Modern Law Issue 19 by Charlton Grant

The Business of Law

August 2015 | Issue 19 | ISSN 2050-5744 Paul Bennett talks news: The Chair of the Law Society’s Small Firm Division Committee explains why personal injury practitioners need to evolve to avoid going the way of the dinosaur. Are you a new era General Counsel? Some of the UK’s largest and most high profile businesses have been exploring the best way to optimise the General Counsel. Julian Ortner reports.

Modern Law Magazine | August 2015 | Issue 19

“What is the point of spending limited marketing and business development resources to generate new leads and enquiries if the firm consistently fails to deal effectively with them?” Professor Ian Cooper

SOPHIA CANNON “Genius is equally distributed in society. The difference is the attention being paid to recognising it”

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Welcome A

s this issue of Modern Law lands on your desk, we will be deep in the throes of the summer months and hopefully, you will be on the way to feeling well rested and ready for the remainder of 2015.

In this edition, we have several perspectives from ‘outside’ the legal profession. I asked our front cover star and former Barrister turned media commentator, Sophia Cannon, for her take on how women are perceived in the legal sector and dogging the sexism ‘bows and arrows’ during her career. Sophia also told me about her work championing access to social justice and championing this through her work in the media. The full interview can be found from page 13. As well as looking at the position of the legal sector from a philosophical perspective, I also spoke to Professor Ian Cooper, the self-proclaimed business development and marketing ‘guru’. Professor Cooper and I discussed his recent survey into how law firms deal with inbound calls from potential clients. The survey revealed that most law firms fell far short of expectations when dealing with new client enquiries. He reveals some simple steps which could set your firm on the road to increasing conversion rates and profits (full coverage from page 17).

Modern Law Magazine

Engaging with other legal practitioners and business leaders should be top of the agenda for those firms wanting to stay ahead. To give you more opportunities to network and celebrate success in the legal industry, the Modern Law events portfolio has grown again. The Eclipse Proclaim Modern Law Awards return for the third year and will take place on 19th November at the Hurlingham Club in London. To view this year’s shortlist and purchase tickets, please visit http://www.modernlawawards.co.uk/. Modern Law has also launched the practice-area specific Modern Law Conveyancing Conference, which we’re holding in conjunction with the Conveyancing Association, taking place on 3rd December at Chelsea F.C., London. More details on how to book tickets to the event can be found via the website http://www.mlconveyancingevents.co.uk/, or in the Conveyancing Supplement, which we have produced alongside this issue of Modern Law. I hope you enjoy this issue and if you have any feedback or suggestions for a future issue, please get in touch with me via the details below. Happy reading!

Charlotte

Charlotte Parkinson, Group Editor, Modern Law Magazine. 01765 600909 | charlotte.parkinson@charltongrant.co.uk @modernchar

Issue 19 – August 2015 | ISSN 2050-5744

Project Director Kate McKittrick

Group Editor Charlotte Parkinson

Business Development Manager Martin Smith

Events Director Julia Todd

Production/Editorial Assistant Charlotte Lamb

Project Manager Ben Longbottom

Contact t: 01765 600909 or e: info@modernlawmagazine.com Modern Law Events: www.modernlawevents.co.uk Modern Law Awards: www.modernlawawards.co.uk All material is copyrighted both written and illustrated. Reproduction in part or whole is strictly forbidden without the written permission of the publisher. All images and information is collated from extensive research and along with advertisements is published in good faith. Although the author and publisher have made every effort to ensure that the information in this publication was correct at press time, the author and publisher do not assume and hereby disclaim any liability to any party for any loss, damage, or disruption caused by errors or omissions, whether such errors or omissions result from negligence, accident, or any other cause.

ML // August 2015

CONTENTS 03-08 Intro & THE News

07 Paul Bennett talks news

The Chair of the Law Society’s Small Firm Division Committee and Partner at Aaron and Partners LLP explains why personal injury practitioners need to evolve to avoid going the way of the dinosaur.

11-20 The INTERVIEWS 13 Interview with… Sophia Cannon

Charlotte Parkinson, Modern Law, spoke to the former Barrister turned social political consultant about ‘iceberg syndrome’ in the legal sector and accidently slipping in to a career in the media.

17 Interview with...

Professor Ian Cooper

Charlotte Parkinson, Modern Law spoke to the law firm business development and marketing ‘guru’ about his national survey showing that law firms are losing large amounts of potential business through poor telephone enquiry handling, and about his new online training project to help firms dramatically improve their conversion rates.

21-47 The views

23 Regulating in a dynamic market

Richard Moriarty, The Legal Services Board

23 Getting on with the business of law

Enid Rowlands, Chair of the SRA Board

25 How do you know what your clients want?

Catherine Bailey, Bar Marketing

25 Is it back to the future for legal

education?

Noel Inge, CILEx Law School

27 Living for today or looking to tomorrow?

Steve Arundale, NatWest/RBS

27 Out of the woods?

Andy Poole, Armstrong Watson

29 A load of PAP

Lesley Graves, Citadel Law

29 The gateway to success...

PJ Singh, Fitzalan Partners

31 Never forget the lessons learned

Colin Taylor, Willis

31 Watch and wait...

Zoe Holland, Zebra Legal Consulting

Editorial Columnists Andy Poole Legal Sector Partner Armstrong Watson

Erica Willmott Marketing Assistant Conveyancing Data Services

Julian Ortner Director Norman Broadbent

Paul Bennett Partner Aaron & Partners

Charles Christian Editor-in-Chief The Legal IT Insider

George Bull Chair of Professional Practices Group Baker Tilly Tax and Accounting Limited

Lesley Graves Managing Director Citadel Law

PJ Singh Head of Business Development Fitzalan Partners

Linsey Carroll In-house solicitor Box Legal Limited

Richard Moriarty Chief Executive The Legal Services Board

Lisa Beale Head Checkaprofessional.com

Rob Parness Costs Lawyer Burcher Jennings

Mark Montgomery Customer Strategy & Marketing Director myhomemove

Roger Quickfall Barrister Parklane Plowden Employment Team

Nicola Smith Director NKS Consulting

Steve Arundale Commercial Head of Professional Services & Financial Institutions, Sectors & Specialist Business RBS & NatWest Commercial & Private Banking

Colin Taylor Executive Director Willis

Gregory van Dyk Watson Managing Director Darren Gower Isokon Limited Marketing Director Eclipse Legal Systems part of Capita Jasvinder Jhumat plc Head of Corporate Business alldayPA Legal David Simon Chairman Jo Hodges Triton Global Head of Sales & Marketing Redbrick Solutions Derek Fitzpatrick Business Development Manager John K Dobson Clio CEO smartsearchuk.com Desmond Hudson Chairman Jonathan Simon LLB (Hons) Veyo Executive Director Willis GB

ML // August 2015

Noel Inge Managing Director CILEx Law School

Sucheet Amin Managing Director Aequitas Legal & Founder of inCase™ Zoe Holland Managing Director Zebra Legal Consulting

49-62 The Features

35 A human touch...

Jasvinder Jhumat, alldayPA Legal

35 Think about your clients...

Mark Montgomery, myhomemove

51 Are you a new era General Counsel?

37 Getting to know you...

Sucheet Amin, Aequitas Legal & inCase™

37 Floating a law firm: sink or swim?

George Bull, Baker Tilly

38 AML Compliance: plain sailing?

John K Dobson, smartsearchuk.com

53 Regional Focus: Birmingham

39 Driving efficiency...

Des Hudson, Veyo

41 Modern day rules...

David Simon, Triton Global

41 Cross-selling: how to get it right

Jo Hodges, Redbrick Solutions

Linsey Carroll, Box Legal Limited

42 New law to stop abuse: a bark with no bite?

Roger Quickfall, Parklane Plowden Employment Team

Ask Your Clients

Derek Fitzpatrick, Clio

43 Being noticed...

Lisa Beale, Checkaprofessional.com

or make do and mend?

yourself In-house?

Gregory van Dyk Watson, Isokon Limited

46 Coping with the new regime

Rob Parness, Burcher Jennings

46 The importance of instructing an

Our resident IT guru Charles Christian looks at the issue many law firms are facing today - what to do with their elderly accounts and practice management systems.

60 Alternative Business Structures:

How PI Insurers Assess The Risk Profile Of An ABS

Nicola Smith, NKS Consulting

45 Probate Software - Develop it

Birmingham City University School of Law - Transforming Birmingham’s Students.

57 The Big IT Issue: upgrade, replace

45 Spreading the word

University

43 Determining Value: 7 Questions to

As part of Modern Law’s ongoing regional focus, Charlotte Parkinson spoke to the President of the Birmingham Law Society, Mushtaq Khan about running a creative and innovative society and effectively engaging with members.

55 Regional Focus: Birmingham

42 To Name or Not to Name

Some of the UK’s largest and most high profile businesses have been exploring the best way to optimise the General Counsel (GC) role and its demands, in order to find the best candidate. But, is it time for lawyers to identify themselves as a ‘modern’ GC? Julian Ortner reports.

Jonathan Simon addresses some fundamental questions that insurers should have in mind when being asked to underwrite ABS business models.

62 5 minutes with...

Chrissie Lightfoot

62 Curtis Law Solicitors

How to grow and diversify your business with a Proclaim Practice Management system.

Interpreter or Translator early on in a case

Nik Ellis, Laird Assessors

47 On steady ground?

Erica Willmott, Conveyancing Data Services

47 A Claimants’ Guide to High Court Enforcement Group

Amir Ali, High Court Enforcement Group.

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Paul Bennett Talks News

Paul Bennett

talks news

The Chair of the Law Society’s Small Firm Division Committee and Partner at Aaron and Partners LLP explains why personal injury practitioners need to evolve to avoid going the way of the dinosaur.

he pace of change in the personal injury market is relentless. As I started to write this piece certain pieces of work lead to me focusing on three key challenges for the sector:

• Securing new clients of the type and quality required after the Legal Aid, Sentencing and Punishment of Offenders (LASPO) Act 2012 (in an SRA and MoJ compliant manner); • Customer service and comparison websites – the emerging threat?; • Mediation and its use in personal injury cases. I thought I would share some insights into each of the challenges ahead. Marketing after LASPO Firms are under severe pressure to evolve in terms of working methods, MedCo (now subject to the call for evidence review announced on 16th July 2015), referral fees, LASPO funding arrangements etc. The pace of change has been relentless. Therefore, the first question I ask my new law firm or CMC clients is always: “Are you a dinosaur?” The introduction of the referral fee ban under LASPO remains a huge challenge. We now know some of the solutions to the challenges ahead and we also know that firms who failed to adapt successfully are now dying off. Ignore the myths and the misleading claims, firms who adapt are thriving and research has shown there are less CMCs who are making more money. So some of the beasts in the personal injury wilderness have evolved. Law firm consolidators are thriving thanks to volume, slick CMCs with good processes and compliance are in demand. Starting with the basics, because

each week I speak to someone who is unaware of these, if the potential claimant makes contact themselves with your firm then payment for the marketing leading to this is not prohibited given the exemption under Section 56 (5) (c ) of LASPO. The Act is silent on the agreements that survive the prohibitions but we know however that payment on a per case basis when a third party (non-client) facilitates the introduction to a legal services provider is prohibited. The key therefore is getting clients to provide their own details to the law firm. It sounds simple but for many CMCs and law firms the urge to do too much before the client instructs the firm can appear overwhelming. CMCs have to market with this restriction in mind and it’s the law firm’s task to check – it is unfair –but adapt to it. If you are receiving introductions from third parties then you must document that relationship (under Chapter 9 of the Code of Conduct (2011)), irrespective of whether a fee is paid or not. Each week I speak to either a CMC or law firm who have failed to do this and then there is a problem with the MoJ and SRA conducting an enquiry into the relationship. The major course is family or friends being involved. This is a breach of the SRA obligations and it is worth law firms showing they are complying as it builds the SRA’s confidence in your firm and your Compliance Officer for Legal Practice (COLP). Having sat in with many good law firms as the SRA Forensic Investigators arrive, the firms that are relaxed when investigated have collected their evidence of compliance over a period of time. In practice this means being

‘Some of the beasts in the personal injury wilderness have evolved’ able to trace and evidence each step of the claimant process from accident to the claim itself. Changing the name of the referral arrangement is not enough. A “recommendation” which is really a referral fee arrangement is unlawful if simply the name changes so it is called a “recommendation”. We have seen a series of “recommendation” arrangements that when the substance of the relationship are checked are problematic.

ML // August 2015

Paul Bennett Talks News

One recent trend is defendant insurers reporting concerns to the SRA about marketing arrangements between CMCs and claimant firms. The tactics of litigation have changed and it may be unethical to report concerns without evidence but it is happening. Insurers need to adapt better as they are wasting regulators time when they do this. I have advised a number of firms who the SRA have visited on the back of insurers misunderstanding the rules. For law firms and CMCs showing how they have moved from being referral fee dinosaurs is key to the regulators letting them get on with great service and helping clients. Evidence of genuine compliance with LASPO soon resolves matters: don’t be a dinosaur! Niche – Is the service any better? You are an expert in your field? You are much, much, much better than that insurer/CMC or law firm down the road aren’t you? Comparison sites seem to be launching each week for law firms at the moment and you (and your potential clients) are about to find out if this is true. The SRA is going to release data to them as well (the SRA’ s remit being to protect consumers of course). The Modern Claims Conference debates on customer service earlier this year got me thinking – who do we give amazing service to? During one of the debates, an insurer claimed in a response to a point I made that the service expectation on insurers was far higher than for law firms. As those present will have gathered I thought he was wrong (and ever so slightly insane). However, it is good to ask: • What does set your business apart? • Why should a client buy insurance from you? • Why should a client buy legal services from you? The client’s perspective is often key to our financial success. Therefore helping prospective clients understand what we do is essential for all of us. As law firm comparison sites grow and evolve (see www.solicitor.info, www.legallybetter.com, or the recently launched www.ReviewSolicitors.co.uk created by Saleem Asif who co founded Quality Solicitors) they will influence the market. How will law firms adapt? Will CMCs be squeezed out? Perhaps insurers will no longer be able to sell their claims databases. The effects will be felt across the sector, with the only question being, how much effect will they have – a little or a lot? Everyone in the sector will need to adapt further. The sensible thing to do Taking service away from personal injury for a moment Tony Roe of Tony Roe Solicitors told me recently: “As a specialist family lawyer other firms who do not undertake family work can refer to me with confidence as their clients are safe from being poached and will be looked after by a specialist practice. I am not a rival but a trusted fellow professional.” For many of the CMCs and law firms the same is true: personal injury is their niche and they can demonstrate their expertise by experience but are their clients going to help them stand out on the range of “Trip Adviser” websites for law firms that are growing? Improving customer service is sensible. At the Conference, we all agreed on this principle but the difficult

ML // August 2015

‘I have advised a number of firms who the SRA have visited on the back of insurers misunderstanding the rules’ bit is how. So after the conference I looked at my notes of the speakers (except me) and thought – what three things will my firm do differently? Of course your answers would differ but I think the key one for me was not to assume that just because we are specialists that our service is better. Obviously, our advice should be better as specialists but the client’s service involves everyone from reception to each team member. ADR Lord Justice Jackson’s report suggested lawyers should always consider ADR (Alternative Dispute Resolution) with their clients but avoided making it compulsory. As a mediator and arbitrator the number of enquiries received has grown during the last two years as claimant and defendant advisers across the whole spectrum of civil disciplines seek to adapt to the new cost regime, the limitations of the revised CFA and DBA rules and the increased focus on ADR from the judiciary. Speaking from personal experience, the personal injury enquiry level has similarly increased, but not the number of mediations. In personal injury matters ADR seems still to be reserved for high value cases (those in excess of £200,000 damages is my experience) and most of the cases I have seen have one common factor: costs dominate the damages. The claimants solicitors fear losing, the defendant solicitors fear losing. Each side (including insurers) seem focused on limiting their financial exposure as they head towards trial. Has the sector truly embraced ADR? Not quite yet. So I am wondering : Are personal injury firms ADR’s dinosaurs? Sorry, but I suspect so. The key lesson of history is those who do not adapt to a changed environment struggle over time. Paul Bennett is a Partner in the Professional Practices Team at Aaron and Partners LLP in Manchester, Chester and Shrewsbury. Paul acts nationwide with a focus on London, the North West and Midlands for law firms and CMCs seeking specialist legal advice. He advises numerous law firms on managing people, their partnership and on practical regulatory compliance. Additionally, Paul is the current Chair of the Law Society’s Small Firm Division Committee (which helps support over 8,000 law firms), an accredited civil mediator and specialist partnership law arbitrator. Paul can be contacted on 01743 453 453 685 or via paul.bennett@aaronandpartners.com www. aaronspartnershiplaw.co.uk

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The Interviews

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Interview with... Sophia Cannon

Interview with... Sophia Cannon Charlotte Parkinson, Modern Law, spoke to the former Barrister turned social political consultant about ‘iceberg syndrome’ in the legal sector and accidently slipping in to a career in the media.

Q A

What is your current take on the position of women in the legal sector? Genius is equally distributed in society. The difference is the attention being paid to recognising it. I call it the iceberg syndrome. Accordingly, if you only see the white male talent pool leading our profession, the other 9/10, women Black, Asian and ethnic minorities (the rest), are below the radar. It’s dangerous not to know that the iceberg is there. It’s dangerous for the law. It’s dangerous for our profession and it’s dangerous for genius. Any female pupil has to dodge the sexism bow and arrows at work, whilst trying to establish a private and family castle at home. Unlike her male counterpart, who is not fighting a war of fertility and opportunity. The number of childless senior legal women makes my heart ache. 1.http://www.theguardian.com/women-inleadership/2013/jun/18/part-time-partnerslegalprofession-changing 2. http://blogs.lexisnexis.co.uk/futureoflaw/2015/05/ representation-in-the-legal-sectorwhatdo-the-latest-numbers-tell-us/ 3. http://www.legalcheek.com/2015/05/association-ofwomen-barristers-slams-unusualgarrick-club-after-11-qcsoppose-motion-to-admit-women/

Q A

Are practitioners, businesses and the government doing enough to encourage and promote equality and diversity within the sector, or could more be being done? The Garrick Club - that’s what I heard someone call the Court of Appeal last week, the Garrick Club. No. However, there are notable exceptions, namely PwC and its diversity program and initiatives to support women and the BME, LGBT communities. Whilst some law firms have implemented gender and

‘Genius is equally distributed in society. The difference is the attention being paid to recognising it’ ML // August 2015

Interview with... Sophia Cannon

diversity programs and ‘targets’ to try to boost the number of female lawyers at the top, I am concerned that such policies are too reactive rather than being innovative. Awareness is key to promoting and challenging equality and diversity within the law. However, awareness is not enough, only action is. We need to ask ourselves, what are we going to do about it? “Bravery is the missing ingredient.” 1. http://blogs.lexisnexis.co.uk/futureoflaw/2015/03/ promoting-gender-equality-isbusiness-critical/

Q A

What is your view on the debate around legal aid?

Gove was right when he identified a two-nation justice system. “While those with money can secure the finest legal provision in the world, the reality in our courts for many of our citizens is that the justice system is failing them, badly.” “Used to have access to a lawyer based on merit and need not credit and greed.” This was my global tweet that was tweeted worldwide. We, the lawyers used to guard the floodgates. However, in family law, in care, we forgot that. There were gravy trains: experts, uplifts and page counts. We need to go back and forward: back to the appropriate tests of merit and forward to using technology to keep in costs. 1. https://social.shorthand.com/UndercoverMutha/ j2mSPUqVl/legal-aid 2. http://www.theguardian.com/law/2015/jun/25/cuts-tolegal-aid-exacerbate-two-nationjustice

Q A

Do you think the rights of the general public are adequately protected and how would you change the current system/access to social justice if you could? The way forward, is for each and every citizen to have legal insurance almost as if it’s like National Insurance so that the little bit is taken out of every working person’s income to support their social rights as well as their health ones. The safety net means the general public are not supported. But out of the realms of fiction, I would say that we need to establish the employment tribunals as as important for the criminal courts,

and lower the court fees to make that happen.

Q A

Have the various changes to the regulatory environment and government reforms affected access to social justice? Criminal defence solicitors have decided not to take on any new legal aid work as from 1 July 2015, in protest about the government’s criminal legal aid policy and I agree with that. Access to proper legal advice and representation and access to justice should not depend on your income. It has long been recognised as a basic human right and necessary for a fair trial. My proposal is, that to better meet the needs of victims and the public and save public money, we need a system that is less bureaucratic and costs less to run. Inequalities threaten not just the legitimacy of the justice system, but our democracy. One of my biggest tweets is the idea that I want to live in a society, not an economy.

Q A

What are the biggest changes/ challenges you experienced during your time at the Bar and why did you decide to leave? Professional challenges were the inequalities in the clerks’ room. Whilst at Tooks Court, a report was commissioned by Dr Marie Stewart to look into issues of racism and sexism facing female and BME tenants. This report was in a left wing ‘right on’ set that acknowledged bias’, even discrimination, in clerking was an issue for black and female tenants. Private challenges were my baby twins. As a single mother, it was more expensive to send my twins to nursery than Eton. I had to work every hour God sent just to stand still. However, the twins were born very prematurely and were ill through their infancy. They were taken by ambulance, together, three days after my maternity leave ended whilst I was in the middle of a case being led, fortunately by Alex Verdan QC. Something had to give. It was my chambers’ career. I had my media training and my policy work to fall back upon.

‘Any female pupil has to dodge the sexism bow and arrows at work, whilst trying to establish a private and family castle at home’ ML // August 2015

Interview with... Sophia Cannon

‘We need to go back and forward: back to the appropriate tests of merit and forward to using technology to keep in costs’

Q A

What drew you to your career in broadcasting and the media? I was always going into political policy as my Master’s degree, even before the Bar. I slipped into TV accidentally, appearing on ITVs This Morning in 2007, although I sought advice from them, many complained to the Bar Council. Further, I had to extend my maternity leave for the welfare of the twins and I began writing when they were in bed or hospital. I had one of the first blogs in 2007 and was roundly criticised as being a maverick, so I pivoted my career. I wrote from my expertise on policy politics and social justice and the BBC, as well as the Sunday Times have picked up on my brand.

Q A

What is the highlight of your professional career to date and why? Which profession? My legal career was only 5 years call with a guideline case based upon the inherent inequity in the court between a vulnerable witness having to assert their case. The judge said I would invite urgent attention to creating a new statutory provision, which provides for representation in such circumstances analogous to the existing statutory framework governing criminal proceedings, as set out in the 1999 Act. Such a statutory provision should also provide that the costs of making available to the court an advocate should fall on public funds. I can see no distinction in policy terms between the criminal and the civil process. Logic strongly suggests that such a service should be made available to the family jurisdiction. If it is inappropriate for a litigant in person to cross-examine such a witness in the criminal jurisdiction, why not in the family jurisdiction? In my media career, it’s being described as “knowledgeable,

Sophia Cannon

eloquent yet amusing” and being plucked to start immediately with BBC Papers with serious heavyweight journalists, live, without a script after my initial training.

Q A

What is next for you?

Freelance writing for six months, and I’ve been commissioned by the Independent newspaper and the Sunday Times. Moreover, it sits very nicely with my evenings with the children and work for the BBC and ITV. It means that I can concentrate on the twins and my brand new husband. I’m finally writing the books that I’ve always wanted to write. I am looking for a new type of literary agent. The nature of the book changed due to my television personality and my new broadcast agent who is more a political and less entertainment agent, and I have decided to change the whole format. Judge Rinder is great but I’d prefer less entertainment and more refinement. So before looking for new publishers, I’m writing one and planning two more. For more information, or to contact Sophia visit: https://social.shorthand. com/UndercoverMutha Sophia can be found tweeting @ UndercoverMutha

Sophia is an English barrister of Caribbean parentage, a single mother to mixed race, mixed sex twins, who specialised in family law dedicated to child protection, having gone through the care system herself. She has appeared as a child law expert on programmes such as ITV’s This Morning, Alan Titchmarsh Show, Daybreak as well as on the BBC News Papers, Sky News and BBC Radio and LBC and appeared on ITVs Election Night as a political commentator. She has now written for the Independent and the Sunday Times outside of the law on race, childhood and culture. She’s a popular social justice commentator and barrister and is now writing about her expertise and experiences in books called Undercover Mutha - Law of Mothering and Wifey - How to Unlock Your Assets on Divorce. .

‘Whilst some law firms have implemented gender and diversity programs and ‘targets’ to try to boost the number of female lawyers at the top, I am concerned that such policies are too reactive rather than being innovative’ ML // August 2015

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Interview with... Professor Ian Cooper

Interview with... Professor Ian Cooper Charlotte Parkinson, Modern Law spoke to the law firm business development and marketing ‘guru’ about his national survey showing that law firms are losing large amounts of potential business, through poor telephone enquiry handling, and about his new online training project to help firms dramatically improve their conversion rates.

Q A

How long have you specialised in the marketing, business development and ‘soft skills’ areas for legal firms and what do you see as the biggest priority for law firms who want to generate more business? Believe it or not I have been helping law firms for almost 31 years and have been into over 900 practices of all shapes and sizes during that period. It might not seem glamorous or wildly sophisticated in this modern ‘high tech’ age, but I can tell you that converting existing leads and telephone enquiries into profitable business should be the single most important business development and marketing priority for all law firms. Let me explain the simple common sense practical logic behind this. What is the point of spending limited marketing and business development resources to generate new leads and enquiries if the firm consistently fails to deal effectively with them; fails to convert them and then actually loses potential new clients to its competitors? Let me be blunt about this. I can tell you having been into so many firms to advise and train them on this issue, that learning the techniques and strategies to convert more of their telephone enquiries into business at the right fee rates, is the quickest, cheapest and most guaranteed way of generating more business, clients, revenue and profit! It is simply astonishing that firms will spend large sums of money on marketing, in order to generate the enquiry or contact, only to squander the business winning opportunity when they get it. Can you believe that the survey I carried out, showed that over 90% of call handlers, who deal with incoming telephone enquiries from potential clients, admit to either not actively enjoying handling new business enquiries, or to not being very good at it? The study also highlighted that over 85% of firms have not given any proper formal skills training to their people, about how to deal with potential new business enquiry calls! Hardly a recipe for success!

Q A

Can you give me some more information about the Survey, how it was carried out and its main general results and findings?

254 firms were ‘mystery called’ across a differing range of legal specialisations. Performance was then measured against 19 individual criteria of call handling. Additionally, further discussions were carried out with 92 senior/managing partners of firms about their approach and strategy towards dealing with new enquiries as well as feedback from hundreds of ‘call handlers’ at all levels. Here are just a few key results and conclusions: There is an astonishing nationwide epidemic of poor call handling, leading to a huge amount of lost potential business by many firms. Generally speaking, there appears to be an overall ‘equality of inefficiency’, with many firms simply being as bad as each other. It is almost as if legal firms have got together and collectively agreed the worst and least commercially effective ways to deal with new business enquiry calls.

Professor Ian Cooper

Professor Ian Cooper is Britain’s most experienced specialist marketing, business development and skills trainer for the legal sector. He has advised over 900 legal firms of all sizes over 31 years and has helped hundreds of firms to massively increase their conversion rates. He is an international business author and speaker with 16 books published, in 13 languages and 56 countries. His latest book, the ‘Financial Times Guide To Business Development’ was shortlisted for the best management/business book of the year award and he is also the Editor of the ‘Financial Times Guide To Business Development Blog’. As a speaker, Ian is well known for his light, engaging but informative style. Last year Ian was invited to become a Visiting Professor at Henley Business School, part of the University of Reading, in recognition of his extensive work in the field of law firm marketing. For more information about his ‘in house training’ on converting telephone enquiries into profitable business or his new Online Training System, or for any other questions Ian’s contact details are: ian@ iancooper.co.uk | 0208 953 6262

ML // August 2015

Interview with... Professor Ian Cooper

‘What is the point of spending limited marketing and business development resources to generate new leads and enquiries if the firm consistently fails to deal effectively with them; fails to convert them and then actually loses potential new clients to its competitors?’ • In 39% of all the calls there was nobody immediately available. • 48% of call handlers failed to introduce themselves by name. • In over a third of all calls neither party knew who they were talking to! • In 87% there was no attempt at any rapport building or/conversation. • In 97% of all calls, the call handler did not ask the caller if they would like to go ahead or make an appointment! If any of your readers are interested to read the full report it is available free through this link: http://surveyreport. icc-increaseconversionrates.co.uk

Q A

When it comes to dealing with new business telephone enquiries, what are the key strategic things that firms must do? 1. Understand how much is at stake – Most firms haven’t done the maths to realise how financially important converting telephone enquiries is. Consider this example of a firm I have been into recently: They received 3 calls per day, asking for a simple ‘residential conveyancing quote’. Over the year, this is 750 business winning opportunities at around £1,300 each. This amounts to £975,000 worth of potential business and across their four offices, a massive £3.9 million. Even just a 10% increase in conversion rates, would have generated an extra £390,000. The same formula applies to all work areas. 2. Have the right people handling the enquiries – Most firms regard dealing with telephone enquiries and quotes, purely as a low-level administrative task, that can be handled almost by anyone. The truth is that dealing with prospective clients over the phone is a real skill and some people are simply better at this than others and will get better results. What firms need to do is ‘find their champions’. They need to look at conversion rates of those that are dealing with enquiries and let whoever gets the best results take most calls. 3. It is not just about price – There are too many ‘call handlers’, who automatically assume that if someone

ML // August 2015

rings and asks the “how much?” question, then the caller is a genetic ‘cheapskate’ only interested in getting the cheapest price. Of course, there are a few of these around, but it is a trap to assume that everyone falls into this category. The skill and the challenge for a firm is to be able to influence a caller to want them at the fee rate they want to charge. 4. Firms must provide the right training for their ‘call handlers’ – As mentioned, most firms don’t provide any training for their call handling staff. What other sector in business, would allow people without ‘conversational sales training’, who don’t really like doing it to deal with new business calls worth millions?

Q A

With the right training what sort of results are possible?

I can only answer from the experience of firms that my colleague and I have been into as specialists in this field. Let me give you some practical examples: The firm I mentioned earlier who received £3.9 million worth of enquiries per year, were getting a 35% conversion rate. This rose after our training to 75%, netting them an extra million or so! A family department in a firm were getting a 13% conversion rate from their privately paid divorce enquiries, saw their conversion rate rise to 82% after we had shown them why they were getting such low rates and gave them appropriate training. A personal injury firm who were converting 43% of their ‘good’ enquiries added an extra 25% to their conversion rate after the training. Basically, 90% of firms that we go into to give them our special simple ‘5 Step System’ benefit from at least a 10% increase in conversion rates within the first month and much more as time goes by. This is regardless of the work area and includes commercial work as well. The average high street firm, who gets to grips with this area, easily generates at least an extra £100,000 worth of new business in the year, in any work area or office they focus on.

Q A

Has the way law firms handle incoming enquiries improved over the last few years, or not and why are law firms so bad at handling enquiries? Whilst some firms have improved at this area, the vast majority have still not made the connection. They are so busy talking about various marketing activities and spending money on new websites; pay per click campaigns; online videos and social media, all to generate leads, that they forget that they need to equip their colleagues with the skills to convert them into paying clients, once the leads come in. The truth is that many solicitors and legal firms either don’t understand the issue, or don’t know that they are getting it wrong and missing out on huge chunks of business.

Q A

I hear you are planning something new to help firms with this issue. What exactly is it, that is in the pipeline? Over the years, I have continually faced the same message and challenge from firms who have heard me speak at a conference, read my material, or who I have already visited for training purposes. They all ask if there is a way to get the training and support in this area, without regular face to face training visits. For the first time, the answer to that very reasonable question is, ‘yes … coming later this year!’ After a great deal of thought, I have made what is a really big decision for me and am now pulling together all my 31 years of experience, ‘know how’ and intellectual property on this topic and making it available in a different way. We are in the preproduction phase at the moment, for what will be an Online Training System, to help firms train their teams to increase conversion rates from new enquiries. It will be a combination of ‘on demand’ presentations and personal support from me. Firms will be able to try it for free and then have it on a subscription basis, without any long term commitment. Your readers have only to contact me, for more information on this.

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Regulating in a dynamic market

he legal services market is growing and changing and as regulators, we need to be vigilant to ensure that regulation remains fit for purpose, reduced burdens where possible, and focused on necessary safeguards for the public and consumer interest. In July 2014, Justice Minister Shailesh Vara, and the then Lord Chancellor, asked legal services regulators to look for opportunities to reform regulation and allow the legal services market to flourish. In July we reported back. Firstly, we outlined progress to date on deregulation. Since the Legal Services Act 2007, each regulator has taken steps to reduce burdens for the professions, to open up the market for new providers and to ensure consumer protection is effective and proportionate. This has led, amongst other things, to the launch of over 400 ABS, bringing new capital, expertise and business models into the legal sector. It has also prompted the re-writing of rulebooks so these are now more principles-based rather than over-detailed and prescriptive. Secondly, we made proposals for changes to the Legal Services Act that will reduce burdens on practitioners and improve the efficiency of regulatory processes. We think these changes are appropriate now in light of evidence that the market changes introduced by the Legal Services Act have not been as risky as feared. The third report shares knowledge and ideas on possible alternatives to practitioners holding client money. While not all practitioners are allowed to handle client money, where they do, it is a significant source of risk and consequently attracts a significant volume of prescriptive regulation, the costs of which are ultimately passed on to consumers. Our paper does not suggest a prohibition on handling client money. Rather, it explores the scope for introducing more choice for practitioners, reduced compliance burdens and lower regulatory fees, for example, reduced compensation fund contributions. We have looked into what commercial alternatives are already available for practitioners who do not want to handle client money. Following discussions with the Financial Conduct Authority, banks and other stakeholders, we have also explored what assurances we as regulators might want if practitioners seek to use third party payment service providers instead. Finally, a paper has been produced as the result of crossregulator discussions facilitated by the Legal Services Board that articulates some of the choices in terms of legislative options beyond the Legal Services Act. It does not argue for any particular way forward, but is a source for further debate and discussion. Richard Moriarty, Chief Executive, The Legal Services Board.

Getting on with the business of law

aw is big business. It brings in billions to our UK economy, and it has established us as a centre of legal excellence. Many of our law firms want to grow their businesses, creating even more wealth and prosperity across the country, providing more services and improving access to justice.

As a regulator, we are playing our part in ensuring this happens. And more to the point, ensuring that our regulations do not get in the way. We have listened to what firms tell us: less is more when it comes to regulation; ease bureaucracy; do more for small and traditional firms. We have cut red tape - rolling back over 26 different rules in the last 18 months, making it easier for you to do business, and we have introduced extra services for small firms. Importantly, we’ve changed the Separate Business Rule, to level the playing field for all types of law firms. This change means solicitors can own or be connected to separate businesses providing non–reserved legal services. It builds on changes we made last year to open up the market to different business models and ‘onestop shop’ services. Now, all law firms can own separate businesses, allowing them to compete with alternative business structures (ABSs). In conversation with solicitors during my visits to local groups across the country this is exactly what they told me is wanted – a level playing field so that you can make decisions about what is right for your business. And it’s not just about reducing the burdens and making life easier for firms. An open and innovative market drives more competitive services, in turn increasing real choice for people and firms seeking legal services. As the first lay Chair of the SRA, with a strong background in consumer issues, I know how much this matters. Consumer protection is key and as a regulator we are here to act in the public interest. That’s why we are also focusing on promoting and maintaining professional principles through our “A Question of Trust” campaign. The professional values at the heart of any solicitor’s practice are fundamental to public confidence and trust in the quality of service law firms provide. Our campaign addresses public and professional expectations and asks what should happen when things go wrong. Across everything we do we want to make sure we are part of the solution in the drive toward more proportionate and targeted regulation, not the problem. I have an open door and am keen to hear your ideas for red tape cuts and for what more we can do to help you. Write, email or talk to me at our road-shows. I look forward to hearing from you. Enid Rowlands, Chair of the SRA Board.

ML // August 2015

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How do you know what your clients want?

aking a fresh approach to marketing needs to stem from truly understanding what you currently do (in terms of marketing, service provision and client care) in comparison to what your clients’ needs are now and what they are likely to be in the future. Measurable marketing strategies to aid differentiation The key is to really think about what services you are exceptional at offering. Determine why people buy your services and, just as important, why they don’t. Then, look at the channels by which you provide those services. Do they differ for the different areas of law? If so, which channels are best suited to those areas – joint partnerships with accountants or law firms to provide complete solutions for blue-chip organisations (or indeed on more local levels for regional businesses) or digital marketing and video surgeries for direct access clients? Successful marketing strategies will flow from the sectors and skills you have identified, adopting a differentiation approach according to the varying requirements of your target markets. Effective ways of evaluating marketing results Once you have your strategy, how do you know it’s successful? There are a whole raft of measurements you can use to track the minutiae of marketing campaigns, such as newsletter opens, advert click-throughs, website visitors, brochure downloads and social media interaction. However, what ultimately matters is the end result – increased instructions or increased work value. In order to measure this, you’ll need to have baseline figures to work from by client, by work type and by legal area. Only then can you see if a concerted campaign into the aviation sector, for example, has produced more instructions than you had previously and if those instructions are ‘advice’ or ‘action’ based and what value is attached to each. From this you can calculate your marketing return on investment. Ways of appealing to new and existing clients Give them what they want and how and when they want it! Sounds simple but it’s not! The world operates more 24/7 than it ever has – how do you measure up to that? Are you able to provide online services, video consultations, online collaborative working? Are you able to respond quickly to clients on the other side of the globe or indeed those who work irregular hours just around the corner? How do you know what they want? The answer is marketing research fuelling client service programmes all tied in to the operational aims of chambers! To support your marketing planning processes, you might want to download our free guides to differentiation and client service for inspirational ideas and advice. Catherine Bailey is Managing Director of Bar Marketing, specialists in marketing strategy and operations for chambers. www.barmarketing.co.uk

Is it back to the future for legal education?

he legal world has finally reawoken to work based learning! For many years, the way to qualify as a solicitor was through what was known as an ‘articled clerkship’, whereby one worked in a legal office and sat the Law Society’s exams.

With the cost of full-time legal education costing an eye-watering £27,000 in tuition fees, with more to pay for living expenses, attention has rightly been focused on training routes that do not require three years (or more) of class room based teaching. In other words, it is back to the future. CILEx has long championed the ‘earn and learn’ route, which is now becoming a popular mantra in legal education more generally. The most obvious benefit of the ‘earn and learn’ route is economic. For students, it helps them avoid the millstone of debt, but there are other, less obvious benefits too. Employers can develop a talent strategy to attract employees at an earlier stage of their career, for example, able school leavers who might otherwise have gone to university. In turn, those school leavers can experience legal practice and decide if it is the right career choice for them, without first committing to a law degree, the LPC and then the potential disappointment of not securing a training contract. Perhaps the most obvious example of this ‘back to the future’ work based learning approach is apprenticeships. For employers who have traditionally recruited from the pool of university and LPC graduates, the relevance of an apprenticeship to a legal service business is not always immediately apparent. In effect, apprenticeships enable an individual to learn in a specialist area of legal practice on the job. As well as having their competence in legal practice assessed, apprentices also accumulate units towards CILEx’s professional qualification, which they can count towards becoming a Chartered Legal Executive. This September, CILEx Law School will enrol over 150 paralegal apprentices working in law firms and increasingly, local authorities. To date the results have been impressive: with a 93% completion rate, many employers who first recruited when legal apprenticeships were launched in 2013 are recruiting again. This is part of the trend for more diverse routes into a legal career, and one in which CILEx can rightly claim to be the pioneer. Noel Inge, Managing Director, CILEx Law School.

ML // August 2015

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Living for today or looking Out of the woods? Benchmarking data suggests that revenue growth has to tomorrow? been supported by the recruitment of additional staff

here is no arguing that many legal firms are enjoying enhanced business levels influenced by an improving economic climate. Indeed the NatWest benchmarking report detailed that many firms were improving performance in terms of revenue growth and PEP. Its not for me to criticise, but I do have some concerns that firms have still to address fundamental flawes in their operational model that were readily accepted during the recession, but have now been masked by the upturn in business levels and new matter starts. The operational challenges I refer to sit within business efficiency, process management, partner performance and of course succession. Many firms say they are simply too busy to divert their attention from their priorities of servicing the work they have in front of them. A number have also advised me that they do not have the skill set they need to tackle these issues and for now the recruitment of additional legal capacity is their number one objective. The habit of firms willing to layer in new overhead costs without truly understanding the performance and efficiency of existing fee earners continues to surprise me. Surely the challenge must be to make existing resource more productive by employing process management, performance management and new technology. Whilst the trading climate is positive now, that wont be the case for ever. And depending on which economist you speak to, the current positive cycle is likely to expire sometime between 2018 and 2020. As we stand the only viable response will be for many firms to re-size their workforce and we know that this is both financially and emotionally expensive. For me, the quote “if you fail to plan then plan to fail” carries significant meaning. Leaders of law firms must not only manage the well reported challenges of delivering legal services but they must also prepare their firms for the economic challenges that lie ahead. In doing so this will undoubtedly force them to examine their operational model and drive out some of the required areas of performance improvement. Of course operational improvement does not come without investment but surely the time to make that investment is when business levels and profits are strong - i.e now. The other obvious thing to say is that Bank’s are carrying positive lending appetite. The cost of investment can be funded and debt repayments geared in line with cost and profit benefits delivered against improved business efficiency.

and as such profit margin remains flat – is that your experience?

ot necessarily. If you were to ask a legal aid firm, a smaller scale personal injury firm, or even an employment firm that question, then they may not agree with the assumption that revenue has grown or that profit margins remain static.

In fact, they would probably jump at that if they had the chance. In reality, I think it is very much a polarised position. Firms in certain sectors are not performing so well because of political, regulatory and market pressures. Those in other sectors such as corporate, commercial, private client and, to a certain extent, litigation, are performing well. Residential conveyancing appears to have had a bounce back in 2013 and early 2014, but activity has since reduced. I think it is therefore more accurate to say that different work types have been impacted in different ways. The averages may show revenue growth and flat profit margins but they hide the real position – revenues have grown profitably for certain work types but average profit margins are flat due to lower fee income and profits in other work types. It is safe to say that we’re not out of the woods yet and even for those firms benefitting from an upturn in performance, the risk of over-trading remains. On the whole, we are seeing a better picture for lawyers and that should be applauded. The order of the day, however, needs to be for continued appropriate management within the legal sector. Andy Poole is the Legal Sector Partner at Armstrong Watson, specialising exclusively in advising law firms. The Law Society has exclusively endorsed Armstrong Watson for the provision of accountancy services to law firms throughout the whole of the North of England.

In summary, legal firms can not simply live for today, they must look forward and consider the implications of the future and develop accordingly. Steve Arundale, Head of Professional Services, NatWest/RBS.

Noel Inge, Managing Director, CILEx Law School.

ML // August 2015

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The Views

A load of PAP Poor financial performance Accounting errors Post LASPO Apocalypse

ccording to accepted research and a recent Harvard Business Review report, the failure rate for mergers and acquisitions (M&A) sits between 70-90%. An incredibly high figure, and yet the frantic activity the legal sector has witnessed illustrates a sector undeterred. None more so than personal injury (PI) law firms, the UK market attracting significant attention from private equity both home and away. The reasons for M&A failure are not understood particularly well; otherwise the success rate would have increased. The Harvard Report suggests that the impediments to success are unrealistic expectations, (over) confidence, promoters and external advice, distrust and group dynamics. In the field of PI M&A a new impediment to success may be “aggressive accounting” in respect of WIP valuation, i.e. overstating WIP value and “accounting errors” in cash flow statements and “poor cash flow” i.e. not settling claims and billing efficiently. The recent headlines in The Law Society Gazette describe a law firm’s accounting errors in detail. References to aggressively growing WIP in recent years and not being as successful at converting WIP into cash as the market previously believed has brought all of the WIP accounting into question. This is, I predict, the tip of the iceberg as the M&A spending spree in the wider PI market melts down. Those who have focused on aggressive acquisition may now find themselves considering the accuracy of their due diligence and their pre and post integration strategy. To “bulk buy” PI cases you must have a tightly run ship in terms of your people, process and WIP accounting methodology. Without that, opening the doors to the scramble of incumbent others looking to be purchased during a LASPO Apocalypse means your business is growing with the stability of a house of cards. We are advising in several PI deals that have not turned out as expected to ensure WIP realisations are met. Questions are being asked of the quality of the advice given at the time the deal was done. Over trading is hitting its peak in industrial disease and clinical negligence and investors, bankers and law firms are still waiting for the profit to come in. WIP and capital lock up, and poor cash flow now presents a significant challenge to overtrading businesses and the corporate advisers who have feasted on the acquisition hungry deal machine may now have their advice analysed to see if it was indeed a load of pap.

The gateway to success...

hen we think of the legal profession as selling something, let alone cross-selling something, we tend to view it as a ‘no go’ zone. But what if we looked at it differently? Let’s look at the lifetime relationship. The loyalty that many clients show towards their solicitor means that throughout a client’s life there are many services that can be offered. Why view a lifetime relationship, fulfilling many shared needs, any differently to cross-selling? The values of quality, reputation and integrity are bywords for the most respected law firms in the country. With that may come dated insular views, which prevent contemplating the possibility of offering related services. While this one-track formula has brought success historically, the challenge might be ‘why fix something if it’s not broken?’ However the market is changing, and firms are opening the gateways to new commercial prospects. Customers are changing too: lifetime value, one-stop shop and ease of access are all in the customer focus nowadays. Cross-selling is normally a term associated with businesses such as retail, insurance and telecommunications. Now information is more accessible than ever, customers are savvy about what to look out for, what to avoid and what price to pay. The popularity of price comparison breeds competition, so as some law firms have lowered their prices, they have begun to offer additional services to recoup the losses. To embrace this new trend, firms will need to be able to sell, utilise outsourcing companies or set up ‘new business’ teams, however if cross-selling proves to be successful then the rewards can turn out to be lucrative very quickly. A prime example can be found in conveyancing. A simple purchase case has the potential to turn into a transaction with a deed of trust, a creation of a will and an additional HomeBuyer Survey added in for good measure. Here is an opportunity to offer clients a ‘one stop shop’ for their house move, that could save them time and money whilst also building relationships. Fitzalan Partners can offer conveyancing solicitors the opportunity to partner with brands that can offer all these services (such as surveys), that a customer would need, in an up-to-date, online comparison formula, thus providing a one stop shop and reinforcing the value for the client. What a service: customer focused, value for money, all needs catered for and a smooth move. Now isn’t that really what this cross selling is all about? PJ Singh, Head of Business Development, Fitzalan Partners www.fitzalanpartners.co.uk

Lesley Graves, Managing Director, Citadel Law.

ML // August 2015

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The Views

Never forget the lessons learned

t is fair to say that some law firms have had a rough ride when it comes to their professional indemnity insurance. After many years of significant claims against the profession, the number of new notifications to insurers has significantly reduced. New insurers have entered the PII market for solicitors and many firms have now been able to find a more secure home in the form of rated insurers rather than the unrated insurers popularly sought out for financial reasons. The SRA’s proposals for changes to the Minimum terms and PII requirements were rightfully postponed last year (although there are murmurings suggesting the subject is still on the agenda). With fee incomes generally on the rise, most firms are starting to enjoy the respite from what have been a very difficult set of circumstances. It is important, however, as we get busier, to remember the lessons of the recent past and ensure we apply those lessons with renewed vigour. Although there are many lessons, the following three points are key: 1.

Although the SRA are removing the need for CPD, firms still need to reinvigorate the training of partners and staff, particularly in risk matters – this does not need to be turgid: we certainly provide highly engaging and widely endorsed training sessions and having a savvy workforce is the first line of defence. 2. Ensure your firm is not weighed down with excessive PII costs – there are currently opportunities available to improve the bottom line without having to acquire new clients. 3. Consider mergers and acquisitions with great care. Using a specialist broker can save time, money and unnecessary headaches (and heartaches). And lastly, but by no means least, is the ever increasing threat of Cybercrime. Law firms will no doubt remain a target of choice for cyber criminals due to the frequent and sizeable transfers of monies: a bull’s-eye for attacks. Additionally, law firms hold high value, commercially sensitive and individual net-worth sensitive data which is equally attractive to criminals. Make sure you review you external perimeter protection and processes and invest in training for everyone that has access to a telephone or a computer.

Watch and wait...

ichael Gove’s appointment as Justice Secretary and Lord Chancellor has attracted unprecedented political and legal commentary. His job is to carry on the reform programme of his predecessors Chris Grayling (not a Lawyer either) and Kenneth Clark. On the agenda are the criminal justice system, Criminal and Civil Legal Aid, rehabilitation and youth justice, all in a time of drastically reduced departmental budgets. The Lord Chancellor’s early comments necessarily profess his commitment to the rule of law, an independent bar, legal aid and an adversarial legal system. He has expressed his appreciation of the roles of the Judiciary, court staff and lawyers. His overriding objective is said to be a One Nation Justice System. An early suggestion is for wealthy law firms to commit to more pro-bono offerings or to pay a levy. Above all, his task is to bring about the abolition of the Human Rights Act and its replacement with a British Bill of Rights, a process characterised as “the greatest threat to liberty in Britain since World War 2”. This will be no mean task. Already the realisation that it’s complicated, surely understood all along - has displaced the election rhetoric promising a quick fix. In his first job in the coalition government Michael Gove “took on the teachers”, as the Daily Mail put it, but was moved over the perceived damage to Tory election prospects of his “toxic” relations with teachers’ leaders who reported a climate of bullying fear and intimidation. In his next short job he took on the speaker of the House of Commons but failed to unseat him. He was thought not to have been a good chief whip. It is reasonable to ask if he has the ability to deliver such a wide programme. Words are words and deeds are deeds; at the outset we are long on the former. So we have mostly questions. Will the changes respect the Rule of Law and the role of lawyers? Will the non-lawyer be willing to take the advice of the legal professionals? Will it get (more) toxic, for example on Criminal Justice? We will have to wait and see – or better, wait and watch - carefully. Zoe Holland, Managing Director, Zebra Legal Consulting.

Colin Taylor, Executive Director at Willis.

ML // August 2015

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The Views

A human touch... Is a combination of on and offline service the way to go to deliver exceptional customer service and are many law firms online offerings still sadly lacking?

t the Tech Crunch Disrupt Conference in New York earlier this year, a tech start up demonstrated the future of customer services with a mobile app using artificial Intelligence. At Cannes Lions Conference in June, Sir Tim Berners-Lee gave a presentation on artificial intelligence being just 15 years away. We accept its good business sense to ‘work smart’ and use technology (online or on mobile) when suitable, but where many go awry, and not just in law, is using online as a way to avoid the customer rather than deal with the customer. When should you use an online interactive video? When will only a highly trained customer care person be able to manage the situation? When will a person reassuring the customer they are important and taking a message be the right approach? Interestingly, public patience levels with ‘machines’ has already started to decrease - 88% now hang up on voicemails and automated recordings. That translates to potentially 88% of customers that are perpetually frustrated and certainly not loyal to your business. Customer services is one department where a human being is needed at some point to demonstrate what technology - even 15 years from now – will not replace; a genuinely sympathetic person providing reassurance and demonstrating with every syllable that the customer matters. If you don’t get your online solution right, it adds fuel to the fire of what are often already challenging situations. Don’t fall into the trap of thinking online customer services is easy - it’s not as you have to anticipate every kind of nuanced response a customer could have, and create a communication that answers them all. It’s only achievable with commitment, time, experience and resource. Until you master the online/ tech approach yourself, ensure– at the very least – you rely on highly trained specialists to represent your business superbly and advise you on how to manage customers rather than avoid them. In a nutshell, rely on technology and online solutions only when they are working well, and always make sure you create customer service experiences by humans, for humans. Jasvinder Jhumat, Head of Corporate Business, alldayPA Legal.

Think about your clients...

ny attempt to deliver exceptional customer service in the online era still has to start with what customers want and, in many ways, all the evidence points to this not having changed a great deal over the years. Customers still want to be provided with a personal, trusted service - especially in the legal sector. They want to be cared for and valued and they don’t want their time wasted. What’s more debatable is the best way to meet these customer needs. Much of the technological innovation in the legal market over recent years has been driven by efficiency for the firms themselves rather than a focus on what customers are asking for. This may explain David Grossman’s view, expressed in Issue 18 of Modern Law, that many law firms’ online offerings are still sadly lacking. While the core of what customers want hasn’t changed, how they expect this to be delivered most certainly has. Encouragingly, some law firms are now taking the next steps to adopt tools such as co-browsing, video content and video calls, which combine technology with the potential for a truly personal online service. They are also looking at innovative ways to present the information that clients need so they can fully understand all aspects of their transaction. Customer expectations of online service in the legal sector have nothing to do with the legal sector. These expectations are shaped by Amazon, government, online retailers, insurers and a raft of other sectors who have reshaped their service models more quickly than our sector. Online service now means ‘mobile first’ (which includes tablets) and expectations of transparency which are shaped by the ability to track a parcel from depot to doorstep. Online service also means thinking about information as ‘content’ - even legal advice can be delivered in highly visual, simple to read and easy to digest chunks of information. As hard as it is for many lawyers to hear, if your client doesn’t understand it, you’re not explaining it clearly enough and this applies to online too. The legal sector should look at how great service is being delivered in other sectors and learn from this. The future of legal services is undoubtedly one which combines great on and offline service and, with very few exceptions, this is what customers will increasingly demand. Mark Montgomery, Customer Strategy and Marketing Director, myhomemove.

ML // August 2015

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The Views

Getting to know you... Is a combination of on and offline service the way to go to deliver exceptional customer service and are many law firms online offerings still sadly lacking?

ustomers are not the same from person to person. They have different needs and expectations, which depend on a number of factors including age; intellect; previous experiences; stories from friends and family and; their gut feeling.

We can group customers to narrow the variances but the starting point is to “know your customer”. I’m not talking about their personal details. I’m talking about their interests; hobbies; magazines they read, the TV they watch and so on. Whilst it is important when getting to know your customer what age bracket they fall into; what their marital status is likely to be; whether they are a homeowner; etc. it is just as important to know what interests them. By building an “avatar” representing a particular group of customers, we can better understand what their needs and requirements are from our businesses and how we can deliver exceptional customer service. Once we have built our “avatars” we can then ask specific questions, such as whether they would suit an online service. In my legal practice, we have a number of “avatars” for different services. In fact, we’ve gone a step further and given our avatars names. It makes them real but helps us to [metaphorically] ask them a question and get as accurate a response as possible. Of course, surveying our existing client base for each service is very valuable in creating our avatars as well. In all of our avatars, an online service, more specifically a mobile app to help communication, was a requirement for exceptional customer service. In some of our avatars, especially the ones aged under-30, it was essential to our service offering. Offline didn’t even come into it as they needed information that was fast and convenient. There is an element of offline communication that will always be necessary. Seeing your client face to face has its value in certain cases and they will work effectively in conjunction with online. Online is becoming more practical and convenient for our customers. Life is busy for them and online creates a platform where they can receive our service efficiently. It goes further and creates a unique service, adding value to the experience. Legal firms are aware that this is an area to focus on. The challenge for firms is that customers want this online service today, not tomorrow. Sucheet Amin, Managing Director, Aequitas Legal & Founder of inCase™.

Floating a law firm: sink or swim? In early June, Gateley became the first UK public law firm when it floated on the London Stock Exchange. Are we likely to see more of this in the legal sector and, if so, why?

ill we see more law firms listing in the UK? Almost certainly. Will many of them be traditional law firms? Probably not but I am happy to be proved wrong.

The recent Initial Public Offering of full-service English law firm Gateley and its admission to AIM mark another significant step in the evolution of alternative business structures (ABSs) in England and Wales. While Gateley is the first UK law firm to achieve a public listing, it is not the world’s first listed law firm. That accolade belongs to Slater & Gordon, the Australian consumer law firm, which listed on the Australian Stock Exchange in May 2007. There have been others. Again in Australia, consolidator Integrated Legal Holdings listed in August 2007, going into voluntary administration in December 2014. Compensation firm Shine Lawyers listed on the Australian Stock Exchange in May 2013. Once the regulatory regime for law firms in a particular jurisdiction is relaxed, it’s only a matter of time before law firms turn to the capital markets to raise money to fund growth or acquisitions. Investors may also be prepared to see some of their funds passing direct to departing partners who will leave on agreed timescales. Flotation is not right for all firms or business models. It is most suited to consumer law businesses, which are by their very nature readily scalable, relying on smart systems, high leverage and little or no partner input to client matters. Hub-and-spoke service or outsourcing models also lend themselves to this. For full-service law firms, listing brings further challenges. For example, lower leverage and a greater reliance on contact between partners and clients means that care must be taken to avoid stalling the partner succession by creating a “marzipan layer” of individuals who would have become partners in the old firm but stand little chance (even with carefully drafted long-term incentive plans and share option schemes) of ever acquiring a measurable stake in the company. The consequence of this is that, by the time senior equity partners leave (typically three-five years after the IPO) the firm may have been hollowed out as senior employees leave to pursue their careers elsewhere. That in turn raises difficult questions for the investors. George Bull, Partner in Professional Services Group, Baker Tilly.

ML // August 2015

The Views

AML Compliance: plain sailing?

When and why should I change from paper documents to electronic verification for AML Compliance?

The quick and simple answer is probably when you consistently recruit 10 or more new clients per month. There are four primary considerations when changing: cost, convenience, risk and full compliance. Like some, you may consider paper verification is free. You have the staff anyway so it doesn’t cost you anything, an interesting viewpoint! If you are recruiting ten or more clients per month, you are likely to consume at least one person chasing Partners for information, chasing clients for documents, attempting to check Sanctions and PEPs and investigating any matches, photocopying, archiving all relevant materials and returning client documents via secure post or carrier. All of a sudden, it sounds more like £15,000 to £20,000 per year minimum, a far cry from free. New clients having to produce documents or certified copies to prove their identity is an irritating and costly inconvenience when more secure electronic alternatives takes less than 3 seconds to process. Processing ID documents is not what you would expect from a firm that has arrived in the 21st century and it’s certainly not

convenient or cost effective. The risk of forged identities only exists with paper documents. Interestingly, all recorded fraud cases since AML regulations were introduced have involved the use of client documents. It is very difficult to create a fraudulent electronic credit footprint and if possible, it would take at least three years to be recognised by the three Credit Reference Agencies, hence the Fraudsters have little or no interest attempting this route. The final challenge is complete compliance; checking Sanctions and PEPs is time consuming and costly using a paper-based system and monitoring regular changes to Sanctions and PEPs is impossible. Many still choose to rely on that old adage, “our clients are not the type of people that would be on a Sanction or PEP list and I know most of them anyway”. Some Banks and Financial Institutions have found it very costly to ignore or short cut this aspect of AML Compliance. With fully compliant AML solutions starting from as little as £600 per annum why would anyone want to take the risk of “paying lip service” to AML Compliance with a half-baked document based solution? John K Dobson, CEO, smartsearchuk.com

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The Views

Driving efficiency... Is a combination of on and offline service the way to go to deliver exceptional customer service and are many law firms online offerings still sadly lacking?

he proliferation of technology solutions, the ‘digital by default’ driven by the government and the expectations of clients to be able to action legal services immediately, as they do with the rest of their lives, is certainly leading to a new online era in the legal profession. The legal sector is proud of its traditional heritage but the technological revolution has not infiltrated all areas of the industry and many still operate antiquated practices that don’t resonate with clients.

service. In a highly competitive environment, customer service is increasingly key for attracting new customers and retaining existing ones. An online offering also gives clients the choice of how and when they can communicate. By moving services into one place in the cloud, it makes communication much easier. This is exactly what the Law Society has done for the conveyancing market with its IT solutions partner Mastek UK, by creating its new portal, Veyo. Veyo brings together electronically all the processes, checks and documentation prepared and undertaken by solicitors and licensed conveyancers in the sale and purchase of residential property. It provides home-movers with a place to connect with their solicitors and receive secure, automatic notifications of updates from the legal parties involved.

Banking and insurance are examples of markets that have modernised by providing online services for a variety of reasons but primarily to drive efficiencies. Likewise, bringing conveyancing and legal services online will save time as clients and lawyers aren’t spending time chasing one another. Time on each case reduces and therefore so does the cost of the resource needed for each case. Additionally making operations paperless can help save on stationary and postal costs.

I truly believe the future of the legal profession will increasingly incorporate online activity to enhance customer service but of course, it cannot wholly be online, especially when legal requirements for wet signatures still exist in many of the legal processes such as conveyancing. We’re moving towards a future where people are working smarter and utilising the available technologies. However, it will only be through mass adoption of online services that the legal and conveyancing profession can transform its image as providing outdated services, drive more financial time-saving and financial efficiencies as well as improve client satisfaction.

An equally important reason to adopt the online world is to help lawyers and solicitors deliver exceptional customer

Des Hudson, Chairman, Veyo.

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The Views

Modern day rules... The SRA recently announced that they will allow solicitors and law firms to own other businesses that are not subject to legal service regulation. The decision was opposed by the Law Society and the Junior Lawyers Division. Do you agree with the revised regulation?

have just returned from a conference at which one of the topics for a panel discussion was: what constitutes a profession? This entailed a debate about whether professionalism was something which was defined by rules and structures or whether (the modern view) it is delineated by an ethic of professional service. One person asked, rhetorically, why the FCA spends so much time trying to persuade businesses in the financial sector to treat the customer fairly when that should be a natural concomitant of being a professional. For years, The Law Society and then the SRA spent enormous effort seeking to spell out and enforce a rulebased distinction for the legal profession- something to enable lawyers to identify themselves as members of a privileged/superior body, namely a profession - by definition closely bounded by rules as to admission, conduct and branding, (to let the outsiders know that this was a profession set apart from mere commerce). The separate business rule, as it was known, was a prime example of this form of professional apartheid. For years, it was a rigid mantra of the regulators that a law firm (or even a bunch of lawyers) were to be barred from actually owning a business providing services other than legal ones. There were two justifications for this: 1. (stated) that there was a danger that the public might be confused and believe the other business to be regulated by the Law Society/SRA when in fact it was not; and 2. (unstated) that these rules were cast at a time when being a lawyer in private practice was perceived to be a licence to print money, so why should any of these fortunate beings want to get into other business ventures outside the rigid but protected confines of the legal world? I encountered the separate business rule at first hand when my partners and I were looking at the opportunities promised by the Legal Services Act and sought to acquire complementary businesses to form an ABS ultimately. I remember telling someone from the SRA about the fact that I had a shareholding in one such business, to be met with an accusatory response of “don’t you know about the separate business rule?” So, I am enthusiastic about the abolition of this silly and out-dated rule. I am delighted that the SRA has finally been persuaded that this throwback to Victorian times should finally be consigned to the history books. David Simon, Chairman, Triton Global.

Cross-selling: how to get it right

hilst many lawyers may shy away from ‘selling’ to potential new clients, there seems to be a much greater level of acceptance that cross selling is part of providing a good service to the client and in developing the relationship. The level of success in cross selling though is variable to say the least. A 2007 survey by BTI Consulting Group found that only 4% described their firm as ‘highly effective’ at cross selling, whilst a massive 77% of heads of marketing in 120 top US law firms reported that their firms were ‘ineffective’. Large consumer brands such as Saga and Co-Op seem much more adept at cross selling having both moved successfully into the legal arena. What can traditional law firms learn from their approach? 1. Strategy A consistent approach is essential and should be led by a cohesive strategy that incorporates cross selling along with new business and has clear KPI’s. A plan should utilise multiple communication channels, across a range of platforms. 2. Data Having client data that is easily accessible, shared across the firm and can be easily manipulated for marketing campaigns makes cross selling so much easier. Being able to run a report showing clients who haven’t updated their Will for 12 months or more means that you can ensure you make contact at the appropriate time with something that will genuinely be of interest to your client. 3. Internal processes Fee earners can feel nervous about passing a client they have built a good relationship with over to another department. Procedures should be agreed across all departments regarding when it is appropriate to pass a client to another department, for the referring solicitor to be kept up to date on other work being carried out and to ensure the same client is not receiving simultaneous, or worse, conflicting communications from different departments. 4. Technology Many of the potential hazards mentioned above can be mitigated by a good case management system. All fee earners should be able to look at a client record and see what other work is in progress for that client, view communications and file notes and also report on the value of that clients business across the whole firm. A good case management system also actively assists in cross selling - for example many of our clients have a step on their conveyancing workflow where they set an appointment to update the clients Will. Cross selling doesn’t have to be complicated or difficult, don’t be afraid to tell your clients about the other services you offer, set a clear strategy and go for it, what’s the worst that can happen? Jo Hodges, Director of Sales and Marketing, Redbrick Soluitions. www.redbricksolutions.co.uk

ML // August 2015

The Views

To Name or not to Name

rranging funding for your client at the outset of a case is one of the most important parts of a Personal Injury lawyer’s job. Top of that list, is a fully compliant Conditional Fee Agreement, but as the following case law may suggest, naming the defendant within the agreement may open you up to challenges to your CFA.

Law v Liverpool City Council [2005] EWHC 90020 (Costs) The correct defendant was Berrybridge Housing Association but the CFA in question named only Liverpool City Council. The Court held that there was in fact still a valid retainer, but that the CFA itself was ineffective and therefore only base costs and no success fee could be recovered. Brierley v Prescott [2006] EWHC 90062 (Costs) The Defendant was named as ‘Hertz UK Limited Car Hire’, when in fact it should have been the driver of the vehicle, Mr Prescott. The Court in this case held that the intention of the parties was obvious, in that a claim for damages was to be made for personal injury suffered on a specific date, which was being handled by Hertz. The Judge held that the CFA was binding in this instance and therefore costs could be recovered, including a success fee. Hailey v Assurance Mutuelle Des Motards SCCO: CCD 1405291 The accident in this case happened in France. Under French law, the CFA should have named the insurance company rather than the Defendant. The Court in this instance held that if the wrong defendant was named in a Conditional Fee Agreement then there was no valid retainer and thus the indemnity principle meant that no costs could be recovered. Brookes v DC Leisure Management Ltd and Technogym UK Ltd [2013] EW Misc 17 (CC) Exeter County The CFA here named the Defendant as Exeter City Council, when in fact the Defendant should have been DC Leisure Management Ltd and Technogym UK Ltd. The court upheld a previous decision and ruled that no costs would be recovered. The court pointed out that it was unnecessary to name any defendant at all, saying:“Although the statutory requirement is that the CFA must be in writing, it does not have to identify the Defendant.” These varying decisions may leave lawyers confused as to the Court’s stance in relation to the CFA. It seems that the most prudent way to deal with CFAs is not to name the Defendant at all, but include the accident date so that the specific proceedings can at least be identified. Linsey Carroll, in-house solicitor, Box Legal Limited.

New law to stop abuse: a bark with no bite?

n recent years there has been increasing public concern with respect to zero hours contracts and their abuse by employers. The concern in government surrounded exclusivity clauses in zero hours contracts by which workers were prevented from working for other employers. On 26 May 2015 exclusivity clauses in some zero hours contracts became unenforceable. Sections 27A(1) and (2) of the Employment Rights Act 1996 (ERA) define a ‘zero hours contract’ as a contract under which a worker undertakes to work for the employer when asked to do so and under which there is no entitlement to be asked to do so. Any other so-called ‘zero hours contract’ such as one under which a worker is entitled to refuse work if offered does not appear to be covered by the statutory definition. The change in the law is that, in respect of a zero hours contract as defined by the ERA, an exclusivity clause is unenforceable. Section 27A(3) prevents employers from stopping individuals on specified types of zero hours contracts from working elsewhere or from doing so without permission. The practical effect of the new law appears to be very limited. An employer frustrated that a worker is working elsewhere may simply decide to offer no more work to that individual and, currently, there is nothing the individual can do about it. An employer not wanting to be caught by the prohibition on exclusivity clauses may simply contract to offer a minimum of say 1 hour of work a year to the individual. Such a contract will not be a zero hours contract as defined as there will be a contractual obligation to provide a minimum amount of work. Alternatively an employer may insert a clause providing that the worker is not obliged to accept the work offered. The government intends to introduce the Zero Hours Workers (Exclusivity Terms) Regulations 2015, which propose to extend the ban on exclusivity clauses beyond zero hours contracts as defined and to create a new protection from detriment for zero hours workers who take jobs elsewhere. Workers will be permitted to make a complaint to an employment tribunal which, if upheld, will entitle them to an award of compensation. The government has also said it will encourage business representatives and unions to develop codes of practice on the fair use of zero hours contracts. The changes that came into force on 26 May 2015 are just the first of a number planned for the future to mitigate the adverse effects of zero hours contracts on workers. Whether they will have the desired effect remains to be seen. Roger Quickfall, Barrister and member of Parklane Plowden Employment Team.

ML // August 2015

The Views

Determining Value: 7 Questions to Ask Your Clients

ong decried as a holdover from a bygone era, the billable hour has become a wedge between law firms and clients looking for a clear declaration of value from legal services pricing. Driven by client desire for change and increasing competition in the legal sector, more firms are moving away from the arbitrary billable hour and towards different pricing models that better reflect the value of services being offered. So how is a solicitor able to define something as arbitrary as ‘value’ for each individual client? It should start with a conversation and seven simple questions: • Do you have a specific deadline for the work? • Do you require cost certainty? • Do you require a service guarantee? • What results are you expecting? • Do you require unlimited access to our firm’s solicitors and staff? • Do you require special payment terms? • What are your strategic objectives? How can we help you attain these? The beauty of this conversation is that each client will value each of these benefits differently depending on their needs - allowing you to determine how to tailor your services pricing. Some clients are interested only in price, whereas others are interested in the value your firm can provide. Many clients, once they think about it, are more interested in hiring the law firm that provides them with the highest net value rather than the lowest fees. These clients offer the highest realisation, profitability, and ultimately retain the highest satisfaction for services rendered. Many solicitors assume that alternative billing arrangements are only for basic legal matters such as will writing, business entity organisation, or an uncontested court case. But these types of arrangements can actually benefit solicitors who specialise in many different areas of law, and the payoff can be satisfied clients as well as healthy law firm realisation rates. Before law firms consider pricing options and alternative billing, they ensure that their prices reflect the value they are providing. Today’s law firms face many challenges, including shrinking profit margins and tight budgets. Hourly fees will likely never disappear and there’s a learning curve when it comes to putting a price on value and adapting to alternative billing structures, but creative fee arrangements will continue to grow and become a larger part of the legal landscape as solicitors and clients become more comfortable with them. Strive to put your clients’ success first, and when your clients reach their strategic or profit goals, law firm profitability is sure to follow.

Being noticed... Is a combination of on and offline service the way to go to deliver exceptional customer service and are many law firms online offerings still sadly lacking?

he real world is increasingly influenced and making decisions via social media, online presence and comments. It is often assumed that this is only being used by young people, who are not what a firm is targeting, or that the type of client we look to attract is ‘high-net-worth’ and therefore would not use online services. However the growing increase in the internet shows that the use of online services is dramatically increasing, with no boundaries in age, gender, or class. In 2014, it is reported that 96% of UK adults used Facebook and Twitter boasted 15 million UK users at the end of 2013. In 2014, UK households with internet access reached 84%, up from just 57% in 2006. Furthermore, it is reported that 62% of British consumers say they are likely to be affected by positive online reviews, especially if independently verified. Online presence is a must and it is a platform to promote a business and a reputation. Used well, it can be as effective as placing a large billboard on the busiest high street, but building a website does not mean that this alone will get a business noticed. Like qualifications for a career in Law, when qualified, this is only the beginning, building a reputation and getting noticed takes hard work, networking and letting others know what you can do. It is no different online! Trust is also an issue, as consumers are becoming increasingly aware of how dressing a shop window can be inviting to lure in prospective clients. The questions most are demanding answers to concern what their experience will be with a firm and how they treat their customers. Businesses have to make a living and therefore have to place themselves in front of their prospective clients, if they don’t, then their competitors will and they will eventually close down. If a business offers good quality service, remembers that it is important to look after and maintain customer relations, then they should be looking to shout this from the rooftops. ‘Let your clients compare quality, transparent services – not prices!’ Lisa Beale, Head of Checkaprofessional.com www.Checkaprofessional.com or call us on: 0800 093 8414

Derek Fitzpatrick, Business Development Manager and EMEA Account Executive, Clio, a cloud-based practice management solution for lawyers.

ML // August 2015

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Isokon Did you know that 36% of law firms use Isokon software for probate work? Why?

Because we can increase your profitability Because Isokon is based on a probate specific accounting engine Because Isokon has no significant competition Many of our customers report achieving a profit margin of more than 70%

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The Views

Spreading the word

see more and more law firms treating cross-selling like some elusive unattainable benchmark! The idea of cross-selling is now more important than it ever has been. Whilst legal marketing is somewhat different from your normal marketing tactics, law firms will have many different sectors to target along with trying to ensure they stand out from their crowd of competitors. In the post-Jackson era, most law firms remain focused on their target areas. These are generally the areas that are financially stable, bring in the greatest revenue streams and are, by their very nature, high profile. The main goal here is to interest your “already existing” client stream in utilising other services that your firm can offer. Firms are already sitting on a gold mine of client information, which (if used correctly) would enable them to promote their other services. One of the quickest and simplest methods is to prepare a leaflet that can be dropped into every envelope that sends out a client letter. That way you are not incurring more postage but simply utilising what you already have! Firms should embrace branding, ensure their website is client friendly and take to social media as a natural extension of their marketing plans. Another excellent way of retaining client information and feedback is to ask a client at the conclusion of a successful claim if they would assist by providing feedback on the service they received. Send your clients a Feedback Form but make sure you include a simple tick box for “receiving further information” about other services etc. Once that box is ticked you can then provide further leaflets/information to that client, without sending unsolicited information. Ensuring client’s are 100% happy with your services not only increases the chances of repeat business but could mean the clients will do your marketing for you by telling other people about the excellent service they received. This goes back to my article in the last issue of Modern Law; the client is and will always remain King. Keep that client happy and he will spread the good word. Nicola Smith, Director, NKS Consulting. For anyone wanting assistance with cross-selling and marketing, please do get in touch – nicola@nksconsulting.co.uk

Probate Software Develop it yourself In-house? Is it more advantageous to develop your software inhouse than buy a tried and tested system that has been developed by an external software company over a number of years?

he questions to ask are: • Are you sure that your inhouse IT development team has the capability to develop the software, and within a reasonable time scale, or have they sold you a pup? • Has your IT development team understood your users’ actual requirements? • What are your reasons for taking on such a task, rather than buying a completed system off the shelf, where someone else has already taken the risk? It is relatively straightforward to construct a case management system, with workflows, mail merging letters, a diary and calendar with a list of tasks completed and to be done. A competent team should be able to knock up something basic within a few months with the tools now available. The question to ask is: how useful is a case management system for probate work, without an accounting system to register the variety of financial details of an estate, such as: logging the assets and liabilities; separating capital and income; making the distinction between post death income and accrued income; dealing with post probate adjustments; accounting for packaged products such as ISAS and PEPS; calculating agricultural or business relief, and constantly recalculating the money due to the residuary beneficiaries, to name just a few typical financial items. The reality is that case management is at best about 20% of the estate administration - the bulk of which is financial accounting. Developing your own probate accounting system is not straightforward, and will take a number of years to complete, regardless of the boasts of your in-house IT team. A number of law firms have begun the task optimistically, until the partners finally realise that they are on the road to nowhere. With this dawning realisation they bite the bullet and buy a completed probate accounting system with integrated case management, installed and usable within a matter of weeks. For further information, please contact: Gregory van Dyk Watson, Managing Director of Isokon Limited. Email: gregory@isokon.com or call 020 7482 6555. Alternatively visit www.isokon.com

ML // August 2015

The Views

Coping with the new regime... The Master of the Rolls, Lord Dyson has recently highlighted that lawyers may require more training in light of changes to costs management, as was seen in the case of judges. Do you agree that lawyers need more training in relation to costs and if so, what method(s) of training would be most effective?

osts management or budgeting was introduced to the Civil Procedure Rules in April 2013. More than two years later, the process remains somewhat random both in terms of the ways in which lawyers prepare their budgets and the ways which the Courts deal with them.

In a speech given on Jersey in May, Lord Dyson emphasised that costs management is here to stay and that lawyers, like judges might need training to cope with the fundamental change. Given some of the decisions emerging from costs management hearings up and down the country, the amount and quality of judicial training is open to question. Prior to the introduction of Costs Management in April 2013, numerous training courses were run for lawyers to help them to cope with the new regime. Unfortunately, as the Master of the Rolls highlighted, lawyers tend to be resistant to change and a large section of the profession continues to do things in the ways in which they always have, ways which are sometimes fundamentally incompatible with costs management. Many lawyers fail to record time spent (the bane of Costs Draftsmen everywhere), others, even where they do record time, add no detail frequently rendering the recording futile. Of more concern, although perfectly natural, is the methodology of simply starting the meter running at the beginning of a case without planning the necessary steps and considering their cost. There is strong anecdotal evidence amongst Law Costs Draftsmen to suggest that lawyers are frequently leaving it to those drafting the budgets to plan cases for them. Equally worrying, given District Judge Lethem’s recent comment that he has never seen an application to amend a budget, it is apparent that many lawyers are not monitoring their costs in the wake of costs management orders, with potentially disastrous results in view of CPR 3.18(b). It seems likely that the problem with lawyers as well as the judiciary is a lack of time and resources rather than knowledge, application or adaptability. Nevertheless, training would certainly be beneficial and there is no better form of learning than by doing; every lawyer practising litigation should be required to prepare at least one budget from scratch on their own and to deal with the resulting Costs Case Management Conference. Rob Parness, Costs Lawyer, Burcher Jennings.

ML // August 2015

The importance of instructing an Interpreter or Translator early on in a case

e began supporting our clients with language services – producing translated documents and arranging Interpreters for Court and appointments over a year ago. During that time, we have experienced a number of cases where the expert language professional is called upon last minute. Essentially reversing what would be the normal process can cause numerous problems, above all a serious lack of efficiency of a case. With Solicitors being squeezed on their costs so much, we feel that instructing a professional at the start is a much more cost-effective and accurate process. By instructing an expert language professional from the onset of a case, it can avoid repeated appointments and cut down on the hours taken to prepare a fully CPR compliant case for court. In the case of foreign clients, the legal process can be a minefield of questions and confusion. A client often won’t understand why a statement initially taken months prior will need to be taken again with the assistance of a language professional. We regularly receive phone calls from the Interpreter saying that the client is confused and doesn’t understand why they have to go through it all again. Not only does this delay the process, but can also increase the costs as the Interpreter will charge for their time. We have seen cases where a court or third party has raised dispute with regard to why English copy and foreign copy documents, seemingly the same are dated and signed differently. All our language professionals are familiar with legal terminology which will assist the client in understanding context and nature of documents. This helps to reduce the number of amendments that are required with taking statements from clients. The language professional acts in a non-biased and professional capacity, which, in any case, is always an advantage to using a friend of the client. In addition, being prepared from the onset can also alleviate the stresses of deadlines. We are regularly instructed last minute right before a Court date for documents to be translated. We consistently turn these instructions around in time, and in some occasions, it cannot be avoided. There are occasions where if instructed at the beginning, the case costs could have been reduced and the stress element alleviated. Nik Ellis, Managing Director, Laird Assessors.

The Views

On steady ground?

ubsidence is movement in the ground which causes a property to move or sink downwards causing a shift in the foundations of a property. This usually happens when a home is built on clay soil, when the water table drops due to a long, dry spell, or when water is sucked out of the soil by trees and bushes. The clay starts to shrink and it pulls at the foundations of buildings, causing structural damage. It also occurs if mining has previously taken place in the surrounding areas. A sinkhole is usually formed by erosion, caused by the frequent exposure to water. There are two basic types of sinkhole; a cover-subsidence sinkhole which is created slowly, over time, and a cover-collapse sinkhole which will appear suddenly. Both are usually the result of what is known as the Karst process, where acidic water, which is created by rainfall seeping through the soil, absorbing carbon dioxide and reacting with decaying vegetation, causes the erosion and dissolving of the soluble rock layers such as limestone or gypsum beneath the surface - eventually creating a cavity below the surface. The soil or sand over the limestone collapses into a sinkhole when it can no longer support the weight above because of the void below. This final collapse of the surface might take anything from a few minutes to several hours. In March this year residents and business were evacuated from an estate in Northfleet, Kent following a hole which appeared in the ground. There were worries of the surrounding buildings subsiding so Lawrence Square was fenced off, people were evacuated and services were shut off. Businesses were shut down as the site was deemed too dangerous for people to enter. In April, Coal Authority experts were called to a sinkhole that appeared in a road in Gateshead. After investigations, the Coal Authority found that the 2ft wide, 5ft deep hole was caused by historical mine works. Police and council officers had to be called to make the area safe. In Britain, the BGS (British Geological Survey) says the carboniferous limestone of the Mendip Hills, the north of the South Wales coalfield, the Peak District, the Yorkshire Dales, the northern Pennines and the edges of the Lake District all host well-developed karst landscapes. Karstic features are also common in the UK on the chalk of south-east England, on salt in the centre and north-east of the country, and particularly on the gypsum that underlies parts of eastern and north-eastern England, especially around Ripon and Darlington, and in the Vale of Eden. Tin Mining and China Clay Mining was predominant in Cornwall, Dorset and West Devon in the past. Erica Willmott, Marketing Assistant, Conveyancing Data Services.

A Claimants’ Guide to High Court Enforcement Group

hen your solicitor advises you to pursue debt recovery or an eviction through the High Court, the work will be undertaken by a High Court Enforcement Officer (HCEO). If the value of your debt is below £100,000, your solicitor will usually complete a claim form in the County Court putting forward your case. A Judge will decide if your application is legitimate, and if so, issue a County Court Judgment (CCJ). Your solicitor may then transfer your judgment up to the High Court for enforcement. At this stage, they will obtain a Writ of Execution, which is more commonly known as a Writ of Control. When attending the Writ address, an officer will seize goods of sufficient value to satisfy the Writ. The defendant is given a Control Goods Agreement form to sign, this means that we can leave the assets at the Writ address, whilst still retaining legal possession of them and eliminating removal and storage costs until absolutely necessary. Although we follow the same basic principles regarding our duties towards both the claimant and debtor, each job will be different. It is therefore necessary for our officers to liaise with you or your solicitor before hand to discuss logistics. What information do we need to know before coordinating an eviction? • Can you identify the land or property in question? • Do you have any physical descriptions of the people and/or animals that need to be removed from the Writ address? • Are there any potential health and safety issues regarding the Writ address and its surrounding environment for example if it is a building site or located near a lake? • What type of building or area is the Writ address, is it commercial or residential premises, is it public or private property? • Are there any children present at the Writ address? • How many people and/or animals need to be removed from the Writ address? • Do you request the removal of any vehicles form the Writ address? • Will you require High Court Enforcement Group to supply recovery vehicle(s)? • Have you arranged post eviction security for your property or land? Please note this is not our responsibility. • Is there any history or potential of violence towards those attending the Writ address? • Is there a history of drug use or other criminal behaviour at the Writ address? • What is the name and contact details of the solicitor or third party agent who our officer on site will give vacant possession to? Amir Ali, Director of Client Services & Business Development, High Court Enforcement Group. amir.ali@hcegroup.co.uk | 07500 016326

ML // August 2015

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20/08/2015 12:24

The Views

49-62

The Features

Are you a new era General Counsel? Some of the UK’s largest and most high profile businesses have been exploring the best way to optimise the General Counsel (GC) role and its demands, in order to find the best candidate. But, is it time for lawyers to identify themselves as a ‘modern’ GC? Julian Ortner reports.

he role of the GC has evolved significantly over recent years. These changes have seen the role expand and diversify, going beyond a legal counsel role and requiring a broad set of skills and experience. Today’s GCs must demonstratethe ability to be the custodian of non-financial risk in the company, possess excellent judgment, and have years of experience in business. Of course, excellent legal experience and knowledge is still a necessity, but are only the building blocks for this role. So what else is required for the modern GC, and how do you know if it’s the position for you?

Flexibility and caution Being flexible is also a necessity for the modern GC, as fashions change in terms of the demands made on business leaders. For example, there has recently been much focus on legislation such as the Bribery Act, and compliance with new regulatory frameworks. Cyber-risk has also attracted interest, providing GCs and their teams with yet another threat to consider. Regulators have become more aggressive and intrusive. As such, a high priority for the GC is to oversee the compliance function or to liaise with heads of compliance where this is a separate function. For individuals who are considering a GC role, these added responsibilities

can be an attraction to the role. However, anyone considering this role needs to be completely informed and must have an interest in ongoing professional development. In many cases, this is proving to be a welcome challenge to those transitioning from law firms where their focus has previously been much narrower. Advocate ethics and values It is not just litigation that can harm a business, as a host of corporate scandals have recently shown. Values, ethics and integrity are issues that the GC increasingly gets involved in as a custodian of the company’s reputation and moral compass. A frequent assumption is that technical legal capability is the priority. But in reality, technical competence should be a minimum standard, rather than the single focus in selecting a GC. To those in the legal profession who want more diversity in their role, and who satisfy that need by sitting on charitable boards or running campaigns, this could well be the role for you. The new era GC is a position which has evolved in recent years with increasing levels of importance and profile across all sectors and within businesses of all sizes. Julian Ortner is a Director at Norman Broadbent and focuses on lead functional roles across sectors, with a specialism in General Counsel/in-house Legal. His aim is to help clients as they evolve and their requirements change, and to meet their need for talent to develop their business.

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Listen, protect and be decisive First and foremost, a modern GC needs to be a trusted adviser and confidant of the CEO and board, so good judgment, built on experience, is essential to bring balance and perspective. Along with these skills, today’s GC requires strong commercial acumen and the ability to think strategically. In particular, following the turmoil of the financial crisis, corporate governance has come into sharp focus and companies and their directors are increasingly exposed to legal scrutiny. As well as being custodians and gatekeepers, the best GCs will support CEOs in making decisions that do not just make good business sense, but which also reflect healthy corporate values; this counsel must be given with confidence and decisiveness.

Two-way management The role of the modern GC often involves liaising between company department heads and the CEO or the board. For example, the head of HR or Marketing may report in to the GC to make requests or to share concerns, which will require the GC to practise effective communication as well as the management of expectations. This often-overlooked challenge adds an extra dimension to the GC position, which may not be found in a law firm. Being a good listener with high emotional intelligence is a rare skill, but these traits are essential for the modern GC. Understanding the requirements of all stakeholders, outside influencers and employers to find solutions can be complex, particularly in a crisis, so a decisive nature is also crucial. This is one of the major differentiators between private practice and in-house practitioners.

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23/07/2015 11:52

The Features

REGIONAL FOCUS:

Birmingham Interview with... Mushtaq Khan As part of Modern Law’s ongoing regional focus, Charlotte Parkinson spoke to the President of the Birmingham Law Society about running a creative and innovative society and effectively engaging with members.

Q A

What are the main challenges the Birmingham Law Society faces at the moment and why? Although Birmingham Law Society is the largest local law society within the UK, it is not immune from the challenges that face other smaller local law societies - which is the need to constantly engage members. Most lawyers are short on time and our challenge is to ensure that they prioritise Birmingham Law Society events/ initiatives and support and attend these. However, one size does not fit all and we understand that our members have different needs and in order to deal with this we offer a range of activities. Our events cater for the young (and the not so young), they can provide the opportunity for members to involve their clients, we undertake charity events, events which focus on competition (lawyers are very competitive!) and events which celebrate our regional legal community and the excellent work that is undertaken in Greater Birmingham. Fortunately, our strategy seems to be working and our membership now exceeds 4,200. However, there is a constant need to be creative and innovative with our events and initiatives to ensure that member’s interest is constantly being stimulated. The Birmingham Law Society is a membership based organisation and we rely upon subscriptions from members. By ensuring we are active and doing things which interest and engage our members we will always be seen as providing value for money. However, we are always looking at new ways of raising income

income for the Society. The ideal scenario would be for the Society to be financially self-sufficient and less reliant upon membership subscriptions.

Q A

‘Perhaps the legal profession could learn a thing or two from the medical profession in terms of how it carefully manages its public image’ and have a very successful sponsorship programme which provides vital income to the Society. We are also looking at other exciting financial ventures that could improve the

What are your core aims during your tenure as President of the Birmingham Law Society? • To deliver a stronger and more successful society at the end of my tenure. • Promoting Birmingham and the region as a centre of legal excellence to help capture investment and growth. • To help raise the profile of the economic and social value provided by the legal profession to the city and the region. • Improve the connectivity between the city’s business, professional and financial services sectors, so that we can speak in ‘one voice’ to better promote and advance the sector and the city.

How do you and the team at the Birmingham Law Society ensure the society maintains its relevance to the profession? We adopt the tried and tested way. We listen to our members and nonmembers, hear their views through surveys, round table meetings, social/ informal events etc. and make the necessary changes. We ensure that the leadership, council, board and committee members are reflective of our membership. We have active committees who are able to keep upto-date with their respective practice areas and provide practice guidance notes to our members. They also

ML // August 2015

The Features

‘The only way forward in the public interest now is for there to be a single legal services regulator and for it to regulate all legal services whether they are reserved legal activities or not’ formulate responses to consultations at regional and national level. We also focus on leadership and adopt the mantra “One Profession: One Region: One Voice”. These six words sum up the role of Birmingham Law Society: bringing together legal professionals within the region and ensuring they are able to speak with one voice for the greater benefit to our legal community.

Q A

What are the aims of the Law Society 2020 Discussion and what do you hope it will achieve? The legal services market is going through unprecedented changes and the national Law Society seeks to engage in discussion with its membership in order to identify exactly what the membership expects and wants. The Birmingham Law Society has been active to getting its members to engage in this dialogue. We have hosted meetings with the national Law Society chief executive, Catherine Dixon and invited our members to engage and have their say. The national Law Society has an important part to play in the future of the solicitor profession and I do hope it can make the necessary changes to make it a relevant and valued membership organisation, otherwise, its long term future will be put at risk.

How important is the role of local Law Societies in representing, supporting and promoting the needs of practitioners on a national level? The local Law Societies have much closer links with the local legal community than the national Law Society does. Birmingham Law Society council member representatives and officers are usually well known to local practitioners, which makes them accessible for feedback on matters of national interest. The role of the local Law Societies is crucial to the future success of the national Law Society – without these ‘vital arteries’, the practitioners platform to voice their views would be lost.

ML // August 2015

How do you think solicitors are perceived by the public? Do local Law Societies have a part to play in building relationships on this level? On the one hand, if one was to count the jokes about lawyers, it would seem that this is not a well regarded profession, dare I say, a despised profession. Yet when one considers the popularity of TV legal dramas like Silk and Suits, and the continued numbers of those that want to join the profession, it is not so straight forward. Perhaps the legal profession could learn a thing or two from the medical profession in terms of how it carefully manages its public image. At a local level, the local Society needs to raise the profile of the local legal profession by identifying the economic and social value it provides to the local community. Birmingham Law Society has an active Public Relations and Media sub-committee, which fosters excellent relationships with local and national media. Individual members with PR experience are encouraged to comment on current news items thus helping to raise the profile of the profession. I spend a significant amount of my time as Birmingham Law Society President representing the profession at public events and important local organisations e.g. at local community events, local hospitals events, Birmingham Chamber of Commerce; West Midlands Constabulary; the Judiciary and charity events. The Society has an active pro bono committee, which brings together practitioners and the academic institutions in the City, and raises the profile of the profession as being empathetic to those unable to find help with legal issues elsewhere. I also have a monthly column in the best read local newspaper – Birmingham Post, which is a great opportunity to engage with the public/readers and help raise the legal professions image.

Do you feel that the Birmingham Law Society has a voice in wider conversations with the Law Society?

As a founding and key member of the Joint V group, (consisting additionally of Liverpool, Manchester, Bristol and now Leeds law societies) Birmingham Law Society has a voice at the Law Society across a range of issues and areas where the Law Society seeks views. The regional manager for the Midlands area is a co-opted member of the council, and will attend on a regular basis to report on Law Society business but also to record the views and thoughts of the council. This is recorded and fed back to the Law Society.

Q A

What does the future look like for the legal profession, on a regional and national level? Without getting into the legal aid cuts, the court fee increases, and the challenging economic market over the last few years, supply/retention of talent, digitalisation, regulatory changes and new entrants - I shall look into the pessimistic and the optimistic crystal ball. Here’s one view: The future of the legal profession is very fragmented, a muddle, there is no clear identification of who is professionally qualified and who is not, and it is very difficult for the public to choose a lawyer. This was at least in part caused by the Clementi report and the Legal Services Act but is now more of a muddle than pre-Clementi, with too many regulators – CILEX; SRA and the Bar. This confusion means there is no longer the focus on ethics or a profession. The only way forward in the public interest now is for there to be a single legal services regulator and for it to regulate all legal services whether they are reserved legal activities or not. The opposing view is that the liberalisation of the legal services market offers significant opportunities for solicitors and law firms. For example, it opens new sources of external expertise and capital to law firms who are interested in innovation, growth and offering a wider range of services to their clients. Once the mist is lifted, it will be somewhere between the two and there will be winners and losers.

The Features

REGIONAL FOCUS

Birmingham City University School of Law – Transforming Birmingham’s Students

n a time when the city of Birmingham is undergoing considerable change and transformation, it is highly significant and appropriate that Birmingham City University’s School of Law has relocated into the heart of the city, moving from its previous home in Perry Barr. The School of Law’s students are primarily local to Birmingham and its surrounding areas, and many graduates stay local, joining the legal profession or being employed in or setting up other businesses. Government cuts to legal aid have affected Birmingham’s large legal profession, resulting in a number of mergers between law firms, as well as a significant rise in the number of litigants without legal representation. For a law school whose underlying ethos is social justice and access to justice, it has never been a more important time to equip our students with the skills necessary to stand out from the crowd. We aim to maximise their chances of obtaining employment, not just through our teaching but by also encouraging them to engage in pro bono activities, such as placements with the Citizens Advice Bureau and community law centres. Equally, with our new location in The Curzon Building in Eastside, we hope to be in a better position to

work with and support Birmingham’s legal profession and business community in these challenging times. On the international stage, we are proud to be visible and research active in the field of human rights. For example, Elshareef Ali Mohammed, who defended Meriam Ibrahim, the Sudanese woman sentenced to death for marrying a Christian, graduated from the School of Law in 2013 with a LLM in International Human Rights. His experiences gave him the skills he needed to secure his client’s freedom in such a globally significant case. Human Rights Law expert, Professor Jon Yorke, from Birmingham City University, said: ‘In line with the School of Law’s vision to promote social justice and access to justice in the world, we train lawyers, such as Elshareef Mohammed, to go and work on cases of human rights abuses, such as the death sentence of Meriam Ibrahim in Sudan.’ The size and scale of the training required for the legal profession is always changing, so it is more important than ever for education providers to ensure our graduates receive the education and experience they need to make their mark on both Birmingham and the world’s transformative legal landscape. Professor Sue Rivers, Head of Birmingham City University’s School of Law.

The Features

THE BIG IT ISSUE: UPGRADE, REPLACE OR MAKE DO AND MEND? Our resident IT guru Charles Christian writes…

ne issue many law firms are facing today is what to do with their elderly accounts and practice management systems. In some instances, the systems are merely getting old, while with others, as a result of industry mergers, takeovers or just plain changes of strategy by the vendors’ pointyheaded managements, the systems are being end-of-lifed and taken off support. (Which is a polite name for involuntary technology euthanasia.) So what is the law firm to do? The obvious hope of legal IT vendors – particularly those who are end-of-lifing software – is that the law firms will say “OK, you win, we’ll get out the cheque book and buy a whole new replacement system. Do you want one or two arms and a leg?” But is this really the only option?

‘Just because a system is old, does not mean there is anything wrong with it’ In focus… The big problem with swapping out and replacing practice management systems (PMS) is that this can be a huge enterprise in terms of time, money and management resources. (There’s a firm in the North of England that a few years ago got through one IT director, two finance directors and three years of pain before it managed to get its new PMS running to its satisfaction.) Rather more importantly, a PMS is essentially just a backoffice system for counting beans whereas the focus of law firms AND their IT investments should be on front-office systems that will help them earn more beans. Talking of which, the Return on Investment (RoI) on buying a new PMS is pretty scant, especially when compared with front-office applications and fee-earner support systems (everything from case management to digital dictation). You have one system that adds up columns of figures and compiles ledgers and you replace it with another system that adds up columns of figures and compiles ledgers. Or, as the managing partner of one large provincial firm once commented “I’m not spending a couple of million pounds of this firm’s money just to make life easier for some accountants and cashiers.”

Reaping the rewards So, what strategies are available? • The first point to remember is that modern legal IT systems are far more stable and reliable than their predecessors. For example, it is now not unusual to find firms that have been with the same supplier for 20 years or more, so just because a system is old, does not mean there is anything wrong with it. (If it ain’t broke, it don’t need fixing.) In fact many vendors now focus their R&D activities on adding front-office applications and utilities that bolt on around the core PMS – and as long as the PMS is stable and kept up-to-date, they don’t need to be reinventing the same old accounts wheel. • Even where a system is being end-of-lifed (which typically means its developers will not be writing any more updates or upgrades for it) this does not mean it will suddenly stop working. You can also take heart from the fact that there are plenty of independent consultancies and software specialists out there who can help keep older systems running well past their sell-buy date. • Finally, an option many firms are now taking with older practice management systems is to enhance their core accounting functionality through the use of thirdparty applications, typically better time recording systems and/or some form of BI/business intelligence management reporting. Why? Because most of the older time-recording software built into accounts and practice management systems are merely a way for processing manual or semi-automated timesheets. What we are now seeing is a new generation (the main players in the UK are Tikit Carpe Diem, Intapp Time and Rekoop) of third-party “time capture” systems that will work on mobile platforms (iPads, smartphones etc) and contain an element of proactivity. For example, with a conventional timesheet it is down to the fee-earner to remember chargeable time whereas modern systems can draw information from other applications (such as email) to help fill the gaps in the record. As for BI, we’ve covered the topic before in this column but essentially this is a more proactive form of management reporting that can be used to dig down into a PMS database to uncover all the facts, figures and trends – a firm’s key performance indicators – that keep law firm partners and managers awake at night. A good time capture system can pay for itself in months in firms that were previously bad at recording time – which is an RoI no PMS will ever deliver, while BI provides a way to realise the mantra of all businesses managements, namely that if you can’t measure something, you can’t manage it. And the good news is neither option requires the firm to replace its existing practice management system! Charles Christian is Editor-in-Chief of the Legal IT Insider.

ML // August 2015

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The Features

Alternative Business Structures: How PI Insurers Assess The Risk Profile Of An ABS Jonathan Simon addresses some fundamental questions that insurers should have in mind when being asked to underwrite ABS business models.

he SRA has now licenced approximately 400 ABSs and a review of the register of licenced bodies on their website reveals a notable diversity in the types of firms with ABS status. Whilst many firms appear to have become an ABS simply to introduce non-lawyer managers into their business, others have adopted the model to allow them to take on external funding. That finance is typically used to embark on ambitious growth strategies and update and implement cutting edge IT systems to deliver legal services to clients. No matter what the motivation is for a firm to apply to become an ABS, all are subject to the SRA’s Minimum Terms & Conditions of professional indemnity insurance for that part of their business that undertakes reserved legal activity. The diversity of ABSs makes it difficult to make generalisations about them as a distinct subset of the legal services sector with the result that when insurers look at a firm’s proposal form they will always consider each business on its own individual facts and circumstances. There will, however, be some fundamental questions that insurers will be interested in knowing the answers to no matter what type of ABS business model they are being asked to underwrite. Some of those questions will include the following:

‘Insurers will usually want to see 3 years’ financial forecasts to enable them to assess the financial stability of the new entity’

1. Is this an existing business? An existing business has a track record which will be reviewed and analysed by insurers i.e. claims history/ fee growth etc. If the ABS is a new venture then further information will probably be required. Much of the additional documentation will have already been provided to the SRA as part of the licencing application. 2. Is the business model changing significantly? If the business model is remaining broadly the same e.g. just admitting existing non-lawyer employees into the ownership then the risk will be judged against past performance. If the model is changing significantly then insurers will require additional information to help assess the risk effectively. Just because an insurer looks after an existing LLP or Partnership is no guarantee they will underwrite the ABS if the change of business plan is dramatic.

ML // August 2015

The Features

‘Supervision is a key aspect of risk management and insurers will look at the ratios of qualified staff to non-qualified’ 3. How sound is the business plan? Insurers will give the business plan particular scrutiny. They will also look at marketing plans to form an overall view of the business, how it intends to operate and the depth to which owners and managers have considered how it will be managed. 4. What are the financial forecasts? Insurers will usually want to see 3 years’ financial forecasts to enable them to assess the financial stability of the new entity, particularly in view of the requirements that they may need to stay on risk for a further 90 days if the entity is not renewed and cannot get alternative insurance, and enters the Extended Indemnity Period. Insurers can then be on risk for 6 years’ run off cover. 5. Is there an element of external funding? Questions will be asked about the nature and purpose of any external funding, as well as where it is coming from. In addition, insurers may query how and when investors are looking to get their money out of the business, as well as requiring details confirming the level of non-legal ownership to consider whether there is any potential scope for conflicts of interest or possible undue influence being exerted on the lawyers/managers. 6. What is the experience/track records of the managers? The names, CVs and legal experience of the managers of the business will be looked at closely as they are the individuals responsible for running the firm on a day-to-day basis. 7. What are the supervision arrangements? Supervision is a key aspect of risk management and insurers will look at the ratios of qualified staff to non-qualified. It is usually the case that if the work undertaken is particularly straight-forward, or of a volume nature and is being managed through an effective structured case management system then higher ratios of non-qualified to qualified staff will be acceptable.

8. What types of work are going to be undertaken - is there a level of diversification? The type of work a firm carries out is a key factor in underwriting decisions and assessing any businesses’ risk profile. Insurers will want to be provided with detailed information on the risk management procedures in place to minimise claims arising if the firm does certain types of work that are perceived to be ‘high risk’. 9. How detailed is the risk register? Risk registers are required to be submitted as part of the licensing application and insurers will review these in detail so it is important to evidence the depth of thought that has gone into assessing potential risks to the business and show that satisfactory controls are in place. 10. How detailed is the practice/office manual? A practice/office manual (or draft if it is a start-up venture) should be provided to insurers to indicate how the organisation will run its affairs on a daily basis. Insurers will want to see that all important areas have been considered and addressed to ensure the business operates in an effective and risk managed manner. To assist in the negotiations with insurers, it is important that a firm’s broker not only fully understands their client’s business, but also the journey that it is on. Insurers do not like surprises and so there is an onus on brokers to ensure that all necessary documentation and explanation is provided at an early stage so their clients are presented in the best possible way. This won’t just speed up the underwriting process, but depending on the quality of the risk should also provide insurers will a degree of confidence that the business is one they want to insure. Jonathan Simon LLB (Hons) is an Executive Director at Willis GB. Prior to joining Willis he worked for a leading professional indemnity insurer for 12 years. He now looks after many of Willis’ ABS clients in their dealings with insurers and providing risk management workshops and training seminars. D: +44 20 3193 9468 M: +44 7903 577388 E: Jonathan.Simon@willis.com

® Proclaim is the only Practice e v a H Management Software solution Endorsed by the Law Society. you heard? CALL 01274 704 100 www.eclipselegal.co.uk/lawsociety lawsociety@eclipselegal.co.uk

5 minutes with...

5 minutes with... Chrissie Lightfoot Q

Did you expect the legal services sector to change so drastically when you started working in it? Yes. It was inevitable. In 2006, the time I entered the sector, the legal world was stuck in its Dickensian ways whilst the rest of the world was experiencing fundamental and drastic change due to the rapid progression of the Digital Age, and the looming NewTech Age. Cloud-based computing, cognitive computing, artificial intelligence and robotics – which would have a drastic impact on the entire legal eco-system; affecting law firms as a business and as a legal service provider.

Q A

What has been the key positive or negative impact of the liberalisation of legal services? What strikes me is the breadth and depth of innovations and positive progress now occurring at an exponential rate in the entire legal eco-system due to the liberalisation, globally.

Q A

working’ decades ago. Ray Kurzweil, Elon Musk, Stephen Hawking, who challenge conventional thinking and push the boundaries of the human mind and spirit.

Q A

Have you had a mentor? If so, what was the most valuable piece of advice they gave you? My mother. I recall her scolding me (rightly so) when I was a little girl for being blasé about my ‘pocketmoney’ chores. She said to me: “Christine! (my Sunday name – boy did I know I was in trouble) If you can’t do the job properly, then don’t bother doing it at all.” Enough said. It’s a valuable lesson for behaviour which set me up in every aspect of life - love, family, career and business.

Q A

If you were not in your current position, what would you be doing? Early in 2014 a Dutch company announced that it was looking for 20 healthy adults to train for eight years to be the first group of human beings to colonise Mars by 2023. There’s something remarkably challenging in such a mission, which appeals to my curiosity, spirit of adventure, and humanness. Simply put, I’d be fighting for lead seat on the space-ship to Mars!

Who inspires you and why?

A whole range of famous and great people from ‘distant’ writers, philosophers, thinkers, inventors, scientists, futurists and pioneers to close friends and family. For example, Charles Handy, who had the vision and confidence to write about his concept of ‘portfolio

Chrissie Lightfoot is author of ‘Tomorrow’s Naked Lawyer: NewTech, NewHuman, NewLaw – How to be successful 2015 to 2045’. (Nov 2014 ), and its prequel bestseller ‘The Naked Lawyer: RIP to XXX – How to Market, Brand and Sell You!’ (Nov 2010). You can pick up her latest book today by emailing publishing@ark-group.com or call +44(0) 207 566 5792.

Curtis Law Solicitors How to grow and diversify your business with a Proclaim Practice Management system. “Proclaim provides a robust, scalable and flexible solution that is perfectly in tune with our commercial aims.” Tasleem Riaz, Principal, Curtis Law LLP Curtis Law was founded in 2008, employing 5 staff to deal with Personal Injury claims. Since that time the firm has extended its reach into Family law, Darren Gower Conveyancing, Probate and Commercial areas and now employs 200 staff across the group. The Challenge Set up initially as a PI claims specialist, Curtis Law had strong ambitions to grow both in headcount and in the range of legal work managed. Curtis Law initially needed a Case Management solution that would provide a flexible and future-proof environment - one that could be scaled out to multiple work areas, not just PI. The Solution Following a detailed analysis of available solutions, Eclipse’s Proclaim Case Management system was selected. A solid track record in helping new start-up businesses to grow was a strong pull, as was the ability to add Practice Accounts at a later stage. Curtis Law took the opportunity to do just this -

ML // August 2015

replacing the incumbent ‘bureau’ accounts system to create a fully integrated Proclaim Practice Management solution. The Results Proclaim is used across all work areas, providing a complete desktop productivity solution. Client care is top of the firm’s agenda; the ability to rapidly see where any file is up to - and provide feedback for clients - is a huge benefit. As a growing practice, managing finances is vital. Curtis Law has been able to monitor and analyse ongoing performance, using Proclaim’s integrated reporting toolset. This means that trends can be spotted, empowering the management team to quickly make informed operational and growth decisions. Case Study highlights • Rapid implementation of ready-to-go solutions for new work areas • Grown from 5 to 200 Proclaim users • Full Practice Management solution • Proclaim used across every department • Powerful financial reporting • In-built flexibility and scalability. For further information, please contact Darren Gower, Marketing Director at Eclipse Legal Systems, part of Capita plc, via: darren.gower@eclipselegal.co.uk or call 01274 704100.

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