Modern Law Magazine Issue 10 by Charlton Grant

The Business of Law

February 2014 | Issue 10 | ISSN 2050-5744

Financial Planning: Law firms are businesses; however they have not always been run like businesses, Steve Arundale explores why a business attitude is key moving into the new legal era. IT Crowd: Charles Christian leads the way in our all new section dedicated to legal IT, what do you need to know in 2014?

Modern Law Magazine | February 2014 | Issue 10

ADAM SAMPSON “There is a tension at the heart of the legal profession, between law as a profession with the client at its heart and law as a profession, with profit at its heart” Adam Sampson

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Interview with... James Parry

Interview with... JAMES PARRY The motion of no confidence proposed in response to the Law Societies conduct with the Lord Chancellor over cuts to criminal legal aid was met with support from many of the society’s members. Charlotte Parkinson, Modern Law, spoke to the solicitor about his reasons for proposing the motion, the aftermath of the emergency Special General Meeting (SGM) and his opinion on the position of the Law Society in the wider legal services arena

Why did you decide the time was right to propose the motion of ‘no confidence’ was there a particular catalyst for the decision or was it a result of a number of factors relating to criminal legal aid, combining?

I was aware that legal aid is always regarded as a soft target by the Government and we haven’t had an increase in rates for almost 10 years. The Law Society has pursued a policy of acquiescence throughout this period but when the first consultation response was published there was a tremendous degree of unity (between solicitors and barristers), which I have never seen before. The profession was united in the fact that what was proposed wouldn’t work and that cuts could not continue to be absorbed at the rate that the profession has been. Profit would be removed in most cases and the work would simply be unviable. We then discovered that the Law Society was conducting secret deals with the Lord Chancellor, which completely undermined everything that was being done by the Bar Council and other associations. I decided to test the water and see whether 100 people wanted to sign the petition, using social media and without any overly aggressive marketing, we ended up with 118 signatures very quickly.

Q A

Were you content with the Law Society’s response to the vote?

No, I received an e-mail from Nick Fluck, in which he tries to pretend that it is business as usual. The Law Society packed the meeting and there were e-mails being sent out beforehand by local Law Societies, urging their members to vote against the motion. They also set the meeting up early in the morning in London, which meant that anyone coming from north of London would have had to incur peak rate rail charges or stay overnight in London as well as juggling court commitments. If they had held the meeting in the afternoon, I suspect there would have been many more people there; however there were an awful lot of motivated individuals there from all corners of the country. The amount of Law Society staff who attended, also clearly demonstrated to me that there was an attempt at vote

rigging, which was unsuccessful. The only people who spoke were directly connected to the Law Society, they included Lucy Scott-Moncrieff and she told us that her method of negotiating with the Lord Chancellor’s department over civil legal aid cuts had failed, which must have put her in a difficult position. It was quite clear that the council was trying to protect its own position. The majority of the concern from practitioners is with the two tier contract concept that will mean two thirds of solicitors will be excluded from offering duty contracts and will

‘ Whilst the Law Society continue to say ‘we oppose cuts’, they refuse to budge on their nonsensical agreement with the Lord Chancellor over the two tiered system ’ ML // February 2014

Interview with... James Parry

‘[The Law Society] are too stubborn and proud of their own position to recognise that what they have done is not in the best interest of the profession and is not supported by the majority; they are living in ivory towers’ render many firms unviable. Whilst the Law Society continue to say ‘we oppose cuts’, they refuse to budge on their nonsensical agreement with the Lord Chancellor over the two tiered system because of the ‘deal’ they have done behind peoples backs. They are too stubborn and proud of their own position to recognise that what they have done is not in the best interest of the profession and is not supported by the majority; they are living in ivory towers. The other problem is that a lot of the Law Societies council members don’t have any connection with criminal legal aid at all and many of the negotiators probably didn’t understand the full effect of what they are talking about. There are some very talented people, such as Richard Atkinson who do understand but he is not a council member so does not have a vote.

There have been talks of a profession-wide ballot following the vote, if this were to go ahead, what, if anything, do you think would be achieved?

The vote was clear and the Law Society should take account of this because that is what you do in a democracy, they packed the meeting but we still had a majority. I can’t think of an institution that faces a vote of no confidence that goes on to ignore it, the honourable thing to do would be to take note of it. If the Law Society executives think that the result of that meeting was disproportionate and that the vote was wrong they should say something. They should do the honourable thing and call for a membership ballot but I suspect they don’t want to do this as they know what the outcome will be and it will demonstrate the lack of support they have.

ML // February 2014

Do you think the Law Society have done enough for their members in the past (in terms of lobbying/campaigning and vocalising professional issues or is there still a long way to go for the society in this regard?

The Law Society has failed to evolve, it is a creation of the Victorian era and the profession has moved on from small high street, professional individuals to a highly diverse profession, from city lawyers to publically funded solicitors. It is therefore very difficult for one organisation to represent so many disparate sections of a diverse profession.

How should the society be looking to improve communication with its members? You have talked of a ‘culture of secrecy’, why do you think they have adopted this culture in the past and how can it be changed?

In the open letters that myself and Des Hudson exchanged prior to the special general meeting (SGM), I called for him to make public the communications he had had with the MoJ and he declined to do so. He explained that while they would normally provide such details to council where possible (which would imply that there are occasions where they don’t inform council of what is

‘The Law Society has failed to evolve, it is a creation of the Victorian era and the profession has moved on from small high street, professional individuals to a highly diverse profession, from city lawyers to publically funded solicitors’

Should the role of the Law Society as a whole be called into question, given the compulsory levy solicitors have to pay in order to be a member of the legal profession? Should membership of the society be compulsory and should the government be stepping in?

The society is rapidly facing the point of extinction; anybody who has the clout to avoid dealing with them doesn’t do so. Many larger criminal defence firms are members of the big firms group and they prefer to deal directly with government, which is totally understandable. The Law Society is increasingly an irrelevance to them. Civil lawyers, PI lawyers and conveyancers also have reasons to distrust the society, so it is difficult to find anybody who would say the Law Society is a championing organisation. For most of us outside London it is an irrelevance, we can’t use the facilities at Chancery Lane, their library services are freely available and the only time we come into contact with them is to write them a cheque for practicing certificates, which is an irritation to many. They are an expensive organisation that isn’t campaigning very well and they have got to up their game substantially if they want to stay in business.

James Parry James Parry undertook his LLB whilst working as a court assistant later a court clerk in Sunderland, North Tyneside and later County Durham magistrates’ courts. In 1990 he re-located to Liverpool where he worked as a senior court clerk at Liverpool Magistrates Court and qualified as a solicitor. Whilst there he had responsibility for the administration of criminal legal aid including responses to several judicial reviews on legal aid policy. He also provided training to court staff throughout the country on the administration of legal aid. In 1997 Butterworths published his book “Legal Aid in Criminal Proceedings”. James left the court service in 1997 and is now a partner with Parry Welch Lacey LLP, a firm which specialises in the delivery of publicly funded criminal defence in Liverpool. James regularly delivers professional development training for Progressive Legal Training and Datalaw and sits on Datalaw’s duty solicitor accreditation panel.

Interview with... James Parry going on), they were not able to make the communications public on this occassion. If this policy (of not telling members what you are doing), is adopted, the organisation leaves itself open to being accused of adopting a policy of being a secretive organisation, to overcome this requires a complete culture change.

Many feel that the society has let down its members in light of reform, particularly in the case of Personal Injury solicitors. In your view, how have the Law Society helped/hindered criminal defence lawyers? Do they offer enough direction/support/guidance?

Personal Injury lawyers have suffered a great injustice at the hands of the Law Society and it failed to make the case which it should have done for them. Trying to restrict the industry in terms of cost is exactly the same as what they are doing in terms of cuts to legal aid; they They are extremely important are stopping people obtaining proper because they actually start to raise the profile of what is going access to justice at the expense of PI on in the mind of the public. Although Lawyers and a business model that worked. I have an office that is a shop the public won’t appreciate that if front premises and on a daily basis, defence practitioners are removed, the call for Judges in the future is also we see people coming in desperately searching for people to deal with their diminished but more importantly the family law cases because there is no pool of people who are competent to longer the provision to do it. prosecute is greatly reduced. It is also important for the public to realise that if defence practitioners are not there Where next for the Law Society and they have the misfortune of having in terms of its role within their house burgled or their car broken the profession and its role in to and the case goes to trial, they amongst other organisations such could well end up being prosecuted by as the MoJ and the SRA? Is the Law the person who had perpetrated the Society working collaboratively with crime against them. other organisations and how might relationships be improved going forward?

The Criminal Bar Associations day of direct action took place on 6th January, how important are events such as these to the wider profession?

If the Law Society took any notice of the SGM, the first thing it should have done was to contact organisations like the Criminal Law Solicitors Association (CLSA), the London Criminal Court’s Association (LCCSA) and possibly even the Criminal Bar Association (CBA) and put the notion of joint negotiation to them. It seems they have such poisoned relationships with these organisations that they shy away from involving themselves in direct communication with them. Unless the Law Society do communicate, there will be a lot of very angry members of the profession and their extinction will be brought about more quickly.

Response from The Law Society “We know this is a time of real instability and uncertainty for many of our members, particularly amongst those who stand to be affected by the Government’s proposals. Our driving purpose has been – and continues to be – to fight against the cuts using every lever at our disposal. We are allying our campaign of opposition with direct lobbying of government rooted in a strong belief that a policy of non-engagement would not work. We are presenting clear evidence to the Ministry of Justice that demonstrates exactly how its proposals threaten the profession and the public, and we have proposed a better way forward. We have already won concessions: Price Competitive Tendering is off the table, a system which would have seen just 400 firms, out of 1600, get contracts. It was defeated by the powerful combination of negotiating and campaigning by the Law Society and our members,

including the valuable work of the practitioner groups and our governance structure including the LAPG, LCCSA and CSLA who we have worked with throughout. We never sought a two-tier arrangement for duty solicitor contracts, nor did we work with the Government to bring this about. It is worth being clear, however, that the alternate on the table was not the nirvana of a contract for all, but a onetier contract, heavily capped at just a few hundred contracts. That alternate would have decimated the profession. We believe the evidence against the Government’s cuts continues to be overwhelming. Only recently, we published independent evidence from Oxford Economics showing that falling trends in crime could raise doubts about the need for those cuts. We have been absolutely clear that the Government’s final proposals must be informed by independent evidence. For this reason, we jointly commissioned research by Otterburn

Legal Consulting and the accountancy firm, KPMG, to inform the proposals. Those reports are still awaited but we have always been clear that if they suggest that the plans pose an unacceptably high risk of market failure, the Government will need to reconsider its proposals. As we fight to secure further changes, we are determined to do more to reach out to as many members as possible. Our Vice President and Head of our Criminal Legal Aid team are travelling the country as I write meeting members, hearing their views and ensuring their thoughts are shaping our actions. The greater the input from our membership, the stronger we are in fighting the cuts that threaten our profession, and our ability to serve those in need of its services.” Nicholas Fluck, President, The Law Society

ML // February 2014

Interview with... Adam Sampson

Interview with... ADAM SAMPSON The legal sector is changing for everybody and the Legal Ombudsman is no different. Charlotte Parkinson, Modern Law, caught up with the Chief Ombudsman and asked what the biggest challenges have been for them in the last year, whether reform is stifling attempts at innovation and asked him his views on the reputation of the legal sector.

How has the position of the Legal Ombudsman changed in light of changes/reform to the legal sector? Has there been an upturn in complains and do you think firms are handling changes in a proactive manner?

There has been no discernable increase in the number of complaints, the number of complaints that have been accepted for investigation by us is actually lower than what we had predicted and lower than the number that was dealt with by our predecessors. This, in part may be due to consumer and lawyer confusion about the winding down of one mechanism and the beginning of another but I think there are two influencing factors here. One is that economic issues, the collapse of the housing market and restrictions in legal aid have driven down the number of consumer transactions and consequently, the number of complaints. The arrival of a new independent Ombudsman scheme has concentrated the professions minds more on complaints handling and is encouraging solicitors to take complaints seriously when they are first raised, rather than referring them on to us.

Do you think that too much and continued reform will stifle innovation in the sector, or is reform encouraging innovation and the creation of new business models/structures?

ML // February 2014

I have been slightly disappointed with the outturn of the first wave of reform in the sense that largely, what has happened is a reconfiguration of the existing regulated market, without a huge outturn in new, regulated business models. The vast majority of firms that have been licensed under Alternative Business Structures (ABSs) are firms that should previously have been within the regulated arena and the essential business model hasn’t changed. What we haven’t yet seen is a significant number of new business models coming into the sector. It seems that the current structure of regulation means that unless you are doing a very limited number of specialist legal services, firms are able to operate effectively and still deliver what consumers want, without needing to be an ABS and without needing to be regulated. Until such time as there is a genuine attempt to modernise the fundamentals of when lawyers need to be regulated and when they don’t, I don’t see that we will see the sort of innovation in the legal market that we might have wanted.

What types/examples of innovation have you seen in the last year which you find inspiring? Which new models do you think will triumph in 2014?

We are particularly interested to see multi-disciplinary partnerships take off. At the moment the vast majority of legal services are offered separately to other professional advice, and it would be far

better for consumers to be able to go to one business that can deal with all your legal and financial needs (for example). The key question is, why should a business go through a lengthy licensing process and submit themselves to intensive regulatory oversight? We will only see true innovation when the costs of coming under a legal regulatory system are exceeded by the benefits. At the moment there are too many firms who are taking on this analysis

‘There is a tension at the heart of the legal profession, between law as a profession with the client at its heart and law as a profession, with profit at its heart’

Interview with... Adam Sampson and deciding that the cost outweighs the benefits and deciding to carry on as they are.

is in knowing the law, which is a very different skill from knowing how to run a business.

Has the client been forgotten in light of changes to the wider legal sector and is it now simply a case of volumes through the door for many firms? How damaging has the ‘no win, no fee’ model been to the reputation of the legal profession?

There is a tension at the heart of the legal profession, between law as a profession with the client at its heart and law as a profession, with profit at its heart. At a time when there is increasing competition within the sector and when technology is pushing the price of fulfilment down, the balance between interest in the client and interest in money, shifts. There has been an impact on the public’s perception of lawyers because of ‘no win, no fee’; the public are quite capable of holding two images of lawyers in their minds simultaneously, the crusading lawyer, with the client’s interests at heart and the man in a sharp suit who is only after money. The more that firms (and Claims Management Companies - CMC’s) encourage access to ‘quick’ money, the more the image of lawyers being after money as opposed to being there to protect their clients becomes reinforced.

How important is it for firms to explore new funding strategies moving into the New Year, considering options for private equity, for example?

The fundamental business model on which many firms have been operating on for many years is being stretched. Undoubtedly many firms must now reassess their business models and it is important, at this point, that lawyers consider what else they may need to do. One is nervous of too many lawyers taking too many risks financially and having their client’s suffer as a result. A substantial proportion of the work we do is created by firms who have gone bankrupt, gone into administration or are so financially strained that they cut corners, increase volume and reduce quality in a desperate attempt to survive. The real issue is that, for most lawyers, their fundamental skill

You recently called for regulators to make the use of CFA templates obligatory and for these agreements to be standardised. You also queried whether the ‘no win, no fee’ label should continue to be used. Is there enough clarification from regulators over these new funding models or is further transparency needed?

Certainly transparency is needed, the new DBA’s are incredibly complicated and for that reason, do not appear to be used very often. Even the CFA agreements are not that easy for the average consumer to understand. There does need to be as much simplicity as possible injected into the basic conceptual relationship between lawyers and their clients. If lawyers are making marketing promises, then those promises should be consistent with the contract that is signed. The reason I don’t like the ‘no win, no fee’ model, is because it does not, in the vast majority of cases, mean ‘no win, no fee’ and lawyers need to understand consumers only really hear the marketing claims, they don’t necessarily see the small print, the same issue applies with fixed fee promises.

Has/is the profession starting to become compliance obsessed or should compliance assurance from firms/regulators be of paramount importance moving into 2014? Is there too much pressure on firms to ensure they are under the compliance umbrella?

Good compliance should only require firms to do what they do anyway, if the SRA is asking firms to tell them about their risk models or demonstrate their quality systems to show they can handle complaints, that is not artificial, they are things that any well run firm should be doing. While I have some sympathy with firms complaining about the burden of regulation and while there are undoubtedly areas where complying can be made easier, most of what compliance is, is running a decent business.

Looking back on last year, what were the biggest challenges faced by the Legal Ombudsman and how does the organisation intend to carry its vision to ensure that ‘everyone can access legal services in which they have confidence’?

The biggest challenge for us was internally to cut costs; we know that these are difficult times for lawyers. When lawyers talk about the ‘burden of regulation’, they don’t just mean the burden of regulation but also the cost of the bodies they pay for, who impose the rules. We have been trying to run as cheaply as possible to minimise this, we reduced our staffing levels by 15% last year, which is never easy. The Claims Management jurisdiction should come under our power this year, the challenge here will be to learn a new area which is much more challenging in terms of the volume of complaints we are likely to get. What we need to do is to guarantee that our service to lawyers is in no way compromised by dealing with the CMC’s. If we get it right, it will be helpful to lawyers because we will be in a position to share some of our basic costs across both the CMC and the legal profession. If we get it wrong, there is a danger that we are hit by a tidal wave of complaints concerning Claims Management Companies, that could, theoretically, impact on the legal profession; this is something we guarantee we will not allow.

ML // February 2014

The Views

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THE VIEWS

ML // February 2014

The Views

ABS: 2 years on SRA Chief Executive, Antony Townsend, takes a look back at the impact of the introduction of Alternative Business Structures (ABSs), since the SRA first started accepting licensing applications at the start of 2012 InjuryLawyers4U founder, Andrew Twambley.

The 3 January 2014 marked the twoyear anniversary of when we started to accept applications from firms that wanted to offer legal services as alternative business structures (ABSs). As is well known, ABSs were introduced by the Legal Services Act 2007 and involve lawyers and nonlawyers sharing the management and control of a business which provides reserved legal services and other services to the public. External investment and ownership of law firms are also allowed if the firm is an ABS. The first year Approval to license ABSs was granted on 23 December 2011 by the Ministry of Justice, and the first applications were accepted 12 days later. There were 30 applications in the first week, and 100 in a little more than a month. The first three licences were awarded on 29 March 2012, and the number of licences at the time of writing (January 2014) stands at 222. The first licences awarded went to John Welch and Stammers, Co-operative Legal Services and Lawbridge. Seventy four licences were awarded in the first year, with the list of high-profile approved applicants including Parabis Law - which took private equity part ownership; Irwin Mitchell - the largest firm at the time and which had five separate licences; Russell Jones Walker - acquired by Slater & Gordon, the first listed law firm; Quindell - an insurance intermediary that acquired Silverbeck Rymer; and Amelans - created by

ML // February 2014

The second year Firms approved to become ABSs in 2013 included Brilliant Law founded by BetFair creator Matthew Briggs; Minster Law - acquired by insurance intermediary BGL Group; Keystone Law - which offers revolutionary cloudbased services; Castle Park Solicitors - a community interest company wholly owned by a registered charity; and Kingsley Law, acquired by accident management company Vamco. BT created BT Law, insurance giant Admiral became involved in two firms Lyons Davidson and Cordner Lewis and AFH Legal was formed by a financial services group. Local authorities have also contacted the SRA to explore the opportunity to create law firms using council staff. The full list of ABSs can be found on our website at www.sra.org.uk/ absregister. Information for firms considering converting to an ABS can also be found on the website at www. sra.org.uk/authorisation. Innovation is evident The innovation we have seen from some of the ABS applicants has been highly impressive and they have taken full advantage of the greater flexibility offered. Numerous firms have seen the arrival of ABSs as an opportunity both to adjust their business models, and to attract external investment. Our work at the SRA - and that of the other regulators and the overarching regulator, the Legal Services Board - is driven by ten regulatory objectives. These include promoting competition in the provision of legal services and improving access to justice. The greater innovation in the legal services market that we are seeing within ABSs should increase competition in the market, better meet consumer needs, and lead to greater access to justice.

Innovation at the SRA too Itâ&#x20AC;&#x2122;s not just the legal services market that has started to adapt to the development of ABSs. We have reviewed the way in which we authorise law firms. In the light of some of our earlier experiences, we made improvements to the application process at the end of 2012 to lessen the administrative burden on both applicants and the SRA, and to reduce waiting times without undermining its robustness. This led to a near doubling in the awarding of licences in 2013 (144). We have had to make sure that our ABS approval process is thorough and robust to ensure that only appropriate people are involved in the delivery of ethical legal services, but without being over-bureaucratic. Applications for ABS licences have ranged from the very straightforward involving existing law firms built along traditional lines, to hugely complex corporate structures with labyrinthine governance arrangements. This contrast in the nature ABS applications led us not just to review the process for those applications, but all firmbased authorisations across the sector. Applicants are now advised how long it will take us to make a decision based on our initial assessment of their application. Low-risk applications can therefore be dealt with much more quickly. This is a process that is much more in line with our ethos as a risk-based regulator, and we strive to practise what we preach. Early days While two years can seem a long time, it is still very early in the age of alternative business structures. There are more than 50 further applications in the pipeline which means we may reach the 300 mark by the summer. However, even then ABSs would still represent less than three per cent of the law firms in England and Wales. It is too early to judge what the impact of the introduction of ABSs has been, but it is clear that they are having an increasingly significant role in the development and delivery of legal services. Antony Townsend, Chief Executive, SRA

The Views

Cash not profit What can be learnt from the recent demise of EOS Law?

hen BDO (the administrator acting with regards to EOS Law) released a statement as to the causes of the administration, it cited the denial by the firm’s bank and lender for additional funding. The bank’s (RBS) spokesperson said many things in response including, “we are holding firms accountable for the prudent financial management of their business” and to paraphrase them, firms should have prudent levels of capital and not be paying partners from debt when income has not been earned and converted into cash. The full facts will never be entirely known but the facts available show that EOS Law made healthy profits, the partners drew less than the profit and yet still ended up in administration, with millions of pounds worth of debts and having no control as the work in progress was split and sold to two law firms for less than £100,000. The first thing that most people probably thought, was “but for the grace of God”, as I am sure that the attitude of banks to law firms has more than just hardened over the last few years. The phrase “holding firms accountable for the prudent financial management of the business” is of particular interest. Prudent is the operative word and specifically who defines what is prudent is of supreme importance. I am pretty certain that the working definition of prudent and prudence for a law firm today is not even a kissing cousin to the definition applied by bankers as little as 2 years ago. So back to the title, what can be learnt? Point one; cash not profit is all that matters at the moment. I cannot restate this enough. If you don’t need bank finance clearly a banks view of prudence is less than moot. If you do need bank finance and let’s face it, most do, then make them and you happy. In this instance happiness is a rigid grip on cash-flow and cash collection. Point two; as soon as Administrators are involved will you get the full value for your work in progress? The short answer is probably / almost definitely not. If you are looking to sell your one and only asset, do it prior to it becoming a distress sale and while you are in control. David Bott, Senior Partner, Bott & Co

‘In the context of security for costs, what is a deed of indemnity?’ ‘A form of security related to, but separate from, an ATE policy.’

pplications for security (or the threat of them) can have significant consequences for a claimant’s ability to pursue a claim.

Where a claimant has the benefit of an after the event (ATE) legal expenses insurance policy which includes cover for adverse costs, the existence of that policy can be a relevant factor. Subject to its terms, a policy provides the insured/claimant with a resource from which to pay the defendant, should they become subject to an adverse costs award. Recent cases have considered the extent to which a policy may constitute ‘security’ (for example Michael Philips Architects Ltd v Riklin [2010] EWHC 834 (TCC) and Geophysical Service Centre Co v Dowell Schlumberger (ME) Inc [2013] EWHC 147 (TCC)). The weight attached to a policy can depend on various factors including the factual circumstances, and the terms of the policy in question, in particular provisions relating to the potential for avoidance as a result of misrepresentation or non-disclosure by the claimant. Where something additional is required, one alternative can be for a claimant to seek a deed of indemnity (also referred to as a bond), from the ATE insurer. The position under an indemnity is materially different. The insurer agrees to pay the defendant an amount up to a specified limit if the claimant becomes liable to pay their costs. Once the obligation is triggered, payment will be due to the defendant, whether or not the insurer has grounds for avoiding the ATE policy as against the claimant. The insurer is, for practical purposes, giving up the right to avoid in respect of the amount covered by the deed. There is a cost attached to that and generally there will be a separate charge in the region of 10% of the security provided. This will be payable by the claimant when the deed of indemnity is put in place. A deed of indemnity is likely to be considered favourable security by the court. An insurer is not obliged to provide an indemnity, but is often prepared to do so, particularly if a potential requirement is highlighted at the time a policy is applied for. Matthew Williams, Head of AmTrust Law

ML // February 2014

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The Views

A strategic M&A

here are a number of misconceptions regarding the much debated topic of Law Firm M&A. Some firms are of the view that most firms have recently or are in the process of discussing some form of merger with another law firm. Other firms are almost paranoid about the subject and say either that they have not been approached by any other firm (i.e. what’s wrong with us?) or that they do not intend to do so (why not?). Extreme circumstances driven either through Professional Indemnity Insurance (PII), funding or regulatory issues of course prompted forced arrangements which we have seen over the last couple of months. I work with firms in all those categories and am absolutely convinced that there is an important role for a consultant to play, right at the outset of this journey. Apparently, successful DIY is all down to good preparation. There is, by analogy a clear correlation between clear strategic thinking and implementation when it comes to any M&A activity. A lot of straightforward discussions need to be had by a firm before embarking on any acquisition of individuals, teams or bolt-ons, or indeed to consider the implications of the firm being acquired, to ensure that that is the agreed strategy to be followed. Failure to do so on the often quoted, ‘never say never’, principle is a recipe for wasted time and cost in the future. An outside view at that critical early stage can help the firm reach a conclusion as to the future direction of their strategic journey, often cutting through some of the blockers that have historically prevented a certain strategic direction being pursued. Failure to do so often causes friction within certain quarters. Of one thing we can be certain - 2014 will see a continuation of the relentless pressure being brought to bear on law firms from all angles. Without wishing to sound too much like a scaremonger, now may well be the perfect time for firms to address these issues, not least at a time when many are finalising budgets and plans for the next financial year. Some difficult discussions may well need to be had in order that firms can move forward in the knowledge that at the very least, the above points have been aired, discussed and decisions reached as to the basis upon which your firm’s future will depend on from a strategic perspective, in the future.

Being ‘social’

hen we speak to legal clients at the moment, we’re emphasising two key areas that they must master if they want to improve the return on their online investment in 2014: content marketing, and taking a proactive approach to social media.

On the face of it, these may not sound like new ideas, but following the most recent Google algorithm updates they’ve become more important than ever. Google has made investing in excellent content absolutely essential for businesses still hoping to prosper online in 2014. And by excellent content, we don’t just mean good quality copy for your website. We mean an interesting and wellmaintained blog; investment in rich media like videos, infographics, memes, and even cartoon strips; in-depth studies; whitepapers with something worthwhile to say about your field. When done right, good quality content earns you links, social media mentions, citations in online news sources and blogs, all of which improve your profile. We’re also talking to legal clients about being more proactive in their approach to social media. Most law firms are now on board with social media, in that they have a Twitter account and Facebook page, but very few of them are actually taking the time to do something interesting with those accounts. Social media is about being ‘social’, so if your firm has an identikit legal account tweeting case wins and legal tips, it’s highly unlikely that you’re seeing any benefits. To be successful on social media, you need a personality and you need to be proactive. Take time and identify who you want to target and build relationships – retweet their blog posts, start discussions and communicate. Social media is really just another form of networking, and you must work the room to be successful. The online landscape shifts so rapidly that we’d be foolish to claim that we’ve ‘seen it all’. However, as the situation currently stands, content and social will form the cornerstones of all good digital marketing campaigns in 2014 – we recommend mastering them now if you want your law firm to continue to be successful online. Mike Blackburn, Managing Director, I-COM

Charles Metherell, Managing Partner, The Corre Partnership LLP

ML // February 2014

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The Views

A new opportunity A recent ruling by the Legal Services Board (LSB) means that Chartered Legal Executives can now enjoy the same rights as solicitors; how important or not will/has this decision been for the future of the legal services profession?

he Legal Services Board (LSB) has approved applications from ILEX Professional Standards (IPS), to regulate Chartered Legal Executives exercising litigation and related rights of audience independently, as well as new rules for regulating immigration advisers. This follows earlier approvals for IPS to regulate independent probate and conveyancing practice rights. Currently, CILEx members are able to conduct many reserved legal activities only under the ‘supervision’ of an authorised person, most commonly a solicitor. The approval of these applications recognises the parity between CILEx members and other legal professionals. It is a major step for consumer choice, for parity between the professions, and for increasing career opportunities in law. IPS is preparing to accept applications from Fellows of CILEx for litigation, advocacy and immigration rights from Summer 2014. This will benefit thousands of law firms who currently have unnecessary bureaucracies in place to sign-off on the work of experienced Chartered Legal Executives, including those working as fee-earners and partners. It has long been recognised that the qualifications achieved by CILEx Fellows equips them to practise in these areas and to achieve partnership. This is the final piece of the jigsaw in the recognition of the standing of Chartered Legal Executives. As well as approving applications for regulating individuals, approval has been given by the Legal Services Board for IPS to start authorising legal practices offering litigation and immigration services when Parliament has granted powers to set up a compensation fund. The LSB has confirmed it will approve IPS’s rules for establishing a compensation fund once Parliament has awarded the relevant powers. IPS hopes to be in a position to accept applications from entities from early 2015 following Parliamentary approval. This means that groups of Chartered Legal Executives will be able to offer legal services to individuals without being in partnership with solicitors. This will be a fantastic move for consumer choice in the selection of legal service providers, and also for career opportunities for experienced Chartered Legal Executive practitioners to set up business on their own account. It will also mean that those working towards Chartered Legal Executive status can be employed directly by those who have followed that route themselves, and recognise the intrinsic value of the qualification through their own experience.

It’s a long way from Texas to Essex John Wesley Hardin b. Bonham, Texas and me b. Ilford, Essex)

n Jones v Kaney the Supreme Court abolished the partial immunity from suit for negligence previously enjoyed by expert witnesses (and barristers). One of the outcomes of this ruling is that it will help remove (or improve) those experts the so-called ‘hired guns’ of this world - who prepare reports perhaps based upon their interpretation of what their instructing solicitor seeks to suggest they write, or end up confusing their role with that of an advocate. So it came as somewhat of a surprise to me to be introduced as ‘the expert from the dark side’ at a master class to which I had been invited to speak by a significant firm specialising in claimant work. Could it be this was a euphemism for ‘hired gun’, or a Mandolsenacolyte? Did I spread that much terror? I thought the presentation went well and since then various members of this firm ‘invite’ me to connect with them on LinkedIn. Perhaps they like building their connections. I respond happily, but was completely taken aback when one to whom I messaged that having taken part in a master class it would be really nice to receive an instruction one day, came back with the pithy “What about (the case of) xxxx?”. Quite took my breath away. I have been a huge fan of the Wild West since my teens and pretty much clued up on all the gunfighters of the time (did you know Ben Thomson and Black Bart were born in England ?) but could I be bracketed with these hell-bent gunmen such as the notorious John Wesley Hardin ? Hardin was undoubtedly the West’s most notorious gunfighter, reputedly killing 40 men and spreading much terror in Texas before being captured in 1878 and sent to prison where he studied law. Now, here’s a thing, upon his release in 1894 he set up as an attorney. Problems such as this could be avoided by the appointment of a single joint expert, but that’s a story for another day. Now where did I put my .41calibre Double Action 1877 Colt, I have another notch to put on it. Trevor Gilbert, Chairman, The TRG Group

Noel Inge, Managing Director, CILEx Law School

ML // February 2014

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The Views ????

Creating the balance

et’s face it, if 2013 was the year of consolidation, ABSs and case-load divestment, then 2014 will need to be the year the independent niche firms, show determination to survive and thrive in the new landscape. The big merger and takeover deals we’ve witnessed over the past year or so have arguably been predicated on one factor: that client’s will remain loyal. But research over the past decade has shown just how immune consumers are to big brands in general in the legal sector, and are far more persuaded by direct response advertising and recommendation. There is one outstanding risk facing decision makers, and that is doing nothing. So I’ve looked at some of the more impressive success stories among our client firms, all in the small-medium sector, to understand how they’ve embraced opportunities that have been the secret to their success. •

•

Be even more attentive: You may think you are looking after your customers well, achieving good outcomes for them, receiving great feedback. Set yourself apart from the crowd by investing even more in service, call clients back quicker, spend more time getting to know them. You won’t need surveys to know your clients are even happier. Be local and generous: One of our client firms has deliberately established itself in the high street, at the heart of its local community. Clients actually walk in (remember those days?) and get a brew and a chat with a lawyer. Often, the firm can’t help the client with that particular problem, but clients drawn from friends, family and colleagues inevitably follow. If it ain’t broke, break it: Innovation in highly commoditised markets is tough – throw away the rule book and encourage blue ocean thinking throughout your firm to create whole new opportunities. Act like a brand – stand for something: You’ve made your charity donations, taken tables at the charity dinners, done the sponsored head shave, tweeted about it - that’s your CSR done, right? Most of that means very little to the average legal consumer. Choose a cause that’s important to your clients, then you’ve really got something to tweet about. Encourage ambassadorship: All of the above count for nothing commercially if you don’t get your best sales force out there campaigning for you – your delighted clients. If they’ve truly valued and appreciated your service, they will not hesitate to recommend you to others – you just need to ask them, and make it easy to do.

James Malloy, Operations Director, Ontime Group

25 00

Your first port of call What new opportunities are there for law firms to embrace digital and online marketing in 2014? Have we seen it all and do law firms fully understand the opportunities available through exploring new online/ digital marketing channels? Law firms need only look at other industries such as financial services or online retail where change is driven by consumers, whether they are people like you or me or a small to mediumsized business, all of whom are increasingly looking online to get help, compare services, seek information and get other opinions before they make their purchase decision. One recent survey by The Law Wizard reported that when in need of legal services, consumers are most likely to look first to the internet. In fact 46% of respondents in the survey said the internet would be their first port of call with only around 35% who would head first to a solicitor. To capture these potential buyers, law firms have to understand the new buyer behaviour and purchase decision making process. If they do not engage earlier on in that process when buyers are seeking information and considering options, they are more likely to never be considered or even be aware. To-date, law firms have focused mainly on having an online presence by way of a website and dipped their toes into search based advertising and search engine optimisation. They have also used referrers or joined networks with more digital savvy marketers to drive leads, paying them on a pay per lead basis but not realising that their own brand is being devalued in the process. The online opportunity for law firms is growing and they need to embrace online and digital marketing holistically themselves. They need to focus more on their target customers, understand them better by segmenting by customer types and needs and then use a mix of digital marketing channels to reach and engage with their target customers one to one. This means that law firms need to expand their capability and embrace other technologies that include next generation interactive websites, know-how systems, contextual search, webinars, video, social media marketing and mobile so they can use the right mix to reach their audience and generate the right demand. Will this happen overnight? No. Law firms are really only at the start of their digital and online marketing journey. But the opportunity is there and the path has been taken by other service industries before them. Those that are brave enough to embrace digital marketing will, I am sure, reap the rewards in the longer term. Jitendra Valera (JV), Chief Marketing Officer, Advanced Legal

ML // February 2014

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The Views

Preparing for growth

enry Ford was attributed to saying ‘A man who stops advertising to save money is like a man who stops a clock to save time’. The same could be said in relation to business development and exploring new opportunities equally with working with existing clients.

To me, existing clients in an ultra-modern world should be increasingly seen as one and the same as new clients i.e. with the vigour and fervour we attribute to them. Product, price and how we communicate with our customers are sure to play a big part in every increasingly fickle consumer decision. Therefore time spent cleaning, marketing to and managing your existing database is a good low cost place to start as the expense and hard work has already been done. Whilst some might still be enjoying pre-April work in progress most firms will have one eye on the ball in terms of how it obtains its future work. The trouble is in my view; the well beaten path of the claims management company in its current form is one which is on life support and whilst the referral fee ban may not have bitten anyone significantly yet, it will only be a matter of time before we pick up this magazine to find out which big firm has strayed too close to the edge and succumbed to a nasty bite from an increasingly diligent regulator. That stated, the risk of embracing and investing in relatively untried new opportunities may seem too bold a move to most law firms especially given the pretty mean cost regime law firms are now enduring and the reliance on cast iron work to prop up profit remains. One area a law firm can help themselves is by testing suppliers’ willingness to support your business, who themselves can be a surprising source of ideas and solutions as I believe it is in our interest help ensure the health of our customer law firms. The balance therefore, lies between the time and money spent invested into known existing projects which have guaranteed yield and the time and money spent investing in developing new projects. The winner will be the firm which understands what solutions are available to their business, clearly defines and ring-fences the risks and which can effectively hedge its strategy; especially in the event of a future scandal throwing the law firms existing work channel into question.

Going it alone

istorically claims management companies were the primary route for personal injury firms to acquire leads. But the recent ban on the referral system has meant the only way for firms to buy-in leads is through ‘marketing services’ and this is only if they meet certain criteria. This has meant that some PI firms have either failed, opted out of the PI market altogether or decided to go it alone and generate their own leads. If your firm is making the transition from paid referrals to organically grown leads it’s a steep learning curve in identifying how to generate the right number of leads to keep your departments busy. Building the right brand and taking control of your future will help you thrive in this challenging market, but to stay competitive you need a strategy. So how do you use marketing effectively to generate new leads with maximum return? In my experience, you need to implement the right brand and more measurable below-the-line marketing techniques such as digital and direct marketing. You should also optimise your website so it becomes a lead generation machine. I also propose that a firm ‘sells its products’ then builds their brand, which requires a mix of direct response mechanisms aimed at getting new business enquiries whilst building credibility. Brand valuation workshops identify the cost and market approach of your brand and once this is defined, your corporate brand and any sub-brands and how they interact with each other, or not, can be established. Once the number of PI leads you need to win has been established a methodology can then be implemented to identify which marketing channels are the best to use. I believe in stating small - if you have a good regional or local presence and an excellent reputation then you should leverage this to your advantage and become the bigger fish in the small pond. You can then test your methods and refine your marketing strategy and when you’ve got it right on a small scale, you can expand to a larger audience. Ian Hunter is the Managing Director of Jellyfish Creative

Jeff Dawson AIC, Director of Sales, Elite Insurance

ML // February 2014

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The Views

Retaining your talent

Challenging tradition

As the market improves and the recruitment cycle picks up, what methods should firms employ to both attract and retain talent?

Quality Solicitors have recently introduced a fixed fee policy, currently something which is relatively unique to the retail legal services/high street legal services market. Are fixed fee policies something which could/ should be rolled out across the high street/’brand’ legal services and is a one-size-fits-all approach appropriate for all?

ince the downturn started to bite in 2008, law firms have been able to worry less about keeping their staff because they tended to be thankful that they still had a job and most felt that security and “better the devil you know” was the most sensible approach in uncertain times.

That was then, but this is now and things are different. Business is picking up and firms are increasingly looking to recruit from rivals so how do you win the war for talent by keeping your stars and attracting stars from your competitors? Keeping and attracting staff is simple. A firm simply needs to become known as the best employer in its location. Most towns will have 3 or 4 firms within 100 yards of each other, and the Partners that know why their staff walk past other firms to work for them will very shortly become known as the employer of choice. The best way of doing this is to ask staff what they think and to act on their feedback. There is an excellent online tool that does just this (www.law-league. com). It takes your staff feedback and benchmarks it anonymously against peers to highlight your strengths and weaknesses. This allows a firm to shout about its strengths and address the weaknesses. Quickly the firm will find that it has happier staff generating more fees, who don’t want to leave so there is no need to pay fees to replace them. It will also be more attractive to new talent making growth much easier. It is a simple virtuous process that saves money, grows profit and also helps with OFR, CQS and WIQS compliance but surprisingly few firms do it. So be the one firm in your town that does, and succeed by listening to the people who know your business better than you do. Andrew Roberts, Managing Director, SSG Legal

ome fixed fee models already exist in the high street legal services market, in particular in residential conveyancing. They are, however, only one option and a broader issue is the alternatives to the traditional time charging model.

Time charging is a fairly recent phenomenon. I can remember, at the start of my career 30 years ago as a trainee in a City firm, the senior litigation partner picking up a file and weighing it in his hands to decide what he thought he should charge. There then followed the conversation with the client to agree the fee before the bill was issued. What started as a management tool and an aide to such conversations now dominates the entire profession, from magic circle to sole practitioner. It’s made practitioners’ lives much easier – ‘computer says this is what you have to pay me’. However, there is a growing realisation of its drawbacks and, even within the profession, an understanding of its downside as a management tool. Clients, and particularly consumer clients, are not interested in how much time is spent on any matter. They rightly focus on outcome, cost and value and fixed fees can be very attractive to them. There are of course cases for which, in their own particular circumstances, fixed fees simply would not work. They do require far more thought and work to establish at the right level so that a firm can remain profitable and stay in business. In their purest sense of pre-fixed menu pricing, this can only be achieved where there is sufficient certainty over the process and contingencies, coupled with volume to smooth out the swings and roundabouts. There is no reason though, particularly in the high street, why a firm estimate for a matter or stage that is agreed before any substantive work is done should not become the norm for nearly all services offered. The right direction for the high street is to move away from time charging towards value-based charging, of which fixed fees will have a major part to play. Simon Goldhill, Principal, Simon Goldhill Consulting

ML // February 2014

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The Views

When the dust settles

he Law Society of England and Wales outsourced professional indemnity insurance to a commercial based system in 2000 enabling the profession to enjoy reduced premiums than those previously charged under the Solicitors Indemnity Fund. Whilst solicitors enjoyed approximately eight years of reduced premiums under the new commercial based system, the challenging financial trading environment in 2008 started to see insurance premiums increase across all insurance products, not least of which was the solicitors indemnity insurance product. Combined with a more robust criterion adopted by insurers in the renewal process, we first saw articles appearing in legal publications in 2009 concerning difficulties faced by solicitors in obtaining PII. In an effort to ease cash-flow complications some firms considered they could better face the challenges ahead by merging other firms into their operation, however often adding to their difficulties through the absence of any due diligence in the merger process. The Law Society has recently started to introduce a number of quality marks within various legal sectors and through a combination of time and appropriate marketing by solicitors and The Law Society itself, the consumer should have restored trust and confidence in the legal profession limiting solicitors to receiving instructions within their chosen specialist legal sectors. Whether this will reduce indemnity claims is uncertain but it is a step in the right direction and may also encourage insurers to offer PII premium reductions where quality assurance accreditations have been achieved. As a firm providing a professional personal injury service throughout England and Wales, JMP Solicitors launched their ‘exit pi’ service for solicitors planning on retirement from the personal injury sector and for those who are unable to obtain PII cover. Ian Howard, Managing Director at JMP Solicitors said “Our exit pi brand is not only there to help firms going through indemnity insurance complications in the short-term, but also for any firm that wishes to opt out of handling personal injury claims in the longterm”. Anyone interested in contacting Ian to discuss the potential acquisition of personal injury cases or setting up an affiliation to work together going forward in the provision of personal injury services should contact him on 01476 539810 or via email on ihoward@jmp-solicitors.com Ian Howard Managing Director, JMP Solicitors

In the know What new opportunities are there for law firms to embrace digital and online marketing in 2014? Has the industry seen it all and do law firms fully understand the opportunities available through exploring new online/digital marketing channels?

his Year is set to be another big year in digital marketing. The team at mmadigital have taken a look at what we think will be the top advances you need to know about this year.

Social media advertising Facebook and LinkedIn have already proven advertising on social media works and Twitter is hot on their heels. The micro-blogging platform caused controversy when it launched its ‘sponsored posts’ last year but the threatened backlash failed to materialise and businesses can now promote their accounts and even sponsor trends. Big consumer brands have used this service well but smaller businesses and professional markets will also start to dive in. Twitter company pages Twitter could create accounts just for businesses. These would have different layouts and functionality that gives businesses better ways of promoting themselves. Facebook, LinkedIn and Google+ already offer this and Twitter could well learn from their early development mistakes to make them the ‘go to’ platform for business. Smartphone app advertising Most free apps for smartphones and tablets come with advertising. Many ads are for games but with some apps being downloaded 200 million times, businesses are realising the potential in buying the advertising space they offer. Faster connectivity With more networks offering 4G in 2014, mobile users with compatible devices will be able to watch your videos and interact with your websites much more easily. Be careful not to let this fool you into thinking that it won’t matter if your website is slow. You’ll still need to make sure those not on 4G are catered for. Video quality Interactive video will open up the medium in a whole new way offering clickable links to websites or control over what viewers see on screen next, allowing a 90 second video to have much more information for the viewer than is currently available. The quality of your videos too will get a massive boost as 3D and 4K (Ultra High Definition) will start being used on computer and mobile screens, allowing you to do more than ever with your online videos. Dez Derry is CEO of mma digital, online marketing for modern law firms

ML // February 2014

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The Views

Identifying and mitigating the compliance risks in law firms

OLPs and COFAs are at the front line of compliance in law firms. Although SRA guidance states that COLPs and COFAs are not solely responsible for ensuring compliance with SRA Handbook requirements, and that all individuals in the firm have a role to play, in practice where there is a regulatory or compliance issue, the SRA will be looking at the action taken by the COLP or COFA. The first priority is to identify the main regulatory risks that the firm faces, so that appropriate procedures and controls can be put in place to mitigate those risks. Although the focus will be on the SRA regulatory regime, firms need to think more broadly about possible investigations by other authorities such as the Financial Conduct Authority (FCA) and the SFO. High risk areas include: •Client money and accounting rules •Money laundering •Internal fraud •Financial sanctions and anti-terrorism provisions •Bribery Act compliance •Insider dealing •Financial services provisions, such as approving financial promotions. Every firm is different, and each firm needs to devise a tailored approach, reflecting its high risk areas. A number of systems and workflow solutions are available on the market to automate back end processes and help to reduce risk. In addition to establishing adequate and appropriate systems and controls, COLPs and COFAs can also take the following steps to mitigate liability: •Good record-keeping and a clear audit trail for decisions taken when dealing with compliance issues. •Clear escalation procedures: if you identify an issue, be clear on whether and when you escalated it to the firm’s senior management. •Good staff training. It is not sufficient just to have the firm’s compliance or anti-money-laundering manual on the intranet. Employees need to have practice area-specific training, ideally a combination of e-training and face-toface workshops. •Keep up to date on compliance and regulatory developments, and make sure others in the firm are aware of them. The authorities are increasingly inclined to bring enforcement action. For example in 2009 the FSA (the FCA’s predecessor) imposed large financial penalties on the law firm Fox Hayes for approving financial promotions that allowed unauthorised overseas companies to target UK investors and illegally sell shares to them. Time invested in compliance now can reduce the risk of a regulatory investigation, or make it less painful if the worst happens. Ian Mason is Head of Content Strategy at Thomson Reuters Legal UK & Ireland.

M&A and the consulting expert

ow often do you seek someone else’s opinion when making a really serious decision in business or in life? Would you spend thousands, or hundreds of thousands, of your hard earned pounds without getting an expert opinion that what you are buying is worth the investment?

Would a Lawyer advise a client to buy a company, a house or a factory without getting expert, independent advice? I think we all know the answer so why would it be any different when firms are looking to merge, acquire or be acquired? The role of an ‘Expert’ consultant, not any consultant, well versed and knowledgeable in the sector can and should be invaluable. A famous saying is that you only know the value of an expert when you realise you have engaged the services of an amateur. M&A activity can be a minefield and fraught with a wide range of issues. Setting aside some of the financial reasons for a second, let’s consider several other key factors; •Culture – Do you share the same values and ideals? •Synergies – Does your target offer something new or better that adds to your proposition? •Personalities – Can you work with the people on the other side of the table and be as one? •Rationale – Why do you want to merge? What’s the true reason for wanting to put your businesses together and create one? •Ambition – What do you want to achieve from the merger? •Name – What will we be called? You’d be amazed how big an issue this one is even if the financial reasons are overwhelming! •Cost – What is the ‘hidden’ cost of this going to be? Taxation, Banking & Accountancy, Branding, Jobs, Reputation are just a handful that spring to mind. I can save you all a fortune on consultants here and now, if the personalities of the business owners and what they want to achieve individually don’t match, then generally speaking a merger will not be a success even if the financials add up. Any merger or acquisition is an extremely emotive time of change and engaging someone with no emotional tie to the business, a critical best friend who will steer you through the change curve can only be positive. Tony Brown, Owner, AGB Legal

ML // February 2014

The Views

Staying on top A

s COLP’S, COFA’S, HOLP’S AND HOFA’S mark their first anniversary in post, it is necessary to ask are law firms now more compliant with SRA regulations than they were before. I would hope that the answer is yes. These post holders should have spent the last year developing the necessary management policies, systems and controls and ensure that they are working effectively. If they have not then this should be at the top of their New Years Resolution List. There needs to be systems in place to manage risk that does not mean simply having a risk register but also monitoring and assessing risks constantly so when a material breach does arise it can be identified easily. As more and more firms shut down due to financial crisis or undergo mergers, it will be those firms that survive where these post holders have fulfilled their roles to the fullest. These roles will become more and more integral to the firms management to help improve performance and structures for risk management. Samantha Barrass, of the SRA, said in a speech in December 2011: “The COLP will be responsible for taking reasonable steps to put in place systems and controls for good compliance. We will expect the COLP to be completely on top of risk and compliance.” A daunting thought indeed and no surprise that these comments caused a great deal of fear amongst those appointed. However at the SRA COLP and COFA conference last year it was clear that the SRA simply wants firms to have systems in place to ensure they can manage their own risks with the regulators being left to deal with the rogue traders. Undoubtedly the fears of the post holders will have waned over the past year and complacency will have set in when carrying out their responsibilities, but this could be potentially dangerous. More than ever the firm, not just the COLP, COFA, HOLP and HOFA need to ensure that they have the most effective systems in place for managing and monitoring risk and overall compliance. If this thought is still too overwhelming then help is at hand. At Legal Eye we can ensure all your firms Regulatory Compliance and Risk Management systems are compatible with the SRA’s outcomes focused framework and to help you improve your firm’s performance. Tina Gosal, Compliance Consultant/Associate, Legal Eye

Keeping up with digital marketing in 2014

he fast paced world of digital technology poses continuous challenges for marketers in the legal sector: We are all on LinkedIn, Twitter and Facebook. Now do we join Google+? Develop a Flipboard magazine? A YouTube channel? An app? New social media platforms are sprouting like mushrooms and it can be difficult to identify which should be explored in order to be cutting edge, and which are merely fads (e.g. Second Life, which some firms adopted when it first appeared). Most top law firms are now actively using LinkedIn and Twitter to market their businesses. How effectively they do this however is still debatable, as the necessary level of engagement is often lacking. Engagement requires authenticity, which is why individual professionals’ Twitter feeds work better than corporate feeds. Solicitors are better able to demonstrate expertise in their tweets, rather than merely referring to it. To use social media well, we need to encourage more individuals to join in to engage and share. The ease and speed with which online and social media allow anyone to create and distribute content has led to an abundance of information, and it is becoming more time consuming to filter out what is relevant. We are often left with a feeling of having missed something. Social curation and bookmarking tools, allowing users to organise and share web content according to chosen topics or themes, are likely to become more popular as they give the user a sense of control. We may therefore see more tools such as Flipboard and Pinterest, which allow users to create a bespoke experience. The second highest number of internet searches is conducted on YouTube (after Google). It is likely that video content produced by lawyers will grow in 2014. Perhaps foreseeing this, Chambers and Partners who recently launched a new website, offers a video profile upload facility for ranked individuals. Solicitor profiles are among the most visited pages on a firm’s website because clients want to put faces to names. Video content will bring our websites yet closer to a more personal and approachable feel. Finally, a social media phenomenon that lawyers may see more of in 2014 is one that actually moves us away from digital media: The Tweet-up, bringing the conversation from online into the real world, as social media becomes truly social. Julia Weiss, Marketing and Communications Manager, Hardwicke Chambers

ML // February 2014

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The Features

37-56

THE FEATURES

ML // February 2014

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The Features

GAINING PACE As the legal sector awakens to a new year and many new opportunities, Richard Burcher explores some key global pricing trends within the legal sector past and present and highlights which pricing considerations are key to your firm’s success in 2014

igration of pricing from administrative function to essential skill: Over the last five years, all the other profitability levers have been pulled or are in the process of being pulled; cost cutting, redundancies, mergers, diversification, specialisation and restructuring. The one that has received little or no attention is pricing but many are now realising that it holds considerable promise, provided they treat it as a capability requiring commitment and investment. That trend is gaining pace. Pricing is becoming a more collaborative process with clients: Clients have made it quite clear that they want to be at the centre of the pricing process, and not be treated as an irritating complication. They want to see from their lawyers:

•Real efforts to reduce production costs and a move away from a costplus mentality •More pricing and payment options •Greater involvement and engagement in the pricing aspect of the relationship •Greater pricing transparency •Greater pricing certainty and budgetary predictability •Greater correlation between price and perceived value •Greater risk sharing around fees Artificial intelligence practice management/pricing software: We are seeing a significant evolution in practice management software. Version 1.0 gave us little more than the ability to properly manage the trust account and the general ledger. Version 2.0 gave us, amongst other things, better financial reporting capability and online time recording functionality. However, version 2.0 is now woefully inadequate. What we have now with the next generation of PM software is a much greater capacity to understand, analyse and plan the objective, arithmetical components of a legal

project, but this still rather misses the point. There are important elements of subjectivity in pricing that the current software does not come anywhere near dealing with satisfactorily. The ability of the software to analyse subjectivity (an oxymoron?) is a long way off. The emergence of pricing specialists in firms: A new breed is slowly emerging – the pricing manager/pricing director. As pricing analysis, policy and strategy becomes increasingly important for firms’ competitiveness and profitability, they are looking for increased expertise in the area. This is proving to be a challenge because the skillset for the role is a unique one, falling as it does in a sort of no-man’s land between finance, business analytics, business development, marketing, sales and delivery/performance of the legal service. Synthesising the art and the science of pricing is where the real alchemy occurs; turning base capabilities into something precious and valuable from the firms’ perspective. Little wonder therefore that people with that combination of skills, qualifications and experience are like the proverbial ‘rocking-horse droppings’; thin on the ground. Polarisation of the profession along pricing lines: Firms are coming to realise that they must not try to be all things to all people. They are taking a view as to their position in the marketplace and making a conscious decision to be the John Lewis, Fortnum and Mason or Harrods of their market. The dawning realisation that competing on price is not only soul destroying, but financially suicidal, will see much greater polarisation of service level, quality of advice and pricing offerings than the relative homogeneity that still exists in many markets.

So, What To Do? -Pricing Governance The best results are achieved when there is a seamless vertical integration between the strategic and policy settings developed by the firm’s Board, down through the finance and marketing functions and ending with the lawyers at the ‘coalface ’who are the ones ultimately responsible for having the pricing conversation with clients. -Pricing Execution Most lawyers say that they know their clients and the market and that they have an intuitive feel for what the client and the job will stand. In our experience though, even the most experienced partners cede margin unnecessarily and often through a lack of empirical understanding of the clients’ pricing drivers. The development and consistent deployment of recognised pricing techniques such as price sensitivity analysis and price elasticity assessment, should be undertaken long before any consideration is given to the fees to be charged to a particular client on a specific job. In other words, individual lawyers must have the skills to price the client before pricing the job. -Pricing Analytics Historically, profitability margins on most legal work were such that there was little need for precision. Since 2008, margins have been savagely squeezed with the result that firms can no longer indulge a ‘near enough is good enough’ approach to managing margins. Firms must now have a deep and robust understanding of precisely what profit/margins are generated by specific practice areas, teams, individual practitioners, individual clients and individual files. Richard Burcher, Managing Director, Validatum (UK) Limited

ML // February 2014

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The Features

DIRECT ACCESS – A DECADE ON Ten years have passed since the launch of Direct Access and the benefits for both barristers and clients are now clearer than ever. As we enter a new year, Sarah Coulthurst reflects on the opportunities and challenges presented by the scheme.

irect Access continues to attract attention and, with the right marketing, demand will continue to increase. The challenge for today’s barrister lies not only in attracting new clients, once the exclusive domain of the solicitor, but also to understand how to effectively engage with their clients. Many potential clients remain unaware of Direct Access and this can be addressed by means of intelligent online marketing. Commercially savvy chambers are taking steps to improve accessibility to barristers but individuals could still do more to enhance the client’s overall experience.

this will be the first step to securing new business. A personalised website approach is increasingly popular for those barristers who have identified Direct Access as a substantial income stream and it is vital for them to have the confidence to market themselves proactively online. At one time a barrister’s reputation was enough to attract business but, as the legal landscape continues to change and competition intensifies, the creation of an effective online presence is more important than ever. Sarah Coulthurst, Founder, Direct Access Websites www.directaccesswebsites.co.uk

An online presence can be used to do the following: • Highlight appropriate cases that a lay person can relate to • Customise content to engage and attract potential clients • Write a personal blog that can be seen and heard • Update news articles relevant to a particular specialism • Provide clear and precise information on a service to save time and money The internet is the force behind today’s rapidly changing market and search engines are now, more than ever, the research tool of choice for potential clients. Information is gathered to connect with a service or person online and a barrister should have an understanding of how to keep ahead of their online competition. If relevant information is not easily found on the web, another search will be carried out immediately and the ‘drop off’ rate per website will increase. An individual specialising in family law with a personal website, relevant membership listings and blog postings will often be found higher on search page rankings than a chambers website due to their active online presence. Search engines work by monitoring how frequently a website changes and so fresh website content is essential

‘An individual specialising in family law with a personal website, relevant membership listings and blog postings will often be found higher on search page rankings than a chambers website due to their active online presence’ for search engine optimisation. ‘Blogging’ can play a key part in generating leads and links. A high quality blog on relevant legal issues will engage a potential client and social media sites can be used to promote blog posts and increase communication with potential clients. Direct Access will continue to require effective marketing and if a client immediately engages with online data

Sarah Coulthurst studied BA Graphic Design at Nottingham Trent University from 2000-2003. After graduating with first class honours she spent two years working at a design studio in South Kensington. With a client facing role in a small creative environment, she immediately understood the value of business and design. From here Sarah followed her passion to work as a freelance designer in Melbourne, specialising in branding and editorial design at leading agencies. Sarah returned to London in 2006 to work at Red Consultancy where she produced eye catching promotional literature designs, brochures and exhibitions for high profile clients including Jacobs, Johnson & Johnson, Nintendo and Nokia. In 2008 she formed her own company Uncoated Design Ltd. Following an increase in demand, website design became a primary discipline. Today, Uncoated Design Ltd continues as a leading Bristol based multidisciplinary design agency with clients in the media, retail, health and legal sectors. In 2013 market research and a stream of client enquiries led Sarah to turn her attention to the legal market. She founded Direct Access Websites, an online company that provides affordable website designs to the market savvy Direct Access barrister. Sarah’s passion for design and client care remains as strong as ever. She mentors students from Weston College and lives with her husband in the thriving design city of Bristol.

ML // February 2014

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The Features

2014 & CLINICAL NEGLIGENCE: RIDING THE STORM

The ‘business of law’ for clinical negligence/PI firms becomes a pressing matter in 2014 as the legal landscape adjusts to a post-LASPO scenario which has impacted the commercial prospects and business operations of many firms in the sector. Modern Law spoke to three experts to find out more.

Sajid Hussain

Reuben Glynn

Since April 2013, leading costs decisions, increased competition and adjustment within the business development strategies of many firms has forced lawyers to take a more purposeful business view towards profit margins and the sustainability of their own place in the marketplace than ever before. We look how a progressive and commercially minded legal & business professionals may look at the clinical negligence landscape in 2014 to ensure adaptability equates to prolonged success—from a legal costs perspective, a barrister’s perspective and from a business and commercial perspective. Reuben Glynn: Director of Legal Cost Consultancy, PI Costing “Last year truly was the year of Cost Management and Mitchell. I predict 2014 will be the year of PROPORTIONALITY! The new test for proportionality came into force on 1st April 2013. Due to the nature of the litigation timeline, this seismic change will only start to bite in the spring. Long gone is the reasonable and necessary test, litigation professionals now need to grapple with the prospect of a long stop test on their recoverable costs. Every action must now fit within a basket of tasks which are proportionate for that case. There is absolutely no official guidance and no CPR approved calculation. We must all sit back and await the Court of Appeal guidance which one hopes will surely emerge this year.“

Karl Hirst

Karl Hirst: Clinical Negligence Barrister, No5 Chambers “2014 is set to offer an entirely new structural model to the Bar. The Bar Standards Board is poised to regulate enterprises rather than individuals. The squeeze is on in a post-LASPO environment where public funding facilities are decimated. Investors are researched and readied to enter the legal arena. Opportunities for IT integration to secure powerful efficiencies and innovation have never been greater. Is it the perfect storm to create a radical new world for the Bar. I don’t think so.

In my experience barristers are broadly devoted to their traditional model which is tried and tested. The model lends itself to flexibility and environmental adaptation and incorporates technological advances as easily as any other. Administrative and compliance burdens are known and embedded. Without doubt, for some barristers regulatory restrictions have stifled their dynamism and this year they will be liberated to explore and innovate further. There will be those who sit externally and see the changes as appealing opportunities for investment. We can expect some excitement from those quarters. I suspect that the Bar will proceed slowly, preferring conservative to radical treatment for its afflictions. If that is right, don’t mistake a deliberately measured approach for a lack of creative thought or determination.” Sajid Hussain: Chairman & Managing Director, Outspire Group “2014 is the first full year where clinical negligence firms find themselves directly under threat from competition. As 2013 ended, a lot of PI firms had adapted in a post-Jackson landscape. It seems now that most of them have their proverbial house in order (that is if PPI, LASPO or Jackson hasn’t taken the roof off) and are beginning to aggressively develop clinical negligence departments. This is visible with the number of accredited clinical negligence solicitors who are jumping ship to avoid the storms, now captaining clinical negligence departments in PI firms. They are forecasting to steer these newly formed departments towards profitability. On the other hand, those PI firms who have created departments and invested in clinical negligence within the last two years will either grow and improve their departmental efficiencies in 2014 and start to reap return on investment. Then again, for those firms who have 2 or more years of clinical negligence experience within these new departments they will discover in 2014 how costly, lengthy and financially draining it is to reach profit targets which existing clinical negligence departments know all too well is a formidable task to say the least. With more emphasis on CFA funded clinical negligence cases, ATE premium recoverability, claim rates against ATE policies may become clearer and could affect future provision of ATE schemes available to clinical negligence claimants. By the end of 2014 and certainly by 2015 we shall know which departmental ships have sunk, which have to offload cargo to other vessels and which will make it to the island of profitability.”

ML // February 2014

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The Features

MORE THAN A SET OF NUMBERS Law firms are businesses; however they have not always been run like businesses, Steve Arundale explores why a business attitude is key moving into the new legal era.

f you were to venture into any other sector in the UK you would find commercially minded people at the helm of the operation; people who recognise the importance of the numbers through financial planning and budgeting. Gone are the days when firms could sit back and rely on free income courtesy of their client accounts to cover the performance of the underlying business. Now the finances really do represent true business performance. The SRA is focusing on financial stability following the failures of firms like Cobbetts and Halliwells. In all probability these firms had a financial plan and a set of budgets but the question is; how closely were they followed? As the economy starts to recover and legal firms start to see an increase in work, the potential for failure could increase. That is because firms forget that increased work is likely to drive an increase in lock up which in turn drives an increased cash requirement. Without financial plans and budgets how does a firm know how much additional cash is required and how can it start to source this additional need? For financial budgets to be more than a meaningless set of numbers they must sit alongside a strategic plan. In turn that strategic plan must include a sense of urgency, a burning platform that is designed to take advantage of opportunity, this becomes a team

vision and gives leaders the energy and ambition to move the firm forward against clearly defined milestones. Many firms don’t understand the relationship between revenue and profit. If a firm operates on a margin of 25% and discounts its price by 5% then it would need to increase revenue by 25% for profit to stand still – that’s known in my world as “busy fool syndrome”. Arguably a better position would be for a firm to deliver niche capability across certain legal areas. In turn it could then charge a premium for its services. If it was then to increase its price by 5% on a margin of 25% the firm could afford to drop revenue by 17% and still achieve the same level of profit without taking in to consideration any efficiency cost savings. The saying ‘cash is king’ is thrown about frequently but it really is and poor cash flow is one of the key reasons that legal firms fail. So, any financial planning should have a strong focus on cash. Profit is always a good starting point but from there it is vital that firms understand the need for cash, examples of which are: drawings, capital expenditure, working capital movement and tax. Aggressive drawings can suck the life out of a business and will certainly inhibit the ability to fund growth. Not only does cash flow suffer but there are examples where the capital position of the firm has been substantially weakened by over drawing on profit. Prudent firms will implement a drawings policy that ensures the health of the business is preserved first and foremost.

Sector experts talk about the looming virtual marketplace and it would be foolish to think that legal sector is exempt from the online takeover. Firms should be investing in technology that will improve efficiency, client service and enhance the day-to-day management of the business. Of course this is another draw on cash which needs to be budgeted for. Legal Firms have regular payment patterns and cash needs throughout the year such as tax and Professional Indemnity Insurance. Banks and other lenders do have the ability to fund these outgoings but is taking on debt for this purpose a good thing? As a banker, my thought process would be; is this firm seeking finance in order to spread the cost over a period of time in order to maintain cash flow? Or is it because the firm hasn’t budgeted for this outgoing and therefore the only option is to borrow? I would look much more favourably upon a request based on the first explanation backed by a decent Business Plan. Furthermore, a lender will look at how leveraged a firm is when considering any future borrowing requests and in doing so they will likely aggregate all debt, including borrowed capital. Therefore, the decision to borrow in order to meet these routine obligations could have an impact on your ability to obtain finance for other more meaningful purposes, such as growth. Given the importance associated with cash management, good financial planning and budgeting may be the difference between success and failure. Steve Arundale, Head of Professional Sectors & Financial Institutions, Commercial Banking, RBS & NatWest

ML // February 2014

The Features

TIME TO UP THE ANTE Proactive business development: Is 2014 the time to up the ante? Will Kintish, reports.

or professional services firms in general and law firms in particular the last 5 years or so has been a time of substantially reduced activities in business development. Yes ‘everyone’ says when the economy turns sour that is the time to increase the resources but few rarely do. I used to be a managing partner of an accountancy practice in the early 1990’s when there was another major downturn. It was the same then, a knee-jerk reaction; the first two items to have big red lines through the budgets were marketing and training.

guests. I hate to say this, particularly to all the speakers but you should not be seen as the attraction. It is the whole team of hosts who have to be as good at their presentation skills as the platform speaker(s). They won’t be doing it from the platform; their ‘presentation skills’ need to be honed prior to and after the talk(s).

Your business development strategy There are only two approaches to gaining new business. The traditional and recurring way is to be reactive hoping your great service and expertise will result in recommendations and referrals. In the heady days precredit crunch that strategy seemed to work as there was so much work about. But now it’s 2014 with all the threats and competition abounding in the legal profession. The other way is to create a proactive culture and control the growth of your practice which, using the first method you can’t.

‘To create early rapport show genuine interest, ask good questions (without interrogating), find something in common and give your undivided attention’

What should you invest in now? There will be a number of different activities and I am going to share three, which in terms of cash spend should be minimal: 1. Hosting Seminars Running seminars can be the best form of marketing when you’re in the advice-giving business. Why? • You’re giving away free and valuable advice • You are getting prospects, existing contacts and clients to give up their time for you to market to them • You are building new or reinforcing existing relationships • You are creating a platform to generate further dialogue You - vs - Your audience The reason you’re putting on the event, is diametrically opposed to the reasons your guests attend! They are attending primarily to learn something at a zero or low price and maybe meet others by way of an added bonus. You should be thinking the same reasons but the other way round. The key motive for you is to network with your

ML // February 2014

The effort and resource of hosting these events can often be quite expensive. The cash spend can be quite low but the invisible resource in terms of time spent in its preparation by both chargeable and non-chargeable staff must be measured. But what return do you get from the investment? When the event itself takes place how well does the team perform ‘on the night…or at breakfast’? Often, you are disappointed. But then why should your colleagues know what to do, what to say, where to stand etc? Have they ever been trained in this specialist area?

Hosting this event…an overview The rules of hosting a business event should mirror the way you host an evening at home. Ensure your guests are looked after from the moment they arrive to the time they leave. There are three distinct and separate sections, each as important as the next. They are: 1.Preparation and planning 2.The event itself 3.Actions after the event 1. Preparation and Planning The following points must be considered: • Where is the event to be held? • When is a good date and time? • What topic is relevant and ‘flavour of the month’? • Who should speak, host and who should be invited? 2. The event itself For me this is the time to start and reinforce relationships. It’s called networking and should be seen as important as the talk itself. Ensure none of the guests are left alone; they should either be engaged with a host or a fellow guest. If it is a big event someone should watch carefully to check no-one is alone. And make sure the cardinal sin of ‘huddling hosts’ is banned in a pre-event briefing.

The Features Ensure the talk is not too long, add colour by way of examples and humour and always finish two minutes before the prescribed time. If you have to miss something out, don’t worry, the audience didn’t know it was in your script anyway. 3. After the event The norm is for guests to thank hosts but whether or not they do, I think it appropriate for the firm to write and thank the guests for coming, summarising the key points from the talk and giving relevant contact points if guests need to know more about the topic.

‘The vast majority of lawyers don’t want to know about business development and the word ‘sell’ is one terrible four letter word 2. Attending Events We have talked about hosting events; let’s now mention the other side of the coin when you are a guest at someone else’s event. This may not be a hosted event, it may be a conference or the attendance at an event set up purely for networking. Before the launch of the first formal networking club 30 years ago (BNI Business Networking International), when the word networking came into vogue what we all did was talk to other people to build relationships. The three key steps to building relationship are: • Know • Like • Trust When you attend more events, and here I refer back to becoming more proactive, you meet more people, you build more relationships. Here are some key pointers to get the most from attending events: • Apart from talking to people you already know do approach individuals you have never met. Reinforcing relationships is vital but not to the exclusion of meeting ‘strangers’. Most of us have a fear of rejection but when you approach new people with a smile, a firm handshake, good eye contact, listen and repeat their name, the reception you are likely to get can only be a positive experience • To create early rapport show genuine interest, ask good questions (without interrogating), find something in common and give your undivided attention. When the conversation’s over you need to find a reason to move. Offer to introduce them to others or suggest a drink or go hunting in pairs by asking, ‘Shall we go and meet others?’. If they don’t want to come, fine, but at least you have been polite • To build trust early in a relationship, always fulfil your obligation. If you promise to follow up with a call or an email or suggest you broker an introduction to someone else or say you’ll send them the latest report on your topic ensure you do it and do it quickly. Speed stuns, that is the best way to start a relationship from scratch.

‘Speed stuns, that is the best way to start a relationship from scratch’ There can never be a substitute for face-to-face communication but with the massive growth of this social network it cannot be excluded from your proactive business development. After registering: • Build an interesting and attractive profile. Populate it with key words for which you want to be known. The search engine on LinkedIn works in a similar way to Google • Update your status regularly with news, advice or requests for help. Your network may see that update on their home page if the timings coincide • Connect with people you know (not competitors!) and don’t miss out clients. When you are linked to level 1 contacts, you then have access to their contacts, known as level 2 connections. Some in that group could be your next client. Ask the people you know, level 1 contacts, to introduce you to their contacts. It’s far better to have a warm lead in than ever starting a relationship from cold • Join groups where you want to be seen and then be proactive in them. Ask questions, offer advice and respond to other peoples’ comment. • If you are involved in the business development or marketing of your firm, have you created a company page? Again it needs regular updating with news and all the services you offer, it is like having a second website. When all’s been said and done The vast majority of lawyers don’t want to know about business development and the word ‘sell’ is one terrible four letter word. But when you replace that word for ‘help’ and think your knowledge, expertise and experience helps your clients and prospects solve problems they can’t sort out for themselves, the attitude to proactive business development ought to change from this moment on. After all your fee income only comes from solving problems and you like doing that, don’t you? Will Kintish is a leading UK authority on effective and confident networking both offline and online. If you’d like Will to speak at your conference or training workshops, call him on 0161 773 3727. Visit www.kintish.co.uk http://www. kintish.tv http://www.linkedintraining.co.uk for further free and valuable information on all aspects of networking.

3. Be Proactive on LinkedIn

ML // February 2014

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The Features

SMALL BRAND, BIG IMPACT One of the most consistent themes of developing a business is the need to address the issue of brand value – even more so in a market where the marketing goal posts change so quickly. Value isn’t always price-related, as your customers may attest - if you actually ask them, as Emma Waddingham explains.

udging by the narrative of 2013 and the requests that have landed, not just at the doorstep of my consultancy but those of my ‘critical best friend’ business consultants, there is still apathy amongst some law firms to build a true, in-depth picture of what their brand and services mean to the market and where they can add differentiating value.

The key note here is, if you haven’t spoken to your customers and target market about what you have created and provide, how do you really know its of value? If managed by a neutral facilitator (i.e. your marketing team or a consultant), honest conversations with your existing client base can often uncover the real reason why you might not yet receive all of their work, for example. You don’t know what you don’t know about your customers and you may be surprised!

On my rounds of regional law societies, national legal associations, law firms, chambers and ABSs, there are fantastic examples of full marketing analysis (as part of the business plan viability) taking place. There are also some visible black holes and interesting claims of innovation but once you unpick the marketing campaigns, what lies behind?

It might be time consuming and concerning to open up conversations across the table with (and I recommend this for an honest account) a handful of customers / potential customers and even those which have slipped

Measuring value to customers If the answer is ‘nothing new’ then that’s not, perhaps the fault of the marketing activities (as the message and brand visibility is clearly there!) but it’s fair to say the long-term ability to maintain a brand on shaky grounds is pretty slim. Consumers aren’t stupid. If you aren’t meeting their needs and you can’t deliver from cradle to grave then the brand can quickly become devalued (thanks to social media). How do we get there? Building a true brand identity means a return to basics: developing a clear service and deliverability vision for a defined marketplace; understanding where the value points lie in your offerings, and; consistently communicating and developing your value points under a consistent umbrella – your brand. Importantly, views and definitions of brand value do not simply revolve around internal assessments of SWOT or PESTLE1 analysis or feedback from employees / stakeholders. Honest, qualitative and broad feedback from the marketplace is essential when looking to see how you can confidently position yourself in an increasingly noisy sector that talks a lot about being ‘innovative’ but is often accused of evidencing any real value of said innovation to the marketplace (Quality Solicitors anyone?).

‘ ‘One’ must always offer something of meaningful value to purchasers too – by this I don’t mean price value (which is often not really the value differentiator) but the notion of being ‘irreplaceable’ in the long-run’ the net but the results are worth it. Process your research and analysis properly and you can identify patterns in the messages, leaving you with some action points to take back to HQ and a list of reasons as to why and where you add value. The result? The basis of your brand values and marketing messages. Low cost = value? “In order to be irreplaceable, one must always be different” Coco Chanel. Yes, to a point but ‘one’ must always offer something of meaningful value to purchasers too – by this I don’t mean price value (which is often not really the value differentiator) but the notion of being ‘irreplaceable’ in the long-run. This is essential for those looking to compete for retained / repeat business. If your services and support offer a ‘go to’ tool for your customer then the value of that service isn’t necessarily defined by price in the long run, its lies in the fact that they need and use your support regularly and can’t do without it. How you introduce them to your service is where price can often be a factor. Here’s where the innovation comes in. A potentially controversial aside here, it’s interesting that the move from hourly billing to fixed price is, in some cases, one in the same thing but marketed differently. Consumers are too savvy not to notice this in the long run so take some advice from some innovative (at the time) consumer brands such as Netflix and see what they did to innovate the introduction of a retained package in a saturated market. Back to the brand What’s great about brand management today is the range of tools available to help you reach target markets to build a picture of what value they think you add (as well as your ideas on value-added), helping to develop something that might not be branded as ‘innovative’ but certainly meets the needs of customers and generates more business. Which is definitely something worth talking about! Emma Waddingham, Director, Emma Waddingham Consulting

1Strengths, Weaknesses, Opportunities, Threats and Political, Economic, Social, Technological, Legal and Environmental issues that may impact or enhance your business.

ML // February 2014

The Features

DON’T LEAVE IT TOO LATE! As per previous years, the 2013 solicitors’ professional indemnity (PI) season had its usual challenges in pockets of the profession. However, David Cable believes the much publicised ‘crises’ should be placed in context.

ithout doubt the smaller firms or firms that have challenging claims experiences would have experienced difficulties in securing PI insurance. Those with heavy exposure to conveyancing, poor claims experience and transactional relationships would have struggled even more. Historically firms of all sizes who were not unable to secure PI insurance through a qualified insurer would have been able to rely on the short-term safety net of the assigned risk pool (ARP). This was never considered a viable long-term solution but allowed the firm time to secure coverage without having to cease trading. Since this was removed the 90 day cessation period is the only grace period available.

‘We have seen some insurers change strategy quite close to the renewal date, reduction in capacity and reduction in competition for certain pockets of the legal profession’ Prior to 2013 the industry had a common renewal date of the October 1st. Whilst there is now the ability to change this, many firms do not appear to have elected to take it. The long-term goal was for the profession to stagger their inception date, to meet the needs of their business. For insurers this will enable the underwriter to devote more time to individual risks and allow firms to be assessed on the quality of how they operate their business and ultimately secure more favourable terms. On the flip side, a common renewal date can benefit some firms, especially those with a challenging work split or claims experience. Sometimes, these firms can get lost in the masses and secure coverage that otherwise may not have been so readily available. Irrespective of your renewal data it is imperative that the legal profession takes their renewal process seriously. As in previous years, we have seen some insurers change

‘PI cover is a necessity to trade, and should be placed as equally important as other compulsory insurance such as employer liability and public liability cover’ strategy quite close to the renewal date, reduction in capacity and reduction in competition for certain pockets of the legal profession. The later you leave discussions with your broker and or insurer, the more susceptible you are to these market conditions. Firms can make the renewal process much simpler by adopting simple processes, building relationship and dialogue with their broker and or insurer and ultimately making it an integral part of their business. Solicitors, like many other professions, are very busy and some regard insurance as an afterthought. The renewal date has been static, so there is no reason why this should be such a surprise each year. PI cover is a necessity to trade, and should be placed as equally important as other compulsory insurance such as employer liability and public liability cover. There is no reason why conversations shouldn’t start several months before inception. In order to smooth the renewal process we would recommend the following: •Ensure you current insurer has the financial security you require •Make sure the insurer and broker used has a proven track record in the PI sector •Be proactive – firms that take time with their presentation and articulate their business needs will be taken seriously by insurers. Last minute details and missing information makes the underwriters nervous •Make yourself available to the meet the underwriter – transparency will lead to a better premium. This is a still a complex class of business for insurers to provide coverage. However a forward looking proactive firm working with a proven broker will ultimately have a wider range of options available to them. David Cable, AGCS UK Head of Professional Indemnity (PI), Allianz

ML // February 2014

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The Features

NEW YEAR, A NEW YOU? A new year often represents that all important time to turn over a new leaf. Charlotte Parkinson, Modern Law spoke to Dolores Evelyn, Sales Director at Eclipse Legal Systems, about why that ‘leaf-turning’ may need to happen more quickly than you think in 2014.

2013 was a year full of memorable moments; from riding out the completely unpredictable weather to Andy Murray winning Wimbledon and even welcoming a Royal baby, there were certainly some great highs in 2013. For many law firms however, 2013 was a year that would happily be forgotten; without a doubt the year was overshadowed by the fallout of the extensive reforms to civil litigation. Although the reforms were not implemented until April, much of the talk pre-April revolved around the ‘what-ifs’ and the talk post-April was dominated by the ‘what now’s’. The changes implemented in April sparked transformation within the legal sector and were followed by talks of further cuts to legal aid and by whispers of continued reform to come in the New Year. Now the New Year is well and truly upon us, the time has come for many firms to consider their options and take stock for 2014. As with the rest of the legal sector, the pace of technological advance and opportunity is far from slowing down. Whether you are stuck between in-housing or outsourcing your facilities-management, want to make the leap and finally go

Charlotte Parkinson

Dolores Evelyn

‘paperless’, or are torn between the balance of working remotely or in the offi ce, there are systems out there which can help. In light of legislative change, investment into IT and the infrastructure of your fi rm has never been so important, the extensive market consolidation (particularly within the Personal Injury sector) means that there is now opportunity for those fi rms who are left to become stronger, better equipped and more cost eff ective, by exploring and utilising new areas of technology which may have previously been undiscovered.

If you are still undecided about which systems and processes are best for your firm, remember that swift decision making will be the key to differentiate your service from your competitors and keep up with market development in the New Year. Start the year by exploring new ways of providing faster and easier services for your clients, whilst ensuring service remains at the forefront of your firm’s vision. 2014 should be the year you make the change, do it, before someone else does.

‘There is now opportunity for those firms who are left to become stronger, better equipped and more cost effective, by exploring and utilising new areas of technology which may have previously been undiscovered’ Charlotte Parkinson

Dolores Evelyn of Eclipse Legal Systems, comments: “It has never been more important to differentiate your services from the competition - and doing so does not necessarily have to be a complicated or mammoth task. ‘Action’ is the watchword - set plans in motion and make the move towards providing a slicker and more personal service for your clients. If you don’t act fast, you can guarantee that the ‘firm down the road’ will.”

ML // February 2014

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???? The Features

SUPPLY & DEMAND Conveyancing is one area of legal services which is bucking current trends. Charlotte Parkinson, Modern Law, spoke to Perran Moon (PM), Marketing Director, SearchFlow and Paul Addison (PA), Managing Director, DevAssist Ltd and asked them what they attribute the recent upturn to.

To what do you attribute the recent upturn in the conveyancing market; government schemes such as ‘help to buy’ / a general upturn in the economic climate and do you think the market will continue to move in peaks and troughs as we have seen in previous years?

any live planning applications, as well as showing where development is likely to take place in the future. It’s like having a full structural survey on a location.

PM: Government stimulus has certainly played a part in the increase in property transactions. Lenders have more confidence to offer attractive products and low deposits and this has brought through a substantial return of buyers to the market. However, rates are at historic lows and can only go one way. It is important that Help to Buy does not overheat demand in the face of still low supply of property. I fear that unless we loosen planning and accelerate new build, affordability will get worse and dampen transactions when rates rise. I also hope that there is an elegant exit from Help to buy, rather than a hasty retreat. Peaks and troughs are an inevitable part of the economic cycle. The trick is how to minimise the gradient of both.

Q A

What is the biggest threat to existing property?

PA: One of the biggest threats to existing property comes from the ever changing man-made landscape. The large transport and energy infrastructure schemes being energetically promoted by government are well publicised and easy to monitor. Far less transparent are the fast growing number of planning applications and/or development opportunities that pose a potential threat to existing properties or communities. Until we came along, these could creep in under the radar of most local searches. Never a day goes by in the office without at least one client being saved by our unique search service which provides a full audit on a location to expose

ML // February 2014

How Perran Moon important is the right type of recruitment into the conveyancing sector, particularly in light of many law practitioners/training providers saying they are inundated with applications – is this inundation being replicated in the conveyancing sector and is it necessary or not?

‘I fear that unless we loosen planning and accelerate new build, affordability will get worse and dampen transactions when rates rise’ Perran Moon

PM: In the dark days of 200911, conveyancing teams were being slashed. There was also a period of strain early last year as partners were understandably cautious about the recovery. Now there is a real need to ensure teams are fully staffed with the right quality. The SRA code of conduct, compliance schemes and lender panel requirements are all determining that firms apply consistently high quality service to protect the client, treat them fairly and transparently. This is crucial in conveyancing, not least to protect the client and firm against the risk of fraud and money laundering. High calibre conveyancing staff must be sought to deliver the best possible due diligence, in order to safeguard supply of work in a rising market.

Q A

Paul Addisson

What do you predict for the conveyancing market in 2014?

PA: As the conveyancing market picks up in the coming months, it will be the firms with the highest levels of client care and legal due diligence who will benefit the most. And we will be there supporting them. With house sales, building and prices all on the rise, opportunity knocks

once again for those involved in the conveyancing industry in 2014. That’s the good news. But it comes with a word of caution. Times have changed somewhat since the halcyon days before the bubble burst. In particular, the need for conveyancers to ensure the highest levels of client care has never been greater, not just to protect clients’ interests but also to safeguard practice reputations and their PI. PM: I am cautiously optimistic about 2014. I predict a continued rise in conveyancing transactions, in line with steadily rising average house prices on a national scale. We must be careful not to get sucked into assuming the rarefied market of London will be replicated across the country. But even in the capital there may be limits. Affordability may reach a natural point that demand starts to contract here. The legal services market will continue to consolidate and better returns made through bigger scale operations, especially on lower margin conveyancing activity. In a year of consolidation, the key for me is for conveyancers to continue to focus on the proactive engagement with digital platforms to deliver customer excellence.

The Features

ON THE UP? The Help to Buy scheme implemented by the Government last year has created more opportunity than ever in the conveyancing market and, as Eddie Goldsmith reports, the industry is on the up.

he UK housing sector took quite a turn in 2013 and the word on everyone’s lips is of course ‘Help to Buy’. Help to Buy is undoubtedly a topic to which considerable controversy has been attached – while some rave about its genius, others prophesise about the imminent burst of the ‘housing bubble’ it has created. One thing is for certain – it has got lenders lending. Mortgages are being approved at a higher rate than at any other time over the last six years and, while more and more first time buyers (or ‘FTBs’) are applying to get their own firm footing on the housing ladder, lo and behold, the dust sheets are being removed and cobwebs wiped from conveyancing books across the country. Indeed, though admittedly it might best be described as a “nice problem

If you’re a property investor with some considerable cash to spend, you’ve come to the right place. The inevitable result of this is, of course, that prices in the capital will be pushed up and most honest, hard-working city-dwellers banished from the wonderful world of home-ownership, H2B or no H2B, until their greying years at least, as a result. However the market in other areas of the UK, especially the North East for example, is looking gloriously healthy, and this time it is home-buyers who are benefiting. Indeed, if H2B has been accused of helping to create a housing bubble in more affluent areas of the country, it is in places such as Durham, for example, that the scheme will bring about some serious and very positive changes. This has in fact led to suggestions that H2B should be limited

‘The industry is struggling to keep up with the demands as a result: after years of the economic downturn, we are now, all of a sudden, experiencing a shortage in the ground swell of expertise we haven’t needed for years’ to have”, in many ways the industry is struggling to keep up with the demands as a result: after years of the economic downturn, we are now, all of a sudden, experiencing a shortage in the ground swell of expertise we haven’t needed for years. But (welcome) recruitment issues aside, all in all, the outlook for the conveyancing sector in 2014 is looking good – indeed, some would say excellent. H2B, the second stage of which allows FTBs to buy houses using a 95% mortgage guarantee from the Government, has sent applications for mortgages sky rocketing since its introduction in October and we, as conveyancers, are certainly feeling the benefits. The wider property market is waking up too - London has just overtaken New York as the best city for foreign property investment opportunities, for example.

to properties valued at £300,000, in a bid to better balance out the benefits (home-buyers are buying) vs the drawbacks (a bubble is being created). It will be interesting to see what happens here. Another encouraging development which can be, at least in part, attributed to H2B, is that the UK’s construction industry seems to have been given a new lease of life – and more houses, equals more interest from buyers, equals more lending, equals more work for conveyancers. However a pick-up in the housing sector – and indeed the wider economy – is not the only reason the immediate future is looking bright for this sector. While it may have taken a bit longer than its industry counterparts and whether we like it or not, we are making the big move “online”.

It seems that the days will soon be gone when we are required to print off and keep a record of every email exchange carried out during a transaction and letters are firmly consigned to the far and distant past. With developments such as the Law Society’s Portal, we will soon be able to do it all at a click of a button. While the argument around whether H2B will or will not continue to see the end of 2014, the developments being made within the conveyancing sector itself to modernise means that the industry is becoming more efficient as the housing market in the UK makes a comeback. While the current climate is keeping us all happily busy, at the Conveyancing Association, we are looking forward to, in 2014, building on our work which aims to provide our consumers with the best service possible. In 2012, we launched the CA Pledges and in December 2013, we were very excited to unveil the CA Protocol to this end. In 2014, we will be working together with other key industry players to continue to raise standards across the board. As part of this drive, we are also looking to expand our membership –we hope that with an even louder voice, our work this year will have a further reaching effect than ever before. Eddie Goldsmith is Chairman of the Conveyancing Association and Senior Partner at Goldsmith Williams

ML // February 2014

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IT Crowd

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IT CROWD

ML // January 2014

IT Crowd

2014 – The year everything kicks off?

Our resident IT guru Charles Christian predicts what you need to know in legal IT as 2014 takes hold.

elcome to the ﬁrst of Modern Law magazine’s new look coverage of legal technology – the IT Crowd – for which I have the pleasure of being the consultant editor. Since Modern Law magazine ﬁrst launched in 2012, our editorial board of contributors writing on legal technology-related topics has expanded to the point where it now makes more sense to group them altogether. And so the IT Crowd was born! My role is primarily to identify and suggest hot topics for the IT Crowd to write about, leaving Charlotte Parkinson and Rachael Pearson the dubious pleasure of herding cats to ensure everyone submits their contributions on time. You will have noticed that many of this issue’s topics (along with those of Issue 9) have a forward looking theme. Obviously one reason is because we are at the start of a new year, the traditional time for predictions and resolutions. But, more importantly, because this year – 2014 – does have all the signs of being a particularly exciting and, for some firms, downright scary time. So, what can we expect? As with all legal IT issues, the context is everything. You do not buy new technology just for the hell of it – you buy it because you have to – and ideally because it is going to help your practice achieve something that would not be possible without it. But this is where it starts to get scary because if you don’t know where your firm is going over the next 12 months,

will cease to work but it does mean there will be no more security and bug fixes – or even paid-for helpdesk and support services from Microsoft. It also means new software applications and upgrades from legal IT vendors will no longer integrate with XP. And, it could also mean firms could be penalised by the SRA and professional indemnity insurers on the grounds of security and compliance risks, because a firm may no longer be able to maintain its administration and client information records. So, like it or not, you are going to have to upgrade – latest data suggests around 27.5% of UK law firms are still running Windows XP. But, where next? Windows XP, which first appeared in August 2001 and hasn’t had a major upgrade since 2008 (hands up any readers who still run a 13-yearold car that hasn’t had a service in five years) is effectively Windows 5 – so do you opt for Windows 7, which is currently the Windows market leader with a 47.5% share? Or do you go for the newer Windows 8.0/8.1 platform. Given that whichever upgrade route a law firm chooses, it will almost inevitably require the additional investment in new computer and server hardware (for the obvious reason that your existing 10+ year old hardware will not support the latest operating systems) this may also be the tipping point for a firm to consider whether it wants to continue with its existing in-house IT facilities or outsource them in some way.

‘If you don’t know where your firm is going over the next 12 months, how are you going to make any informed decisions on your technology requirements?’ how are you going to make any informed decisions on your technology requirements? If you are preparing to reinvent your practice as an ABS, then there is one IT route you will want to travel. But, if the only light you can see at the end of the tunnel is a train coming the other way and your strategy is to find someone to acquire or merge with your firm, then spending money on technology is probably the last thing on your mind. For example, one of the developments we will see this year – on 8 April to be precise – is the ending of support for the Microsoft XP operating system (and also the Microsoft Office 2003 application). This doesn’t mean that the operating

ML // February 2014

And I say in “some way” because once again this is not a simple choice: are you planning to outsource the entire operation and let some third-party run them for you on a managed services basis? Or perhaps you might be opting to retain your existing infrastructure but access the software over the Cloud on a SaaS (software as a service) basis? And let’s not even get into the different permutations of SaaS and Cloud services which can vary from long term commitments to true pay-as-you-go/commodity-based pricing models. This year is going to be an exciting year (as in the old curse: “May you live in interesting times”) for all law firms and legal service providers – and the IT Crowd will be here to help you navigate through the thorny issues you will face. Charles Christian, IT Crowd Consultant Ediitor & Editor in Chief, Legal IT Insider

IT Crowd

Far from remote The swinging pendulum

ith so much technology now supporting out of office work and remote online collaboration have we reached a point where firms should consider cutting back on their traditional office space?

Firstly, we need to examine why we attend a common workplace daily. Is it to use equipment, to interact with colleagues or to simply control the persons doing the work and therefore the output of the work? If we assume that the output can be measured in other ways, can remote working accommodate the other objectives? Technology such as our own Liberate software allows workers to become mobile. This not only allows home working but also work at client premises, be they the offices of business clients or homes of private individuals. This provides an opportunity for closer interaction with the client whilst still being connected to business systems and information as though they were still physically present in the workplace. Using mobile working in this way maintains the integrity of the firms’ standards, allows the use of common precedents and allows COLP and COFAs to retain visibility of the whole firm’s activities. By using the collaboration tools within Liberate, information, including documents, can be worked on remotely and instantly shared with other interested parties, solicitors, barristers, estate agents or colleagues. They can all be prompted to view and, subject to permission, comment on or carry out amendments. This sort of decentralised working far from being remote is in reality more inclusive and yet not dependant on a fixed desk and PC. Any internet enabled device, laptop, tablet, iPad or even the clients’ own PC is then a part of a collaborative inclusive world and not remote at all. While the technology permits workers to be truly mobile, before cutting back on office space, firms need to consider other factors. Workers in the same physical space stay “connected”: stronger team working, chance discussions, ideas discussed over a coffee which otherwise would not take place. We are still very social animals and still need to interact with people face to face. The technology is there to allow true working mobility, without the workers becoming remote from their regular workplace or colleagues. The decision of how much remote or mobile working you want to create becomes one of human need rather than being technology driven.

n-house IT or outsourced/facilities management - the pendulum keeps swinging in favour of first one and then the other - where do you think the trend is going this year?

It’s an age-old battle! Well, maybe not age-old, but I can certainly remember 10+ years ago various legal software vendors putting resource into promoting ‘ASP’ solutions (one of the first legal IT monikers I can remember for today’s ‘hosted’ or ‘cloud’ software solutions). The answer is, I fear, not straightforward and boils down to “horses-for-courses”. Some legal services firms will undoubtedly need to outsource their core case / practice management software. Why? A myriad of reasons, maybe a lack of internal IT resource, maybe a need for staff at various disparate locations to be able to access one consistent system, maybe the need to quickly upscale / downscale user count. We have an increasing number of clients approaching us with a need for a cloud-based Proclaim solution, taking into account any one (or more!) of these scenarios. But interestingly, we have also recently IN-sourced a number of case management implementations. That is, replaced a client’s incumbent cloud solution with an internally installed Proclaim system. Why would this happen? Well, there is an element of ‘control’ at play. Larger firms often wish to keep their data and infrastructure in-house - technologies such as Citrix can still be used to manage user access, but data is held in-house (and many firms view that as the safer option). In addition, an externally hosted solution is still - like it or not - reliant upon phone / comms lines. If these fail, then you have no access to your software until such time as the lines are back up. This is too much of a risk for some firms to take on board. I, for one, think the pendulum will keep swinging for some time yet! Darren Gower, Marketing Director, Eclipse Legal Systems

Tony Klejnow, Managing Director, Linetime

ML // February 2014

IT Crowd

The bottom line

here is a suggestion, made by Richard Susskind among others, that ‘project management’ is set to become a key skill in law firms as processing complex cases requires a combination of not just legal but also IT and business skills. But who do you think can provide these new skills and how is a firm going to bill for them?

Now that software is providing what it promised years ago, it’s important for law firms to take a leading role in ensuring that project management skills are taught to all their partners, fee- earners and support staff, as it’s these principles that will help firms improve their bottom-line. Most firms enhance their business processes using software such as practice management systems, which are designed to manage transactions efficiently and correctly. However, these systems don’t enable fee-earners to make sense of their data. This is where business discovery tools excel as they enable everyone within the firm to analyse their own data, meaning anything out of the ordinary is obvious immediately and resolved with minimum fuss. Firms also use dashboards that clearly show where their financial performance needs to be improved, but the real benefits come when staff can take control of their own specific areas. The best client relationships are held by the fee-earners and teams that work directly with clients. And with the right tools and skills these staff can ensure clients are happy with the service they get and if a good relationship exists, fees will be paid quicker which controls lock- up, and a reduction in lock-up means an improvement in cash flow and the bottom-line. Not all clients are prepared to pay for new reports or insights into how their matters are progressing, so being able to identify the benefits to the client will make their acceptance of a charge more palatable. This is particularly relevant for firms that work closely with insurance companies as being able to share the status of all matters with drill-down capabilities on a daily basis enhances client-relationships. We can provide firms with the tools and skills they need for everyone within the firm to take control of their own data in a measured and evaluated way. We work in partnership with internal teams to provide mutuallybeneficial training that removes the fear of technology and makes the time spent using it enjoyable. Barry Talbot is the Managing Director of Informance – a QlikView Elite Solution Provider

Far from remote

ith so much technology now supporting outof-the-office working and remote online collaboration, have we reached a point where firms should consider cutting back on their traditional office space? Before you take the plunge for out of office working, ensure you understand the basic ethos of the firm. How important is corporate culture? Do you have a micro-management style of leadership? Do you have a trusted advisor in IT? Are these sources independent in their approach or is it driven by internal IT teams? For all these reasons or objections many firms take the easy option of staying with traditional office space. Control can be lost, if it was weak, or worse, never in place. It’s more about communication, monitoring and ownership, who will ultimately be responsible for ensuring all the actions are adhered too. Firms need help to gain the benefits and need to not only adhere to all the remote working legal aspects, but also understand their own business processes and workflows need to be defined more clearly. Many firms have compliance obligations to certain aspects of their business and a firm can increase the efficiency by cutting back on traditional office space by introducing remote working. The solution is not for every firm; therefore often a holistic approach is required to understand when a firm should cut back on office space. For many firms who are open to outsourcing functions in their business, it works well and it could also demonstrate creditability if they search IT firms who are already ISO27001 certified. These IT firms all have security as the key driver and therefore automatically can help your firm comply with required aspects of remote working and collaboration. The ‘Cloud’ solution is excellent as it allows you to leverage skills from all angles. The ‘Cloud’ opens doors for mergers and acquisitions, for firms that want to grow without extra office worries and in this situation you can do away with traditional office space. It also enables us to employ staff anywhere in the world, giving them the ability to access our systems and work as if they were here in the office, without any additional cost or workload. Ultimately, It’s all about balance and ensuring your house is in order before removing your furniture, introducing better process and then monitoring before you take the leap of faith. Given all these “things to think about”, enthusiasts will still suggest in this day and age, you do not need office space. Technology is not the driver; it’s only another efficient tool to enable your processes. The driver is you and your objectives. Priti Mehta, Group CEO, Acuutech Ltd.

ML // February 2014

IT Crowd

Secure remote working for legal services

emote working, specifically home working can save on average £6,000 a year per employee (BBC News, 2011), improve productivity and help maintain business continuity. However, working away from the office is only successful when a firm ensures that proper access and security controls are deployed and enforced. In order to gain competitive advantage, legal firms should be providing a guaranteed remote access solution for a variety of user profiles, including lawyers located in the office, working from home, or at a client’s site. Multi factor authentication is the process which involves two stages to verify the identity of an individual trying to access IT services. These two stages are made up of something you have with something you know – for example, a token and a PIN number. Firms that choose to deploy multi factor authentication are adding an additional layer of security for their remote working employees who access sensitive and confidential resources and applications. Some of the most progressive firms are looking towards multifactor authentication throughout the whole organisation and not just limited to remote access technologies. Large corporate clients are looking for greater assurances about the security of their information and are looking towards standards such as ISO27001/2 as a means to benchmarking their legal providers. Multifactor authentication technologies can help firms achieve large steps towards meeting these standards and protecting client information not only from external attacks but also from internal leaks and access gained when relying on usernames and passwords alone. For those firms who have looked to cloud solutions for certain less sensitive information, a single well chosen multifactor authentication can even protect cloud services such as salesforce.com and others. Whilst multifactor authentication can be seen by users as a barrier to and easy logon process it is becoming more common place in banking and will inevitably be rolled out through more and more services and businesses in the near future. Frank Gillman from Allen Matkins (US law firm) writes that “some law firms have been hesitant to use the internet for remote access because they are concerned about security.” However, using a remote access solution in combination with multi factor authentication provides “attorneys fast, reliable web access to case-related information while protecting our intellectual property and maintaining client confidentially.” (www.safenet-inc.com, Allen Matkins case study). Mike Batters, Technical Director and Co-Founder, NETprotocol

Attitude to change

ith so much technology now supporting out-ofthe-office working and remote online collaboration, have we reached a point where firms should consider cutting back on their traditional office space?

The range of technology solutions available today mean that we have, most certainly, reached a point where law firms could consider cutting back on their traditional office space. Providing fee earners with the flexibility to work remotely can bring about significant benefits. Time can be used more productively, for example, working from home for an hour or two before a client meeting can cut out unnecessary travelling and free up time for important case work. Often, remote working can enhance staff well-being and firms can benefit financially by releasing unnecessary office space and reducing overheads, or by increasing turnover without investing in additional office space and the associated overheads. At Redbrick Solutions, we have worked with clients who have expanded their business nationwide by recruiting legal specialists to work remotely. By implementing Redbrick Practice Management, firms can make functionality such as; Lexcel compliant workflows, a full suite of legal forms, document management, time recording and a central database to store client information and documents, available to remote workers via secure access to the firm’s server. Redbrick Practice Management can then be fully integrated with Redbrick Business Intelligence so that all ‘back office’ and time consuming financial tasks can be performed (if desired) by office based staff, leaving the remote workers free to focus on profitable legal work. Of course, implementing technology solutions to enable remote working is not without its challenges. Firms need reassurance that their data is accessible, yet secure at all times and a well co-ordinated, expertly delivered training programmes with on-going support, is essential to ensure remote workers feel confident and at ease when using the system. It is therefore important to choose a supplier who not only offers the very best in cutting edge technology, but one who understands your business and will work hard to offer the very highest standards of customer support and service. So, have we reached a point where firms could consider cutting back on their traditional office space? Yes, most definitely. Should firms cut back on traditional office space? That is a decision to be taken by individual firms and will depend on many factors, such as their business philosophy and growth strategy, financial position, culture and attitude to change. Jo Hodges, Head of Sales and Marketing, Redbrick Solutions

ML // February 2014

IT Crowd

5 minutes with... Andrew Twambley, InjuryLawyers4U Q

Did you expect the legal services sector to change so drastically when you started working in it?

Absolutely not. When I started, all those years ago, they had just disposed of scaled conveyancing charges. Trainee lawyers were paying their principals to take articles for 2 years. Things changed for the better until LJ Jackson hit us. Now, access to justice has been removed from the man in the street and the whole legal playing field has become unbalanced.

politics has entrenched itself in the ideal and vested interest has become the key reason for change. A better man than me recently described it as ‘repositioning the deckchairs on The Titanic’. Not enough has been said about the thousands of people on the employment scrap heap. How many excellent lawyers and support staff are unemployed through no fault of their own? It makes me very angry.

Q A

Who inspires you and why?

What has been the key positive or negative impact of the liberalisation of legal services?

I have many friends and colleagues in the profession who are far more intelligent and creative than me. They inspire me to do better and to try and find a save path through the mess that the government has left us in. I just wish I spent the 1970s studying and taking MENSA tests rather than going to punk rock gigs.

Demystifying lawyers and bringing in other professions must always be a good thing but

Have you had a mentor? If so, what was the most valuable piece of advice they gave you?

When I was 17 with long hair and bad skin, I knew the local solicitor who was then in his mid 20’s. He drove a Jag, had a big house and gold plated bath taps. He was a Blackpool legend. Whenever I needed advice, he was there to help. Unfortunately, he later fell foul of The Law Society and now sells number plates. I never did get gold plated bath taps.

If you were not in your current position, what would you be doing?

I would like to be a wildlife photographer, sitting in a hide, somewhere in southern Europe, waiting to shoot rare species of mammal, the ‘money shot’. “All views are my own and do not reflect the views of the publishers or any company or organisation I am associated with.” Andrew Twambley is Founder and Director of InjuryLawyers4U

Advantage Property Lawyers

Award winning conveyancer sees 200% growth since implementing Proclaim

n 2013 Advantage Property Lawyers (APL), with the assistance of a Proclaim Practice Management Solution, won 3

best practice at all times. The solution would also have to be reliable and offer easy scalability in line with APL’s aspirations to become one of the UK’s biggest and best conveyancers.

-Large Conveyancer of the Year (silver) - Sunday Times Estate Agency of the Year -Yorkshire & North East Conveyancing Firm of the Year (gold) and -Conveyancing Firm of the Year (silver) - LFS conveyancing Awards

The Solution Eclipse’s Proclaim Practice Management solution was implemented at APL’s inception as it provided a centralised, secure desktop toolkit for every property transaction - utilised by all staff. Proclaim was also chosen for its outof-the box conveyancing focus and ease of integration with third party complementary software - as most work came from large corporates and major estate agents.

The Challenge In 2009, as a new start-up, APL needed a Practice Management solution that focused specifically on residential conveyancing. Software was needed that would allow the firm to offer its clients and introducers an outstanding level of service and customer care, whilst maintaining

The Results Proclaim has proved to be an essential ‘enabler’ for providing a superb client experience and reducing turnaround times. Proclaim facilitated APL to achieve over 4,000 completions and increase turnover by 40% in 2013.The financial and reporting toolset is used to provide instant data retrieval with

major awards:

ML // February 2014

on-going monitoring and analysis of KPI sassisting with the management of systems, processes and risk calculations. APL is using Proclaim to automate a vast number of administrative processes including document production and hopes to move towards a paperless office soon. Since implementing Proclaim, APL has grown rapidly requiring an increase in staff numbers by over 200% from 15 to over 50. The firm is now represented on the management board of The Conveyancing Association and was the first conveyancing firm to receive the ‘Legal Eye’ quality standard. Stephen Coupland, Head of Sales & Marketing at APL said: “Working with Proclaim will enable us to achieve ‘Top 25 Status’ in 2014” 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

Why switch to client-centric Case Management Software?

For less boring paperwork Proclaim is the UK’s leading Case Management Software solution, in use by 20,000 legal services professionals. Proclaim streamlines processes to enable you to focus on what’s important - your clients and customers. Deliver a superb experience for them and maximise profitability for you.

More profitable people work • Hugely configurable - have it your way • Manage your full range of matter types • Instant, slick online services for clients and customers • Automate procedures and document production • Access live KPIs and performance data • Integrate with business partners

Get the competitive edge

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