“Practice managers drive change by analysing the implications for the future of what’s happening in relevant sectors now and drafting strategies for moving forward� Christine Kings, Legal Practice Management Association (LPMA)
Practice Management: Driving change Modern Law gathered together an array of legal practice managers and sector specialists to uncover how the face of practice management is changing as the legal services market continues to evolve and modernise.
Practice Management Supplement 2015
MORE LEGAL SOLUTIONS. ONE SOLUTION PROVIDER. Whether you practise, support, create or enforce the law, Thomson Reuters delivers best-of-class legal solutions that help you work smarter, like Practical Law and Westlaw UK, as well as tools to help you manage the business of law, like Serengeti Tracker and Thomson Reuters Elite. Intelligently connect your work and your world through unrivalled content, expertise and technologies. See a better way forward at legal-solutions.co.uk
03
THE EDITOR’S OVERVIEW W
elcome to the latest of Modern Law’s special supplements. As we move further into 2015, the role of the Practice Manager and legal practice management is becoming an area that is being more closely considered as firms emerge from tough times, understanding the importance of running themselves as businesses. Christine Kings, the Co-Chair of the Legal Practice Management Association (LPMA) discusses how the role of the practice manager has shifted in Chambers since she founded the association in 1996 and how modernisation has crept into the management mix (from page 6). I also spoke to the Managing Director at MLP Law, Stephen Attree, about managing operations in a fast growing firm and international pressures which are effecting the corporate legal services market (from page 11). In light of consolidation in the Personal Injury section of the legal market, I caught up with former Modern Law columnist, Neil Hudgell, about his firm’s recent acquisition of Rapid
Solicitors, and how he hopes the latest purchase will help the firm’s growth plans come to fruition (from page 14). Legal marketing seemed to be bigger than ever in 2014 and 2015 is looking to be no different with new channels such as blogging rising through the ranks. Thomson Reuters explain how to implement an effective blogging strategy in 2015 and beyond (page 22) and Clive Meredith outlines his top tips which law firms should consider before merging, and explains why mergers are akin to relationships on page 26. Thank you to all our contributors who have taken time out to help put this supplement together. I hope you enjoy it and if you have any ideas, comment or feedback for Modern Law or an associated supplement, please get in touch. Drop me a line via: 01765 600909 or send me an e-mail at: charlotte.parkinson@charltongrant.co.uk
Charlotte
Charlotte Parkinson, Group Editor, Modern Law.
19-31 The Features
05-17 The interviews 06 Interview with...Christine Kings
Charlotte Parkinson, Modern Law, spoke to the Co-Chair of the Legal Practice Managerment Association (LPMA) about modernisation in chambers, the changing role of the Practice Manager and analysing the implications of change in the future.
11 Interview with... Stephen Attree
Charlotte Parkinson, Modern Law, spoke to the Managing Director at MLP Law about managing sustainable growth versus profitability and combining entrepreneurs with the law.
14 Interview with...Neil Hudgell
The personal injury market has been dominated by talk of extensive consolidation and pressures in recent years. The Managing Director of Neil Hudgell Solicitors spoke to Charlotte Parkinson, Modern Law about bucking the trend in light of those pressures and why the firms’ ambitious growth plans are now beginning to come to fruition.
20 Why should managers of legal businesses support pro bono?
Many law firms of all shapes and sizes encourage their partners and staff to engage in pro bono activity in many different ways, as Michael Napier explains.
22 The year of the blog
How did your legal marketing go in 2014? Was it the year of the blog? Or the year of no blog? Perhaps you’re wondering whether lawyers should blog at all? We’ve got the answers and some helpful tools to help you build a successful blogging strategy in 2015.
24 Clear lines of communication
Last year, a number of changes to UK employment law were brought in. Therefore, it has been particularly important for legal firms to have strong and responsive HR departments that are able to respond to these changes and continue to abide by the law. Sara Duxbury discusses the importance of law firms having a robust HR department and implementing a strong HR strategy, as well as the increasing need for law firms to adopt a more flexible approach when itcomes to accommodating the needs of employees.
26 Make or break
Modern Law Magazine Project Director Kate McKittrick kate@charltongrant.co.uk
28 In the hot seat: financial solutions
Group Editor Charlotte Parkinson charlotte.parkinson@charltongrant.co.uk Contact 01765 600909
Clive Meredith outlines his top tips which law firms should consider before merging, and explains why mergers are akin to relationships.
Richard Hill explains why now more than ever sound financial governance and professional management are fundamental disciplines that a successful legal business must demonstrate.
31 Google+ and how it can benefit your firm
If you think Google+ is just another social site, you are in for a big surprise. FindLaw UK takes you through how to use Google+, highlights the features available, and provides useful tips about where to focus your efforts in Google+.
ML // Practice Management Supplement 2015
Give Yourself the Advantage
www.charltongrant.co.uk 01765 600909 Publishing | Events | Design | PR | Marketing
The Interviews
05-17
The Interviews
05
Interview with... Christine Kings
07
Interview with... Christine Kings Charlotte Parkinson, Modern Law, spoke to the Co-Chair of the Legal Practice Management Association (LPMA) about modernisation in chambers, the changing role of the Practice Manager and analysing the implications of change in the future.
Q A
Why did you decide to set up the LPMA?
I was the first practice manager appointed in a barrister’s chambers in 1990. I started at Doughty Street Chambers with a completely empty office and was given four weeks to get it furnished and staffed for the opening on 2 July. On my second day I went to IKEA to buy furniture – I went round the North Circular with Helena Kennedy (now QC/ Baroness) who had passed her driving test the day before. It was like an initiation to the Bar. By 1996, more practice managers were being appointed and they were mainly women. Over a two week period I had lunch with three new appointees and I just thought – this is mad – I should be putting these women in touch with each other. So I invited about 12 women to Doughty Street to meet each other and we had the most almighty therapy session! We all had the same kinds of problems, problems with the clerks, problems with the barristers, no understanding of our role and no experience of the outside world. A month later, we did the same thing again and that’s when we decided we needed to put things on a more formal footing. The LPMA was born.
Q A
What does the LPMA aim to do for its Members?
The main focus is on ensuring that Members are aware of all the latest developments that will impact on their chambers. We try to anticipate what issues are coming up and schedule sessions so that Members can get a quick briefing, find out what the timetable is, and get clarification on what they need to be doing. We arrange sessions on strategic issues, regulatory developments, employment updates and “how to” sessions. Every year we invite the BSB and the Chair of the Bar Council to speak to our Members and answer questions. Our conference every other year is a full day of talks and presentations on the issues of the day and usually includes regulatory developments, strategy sessions and practical approaches to expanding work or managing change. It is well attended and invariably gives rise to other followup sessions. The other thing, which for many is just as important, is that the LPMA provides support. Being a practice manager1 is a bit like being the jam in the sandwich. You’re brought in to bring about change and to implement regulatory standards, neither of which is likely to be universally popular. You’re
‘As long as there is a clear business need for compliance, most sets have got on with it and accepted that this is part of the new world we’re operating in’
an easy target if things go wrong. So, the LPMA offers the chance for practice managers to meet, engage with others in the same position, build a support network, swap ideas and benchmark performance, often over a meal and a drink! Some of our Members are working in solicitor firms and this brings a different perspective to our discussions, which can be invaluable.
Q A
How does the LPMA work strategically with the Bar Standards Board and the Legal Services Board? It is in the interest of both the LPMA and the BSB to have good communications. We know whether what the BSB is proposing is likely to work and we are the ones who will have to introduce or implement the changes. The BSB want to achieve compliance as quickly as possible and we both want it to be as painless as possible. Some LPMA Members sit on BSB committees and working groups and have had a direct input into matters such as entity regulation, supervision requirements and CPD and indeed one of the new BSB board Members next year will be a current LPMA Committee Member. Our Members drafted a business standard for the Bar Council and we consulted with the BSB to ensure that the various aspects dovetailed with their requirements. We have trialled some of the software and the questionnaires for the Chambers Supervision 1. Practice manager here refers to staff in senior roles with responsibility for strategy, business and policy development, regulatory matters, finance and/or staff management and includes directors, CEOs, BDDs, senior clerks.
ML // Practice Management Supplement 2015
08
Interview with... Christine Kings
What are the top 5 considerations that legal practice managers need to be aware of in 2015 and beyond? 1. 2. 3. 4. 5.
Market awareness: knowing what our competitors are doing Remaining competitive – internally and externally Talent retention – making sure we keep our good barristers and staff Investment in talent and resources to deliver quality client care Differentiation – how do we stand out from the crowd?
Assessments. The BSB assisted us a few years ago when chambers were being asked by the BSB, the Bar Council, the AG’s Department, the BSN Survey and other bodies to produce E&D statistics but they all wanted something slightly different which was time consuming to prepare. The BSB agreed on one set of statistics which they would collect. Whenever the BSB has a consultation or anticipates a new requirement they contact us for input, feedback or to arrange a briefing session. It all helps to ensure that chambers are kept up to date and the task of regulating them is made easier. The LPMA has had occasional contact with the LSB. The most obvious example was over the requirement for chambers to notify lay clients at the earliest opportunity of their right to complain about a barrister. While we all agreed that lay clients should know about their right to complain, this requirement placed the onus on the chambers to make them aware of it when the chambers does not normally have any lay client contact details. This one issue caused more frustration and irritation than any other issue for chambers in the last five years. Several chambers that could expect to comply 100% with BSB requirements became non-compliant. Many solicitors declined multiple requests for their client details. The obvious solution (that solicitors include a note in their contractual terms, alerting lay clients to their right to complain about a barrister and offering to provide details should the need arise) was not followed up and even now chambers still have this responsibility, albeit that solicitors are now supposed to help them discharge this responsibility.
Q A
How has the role of the Practice Manager changed in the last 5 years?
Dramatically; partly regulation but mostly the changes in the market. There was an expectation that chambers’ would eventually be impacted by the Legal Services Act but because they are further down the chain it would take longer. In fact, the combination of changes in legal aid, the Jackson reforms, the LSA 2007 and the expansion in international work has, in one way or another, created significant insecurity, opportunity, bureaucracy and/or movement. For practice managers, the challenge has been to keep an eye on what competitor sets are doing, understand how to stabilise or expand shrinking incomes, maximise opportunities to move into more lucrative areas, keep existing tenants together and motivated, move quickly on recruitment, and generally bring about the kind of change that sustains the organisation in the long term. In practical terms, this can mean anything from restructuring and rebranding to setting up new entities and revising constitutions. This is in addition to ongoing practice and business development, staff and financial management and everything that goes in to running a chambers.
Q A
Is risk management and compliance fast beginning to make up the majority of the work for a legal practice manager? Even those sets that are well organised with documented policies and procedures,
business plans and risk management processes have had to allocate more staff time to understanding and implementing regulatory requirements and reporting. As long as there is a clear business need for compliance, most sets have got on with it and accepted that this is part of the new world we’re operating in. It would not be true however to say that this constitutes the majority of the work for a practice manager. The job is much more wide-ranging for most of us!
Q
How can/should practice managers be working to drive change from within chambers, during changing times for the legal sector?
A
With a group of intelligent, busy, strong willed, selfemployed practitioners, one of the key ways to bring about change is to engage and recruit some of those who are forward thinking and command respect. If you can get them on board to help articulate the need for change and help manage change that makes everything much easier. Things are moving so quickly that chambers need to position themselves for the long term with sufficient flexibility to respond quickly to opportunities as they arise. Even when there’s a consensus for change, it needs to be clear what that means. Practice managers drive change by analysing the implications for the future of what’s happening in relevant sectors now and drafting strategies for moving forward. Pulling together the movers and shakers in chambers and engaging them on strategic issues helps build the momentum for change.
Q A
How can chambers reach a balance between profitability and efficiency? In a chambers, the important balance is the need to keep percentage contributions (what barristers pay to keep the organisation running) competitive while maintaining efficiency, good client care and
‘With a group of intelligent, busy, strong willed, self-employed practitioners, one of the key ways to bring about change is to engage and recruit some of those who are forward thinking and command respect’ ML // Practice Management Supplement 2015
Interview with... Christine Kings
09
practice development support. Those sets that have traditionally relied predominantly on legal aid are finding it particularly difficult to get this balance right because lower incomes means less money available to run chambers. The options for sets experiencing a downturn in income include moving into more lucrative areas of work, which takes time and planning; cutting overheads, which could result in a deterioration in service; maximising barrister time to increase work output, which means adopting different ways of working; increasing fees, which can be dangerous and isn’t always an option; recruiting high earners or merging with another set.
Q A
How has technology changed the role of the Practice Manager?
All organisations benefit from the efficiencies brought about by new technology. It is easier to stay in touch with clients and to manage casework. Chambers systems and procedures are more streamlined. Communications with the regulators are all electronic. Telephone and video conferencing makes meetings easier to organise. The downside is that electronic communications create an expectation of a quick response, which can be particularly difficult in a chambers with a large number of self-employed barristers. Websites require constant updating and reconfiguring. Social media poses a number of potential risks. Case papers are increasingly sent electronically and frequently require printing out. And, of course, there are numerous concerns around confidentiality and data security which need to be properly managed.
Q A
What is in the pipeline for the LPMA in the short, medium and long term? Do you have plans for further growth?
The LPMA is growing quite rapidly as chambers’ appoint more managers to lead responsibility for non-clerking roles and as senior clerking roles become more specialised. We now attract senior staff in marketing, administration, finance, IT, regulation and business development at well as CEOs and directors who have overall authority and we are getting about five new Members a month. The legal market will continue to change significantly and the LPMA will continue to ensure that Members get the information they need to keep abreast of developments. This year, among other things, we will be looking at: entity regulation, including single person entities and the implications for chambers’ constitutional arrangements; employment issues and updates; E&D and social responsibility; business opportunities in different sectors. The big issues for the Bar are also many of the big issues for the LPMA. There is also a distinction to be made between higher level strategic regulatory issues and operational regulatory issues. On a day to day basis, it is the operational issues which occupy our time but there could be major repercussions for us if the existing regulatory bodies were replaced by one overarching regulator, as has been mooted on several occasions. In such circumstances, the LPMA would aim to be involved in discussions with any new body and try to ensure that there was a smooth transition in operational terms from one regime to another.
Christine Kings Christine Kings is a director at Outer Temple Chambers. She leads on policy development, strategic planning, finance, marketing and administration. Over the years she has contributed to numerous Bar Council and BSB committees and working groups, particularly around equality and diversity, new business models and quality standards. Formerly chair of the Mary Ward Legal Centre, chair of the Barmark panel, treasurer of the Bar Pro Bono Unit and a trustee of Bar in the Community, she is currently joint chair, with Edith Robertson of Falcon Chambers, of the Legal Practice Management Association and vice chair of the Legal Action Group. She helped set up Doughty Street Chambers in 1990 and was chief executive there until 2007. Prior to managing chambers, Christine was an emergency support worker at a women’s refuge, head of campaigns and national events organiser at the Campaign for Nuclear Disarmament, an events organiser in the last year of the GLC and co-director of the Emergency Planning Information Centre.
‘Those sets that have traditionally relied predominantly on legal aid are finding it particularly difficult to get this balance right because lower incomes means less money available to run chambers’ ML // Practice Management Supplement 2015
Relax... we have it covered
www.charltongrant.co.uk 01765 600909 Publishing | Events | Design | PR | Marketing
Interview with... Stephen Attree
11
Interview with... Stephen Attree Charlotte Parkinson, Modern Law, spoke to the Managing Director at MLP Law about managing sustainable growth versus profitability and combining entrepreneurs with the law.
Q A
How do MLP place a focus on the operational management of the firm in the modern legal services arena?
For me that is about the structure we have at MLP which revolves around monthly operational meetings. Anyone with an operational responsibility meets once a month with a structured meeting and set objectives to look at operational efficiency and issues. The strategic objectives from the board also very much feed into these meetings.
Q A
MLP has undergone significant growth recently; what are the biggest challenges associated with managing a fast growing business?
For me that is about maintaining our values and ethos at the front of what we do. When growth involves recruitment and acquiring new people, it is important to focus on the overall people and processes of the business. Our values and ethos are carried through, to ensure any new people we take on really buy into what MLP is all about.
Q A
Which business structure/strategy was right for MLP and why?
We decided to structure as an LLP because it was right at the time, 2 years ago. I keep our structure under constant review and I try and operate a collegiate, strategic board firm. I am aware that it’s not just about me as the Managing Director and shareholder, it is about the board, the collective and the team, driving a strategy and overall operations of the firm.
‘We spend a lot of time with our trainees, teaching them about the business of law’ ML // Practice Management Supplement 2015
12
Interview with... Stephen Attree
MLP Law Creating successful outcomes for you and your business MLP Law is one of the leading commercial law firms in the North West. Whether you need legal advice from our commercial solicitors, or require private client legal services, our experienced lawyers will help you to achieve a successful outcome. Based in the commercial heart of Altrincham, near Manchester, we are ideally placed for ease of access serving local, national and global clients from start-ups, to large corporates. We also deliver a range of private client services, from family law to probate advice to individuals across the region. Experienced solicitors We are a dynamic, entrepreneurial team and believe that our clients gain the best solutions from us. We are passionate about our proactivity, the quality of work that we produce and believe that our services should be affordable, therefore we are always clear and up front about our fees. We also keep you updated every step of the way, so you’ll always be clear on the progress that’s being made. Commercial lawyers you can trust As a commercial law firm we understand the business challenges that you face and how those can have an impact on your personal legal affairs. We provide a best in class range of services and our experienced solicitors understand your issues. We do everything in our power to achieve successful results and we’re here to help you get on track and remain there.
Q A
How would you define the MLP ethos and culture?
There are two sides to this. Firstly, we have an unrelenting focus on client service, client service and client service, that is a mantra we often repeat in the office. We also have a core focus around people and make sure we attract and retain dynamic individuals that have commercial insight. It’s not about the technical expertise and skills, it is about lawyers with business brains who can drive our business forward.
‘Making sure technology delivers the services that clients want, not just the services that lawyers think clients need based on what has traditionally been delivered’
ML // Practice Management Supplement 2015
‘We have an unrelenting focus on client service, client service and client service, that is a mantra we often repeat in the office’
Q A
What are the biggest challenges/pressures facing providers of corporate legal services at the moment, in the UK and internationally?
UK and international pressures are both interrelated. They centre around efficiencies in IT and making sure technology delivers the services that clients want, not just the services that lawyers think clients need based on what has traditionally been delivered. It is important to embrace technology and the opportunities it brings in order to differentiate ourselves as a firm. We are not unique as a firm but we are made unique by attracting the right talent which drives excellence.
Q A
How do MLP put the ‘business of law’ into the daily running of the firm?
We put all our lawyers and individuals close to the heart of our business. Everyone understands where we are in terms of performance indicators and the whole pipeline of work in, work done and work in progress. It is important that every individual understands where we are as a unit but also where they fit within the team and the wider firm. We also place a lot of emphasis and time on performance management; I often liken us to a team of athletes in that it is important to identify the elite members of the team who have elite potential. We make sure we manage their performance and train them so they can become the best they can be.
Q A
Why is the combination of entrepreneurs and lawyers such an important one in the modern legal services market?
This combination is important because it can encourage lawyers to break free of traditional training, the fact they are often risk averse and tend to ‘quote the law’. It also helps put real life experience into the context of management for clients. We deal with a lot of entrepreneurs as our clients and for us to understand what it is like to live in their shoes, we have got to understand their mentality in order to give the best advice.
Q A
Should management/business be a core focus during the legal training process?
Certainly, currently there is an awful lot of emphasis placed on ethics, which is not a bad thing. However, we spend a lot of time with our trainees, teaching
Interview with... Stephen Attree
13
‘It’s not about the technical expertise and skills, it is about lawyers with business brains who can drive our business forward’ them about the business of law. It is important for trainees to understand that what they do and how the time they spend with clients, ultimately connects to the success and the profitability of the firm.
Q A
What are your top business tips for law firms and practitioners that they should be aware of now and moving into 2015?
Firstly, do not compromise on client relationships and client service, or the quality of the people you employ. The second point is to focus on attracting talent and to nurture and promote talent when you have got it, it is important to develop every person in the business into a magnate to clients. The third point for me is an unrelenting focus on the top 50% of your client base. Each individual firm needs to work out what their top 50% is and work on retaining that client base and managing their existing relationships. All the time and resources that the firm is nurturing and investing in existing clients needs to be taken into account; be that partner and senior partner level, through to accounts and support staff.
Q A
What are the long term and future goals for MLP?
I can see the legal market shifting massively in the next 3-5 years and our immediate goal is to achieve 50% growth over the next 30 months and to do that whilst maintaining margin. It is important not just to focus on the top-line and revenue; it is about maintaining profitability on the bottom line. We are doing that by attracting talent, nurturing our elite and being ruthless with those who are not in the elite. Investing in and understanding the opportunities in IT is also high on our agenda but beyond that, because of the considerable changes in the market and technology, it is hard to look further forward than 3-5 years.
‘It is important for trainees to understand that what they do and how the time they spend with clients, ultimately connects to the success and the profitability of the firm’
Stephen Attree Position: Managing director and head of corporate and business services. Role and responsibilities at MLP Law: Stephen leads the strategic direction of the firm, in addition to heading up the corporate and commercial team. He acts for businesses and business people in the SME, owner managed and family run sectors. Career history: Stephen joined MLP Law in January 2011, following his move from the city centre law firm that he had joined as a trainee in 1998 and where he had been a partner since 2004. He became managing director of MLP Law in 2014. Relevant qualifications: An accredited Family Business Adviser (STEP 2012), an intellectual property expert, a member of the Family Firm Institute Inc. (FFI), a member of the Employment Law Association (ELA), on the accredited ECA adviser Panel. Interesting fact: He very nearly went for a career as a snowboarder before opting, instead, to start the Legal Practice Course. He has raised over £10,000 for charity leading a team on the national three peaks in 2009.
ML // Practice Management Supplement 2015
14
Interview with... Neil Hudgell
Interview with... Neil Hudgell The personal injury market has been dominated by talk of extensive consolidation and pressures in recent years. The Managing Director of Neil Hudgell Solicitors spoke to Charlotte Parkinson, Modern Law about bucking the trend in light of those pressures and why the firm’s ambitious growth plans are now beginning to come to fruition.
Q A
What are the key challenges associated with managing a legal practice prior to and throughout the acquisition process?
The key challenges start and end with staff. Before we complete an acquisition, we have to make sure we have the capacity to deal with it. To take on several thousand new clients, the staff and our systems have to be geared up internally to cope without disrupting the core running of the business as it is. We have had a lot of experience of this over the last 3 years and whilst it may seem that it is not a difficult thing to do, if the business isn’t properly prepared, we can run into all sorts of logistical, client care and cash flow issues. The business must be able to absorb practical, logistical and regulatory issues from day one.
Q A
Why was Rapid the right business for Neil Hudgell Solicitors to acquire?
There were a number of reasons; regionally, they were a substantial player in the market in the same space as ourselves, so, in that sense, it took care of an element of the competition. They also have some great people and have a brand that (within the industry) probably has a mixed reputation but to the consumer, the brand is very recognisable and produces a steady stream of new
‘We are planning to consolidate, understand what we have and what we need, rationalise expense and increase the bottom line as much as the top line’ ML // Practice Management Supplement 2015
leads and enquiries. It was also a profitable business at the time we took it over, which is a hugely important factor, in terms of revenue growth.
Q A
What is the current business strategy for Neil Hudgell Solicitors for 2015 and beyond?
We have doubled the size of the business with the acquisition of Rapid, and are now up to about 230 staff operating at a significantly increased income level but with an extended costs base to match. To that end, there will be a lot of consolidation in the back office in terms of accounts, business support, IT, new claims - all the functions that have run separately between ourselves and Rapid will be merged into one. This means we can make some real savings and rationalise central overheads. In Hull, we currently have 4 premises and in the next 12 months we want to reduce this number to 1, which means we have a huge amount of work to do there. In Leeds, we are planning to continue the incremental growth that we have seen in this area for the last few years. London is a big project for us, as we have been established down there at our office near the Tower of London for 18 months and we are aiming for further growth in that area. We are planning on recruiting some senior people in London over the next few months and plan to double the size of the office by the beginning of 2016. We are looking to drive a lot of our multi-track and high value work through that office and build a reputation and presence down there. London is quite a fragmented market and nobody has really grabbed significant market share, so we expect this will signify the biggest area of organic growth this year. As the year progresses, we may undertake more caseload acquisition, although at the moment, we are only looking at one other business which we may acquire. This practice is a niche, high-value, injury firm and we are going through information exchange at the moment. In the main though, we are planning to consolidate, understand what we have and what we need, rationalise expense and increase the bottom line as much as the top line.
‘The most important thing to remember is to only do business for the right reasons and to be aware that there may be some shortterm integration pain that comes from an acquisition’
16
Interview with... Neil Hudgell
‘We look for people who are forward thinking, take pride in what they do and are capable, above all, of doing the work’
Q A
What are your top tips to consider before a merger or acquisition?
A lot depends on whether the deal is for a caseload or if it is a going concern acquisition. If we are looking to acquire a caseload, it is important to have thorough, external due diligence conducted to establish the safe recoverable WIP on the files and to ensure that you don’t pay beyond that figure. I have never assumed historic liabilities and always ensure the seller acquires run-off cover if it is a sale of goodwill or as a going concern. If we are acquiring a firm, it is vitally important to look at the financials and consider what, if any, liabilities you are inheriting. We also look closely at their accounts and levels of borrowing. We then look at any commitments the firm may have, in terms of leases on premises, whether they have large expenses comparative to the size of the business, particularly if it is a diminishing business, which many in the PI space currently are. We want to know if the firm generates it’s own work or is reliant on the CMC model. If the latter, we effectively value on the basis of the WIP book. We look at whether the staff are overqualified for the type of work they are doing and also the cultural fit of the firm with our own. We look very closely at the claims history of the firm we are acquiring, as well as their history with the Legal Ombudsman and appropriate regulators. We also ensure we retain a good commercial lawyer, to ensure the contract is watertight and avoid any additional liabilities creeping out of the woodwork and attaching to our business. The most important thing to remember is to only do business for the right reasons and to be aware that there may be some short-term integration pain that comes from an acquisition. Often, people and senior management are drawn into the consolidation process and that can take them off the day-to-day running of the core business.
ML // Practice Management Supplement 2015
Q A
You have ambitious growth plans to reach a turnover of £25m by April 2017, how do you plan to achieve this? It is an ambitious growth target, particularly in the PI space at the moment but the way we plan to get to it is by continuing to grow organically with some strategic bolt-ons. Part of our strategy was developing our Clinical Negligence department 5 years ago; this means that a lot of the growth we are set to see is a natural consequence of increasing amounts of our high value work coming to fruition in the next couple of years. Some of that growth is also down to our acquisitions, Harris Cartier for example, from whom we acquired a significant amount of WIP, which will come to fruition in the coming years. The acquisition of Rapid will also facilitate a significant upturn in revenue, particularly in the next financial year.
Q A
Why did you decide to launch www.webuyanyfiles. com. Has this venture gone as planned? We launched ‘webuyanyfiles’ mainly for marketing purposes, to attract attention. We have completed about 26 deals through it, which differ in size. It has gone well, although we are not focussing on it or pushing it that hard at the moment because we have plenty of other things on our plate. It definitely still has a place and we are still fielding enquires, all be it that the numbers are reducing as the number of firms are reducing.
Q A
Is the firm planning on specialising in high-value or high-volume work or a mixture of the two? Both, we are going through a complete rebrand at the moment and the intention is that the ‘Hudgell’ side of the business will deal with high-value,
niche and clinical negligence work and the ‘Rapid’ brand will fit with the low-value, fixed cost work. At the moment, although we are still in the process of reviewing the whole operation, the Rapid brand will remain as it is - recognisable to the consumer, so we will be running two horses together in that sense.
Q A
What type of mindset/culture do you look for in a firm you are looking to buy/acquire?
We look for people who are forward thinking, take pride in what they do and are capable, above all, of doing the work. We also look for a client-focussed attitude and for people who are able to take ownership of their own caseloads and to be an ambassador for the firm, in that they look for opportunities and to bring in work. One very good example of that is that one of our solicitors was on This Morning recently, discussing a case she had been working on, which generated a lot of PR and client enquires. Above all, we look for people who are dynamic and enthusiastic.
Q A
What does the future hold for Neil Hudgell Solicitors?
The firm has been in operation for 18 years so hopefully, we will make 20 years having achieved the goals I have mentioned. The personal injury space is an everfluid market and I am sure there is further change on the horizon. It is our job to ensure we see this change not as a threat but as an opportunity. There are too many doom and gloom merchants who constantly think the end of the world is nigh but we cannot moan about our situation, we just have to get on with it. We have got to put our energy into positivity, make sure we remain commercially viable and continue to do the best job we can for clients, which is ultimately the most important thing.
Interview with... Neil Hudgell
17
Neil Hudgell Areas of specialism: Leading a team which is centred on meeting our clients’ needs and getting them the best possible outcome. When I founded Neil Hudgell Solicitors in September 1997, I set out to create a specialist personal injury and medical negligence law firm where client care is always the priority. That focus remains the same today. Expertise and key strengths: As a personal injury lawyer with more than 20 years’ experience, I have successfully represented many clients who have suffered trauma and loss. Today, I have built a team of expert lawyers with a reputation for achieving settlements that enable people to get their lives back on track and look to the future. I have led the business through continued expansion, ensuring our commitment to client care remains first class. I ensure that we take a holistic approach to all our clients and offer much more than legal solutions. For example, we have a network of partners able to give high quality rehabilitation support to clients. My career: I have established Neil Hudgell Solicitors as a highly successful firm and an established national brand. As well as the headquarters in Hull, we have offices in London, and Leeds enabling us to serve clients across England and Wales. We never forget our roots. That’s why Neil Hudgell Solicitors supports many local activities through The Neil Hudgell Solicitors Trust. We value being close to the communities which have helped our business to grow and thrive. Proudest professional achievement: In 2013, I was named “Outstanding Innovator of the Year” in the legal profession’s Claims Innovation Awards. The judges said: “A true innovator in the purest sense of the word...with client care at the core of its ethos, his firm has grown in size, year after year.” I was also humbled to receive a special award in recognition of Neil Hudgell Solicitors Trust’s support for disabled sport at the first ever Hull and East Riding Disability Sports Awards. Organisers said: “From day one we have had wonderful support from Neil. He has been with us all the way, and has shown he is willing to support people financially.” In addition, I am proud that 9 out of 10 former clients would recommend us to their family and friends. Qualifications and professional memberships: Member of The Law Society Personal Injury Panel.
‘There are too many doom and gloom merchants who constantly think the end of the world is nigh but we cannot moan about our situation, we just have to get on with it’ ML // Practice Management Supplement 2015
HAVE YOU SEEN OUR SISTER PUBLICATION?
www.modernclaimsmagazine.co.uk TO ARRANGE YOUR FREE SUBSCRIPTION PLEASE EMAIL INFO@MODERNCLAIMSMAGAZINE.CO.UK
The Features
19-31
The Features
19
20
The Features
Why should managers of legal businesses support pro bono? Many law firms of all shapes and sizes encourage their partners and staff to engage in pro bono activity in many different ways, as Michael Napier explains.
P
ro bono is nothing new because for centuries lawyers have given legal help free of charge or “pro bono publico” (for the public good). Even in the “Wolf Hall” era, as long ago as 1494, Henry VII decreed by statute that for the benefit of the unrepresented poor at Court the Lord Chancellor should appoint “learned counsel and attorneys without any reward”. Today, the level of pro bono contribution by all branches of the legal profession (solicitors, barristers and legal executives) towards meeting “unmet legal need” is impressive and increasingly important. Moreover, efforts over the last dozen years to co-ordinate effort and to connect pro bono lawyers with the voluntary sector that knows where help is needed, means that nowadays there is an identifiable “pro bono movement” both domestically and internationally. Nevertheless, it is important to understand that whatever quantity of pro bono help is made available, it will never be sufficient to eradicate unmet legal need. It must also be remembered that pro bono is only an adjunct to and not a substitute for legal aid which, as everyone knows in these austere times, is now much less available than in the past.
Q
Why should leaders and managers of legal businesses promote pro bono activity as an integral part of their organisation?
A
Because encouraging participation in pro bono legal activity generates a range of positive benefits for the organisation and for its members. Four such positive benefits are: • Legal DNA: In 2001, Professor Andrew Boon of the University of
Westminster published his research paper “Something for Nothing?” Amongst his conclusions was the finding that “the tradition of pro bono publico is a mechanism for elevating legal professionalism”. That mechanism applies as much to the entity of a legal business as it does to the individuals who work there. As a recent strapline message for the annual National Pro Bono Week declared; “Pro bono: it is part of being a lawyer”. Or to put it another way round, a commitment to pro bono should be part of the DNA of being a lawyer. That message is especially understood by law students who gain early exposure to pro bono through clinical legal education (CLE) programmes that are now run by most law schools. When applying for a training contract or a pupillage the law students of today will positively seek out firms and chambers that offer pro bono opportunities. It follows that the legal business that offers pro bono opportunity will
‘It must also be remembered that pro bono is only an adjunct to and not a substitute for legal aid’ ML // Practice Management Supplement 2015
attract the best candidates. It will also engender a pervasive and positive internal culture that will enhance good morale and foster collegiality. • Client pressure: In the increasingly competitive world of legal services today the legal business that is unable to produce hard evidence of its pro bono programme is vulnerable to losing out to the competitor that can; for example in a tender process to a client who wants to know more about the business than purely its legal excellence and charging rates. All businesses, legal or otherwise, need to be acutely conscious that the purchasers of their services are positively influenced by knowing that the supplier of those services has a real commitment to what is frequently called “corporate social responsibility” or sometimes more simply “social responsibility”. It follows that the business that is able to demonstrate (through its pro bono programme), a genuine appreciation of the needs of the community that it serves and that pays its bills, is likely to have a more satisfied client base. • “It’s the work that counts not the motive”: This was the headline that appeared in The Times during the first National Pro Bono Week in 2001. The purpose was to convey
The Features
‘It is perfectly acceptable for management to regard a pro bono programme as a soft edged part of its strategic development that may in the long term assist in the growth of the business’ the message that the legal business which gives free legal advice or representation to a client that cannot pay today, in the hope that in different circumstances that client may be able to pay tomorrow, is not committing a professional sin. It is perfectly acceptable for management to regard a pro bono programme as a soft edged part of its strategic development that may in the long term assist in the growth of the business. • Standards: The legal professions, and many law firms that conduct pro bono legal help, have signed up to follow the guidance and standards set out in the domestic and international pro bono protocols (accessible via the Lawworks1 website below). These protocols were devised by the Attorney General’s two pro bono committees which help to promote the co-ordination of pro bono activity domestically and internationally. By endorsing and applying the protocols the management of a legal business will ensure the application of common standards in the delivery of legal advice and representation whether given freely or for reward.
Q
How can managers initiate or expand pro bono opportunities for the business and its members?
A
By encouraging individuals at all levels of the business to lead a pro bono programme that engages proactively with the pro bono community.
Examples of the domestic legal pro bono community are: • LAWWORKS (formerly the Solicitors Pro Bono Group) which “identifies need, brokers casework and connects volunteer lawyers with communities nationwide” working with member law firms, in-house counsel, mediators and law students. The LawWorks HQ is based at the National Pro Bono Centre in Chancery Lane, London and it has strong links around the regions through its network of 175 pro bono clinics nationwide. • THE BAR PRO BONO UNIT2 which is also located in the National Pro Bono Centre and “helps to find
pro bono legal assistance from volunteer barristers”. • THE CILEX PRO BONO TRUST3 which is “committed to ensuring that all members of CILEX can become involved in pro bono particularly students and trainee legal executives.” • FREE REPRESENTATION UNIT4 which operates in London and Nottingham (in conjunction with Nottingham Law School) and provides free representation in employment and social security tribunals. Examples of the domestic voluntary sector are: • LAW FOR LIFE/ADVICE NOW5 which is the foundation for public legal education (PLE) that “equips people with the knowledge, skills and confidence to resolve problems in day to day life”. • THE LAW CENTRES NETWORK6 which nationally “defends the rights of people who cannot afford a lawyer”. • CITIZENS ADVICE7 which through its national network bureaux “tackles consumer vulnerability and helps people resolve their legal, money and other problems by providing free, independent and confidential advice”. • BUSINESS IN THE COMMUNITY8 which “stands for responsible business” and assists all kinds of businesses in voluntary connections with the community • THE CITIZENSHIP FOUNDATION9 which “helps young people to understand the law, politics and democratic life”. • ADVICE UK10 which is the coordinating body for independent advice providers in the UK.
Q
If our business is unable to commit human resources towards pro bono is there any other way that we can contribute?
A
Yes there is, by supporting The Access to Justice Foundation.
• The Access to Justice Foundation11 (AJF) was established as a result of section 194 of the Legal Services Act 2007 which introduced the new
21
mechanism of a “pro bono costs order”. This means that in a civil case where a pro bono represented litigant is successful the Court can award costs in the usual way on the basis that those costs will be paid to the AJF as a charitable body. • The AJF is also the recipient of charitable donations from legal businesses that wish to distribute funds from dormant client accounts or as a straightforward percentage of their annual profits. • The AJF makes annual grants from its funds to advice organisations that need financial support to assist their giving of pro bono legal help. Forward thinking Many legal businesses appoint someone at high level to be the pro bono partner or director who will co-ordinate activities with the help of a committee drawn from all levels, possibly linking with a similar structure if it has other offices. Leadership from the top is important particularly to make it clear that individuals who engage in pro bono activity will not be penalised when their billable hours are scrutinised at remuneration/bonus time. On the contrary, the forward looking business will positively encourage its fee earners and others to carry out a target number of “aspirational hours” engaging in pro bono. It is hoped that this article has shown that the opportunities for legal businesses to participate in giving something back to the community through pro bono are considerable and hugely beneficial. And there is another dimension (not really touched on here because of space) for the international legal business that wishes to give free advice and representation to help meet the legal needs of individuals and organisations in other countries particularly where the Rule of Law is deficient. Michael Napier CBE QC (Hon), Attorney General’s pro bono envoy. 1. www.lawworks.org.uk/ 2. www.barprobono.org.uk/ 3. ilexprobono.wordpress.com/ 4. www.thefru.org.uk/ 5. www.advicenow.org.uk/going-to-court/ 6. www.lawcentres.org.uk/ 7. www.citizensadvice.org.uk/ 8. www.bitc.org.uk/ 9. www.citizenshipfoundation.org.uk/ 10. www.adviceuk.org.uk/ 11. www.atjf.org.uk/
ML // Practice Management Supplement 2015
22
The Features
THE YEAR OF THE BLOG How did your legal marketing go in 2014? Was it the year of the blog? Or the year of no blog? Perhaps you’re wondering whether lawyers should blog at all? We’ve got the answers and some helpful tools to help you build a successful blogging strategy in 2015.
O
f course, the kind of blogging we are speaking of here does not include a personal blog sharing the world’s best bread recipe, or the latest celebrity feuds. But the question remains: should lawyers spend the time and money to gain the expertise necessary to make a smart, welltrafficked legal blog to form part of their law firm marketing plan? You might expect FindLaw UK, the market leader in legal website creation and marketing from Thomson Reuters, to be a proponent of legal blogging, but you need not take our word for it; the numbers speak for themselves. At this time, the legal profession has become aware of and even quite savvy regarding online legal marketing and the way it can bring not just more clients to a practice, but bring in the kind of clients that a practice most values. So to keep one step ahead of the pack what should a smart marketing strategy include? The answer is a blog. For example, even with the increase in blogs, a recent article in eMarketer found that by 2015, 60% of those online will read blogs, but only 13% will be writing them. The maths clearly shows that those with blogs will wield a significant amount of influence over a huge audience.
‘By 2015, 60% of those online will read blogs, but only 13% will be writing them’
‘Writing blog posts can be a satisfying way to express yourself and to share your hard-earned knowledge in a way that your busy practice often doesn’t allow’ Further statistics bear out the effect a blog can have on a law firm marketing strategy. According to Technorati Authority, in 2014, 58% of bloggers became better known in their industry. Another 56% of bloggers established their company as thought leaders. More importantly, 71% of bloggers increased the visibility of their business. There are additional benefits to blogging that can be tailored specifically to the practice of law. FindLaw UK has developed its Blog Services to help drive traffic to clients’ websites. This is accomplished by designing a legal blog, its domain and content to focus on the particular kinds of cases and issues that matter most to that firm and its practice. However, what if this all sounds compelling, but clients just don’t have the time to do it all? FindLaw UK also provides Blog Content Services to do the work for our clients and provide law firms with the kind of content that keeps their firm “top of mind” and allows lawyers to get on with what they do best: practice law. The world of law firm marketing has changed, and whether you want to take the reins and do your own blogging or have a specialist third party like FindLaw UK do it for you, here are some must knows.
ML // Practice Management Supplement 2015
The Features
23
‘The legal profession has become aware of and even quite savvy regarding online legal marketing and the way it can bring not just more clients to a practice, but bring in the kind of clients that a practice most values’ Simple Ingredients for a Good Legal Blog Post A blog can bring traffic — notably, potential clients — to your website. A blog can also establish you as an expert. It could help make you a go-to person on a legal topic for journalists, which can promote you and your practice to a large audience. And writing blog posts can be a satisfying way to express yourself and to share your hard-earned knowledge in a way that your busy practice often doesn’t allow. But not all blog posts are created equal. A bad post can drive your potential clients away. Good posts attract them. Here are the key ingredients to getting there: 1. Your Practice Area(s). Focus on your expertise, not on other aspects of the law that don’t relate to your specialty. Blogging is inexpensive marketing, but you don’t want to waste your time writing about subjects that don’t matter to your potential clients. 2. A News Hook. Put your reporter hat on. You shouldn’t write about, say, your take on oil spill law if a spill hasn’t happened recently, or at least garnered enough attention to be common knowledge among the general public. Picking a topic that is in local or national discussions will give your post more relevance. 3. Your Point of View. Don’t simply regurgitate facts. Flex your legal muscle and give your opinions. After all, visitors are looking to see how you are different from the competition. Just make sure the opinions are reasonably argued. Simply ranting could alienate people.
5. A Dash of Informality. You’re not writing a legal brief or even the practice area pages of your website. A blog is meant to speak conversationally to its readers. Treat each post as a communication with a client where you use helpful analogies and even a little humour. 6. Simple Terms. Who are you trying to reach? Most likely, not other lawyers. So avoid jargon and legalese. 7. A List. People are attracted to lists. A list makes the information you present more digestible for readers and can lead to an enticing headline. It also makes writing your post a little easier. 8. Regularity. Visitors who see nothing but out-dated posts gathering dust may question your firm’s relevance, engagement or attention to detail. So commit to offering authoritative, useful content throughout the year like commentary on news stories related to your practice area. If you’re already an active blogger, use tags and categories to make your content more searchable and user-friendly. Sounds like a lot to keep in mind all at once, doesn’t it? Don’t let that discourage you. Just like crafting a legal argument, good blogging does take practice. But the more you post, the better you’ll get — especially if you enjoy writing and sharing what you know. And the more you post, the more likely you’ll be able to get people to visit your website. And that includes future clients.
4. Brevity. No need to take up too much of your time writing a long post. Many readers will leave your website if the post looks long — they want information fast. A good rule of thumb on length: no more than 500 words.
If you would like to learn more about how FindLaw UK can help with blogging solutions, please don’t hesitate to contact us. Phone: 0207 542 3725 Email: findlawuk.info@thomsonreuters.com Visit: findlaw.co.uk/law-firm-marketing
ML // Practice Management Supplement 2015
24
The Features
Clear lines of communication Last year, a number of changes to UK employment law were brought in. Therefore, it has been particularly important for legal firms to have strong and responsive HR departments that are able to respond to these changes and continue to abide by the law. Sara Duxbury discusses the importance of law firms having a robust HR department and implementing a strong HR strategy, as well as the increasing need for law firms to adopt a more flexible approach when it comes to accommodating the needs of employees.
A
good HR department with a strong HR strategy is vital to the success of any business, and this is particularly true of a law firm. Furthermore, as legal practitioners, it is particularly important that legal firms are seen to be abiding by all legislation that pertains to employment rights as well as proactively responding to all new employment legislation too. A robust strategy An organisation is only as strong as its workforce. This is particularly true within the legal sector, as law firms are so reliant on people. Every solicitor at a firm needs to be able to apply their knowledge of case and statute law, as well as their past experience, to each new case they work on. This is because each case is different. Hence, it will have its own unique set of circumstances that the solicitor needs to be able to take into account when they then come to assemble their arguments. Furthermore, solicitors also rely on the support of legal secretaries and other support staff to help them too. Therefore, HR is a vital cog when you consider that it is the department responsible for such things as the recruitment, talent spotting, and training and development of a firm’s staff. Thus, if a firm doesn’t have anyone to look after its team of legal professionals, it isn’t looking after its best and most vital resource. This then is why a robust HR department that has put in place a strong HR strategy aimed at supporting its people is so important. Implementing a HR strategy that has real substance is not just about policy and procedure either. It is also important to ensure that there are HR professionals in place who are engaging and transformational in how they deliver it. This is because everyone needs to have confidence when a new strategy is implemented. Otherwise, it won’t stick. It is also important that the HR strategy feeds into the overall business strategy and objectives too – planning for expansion, developing talent, attracting the best talent from external sources, and keeping the workforce happy and engaged are all going to affect a firm’s bottom line and ability to achieve other goals. Recently, more and more law firms have begun to recognise the importance of HR, especially in order to attract the best talent. This may be partially due to the fact there is an increasing need for firms to address the skills gap that
ML // Practice Management Supplement 2015
‘It is essential that legal firms begin to become more malleable with staff, as a lack of flexibility is starting to have an impact on a firm’s ability to attract the best people’
The Features
25
‘Remote working and flexi-time are fast becoming the biggest driver for lawyers on the move to the next stage in their career’ currently exists in the market, and attract quality lawyers that in the past may have tended to gravitate towards bigger firms in London. In addition, there is also a need for law firms to retain and develop the talent they already have too, as well as ensuring that new staff are also being upskilled in the correct areas. Having a robust HR department and strategy that takes this in to account can help to address this. A flexible approach The modern workforce is changing across all professions, and law firms have one of the hardest jobs in accommodating this shift. This is because the perceived working practices associated with the legal profession no longer fit. There is plenty of evidence that suggests high-end lawyers are being pushed to breaking point by their work. For example, a recent survey found that while 58 per cent of legal professionals said senior management encouraged employees to maintain a work-life balance, less than half of those surveyed believed management was truly sincere in this. Meanwhile, another high-profile survey revealed that 5 per cent of lawyers work up to 80 hours per week (equivalent to 11 hours work per day, every day of the week!) and a further 18 per cent do 61 to 70 hours per week, while just six per cent posted 40 hours per week or less. Moreover, 30 per cent said that at their law firm there is no clear flexible working policy and no-one really works flexibly, a further 20 per cent said there is no clear policy but people can work flexibly on an ad hoc basis, and 35 per cent said there is a policy, but in practice few work flexibly. There is clearly a need for firms to adapt to changing times. If around a quarter of legal professionals are putting in over 60 hours per week, this is not in the best interests of the firm, as that lawyer will not be wellrested. Some legal professionals will
also need some flexibility with their hours or working patterns in order to accommodate such things as childcare, the school run and medical appointments among others too. Therefore, it is essential that legal firms begin to become more malleable with staff, as a lack of flexibility is starting to have an impact on a firm’s ability to attract the best people. Such things as remote working and flexi-time are fast becoming the biggest driver for lawyers on the move to the next stage in their career. This means they are not afraid to decline a lucrative job offer if the firm do not have flexible working practices in place. At Fletchers Solicitors, we realised long ago the value of flexibility to employees, which is why we offer flexitime and the ability for staff to earn early finishes or a day off each month. This is part of our five-point package aimed at attracting ambitious and experienced medical negligence lawyers to the firm. As well as offering flexible working practices, the package also offers our senior medical negligence lawyers the ability to work remotely, a competitive salary that reflects the role and the market rate rather a lawyer’s location, confidence in the strength of the firm going forward and the ability to access a relocation package of up to £8000 tax-free. This also meant we were not afraid of the updated flexible working legislation that came into force last year, unlike many profiled in the media who had never worked in this way, and so, have been able to continue accommodating such requests. Fundamental changes On the introduction of new employment legislation, there have been some fundamental changes to employment law in the last twelve months. As mentioned, flexible working practices have now been extended to all employees. Most notable among the others, employment tribunal fees
ranging from £160 to over £1000 have also been introduced. This is in addition to the mandatory need for employees to now seek conciliation with their employer via ACAS’s Early Conciliation Service before going to an employment tribunal. While employers may have breathed a sigh of relief at this legislation, as it has led to a 79% fall in the number of applications to employment tribunals being made, many employee groups have lobbied against the high cost of bringing a claim. The introduction of early conciliation through ACAS is a positive though. Being on either side of a tribunal is an extremely stressful time, and can also be prone to long delays and excessive costs. However, under the new rules, staff and employers are required to consult ACAS before going to tribunal, and there is no cost to this service either. Early conciliation provides a route that avoids the stress, the delays and the expense by encouraging both sides to resolve the dispute outside of the courts. As well as being a free service, ACAS also prides itself on being an independent and impartial body that encourages all parties to reach a quick resolution and also restore trust if the claimant is still an employee of the organisation. It can be argued though that having a robust HR department in place should also help to resolve any conflicts before it gets to the stage where ACAS needs to be called in. Therefore, having a strong HR department that has implemented an all-encompassing HR strategy is paramount. Not only will it help to ensure the firm is responding to new employment legislation and the expectations of the workforce, but when done correctly, it should help to keep the lines of communication clear between senior management and the rank-and-file, thereby also improving trust and morale. Sara Duxbury is Head of People at Fletchers Solicitors.
ML // Practice Management Supplement 2015
26
The Features
Make or break Clive Meredith outlines his top tips which law firms should consider before merging, and explains why mergers are akin to relationships.
“W
e need to grow so let’s merge!” These are words that I’ve heard and said a number of times over the last 7 years in our journey from being a 1 office firm with 50 staff to now having 6 offices throughout Devon with 135 mouths to feed and 16 partners to please. It’s taken 4 mergers to get where we are today and I’m still smiling... just. Mergers, I always think, are akin to a relationship; the first flush of excitement when it’s all fresh and new can soon turn into a battle ground as conflicting cultures and habits knock against each other for no other reason other than “we’ve always done it this way!” So, if you’re thinking “we need to merge” – my advice to you would be at least go into it with your eyes open. Here are my top tips, for what it’s worth, in trying to make the journey as easy as possible. 1. Build from a firm base If you’re the only one in your organisation who thinks you should merge it’s a pretty safe bet it’s not going to happen. You have to have like-minded people around you with the desire and the energy to want to make it succeed. It may sound obvious but there is a lot of work to do leading up to any merger. However, the real work starts on the first day of the new firm and if you’re lucky, your life will start to settle down again in around 3 years! I’m fortunate to have a great Chief Exec, who understands the importance of organisational growth. Without having someone like him around seeing the bigger picture,
encouraging and working with me, it could be very easy for the vision to lose focus. Successful mergers are very much about teamwork. 2. Make sure your cultures fit (or are at least similar!) The first thing I would look at in a potential merger would be the culture. Culture is defined as “The set of predominating attitudes and behaviours that characterise a group or organisation”. It’s not rocket science, you don’t have to be clone practices, but if you’re going to get into bed with another firm you need to be sure you can stomach the look of them in the morning when you’ve both had a rough night! Culture is not about how nice the people are in the other firm. Culture starts, for me, with the way any organisation does business: the speed with which decisions are made, the structure of management, the pace at which change happens and the vision and strategy of the leadership. Real tensions can arise from something as simple as decision making. I can get a major decision from my management board in 20 minutes if necessary. Some partnerships can take months to make a simple decision. This blend of cultures can lead to some partners not feeling part of the business because decisions can happen without them being involved. The cultural fit of two firms can make or break a potential merger. 3. Be prepared to make tough decisions Unfortunately, in my experience, after a merger you will find that not everyone will stick with you. People leave for various reasons. Sometime they just
don’t like the new culture of the firm, or, as is often the case, the momentum of merger brings with it the energy to deal with underperforming members of staff in a far more focused way than a firm pre-merger would have done. Dealing with staff is not easy, especially when there is often a long history to be dealt with. Making hard decisions over staff comes with the territory of growth, you continually need to keep asking yourself the question “what’s right for my business?” Then act of it. To be honest, you normally know the answer to that before you’ve even asked the question! 4. Look at the figures There are a number of reasons to be looking at a potential merger but the financials have to be right. Why have more pain without any more gain? In reality though, the gain does take time to find its way through to being converted into cash in pockets. If a firms’ figures are reasonable before merger, be aware that if you’re going to be making changes, staff replacements, implementing new systems and procedures and trying to win hearts and minds for a new cultural approach in your firm, the figures will take a hit in the short term. Look at this as investment. Successful companies understand that without investment there is no upward gain. As the great Bill Gates said, “Most people overestimate what they can do in 1 year, and underestimate what they can do in 10!” If you don’t get the returns you expected in years 1 -3 don’t panic, as long as you are building correctly, the returns will follow. 5. Consistency in all things in all offices
‘Strong leadership is required to educate and then enforce change when required to ensure consistency’ ML // Practice Management Supplement 2015
How easy does that sound? Simple really, let’s just all do the same things, in the same way in all our offices. Even when you put the same IT systems in and the same procedures, human
The Features
27
‘Strategy is an idea of where you want to get your business to in the medium to long term’ nature has a way of finding a way of doing things to suit the individual rather than the firm. In my opinion, consistency across all offices is the key to providing a first class service to our clients. We do tend to forget that consistency of approach ensures that we can improve our service to clients as a firm. The law, while very important, is a small part in any client’s interaction with us. The thing that will set us apart will not be getting the law right – that’s a given! It will be the client care, and consistently high-class service clients receive when they come to any of our offices. This can be a real culture shock for partners in firms that have not had to think that way before. Strong leadership is required to educate and then enforce change to ensure consistency.
our firm and move it forward. Our first merger came as a result of an opportunity that came up. Strategy is an idea of where you want to get your business to in the medium to long term. Our mergers have come about from a strategy of opportunity. As you grow, you’ll be amazed at how many more opportunities crop up. If your culture is one of growth, you become attractive to other parties. Sometimes partners want things planned so much that anything that doesn’t fit into the plan can be deemed as “not part of our strategic vision”. I’m all for the strategy of opportunity but it’s got to be weighed against what’s best for the business and not just what’s written in our business plan. If there is a benefit to the business - it fits my strategy.
resourcing properly. You will question at times why you’ve done it, you’ll say to yourself “this is the last merger I’m ever doing”. But, after a couple of years of hard work you forget the pain and see the benefits to the organisation. Being part of growth is one of the most rewarding experiences in work life and despite the frustrations that come along with a merger or 4, I wouldn’t change it for the world. Clive Meredith is Practice Director at Wollen Michelmore.
7. It’s hard work! 6. It’s okay to have a strategy of opportunity We knew we had to grow, not to survive, that wasn’t our motivation, it was simply this: we wanted to improve
Don’t be fooled. Anyone who’s been involved with a merger will tell you it’s exhausting. The work that’s involved in bringing 2 firms together, on top of your day job is huge and needs
ML // Practice Management Supplement 2015
28
The Features
In the hot seat: financial solutions Richard Hill explains why now more than ever sound financial governance and professional management are fundamental disciplines that a successful legal business must demonstrate.
T
he legal industry has certainly had to up its game over the last few years and we are now witnessing a more competitive, consolidating and globalised market where better informed clients are in the driving seat resulting in a downward pressure on fees and with changing client expectations and consumer habits in purchasing legal services. The management of financial and business risk has become more complex in particular when dealing with financial compliance, strategy and reporting as the expectations of other stakeholders such as regulators, external lenders, insurers and new investors have become more strenuous. Compliance At present, the main focus of financial compliance is the protection of client money. The Legal Services Act introduced the new role of HOFA (Head of Finance and Administration) as a mandatory requirement for the new ownership models (Alternative Business Structures). The role was the brainchild and suggestion of Sir David Clementi during his review of legal services but the SRA changed the name to Compliance Officer for Finance and Administration (COFA) and extended the requirement for this role to all practices. The role has certainly ignited some debate and placed the spotlight on the SRA Accounts Rules, which has unquestionably raised awareness and has also confronted old paradigms with a better understanding of the regulatory requirements and also the commercial benefits. More recently, it
has been emphasised, that in reality, the detailed Accounts Rules alone are not enough to protect client money nowadays. Other factors that need to be tackled include fraud, IT security, bogus law firms, general management of finances, and people management. We have already seen the changes to the residual balances rule whereby the limit to which you need to gain the SRA’s authority to donate untraceable client funds to charity was increased to £500 in October 2014. The Reporting Accountants role could be redefined as the SRA are concerned that the prescriptive nature of the Accounts Rules result in a large number of qualified reports being filed with the SRA when in fact the issues being reported represent little real danger to client money. The chief purpose of the SRA consultation is to redefine the circumstances in which the accountant’s reports are qualified, to change the format and content of the report, and to replace the test procedures set out in rule 39 with a new rule based on the reporting accountants professional judgment. According to the consultation document, the SRA has calculated that if they were to exempt practices that held an average client account balance of less than £10,000, then a further 995 practices could be removed from the requirement to obtain and submit an accountant’s report. If the threshold was increased to £50,000, then 1,957 practices would be exempted. In its current format, it is questionable whether the SRA accountants report is fit for purpose, but completely removing a perceived barrier against
‘A rules-based system can encourage creativity (not the good kind - finding loopholes) and fosters a ‘tick-box’ mentality to compliance and ethical obligations’ ML // Practice Management Supplement 2015
non-compliance has been seen a step too far by many key stakeholders. Perhaps more far reaching is that the SRA are planning a wider review of the Accounts Rules, with a view to issuing a completely new version in April 2016. I would imagine a move away from prescriptive rules to a simplified principle based blueprint more in line with the outcome-focused regulations. A rules-based system can encourage creativity (not the good kind - finding loopholes) and fosters a ‘tick-box’ mentality to compliance and ethical obligations. Many of the rules are outdated and too fussy as a written rule and there needs to be some flexibility for accounting staff to
The Features
implement best practice. The holding and transacting of client’s money is seen as one of the biggest risks for a legal business. It is easy to see why, with the emergence of bogus law firms (454 reports to the SRA up to August last year), and sophisticated fraudsters targeting law firms, Anti-Money Laundering concerns, client account mistakenly being used as banking facility by clients, heavy regulation (with compliance officers) and the increased misuse of client money. So is there an alternative for firms holding client money? Well, the SRA may consider the idea of an escrow account. This would be similar to the Bar Council scheme (BARCO), or French CARPA model, which allows barristers to hold client money through a third-party escrow account (ringfenced account with Barclays). As a risk mitigation arrangement for the industry as a whole, it seems a viable alternative which could potentially benefit PII premiums with the strain property claims have put on the insurance market. The most logical solution would be to give solicitors the choice to opt in to an escrow account arrangement and this will be something many COFAs will contemplate if available. Therefore, COFAs and finance managers will need to keep up to speed with these developments and disseminate this information and the practical solutions, to avoid putting the COFA in the hot seat of reporting material breaches. Financial management Generally speaking, the legal industry is playing catch up with the rest of the business community. In SME legal practices, the partners now recognise the necessity for competent practice management and delegating the management of the business to skilled professionals. The finance function is at the heart of this. The requirements of statutory financial reporting, the maintenance of financial records, the preparation of the yearend statements and safeguarding against any creative tax avoidance are of course all essential. Now more than ever, firms need responsive and relevant financial information presented in the right manner to senior management to aid decision-making, react to any impending issues and to assist with the future plans of the business.
29
‘The financial role in many legal practices has been to solely report on what has happened in the past rather than to attempt to forecast financial performance and set strategic goals’ their organisation and outside it. To do this, they need to look beyond just the traditional accounting skills, as they are increasingly required to demonstrate sound business acumen, excellent communication skills, people and leadership skills, and fluency with information technology.
In the past, it is all too common for decisions to be made on a ‘gut feel’ without any helpful information to hand. A prime example of this is with billing fees and pricing policies. Some practice’s are struggling with the shift from charging by the hour to fixed fee work and often compare just the revenues of the differing pricing policies without understanding profitability. If tendering for work how do you know your margins or estimated breakeven point and submit a competitive tender that is still profitable? Finance professionals will be key to capturing, analysing and presenting the data in a simple and decipherable format to highlight the hourly cost to service the work and suggest alternative fee structures. Overall, the financial role in many legal practices has been to solely report on what has happened in the past rather than to attempt to forecast financial performance and set strategic goals. The finance function should cover a wide range of responsibilities from highlighting working capital trends to structuring performance remuneration framework, and from competition analysis to appraising investments in technology. We have also seen the emerging influence and interest that external stakeholders have in today’s legal practices. The need to demonstrate sound risk and financial management to these stakeholders has never been greater due to their vested interests in a law firm’s success (and more significantly, failure). These stakeholders can even threaten the firm’s existence whether it is by an SRA intervention, the bank refusing overdrafts or even insurers refusing PII cover. Professional development and training Finance and accounts professionals are expected to perform accounting and finance activities within the context of the business in which they operate. They are expected to influence the decisions, actions and behaviours of their colleagues within
Then there is the increased attention on compliance, which has led to greater recognition and demand for qualified legal accounting professionals. Senior management now realise the importance of demonstrating sound governance so they are left alone by regulators. Accounts staff must therefore demonstrate more than just “transactional accounting” and focus on the prevention of accounting breaches rather than just the cure, ability to design and test procedures that are robust whilst not impeding fee earning and break down the barriers between finance teams and fee earners with good communication. The ILFM’s training, qualifications and membership support is tailored to provide a career path and guidance to anyone wishing to work and progress in legal finance and practice management. We aim to provide our members with the practical and relevant skills to tackle the challenges and meet the demand for qualified accounts staff. Many of our members form an integral part in the legal account team and cashiering function, and are heavily relied on by the senior finance professionals. What does the future hold? We are likely to see a very different industry in 10 years time with new business ventures, failures and successes, and a reduced number of practices. But one thing will not change; professional business management will allow skilled legal professionals to service their clients needs and financial management will be key to the success of a legal business. Richard Hill, Chair of the ILFM (Institute of Legal Finance & Management).
ML // Practice Management Supplement 2015
Targeted Marketing Campaigns
www.charltongrant.co.uk 01765 600909 Publishing | Events | Design | PR | Marketing
Case Study
31
GOOGLE+ AND HOW IT CAN BENEFIT YOUR FIRM If you think Google+ is just another social site, you are in for a big surprise. FindLaw UK takes you through how to use Google+, highlights the features available, and provides useful tips about where to focus your efforts in Google+. Note: Google changes the look and feel of Google+ on an on-going basis, so do not be alarmed if something looks slightly different than what is provided in these instructions.
your posts and profile to be visible to more users. Followers on Google+ can see your posts directly in their G+ stream so the more followers you have enables more users to see your posts.
GOOGLE + POSTING Posting to Google+ is a way to share information with other Google+ users. Google offers a variety of different posting options so users can share information and media that best suits their needs and interests.
Users: Getting other users to add your profile to their circles can be difficult, but following the advice in this guide can make it easier for users to find your profile, and if the content resonates with that user, they may add you to their circles, thus building up your followers.
POST TYPES AVAILABLE: • Text - A text only post. Text posts can include hashtags #examplehashtag or mentions of other users +exampleuser • Photos - Photo posts can utilise pictures to enhance the post. A photo post can also include a text summary • Link - Adding a link to a post will connect the linked content to the post. This option is useful when sharing information that has already been created • Video - If the business has a video about the firm or recent activities from the firm, adding a link to the video will make the video appear in the post • Event - Businesses can create an Event Post to promote future events. The post allows users to engage with the event and even invite others to the event for additional search exposure Usage: Using Google+ can help with sharing information about your business and activities that you are involved in. There are other benefits to using Google+ that can continue to build on this authority over time and can lead to your listing, profile and SERP results to gaining more visibility in search, local search and even social search.
The easiest way to start building up followers is to post high content that other users will want to read and engage with.
GOOGLE+ ENGAGING Interacting with other users on Google+ and having others interact with your posts is referred to as ‘Engagement’. Engagement on Google+ sends signals to Google about the business and again leads to greater visibility and increased topic authority. The three types of engagement on Google+ are: • +1 • Reshare • Comment When a post receives a lot of engagement, the post can get additional exposure as a trending post or “Hot on Google” status. BUILDING FOLLOWERS Building followers on Google+ is beneficial because it allows
Mentioning other users in your posts, i.e +JimSmith will provide that user(s) a notification that they have been mentioned in a post. Using this method can make other users aware of a post you made that they may not otherwise have seen. To get additional exposure from a post, share with a relevant Google+ Community. Join Communities: Google+ Communities are groups of users that share a common interest. Sharing with a Google+ Community will allow your post to be seen by all users in that community. The benefit is that Google+ Communities can have hundreds to thousands of users, whereas an individual profile may have much less. REVIEWS Obtaining reviews on Google+ can help increase the Google+ Business listings visibility in local search but it also provides potential users with a glimpse into what their experience might be like. Reviews by users can be seen by others so if a user has many people following them, all of their followers will have visibility to their review. FindLaw UK from Thomson Reuters offers trusted law firm marketing solutions from website builds, design and content writing, to blogging services and more, helping to drive the kind of traffic you want. To request a free audit of your current website today, please contact the FindLaw UK team: Call: 020 7542 3725 Email: findlawuk.info@thomsonreuters.com Visit: findlaw.co.uk/law-firm-marketing
ML // Practice Management Supplement 2015
THE WORLD’S BEST LEGAL PRACTICES RELY ON OUR BEST PRACTICES. Whether you practise, support, create or enforce the law, Thomson Reuters delivers best-of-class legal solutions that help you work smarter, like Practical Law and Westlaw UK, as well as tools to help you manage the business of law, like Serengeti Tracker and Thomson Reuters Elite. Intelligently connect your work and your world through unrivalled content, expertise and technologies. See a better way forward at legal-solutions.co.uk