Modern Law Magazine - Issue 26

The Business of Law

Issue 26 October 2016 ISSN 2050-5744

Miranda Brawn “Ensuring fair and equal access to business is important, for our economy and society, and for companies and individuals.�

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MODERN LAW

Editorial BOARD Adam Bullion GM of Marketing InfoTrack

Mark Everitt Chartered Financial Planner Saunderson House

Andy Poole Legal Sector Partner ArmstrongWatson

Martin Griffiths Director Richmonte Wells Ltd

Anthony Pearlgood Managing Director PHS Data Solutions

Matthew Claughton Managing Director Olliers Solicitors

Catherine Calder Solicitor and Director of Client Care Serjeants’ Inn Chambers

Matthew Williams Head AmTrust Law

David Simon Chairman Triton Global

Maurice Power Managing Director Ferguson Litigation Funding

Graeme MacLachlan Regulatory Associate Legal Services Board

Maxine Park Co-founder ServicesNowGroup

Ian Barlow Financial Counsel BMS Funding Ltd

Paul Rolison ACA Director Cyber Strategies Ltd

Jonny Davey Product Manager Geodesys

Richard Burcher Chairman Burcher Jennings

Julian Bryan Managing Director Quill Pinpoint

Robert Norman Director and COO VFS Legal Funding

Kevin Ferriby Managing Director Informed Financial Planning

Sarika Sangar Marketing Executive Conveyancing Data Solutions

Lesley Graves Managing Director Citadel Law

elcome to the latest edition of Modern Law Magazine.

In this issue, I caught up with our cover star, the investment banker and barrister-turned-diversitychampion, Miranda Brawn. Brawn told me about why she thinks strong leadership and a culture of inclusion are key to overcoming diversity issues in law firms and other businesses, and also explained why prioritising diversity must come via a top-down approach. The full interview appears on pages 13-15.

W

As more legal businesses consider alternative working practices, I spoke to the former Managing Partner of global law firm, Clifford Chance, and now Principal at Jomati Consultants LLP about why success is not necessarily about the structure of a firm, but the attitudes of the people. Williams also told me about why more firms should consider legal project management techniques and launching LCCs in his interview, which can be read on pages 17-19.

As well as our focus on diversity in business, in this issue we also consider technology in its many guises. Jonathan Bamford, Head of Strategic Liaison at the Information Commissioner’s Office talks data protection in his news article, as the legal sector continues to utilise increasingly sophisticated systems and processes. Take a look at page 7-8 for Jonathan’s tips on how to avoid hefty penalties in the event of a data breach, and ways to mitigate against reputation risks by keeping information safe.

Adding to our tech-focus in this issue are the Legal Software Suppliers Association (LSSA) who feature on page 46-47, and our resident ‘techspert’ Charles Christian, who considers the role of a technology guru on page 55.

Modern Law Events continue to go from strength to strength and the fourth Eclipse Proclaim Modern Law Awards take place on 10th November at the Hurlingham Club in London; look out for full coverage from the event in the next issue. 2017 is already looking busy and will see the return of the Eclipse Proclaim Modern Law Conveyancing Conference in March and the Eclipse Proclaim Modern Law Conveyancing Awards in July. More details about all our upcoming events can be found on page 62.

Lloyd Ellison Director of Account Management and Client Engagement Specialist Tikit

Issue 26 October 2016 ISSN 2050-5744 Group Editor Charlotte Parkinson

Production/Editorial Assistant Brendan Gurrie

Project Manager John Margett

Events Sales Kate McKittrick

Modern Law Magazine is published by Charlton Grant Ltd ©2016.

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.

Front cover image: © Kay Mills - Captured Studio

October 2016

WELCOME

This issue of Modern Law is a special one for me as it will be my last as Group Editor. After 4 fabulous years at Charlton Grant and helping to produce 24 editions of Modern Law, I have decided to move on to join the marketing team at an international law firm, and will be passing the reins to Brendan Gurrie, our wonderful and extremely capable Editorial Assistant. Brendan will take up his post as Editor from the next issue and can be contacted via 01765 600909 or brendan@charltongrant.co.uk. I hope you enjoy this issue and for the last time from me, happy reading!

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

Modern Law 03

MODERN LAW

CONTENTS NEWS

INTERVIEWS

07

13

7 Jonathan Bamford Talks News

EdiTorial Board

The Head of Strategic Liaison at the Information Commissioner’s Office (ICO) outlines how to avoid risking your reputation and a fine of up to £500,000 by looking after your clients’ details.

13 Miranda Brawn

Charlotte Parkinson, Modern Law, spoke to the investment banker and barrister-turned-advisor about moving diversity up the agenda for boards, and why market segmentation is set to accelerate.

17 Tony Williams

Charlotte Parkinson, Modern Law, spoke to the Principal at Jomati Consultants LLP about why some law firms are exploring alternative working practices, and why embracing change can be a challenge for lawyers.

23

23 Encouraging a diverse profession - what can we do as regulators?

25 The Critical Friend

Martin Griffiths, Richmonte Wells Ltd

25 First 100 Years

Catherine Calder, Serjeants’ Inn Chambers

27 As the door closes in Ireland, what does the future hold for professional third party litigation?

EDITORIAL BOARD contributors

Graeme MacLachlan, Legal Services Board (LSB)

Maurice Power, Ferguson Litigation Funding

27 How do I go about specialising in acting for a particular sector? Part 1 Andy Poole, Armstrong Watson

29 Hands-off pricing leadership produces lousy outcomes

Richard Burcher, Burcher Jennings

29 The Digital Mailroom

Anthony Pearlgood, PHS Data Solutions

31 Age of the millennial

AmTrust Law

An AmTrust International Division

Kevin Ferriby, Informed Financial Planning

31 ABA on ABSs

David Simon, Triton Global

33 Will there be life after Osborne for The PI Firm? Yes! Ian Barlow, BMS Funding Ltd

33 Cyber attacks: threats and actions

04 Modern Law

Paul Rolison ACA, Cyber Strategies Ltd

October 2016

MODERN LAW Issue 26 October 2016 ISSN 2051-6495

EdiTorial Board

FEATURES

49

35 Q: What is an IFS Rating?

Should my client be aware of this when selecting ATE cover? A: An ‘Insurer Financial Strength Rating’. Yes.

FEATURES

52

Matthew Williams, AmTrust Law

35 4 Top Tips to polish your personal finances

Mark Everitt, Saunderson House

37 Managing a modern law firm requires the same dexterity as managing a commercial business, and more

Robert Norman, VFS Legal Limited

37 Conveyancing and technology - there is no time like the present to make a change Adam Bullion, InfoTrack

39 To SQE or not to SQE?

Matthew Claughton, Olliers Solicitors

39 Essential skills for Expert Witnesses

Martin Burns, Royal Institution of Chartered Surveyors (RICS).

41 Are law firms successfully utilising alternative working practices?

Lloyd Ellison, Tikit

41 Personal Injury - Which way now makes sound business sense?

Lesley Graves, Citadel Law

43 On-demand support; it’s about time

Maxine Park, ServicesNowGroup

49 Keeping law firms and client funds safe from cyber criminals

Craig Matthews and Adrian Jones from the Legal Software Suppliers Association (LSSA) outline some of the risks from cyber criminals and give helpful tips to lawyers.

52 Regional Focus: Nottinghamshire

As part of Modern Law’s ongoing regional focus, Charlotte Parkinson, Modern Law, spoke to the President of Nottinghamshire Law Society and Barrister at No. 1 High Pavement Chambers, about why he is fighting the traditional perception of the lawyer as the devil, and addressing perceptions of the legal profession by politicians and Government.

59 Cyber Security - An Insurance Minefield!

Should you rely on our professional indemnity policy to respond to a cyber incident? Brett Warburton-Smith reports.

61 Case Study - Eclipse Legal Systems

Woodcocks Haworth & Nuttall selects Eclipse’s Proclaim Practice Management Software solution

10 MINUTES WITH 62 10 minutes with…

Doug Crawford

57 Being a guru is never having to admit you are wrong!

Our resident IT commentator Charles Christian writes…

43 Essential questions to ask your outsourced cashiering provider

Julian Bryan, Quill Pinpoint and Legal Software Suppliers Association

45 Check, check and check again!

Jonny Davey, Geodesys

45 Living and breathing contamination

Sarika Sangar, Conveyancing Data Services

October 2016

Modern Law 05

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NEWS

Jonathan Bamford TALKS NEWS The Head of Strategic Liaison at the Information Commissioner’s Office (ICO) outlines how to avoid risking your reputation and a fine of up to £500,000 by looking after your clients’ details.

S

taying on the right side of the rules when it comes to data protection is not just a matter of doing the right thing; it’s a matter of law.

In a world where technology is constantly changing, protecting people’s data is more important than ever before. It is therefore vital that solicitors and barristers understand their legal obligations and the data protection principles that apply to their work.

Lawyers often deal with sensitive personal information relating to their clients on a daily basis, be it health data, financial details, criminal records or social care information. Personal details are recorded, used in a case, filed, stored and shared with others in the organisation and beyond. As such, those working in the legal sector face some of the most significant potential effects of data breaches due to the nature of the information they deal with and the type of work undertaken.

Legal businesses can only prosper with clients’ trust and confidence. If you don’t look after their personal details you won’t have that and could end up with a sullied reputation and a lighter bank balance. The ICO can serve a monetary penalty of up to £500,000 for a serious breach of the Data Protection Act. In most cases these penalties are issued to companies or public authorities, but barristers and solicitors are generally classed as data controllers in their own right and are therefore legally responsible for the personal information they process.

What the law says Under the Data Protection Act, you are legally responsible for looking after the personal information you hold for your business purposes.

This includes your own staff as well as clients. If you hold details about them either on computer or on certain types of filing systems you may be holding ‘personal data’, which is defined under the Act as “…data which relates to a living individual who can be identified a) from those data, or b) from those data and other information which is in the possession of, or is likely to come into the possession of, the data controller”.

In practical terms, most compliance issues centre on the Act’s eight principles, covering areas such as how you obtain and use those details, keep them secure and minimise risk, for example by not keeping for longer than necessary. If you were to do something that breached the Act it would often be because you’ve breached one of the principles listed below: 1. Personal information must be fairly and lawfully processed 2. Personal information must be processed for limited purposes 3. Personal information must be adequate, relevant and not excessive 4. Personal information must be accurate and up to date 5. Personal information must not be kept for longer than necessary 6. Personal information must be processed in line with the data subjects’ rights 7. Personal information must be secure 8. Personal information must not be transferred to other countries without adequate protection.

October 2016

In a world where technology is constantly changing, protecting people’s data is more important than ever before. It is therefore vital that solicitors and barristers understand their legal obligations and the data protection principles that apply to their work

Modern Law 07

NEWS

Whatever the future holds, remember, the ICO is here to help. We offer free advisory visits to law firms to give organisations practical advice on how to improve their data protection practice There’s also a legal requirement under the Act to notify the ICO if you’re processing personal data. For most organisations this can be as little as £35 a year. Only larger organisations need to pay a higher fee.

Risks in the legal sector

The information held by legal professionals is often very sensitive, so the damage caused by data breaches is often substantial and could meet the statutory threshold for issuing a financial penalty.

Last year four per cent of data security incidents reported to us involved solicitors and barristers.

The majority of cases our enforcement team see relate to something completely avoidable – the loss or theft of paperwork, often through papers being mislaid by staff rushing around. Whilst computerised case files are increasing it’s often still the nature of legal work that paper documents need to be transported out of the office regularly, with lawyers often carrying around large quantities of information in files when taking them to or from court, as well as sometimes storing them at home. The law is clear though - you must have appropriate technical, organisational and security measures to prevent the personal data you hold being compromised, be it by accident or through security vulnerabilities putting it at risk.

Another key area of risk we have seen with the legal sector is data posted or faxed to an incorrect recipient. The very first monetary penalty the ICO issued following the implementation of its new powers in 2010 was to a council who sent two faxes to incorrect numbers. The first was intended to go to a legal chambers but due to a dialling error it ended up with a member of the public.

The information contained within the fax was highly confidential.

The second fax arrived at the wrong chambers. We decided that the council had failed to take the appropriate organisational and technical measures to protect the information and the result was a £100,000 penalty.

Loss and theft of unencrypted devices and data being sent by email to the incorrect recipients are other reasons behind a large number of data breaches. In one case, which resulted in a £120,000 penalty, a solicitor working for a local authority sent emails containing sensitive personal data to 111 wrong email addresses.

Insecure web pages are another risk. We have seen this as an emerging threat across all sectors.

What can law firms do?

The steps to avoid these kinds of breaches can be really quite simple.

In nearly every breach report we see there is an element of human error. It’s up to the data controller to put appropriate measures in place to minimise the risk of that human error. An organisation cannot just rely on saying an individual made a mistake to get off the hook.

Those who handle sensitive personal data, such as those in the legal sector, often become desensitised to the sensitivity of the data they’re handling, and so it’s really important that data controllers have a culture of awareness as well as robust training for their staff, backing up sound policies and guidance.

Steps you can take include: • Encrypt electronic devices, laptops and memory sticks – anything likely to hold data that in the wrong hands could

08 Modern Law

cause a problem. Encryption is not expensive or time consuming and yet we still see reports of data being lost on devices that aren’t encrypted.

• Adequate physical security – lock-able bags etc.

• Data minimisation – do you need the personal information in there?

• Clear policies and procedures – do staff understand what their responsibilities are?

• Appropriate training – culture of awareness that data protection is important and the consequences for failures personal and organisational.

• Effective access control – do people that need the information have it and do those who don’t need it not have it?

• Have a breach management plan - the worst time to be thinking about what you should have put in place is in the aftermath of an incident.

What’s the risk if there is a breach?

At present the maximum penalty we can impose for a breach of the Data Protection Act is £500,000.

The legal threshold for us to consider a civil monetary penalty is that we consider the breach to be serious and of a kind likely to cause damage and distress to the affected data subjects. We also need to be able to show that the organisation knew or ought to have known that there was a risk and that they failed to mitigate against that risk.

It’s not just the amount of the penalty though; it’s also about the negative publicity which follows and the impact this has on the business. Security breaches can be big news with a lot of public and media interest. Lawyers operate in a very competitive market and their reputation is hard won and easily lost.

What changes should I be aware of?

The General Data Protection Regulation (GDPR) was on track to come into force in the UK on 25 May 2018. The result of the 23 June 2016 referendum on membership of the EU now means that the Government needs to consider the impact on the GDPR. While the detailed future of what data protection rules the UK will be required to follow is still uncertain, the underlying reality on which the need for data protection laws is based has not changed all that much since our first generation of data protection laws back in 1984. We have all seen how personal information has become the lifeblood of so many aspects of our modern world.

Personal information is more at risk than ever and the need to safeguard it and inspire the trust and confidence in those it affects is just as strong.

How can the ICO help law firms comply?

Whatever the future holds, remember, the ICO is here to help.

We offer free advisory visits to law firms to give organisations practical advice on how to improve their data protection practice.

Our advisory visits are a co-operative process where we will tell you what we think you are doing well, and what areas we think you should work on to improve.

If you have any questions about your obligations under the DPA, our website, www.ico.org.uk, provides guidance and advice. You can also call our helpline on 0303 123 1113 if you would like to discuss your question with one of our advisors.

Jonathan Bamford is a member of the senior management team at the Information Commissioner’s Office (ICO), the UK regulator set up to uphold information rights in the public interest. He is responsible for the ICO’s engagement with its significant stakeholders across all sectors.

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INTERVIEW

Miranda Brawn Charlotte Parkinson, Modern Law, spoke to the former investment banker and barrister-turned-advisor about moving diversity up the agenda for boards, and why market segmentation is set to accelerate.

Q

To date, your career background has involved being an investment banker, a barrister and board advisor, having spent your career at some of the most prestigious global financial institutions such as Goldman Sachs & J. P. Morgan. How has your past career experience enhanced your understanding of diversity issues in business?

A

My past career experience working in the investment banking and legal sectors has highlighted the various diversity gaps which have existed over the years. Unfortunately, these diversity gaps still exist in business today. Ensuring fair and equal access to business is important, for our economy and society, and for companies and individuals. Opening up access to top jobs is vital in order to ensure higher rates of relative social mobility and diversity, and to reduce the impact of structural inequalities, which result in eventual business and economic success.

Q

You are the Founder of the Diversity Leadership Foundation.

Can you tell me more about the purpose of the foundation and its aims?

A

The foundation provides future BAME leaders with opportunities and incentives via diversity lectures and scholarships, which include funding, work experience and mentoring. The differentiating factor is providing young leaders access to the corporate and UK workforces to help them progress towards successful careers. Through a partnership with The Prince’s Trust, the aim is to increase diversity in Britain and beyond. As a diversity leader, I wanted to launch an initiative that went beyond public speaking, interviews and articles to play my personal part in leading the race diversity initiatives within the UK workforce, which includes the legal and business sectors1.

The University of Law will be the sponsor for the “Miranda Brawn Diversity Leadership Annual Lecture” held on 15 October 2016.

This diversity event aims to raise awareness of diversity and equality with the next generation of future leaders.

The Foundation is already making a real difference in its first year.

This is due to a great need for race diversity with the next generation.

The focus is mostly gender and social mobility right now, hence, this is a great opportunity to help to inspire others to follow2.

Q

Do you think the legal profession is doing enough to reach out to and encourage people from underrepresented groups to embark on a legal career?

A

Image: © Kay Mills - Captured Studio

The “Miranda Brawn Diversity Leadership Foundation” aims to help Black, Asian and Minority Ethnics (BAME) future leaders while increasing race diversity and equality in Britain. This includes the Miranda Brawn Diversity Leadership Scholarship, which is an annual scholarship to provide funding and guidance for our next generation of young BAME leaders to successfully pursue their education.

The profession will continue to struggle with embracing diversity and inclusion until those with the power to change things are forced to be more self-reflective about the importance of an allinclusive cadre of lawyers serving community needs

The legal profession has to do more to reach out and encourage people from underrepresented groups to embark

October 2016

Modern Law 13

INTERVIEW

Social inclusion and strong leadership is a key requirement in order for the industry to close the diversity gap at a faster pace on a legal career. Otherwise, the profession will continue to struggle with embracing diversity and inclusion until those with the power to change things are forced to be more self-reflective about the importance of an all-inclusive cadre of lawyers serving community needs. We need to ensure that all potential for bias is eradicated and that the legal profession is doing everything to encourage underrepresented groups to apply.

initiative. Also, the business case for diversity within law firms will exist if the firm’s clients extend their diversity commitment to such law firms. Conversely, if these business clients do not believe that diversity within law firms is important to them, then no real and compelling business case for diversity will evolve within such firms.

That said, there is more action now than in previous years.

However a lot more is required to ensure that diversity is achieved at a faster pace especially from underrepresented groups. There are many global law firms (such as Hogan Lovells) who are very active in reaching out to encourage people from underrepresented groups. Hogan Lovells are sponsoring one of the Miranda Brawn Diversity Leadership Scholarships, which is called the “Hogan Lovells Law Scholarship”.

Along with efforts to educate, communicate and change culture and stereotypes, targets are a must. Setting targets for participation rates can in fact help organisations get closer to an objective definition of merit and thereby ensure they secure and retain the best talent.

This will happen because targets and accountability will force a focus on what is really happening in the recruitment and management of talent to advantage or disadvantage particular groups. Diversity is also likely to bring some level of competitive advantage for firms that are able to attract and retain such diverse talent. That said, the focus should be on the selection of merit and capabilities.

Q A

Q A

What are the biggest barriers to overcome in terms of diversity in the legal sector?

The biggest barriers and challenges start with the recruitment process and the relationship between the employers and educational institutions. The lack of diversity is amplified across the UK workforce. Diversity needs to be on the board and management’s agenda on a daily basis, driven by targets with accountability. Without a requirement to appoint diverse candidates, the pace, of change will remain intolerably slow.

Q

What are the main similarities/differences when considering diversity in the legal sector and comparing that to investment banking and other corporate sectors?

A

The legal and investment banking sectors have changed over the last decade and become proactive about diversity, which is vital in order to create a more inclusive industry. The realisation is starting to hit home now that diversity does not just mean people of different ethnic, gender and social backgrounds. It also means disabled people, people of different religious beliefs, ages, or sexual orientation and so on. Everyone needs to ensure that they are asking themselves the right questions to benefit not only themselves and their organisation, but within all the corporate industries. However, the legal industry appears to be leading with more initiatives, sponsorships and events to help diversity. There are still huge diversity gaps in all the corporate sectors, which need to be closed at a faster pace.

Q A

Do you agree with equality/diversity quota systems, which are increasingly being utilised by firms?

Targets, not quotas, will produce an organic growth of diversity in the profession. Targets should be put in place, not quotas, as this implies that a set number of roles have to be filled by employees who meet certain diversity criteria, almost irrespective of whether or not that individual would have been appointed on merit. Setting diversity targets enables the success of any diversity

Legislative changes and government priorities continue to have a significant impact on the legal services market 14 Modern Law

How would you contrast diversity within law firms, with diversity at the Bar?

Employers at the bar appear to be lagging behind those in law firms in recognising and acting to reduce the full range of barriers to access on the basis of social background, gender and race. Social inclusion and strong leadership is a key requirement in order for the industry to close the diversity gap at a faster pace.

Both the Bar and law firms have a long way to go before they achieve full diversity and equality. However, the senior judiciary clearly does not reflect the communities it seeks to serve because of a lack of ethnic minority and female QCs. Less than a third (28 per cent) of ethnic minority barristers who applied for silk were successful, compared to 43 per cent of men and 52 per cent of women. Although women were more likely to succeed than men, the proportion of female QCs remains at just over 20 per cent, according to the Bar Council. By contrast, the percentage of female partners at the major law firms continues to slowly increase, but progress remains painfully slow.

Q A

How do you view entrepreneurs in the legal sector; are new business models putting pressure on traditional firms?

There are a growing number of entrepreneurs in the legal sector who are putting pressure on traditional firms or helping them to become more innovative and efficient. We are seeing “disruptive innovation” in the legal sector. This is a term coined by Harvard Business School Professor Clayton Christensen, which is often heard in business circles but is now making waves in relation to legal practice. Disruptive innovation has hit the law and is applying pressure on traditional firms.

New business models are reducing costs, breaking away from old patterns of fee arrangements, and increasing efficiency through unique structuring and use of technology. The key to success for all market participants in the future will be driven by the extent to which law firms can continue to remain relevant to clients, respond quickly to their changing needs and provide high quality advice both cost effectively and efficiently, while managing the firm to deliver long-term stability and continuity through multiple business cycles. Many law firms are challenging their traditional business models and seeking different approaches to the organisation and structure of their firms.

Most interesting is the increasing focus on executing legal and backoffice activities in lower-cost jurisdictions, perhaps within the firm or outsourced to a third party provider. At the same time, the use of contract staff and paralegals is accelerating. A major and highly

October 2016

INTERVIEW

Images © Kay Mills - Captured Studio

The power to reduce risk in business is in every firm’s own responsibility. It is in the clients’ interests and firms can address this by ensuring that good risk management is part of good business management desirable consequence of this is the shift of the traditional law firm cost model from a heavy fixed-cost to a much more variable-cost model. Over the next few years to remain competitive, law firms will need to better understand their businesses.

Q A

What are the core risks for firms operating in the legal market, and how can firms address and manage these?

The legal profession is faced with infinitely more difficult challenges today. The global economic crisis of 2008 and the prolonged economic recession which followed were seemingly the nadir for the profession. Legislative changes and government priorities continue to have a significant impact on the legal services market.

In terms of investment banking and the associated legal market, there are various risk mitigation techniques, such as pooling and diversification, which are used and, no matter which sector, are influenced by a handful of core risk types: market, credit, operational, liquidity and legal risks.

Reducing risk is not, of course, just a matter for firms operating in the legal market. Law firms and other business sectors have the front line responsibility for managing risk in the legal sector - the power to reduce risk in business is in every firm’s own responsibility. It is in the clients’ interests and firms can address this by ensuring that good risk management is part of good business management.

Q A

Can you tell me more about what’s coming up for you this year?

There are so many exciting developments for me this year! This is a mixture of several diversity initiatives, television work and lots of public speaking alongside my day job and board advisory roles. I have lots of other public speaking engagements on various topics which include diversity, technology, law, finance and regulations.

An important event is the Cancer Research UK Women of Influence “Bags, Bangles and Brooches” where I am a board advisor. This event will be held at The British Museum in December 2016 to help raise funds to beat cancer sooner.

However, the launch of the Miranda Brawn Diversity Leadership Annual Lecture in October 2016 at the University of Law will be the biggest event of the year for me, where the first set of the Miranda Brawn Diversity Leadership Scholarships will be awarded. I will be joined by the UK’s top diversity leaders such as Dame Jocelyn Barrow and Dame Fiona Woolf who will be speaking with me at the lecture alongside other fantastic leaders who are joining me to help increase diversity and make a positive difference within the UK workforce.

Miranda Brawn When you first hear about Miranda Brawn, you may find yourself wondering how she gets so much done – she is one of those people who always seem to be doing a million things.

Right now, Brawn has started her own diversity leadership foundation, the UK’s first race diversity technology company, advising on boards, appearing on TV and radio– all while posting some of the best inspirations on social media. But after a couple of hours in Brawn’s company you will not be wondering anymore: the woman is so energetic, so in-theknow, and so downright lovely that it seems about right she should be so successful with an ageless beauty matched with great intelligence. Having her face on TV and in newspapers and magazines for the past few years has made Brawn that thing they call an industry thought-leader.

Brawn is a multi-award winner, which includes being selected

by Brummel magazine as one of the most inspirational women in London, listed in City’s AM Women in the City of London Powerlist, a Fellow of the Royal Society of Arts for her outstanding contribution to diversity and philanthropy work.

The unstoppable Brawn was profiled by the Financial Times in their first Powerlist for the Top 100 Black, Asian and Minority Ethnic (BAME) Business Executives for the future FTSE100 boardroom – something that is under the spotlight right now, in the British corporate industries.

Brawn has also joined the Government’s Equalities Commission focussing on the representation of equality within London, specifically Lambeth. Courageous women like Miranda Brawn are pure gold. We could not have a more inspiring person – who literally seems to fizz with energy and passion – to shakeup things, and spur on the aspiring and current leaders out there to join her making a difference in the world.

Follow Miranda Brawn via @brawnm and www.facebook.com/ MirandaBrawnEsq

1. http://http://www.londonlive.co.uk/news/2016-01-16/east-london-barrister-sets-upscholarship-for-bame-young-people-miranda-brawn-diversity 2. http://mirandabrawn.com/diversity-leadership-foundation-scholarship/

October 2016

Modern Law 15

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INTERVIEW

Tony Williams Charlotte Parkinson, Modern Law, spoke to the Principal at Jomati Consultants LLP about why some law firms are exploring alternative working practices, and why embracing change can be a challenge for lawyers.

Q A

In your experience, what are the most successful legal business models, aside from traditional partnerships?

Obviously, legal businesses have moved increasingly to the hybrid-style LLP structure over the last ten years or so, and that now dominates the top one hundred firms. There are also now many firms, particularly at the medium and smaller end, which operate as limited companies for a combination of tax and structural reasons. However, it is not the structure itself that determines whether you’re going to be successful or not. Any structure can work, and it can have problems - ultimately it comes down to whether the people in the firms want to make it work or not. This is centred around the outlook, management approach and strategy.

Q A

Do you think law firms are successfully utilising alternative working practices?

Yes, although it is still a relatively slow burn. We are seeing the development of onshore centres and an increased use of project management and pricing skills. Change in the legal sector tends to be evolutionary rather than revolutionary, which is fortunate. Firms don’t have to change overnight, but it is important not to fall behind, particularly as more and more legal work moves to a fixed price or capped fees. Lawyers tend to be very conservative, with a small c; if they can get away without making changes, they will.

Q A

How do you think law firm management can successfully apply project management to the running of their firms?

What I would say is avoid a ‘save the world’ project.

Traditionally, leaders of firms have tried to convert everybody to their way of thinking before they proceed. When it comes to project management skills, go with the partners that actually need it now - work with the willing and others will gradually get on board. You’ll find much greater success, and quite frankly much less grey hair, if you approach it that way.

Q A

What are the key drivers for firms to be launching LCCs?

In a centre away from the head office you can experiment.

You can find out what worked, what didn’t, and how to change it. A continuous learning environment can be really effective, and doing that away from the main office avoids interference from partners. When I visited a low cost centre a couple of months ago, the young paralegals did a presentation for me and they were on top of their game. They were excited, they were enthused, they were looking at every project and assessing how they could have done it better, what they could learn from it. In an environment of change you need that element of ‘constructive post-mortem’. If you just move people to the other end of the country you do get a one off saving in premises

October 2016

The issue these days, with the level of pricing pressure, is how to increase efficiently and find the ‘cheapest level of competence’ for work

Modern Law 17

INTERVIEW

The benefits of project management are not invented, but they do involve change, which traditionally, lawyers hate and people costs, but you’re not fundamentally changing your processes. It’s that continuous change which will drive efficiencies, and of course elements of best practice can then go back to the main office as well.

Q

LCCs have historically offered back office functions, whether that’s marketing, HR etc., but a number of them are now offering legal and client facing services. Will this trend will increase?

A

Most dramatically so. There are two elements within an LCC, the back office functions and the legal functions. To some extent, firms used a slightly Trojan-horse approach by saying the LCCs were mainly for back office functions. They have evolved naturally to provide legal services because once it goes well, more and more people jump on the bandwagon. Cost is part of it, but it’s also to do with consistency, particularly when you’re dealing with highly paid lawyers, some may feel certain work is beneath them, so it is helpful to have an office that is focused entirely on certain projects and processes. The client feedback from most of the clients I’ve spoken to has been very positive, so I think it will expand. The challenge will be that in certain locations the pool of talent may not be large enough. With the large number of law graduates and other non-law graduates wanting to be lawyers, and the very small number of training places (only about 6,000 a year), we are not going to run out of paralegals or people prepared to do this sort of work.

Q A

What are the core advantages and/or disadvantages of near-shoring, or on-shoring, versus off-shoring?

The key advantage of near-shoring is people will speak the same language and have the same cultural background, as well as being on the same time zone, so they’re very accessible if needed. Most LCCs tend to be in the city centres so there’s easy access to the local station or airport. Lawyers have a tendency to be control freaks - if something is too far away from us we get twitchy. Not necessarily rationally so, but we do. A large number of these paralegals will be graduates that have gone through some of the postgraduate training as well, so they’ll be familiar with many of these issues which will help. Off-shoring may mean even further potential costs reduction, but there is uncertainty as to whether that flows through to bottom line, or whether certain inefficiencies become built in. Scale must also be a consideration, as the larger the firm, the more favourable an off-shoring capability may become.

Even the best lawyers are sometimes quite insecure individuals, and change is frightening

18 Modern Law

Q A

What would you say are the key advantages of legal project management, in terms of process and resource optimisation?

For the last 30 years, technology in law has been about automating the quill pen. We haven’t fundamentally changed our processes, rather made them more efficient. Project management can help examine if you should be doing certain tasks, who should be doing them and how they should be done.

Technology needn’t be a threat to us, it can be a fantastically helpful tool. The issue these days, with the level of pricing pressure, is how to increase efficiently and find the ‘cheapest level of competence’ for work, whilst increasing the levels of competence as quickly as possible, to make the work cost effective. Legal project management helps to do that. It is important to remain open minded; there will be some initial mistakes, and it is important to learn from those.

Q

Why do you think some firms fail to obtain the buy in from fee earners in relation to legal project management (LPM)? What do you think is the biggest hindrance to process improvement in firms?

A

It’s fear, to some extent; some fee earners fear that if work is taken away from them, they will be in the firing line. This relates to my earlier point when firms try to convert everybody, rather than go with the willing. Work with those who need it and promote the positive experiences. Within two or three years, the vast majority of the firm will be utilising project management tools. Soon, if firms aren’t using project management, they’d better have profitable practices, otherwise they’re going to be exposed. It is extremely powerful to be able to utilise project management and report to R&D teams with facts and figures about how tasks are undertaken and how the firm operates. The message from clients to that approach has apparently been very positive. The benefits of project management are not invented, but they do involve change, which traditionally, lawyers hate. Fundamentally, even the best lawyers are sometimes quite insecure individuals, and change is frightening.

Q A

Would you say there is genuine client demand for firms to utilise LPM?

Legal project management is being mentioned more in tenders, but clients aren’t as interested in whether you’re using LMP or not. They are more keen to ensure the firm is providing a cost effective, business focused service, with predictable pricing and outcomes. LPM can help with that, but I’m sure there are firms who say they can deliver without using LPM. The key thing for the client is, can the firm really deliver what it says it will deliver?

Q A

Why do you think more firms are offering Contract Lawyer Services (CLS) and is this likely to increase?

There is a very good pool of talent available, many contract lawyers are alumni of major firms and don’t necessarily want to work on the basis that full time lawyers work, but are still very good and very motivated lawyers, and can be a good quality resource. Seconding full time lawyers can be expensive, when considering what the lawyer would have been doing had he stayed at the firm. Secondments are very important for both training and collaboration but making contract lawyers available eases the pressure while still meeting the client’s needs. We will definitely see more firms utilising contract lawyer services in the future.

October 2016

INTERVIEW

New entrants do provide a catalyst for change, the question will be to what extent they cause firms to respond and change themselves.

Q A

Do you think new market entrants pose a threat to ‘traditional’ firms, or not, and why?

Yes and no. New entrants potentially do because they have some very interesting ideas. However, to date, no new entrant has come in with the same scale and reach as the big corporates. The Parabis debacle may make people even more nervous. Certainly, new entrants do provide a catalyst for change, the question will be to what extent they cause firms to respond and change themselves. Some new firms (such as Riverview and Axoim) are growing very rapidly, but in the context of the overall legal market, they are still relatively small. I have no doubt that a range of disruptive new entrants will rise, but will they get the critical mass before the traditional firms swoop in? I don’t know, is the honest answer, and in such a vibrant market it’s very difficult to predict what will happen.

Tony Williams Tony Williams has more than thirty-five years’ experience in the legal profession, occupying senior management positions as well as direct client handling and fee earning. He is admitted as a solicitor in England & Wales, Hong Kong and Victoria, Australia. In Jomati Tony does not practise as a lawyer.

As principal of Jomati Consultants, Tony has worked for a range of international and domestic firms in the UK, US and Continental Europe, Asia and Australia. His advice covers such matters as management succession, partner appraisal and remuneration, peer reviews, firm strategy and its implementation including business planning and the positioning of law firms in their market. He is also actively involved in firms’ strategic expansion including mergers, new offices, alliances and team hires. He also assists firms on reorganisations, profitability analysis and client strategies.

Q A

What do you make of the Big Four gearing up in terms of their legal offering? Is that a bigger threat to firms?

Potentially yes. For some of us there is a sense of déjà vu, but they have the size, the clout and the connections.

Globally, they probably invest more in IT and training than the revenue of most major law firms. They are major businesses, and they will use their systems and their knowhow much more effectively. It’s not yet clear to me that they’ve quite developed a clear and compelling offering, but I think they certainly will, and over a five to ten years they will certainly be a significant force in the legal space.

Before founding Jomati Consultants Tony was worldwide managing partner of Andersen Legal and head of its UK practice. He developed the international strategy for Andersen Legal, which in 2001 was the ninth largest global law firm in fee income. Following the Enron crisis he managed the dissolution of Andersen Legal and of the English law firm Garretts. For his role in the orderly and controlled dissolution of Garretts he was named “Partner of the Year” by The Lawyer Magazine in 2002.

Prior to joining Andersen Legal, Tony was managing partner of the world’s largest law firm, Clifford Chance. He was with Clifford Chance almost 20 years and prior to his managing partner role he was a corporate partner in London, Hong Kong and the managing partner of the firm’s Moscow office.

Tony is a founding member of Halsbury’s Law Exchange, an independent and politically neutral legal think tank which contributes to the development of law and the legal sector. www.halsburyslawexchange.co.uk.

Tony is also a Visiting Professor at the University of Law.

October 2016

Modern Law 19

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EDITORIAL BOARD

Encouraging a diverse profession – what can we do as regulators?

Graeme MacLachlan outlines the Legal Services Board’s approach to diversity and explains why the oversight regulator plans to shift the emphasis for action to the regulators. he Legal Services Board is a passionate advocate for a diverse legal profession, reflecting its inclusion as a specific regulatory objective in the Legal Services Act. We promote diversity and social mobility through our regulatory framework and we expect the legal services regulators to do the same.

T

This autumn, we will be consulting on our diversity guidance for regulators, first issued in 2011, to make sure it remains up to date and relevant. The changes we propose are designed to give regulators the freedom to develop their own approaches to improving diversity throughout the profession.

Delivering real change

In our recent Market Evaluation published in July 2016, we found that the sector has made some progress but that there is still much to be done to encourage the profession to become more representative of society. At entry level, the profession is broadly comparable to the wider population; however, as one climbs higher, and in particular at senior levels, it remains disproportionately white and male.

There are many excellent initiatives, both in the legal sector and further afield, that have delivered real change to diversity profiles. Many of the most effective are led by firms themselves, in recognition of the benefits that diversity brings to their business.

Professional bodies have a role to play too, and The Law Society has done good work to develop the business case for diversity and inclusion, identifying the benefits in the shifting profile of the profession. The Society set out recommendations and actions for firms across the size-spectrum that might deliver commercial benefit. We hope our new guidance will complement these initiatives and encourage regulators to play their part in spreading evidence of firm best practice within their regulated communities.

The work on diversity by the regulators to date has followed LSB guidance from 2011. Our aim five years ago was to develop the evidence everyone in the legal sector needed to analyse the diversity profile of the legal services profession, and we are encouraged by what has been done to date. The next steps are to take the data that has been collected and use it to inform policy changes to deliver more diversity initiatives.

In all our work, we aim to be proportionate. We understand that some of the regulators we work with have a lot more resource than others. We also know from other sectors that improvements in diversity and inclusion cannot be achieved without dedicated work. It has been positive to see how some regulators have started using the information they have collected over the last few years to implement changes. The Bar Standards Board (BSB) has introduced diversity as a consideration for policy decisions in all areas. Our hope is that regulators will be encouraged by the BSB’s progress and work collaboratively amongst themselves to achieve similar change.

Collecting data alone will not bring about change; change will only happen once the data is used to alter attitudes data collection. We gave regulators a series of deadlines to achieve certain things and, now they are all collecting data on diversity, we are changing our focus to a broader set of outcomes. While we have committed to reviewing this year’s work in 18 months, we have drafted the proposed outcomes in a way that allows them to remain relevant even as the regulators make progress.

The outcomes we have suggested in this consultation are not supposed to be easily achievable, and nor do we expect regulators to achieve them all through the same work as others.

The thinking behind this proposed switch to outcomes is to allow our colleagues within the regulators to assess their respective professions and policies and carry out the work they think can have the greatest impact on diversity and inclusion.

It might seem to some that this change is nothing more than an increase in the regulatory burden; it might be perceived that we are giving the regulators more work while also asking them to continue developing their understanding of the diversity profiles of their profession. We don’t see things that way. The first iteration of the guidance was always a stepping stone to something else.

Collecting data alone will not bring about change; change will only happen once the data is used to alter attitudes. We want to give regulators the freedom to explore ways they can achieve the outcomes we have suggested; we do not want to give them a list of new tasks to be completed by a deadline.

The consultation opened on 23 September www.legalservicesboard.org.uk/what_we_do/consultations/open/ pdf/2016/20160929_LSB_Diversity_Guidance_Consultation.pdf.

We are hoping to receive representations from as broad a range of interested parties as possible. The more we can understand about the experiences of front line legal services providers the better. We aim to regulate in a way that delivers positive outcomes, and in this instance we hope to make our guidance to regulators as beneficial to you as possible.

Graeme MacLachlan, Regulatory Associate, Legal Services Board (LSB).

Igniting change

The LSB’s focus this year is on developing our approach to diversity and shifting the emphasis for action to the regulators. The guidance we issued in 2011 was, necessarily, very prescriptive and focused on

October 2016

Modern Law 23

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EDITORIAL BOARD

The Critical Friend

First 100 Years

here is a wide range of external advisors that managing partners, department heads and other senior law firm managers and leaders can turn to. The choice depends on the nature of the support being sought. A coach might help through a period of change, a non-executive director might be appropriate for on going guidance on strategy or governance, consultants are often engaged to work on specific projects, and they may be specialists in particular areas and will often be ‘hands on’ rather than just advisory.

e are using this month’s column to raise awareness of some exciting new initiatives from First 100 Years, the ambitious video history project celebrating women in the law, which Serjeants’ Inn is privileged to support.

So why might a “critical friend” be of use to a law firm, what is it, and do we need another type of external advisor?

To date over 20 video stories featuring women who have shaped the legal profession have been filmed. The list includes Baroness Brenda Hale, Dame Linda Dobbs, Shami Chakrabarti, former Simmons & Simmons senior partner Dame Janet Gaymer, and Rosemary Martin, general counsel at Vodafone. Videos can be viewed on the First 100 Years website at http://first100years.org. uk/.

T

A critical friend is like having your best friend or a close sibling working with you. They praise when things go well, commiserate when they don’t, suggest ways forward when you are struggle to work out what to do, tell you that your ideas are good or daft and caution against taking actions that may be ill advised. Above all they bring an external perspective and provide a sounding board.

They offer support (the friend bit) and challenge (the critical part).

The critical friend is someone who is encouraging and supportive but who also provides honest and often candid feedback that may be uncomfortable or difficult to hear; they speak truthfully but constructively about weaknesses, problems and difficult issues.

Like many business tools the critical friend concept first developed in another sector and emerged in the education sector in early 1990s, the idea being that school or college governors were critical friends to the head. It was subsequently adopted in the public sector, being promoted in government departments by the Cabinet Office.

For law firms the critical friend can be a major help in many situations. If the choice of critical friend is carefully made then the one-to-one relationship between them and, say, a managing partner, can be of immense value if that relationship is one of respect and honesty. The tool is not only applicable to helping individuals; the critical friend can play a key role on a board or committee, providing an external view and a questioning of decisions. They can also support specific projects, working with either the leader or the whole team to question decisions and keep things on track, but not to take responsibility for specific tasks.

Above all the critical friend has the firm’s best interests at heart and provides those with that common interest with an additional but different lens to view their work.

Martin Griffiths, Director, Richmonte Wells Ltd.

W

First 100 Years is showcasing the contribution of women to the legal profession over the five years leading up to the 2019 centenary of the Sex Disqualification (Removal) Act, which paved the way for women to enter the profession.

In August, First 100 Years launched its Inspirational Women in Law Awards, which will identify and celebrate 10 female legal trailblazers who will provide an inspiration to the next generation of lawyers, driving change to ensure a strong and equal future for women in the profession.

The awards are truly inclusive; nominees have been sought from across the legal sector, including solicitors, barristers, in-house legal counsel, judges, magistrates and members of the IBC, CILEx, and the Institute of Paralegals.

The award winners, who must have been working as a legal professional for less than ten years, will feature in a special chapter celebrating the next generation of pioneers in the digital exhibition that First 100 Years is curating for the British Museum.

The first winners will be announced at the project’s second annual conference, SPARK21, on Wednesday 9th November at Simmons & Simmons’ offices in the City of London.

The conference will include a series of panel discussions chaired

by BBC Woman’s Hour’s Dame Jenni Murray. If you, like us, are committed to diversity within the legal profession, we would urge you to attend. Full details are available on the website.

Serjeants’ Inn is proud to work closely with First 100 Years: with both Bridget Dolan QC and Katie Gollop QC taking silk this year, it underlines our commitment to equality and diversity in tangible terms. We have supported the initiative not just financially but also in practical ways, for example by becoming involved in the organisation of many of their events. As Director of Client Care at Serjeants’ Inn, I am delighted to be a Champion of the project and a trustee of Spark 21, the charity running the campaign. Please do contact me - or indeed the founder, Dana Denis-Smith - if you would like to support this excellent, inclusive project.

Catherine Calder, Solicitor & Director of Client Care, Serjeants’ Inn Chambers.

October 2016

Modern Law 25

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EDITORIAL BOARD

As the door closes in Ireland, what does the future hold for professional third party litigation funding?

How do I go about specialising in acting for a particular sector? Part 1

Maurice Power examines shifting attitudes to professional third party litigation funding.

Andy Poole shares his key points for the all-important research and planning stages lawyers should undertake before specialising.

2

016 has seen the Irish High Court address the status of third-party funding, and has struck a blow to funders seeking to service the Irish market by declaring it unlawful.

The Court’s judgment was handed down in April in the case of Persona Digital Telephony Ltd v The Minister for Public Enterprise. Whilst an appeal has been lodged, professional third party litigation funding, for now, remains prohibited.

The Irish High Court decision was the first case to have come before the Irish courts directly concerning the acceptability of professional third party litigation funding. The court noted a steady line of authority backing the view that maintenance and champerty remain unlawful in Ireland. The Court outlined that it is contrary to public policy and an abuse of process for a third party to provide financial assistance to support litigation, in return for a share in the proceeds, unless that third party has a genuine interest in the litigation. This view differs to the position in many other jurisdictions, including England and Wales, where the law has evolved significantly over recent years.

Third party funding is allowed in cases where the funder has a lawful interest or a clear and legitimate concern in the litigation, e.g. as a shareholder or creditor of a company that is a party to the matter. However, those who fund litigation in this way risk being made personally liable for the costs of the litigation, if the action they are funding is ultimately unsuccessful.

Unless the appeal is granted priority, the decision is unlikely to be reviewed for at least a year - although challenge on constitutional grounds may yet emerge.

With the recent acceptance in principle of ATE insurance in Ireland, it appears that the attitude of the Irish courts to third party litigation funding is evolving, regardless of the absence of any legislative change to deal with the issue of litigation funding generally. Future legislative changes on litigation funding should not be discounted.

With reports of third party funders now financing FTSE 100 company’s litigation portfolios, it is clear that this service is now firmly part of mainstream practice. With many international Corporates choosing Ireland as their European base, it would be prudent to question whether the Irish legal system’s failure to adopt modern practice will ultimately have a telling impact on the decisions of the Corporates to locate there.

Maurice Power, Managing Director, Ferguson Litigation Funding.

October 2016

s a result of both my own sector specialism in acting for law firms and also advising law firms on their own strategies, I have found that those who reap the greatest benefits from specialising are those that totally immerse themselves in the sector that they are seeking to specialise in.

A

If something is worth doing, it is worth doing properly. After so many years specialising in advising lawyers, I’ve got to the point where I now actually feel more like a lawyer than an accountant!

Key points to implement a sector specialist strategy include: • Research • Planning • Marketing.

I’ll cover research and planning in this edition followed by marketing in the next. My key points for the research and planning phase are: 1. Decide which sector you want to specialise in 2. Subscribe to and continually actively read as many of the trade publications of your chosen sector as you can 3. Compile lists of the businesses in the sector that you would like to act for and you think would benefit from your specialist knowledge – importantly also note the key decision makers in those businesses 4. Compile a list of other specialist advisers to your chosen sector and a list of your existing clients in the sector 5. Meet with the other specialist sector advisers (business partners) to find out what they think the hot topics and current developments/issues are for the sector 6. Meet with your existing clients in the sector to inform them of your plans, the benefits that should bring for them, but also to ask them to help you to build your knowledge 7. Determine how and why your specialism will allow you to differentiate from your competitors – just specialising and knowing more about the market is not sufficient. There needs to be a benefit for clients in working with you, potentially including the provision of additional services that you would not have provided pre specialising 8. Continue learning – never stand still.

In the next edition, I’ll review how to use the new knowledge from a marketing perspective in order to take on and help additional clients.

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.

Modern Law 27

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EDITORIAL BOARD

Handsoff pricing leadership produces lousy outcomes he pricing function in most law firms is something of an orphan. No-one knows who it belongs to so it ends up belonging to no-one. Individual department heads and fee earners make decisions on the fly with little regard to the firm’s pricing policies, processes and protocols.

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Fee earners, particularly senior people, will tell you that they are the logical final arbiters of what is an appropriate fee. After all, they manage the client relationship and sometimes brought the client into the firm.

“Hang on a minute. We in finance know what is profitable and what isn’t (sort of!). We must be involved.”

“Don’t forget us in BD and marketing. It is important to have an integrated and cohesive message. We need to have input.”

“Sorry, they are my clients and I will decide what is best so far as price is concerned.”

“But wait, I am the managing/senior partner. I think there should be some place for me in this. On second thoughts, I’m too busy sorting out other stuff. Just get on with it.”

Hmm, ring a bell with anyone? To be fair, they are all correct in a way; the issue is a lack of leadership.

If someone very senior in the firm’s management team does not overtly, forcefully and visibly ensure that a pricing plan is developed and implemented, and over which they will be exercising penetrating oversight and accountability, don’t even bother starting to head down the pricing improvement track. You will be largely wasting your time, effort and money.

Sure, this needs the support of the Board or the whole partnership or whatever the firms’ governance rules require, but pricing leadership by definition includes securing that support. Anything less than a vigorous and forthright approach will produce results that are at best, insipid and transient, at worst, non-existent.

In firms where the approach to this issue has been markedly different we find that without exception, those firms that are getting not only the best short-term results but also sustained and durable results are those firms where someone very senior in the firm has really taken ownership of the issue.

Firms must create an environment and a culture of pricing capability, awareness and aspiration, and senior people in the firm must lead by example. Simply telling the Finance Director that he or she needs to get the firm up to speed on pricing does not cut it by a long shot!

Richard Burcher, Chairman, Burcher Jennings.

“The Digital Mailroom” s the lawyer-client relationship is at the core of a law firm’s sustainability, each practice needs to respond to its clients’ communications in a manner as efficient and timely as possible. In fact, response times could be a key factor in client retention. Since the use of smartphones has become prolific, legal clients now have higher expectations about how communications should be conducted.

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Many law firms acknowledge that it will take significant change to the way they organise themselves, deliver legal advice and service their clients to improve on pre-financial crisis levels of profitability and admit that innovative use of technology needs to be at the heart of this change.

The legal industry’s competitive advantage is still driven by the ability of lawyers to consume, assess and synthesise vast amounts of paper documentation, evidence, statements, filings and court proceedings. This leaves little room for error or lapses in security.

However, 90% of technology resources and investment is still focused on ensuring that email systems are working, there is enough storage and that lawyers can type a document.¹ Law firms need to accelerate their physical mail distribution process to support business growth and boost their legal team efficiency. If they could shorten the time spent on this area of the business then employees could spend more time on tasks that add greater value to the firm.

Implementing an automated digital mailroom system, such as that offered by PHS Data Solution’s Capital Capture, could be an ideal solution which also guarantees security and confidentiality of important and vital information.

A digital mailroom provides a range of proven returns to business which include: • Improved efficiencies in mail handling and response times and costs • Mail prioritisation • Effective channelling of communications • Effective information sharing • Reduced paper usage • Improved information management and processing.

In the Change Harbour 2015 survey of 250 law firm leaders, 82% say using technology to make lawyers more effective is a high priority over the next 18 months. Comparatively, 18% say reducing the cost of supporting the business is of high importance.

But wanting to do something and actively achieving it will require more legal businesses to open their minds (and pockets) to alternative digital working practices. ¹ According to Simon Thompson, MD at Change Harbour, an independent consultancy advising organisations in the legal sector on strategy, process, technology and organisational design.

Anthony Pearlgood is Managing Director of PHS Data Solutions, a leading player in the scanning, storage and shredding industry for a variety of sectors, including Government, the NHS, pensions, insurance, legal and retail.

October 2016

Modern Law 29

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EDITORIAL BOARD

Age of the millennial Future proofing: As millennials begin to purchase legal services, does the sector need to modernise its image to appeal to these new generations? lot has been written in recent press about the millennial generation. Lazy, entitled, demanding, “job-hopping”, tech-savvy, self-confident and socially aware are just some of the descriptions I have read. When compared to the Baby Boomers and Generation X who make up over two-thirds of the current workforce, there are clear differentials.

A

Millennials grew up with technology as a generation – especially mobile, like smartphones – and use it constantly for business matters and personal use. There is an expectation that this technology should work consistently, anytime and anywhere, and it is frustrating when it does not. They also tend to look for work/life balance and have high expectations of their own future in terms of promotion and personal development.

Some legal firms are evolving as a result – through more active use of their website and social media channels, talent acquisition/ retention programmes and employee engagement levels. In recent months I have witnessed the promotion of two young (mid 30s) lawyers to senior positions in their firm, however this is still outside the norm. The majority of law firms are still run day to day by the Baby Boomers who have little understanding of the Millennials’ potential for senior leadership, compiling marketing and PR strategies in line with the modern day and in improving engagement with the wider public.

The most common problem is that the partners of the firm do not have an understanding of technology and have grown in a legal sector whereby there is little transparency within the firm internally, and therefore no “buy-in” from employees and no real marketing or client acquisition strategy. I am amazed when I speak to young lawyers about their firm and they tell me they don’t know what the firm’s turnover is, what other fee earners have brought in this year and whether they are “on track” or not against any set objectives or targets. No common goals to bring employees together and something to work towards is a recipe for a lack of cohesion and employees having no real sense of belonging.

The firms who are actively thinking about their internal and external “character”, or brand, and how to engage with both employees and clients of the millennials will find themselves ahead of the pack.

Kevin Ferriby FMAAT FPFS, Chartered Financial Planner, Managing Director, Informed Financial Planning.

ABA on ABSs The American Bar Association (ABA) have issued a report which states they will gather more evidence about the risks and benefits of ABS-type legal businesses before they agree to licensing new entities. Could this decision impact in any way on ABSs (existing and potential) in the UK, and what are the risks and benefits associated with alternative business models?

M

y view is that it is difficult and possibly downright dangerous to attempt to draw lessons from the experience of institutions in other jurisdictions.

I suggest that the views, experiences or prejudices of the ABA should NOT cast any light on how ABSs operate in the UK. The whole conception of legal liberalisation in the UK lay not in the hands of lawyers but came as a result of measures by pressure groups (non-legal) and governments. How far would that liberalisation have got in this country if it have been left to the Law Society, the SRA and the Bar Association to pontificate on whether the legal profession should be “opened up”?

It is not surprising that in the USA there have not been similar pressures towards liberalisation. Surely, you might think, an entrepreneurial spirit should flourish in the home of Free Enterprise. This is why not: The US is a country in which lawyers do enjoy extraordinary levels of control and influence. It has always been hard to get anywhere as a budding politician without reaching the ranks of at least a provincial DA and most leaders of industry have started their careers in legal practice.

In both State and Federal politics, lawyers have always wielded enormous influence, as have the judges and Bar Associations.

It is a truism that lawyers tend to look after their own and that has been enshrined in folklore and tradition in the States - ask any Attorney who has tried to fight an “out of town” case, i.e.in a state in which he is not a member of the local Bar Association!

Are any US politicians going to have the clout to promote change in the legal profession?

When you have a monopoly, it is difficult to summon up enthusiasm for a change in the status quo, especially when that status quo has proved to be very lucrative over many generations!

It is no accident that US Attorneys have (to British eyes) very highly developed rules on privilege and confidentiality - a sort of carapace to deter the layman from enquiring too closely in the mysteries of legal procedure and tradition.

To me, the surprise therefore lies in the fact that the ABA is even spending time and money on “evidence gathering” to evaluate something to which they are intrinsically opposed.

David Simon, Chairman, Triton Global.

October 2016

Modern Law 31

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EDITORIAL BOARD

Will there be life after Osborne for The PI Firm?

Yes! oday’s climate means that competition is fiercer than ever, with the result that PI Law firms are under increasing pressure to respond! Following Osborne’s proposed reforms, margins will be reduced considerably. The sector is demanding higher levels of service and internally there are expectations of achieving more with less!

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The challenge that PI Law firms face in such market conditions is how to achieve significant growth and maintain the stability of the organisation. Normal organic growth of claims and costs will build the profits gradually but is unlikely to secure the future in an increasingly competitive market. In order to build profits and secure the future, revenue and margins must grow, and continue to grow, much more quickly than operating costs. To protect the future growth and maintain stability, the PI Law Firm’s strategy must be achieved without exhausting its resources and without taking risks.

To develop a strategy for PI Law Firms and help them become successful post-Osborne reforms, BMS Funding studied the legislation and developed a working solution that is helping our current partners become more profitable and successful again. We limit the risks to the Law Firm, offering efficient working solutions, generating higher returns per capita and increasing the overall returns on investment.

At BMS we partner with PI Law Firms to offer innovative and forward thinking solutions that include: • Arranging funding for case acquisition on PI Portal cases at NO COST to the Firm • Automating the Proclaim system at NO COST to the Firm • Arranging Triage Rehabilitation and MedCo portal fees where the Law Firm is not at financial risk so again NO adverse COST • Arranging written advice on Quantum on every case at NO COST to the Firm or the client As the UK’s premier PI funder, BMS is helping PI Law Firms create the capability to identify new opportunities, and sustain a higher level of business performance via effective and pro-active solutions that pose NO RISK and NO COST. We endeavour to push the boundaries, and continually work alongside our partners to further develop our ideals.

Ian Barlow, Financial Counsel, BMS Funding Ltd.

Cyber attacks: threats and actions As cyber crime continues to affect the legal industry, how can law firms minimise the risk of being targeted, thereby preventing, rather than having to recover from, the potential damage?

1. Acknowledge the threat exists and that action is required.

This may seem a little patronising but I still find legal firms who are aware of a problem and have done nothing to be certain that their firm has the right security provisions in place.

2. Understand that there is no silver bullet and develop a plan of action should a breach occur.

It is very likely that most legal firms will suffer some form of attack at some point, and an incident management plan is vital, especially with the rigors of GDPR on their way next year.

3. Threats and actions.

The table below shows three common threats and the actions required to help mitigate the threat.

Threat

Description

Actions

Ransomware and other malware

A successful attack of this nature requires the malware to be installed on a device and the most likely methods to be used are: - i) email or ii) USB key.

1. Changing the configuration of devices can prevent malware from being installed. Two examples required by the Cyber Essentials standard achieve this – i) remove admin rights from users preventing software from being installed: and ii) disable auto-run so that software on infected USB keys and DVDs is not automatically run when the device is inserted.

2. Provide staff awareness training and testing.

Spear-Phishing

Sufficient information 1. Review website information provided is gathered by the about partners and staff and replace sender to make the email addresses with enquiry forms. email recipient believe 2. Provide guidance to partners and staff it is bona fide. on the use of social media and the nature of information allowed to be posted.

3. Provide staff awareness training for front line staff to challenge requests for information from non-validated callers.

Hacking

Attacker exploits 1. As noted above, conforming to the vulnerabilities in the IT Cyber Essentials standard can also system and software help in this area by: - i) checking the installed. configuration of routers and firewalls; ii) updating systems and software promptly; and iii) removing software not required by the firm and only software that can be maintained; that is, no Windows XP systems, etc.

My best single recommendation is get Cyber Essentials certified and keep going on the journey once you have.

Paul Rolison ACA, Director, Cyber Strategies Ltd.

October 2016

Modern Law 33

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EDITORIAL BOARD

Q What is an IFS Rating?

Should my client be aware of this when selecting ATE cover?

4 Top Tips to polish your personal finances

A An ‘Insurer Financial Strength Rating’. Yes.

1) Pensions

1. An ‘Insurer Financial Strength’ (IFS) rating is an opinion provided by an independent rating agency on the financial strength/ claims paying ability of an insurer. This is of interest to various parties, not least potential policyholders. They will want to know the prospects of an insurer being able to pay out should it be necessary to make a claim under the policy. Unfortunately, the relevance of this point has been demonstrated recently by the appointment of a provisional liquidator for Enterprise Insurance Company plc, an unrated insurer whose markets included both solicitors professional indemnity and legal expenses insurance.

2. IFS ratings look at the risk of an insurer defaulting, and considerations include • the ability of an insurer to meet its policy obligations, and • expected recoveries for policyholders in the event of an insurer failure or regulatory intervention, (based on sufficiency of assets).

3. Recognised rating agencies include A.M. Best, Fitch, Moody’s and Standard and Poor’s. The ratings they produce reflect their views, having taken into account research on, for example, capital, reserves, profitability, gearing, management quality, group parentage, etc. (They do not take into account the quality or value of products or issues relating to claims handling). Each agency will have its own standards and methods for rating insurers and each has different codes for rating/reflecting their views. Details of these agencies and how to access their ratings are readily available on the web, and a potential insured can of course make enquiries of any broker who may be assisting them.

4. IFS ratings are interactive, in that an insurer will pay a fee to an agency to carry out a detailed examination of its business in order to obtain/maintain its rating (although ratings can also be unsolicited). ‘Unrated’ insurers are those that have chosen not to obtain an IFS rating.

5. Insurers can ‘fail’ whether they are ‘rated’ or not. However, a rating does provide a certain level of confidence based on underlying agency diligence. Being aware of an insurer’s rating status will enable informed decision making. A policyholder who proceeds with an unrated insurer may do so for a variety of reasons, but will probably want to do so on an ‘eyes wide open’ basis having made a positive decision on it.

While their attractiveness has been reduced for high earners going forwards, mopping up the carry forward allowances from the last three tax years can allow a high earner (who has not contributed in recent years) to receive full 45% tax relief on a £140,000 gross contribution. This figure comprises £50,000 gross from the 2013/14 tax year, £40,000 gross from each of the 2014/15 and 2015/16 tax years and £10,000 gross from the 2016/17 tax year.

2) Other tax allowances

Following on from our previous articles, the following allowances are now available for each individual (irrespective of earnings level): • ISA allowance: £15,240 (rising to £20,000 from 6 April 2017).

• Dividend allowance: £5,000.

• Personal Savings Allowance: £1,000 (basic rate taxpayer), £500 (higher rate), £0 (additional rate).

• Capital Gains Tax exemption: £11,100

3) Suitability of wrappers

It may be that you set your pension up many years ago, or a previous employer might have organised a group scheme for you and other employees at the time. You may have collected many pensions as you have moved between roles, and ISAs with a different provider for each tax year, all of which are very common. Reviewing the costs of these wrappers and potentially consolidating them to the pension/ISA with the most competitive costs can often save you money, as well as reduce the administration and post that you receive to a more manageable level. Some pensions, especially the older ones, have not had their rules updated to offer the new flexibility in terms of drawing your money out, and a transfer could ensure that you are not limited to an annuity purchase, given the low rates on offer currently.

4) Asset Allocation

Is the asset allocation of your investments appropriate for your attitude to risk, and for your time horizon for drawing from your portfolio? Have you sought a professional opinion on this? It is often quoted that the asset allocation of an investment portfolio is the main factor in deciding on the returns. If your portfolio is all in cash, and by nature, you would be willing to take some risk for the potential of a greater return over the long run, it is likely you are missing out.

Mark Everitt, Chartered Financial Planner, Saunderson House. Saunderson House Limited is Authorised and Regulated by the Financial Conduct Authority.

Matthew Williams, Head, AmTrust Law.

October 2016

Modern Law 35

EDITORIAL BOARD

Managing a modern law firm requires the same dexterity as managing a commercial business, and more our ‘product’ (successful management of your clients’ legal business) is delivered using hard earned skills acquired over time, which need constant updating to remain ‘legally’ usable.

Y

Each client’s ‘project’ is bespoke – developed from a brief using your skills and knowledge, and those of third parties, and requiring resourcing for a variable and largely indeterminate period of time with no return on your investment until sometime after completion.

Add to this the normal business management challenges, including the critical issue of cash flow and it’s clear that managing a legal business is a far more complex scenario than faced by many businesses.

Finding the resources in terms of skills relies on a network of specialist providers. Medical agencies; paginates; Council; Expert Witnesses and the myriad of other third parties understand the timescales and logistics of the legal ‘industry’. Unfortunately, on the ‘business management’ side, providers are not always willing, able, or simply don’t recognise the importance of aligning with your logistics. This is often true of business funders.

Conveyancing and technology - there is no time like the present to make a change hese days technology has us living as a 24-hour society.

Our time is quickly filled, particularly through the use of said tech, whether at home or at work, and we frequently find ourselves describing our lives as ‘busy’. Living in a fast paced society means we now expect instant gratification when purchasing an item or service as well as receiving swift, exceptional customer service – and all at a competitive price, of course. As a service industry, legal firms are not immune to this, and many issues around time efficiency can be addressed by using process consolidating technology.

T

Recently, I read the 2016 Lexis Nexis Bellwether Report, which provided an optimistic view of attitudes toward technology in the legal industry, stating that over 90% of lawyers surveyed agreed that “continued investment in technology is no longer optional – it is a must”, and 64% ‘strongly agreed’ that continued investment in technology is essential to legal practices.

However, in contrast, in a recent survey performed by InfoTrack, 73% of conveyancers who responded said that they are still using up to 5 websites to complete a conveyancing matter, and almost 70% said they were missing charging disbursements due to technology based errors.

Traditional providers of cash to businesses have their own selfcentric structures for lending. Lessors will provide arrangements for the purchase and use of assets. Business development funding will look for security against the real assets of the company. All generally provide loans and require repayment of capital and interest on a monthly basis over a fixed term (e.g. 6/12 months).

Unlike traditional funders, VFS Legal specialise in funding Law Firms and our products are specifically structured to align with the business logistics of running cases. They are targeted to free up the cash invested; repayments are structured to align with your timescales with low monthly interest only charges. The big costs you incur are for disbursements, often small for each case but amounting to significant sums across the whole portfolio, and for your billed costs on success, where despite winning you are faced with significant periods of time before agreeing quantum let alone actually receiving your money.

The market clearly accepts that investing in consolidated technology is imperative to maintaining a competitive edge and key to increasing productivity, particularly in industries such as conveyancing. From searches, through to indemnities and submission of notoriously lengthy SDLT and AP1 forms, conveyancers expect to be able to access all key tasks in one location in order to create efficiency and allow them to focus on providing exceptional customer service.

Don’t underestimate the higher level of business skills needed to run a successful legal practice and be alive to the fact that just as specialist legal resources are available so are, from the right financial institutions, facilities for funding cash flow – the life blood of any business.

There is no time like the present to make a change in the technology being used. Implementing the right changes allows firms to turn their focus to areas such as customer service, and by identifying systems and processes that are going to benefit both internal and external stakeholders in the long term, adopters of change and consolidating technology will reap the benefits.

So why does industry research also demonstrate that the market is still accessing numerous websites to complete a single transaction? I believe it comes down to a fear of change. Whilst this may sound bullish, I would argue that many law firms have tried providers who haven’t quite delivered on their promise.

However, as technology changes continuously, law firms have to regularly investigate the new technology available to them.

Robert Norman, Director and COO, VFS Legal Limited.

Adam Bullion, GM Marketing, InfoTrack.

October 2016

Modern Law 37

EDITORIAL BOARD

To SQE or not to SQE? The SRA has proposed a Solicitors Qualifying Examination (SQE) to simplify the legal qualification process. What are the advantages or disadvantages of implementing the SQE? he SRA has expressed its desire that all solicitors’ skills and knowledge are of the same high standard, irrespective of the route taken into the legal profession. Their proposals are contained in the consultation “Training for Tomorrow: Assessing Competence” which closed in the Spring of 2016.

The proposals would see all prospective solicitors taking the Solicitors Qualifying Examination irrespective of route to the qualification. This short piece examines the advantages and disadvantages of the proposals.

T

Advantages:

• Whilst some LPC providers have success rates in excess of 90%, others are below 50%. The current system does “not provide direct assurance about the standard of awards made to students or their broad comparability” (Higher Education Funding Council for England).

• The principle of centralised assessment, supported by the Law Society, will achieve consistency and improve standards. All aspiring solicitors, no matter what institution they attended or pathway they took, are assessed against the same high standard of competence.

• The SQE will make the process cheaper and less prescriptive and will improve diversity and access to the profession.

• By removing the pre-requisite of the Legal Practice Course, students will be spared what the SRA training and education director, Julie Brannan, has referred to as the “£15,000 LPC gamble”.

Disadvantages:

• Will it be possible to create an examination capable of achieving the SRA’s objectives?

• Is there a risk of placing too great a burden on a single instance assessment?

• Would entry requirements, a degree in a related subject, work experience or equivalent be a pre-requisite?

• Would assessments be modularised, allowing picking and choosing of assessments undertaken, arguably creating less reliability and higher inconsistency?

• How would future work-based learning be supervised?

• Inherent dangers in “light touch supervision”.

• How much credibility would the SQE have internationally? Law schools currently validate LPCs at level 7, the equivalent of a Masters degree. Would the same apply to the SQE? Any decision on the SRA’s plans for reforming the process of qualification will not be made until 2017.

Matthew Claughton, Managing Director, Olliers Solicitors.

Essential skills for Expert Witnesses The secret to becoming an effective Expert Witness? High quality training and qualifications. wo things are essential for anyone acting as an expert witness.

First, they must have high levels of subject matter expertise.

Secondly, they must be able to discharge the role of expert witness effectively and in accordance with relevant judicial rules.

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Expert Witnesses play a central role in the judicial process. Their job is to communicate technical matters that fall within their area of expertise to a tribunal, so that the tribunal is able to them. Ultimately, expert witnesses ensure decisions made by tribunals are fully informed and are connected to the issues at the heart of disputes.

The problem is that instructing parties may not know how experienced or knowledgeable their expert is in discharging the role of expert witness. Many experts may lack a genuine understanding of how to effectively act as an expert witness.

The key constituent of expert evidence is specialist subject matter knowledge. However, in recent times it has become clear that technical knowledge alone is not a sufficient qualification for someone to be an expert witness in the courts of England and Wales. Following the Supreme Court’s Decision in Jones v Kaney (March 2011), which removed immunity from expert witnesses for actions in negligence, expert witnesses have come under increasing scrutiny.

Instructing parties now appear to require experts to have higher competency levels in legal proceedings. Tribunals require experts to have much more than “a grasp” of rules and protocols for giving evidence. Expert witnesses need to be highly skilled at writing reports which non-experts can understand and must give spoken evidence clearly and confidently.

High quality expert witness training programmes are necessary to teach professionals core skills around writing reports correctly and giving evidence in the witness box. Effective schooling helps experts to appreciate the importance of assembling relevant information. Training teaches them to communicate their specialist knowledge effectively to those who are not subject matter experts and who may not understand technical jargon.

Experts who are well trained acquire high levels of confidence.

The qualifications they achieve through training enables them to demonstrate that they have first-rate courtroom skills and have mastered the art of dealing with robust cross-examination.

So, although instructing parties still desire experts who have high levels of technical expertise, they are also increasingly demanding additional proficiency in communication, judicial procedure and courtroom skills. They want subject matter experts who are trained and qualified to act as expert witnesses.

Martin Burns, Head of ADR Research and Development, the Royal Institution of Chartered Surveyors (RICS).

October 2016

Modern Law 39

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EDITORIAL BOARD

Are law firms successfully utilising alternative working practices? op law firms have focused on specialisation, creating narrowly defined practice areas to gain a competitive advantage. Against this backdrop, these firms are also looking to maximise the productivity of legal professionals by sharing and integrating their specialised knowledge amongst their workforce and client base. The key to successful ‘collaboration’ is making valuable content easily available to everyone who needs it – and that includes key stakeholders inside and outside of the firm.

Here are five top tips to get started with mobility, collaboration and efficiency improvements:

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1. Start with content and document management.

Manage all your firm-wide documents and content including organising, sharing and governance, from their creation to eventual archive or destruction. View relevant work product in context and allow your lawyers to rapidly create and revise documents. Collaborate with your team and stakeholders. Ensure your files are securely accessible from anywhere, on any device.

2. Become paper light.

A robust paper to digital solution will help keep the core repository optimised and populated with the firm’s valuable knowledge and content, while providing governance and policy compliance. This will also enable other collaborative technologies to integrate into the ecosystem with more efficiency and with better outcomes.

3. Enable secure access for everyone to the content resources.

This should encompass a secure mobile strategy comprising technology and policy. At one time, data privacy and security concerns stopped law firms from enabling mobile access to sensitive data. That is no longer the case as robust technologies and frameworks exist to enable mobile and remote access to collaborative platforms from a number of devices, ranging from laptops to tablets, with a seamless user experience.

4. Pay lots of attention to user interface.

For some lawyers, moving to using a collaborative platform is a big step. Consumer user interfaces require very little training and are intuitive – imperative for successful adoption. Once a user has taken that step successfully it is important to replicate the user experience so that they can access the platform from any device in a way that is familiar and easy for them.

5. Enable clients to access the platform.

When the collaborative platform is operating successfully internally, do not stop there. It is critical to take the final step of enabling client sharing so that clients have access to selected resources.

Lloyd Ellison, Director of Account Management and client engagement specialist, Tikit.

October 2016

Personal Injury – Which way now makes sound business sense?

Relentless challenges to the profitability of carrying out personal injury (PI) work remain an ongoing concern for many firms. s I write this article, it is anyone’s guess what will happen regarding the proposed increase in the Small Claims Limit and the potential widening of the net for claims caught by fixed fees. Any firm dealing in claimant PI has its future strategy under the spotlight and must be thinking, “Which way now?”

A

Many firms have diversified and added clinical negligence, noise induced hearing loss or holiday sickness claims to their suite of PI services. Others have remained with their core services but found a hardening of attitude from insurers and thinner profit margins have resulted in WIP and capital lock up and negative impact on cash flow and profitability. Furthermore, how are case acquisition costs stacking up?

A firm’s strategic future in PI could be to invest further and acquire more work, trade out and run the book off, sell or merge.

Whichever option one takes, ensuring your PI work is as lean and profitable as possible will make you agile to react to the future opportunities and challenges ahead.

Identifying areas that are capable of improvement can enhance profitability now and set you in good stead to make sounder business decisions in the future.

Commissioning an independent review of your PI business can achieve this by considering the following as a fundamental starting point: 1. Case management system – utilisation and potential for development.

2. Governance and oversight regarding fee earner technical capability, financial performance and risk management.

3. WIP valuation, financial forecasting and cash collection.

4. Robust management information (MI).

If you are embarking upon a merger or sale, carrying out your own vendor due diligence before you go to market is critical. Through a similar process to an independent review you ensure that your PI book’s valuation is maximised and your systems and financial MI are robust under independent scrutiny. This exercise can make a deal look far more attractive and increase its value.

Whether by independent review or vendor due diligence, the review process should achieve the same aim - namely to make a business leaner, increase profit and get fit for whatever lies ahead.

That makes sound business sense.

Lesley Graves, Managing Director, Citadel Law.

Modern Law 41

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EDITORIAL BOARD

On-demand support; it’s about time n-demand service provider ServicesNowGroup has developed a diverse offering that demonstrates how successful businesses have improved productivity and efficiency, whilst cutting costs and full time staff numbers.

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All the services, from digital dictation and transcription to call handling and diary management were traditionally support services fulfilled by employees, but the ability to cope during busy periods typically meant over-staffing.

Law firms and Barristers’ Chambers will usually average out the hours of support they need across the year, often ignoring the increases and decreases in demand that occur on an almost daily basis. It is an approach that ensures most have too many staff with too little to do, except when a rare and all too short busy period occurs.

ServicesNowGroup was born out of a demand for support that allowed businesses to pay only for the support they need, when they need it.

From a single service at the start, providing outsourced transcription of digital dictation sound files for the legal sector, the firm’s offering has burgeoned. Now under three distinct brands, DictateNow, InTouchNow and TotalCounselNow, on-demand support services are available to businesses ranging in size and complexity, from global law firms and Barristers’ Chambers to small high street legal practices.

Agility is at the heart of the ServicesNowGroup offering, which is shaped by listening to clients and understanding what services law firms can easily outsource to help improve efficiency and productivity. Quickly developing new on-demand, pay-as-you-go services, typically follows a detailed analysis of costs management within a client’s business.

This often highlights non-core activities that take too much time and resources to be financially viable for law firms, particularly those paying high city rents, where the cost per metre dictates space should be occupied by fee-earners, not support staff.

Smart legal sector businesses are lean, with significantly improved productivity and reduced overheads, which for most are the route to long-term success.

The message from outsourced service providers like ServicesNowGroup is becoming ever more relevant. Why pay for underused staff, let alone their holidays, National Insurance contributions and sick days, when everything they do can be bought by the hour, when it is needed, without a contract or minimum usage requirements?

ServicesNowGroup will continue to add to its offering to help ensure businesses within the legal sector can operate more efficiently, increase productivity and boost profitability in what remains a challenging economy.

Essential questions to ask your outsourced cashiering provider utsourcing is a strategy increasingly adopted by law firms and ABSs eager to operate more efficiently and focus on their priorities of fee earning and business management.

But, before engaging an outsourcing provider, careful screening is recommended.

O

To help you, we’ve compiled these essential questions…

Who will manage my account?

As you’ll be working together closely, will a dedicated individual be handling your day-to-day tasks and is there an assigned deputy for absence cover? Also, who heads up the team? Over time, you’ll need to interact with your cashier, deputy and supervisor, so chat over the phone or meet face-to-face to decide if you’ll get on well.

Do you have a proven track record in my industry?

Specialist suppliers to the legal profession are well versed in how you work and the challenges you face. Check credentials, ask about service level agreements and request reference sites. Speak with a handful of these existing customers for honest feedback about service quality and overall satisfaction to assist your purchase decision.

What are the costs to outsource?

Secure detailed pricing up-front to avoid any nasty surprises from hidden costs later on. Do any add-on fees apply for various outsourced service components? What happens if your business changes? Will the service scale up or down alongside you? Finally, weigh up the final pricing structure against the in-house alternative – employing staff and purchasing software – to get the total pricing picture.

What are your security measures?

Enquire about encryption, firewalls, password protection, physical data centre anti-intrusion systems, regularity of software updates and back-up procedures. In the rare event of a security breach, what’s the provider’s response plan? How will they handle incidents and rectify any ensuing data or financial losses? Seek minimum ISO 27001 standards and a business continuity plan.

Why should I outsource anyway?

If you’ve got retiring, resigning or long-term absent employees, and if you’re just a tiny bit curious what positive impact outsourcing may have on your business, then begin your enquiries.

Outsourcing isn’t always the answer but imagine the possibilities if it is.

This isn’t an exhaustive list. To read more questions including those relating to the financial health and ownership of the provider, speed to get up and running, minimum contract terms, termination agreement, out-of-hours support and other outsourced services available, go to www.quill.co.uk/essential-questions.

Julian Bryan, Managing Director, Quill Pinpoint and Chair, Legal Software Suppliers Association.

Maxine Park, co-founder, ServicesNowGroup

October 2016

Modern Law 43

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EDITORIAL BOARD

Check, check and check again!

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Living and breathing contamination

ybercrime – how many times do we hear that term nowadays? It is a reality of modern day life that we have to acknowledge, both as individuals and as a business.

We are living in a digital paradox. Firms today are able to do more and do it more quickly; digital connections, tools and platforms allow us to connect and communicate with clients effectively and efficiently. Yet at the same time, cybercrime has become a powerful force, which limits the potential of such communication and connectivity.

Fraudsters who target the conveyancing market are getting more clever by the day. An occurrence of cybercrime happens every day, several times a day. There are several stages of any property transaction that provide an element of risk, and it seems that the preventative measures widely discussed within the profession can only do so much to help avert that risk. The key message that prevails is check, check and check again. In the case of conveyancing, you can never be too zealous in your checking of information prior to carrying out any process within a transaction.

The way the crime industry is developing within the cyberdomain means it is becoming increasingly difficult to produce comprehensive preventative measures to safeguard against attacks. The maturing criminal marketplace is allowing those with even the most basic of skills to participate with regular frequency.

Criminals are able to shield themselves from detection by operating behind the computer and take advantage of high impact opportunities, which affect numerous parties in one fell swoop. Don’t let your firm or your client fall victim to the criminal conveyancer; validate the account you are sending funds to and eliminate the risk.

As a well-established provider of property searches and compliance reports, Geodesys offers Lawyer Checker, the ESSENTIAL search to ensure client money is being transferred to a bona fide recipient vendor firm. Lawyer Checker’s simple online service enables you to establish preventative measures against cyber criminals. It does this by providing extensive checks over ten databases. No firm is able to achieve this as thoroughly and efficiently as the Lawyer Checker dedicated team.

Jonny Davey, Product Manager, Geodesys.

ecently MP’s have warned that public health is at risk due to ministers failing to protect Britain’s soils. The Government have decided to withdraw funding for local authorities to decontaminate polluted land. According to the Environmental Audit Committee, the Department for Environment, Food and Rural Affairs (Defra) “refused to assess” the impact of withdrawing the grants. The committee believes that Defra appears to be complacent and there is no budget for local authorities to investigate contamination. Furthermore, the report warned that neglecting the condition of the soil could result in greater flood risks, reduced food security, greenhouse gas emissions and damage to public health. All in all dire consequences for the nation and home buyers.

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During 2009-2010 funding to decontaminate polluted land was £17.5m. By 2013, this had fallen to £2m. It was then further reduced to £0.5m in 2014. Plans are in place to phase it out completely by April 2017. Although the Government say they will ensure that soil is sustainably managed by 2030, doubt has been cast on whether this may be possible.

The Environment Agency estimates that around 300,000 hectares of land in England and Wales is affected, to some extent, by industrial contamination. In areas where space is at a premium, old industrial sites are often reclaimed for housing. While it is great that more new houses are being constructed, it is important for home buyers to be made aware of the historical land use. If the original polluter of the contaminated land cannot be found, the new owner of the land may be liable for cleaning it up. In some cases, this can cost over £1,000 per tonne of soil.

Contaminated land can cause health risks as well as potentially huge financial liabilities. Exposure to contaminants through inhalation of dust or gases, contact with the soil, or any food grown from the earth will result in health issues. Furthermore, pollutants draining from the site in liquid form can infect groundwater and nearby water sources.

Thankfully in most cases, the risk from living on previously used land is low. However, a perceived risk can severely affect the value of a property. It is therefore imperative that solicitors are aware of reports that can highlight the dangers to their clients.

Sarika Sangar, Marketing Executive, Conveyancing Data Services.

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Keeping law firms and client funds safe from cyber criminals Craig Matthews and Adrian Jones from the Legal Software Suppliers Association (LSSA) outline some of the risks from cyber criminals and give helpful tips to lawyers. yber attacks can take many different forms. The most complicated, those that make headline news, normally involve direct hacking attacks of government or large corporate networks to either disrupt their business or simply to add the scalp to the hacker’s resume. These attacks are often very complicated and involved. Highly talented software engineers will work their way through the very best firewalls and intrusion detection applications available, not to mention all the other security modules these firms will have deployed on their network. The reason these attacks are deemed newsworthy is that they are relatively rare, but often involve private individuals or companies being defrauded of large sums of money. The most frequent cybercrimes, phishing scams, are conducted through, in relative terms, simple methods and happen all the time.

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Phishing scams are designed to convince the end user to provide the hacker with their username and password so the hacker can gain access to their PC, network or email account.

It is more likely that you or a member of your firm will fall foul to one of these phishing scams than a full-scale hacker attack. You of course must still ensure your firewall, intrusion detection application and other hardware and software security devices are properly maintained, up to date and appropriate for the risk profile of your firm, but even the most complex security designs can be breached if a user unwittingly gives their credentials to a hacker.

So how can you avoid falling foul to a phishing scam and how can you mitigate against cybercrime? The key is education.

In this article we look at how your firm can adopt better password protection and avoid members of staff giving out their credentials unwittingly, and we look at how you can adapt your current business processes, or adopt new ones, to add extra layers of protection and security when dealing with your clients,without over complicating your processes and making them unwieldy.

Following the simple lessons below could greatly assist in reducing the likelihood that your firm will fall victim to a phishing scam or password theft.

Managing your credentials

Don’t give them out. The simplest way to for a hacker to break into your computer system is with your credentials. Never provide your credentials to a third party. No reputable firm will ask you to disclose your username and password to any service they provide and most certainly would not ask you to disclose your username and password to any services they do not provide.

October 2016

The most frequent cybercrimes, phishing scams, are conducted through, in relative terms, simple methods and happen all of the time Don’t log into any web sites or portals unless you know and trust them

Often phishing scams will involve the victim receiving an email with an attachment. Upon opening the attachment the victim is asked to enter their username and password to download the contents. Don’t! You should never need to enter your credentials to download an attachment sent to you. If you are at all in doubt, contact the sender to verify the contents of the email. If the attachment is particularly sensitive we would recommend asking the sender to upload the document to a portal or deal room site and provide you with access to it rather than sending it via email.

Don’t save your passwords

Most web browsers will ask you if you want to save your username and password. Don’t! Saving your credentials to your web browser will mean that anyone who gains access to your machine can gain access to all of the applications you use. You can also see a list of all usernames and passwords saved on the web browser in plain text. We recommend that you turn the save password or remember password setting off on all devices and all browsers.

Don’t write your passwords down

Whilst you may not be giving out your credentials, writing them down and sticking them to your monitor is equally as risky. Whilst we all trust our fellow co-workers, you may have third parties walking through your office and any of these could see and make a note of your password. Not writing down your username and having just your password on show is no less of a risk. Most corporate networks and email accounts will follow the same pattern, meaning that if someone has your password they can easily guess your username.

Use strong passwords

A great number of computer users still use weak passwords. Just as a hacker with your password can guess your username, a hacker

Modern Law 49

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Educating your staff about the risks throughout a transaction and adopting all elements of the process below will also greatly reduce your risk with your username can guess a weak password. Your password should be at least 8 characters long and should contain a mixture of upper and lower case letters, numbers and special characters.

Your initials and date of birth, though they may help meet the minimum security requirement, would still be a weak password as it would be easy for anyone who knows you to guess. The more obscure your password the better.

Change your password

If you are given a password the first thing to do is to change it. You immediately reduce the number of people who know your password to just one person. You should also frequently change your passwords. Approximately every 45 days is a sensible time frame.

Use different passwords

It can be difficult to keep track of your different passwords for your different applications. However this shouldn’t prevent you from having a different password for each application. If you were to ever unknowingly give out your passwords or have your account hacked, far less harm will be done if the hackers only have access to one account and not all of your accounts.

Ensuring your staff understand the risks in providing their credentials to even trusted third parties and by following the rules above you will greatly reduce the likelihood that your firm will become a victim of cybercrime.

Keeping your passwords safe is of course not enough on its own.

Educating your staff about the risks throughout a transaction and adopting all elements of the process below will also greatly reduce your risk. Taking extra steps at appropriate times throughout a legal transaction can make a major difference as to how likely you and your firm will be subject to cybercrime. At engagement, when money is first exchanged and at each subsequent exchange, when confidential information and documents are shared and at various other stages using simple to follow procedures and educating your staff as to how they must operate may very well save you and your firm from becoming a victim.

service or lawyerchecker.co.uk to validate banks accounts before making a transfer. Never accept changes of banking details at face value and always verify with the relevant parties directly before accepting any changes.

• Consider having an employee fraud training and awareness program within the firm, give regular updates of fraud trends and areas of risk. Your bank manager should be able to assist you with this. The program should focus on compliance, fraud prevention and where responsibilities are held. The responsibilities should include what to do in the event of suspected fraud. Adopt security measures from the ground up and ensure all members of staff are part of this process. Hackers are opportunists, therefore it is important to stay informed and regularly review procedures.

• With conveyancing matters consider having a set of fraud mitigation warning flags, and where a transaction falls into the following categories you should undertake additional checks: • No estate agent is involved in the sale of the property.

• The transaction involves a relative.

• The transaction is under a Power of Attorney.

• The property has recently changed hands.

• The property is funded through other parties.

• The purchase contract involves payments to other parties.

• The Land Registry has launched a monitoring service called Property Alert, which will notify if there has been certain activity involving the register of the monitored property, allowing you to decide whether or not the activity is suspicious. This allows you to take immediate action if something happens to your property that you are not expecting. This is a service you should be recommending to your clients.

For more information please visit www.lssa.co.uk Craig Matthews and Adrian Jones, Legal Software Suppliers Association (LSSA).

Tips to help prevent cybercrime:

• Within the engagement letter sent to any new clients you should clearly set out that as part of cyber safety measures clients will never be directly contacted by email or telephone regarding bank accounts, change of bank accounts, or any other financial information. Also provide a senior contact name that your client should speak to if they have any concerns or questions about fraud.

• Ensure procedures are in place that certify that the entire firm complies with the above.

• If cyber safety is taken seriously consider asking your client to break any large transfer into two amounts, sending an initial £1, once that is confirmed the remaining amount can be transferred shortly after.

• All communications with your client that request or contain any sensitive, or financial information should either be via a) secure client portal, b) password protected document such as a PDF, or c) sent via printed and franked letter, never by email or telephone.

• Use a third party service such as GB Group’s Bank verification

October 2016

Modern Law 51

FEATURES

REGIONAL FOCUS: Nottinghamshire Interview with... Michael Auty QC As part of Modern Law’s ongoing regional focus, Charlotte Parkinson, Modern Law, spoke to the President of Nottinghamshire Law Society and Barrister at No. 1 High Pavement Chambers, about why he is fighting the traditional perception of the lawyer as the devil, and addressing perceptions of the legal profession by politicians and Government.

Q A

What are the main challenges the Nottinghamshire Law Society faces at the moment and why?

When I was a solicitor, we all knew one another; even if we practised in different areas of law. We knew the names of one another’s wives, partners and children, and we socialised together. It was a family; a nuclear family. Now, the kids have left home and they seldom telephone unless, that is, they want something. People are experts in areas of law I can’t begin to fathom and frankly never knew existed. They all know those with whom they have regular dealings but they are prisoners in their world, never contemplating what may lie beyond the perimeter. Nottinghamshire is home to a rich diversity of legal talent. We have huge Civil Law firms, some based in London, Birmingham or Manchester, with a second office here. Others, like Browne Jacobson, the Johnson Partnership, and Bhatia Best are indigenous and punching well above their weight.

The Bar in Nottingham is hugely successful too, with specialist Criminal Law chambers at 1 High Pavement, Civil Law expertise at the Ropewalk, Family Law at St. Mary’s chambers and a traditional mixed set at KCH. By far and away the greatest challenge is to generate a collegiate attitude or else we risk being picked off by snipers from governments of any and every hue determined to break the professions generally, but with a particular loathing reserved for those infernal lawyers who have the unfortunate habit of requiring our leaders to behave lawfully. In a sentence, “United we stand; divided we fall” has never been more true!

Q A

What are your core aims during your tenure as President of the Nottinghamshire Law Society?

When my tenure ends in April 2017, the baton passes to Kathryn Meir and then to Laura Pinkney, both young, brilliant, dynamic women with a modern vision for the future. My task has been to put into place the structures and mechanisms that will allow NLS not only to continue, but to flourish and thrive. For me; it’s all about maintaining relevance and changing to meet the evermore diverse needs of the members, whilst at the same time remaining familiar to those who have been here throughout arguably the most challenging of times in our history. It’s not about me, NLS is bigger than any of us and yet, through its auspices, so much of your professional life can be enhanced immeasurably.

52 Modern Law

We like to get ahead of the game as much as possible; let our members know what’s on the way and help them to prepare for it

October 2016

FEATURES

I have long fought against the traditional image of the medic as the angel and the lawyer as the devil

Q A

How have the needs of members changed over the last 3 years?

NLS recognises that its role is a symbiotic one with the members. Who can hope to keep abreast of all the changes that continue to come thick and fast from administrations determined to “change” everything irrespective of whether that brings with it a scintilla of improvement.

We like to get ahead of the game as much as possible; let our members know what’s on the way and help them to prepare for it. We run courses, locally, in everything from advocacy to soft skills. In turn, they come and meet people from all kinds of differing legal backgrounds.

The traditional image of the lawyer in his pin-stripe suit, sitting in the rarefied atmosphere of a fine restaurant talking about nothing more thrilling than their pension is far behind us. Lawyers are becoming increasingly active in the world and are making their voices heard. Whether it’s campaigning for access to justice at home or abroad, against the death penalty, torture or cruel and degrading treatment, or, as with one recent case in Nottingham, raising money for abandoned children in the “Jungle” at Calais, teaching them English, bringing them books and clothes or just showing them some human compassion. Many are doing what they do best; walking the walk, showing that they mean what they say and that they truly stand for something. I have long fought against the traditional image of the medic as the angel and the lawyer as the devil. A doctor may save your life, but unless you can live in freedom, peace, and be properly fed and housed, can it truly be said to be a life worthy of the name?

Q A

How do you and the team at the Nottinghamshire Law Society ensure the society maintains its relevance to the profession?

We’re adapting all the time. We are about to roll out a whole new website and bulletin, and include all kinds of general interest items as well as the strictly legal. As our membership becomes increasingly diverse, and very much younger, we find we need to broaden our appeal. September finds us putting on a Beer Festival (including curry), Kathryn Meir runs the International Committee which brings with it annual events in Ghent and Karlsruhe. We have cricket matches (Barristers vs Solicitors) and other sporting and social events as well as training and education.

Q A

What are the aims of the Law Society 2020 Discussion and what do you hope it will achieve?

My greatest hope for the Law Society 2020 is for the Law Society to be able to fend off the ludicrous proposals from the SRA that will lead to two classes of solicitor and a confused public with no way of knowing what they’re getting and what the true differences are.

It is absolutely paramount in my opinion that the Law Society, and the Law Society alone, be allowed a complete and unfettered discretion to determine the academic and training requirements essential for a person to be worthy of being awarded the title of “Solicitor of the Supreme Court.”

“Solicitor” and “Barrister” are important words denoting a status worthy of the name. They are neither off-putting nor discriminatory.

The only people with any need to fear them are those intending to act unlawfully or those incapable or unwilling of meeting the standards required to be awarded the title in the first place. No

October 2016

one complains about the title “Surgeon” after all? I could make a reasonable stab (which might not be a wholly inappropriate word) at removing your appendix; I have quite a fair rudimentary knowledge of many areas of medicine, but I’d be willing to bet most people would still prefer a traditional “surgeon.”

Nelson Mandela and Mahatma Ghandi were both called to the English Bar. Solicitors and barristers who have earned those designations in this country are revered the world over for their: Intellect, Insight, Industry, Integrity, Instinct and Ingenuity. Any attempt to diminish that is to be deprecated and resisted at any and all costs.

I also think the Law Society, at a national level, needs to resist being pulled apart by the divergent interests of various groups within it. The wealthy commercial lawyers earn their income on the backs of the reputations of the lawyers doing publically funded work. “Rumpole” is, after all, known the world over, better even than John Mortimer QC, his creator, who, incidentally, defended Virgin at Nottingham Crown Court in 1976 for displaying the “Never Mind the Bollocks” album sleeve in their shop window.

Q

How important is the role of regional law societies in representing, supporting and promoting the needs of practitioners on a national level?

A

Alan Radford, our immediate past President and Ash Bhatia, two before him, sit on boards of the National Law Society and ensure Nottingham’s voice is heard. It is a powerful and potent voice, and it is crucial that, although inevitably based in London, the Law Society is a truly national body representing every geographical area with the same enthusiasm and zeal, as well as every area of law.

Q

How do you think solicitors are perceived by the public?

Do regional law societies have a part to play in building relationships on this level?

A

Ever since Shakespeare declared, “Let’s kill all the lawyers,” we’ve had a pretty tough time of it. I’ve never much been one for the view that it is essential to carry the public with us at every stage; frankly, that seems unrealistic. I think the vast majority of educated people probably have a healthy, if slightly begrudging, respect for solicitors and lawyers in general.

Lawyer jokes have been the staple of far too many comedy acts, particularly in the USA where they are particularly loathed in my experience, for us to ever be the darlings of the public in the way that medics are.

However, in Drs Shipman, Cream and Crippen, I can name three serial killers who were medics and I have personally prosecuted and defended many medics for some of the most horrifying sexual offences. I struggle to think of a single lawyer I have seen as a defendant in either type of case.

As with all forms of prejudice, it is generalising from the particular that causes the problem. I have no doubt there are some unscrupulous and thoroughly disreputable lawyers out there, but, at their best, they rank among some of the most humane, fundamentally decent, committed, devoted and inspirational people you could ever hope to meet.

We would probably fair an awful lot better if politicians would stop trotting out the thoroughly dishonest image of the “Fat

Modern Law 53

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Ever since Shakespeare declared, “Let’s kill all the lawyers,” we’ve had a pretty tough time of it Cat” lawyer gorging on public funds, particularly when they’ve faced cuts of about fifty per cent over the past 20 years or, if you prosecute, complete stagnation since 1997.

We do very well locally. The Bar and the Solicitors held completely firm in Nottinghamshire in the dispute over fees when Chris Grayling was Lord Chancellor.

The difficulty for lawyers is that people don’t mind paying for results but they don’t like paying for advice, particularly when its advice they find unpalatable or simply don’t want to hear.

Q A

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

We certainly have a powerful voice in wider conversations with the Law Society. Three of the twenty-five members of the “Big Firms Group” of solicitors practising Criminal Law are based in Nottingham. We have some huge Civil Law practises (Eversheds, Freeth Cartwright, Browne Jacobson, etc.) and, together with unsurpassed excellence at the local Bar, we continue to punch far above our weight.

We enjoy a very close relationship with the Birmingham Law Society as well as with the other societies in the East Midlands; namely Leicestershire Law Society, Derbyshire Law Society, Lincolnshire Law Society and Northamptonshire Law Society. This allows us to pull significantly at a local, regional and national level.

Q A

What does the future look like for the legal profession, on a regional and national level?

I’m naturally optimistic but the reality is that publically funded work has lain is a state of near paralysis for many years now and something has to change; and quickly.

When I hear Liz Truss speak of the Legal Industry, I hope she is speaking of the Commercial Law firms and, if she is, then it is entirely appropriate that she speaks in those terms.

Publically funded work is not an industry though and I fear that, Michael Gove excepted, politicians have regarded it as such for far too long. We are not there to make a profit; we are there to provide a service in precisely the same way as the NHS provides a service. And we are every bit as valuable to the good of society as the NHS and there can be no justification for our budget not being protected.

The true picture of serious crime rising is starting to emerge and the Government will come under increasing pressure to deal with it. Sooner or later they are going to have to wake up to the situation they have created. It’s a little like looking after a house.

Had they undertaken the routine maintenance necessary to keep the thing in repair all would be well but all kinds of rot have set in and there has to be a question mark over whether the building can be saved or whether it must now be demolished and we simply start again.

Perhaps another important distinction between us and the medics is that most people can imagine that, as they grow older, they might need medical treatment, but Crime, matrimonial problems or a Civil dispute are for other people; they simply never imagine they will need a lawyer, but I strongly suspect that they imagine a rich bed of expertise will await them if they should.

It was the Nigel Evans case that perhaps encapsulated this most for

October 2016

Michael Auty QC The first piece of written work I ever had to do at school was to say whether there were fairies at the bottom of my garden.

I was certain there weren’t, partly because I’d never seen any and partly because I knew very well that was where a barrister dwelt; over the fence to be precise. Twenty-six years on, I would share a room with him. Within a year I would meet the late and truly great Gilbert (“Gillie”) Gray QC on the footplate of my grandfather’s railway engine, a meeting he later recalled better than I. Meanwhile, a solicitor moved in next door!

A false start as the Lead Guitarist in various rock bands, was followed by qualification as a solicitor. On the anniversary of my admission I was made a partner; I had it made - for life.

There was only one thing left to do; I handed in my notice and decided to seek a call to the Bar. I took “silk” in 2013 and find myself President of the Nottinghamshire Law Society; the first barrister (I believe) to hold such a position.

me. I just happened to be in the adjacent court at Preston when the trial was going on. I was, as it happens, defending a doctor charged with raping and otherwise indecently assaulting his patients.

The case against Evans was challenged expertly and the jury acquitted him on all counts. He’d spent over £125,000 on his legal team and, however grateful he was to them in the hours following his acquittal, that generosity ebbed rather once it became plain that he couldn’t recover his costs.

Rather unfortunately, Mr Evans made a great deal of noise about how unfortunate this was until someone pointed out not only that his Government had introduced that change and that he had personally voted for it. You couldn’t make it up!

The future in Nottingham is extremely bright. We have many young firms practising across a broad spectrum of different legal fields.

The fundamental problem is the way we are perceived by Government and politicians more widely. We are only the enemy of the corrupt, wicked, inept and scandalous. On any rational view, that really ought to make us the good guys, shouldn’t it?

Modern Law 55

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Being a guru is never having to admit you are wrong!

Our resident IT commentator Charles Christian writes…

There are now more self-appointed experts and gurus in law firm technology, knowledge management, marketing, business development, legal processing management, outsourcing, social media, and law firm “futurism”, including AI/ artificial intelligence, than at any time in the profession’s entire history. Magazines, conferences, books and the internet are filled with their predictions and prognostications – but should you pay any serious attention to anything they say?

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In the early 1950s, the philosopher Isaiah Berlin divided experts into two categories: the “foxes” and the “hedgehogs”. Foxes draw their ideas from a wide variety of experiences and sources, and tend to take a balanced view of any situation, whereas hedgehogs view the world through the lens of a single defining idea and interpret everything from this perspective.

Considering both sides

Most lawyers (and journalists) are foxes. For example, a lawyer acting for a claimant in one matter is more than capable of defending a client from a claim in another matter. Similarly, a conveyancer who knows everything needed to protect the interests of a homebuyer can equally well act for a vendor. As for journalists, I could write you an article on 10 reasons why cloud computing is good for law firms but I could also write on 10 reasons why cloud computing is risky for law firms. Alternatively, I could even write about 20 pros and cons of cloud computing. In other words, we “foxes” are capable of analysing both sides of a situation and advising accordingly.

In practice, the predictions of experts are only slightly better than chance – and those of foxes tend to be more accurate than hedgehogs because the former take a more balanced perspective, weighing up all the factors the subtle nuances of what they were saying. Gardner and Tetlock even cite examples of hedgehogs “disremembering” some of their more outrageously inaccurate predictions.

Certainty in the face of an uncertain future

So what are we to make of this? That some experts are in denial or verging on the delusional? Or, they are so confident of their own view that they have a contempt for anyone who disagrees with them? Skeptics like me would say they’ve drunk their own “KoolAid”. It’s also intriguing that many “hedgehog” experts are undoubtedly charismatic in their presentation styles, a character trait they share in common with religious fanatics and politicians of all shades!

Most experts and “gurus”, however, take a far narrower view and interpret everything through their own predetermined prejudices and perspectives, so one might give you “10 reasons why cloud computing is the greatest thing ever to have in technology” while another “expert” would be telling you “10 reasons why lawyers would be insane to embrace cloud computing”.

All of which prompts the question: how do they get away with it?

How come nobody points out they are like the emperor in his new suit of clothes? This leads on to the third major research finding ­–­what Gardner calls “Future Babble” – namely that humans crave for certainty about the future and hedgehogs, with their unshakeable confidence in their predictions, can offer this.

Since Berlin’s time, the “foxes and hedgehogs” analogy has been followed up by a number of other writers and academics (mainly in North America) including, most notably, Philip Tetlock and Dan Gardner. What they’ve found, looking at not just tech predictions but also the predictions of political and financial pundits and experts is that:

To go back to my cloud computing example, as a fox my view that there are both advantages and disadvantages associated with cloud computing is unsatisfactory as it requires people to take their own decisions – and people don’t like doing that as they might make a mistake. However, if I were to adopt the mantle (or spines) of a hedgehog and tell them, “You must embrace the cloud, it is the future – and if you don’t, you are a crazy fool whose law practice will be destroyed leaving you and your family destitute and homeless within five years,” then I’ve made the decision for you. I’ve given you certainty in the face of an uncertain future.

Firstly, in practice, the predictions of experts are only slightly better than chance – and those of foxes tend to be more accurate than hedgehogs because the former take a more balanced perspective, weighing up all the factors etc.

Secondly, and this is where things start to get worrying, even where hedgehogs have been found to be palpably wrong in their predictions, they have such a strong belief in their opinions that they refuse to acknowledge or recognise their mistakes. Instead, they will claim their predictions were right all along but the timescales were wrong or else other people failed to appreciate

October 2016

And of course if it all goes disastrously wrong for you in five years’ time then I’ll just point out that you misunderstood my predictions and the timescale in which it would happen. Being a guru means never having to admit you were wrong!

Charles Christian is the Editor-at-Large of the Legal IT Insider & tweets about #tech and #legalit at @GonzoNewswire.

Modern Law 57

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FEATURES

Cyber Security - An Insurance Minefield!

Should you rely on our professional indemnity policy to respond to a cyber incident? Brett Warburton-Smith reports. here is no question that all law firms in England & Wales are vulnerable, given the volume of personal and corporate sensitive and valuable information they handle on behalf of their clients. Across the profession, firms vary their approach to cyber security ; some choosing to spend their money in building their IT defences, investing in the best security software to detect attacks and system vulnerabilities, whilst others have chosen to incept specialist cyber insurance as their fall-back position. In our experience, people are the weakest link in the IT security chain so a programme to educate all fee earners about the risk of malware and clicking on the link that might trigger a breach is vital and an ongoing duty throughout the year.

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Other firms rely on their Professional Indemnity policy to provide third party protection however it is often subject to a large selfinsured retention and it certainly will not offer any first party protection to help the firm manage a breach, should it occur.

Some specialist cyber policies are structured to offer a suite of breach response services that are so crucial when the firm falls prey to a cyber incident. The policies will pay for the IT forensic investigation costs needed to determine what information has been compromised and look to remediate the problem. Beyond this the support of a PR company will help the firm manage any adverse media that may occur – so important in the modern social media world in which we live.

Access to specialist legal advice should also be available. This will help you decide whether you should notify affected clients, the regulator and the police. Extending Privilege to the proceedings is crucial, as well as preserving evidence for any future criminal investigation.

In our opinion relying on your Professional Indemnity to respond appropriately to a modern cyber-attack may not be the best approach as the policy was not designed to respond in this way.

A specialist cyber insurance policy should be considered and potentially structured to sit as First Response or Primary Layer cover to not only first party claims but also third party, if possible.

Recent Cyber Incidents

Another month and another major breach, in fact the largest data breach of all time so far. Yahoo, were subject to an alleged international state sponsored hack in 2014 which has only recently come to light. The hack resulted in close to 500m users’ personal records being stolen.

At the other end of the size scale is the ongoing “phishing” and “whaling” fraud through the use of Social Engineering which continues to burden finance teams in all organisations. Professional Service firms have suffered heavily from this type of attack vector. This was highlighted by a recent survey undertaken by the UK accountancy firm, Hazlewoods. The survey concluded that “phishing attacks” against professional service firms were up 40% in the past 12 months.

Cover for Cyber Theft of money from “phishing” and “whaling”, such as highlighted above, is still available from some cyber

October 2016

Relying on your Professional Indemnity to respond appropriately to a modern cyber-attack may not be the best approach as the policy was never designed to respond in this way insurers however it is generally sub-limited and remains under review. Our recommendation is that it is still not a good substitute for a quality dedicated crime policy.

The structure of a Cyber Policy

Often hackers will compromise a vulnerability within an organisation’s IT network and sit quietly for some time before triggering the attack and/or deploying the Malware payload. When buying cyber insurance for the first time (as many UK organisations are today) it is important to consider cover for Prior Acts, if available.

Cyber insurance is almost always written on a “claims made” basis.

This means that it will respond to claims that are “made” during the policy period. A particular feature of a “claims made” policy is that they usually contain a retroactive date which limits coverage to claims arising out of the events or acts that occurred after a certain date. The first time an organisation purchases such cover, that date is typically set as the policy inception date. In future years you can usually keep that “prior acts” date so the retroactive period gets longer and longer.

The challenge with prior acts and cyber insurance is clear from the above Yahoo example, and evidenced by The 2015Ponemon survey, sponsored by IBM, which found that hackers will have broken into the target companies’ IT system for an average of over 200 days before the organisation becomes aware.

Without Prior Acts cover the insurer can argue that the entire breach is based on an “act” that occurred before the policy inception and therefore refuse to pay the claim.

Prior Acts cover is not available from all cyber insurers but when it is it will often come at an additional cost. It is therefore critical the appropriate insurers are approached to secure the broadest cover possible.

It is important that your Insurance policies are tailored to the needs of your business, there are numerous products available, please contact the Lockton team who will be more than happy to discuss further.

Brett Warburton-Smith is a Partner at Lockton Companies LLP.

Modern Law 59

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CASE STUDIES

Woodcocks Haworth & Nuttall selects Eclipse’s Proclaim Practice Management Software solution reater Manchester and Lancashire law firm, Woodcocks Haworth & Nuttall (WHN), has implemented the Proclaim Practice Management Software solution from Eclipse Legal Systems.

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Employing over 100 specialists across seven locations, WHN offers a comprehensive array of legal services. The firm’s expertise Darren Gower ranges from corporate and commercial property disputes through to conveyancing and medical negligence.

WHN prides itself on its commitment to delivering outstanding service and results to businesses, individuals and families.

The deal means the firm will be implementing the Proclaim Matter Management Software solution, with a ready-to-go Conveyancing Case Management system enabling the residential property team to experience immediate process enhancements. WHN will also utilise Proclaim as its integrated practice accounting and reporting toolset, providing a ‘one view’ approach to the firm’s finances and financial management data.

As part of the drive to further enhance efficiencies in property transactions, WHN will take advantage of the integration between

Proclaim and the Land Registry’s Business Gateway (LRBG).

Providing two-way integration for both data and documentation, solicitors will have instant access via the Proclaim desktop application, delivering the ultimate in operational effectiveness.

Mike Gillibrand, Finance Director at Woodcocks Haworth and Nuttall, said: “The decision is client led. In a modern, flexible world the right IT can make a huge difference in how law firms deliver legal services.”

“More of our solicitors are working offsite, on the move with clients, so the new legal software will give them the tools to bring greater efficiencies into the way they advise clients, accessing important documents as and when they need them.”

“Whether it’s working with businesses or individuals, due to the nature of our business, we must have a rigorous and robust document storage management system. The process in how we store and recover documents will now be quicker and more secure, bringing greater operational efficiencies.”

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. Alternatively, visit www.eclipselegal.co.uk

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www.charltongrant.co.uk 01765 600909

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10 MINUTES WITH

Doug Crawford Q A

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

I joined My Home Move in early 2012, five months after My Home Move’s subsidiary conveyancing firm had already become the very first Alternative Business Structure (ABS) to be authorised and just before the following wave of ABSs started to emerge. There was lots of talk at the time about the drastic sector change that was about to take place and, against that backdrop, the level of change over the last 4 years has been fairly disappointing. We have been continually investing and improving but, at a market level, there has been less visible investment and change across the market than certainly we hoped, and especially within the conveyancing sector where we operate – there is just so much more we can all do to help the market function better for the benefit of clients. Maybe some of those who were quick to enter the space underestimated the challenges of building a successful legal services business – the next wave of entrants will undoubtedly be more savvy and the adoption of the right technology can help catapult an also-ran into pole position, which is why we are continuously developing our technology and processes to shape the future of our business and the sector; we are very conscious that our next major competitor is as likely to come from outside the Legal Sector as it is from within.

Q A

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

The liberalisation of legal services has undoubtedly created some of the conditions needed for drastic change to take place and the kind of investment that can make a real difference to customers. Many small firms simply can’t contemplate the level of investment needed to adopt new technologies, but ABSs can, if they can demonstrate a return. New entrants know that they need to meet customer needs better if they want to compete with existing players and the liberalisation of legal services enables new entrants to look at how they can do things better in a given sector.

Anything that accelerates the change process and raises standards for clients has to be a positive thing.

Q A

Who inspires you and why?

I admire people who started with nothing and went for it – those who have taken risks, aimed high and worked all the

Anything that accelerates the change process and raises standards for clients has to be a positive thing hours possible to succeed; someone like Richard Branson. From the age of sixteen he has lived and breathed business. He has seen some enterprises fail where others have succeeded – and his ability to keep striving and building is inspirational.

Q A

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

Stuart Gale was my National Sales Director, when aged 24 I joined Nilfisk, a Danish manufacturer of professional cleaning equipment, as a UK Sales Rep. It was my first ‘proper’ job. He taught me how to run a successful company by investing in your staff and giving them the skills and confidence to thrive. He even pushed for me to complete my MBA while there.

The training at Nilfisk was so detailed and thorough that even to this day I can remember what we were taught. His style of delivery, constant reinforcement and particular focus on customer service has stayed with me and shaped my business vision thirty years on.

Q A

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

Ideally, I’d be a professional rugby player. Well, probably a retired one by now being 54. There was a time when I was invited for a trial to play for Ulster. However, having just landed my first ‘proper’ job I felt I couldn’t ask my new boss for time off to fly back to Belfast for a midweek game. As it turned out my position was filled by guy who went on to be capped 40-odd times for Ireland and I continued on a career path to become the CEO of My Home Move, the UK’s leading provider of mover conveyancing services. It’s funny how life turns out but I can guarantee you I have no intention of retiring any time soon!

Doug Crawford is the Chief Executive Officer of My Home Move.

SAVE THE DATE Eclipse Proclaim Modern Law Awards 2016 Thursday 10th November 2016 The Hurlingham Club, London CONTACT Event enquiries | ellie.campbell@charltongrant.co.uk | 01765 600909 Sponsorship enquiries | kate@charltongrant.co.uk | 01765 600909

62 Modern Law

October 2016

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