. Either, bring back legal aid for the family court using a cost effective formula that provides for costs recovery, and/or make legal aid available not only for mediation, but for arbitration. We are told by the President of the Family Division there is more to come in relation to ancillary relief and I expect there will be much more information produced about how the law operates and rule changes to simplify the procedure. LC: Family mediation is here to stay; that can only be a good thing for the public. However, the family law profession will continue to face the challenges that have arisen from cuts to legal aid. Ultimately, family law solicitors, barristers and mediators need to work together to create a family law services package which is fit for purpose and can survive these ever changing times.

Laura Clapton

Julia Nelson

Marilyn Stowe

ML // August 2014

The Features

THE FUTURE: IN YOUR HANDS? Charlotte Parkinson, Modern Law, spoke to three legal experts about their view on App technology and what it can offer law firms as well as clients. Trevor Gilbert explains his new App, designed specifically for witnesses; David Oliver asks whether Apps are a gimmick or a useful tool and Sucheet Amin explains how Apps can increase productivity and efficiency, in a world where the client expects a service offering which is ‘always on’.

THE EXPERT VIEW: TREVOR GILBERT O

n the other side of the pond an American law firm is pioneering the use of Google Glass so that a claimant’s evidence can be conveyed to judges in court. The claimant, double-amputee Gary Verrazono, uses Google Glass to share the challenges of his daily lifein real time, send a text or e-mail, record video, teleconference with his lawyers, and photograph, exchange and distribute legal documents – all with a voice command or blink of an eye. An app for i-pad, TrialPad, is another innovation in the States, allowing a hot document to be added/ highlighted which the judge/jury can see immediately. A good example of app technology here in the UK is iLegal, enabling access to the revised text of almost all UK, Northern Ireland, Scotland and Wales primary legislation. A helping hand... It is not uncommon for witnesses to give poor evidence in court, so what is available to help them? Very few, if any, have received training to prepare themselves for the rigours of cross-examination or for that matter have a basic understanding of how to present themselves, the process, who’s who, and what to do and what not to do. Formal witness familiarisation training is available through various training providers and is positively encouraged by the courts and the Bar Council. There are over 300,000 trials/hearings a year in the UK and a rough estimate of three witnesses on each side produces a total of approximately 1.8 million people giving evidence. Every witness has a right to access to justice, particularly vulnerable witnesses such as those with mental health issues, or victims of crime. There are many routes to achieve

ML // August 2014

access to justice, but the most important to my mind is that witnesses are thoroughly prepared for the experience they are about to encounter, an experience unlike any they have had before. Complete transparency There should be complete transparency and for a system such as the trial process which is opaque in the extreme to Joe Public, every effort should be made to assist a better understanding of it for the simple reason there should only be one objective; that ALL witnesses should give their very best evidence in order for the court to reach the appropriate decision. Trevor Gilbert, a well-known expert witness, makes his knowledge and experience available to the wider public through the world’s first app to allow witnesses to be prepared when giving evidence in the British jurisdiction; PocketWitness. Available through Google Play and the Apple Store, it is easy to navigate and written in plain English. PocketWitness is a pioneering app which will help witnesses be informed and ready to give credible, consistent, truthful and verifiable evidence, providing support which otherwise would not be there. Trevor Gilbert, Chairman, Trevor Gilbert & Associates.

The Features

THE EXPERT VIEW: DAVID OLIVER Apps for Legal Firms: Gimmick or Great Idea? The fact that the use of mobile devices has skyrocketed in recent years (and is continuing to do so) is far from headline news, but for the purpose of this article let’s put a figure on things, according to TechCruch, we now search more ‘in App’ than on Google. In a recent blog article by calls9, Apps dominate the Mobile Web with 86% of mobile browsing time spent in Apps and just 14% on search engines. Why are their mixed opinions about Apps? Some legal firms launched an App while others remain unsure of their value. One reason for this is the thought that to get a legal App is expensive, time consuming or requires complex quotes or new infrastructure. Thanks to the process we use, law firms can have their own App live ‘in store’ without hassle, at low cost, in a matter of weeks. Are Apps a passing phase? When it comes to technology, things are getting faster, smaller, more personal and more specific. Apps help in a considerable way to facilitate this, the future is not – will law firms have Apps, it will simply be about what your Legal App will do. Why consider an App if I have a mobile site? With 86% of mobile browsing time spent ‘in App’, a mobile website in response to mobile growth is actually only appealing to a small proportion of prospects and clients. What’s more, Apps have features that a mobile site can’t offer. Will an App really enhance my client and prospect relationships? Providing your Legal App which makes life easier and more efficient for your customers will ensure you have happy customers – and happy customers will not only be more likely to stay with you, they will be far more likely to recommend you to others. An App can also act as an additional channel to generate new clients via direct App promotion and reactive enquiries generated through your presence on the App stores.

THE EXPERT VIEW: SUCHEET AMIN How can mobile applications increase productivity and efficiency for lawyers and clients?’ The technology around mobile applications or “apps” has developed at an amazing rate over recent years. So much so that according to a recent report from Deloitte*, 72% of UK consumers own a Smartphone such as an iPhone. Of those owning a smartphone, a huge 89% of that group are between the ages of 25-34 years old. With these stats, law firms (and businesses in general) can ill-afford to ignore adapting to the way in which their clients are using their smartphones to interact with them. Clients expect more from businesses with the availability of technology and law firms are no different. An effective mobile app will serve one and at most two main objectives. For lawyers and clients it is “communication” and “information”. Keeping the client informed Clients have always wanted to be kept informed about what is going on and of course, lawyers have a duty to update their clients in line with their own retainer. This is where the demands of clients can be costly to law firms as requests for general updates or questions such as; “what happens next?”, continue to distract lawyers from more effective and cost recoverable work. Mobile app technology can really play a huge part here in keeping clients informed. An effective mobile app will be integrated into a firm’s case management system allowing a lawyer to send messages to a dedicated app on the client’s smartphone. Within a second or two, the client’s smartphone will “ding” just as if a text message was received with a notification bar explaining that they have a new message. A quick press on the screen will bring the app and that message to life. Within an instant, the client’s need to be informed about what is going on has been met - no need for the client to check his email later that week or wait for the post to arrive.

Does an App help with communication? An App is possibly the most personal permission-based communication channel; reaching out via a device which people take everywhere with them. One example of App communication is via push notifications (a short message sent by clients that automatically appears on a users device), which for us provides an open rate 80% higher than that of email. In reality an App is not only a valuable tool for clients and prospects but it is also a valuable tool for law firms to communicate with those people.

Increasing productivity The advantage for the lawyer is that they have been able to inform their client of an important step or piece of information and alert them to reply if necessary. The net result is information has been passed to the client via an app quickly, efficiently and with app messages costing nothing; cost effectively, all of which allows the lawyer to be more productive with their time.

David Oliver, Founder, MyFirmsApp.

Sucheet Amin, Managing Director, Aequitas Legal.

* The Deloitte Consumer Review – fifth edition 2013

ML // August 2014

The Features

AN ELEGANT SOLUTION Peer to Peer lending is fast becoming a viable alternative to traditional funding routes for law firms and, as Ivor Freedman explains, it is here to stay.

he banking crisis of 2008, the so called “credit crunch” was unlike previous cyclical downturns. In all previous downturns it was the bank customers that had problems, the banks themselves remained solid. On this occasion, it was the banks that had the problems. Governments found themselves compelled to step in and recapitalise the banks with taxpayer’s money and at the same time, tightening the capital adequacy rules and bank regulation combined to produce a dramatic reduction in the capacity of the banks to continue lending to their traditional small business market. At the same time, in an attempt to stimulate the economy the Bank of England reduced and kept Base Rates at a record low 0.5% for a record period and their attempts to increase the funds available for banks to lend to small businesses resulted in the rates of interest paid to depositors reducing to virtually zero. Borrowers couldn’t borrow and depositors couldn’t get a sensible return. All of this brought the economy to its knees and something had to change if the economy was to get out of this bind. The banks have dominated the small business lending sector in the UK for generations but this crisis provided the impetus for a range of new initiatives providing alternative sources of finance. Peer to Peer lending is one of the most innovative solutions, attempting to bypass the banks completely. What is Peer to Peer lending? The best way to understand it is to consider it as a “meeting place in the cloud” where people who want to borrow money can meet people who want to lend. Most platforms operate an auction process where lenders bid to be part of a lending syndicate offering funds at different interestrates. The lowest bidders are selected to make up the syndicate and the result is that borrowers can borrow simply and lenders can get a better return than they can get from a bank. In 2005, the first ever Peer to Peer lending platform Zopa was created to arrange personal loans between individuals. It has lent over £575m in personal loans in the UK. Starting in 2010 the Zopa example was used by two new platforms Funding Circle and ThinCats to establish similar operations lending to businesses and in the process creating an entirely

‘The banks have dominated the small business lending sector in the UK for generations but this crisis provided the impetus for a range of new initiatives providing alternative sources of finance’ new way of funding businesses and providing a new asset class for investors. In less than 4 years Funding Circle and ThinCats have loaned nearly £400m and the market sector is growing very rapidly, effectively doubling every 6 months or so. The UK leads the rest of the world in peer-to-business lending because of the regulatory environment. Peer to Peer lending became regulated by the Financial Conduct Authority on 1st April 2014. Most peer to peer lenders have adopted highly automated credit checking models to select suitable borrowers but ThinCats bucked that trend by using a network of ‘sponsors’ who behave like traditional bank managers, getting to know the borrowers and helping them overcome their financial constraints. Peer to Peer lending is now a permanent feature of the business finance landscape. Her Majesty’s Government is keen to foster it further and has provided funding and active encouragement to the sector including plans to allow ISAs to invest in peer to peer lending as from early 2015. Changes to Pension legislation has also seen a large increase of personal and corporate pension funds going through this channel. It is predicted that the peer to business market in the UK will exceed £3bn p.a. by 2016 and will soon become a serious alternative to traditional banking. Here to stay Whilst at present market supply and demand means that peer to peer lending is priced somewhat higher than a bank, (if it would lend at all) it is likely that peer to peer rates will fall as additional funds are attracted by the interest rates on offer whilst the cost of bank lending should rise as the Bank Rate slowly returns to a more normal rate over the next few years. In summary, Peer to Peer lending is here to stay. It is a simple and viable new source of Business Funding which will dominate the market for business loans up to about £5m. It will soon be seen to be the avenue of choice for SME’s seeking to borrow up to this level, a market in which the banks find it hard to make money and will find it hard to compete in future. Ivor Freedman is Senior Partner of Freedman & Partners LLP, leading sponsors on the Thincats Business Loan Network.

ML // August 2014

MLMHP000310072013

Because litigation is rarely black and white If you’re a solicitor looking for a legal expenses insurance partner, there are several options on the market - few with the levels of free-thinking flexibility offered by AmTrust Law. Our underwriters specialise in tailor-made commercial legal expenses policies that give your clients the cover they need. With an ‘A’ (Excellent) credit rating from A.M.Best, worldwide cover capability and a strong balance sheet, we also have the financial clout needed to underwrite higher indemnity values for large commercial clients.

www.amtrustinternational.com

Call 0844 854 6838 to set up an introduction to a broking partner

AmTrust Law

An AmTrust International Division

AmTrust Law is a trading style of AmTrust Europe Limited which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and Prudential Regulation Authority. AmTrust Europe Limited has been rated ‘A’ (Excellent) by A.M.Best.

The Features

FUEL FOR GROWTH... Charlotte Parkinson, Modern Law, spoke to Andrew Stenning about challenges faced by search companies in light of the boom in the conveyancing market and how client care and support should remain top of the tree.

How have you supported your client base through the change in the conveyancing market?

Searches UK continually adapt to the changing market and are flexible in our approach to how clients work. We always tailor our service and systems to meet our clients’ needs; this ranges from the order processes to payment methods. When our clients need help on products or searches, our Conveyancing Specialists are on hand to assist in any way they can. There are a number of benefits to using Searches UK, we offer more than just searches. The market has seen some considerable changes but the launch of our protection schemes has helped our clients to capture, increase and maintain conveyancing business. Our protection schemes give buyers peace of mind that should their purchase transaction fall through for a reason covered by the scheme they can reclaim up to £1,850. We host a number of free CPD courses for our clients, make case management systems available to them at a reduced cost, and offer legal compliance services and software proven to help them reduce their annual PI.

Q A

Have you seen a marked up-turn in work following the ‘boom’ in the conveyancing market?

into our team. We have successfully recruited very positive team members where no task is too much for them. Searches UK recruit people who are passionate about what they do. For us, we promote the underlying message that the most important thing is to work together as a team and we ensure we have a strong team who have the skills, support and capacity to service the needs of our client base.

Q A

How can search companies continue to support clients through innovative initiatives?

At Searches UK, we are in tune with our clients and regularly contact them to ensure they are happy and satisfied with our service. We have proved to be the leader on innovative schemes in many areas now with our competition following in our footsteps, which shows we are moving in the right direction. Over and above our innovative schemes, we understand that Risk and Compliance is always a real headache for Solicitors and with our in-house Risk and Compliance Specialist with over 25 years in the industry, we are able to assist in a number of areas in this respect.

Q A

What is your opinion on the future of the conveyancing market in the UK?

We believe the future looks positive and Searches UK looks forward to continuing to grow and expand and help even more clients with their conveyancing searches. One thing is for sure, we won’t stop doing all we can to generate business, achieve high standards, keep our clients happy with our service and promote the personal search industry. Andrew Stenning is Managing Director at Searches UK.

We are always busy and our business is thriving at the moment. Some of this is attributed to the upturn but a lot is down to the many products and services we have launched to help our clients in the current market; we have seen a very positive growth to the business. We like to think that our strong drive to client satisfaction and high service levels has also helped contribute to our success.

How should search companies and conveyancing solicitors be managing their recruitment to ensure they can effectively cater for an increasing demand from clients?

At Searches UK we are constantly monitoring search volumes and anticipated volumes from new business sources to ensure that we are never exceeding 80% capacity. Once we reach this level we recruit and train new members

ML // August 2014

The Features

A NEW SET OF CHALLENGES... Charlotte Parkinson, Modern Law, spoke to Darren Gower, Marketing Director at Eclipse Legal Systems, to find out how the right type of support is fundamental to the success of any firm looking to diversify their service offering in a more competitive market.

ord Justice Jackson’s reforms to civil litigation in 2012 may not have impacted the medical negligence sector as deeply as they affected the personal injury market but it has still felt the brunt of change, particularly for low value cases. Right across the claims sector, in areas such as catastrophic injury, clinical and medical negligence and commercial litigation, firms are beginning to become more reliant on high value, low volume claims – but high value cases are not without their own challenges. A suitable alternative? Many clinical negligence firms were, until recently, working through the backlog of cases which had been issued prior to the new rules coming into force but these have now largely subsided in the sector, leaving many firms questioning where their next move in the market should be. As the changes to civil litigation funding and costs affected lower value claims (particularly low value RTA claims in the case of personal injury), various potential revenue streams are being considered to replenish dwindling cash flow. Noise Induced Hearing Loss (NIHL) claims are an area which some firms are beginning to look to as a potential replacement for RTA claims, although these types of case are not without their own potential indemnity risks. For those firms who are looking to expand into other areas of litigation, new departments within firms are cropping up to take on high value, low volume claims but for some, this transition is not an easy one. High value claims often require a huge outlay of time for more experienced Partners and could also lead to a potential increase in Work In Progress (WIP) lock-up for the firm. Another factor to bear in mind when considering branching out into high value claims should be the removal of legal aid for clinical negligence claims, which has increased competition within the sector as more and more personal injury firms begin to take on clinical negligence and other high value claims. Prepared for change... Bearing in mind the newly reformed sector and the everchanging costs landscape, firms should ensure emphasis is placed on concluding cases quickly, in order to avoid adverse costs; however, this should not be to the detriment of fully understanding undeniably more complex cases. As firms begin to explore potential new work streams, they must also consider how they will support a potential hike in work load across the firm. By implementing new or extending existing systems, which could assist with streamlining the support process, the conundrum many firms are facing could become a lot clearer.

ML // August 2014

Darren Gower

Charlotte Parkinson

Darren Gower of Eclipse Legal Systems comments: “In refocusing on more complex work areas, the reliance on effective matter management software solutions becomes even greater. Such software systems enable the practice to budget each matter effectively, to ensure compliance, and to reduce administrative overhead as much as possible. In a nutshell, use of the right matter management software lets the lawyers get on with doing the lawyering - and provides a solid framework for process efficiencies.”

IT Crowd

55-62

IT CROWD

SSG Legal has over 20 years’ experience advising UK law firms on growth strategies, mergers and senior level lateral hires. Law League is the UK’s only system for benchmarking and measuring Client and Staff feedback. Real time online feedback benchmarked against over 250,000 answers. For just £100 / month shouldn’t you know how your firm measures up?

“We chose to work with SSG Legal because of their understanding of the market, their sensible advice and their commercial approach. Our expectations have been exceeded on each count.” Managing Partner, £17m turnover firm

For a confidential and informed discussion about how we can help your firm, please call Andrew Roberts on 08456 43 93 43 or email him on andrew.roberts@ssglegal.com

Please call Rayne on 01373 814773 or go to www.law-league.com

Personal Injury, Clinical Negligence and Commerical Litigation Costs, Costs Budgeting/Management, Compliance and Training.

Contact Amber Holt for assistance on 0161 359 4652 or email: amberholt@justcosts.com Manchester:

London:

jonathanbassey@justcosts.com / iaincherry@justcosts.com amandajordan@justcosts.com simonwadlow@justcosts.com simonwadlow@justcosts.com iaincherry@justcosts.com scottjarrold@justcosts.com 53 King Street Central Court, 25 Southampton Buildings Dunston Innovation Centre, Dunston Road Chesterfield, Derbyshire, S41 8NG Manchester, M2 4LQ London, WC2A 1AL DX 14385 Manchester DX 426 LDE DX 743530 Chesterfield 8 Tel: 0161 359 4666 Tel: 020 7758 2155 Tel: 01246 267 961

Performance Improvement for Law Firms

A specialist consultancy service offering bespoke advice and solutions

Leeds:

simonwadlow@justcosts.com No.1 Leeds 26 Whitehall Road Leeds, LS12 1BE Tel: 0113 357 0330

Authorised and Regulated by the Solicitors Regulation Authority – Registered in England and Wales: Number 05867110, Registered Office: 53 King Street, Manchester M2 4LQ

M: 07775 823 493 E: enquiries@agblegal.co.uk

AGB Legal Press Ad.indd 1

22/11/2013 14:22

IT Crowd

Tech Procurement - Does the cap (ex) fit anyone? Our resident IT guru Charles Christian writes…

hile any discussions about legal technology inevitably have a strong focus on what sort of technology law firms and legal service providers should be buying and how best to then handle the rollout to get lawyers actually using it, the issue of how to pay for it tends to be ignored. All too often firms automatically pay for technology the way they have always have done, namely the one-off up-front cost of buying a perpetual license followed by an annual maintenance charge. How they then raise the capital to buy the perpetual license varies from firm to firm (cash reserves, capital injection by partners, bank loans, finance/leasing etc) but it all comes down to what is known as the CAPEX (capital expenditure) model. There is however an alternative – sometimes called SaaS (software as a service), or subscription licensing, or even pay-as-you-go – in which the firm pays a set fee per user, per month for however long the software is needed. This is known as the OPEX (operating expenditure) model, as the cost comes out of firms’ regular running costs, rather than involving major capital investments. That’s my law firm finance #101 lecture over, so now let’s get to the heart of the matter: the respective merits of CAPEX versus OPEX. The element of uncertainty I’ve lost track of the times I’ve been told that law firm partners hate OPEX, that law firm IT directors hate OPEX, that legal technology vendors hate OPEX and that legal technology sales staff really hate OPEX. You can have sympathy with the last group because most sales staff are on relatively low basic salaries and depend upon sales commission to make their money. And with CAPEX sales there is a potential to make huge amounts of money on really big sales – three years ago one legal IT salesman in the UK earned £1.5 million in commission from a single deal. This, incidentally, also explains why smaller firms frequently receive a more cavalier response from vendor sales staff – because they would rather focus their efforts on the bigger firms where they can earn bigger commissions. So; why law firms hate OPEX? The argument here is basically that OPEX introduces an element of uncertainty that can trash law firm budgeting and financial planning. With CAPEX, you buy 100 licenses and you not only know what your upfront capital expenditure is today but you also know what your maintenance fees will be tomorrow and the next day, for the next five years. (Perpetual licenses usually lock in maintenance terms and have annual inflationary

‘As law firms found during the 2008 economic downturn, with CAPEX you are still required to pay maintenance on all those licenses you bought, even if many of the people you bought them for have been made redundant’ caps.) This is contrast with OPEX, where you take out a subscription to 100 licenses today but then tomorrow you need 150 licenses and suddenly your IT budget has been exceeded by 50%. Interestingly, IT vendors hate OPEX for exactly the opposite reason: if you sign up a firm for 100 licenses today, you are in serious problems if tomorrow they decide they only need 50 licenses because then 50% of your revenues are wiped out. Sharing the pain Well, at least that is the theory but even with CAPEX, if you as a law firm need an extra 50 licenses, you are still going to have to pay for them somehow. However what happens if you have to cut back? With OPEX no problem (subject to any notice periods, minimum terms etc) but with CAPEX you are stuffed. You cannot return the licenses to the vendor and get a refund and usually there is no secondhand market available. More importantly, as law firms found during the 2008 economic downturn, with CAPEX you are still required to pay maintenance on all those licenses you bought, even if many of the people you bought them for have been made redundant. Indeed, the recession saw some unpleasant squabbles between vendors and law firms over this very maintenance-for-empty-seats issue although the smarter vendors realised that “sharing the pain” with a firm was better for longer-term customer relations than trying to squeeze out every last drop of blood from a contract. Final thoughts: if as a law firm you do move your IT expenditure onto an OPEX basis, then your capital remains in tact and the partners can either use it to pay themselves lots of money or, rather more longer-term, strategic thinkingwise, that capital is available to fund other projects, such as business expansion. As is often the case in the legal industry, just because you’ve always done something this way doesn’t mean that is the only way to do it. Charles Christian is Editor-in-Chief of the Legal IT Insider and IT Crowd Consultant Editor for Modern Law Magazine.

ML // August 2014

E C L I P S E

Modern LAW Awards 2014

Best of luck! Thank you to everyone who has entered this yearâ&#x20AC;&#x2122;s Eclipse Proclaim Modern Law Awardâ&#x20AC;&#x2122;s, shortlist announced soon.

The awards ceremony will take place on Weds 15th October at The Hilton on Park Lane, London. To register your interest for tickets to attend please contact Ellie Campbell 01765 6000909, ellie.campbell@charltongrant.co.uk.

E C L I P S E

For sponsorship enquiries please contact Martin Smith on 01765 600909, martin@charltongrant.co.uk

IT Crowd

The perfect fit

The building blocks

For organisations contemplating implementing case/ matter management systems, which are the low hanging fruit work-types they will find it easier to start rolling out this technology?

For organisations contemplating implementing case/matter management systems, which are the low hanging fruit worktypes they will find it easier to start rolling out this technology? Residential conveyancing / RTA / personal injury work etc?

ncreased competition and regulatory changes have led to Firms being under increasing pressure to deliver more for less whilst at the same time trying to grow their profit margins. These Firms are turning to technology more than ever before to help them achieve their goals. Whether you are a firm looking to upgrade existing technology or a firm that is new to case management, a clear objective is essential to ensuring you make the right buying decision and achieve your desired goals. Some of the issues firms come to us looking to address are: -Disparate systems in place resulting in costly and inefficient working practices -Poor matter information causing risk management concerns -Being unable to accurately measure progress across files -Inconsistent working standards across the firm -Lengthy document production times There are many advantages to a firm wide roll out of case management, such as; consistency across the firm, effective risk management and accurate business reporting. But, for firms who do not want to roll out case management across the whole firm, it makes sense to look at departments that have the most to gain in terms of efficiencies by way of automation and the most process driven departments that lend themselves easily to workflow management. Conveyancing is a typical example of a high volume, process driven area that lends itself very easily to case management. In addition to workflow and document creation, third party links such as Land Registry, SDLT, AML and Search providers can provide a significant reduction in time spent on a matter. As much conveyancing work is fixed fee and referrers are further squeezing already tight margins, an effective case management system can be the difference between making a profit, and not. Recent research has shown that the three biggest factors influencing decision makers in buying new technology are: 76% - ease of use 64% - ability to customise technology to fit requirements 44% - ongoing cost.

t’s a traditionally held view that case and matter management software lends itself to ‘process driven’ and ‘prescriptive’ legal services. And while this is certainly true to a degree, there is a changing tide of opinion regarding suitability for less prescriptive work areas too. But let’s approach that low hanging fruit first. Many law firms have made their name by processing huge volumes of work in a particular area, utilising a solid case management software system at the core. The model behind this, at a basic level, is to get the software to do as much actual administrative work - and simple decision making - as possible, to maximise margin on each successful case. Traditionally, the work areas tackled in this way including conveyancing (and remortgage) transactions, injury claims (including road traffic accidents, employer claims, and public claims), and debt recovery. So is that it? Are we to assume that case / matter management software is limited to these work areas? Not at all - we’re seeing a rapidly expanding number of legal service providers who are embracing matter management systems to handle broad ranges of work. These range from more ‘involved’ claims matters (so for example, clinical negligence) to commercial litigation; court of protection work, and a myriad others. The key to using software to manage complex matters is to get the environment right initially. Although your software won’t be able to make as many ‘decisions’ as it can in process-driven work areas, the administrative overhead it can handle is huge. From enabling you to create complex documents from component ‘building blocks’, to organising an array of time- and persondependent tasks, the advantages of a well put together software platform are plentiful. Quality and compliance are the real benefits - your software framework can really take the weight of the legislative and conformity issues, while you as a business utilise the legal knowledge that your clients want to pay you for. Darren Gower, Marketing Director, Eclipse Legal Systems.

The high level of importance placed on customisation demonstrates that firms no longer want out of the box, fixed solutions that have been built for a certain type of firm or department; they want the ability to take their chosen technology across as many departments as they wish and customise it to fit the way they choose to work. Jo Hodges, Head of Sales and Marketing, Redbrick Solutions.

ML // August 2014

IT Crowd

All aboard...

The prized apple...

For organisations considering outsourcing/moving to some form of managed services, where should they start. With relatively minor, non-core projects - or bite the bullet and go all-hog for Big Bang?

et’s consider the size of the firm, nature of business requirements, business culture and the business risks. For small firms typically who have around 50 staff, just go for it! It is a pretty safe bet to opt for the “Big Bang” approach. Of course the fear factor will always be present, it’s a culture one cannot remove and as with all office moves or outsourcing functions, it about ensuring key personals and vendors are all working together. Project management is a key driver in milestones and most certainly always a great place to start. Let’s refer to this as the statement of works (SOW); this would include project team contacts, a detailed solution and design, often a proposed hardware or software outline with current and new licence considerations. Firms must also consider the part that makes it all happen; resources utilisation, how will the implementation take place? What will be the ongoing support? And any extra and miscellaneous issues would all be covered in the frame work. All critical services should be rolled out and tested within an agreed timeframe, ideally out of normal business hours. Firms with over 70 staff should most certainly consider a phased approach, normally over 2-4 weeks. If any of these services are moving to the cloud, you also need to ensure the statement of works covers all dependencies and assumptions such as business applications and a cloud readiness assessment should be undertaken. This will show the local connectivity, remote locations and current network state of play. Firms should most certainly use this opportunity to tidy data folders and implement archive policies. Finally, it’s fairly obvious but forgotten! Ensure backups are reliable prior to any outsourcing or managed service. As to which method works best, this is very much down the firm choice. Do not be rushed; ask yourself questions. Are the risks really any issue? Can the risks be managed? It’s simply a case of educating your staff and ensuring they are onboard with your decision. Priti Mehta, Group CEO, Acuutech Ltd.

ML // August 2014

few years ago the low hangers would definitely have been the predictable work types of conveyancing and PI. This has changed with a major shift from case management to matter management. One of the main drivers has been the emergence of increasingly accessible versions of Microsoft Office. When I say accessible I mean from a technical perspective. Certainly with MS Office version 2010 and beyond it is possible to integrate with and manipulate the specific components of the suite. This means that fee earners performing complex and varied types of work can “live within Outlook”. Because there is no need to define workflows or extensive data structures a simple but useful support system can be delivered quickly and with minimal drain on the IT department. Users performing this kind of work can improve efficiency and productivity by simply harnessing the document management aspects of tight integration with the office products. Add to that, contact management and a dependable diary and you have a rapidly deployed support system. The change has been the ability to make the office suite talk to the underlying case management program that sits in the background. Users may not even be aware that compliance issues are being managed and house styles adhered to as they literally “get on with their work”. Of course, the traditional workflow orientated case management processes continue to be available as predefined systems but they still need tweaking and refining before they can be used in earnest. To continue the fruit analogy they could be described as a ladder to the prized apples a little further up the tree! The divide separating case from matter management is becoming increasingly blurred and the ideal system is one that can accommodate both extremes and all happy mediums in between. Phil Snee, Development Director, Linetime.

IT Crowd

Five Winning Practices for Case Management T

oday’s law firms are different from those of the past. Technologies ranging from cloud-based software services to mobile devices are helping lawyers better manage their practices, their cases, matters, and client relationships.

Modern practice and case management solutions also help facilitate automation in law practices. These services share information with other members of the firm and minimise errors by keeping everyone impeccably organised and in full communication. Repetitive tasks and scheduled reminders can also be programmed so as to unburden lawyers from non-billable work and keep their calendar up to date. These solutions also improve time tracking, eliminating any second-guessing on billable time spent on each matter. Lawyers can use these solutions to track time in the moment, apply the right billing rates and description, and store notes about the work being performed. They also allow lawyers and staff to associate billable time to matters, quickly creating invoices and securely delivering them to clients. But are there certain types of legal work that are more suitable for such solutions? In many regards, nearly every type of practice reaps many benefits; being organised, efficient, and in ready communication with clients is never a bad thing. Based on customer research from Clio, a leading cloud-based legal practice management solution, the five most frequent users of their software service are practitioners in civil litigation (13.64%), lawyers practicing in family law (11.57%), and those practicing in the area of wills and estates (9.92%), criminal law (7.59%), and personal injury (6.6%). Certainly, these areas represent half of Clio’s users and there are some obvious reasons: solutions like Clio allow lawyers to better track and organise their matters, cases, and client information, and just as importantly, they have the benefit of being able to securely and readily provide clients with an online portal for gathering, storing, and sharing information on each case or matter. In dealing with the public and a wide array of clients, these lawyers are able to provide regular updates and seek input from their clients like never before. Through the click of a button or the swipe of a screen, the lawyer-client relationship is forged anew in a way that clients have come to expect from services such as banks, government, or educational institutions. Nagib Tharani is the Director of International Expansion for Clio, a cloud based practice management system for lawyers.

It’s not rocket science... What techniques and technologies should law firms and legal service providers be considering to improve their own internal credit control, including WIP management and unpaid bills recovery?

ll businesses today must be on top of their outstanding debt in order to ensure that their cash flow is positive and they have money in their bank earning interest. And this is especially important for law firms or any other type of organisation that sells time as managing their work-in-progress equally and diligently is an added incentive in turning their WIP into cash as the longer WIP and debt remain outstanding, the more pressure it puts on a firm financially.. Most law firms probably feel that they have a good handle on their WIP and outstanding debt which is historically based on the fact that they always have a positive cash balance or have accepted always being 30 days over on their lock-up number. It could also be that they don’t have the systems in place to inform them otherwise, so they don’t worry about it. But modern-thinking firms are starting to see the benefits of being able to keep strict control over their WIP and outstanding debt as those firms who regularly keep WIP churning through the accounts and are quick to collect the resultant cash are the ones who have strong financial control and cash available for new opportunities. Over the last six years or so, business within the legal services industry has been challenging with many firms reporting a reduction in revenues. However, the tide seems to be turning with many firms now showing better revenues and increased profits and as the economy improves so will the internal controls that have been forced into place in recent years. Using business discovery technology, we have been able to help all our legal customers change and improve the way they manage their WIP by enabling them to treat WIP as a vital asset, both from a cash point of view and a realistic point of view. And the secret to this isn’t rocket science but a combination of having the right data available and good management practices in place in order to reduce aged debt and aged WIP. In our experience, we find having the data available is probably the one key ingredient that most firms have difficulty with, particularly if they need to analyse WIP at matter, client and fee-earner level and all at the same time. But this is something that is easy to achieve using digital dashboards that support the effective financial control and facilitate the prompt billing of WIP. We are happy to report that customers using our applications and processes have all seen a dramatic reduction in their lock-up! Barry Talbot is the Managing Director of Informance, a Qlik Partner Solution Provider.

ML // August 2014

5 minutes with...

5 minutes with... Michael Napier QC Q Q A

Did you expect the legal services sector to change so drastically when you started working in it? When I qualified as a solicitor in 1970 a crystal ball surely wouldn’t have revealed a picture of the legal sector as it is today, which is hardly surprising over 44 years! As an advocate of change I’ve always supported the reforms that have transformed the profession, the major ones being: • Allowing a firm to have more than 20 partners • Removing the ban on advertising • Relaxing the rules on the name of a firm • Introducing CFAs and the no win – no fee concept • Licensing ABSs and allowing external investment • Supporting lawyers to engage in pro bono legal advice and representation. In essence these changes, and many

others, simply reflect the obvious need for the law to keep pace with the needs of a modern society and for lawyers to respond to the expectations of the clients they serve. However, what must not change is the equally essential need to maintain the high standards of professionalism expected of lawyers and the businesses in which they deliver legal services today.

Q A

What has been the key positive or negative impact of the liberalisation of legal services? Positive: lawyers being able to share profits with non-lawyers, particularly their staff for example in an employee ownership scheme. Negative: the slow willingness of many in the legal professions to embrace the opportunities of liberalisation, particularly ABSs and external investment. Who inspires you and why?

Have you had a mentor? If so what was the most valuable piece of advice they gave you? In the days when I was a trainee we were called articled clerks. I served my articles in Loughborough. My Principal Malcolm Moss gave me the wise guidance that goodwill is “like smoke”. If you were not in your current position what would you be doing? Opening the batting for the England cricket team.

Q A

Michael Napier CBE, QC, LLD is Principal at Michael Napier Consulting Ltd, which offers a range of consulting services to law firms.

Q A

The late Lord Bingham was an inspiration to many lawyers including me. His book “The Rule of Law” should be on the reading list of every law student.

Chadwick Lawrence implements Proclaim Eclipse’s Proclaim Practice Management solution selected in 6-figure deal.

Darren Gower

eavyweight Yorkshire practice, Chadwick Lawrence, has implemented the Proclaim Practice Management Software solution from Eclipse Legal Systems.

With 7 offices across the West Yorkshire region, Chadwick Lawrence employs 250 staff and provides a full range of legal services to both corporate and private clients. Founded in 1840, the practice has a rich history and has expanded both organically and through acquisition to position itself as the go-to firm in Yorkshire. To cement this position, and as part of a strategy to implement superior client service, Chadwick Lawrence is rolling out Proclaim for its personal injury and conveyancing teams. A total of 70 staff will utilise Proclaim, including the practice’s financial

ML // August 2014

accounting team. To provide practicewide management information, the firm will be utilising the Proclaim Data Warehouse. The Data Warehouse tool enables Chadwick Lawrence to amalgamate Proclaim data with data from its other departmental software systems - to be manipulated and utilised as one core data repository. As part of the solution, the personal injury team at Chadwick Lawrence will be using Proclaim’s direct integration with both the EL/PL (Employer and Public Liability) and RTA (Road Traffic Accident) Portals. For client self-service, the firm has rolled out Eclipse’s FileView online matter tracking solution. Dan Bell, IT Manager at Chadwick Lawrence, comments: “In the current climate it is vital to build the very best levels of client service into our processes. At the same time, building automation and standardising our matter management means that fee earners can really focus

on value-adding work, without getting tied up in administration.” For further information, please contact Darren Gower, Marketing Director at Eclipse Legal Systems via darren. gower@eclipselegal.co.uk or call 01274 704100. Alternatively visit www.eclipselegal.co.uk

Driving efficiency and compliance ALB from Advanced Legal, the right partners for your ABS ALB is a single, fully integrated case management solution with best practice functionality built-in. Making it the perfect fit for demanding ABSs.

• Consistent firm-wide access to a single information stream • Wide-ranging automated processes assist with risk management & compliance • Workflow & document management deliver improved operational efficiency • Powerful reporting capabilities allow detailed analysis, tracking & reporting of critical KPIs

advancedcomputersoftware.com/legal | 0844 815 5575

Work faster, smarter and more efficiently with Eclipse Eclipse is the leading provider of Case Management, Practice Management, Matter Management and Process Management Software in the UK. So if you want to make your practice more effective,

let’s talk.

Matter Management Software Stay in control of your practice’s non-prescriptive, complex and bespoke work areas, with client and matter inception, document production and data storage all in one place.

Practice Management Software Keep finances running smoothly by organising everything from individual to practice-level data… take advantage of comprehensive reports and real-time management information.

Case Management Software Manage active cases, streamline processes and deliver a superb experience to clients, with Case Management Software that can be tailored to the individual needs of your business.

Process Management Software Streamline business processes by automating time-consuming administrative tasks, with easy document production, in-depth reporting and full workflow functionality.

Eclipse’s Proclaim solution is in use by 20,000 legal professionals in over 700 organisations.

To find out more

Call 01274 704 100 visit eclipselegal.co.uk email info@eclipselegal.co.uk