Modern Law Magazine - Issue 28

Issue 28 February 2017 ISSN 2050-5744

The Business of Law

Jonathan Smithers “We also want to ensure that the legal profession is seen as a thought leader, not just commenting on the thoughts of others but coming up with new ideas�

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MODERN LAW

Editorial Contributors Adam Bullion General Manager, Marketing InfoTrack

Noel Inge Managing Director CILEx Law School

Andy Wells Founder BMS Funding Ltd

Norman Kenvyn Founder & CEO VFS Legal Funding

Caroline Wallace Strategy Director Legal Services Board (LSB)

Paul Moonan Managing Director Restore Plc

Dr Hugh Koch Clinical Psychologist and Director Hugh Koch Associates

Richard Burcher Chairman Burcher Jennings

Geoff Hornsby General Manager iManage

Ross Weldon EMEA Marketing Specialist Clio

Jane Malcolm Executive Director of External Affairs Solicitors Regulation Authority (SRA)

Sarah Roberts Marketing Executive Eclipse Legal Systems

Joe Roxborough Chartered Financial Planner Saunderson House

Sarika Sangar Marketing Executive Conveyancing Data Services

Josh Richardson Financial Planner Informed Financial Planning

Susan Fairbrass Marketing and Client Relationship Manager Geodesys

Kathryn Holmes Marketing Specialist Linetime

Modern Law is committed to bringing you the most interesting and illuminating insights from the entire legal sector, so for this issue we went all the way to Australia to speak to the new CEO of the Law Council of Australia, and the former President of the Law Society of England & Wales, Jonathan Smithers. Or we would have done, except Jonathan happened to be back in England earlier in the year, so we spoke to him then.

M

Tom Dodd Marketing Team entrustIT Ltd

Lesley Graves Managing Director Citadel Law

WELCOME

Maurice Power Managing Director Ferguson Litigation Funding

It became clear that many of the challenges facing our legal sector also exist on the other side of the world in Australia, including challenges around technology, crime and communication. It was also evident that while we can look to other countries’ systems for lessons, the UK legal sector is still seen as a measuring stick for law, and those countries are equally looking to us to blaze trails and pave ways. One example of this was the recent debate around the privatisation of the Land Registry, since now a similar argument is currently happening in Australia around the sale of their Land and Property Information Unit.

While the outcome of this argument in Australia remains to be seen, as we all know the decision has been made to not privatise the UK Land Registry. So in this issue we also take an in-depth look at what else is happening in the UK conveyancing market. Despite conveyancing being a service that most people will utilise at some point in their lives, the home moving process is still shrouded in mystery in the eyes of many first-time buyers. The availability and transparency of information in conveyancing is a common theme in the columns, articles and interviews featured in this edition of Modern Law, as well as in the accompanying Conveyancing Supplement being sponsored by Future Climate Info, but hopefully these pages will provide you with some of that information that can then be used to help give clients more clarity.

If you’re still thirsting for more knowledge after reading this issue, then the upcoming Eclipse Proclaim Modern Law Conveyancing Conference, taking place on Tuesday 23rd May at the Etihad Stadium, Manchester, will be the place where you can get it. And as always, if you would like to share your own knowledge by writing for Modern Law, feel free to get in touch via the below details.

Brendan Gurrie, Editor, Modern Law Magazine.

Issue 28 February 2017 ISSN 2050-5744 Editor Brendan Gurrie

Production/Editorial Assistant Liam Lambert

Project Manager John Margett

Events Sales Kate McKittrick

01765 600909 @ModernBrendan brendan@charltongrant.co.uk

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.

February 2017

Modern Law 03

MODERN LAW

CONTENTS NEWS

INTERVIEWS

07

13

07 Rob Hailstone talks news

EdiTorial Board

“The Law Society really is under the Cosh“, claims Rob Hailstone. He examines the recent difficulties facing the Law Society, and how it can change to ensure its survival.

13 Jonathan Smithers

Jonathan Smithers recently moved to Australia to become the CEO of the Law Council of Australia. Modern Law spoke to Jonathan about the difference found in the legal sector across the pond and how he is working to improve the sector for both legal professionals and consumers of legal services.

16 Chris Harris & Tony Piccirillo

Tony Piccirillo and Chris Harris are the Chairmen for this year’s Eclipse Proclaim Modern Law Conveyancing Conference. They share their thoughts on recent and prospective changes to the conveyancing sector, highlighting the dangers presented by fraud, the opportunities in technology and the role that the government has played in changing conveyancing.

25

23 Publishing information helping to connect firms with clients

25 Reforming the Legal Services Market

Caroline Wallace, Legal Services Board (LSB)

27 Who funds the funders and why?

Maurice Power, Ferguson Litigation Funding

27 Apprenticeships: Education in the 21st Century

Noel Inge, CILEx Law School

29 ‘Value Pricing’ – Capitalist Acts Between Consenting Adults

EDITORIAL BOARD contributors

Jane Malcolm, Solicitors Regulation Authority (SRA)

Richard Burcher, Burcher Jennings

29 Scanning Ahead

Paul Moonan, Restore Plc

31 Don’t Get Left Behind

Josh Richardson, Informed Financial Planning

31 What challenges will the legal sector face in 2017?

Geoff Hornsby, iManage

33 Moving goalposts

Andy Wells, BMS Funding Ltd

33 An App for Everything

Ross Weldon, Clio

35 The best of the best

04 Modern Law

Dr Hugh Koch, Hugh Koch Associates

February 2017

MODERN LAW Issue 28 February 2017 ISSN 2051-6495

EdiTorial Board

FEATURES

35

35 Assessing returns – what financial advice can do for you

Joe Roxborough, Saunderson House

45

52 Interview with Brian Hall and Dominic Hendry

46 2017: Now we really need to identify and celebrate our modern law leaders

55 You are going to buy marketing software. Great idea, but will anyone use it?

Susan Fairbrass, Geodesys

Sarah Roberts, Eclipse Legal Systems

39 Stumped By Trump?

Norman Kenvyn, VFS Legal Funding

39 Why is it so hard to build houses?

Sarika Sangar, Conveyancing Data Services

41 If Trump has his way, we’ll all lose some freedom

Tom Dodd, entrustIT Ltd

41 Evolving Contract Packs in Conveyancing

Kathryn Holmes, Linetime

42 Business as usual for Personal Injury lawyers in 2017? Not if you want to avoid failure

Lesley Graves, Citadel Law

48 The Benefits of Comparison

Lee Dixon explains why digital comparison tools are needed to prevent Millennials from falling into the latent legal market.

49 Cloud, regulation and security — reaping the rewards

With cyber security posing such a huge threat to businesses, Nick Hayne explains how migrating to cloud can potentially mitigate these risks and simplify a firm’s IT management.

Julian Chamberlayne examines the impact that catastrophic injury claims can have on a firm’s resources, and whether or not they are always worth taking on from a risk management perspective.

Brian Hall and Dominic Hendry speak to Modern Law about the challenges, benefits and changing landscape of probate insurance, giving insight into its wider role in the legal sector.

Our resident Tech commentator Charles Christian writes…

59 Can everyone benefit from digital mailrooms?

Among the numerous digital solutions available to the legal sector is the digital mailroom. Neil Maude explains what considerations firms should take before going digital, and how the relatively simple technology can greatly improve workflow.

61 Case Study – Eclipse Legal Systems

Eclipse’s Proclaim Practice Management System selected in 6-figure deal by QualitySolicitors Copley Clark.

61 Case Study - PSG

What lies beneath? – The importance of mining due diligence

51 The Dangers of Complex Injury Claims

February 2017

Kevin Gidney explains how legal professionals can use artificial intelligence to increase efficiency now, and why they don’t have to wait until the distant future to do so.

Following on from his analysis of November’s Eclipse Proclaim Modern Law Awards in the previous issue of Modern Law, Chris Bull, who was the Chair Judge for the event, discusses the importance of recognising success in the legal profession in order to remain up to date with a changed legal sector.

Adam Bullion, InfoTrack

42 The rise of automation in the legal sector

62

45 AI in Business: It starts with the basics

37 Exciting Times Ahead 37 What are the potential applications of ‘big data’ in law?

FEATURES

10 MINUTES WITH 62 Sheila Kumar

Chief Executive of the Council for Licenced Conveyancers (CLC).

Modern Law 05

Over 20 years of Medico-Legal excellence (Tier 1 MRO) Market Leading Service Unrivalled in-house Medical Expertise D e d i c a t e d Te a m s f o r H i g h V a l u e C l a i m s

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NEWS

Rob Hailstone TALKS NEWS “The Law Society really is under the Cosh“, claims Rob Hailstone. He examines the recent difficulties facing the Law Society, and how it can change to ensure its survival. s recently as November last year, the Law Society CEO Catherine Dixon announced a new strategy for the Law Society that focuses on representing, promoting and supporting its members. Ms Dixon was very factual and reasonably upbeat: “This is just the beginning. We are committed to representing, promoting and supporting solicitors and achieving our vision.” However, fast-forward barely six weeks later and Ms Dixon resigned (rather publicly) after only two years in charge at Chancery Lane.

A

It is likely that there will be an investigation as to how the full contents of Ms Dixon’s resignation letter was made public. Law society President, Robert Bourns recently said: “I believe Catherine intended what she was saying to council would be between her and council.” This begs the questions who leaked the contents of Ms Dixon’s letter and why? It is thought that the leak could have come from a member of the 100 strong Law Society council.

Finding out which one isn’t quite as tricky as looking for a needle in a haystack but is probably as difficult as finding Wally, in a Where’s Wally picture. For the purposes of this article, and as we don’t know their identity, let’s call the instigator of the leak Wally.

So, why would Wally leak the contents of a private and very explosive resignation letter? I think Wally could be termed a whistleblower (a whistleblower is a person who exposes any kind of information or activity that is deemed illegal, unethical, or not correct within an organisation that is either private or public).

Why whistleblow?

Those who become whistleblowers can choose to bring information or allegations to surface either internally or externally.

Internally, a whistleblower can bring their accusations to the attention of other people within the accused organization.

Externally, (as in this case) a whistleblower can bring allegations to light by contacting a third party outside of an accused organisation. Depending on your point of view, Whistleblowers are either foolhardy or brave, and frequently face reprisal, often at the hands of the organisation or group they have accused. A number of years ago I was at a relatively high powered meeting where it was decided by the majority that some ‘creativity’ should be used in a future press release. I strongly disagreed with that course of action and, ‘blew the whistle.’ It wasn’t a nice feeling, despite doing what I felt (and still feel) was morally correct, rather than hide behind anonymity I would have preferred to put my name to the leak. However, if I had done so, I know life would have become very difficult and I would have been ostracised.

Despite the fact that the Law Society is currently fighting many battles at once […] I personally think it has an important role to play and it would be a pity to see it disappear completely

It is fair to say then, that Wally would not have leaked the information lightly and they did it because they wanted the world at large, and in this case the members of the Law Society to know, exactly how slow, archaic and frustrating the internal workings of the Law Society are. There could, of course be a different motive, the possible attempt at a council coup d’état. I will leave that more sinister thought with you.

February 2017

Modern Law 07

NEWS

Whistleblowers are either foolhardy or brave, and frequently face reprisal, often at the hands of the organisation or group they have accused Resisting change

years; I was at a conference discussing the forthcoming Home Information Pack, as was a senior member of the Law Society. It was a very hot summer’s day and the temperature in the room was high. Before the conference had commenced I had, in order to cool down, removed my tie. We both explained how our respective Hip production systems would work and then took questions from the audience. After the Q & A session the Law Society representative rather surprisingly got up and said: “whatever system Rob develops, ours will be far more sophisticated.” That took me by surprise and my response was immediate and not particularly well thought through. “If you want sophistication, next time I will wear a tie,” I said. The audience laughed, the Law Society representative bridled and the writing was on the wall.

Robert Bourns believes that the most important issue playing on Ms Dixon’s mind was having membership of the board but no voting rights. It is very clear from Ms Dixon’s resignation letter that this is a very convenient, simplistic and dismissive view of what was really eating away at her. Ms Dixon said: “It had taken council nearly a year to get to a point where a decision could have been made to start making changes to governance.” One could imagine that every attempt made by Ms Dixon to speed matters up was blocked at every turn. Beyond frustrating for someone who was probably used to seeing her ideas and plans put into almost immediate motion.

Now, that story in itself was, you would have thought, relatively inconsequential, and we should have both dusted ourselves off and moved on. However, what happened next was remarkable.

Despite the fact that the financial backer of my business was a big player and worked regularly with the Law Society, from that moment on, I was persona non grata at all future business meetings with the Law Society.

Apparently, ex Law Society president Paul Marsh recently observed: ‘Promoting change in an organisation like the Law Society is difficult and requires a certain deftness of touch – particularly when it comes to asking late-middle-aged men to change the way they do something.‘ Marsh thought that Ms Dixon lacked a necessary lightness of touch. My reading of this wording is that some of the Council members are particularly sensitive and thin skinned and have egos that should be stroked and massaged rather than battered and bruised. I predict that it is going to be a rough few years for the Law Society. I suggest those fragile individuals should resign now or risk a rather more undignified exit later. Their time is up.

The Law Society CEO is a very well paid role. It will be interesting to see who takes it on next permanently (maybe the interim CEO Paul Tennant OBE) and how long they last. One thing is certain; when they decide to take on the role the agreed rules of engagement must have been spelled out by both sides very clearly.

Other challenges

In addition to Ms Dixon’s recent resignation, the Law Society has a number of its members still smarting from the loss of many millions from the disaster that was Veyo. I do not need to expand on the Veyo debacle here, enough has already been written about that already.

Next up (at the time of writing) is the awaited outcome of a Competition Appeal Tribunal hearing; Training provider (Socrates) claimed that the Law Society acted anti-competitively by requiring law firms to buy its own anti money laundering training in order to maintain their Conveyancing Quality Scheme accreditation.

The claim alleged that the Law Society was “dominant in the market for the provision of quality certification/accreditation services to conveyancing firms, and its insistence that firms must buy their AML, mortgage fraud or other financial crime training from itself rather than from the claimant or any other provider, is an abuse of its dominant position, restricting competition in the downstream market for the provision of AML and financial crime training and causing loss to the claimant”.

My point is that if you dare to openly criticise, challenge, or in my case slightly embarrass the Law Society or its council members, you pay the price. That cannot be right and I congratulate Wally for taking the action they have done.

Despite the fact that the Law Society is currently fighting many battles at once, including a particularly rough and open one with the Solicitors Regulation Authority, I personally think it has an important role to play and it would be a pity to see it disappear completely. Part of the problem is the size of its membership (very large) and the different requirements many of those members have. Maybe one organisation, leading from the top down, cannot be all things to all people. Things have moved on massively since the 60s and 70s.

The way forward isn’t a case of re-arranging the deckchairs on this slowly sinking ship. It is about going right back to basics and establishing what all of the members want and need (in the 21st century) and how best to provide those needs. Even if it means breaking the Law Society down into smaller, more relevant pieces.

Failure to succeed will result in the permanent demise of this nearly 200 year old institution.

Rob Hailstone, an ex-residential property conveyancer with four decades of experience, formed the Bold Legal Group in 2010. The BLG now has over 600 member firms of all shapes and sizes, and has recently launched an ongoing training system, BLGTraining, for its members.

If the Law Society lose that case it will be yet another body blow for the way it is run and governed. Even if they win, one has to question the way it uses its might and power to negotiate certain deals and promote other businesses or product and service suppliers.

Speaking from experience

I have to hold my hands up and say I have some ‘previous’ with the Law Society. This is not a story I have repeated to many, but it is short and perhaps telling. Wind back the clock about ten

08 Modern Law

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INTERVIEW

Jonathan Smithers Jonathan Smithers recently moved to Australia to become the CEO of the Law Council of Australia. Modern Law spoke to Jonathan about the the differences found in the legal sector across the pond and how he is working to improve the sector for both legal professionals and consumers of legal services.

Q

What are the key regional and structural differences between the British and Australian legal sectors, and between the ways these different regions operate and communicate?

A

You need firstly to understand how large Australia is. It is bigger than the whole of Europe and with a very diverse economy. There are now eight states and territories. Federation of the original six states took place in 1901, so Australia as one country is relatively recent. Just like in the USA, each of the states has its own parliament, makes its own laws, and has its own legal profession. There has been progress towards harmonisation so if you are admitted as a solicitor in one state, you are now recognised in another.

In five of the eight states, the profession is fused, just as it is in Canada, so you are both a solicitor and barrister. However in Queensland, New South Wales and Victoria, solicitors and barristers are separate, just like the UK, so it’s quite a complicated picture.

The Law Council, of which I am CEO, is a peak body, so called as it represents the legal professions from all eight states and territories at federal and at international level. The Australian Parliament and many of its departments are based in Canberra, (which is why the Law Council is too) and deals with federal matters, from a legal perspective, such as the family courts system and national legislation, Many other disciplines, like land law and probate, are subject to state-based law, although there is a trend towards harmonisation on these between states There is a comparison of sorts in the UK between English law, Scottish law, Northern Irish law and increasingly a body of different law being developed in Wales. The difference here is a trend towards harmonisation rather than accentuation of the differences between jurisdictions.

As to communication, that is much the same: endless email! Face to face meetings and telephone calls are more of a challenge given the distances and time zones. Perth in Western Australia is three hours behind Sydney (and four hours flying time), Adelaide is 30 mins behind and Darwin in the Northern Territory is 1 hour 30 mins behind, so you need to be careful when arranging times to meet or speak.

Q A

What challenges does the Australian legal sector face, and how are these different to those present in the British legal sector?

We also want to ensure that the legal profession is seen as a thought leader, not just commenting on the thoughts of others but coming up with new ideas

Many of the challenges for the professions here are similar, due partly to the common law nature of the jurisdiction.

The Law Council of Australia has been leading a project to examine the dynamic factors in the legal economy, which has identified the rise of technology and the way that may impact the running of a practice, artificial Intelligence, demographics, and the way that the next generation will interact with their lawyer as factors which will shape the professions. There are low level factors, for example the universal use of smartphones, whereas half a generation ago, everyone was using pen and paper. There

February 2017

Modern Law 13

INTERVIEW

Face to face meetings and telephone calls are more of a challnge given the distances and time zones are also bigger picture issues like government funding, legal aid, money laundering and cybercrime.

New regulation on anti-money laundering is something the Australian government is looking at in great detail at the moment. They have previously been on a different track to England and Wales, somewhat less regulated, but are seemingly set to change with all the attendant cost and burden for practitioners that is all too familiar in the UK. There are also concerns here, not dissimilar to the UK, about identification of foreign money flowing into Australia, and concerns as to how the legal sector will deal with identification and money laundering checks.

Q A

Are there parallels between any of the challenges, risks and opportunities faced by the British and Australian legal sectors?

Yes there are. As I mentioned, globalisation, technology, demographics, and government funding challenges are very similar. International competition is however a different challenge.

The law of England and Wales is used internationally and is accepted across the globe, which gives solicitors in England and Wales an in-built advantage. Australian law is less so and of course may differ between states and territories, so the profession has a different challenge to overcome.

The nature of the legal and the political systems in many Asian and Pacific neighbouring countries also creates a different dynamic to solicitors in England and Wales, who may be competing in Europe.

Competition for international work is fierce, so gaining entry to a market is vital. I was in Hong Kong recently, meeting with firms and speaking with many of the Australian lawyers who work there.

Perth is actually in the same time zone as Hong Kong, but lawyers in Hong Kong have historically tended to look towards London for specialist advice, despite the fact that there are Australian lawyers close at hand who can be spoken to on the same day. We want to encourage people in places like Hong Kong and Singapore to look to Australia for legal advice.

Q A

How has your role changed following your appointment as CEO of the Law Council of Australia?

There is a significant difference between a President and a CEO position. As President of the Law Society I chaired its Council and was an ambassador for around 166,000 solicitors in England and Wales, but did not have an executive role in the day to day running of the organisation.

We live in a digital age where we’re all much more aware of fraud. Fraud is carried out much more easily, by some very sophisticated criminal gangs, and is facilitated through digital means

14 Modern Law

As the CEO of the Law Council I am very much responsible for its operations. It’s not dissimilar to running a firm, somewhat akin to my old firm CooperBurnett in Tunbridge Wells, of which I was Senior partner. The Council is not itself a Law Society or Bar Council, rather it represents the Law Societies and Bar Councils from the states and territories so there is less direct connection to practitioners.

Q A

What are your aims and goals as CEO of the Law Council of Australia, for the council and for the Australian legal sector?

One of the long term projects with which the Law Council has been involved is the creation of a national profession across all the states and territories. When I arrived in Australia, I was taken to meet the Chief Justice, whose first question was: “How quickly can you bring this [harmonisation] in”. No pressure there! There are many complicated reasons why the journey to a single Australian profession will take time and patience to achieve but I believe it can be, and will work with all the member bodies to achieve progress.

As an organisation, we are constantly striving to ensure that the ever flowing stream of new laws and regulations being brought in are proportionate and effective. To do this we need to have the confidence of the government and policy makers as a trusted advisor. This must be balanced against the need to disagree and protest on occasion when our policy conflicts with legislation. It is sometimes a difficult path to tread, but I am determined that we shall maintain our course, as it is vital if we are to persuade rather than just criticise.

We also want to ensure that the legal profession is seen as a thought leader, not just commenting on the thoughts of others but coming up with new ideas. We are the receptacle for the national legal expertise and need to focus that to best effect.

We need to be bold about the value of lawyers in society. It’s something I spoke about in England and Wales a lot last year, but it is no less true and important here - lawyers don’t simply sell legal services, they have a higher duty to the court to uphold the rule of the law and to act with integrity. That is a fundamental to society; part of the glue which holds it together.

One of the projects that the Law Council Vice President is now working on and will be a major focus next year is called a RRR strategy – Rural, Regional and Remote. Lots of small towns across Australia don’t have enough lawyers or indeed any at all, so we need to make sure the people living there can have access to legal advice and access to justice. England and Wales is familiar with legal aid deserts but the problem here is magnified many times, simply by the distances involved. Electronic communication may be a partial solution, but connectivity in rural Australia is in itself an issue. Everybody accepts that doctors and teachers are essential in a community, but lawyers can be just as important. We want to bring about a greater appreciation for that and in turn a greater respect for the profession.

Q

Is there a difference in the public perception of solicitors in Australia? How is the Law Council of Australia helping to improve the reputation of legal professionals?

A

No, it is quite similar. There are the usual stories in newspapers about lawyers having the temerity to defend a criminal (!); they make for good headlines in the red tops. Having said that, the Law Council is a well-known and respected organisation so we have considerable success in terms of comment in column inches

February 2017

INTERVIEW

We want to bring about a greater appreciation […] and in turn a greater respect for the profession and radio and television broadcasts. Having the ability to showcase the expertise of lawyers will always help with improving reputation.

From my own experience, the government here is much closer to the legal profession than in the U.K., which helps with the access point I made previously. A number of government members have practiced in the relatively recent past and been active members of their own state and territory Law Society or Bar Council. Some senior Politicians have even been directors of the Law Council when they were working in the real world.

Q

What are the problems with the proposed sale of the Australian Land and Property Information (LPI) unit, and are there similarities with the scrapped plans for privatisation of the UK Land Registry?

A

The arguments made by the Law Society, which I think were persuasive in getting the UK government to drop the plans, are very similar. The LPI unit is, like the Land Registry, what we described as critical national infrastructure. What I mean by that is the ability of everybody to know, with certainty, and the backing of the state, that they own land and can buy, sell or mortgage it, thus underpinning the economy.

The appetite for risk in government is, quite rightly, very low, but is much higher in the private sector. We now live in a digital age where fraud by electronic means is a real problem and a growing one too. Cyber security is today’s big issue. Fraud is carried out almost routinely, by some very sophisticated criminal gangs. This means that the register is now more vulnerable than it ever was.

Thus zero tolerance for risk may be seen as inefficient or costly, but is seen as a price worth paying for a stable economy. The government has the legal ability to privatise the land registry or LPI - it’s a national asset and they can sell it - but the risk is that you’ll destabilise the certainty of ownership. It is also a natural monopoly, and its use, a distressed purchase. Nobody goes out in the morning saying, “We’ve got a brilliant land registry, I’m going to go buy or sell my house”. You have to use it so there can be no competition to drive quality.

If you sell it to a private company, how are they going to make their money, where is the margin? In England and Wales, and likewise in New South Wales, the government was going to set the fees, so they’ve got to drive profit somewhere else. The easy answer is hiring cheaper, less qualified staff, which is not going to drive increases in quality or expertise.

In England and Wales, the Land Registry is efficient and sufficiently profitable that it has money to reinvest in improvements. There is no reason why the same cannot apply in New South Wales. The idea that progress will only be made in private hands is simply not true; the Land Registry in England and Wales has been very innovative, progressing very well with their digitisation plans.

Q

What external factors, for example political or economic changes, might impact on the Australian legal sector in the next five years?

A

Australian politics has been somewhat more volatile than UK politics in the last few years. The frequency of change in Prime Ministers is proof of that! There is a general election every three years, so there’s a tendency for short term policy. That may well change the outlook, for example, on legal aid and various

February 2017

Jonathan Smithers

Jonathan Smithers started as CEO at the Law Council of Australia in September 2016, to head an organisation representing the Australian legal profession at Federal and International level.

This followed on immediately after completing his term as President of the Law Society of England and Wales, having served on its Council and many boards and committees for ten years.

Jonathan practiced at CooperBurnett in Tunbridge Wells for thirty two years, from Articled Clerk to Senior Partner, specialising in conveyancing and land law work.

He is also a past President of Tunbridge Wells Tonbridge and District Law Society and Kent Law Society.

policies directly affecting the legal profession, which in turn, through a lack of certainty, impact on investment and innovation.

The anti-globalisation trend of the new US administration, e.g. cancellation of the Trans Pacific Partnership (TPP) of which Australia is or was a part, and other agreements may make it harder to trade internationally. Imports and exports, and the attendant legal advice that goes with them, are a vital part of the Australian economy, so there is likely to be a dulling effect on the sector.

Q A

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

It looks bright. The amount of work is increasing, as is the number of lawyers working, although as the practices and the structures in which they work evolve, the future may look different to the past. As with many jurisdictions there is an increasing polarisation between the larger firms and the smaller ones, with the challenges of rural and regional practice becoming much greater. I know that the profession will continue to thrive and carry out the vital work which allows the rule of law to function and benefit all of society.

Modern Law 15

INTERVIEW

Tony Piccirillo & Chris Harris Tony Piccirillo and Chris Harris are the Chairmen for this year’s Eclipse Proclaim Modern Law Conveyancing Conference. They share their thoughts on recent and prospective changes to the conveyancing sector, highlighting the dangers presented by fraud, the opportunities in technology and the role that the government has played in changing conveyancing.

Q

Has the way consumers choose their conveyancing provider changed in recent years, and what have conveyancers done to meet rising standards?

A

Chris Harris (CH). Consumers are embracing digital technology more by checking out their conveyancers’ presence online, and using reputation management tools more.

Consumers are more savvy, more demanding, and more likely to check you out before they actually instruct.

Tony Piccirillo (TP). Reputation is crucial now. The Property Academy is an academy for estate agents, and they found that only 11% of people list price as their main decider when instructing conveyancers, and the rest is on other factors, such as quality.

Representation is so visual now, what with social media, and businesses are desperate to get positive social media reviews, although not all of them are catching on.

Q

As economic uncertainty continues to increase on the approach to Brexit, do you predict consolidation in the conveyancing market?

A

CH. People have talked long and hard about conveyancing consolidation for many years. For the past five or six years, 4,500 firms have provided conveyancing, and the number hasn’t dropped. There has been a slight movement towards the larger firms, but there has been a broad and consistent number of law firms out there. So despite the supposed pressure to consolidate, people still think the ‘local’ is very important and will still choose providers that they can see locally face to face.

Whilst there are lots of reasons why consolidation may appear to be something that’s going to happen, I’m not actually sure it is going to happen. I’m seeing new firms set up, new firms coming to market, and firms leaving the market, but it doesn’t appear that the post-recession inhibitors to setting up a law firm that does conveyancing are quite as difficult as they were five years ago.

Changes in technology allow forward thinking and active business owners to demonstrate entrepreneurialism by finding new ways of doing things Chris Harris

TP. If they’ve got over that hump of the last few years, the number of firms that carry out conveyancing will probably be quite consistent. However, the amount of work that smaller firms do will reduce; the ‘specialist firms’ are getting hungrier to take more of the market. Some of the firms I’ve been speaking to have got expansion plans, but some of the ‘non specialists’ may not have the focus or investments to put into the type of structure they need to have in place to compete.

Q

What effect will the measures proposed in the 2016 Autumn Statement have on the conveyancing market?

16 Modern Law

February 2017

INTERVIEW

Some firms have been rejected from the CQS, which may be a good thing, because if they couldn’t get the CQS certificate it means they may not be the right people to provide a good service for customers Tony Piccirillo

A

CH. We’re already seeing that buy-to-let investors are looking at selling their portfolios, and first time buyers are increasing in number. First time buyers will grow market share, and start to return to the market, whereas buy-to-let investors are not buying as many and are not being as considerate in what they are buying.

TP. Last year, the first time buyer market represented 28% of property purchases; this number is getting higher and higher. The Housing Infrastructure Fund has been created, and a lot of that is geared towards first time buyers. £1.4 billion has been invested to provide 40,000 new affordable houses. Any action that stimulates first time buyers is likely to have a positive impact on the volume of transactions.

Q

How will the threat of cybercrime change in the future, and how does the conveyancing industry need to adapt to meet this threat?

A

CH. The nature of crime is constantly changing, and the amount of money held by conveyancers means that they will increasingly be a target. Fraud will continue to evolve and become more sophisticated, and conveyancers need to be constantly reevaluating the risk rating on files, and asking the question, “Does this make sense?” They need to use all the tools available to them to protect themselves.

TP. Cybercrime is really a big problem for the entire world, not just for conveyancing. In the 12 months before November 2016, cybercrime netted a whopping $450 billion in profits, with 2 billion records lost or stolen worldwide; that’s the equivalent of the GDP of about 160 countries in the world, including Portugal and Ireland. The United Nations estimates that 80% of this is carried out by highly organised criminal gangs. These gangs operate like legitimate business, where their employees work Monday to Friday.

Apparently these criminals have got their own black market ‘dark websites’ where they can discuss technology and ‘rate’ their cyber technology. It’s only going to get more prevalent, so conveyancing companies have got to develop procedures to ensure that they are even more vigilant. They need to get systems in place that make finding problems easier, use third party software where available, and keep up with the latest IT and firewalls in order to be safe.

Conveyancers also need to make sure they’re training staff properly, in order to spot things that do not look right.

Q

Is collaboration between the different parties involved in the home buying process an area of conveyancing that can be improved to speed up service?

A

CH. Conveyancing collaboration is like the army or the NHS; it’s the perfect goal or a social good, but who’s going to create an environment that is truly independent and isn’t swayed by commercial tendencies? Every time anybody has tried to do this, other organisations have cried foul and said that commerciality creates a distorted market. Collaboration is vitally important to create efficiencies within the process, reduce crime, and make the consumer home move process easier, but can it actually happen without legislation? It seems that the government has other things on its mind at the moment.

TP. There are massive benefits to collaboration. One thing that’s

February 2017

difficult to achieve is more collaboration from local authorities and management companies, because one of the big problems with conveyancing is the amount of time spent waiting for third parties to relay information to you. Solicitors often get bogged down with that.

Q A

Are conveyancers utilising technology to its full potential, or is this still an area that needs to be improved?

CH. Technology is constantly evolving, and becoming cheaper and more accessible as it does. People are not using technology as much as possible, because they’re always playing catch up, whether this is through telephony services or video interaction, or even using their case management systems fully.

Changes in technology allow forward thinking and active business owners to demonstrate entrepreneurialism by finding new ways of doing things. There are lots of conveyancers out there that are quite a long way behind the curve in technology, and they’re the ones that are struggling and finding difficulty in surviving. There are other conveyancers, both large and small, who are very quickly adopting technology and ensuring that they are price competitive in the market. Technology is a function of market competition and a failure to use it will result in a business becoming uncompetitive in a rapidly growing market.

TP. Technology allows you to free up your people to deal with clients throughout the conveyancing transaction. Overall, conveyancers embrace this, but they’re nowhere near where they could be with it. There are a lot of people behind the curve still, and while there are companies getting on board with this, there are many that are still not.

By 2020, 50% of the workforce will be made up of millennials, and they live and breathe technology. Businesses need to understand and embrace this.

Q A

Has the Law Society’s Conveyancing Quality Scheme ultimately improved the quality of conveyancing for consumers?

CH. The CQS was essentially a response by the Law Society to shrinking lender panels and pressure from lenders to verify the credentials of solicitor conveyancers. I remain to be convinced that the CQS has dramatically improved the lot of the consumer, however there are clearly many people working hard within the Law Society to try and make that happen.

The process that we go through is essentially still a process that was designed during the Victorian age. Without fundamental change to the process, a quality badge is not going to improve the consumer experience.

TP. Overall, it’s done a good job. It’s added a baseline. Before this, there was no baseline, and it was very subjective to what everyone thought a good job was. It probably needs more teeth, and could do with a department from which you can get a decision about what is part of the protocol or not. Quite often, you have people that are part of the CQS that don’t follow all parts of the CQS. Rather than have a longwinded discussion with the other side’s lawyers, it would be good to call the CQS, and they can give an informal decision.

Modern Law 17

INTERVIEW

By 2020, 50% of the workforce will be made up of millennials, and they live and breathe technology. Businesses need to understand and embrace this Tony Piccirillo It’s also good in that it’s helped lenders recognise a baseline level for some firms. Some firms have been rejected from the CQS, which may be a good thing, because if they couldn’t get the CQS certificate it means they may not be the right people to provide a good service for customers.

Tony Piccirillo Tony is a partner and coowner of pioneering AVRillo Solicitors, based in London and founded in 1988. He is also COLP, COFA as well as holding other positions in the Firm.

Q

It has been suggested that a pre-contract pack, a pack of documents prepared by the seller’s solicitor, would speed up the home-buying process for consumers. What are the potential benefits or drawbacks of this suggestion?

A

CH. Providing information at the earliest possible opportunity has considerable benefits. That was the whole basis of having information packs. However, implementation of it got mired in politics, and the whole process was undermined due to vested interests. You also have to question how old and how current the data is by the time you see it. Providing data as soon as possible, in a timely fashion, is always going to improve the quality and speed of the conveyancing process. People don’t want a lengthy moving process, they want a house.

TP. In principle, it’s a really good idea. The more information you provide up front, the more people can make informed decisions at the outset. You have got the problems Chris mentioned, to do with the information being out of date by the time the property has sold.

The level of effectiveness may be something that depends heavily on the areas people live in, so in hot areas, where properties are selling quickly, an information pack is going to be really relevant.

However if you’ve got an area where properties aren’t selling quickly, that may not be the right place for a legal pack.

Q A

How do you foresee the conveyancing market changing over the next five years?

TP. The consumer that we’re going to have will change considerably. I mentioned before about the millennial workforce, and they’re going to want a different kind of customer experience. They’ll want a better service and a more IT-centric service. They’re going to expect more, but that is the way society develops. They’re used to dealing with something like Amazon Prime, where if you order something this evening, and it doesn’t come by 10AM tomorrow, you get upset.

You’ve also got companies like Uber, where you can track exactly who’s coming to pick you up, what their mobile number is and what they look like. As a conveyancing market, you have to provide that type of service, and we’ve probably got about four or five years to get ready for that change.

There are lots of uncertainties in the market at the moment: Brexit, a general election in the next five years, Donald Trump.

These things may or may not affect the market. Is the government going to introduce the funds they’ve promised for the housing infrastructure fund? That’s about £5.4 billion they’ve promised, which will really help if they go ahead with it.

CH. The other thing that will change is conveyancers themselves.

The amount of conveyancers that are solicitors is slowly diminishing, as solicitors choose not to do conveyancing, and more and more CLC regulated or CILEx regulated staff will be running and driving the departments and businesses that do conveyancing.

18 Modern Law

AVRillo is an LLP and Tony runs the firm alongside his brother Angelo. The firm has won 25 awards over the last 24 months, including Gold for Customer Service at both the Symphony Legal and Modern Law Awards.

Tony is the current and three-time winner of the Sunday Times Individual Conveyancer of the Year. He is highly regarded as one of the most innovative lawyers in his field, with 25 years’ experience in property conveyancing, including 16 of those years co-running AVRillo Solicitors. He is a CPD accredited trainer and NLP practitioner who teaches problem-solving with an open attitude and commercial acumen.

Chris Harris Chris is the founder and managing director of Lawyer Checker, Today’s Conveyancer, Practical Vision and Solve Legal; all providers of innovative solutions to the legal marketplace.

Qualifying as a solicitor in 1994, Chris has a wide knowledge of the changing dynamics of the UK’s conveyancing sector.

Will we see more licensed conveyancers, or changes to the rules so that a wider range of organisations are able provide conveyancing? At the moment we have a situation where a lot of solicitors’ practices do conveyancing, but are actually resourced by non-solicitors actually practicing. The knowledge and experience of the training contract and the breadth of the areas of law I trained in when I became a solicitor are unusual now, and we’re getting more and more specialists who have only ever done property law.

February 2017

Chris is recommended by The Legal 500 for his “excellent tactical analysis, good rapport with clients and extraordinary courtroom presence”. He has a national reputation for serious crime, commercial fraud, business regulation and professional discipline.

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EDITORIAL BOARD

Publishing information helping to connect firms with clients Jane Malcolm explores the benefits of fostering price transparency in law firms, and how publishing valuable information can improve firms’ relationships with other businesses. egal services are a business success story, with law firms contributing over £25bn to the economy every year, and the profession can be proud that we have a reputation for having some of the best lawyers in the world.

L

But we know there is more to do, and that nine out of ten members of the public do not use legal services. The Competition and Markets Authority’s recent market study looked at some of the reasons why. They said a key area is the lack of information available to support people to find a legal service, help them shop around, or compare information on costs.

This not only makes it hard for businesses and the public to access legal services, but also dampens competition. The CMA recommends an increase in transparency on services, quality and price, so the public can make better choices.

We have already started that process. We run the Legal Choices website, offering the public plain English information on legal services. Our website also has a popular law firm search function, and we share our core data with comparison sites and others.

More still to do

Yet we still have a long way to go. We are looking at creating a public register for firms and solicitors so that people have better information to make better choices. Transparency on price could help as well. Research suggests that consumers significantly overestimate the cost of services. If people could see costs upfront, they might be more confident about buying services.

Experience shows that they are also looking for value-for-money, not necessarily the cheapest option.

More openness will also create opportunities for firms. Around 86 percent of small businesses think legal services are essential for their business, but only 13 percent think solicitors are a good value way to resolve their legal problems. There are huge opportunities for firms to deliver services that are relevant, accessible and valuefor-money for these new consumers.

Getting your input

In the autumn we shared initial ideas about what type of information might be useful, including what we should provide through a public register, and what solicitors themselves should make routinely available. For example, we could publish meaningful, in-context, information on enforcement, upheld complaints and qualifications. And what about quality marks flagging consumer protections such as the compensation fund and indemnity insurance?

We need to think carefully about what we publish and how.

More information will not help if it’s confusing, hard to access, or irrelevant. And some information might be more useful if it’s published by firms – we think pricing is one such area.

February 2017

And we must get the balance right. We have made good progress getting rid of unnecessary burdens on firms. There is no point asking firms to provide more information unless there are clear benefits.

Thank you to all those that responded to our early thinking.

Once we have analysed comments, we will move towards firmer proposals later in the year.

But it will come as no surprise to find that conveyancing is one area we think could benefit from greater price transparency. Every house purchase is certainly not a straightforward transaction, but conveyancing is a key part of the market. It is worth exploring the options.

Risks around cybercrime

Unfortunately, when we think of conveyancing, we quickly come to another priority: cybercrime. Last year the majority of reports related to email hacks of conveyancing transactions, with £7m of client losses.

Criminals modify emails directly, usually by hacking into the system of an individual. They then alter the client’s emails to the solicitor or vice versa, changing bank details so funds go to the criminal.

Through our regular updates we want to help you manage these risks, so you can take steps to protect yourselves and your clients’ money and information. I must stress that this is about people - staying vigilant and training staff at every level - as well as maintaining technology protections.

We are keen to see firms making sure their clients are aware of the risks and taking steps to help. For example, avoid sharing bank details over email or transferring money before confirming the source of any request.

Firms must let us know if client money or information is lost. If you are a victim of cybercrime, or even experience an attempted attack, get in touch. As threats change so rapidly, sharing information can help us work together to keep our sector as safe as possible.

And that is also true for our proposals for sharing information with the public. Your input is key to developing an effective approach. I look forward to hearing your views.

Finally, the SRA’s latest report, ‘IT Security: keeping information and money safe’ is available at www.sra.org.uk/risk. Our ideas around better information can be found at www.sra.org.uk/choice.

Jane Malcolm, Executive Director of External Affairs, Solicitors Regulation Authority (SRA).

Modern Law 23

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EDITORIAL BOARD

Reforming the Legal Services Market Caroline Wallace outlines why the legal services market is not working well for individual consumers and small businesses, and how the Competition and Markets Authority’s legal services market study report recommends this is dealt with. s most readers are aware, the Competition and Markets Authority (CMA) issued its final legal services market study report and recommendations in mid-December. The market study itself was launched in January 2016.

At the moment, the LSB is considering its detailed response to the recommendations directed to it. The LSB is pleased that the CMA has recommended measures to increase transparency for consumers alongside recommendations regarding regulatory reform.

The CMA has found that competition in the legal services sector is not working well for individual consumers and small businesses. It identified adverse outcomes for consumers, including:

This final report is not the end of the process. In fact, it is the start of an implementation process in which the LSB will be actively engaged. The CMA has helpfully outlined a clear timetable for action on the recommendations directed at the front line regulators.

A

• lack of information about legal services, which in turn contributes to unmet legal need.

• a considerable spread of prices for the same legal service, suggesting that consumers could make sizeable savings from shopping around.

• limited innovation, leading to consumers not having access to new and different services that might better meet their needs.

The Legal Services Board (LSB) welcomes the CMA’s report. Its findings are very much in line with our own view that the legal services market needs to work better for consumers and small businesses and that the current regulatory framework should be reformed.

The CMA has made recommendations to remedy the failures it has identified. These include: • Recommendations to legal services regulators to increase the transparency of price and quality information, to facilitate the development of comparison websites and to develop a consumer information hub based on the existing Legal Choices website.

• Recommendations to the Ministry of Justice, including: • to review the case for extending redress to consumers using unregulated providers • to undertake a review of the independence of the legal services regulators • in the longer term, to undertake a review of the regulatory framework.

• Recommendations to the LSB relating to monitoring and reporting on the progress of the legal services regulators in implementing the recommendations directed to them, and taking appropriate action where regulators fail to address information gaps.

The report suggests that the legal services market cannot be expected to change itself, rather it considers that regulatory intervention may well be required to make change happen.

The CMA, amongst other things, is seeking a change in the behaviour of providers of legal services to individuals and small businesses.

The executive Director for Markets and Mergers at the CMA, Rachel Merelie said at launch “You might not need a lawyer very often, but when you do, it will often be at a crucial point in your life.

So the transparency, affordability and accessibility shortcomings we have identified are a real concern.

“Consumers who are equipped with the information they need to assess the services on offer and choose the best deal for them will not just benefit personally, but will also help drive competition, quality and innovation across the whole market. That means a better outcome for everyone and, importantly, fewer people will be discouraged from seeking the help they need.”

If these recommendations are successfully implemented, then the views and needs of individuals and small businesses consumers of legal services will help drive the way the market develops.

How firms prepare and respond more efficiently and effectively to consumer needs is going to become a key consideration going forward and is something to which the LSB can offer its wholehearted support.

The full CMA legal services market study report can be found here: https://www.gov.uk/cma-cases/legal-services-market-study.

Caroline Wallace, Strategy Director, Legal Services Board (LSB).

The CMA examined independence in legal services regulation in its report. It said the Ministry of Justice should carry out its planned review of the independence of legal regulators as soon as possible and stated that it supported independence as a “key principle”.

This echoes the LSB’s own views on regulatory independence, which we outlined in our September 2016 Vision Paper.

February 2017

Modern Law 25

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EDITORIAL BOARD

Who funds the funders and why?

Apprenticeships: Education in the 21st Century

s third-party litigation funding matures in the European market, investors are increasingly considering the attractions of backing the funders. It is increasingly becoming a partnership that is working for both sides, and the key to success for investors lies in working with teams that are able to originate and source cases - because there is plenty of capital queueing up to back the right opportunities.

It has been suggested that law schools must update their teaching to reflect the state of the legal sector in the 21st century? Is this accurate in your opinion or experience?

A

The decision to litigate can be cost sensitive, particularly in the insolvency market, where the removal of the exemption from LASPO for insolvency litigation means insolvency practitioners have nowhere to go. They would have to be able to budget for solicitors’ fees, legal disbursements and costly after-the-event insurance before pursuing an action. So, IPs have claims, but don’t have the money to pursue them.

Our funding partner at FLF is a private fund advised by Omni Partners. These investment funds are driven by low interest rates and a lack of access to capital, meaning the potential returns through litigation funding are attractive to investors. In our case, the real driver behind the fund’s interest is the uncorrelated nature of the returns, as these are not dependent on the economy or the state of the markets.

Our funding partners see us as an attractive dynamic. The market is an example of one where simply having the access to capital shifts the odds of a successful outcome in your favour. The cost of litigation, particularly in the insolvency arena, is now so high that, very often, strong cases for reclaiming money are not taken forward, because no-one is willing to put up the cash. The fact that our partners have deep pockets and a proven appetite to provide funding reduces the risk at the outset.

Recent changes in legislation are designed to be investor-friendly, so we are going where the government wants our partners to go.

Access to justice is what’s driving this, and the government wants third-party capital to come in to create a route to access justice.

Maurice Power, Managing Director, Ferguson Litigation Funding.

or many years, lawyers have been created by two main routes. The most familiar is the law degree/GDL route, followed by vocational training in the shape of the LPC/ BPTC. The other path through CILEx’s work based learning is an industry standard, but is not as widely understood by the public.

F

Of the two systems, the pendulum is swinging strongly towards the work based learning model in the form of apprenticeships for many reasons. It fits well with the government’s agenda to promote higher level learning through apprenticeships: they are perceived as being the modern way to help close the country’s productivity gap, an ironic development given that apprenticeships date from the middle ages.

An apprenticeship also avoids the eye-watering debt levels experienced by graduates. According to the Sutton Trust, this is typically £44,000 for a UK graduate, which is likely to reach the £50k mark following the abolition of maintenance grants.

Arguably, the value of a degree has diminished too. Two pieces of research, one published in the Times Higher Education (08.12.16), show that the ‘value added’ by a law degree taught by some non-Russell institutions is very low in terms of career salary enhancement. Another research exercise by the Higher Education Statistics Agency shows a marked grade inflation effect, such that three quarters of students graduate with the top two degree grades, thereby diluting the value of a degree.

But perhaps most importantly, an apprenticeship can be moulded around the employer’s business requirements. For example, at CILEx Law School, we have found that employers particularly value the induction programme we deliver to apprentice learners and supervisors at the start of their programme. At different points in the apprenticeship, we can also incorporate additional soft skills, so that the apprenticeship skill set matches the employer’s business needs. In essence, we are moving towards the ideal of blending skills and knowledge which in the past have been taught discretely.

In this respect, legal apprenticeships in particular do reflect the requirements of 21st century legal sector. They are more responsive to employers’ needs, which are dictated by market forces and the increasing pressure to specialise. The integration of the CILEx imprimatur on apprenticeships also means that able apprentices can develop their careers through a route that has long championed the specialist lawyer, but with the added advantage that employers received funding for training through the apprenticeship medium.

Noel Inge, Managing Director, CILEx Law School.

February 2017

Modern Law 27

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‘Value Pricing’ – Capitalist Acts Between Consenting Adults

Scanning Ahead

ne useful definition of value pricing is as follows: Valuebased pricing is a pricing strategy which sets prices primarily, but not exclusively, based on the perceived or estimated value of a product or service to the customer rather than based on the cost of the product or historical prices.

utomation is rapidly encroaching on the legal profession, perhaps in the way industrialisation caught up with the luddites. Even practices and chambers with a forward-thinking approach to IT integration might benefit from outsourced support.

At the heart of value pricing is pricing fairness. In this context, fairness has nothing to do with quantum. It is a subjective test.

Legal businesses have many areas which can benefit from adopting technology to increase the automation of specific tasks.

Where such systems complement human work, lawyers should then be released from process-driven work and allowed to focus on higher income generating activities.

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When you transgress the fairness threshold, wherever it may lie, look out, you will be punished. Consider the swift public responses to the following random examples of companies whose pricing their consumers deemed unfair: • When Bank of America announced that it would start charging a $5 monthly debit card fee, the public outcry was so intense that the bank quickly scrapped the proposal. But the damage was done: Account closures in the final months of 2011 increased 20% compared with the same period in 2010.

• When Netflix implemented a 60% price increase for customers who both rented DVDs and streamed video, 800,000 users cancelled their service and the company’s market cap plummeted by more than 70%.

• When irate customers targeted Marks & Spencer for charging £2.00 more for bras with large cups, M&S initially defended the practice, not unreasonably pointing to the higher cost of goods. But as the complaint gained traction on social media, the company relented, implementing a “one price fits all” policy and offering a month long 25% discount on all bras.

In each of these instances, the price did not pass the ‘fairness’ test in the minds of the customer. So what are the characteristics of fair value pricing?

• The fee addresses 3 key criteria as seen from the client perspective; how does this make me more money, how does this save me money and how does this meet my emotional needs (e.g. a ‘top’ law firm providing peace of mind or status purchase) • The client has been closely involved with scoping the job from the outset • There is an attempt to achieve a measure of alignment between the result and the fee and not just the effort and the fee • The fee strategy reflects a demonstrable alignment of both the lawyers’ and the clients’ interest Richard Burcher, Chairman, Burcher Jennings.

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Certain types of procedural legal work can benefit from using innovative IT systems. According to the Law Society, “processdriven legal services are being commoditised through automation.

In time, with cheaper computing power and better software, increasingly sophisticated services may be automated.”

To take care of the enormous task of organising data and vital documents, legal firms can work towards optimal efficiency by using a data scanning service. Scanning companies like Restore Scan realise that data is the lifeblood of legal firms and that having speedy cloud-based information can result in tangible cost benefits.

Data digitisation by scanning is a cost-effective and efficient way of reducing reliance on document storage, freeing up space, sharing documents and improving document security. With cloud-based hosting of documents and data, organisations can efficiently share information, speeding up and improving customer service. This is all the more relevant now that the pace has been set by the Ministry of Justice to digitise all court rooms by the end of 2016.

Why pay fees to store roomfuls of paper records and files?

Choosing to scan, store and manage documents digitally reduces the cost of paying for physical storage. In addition, documents of any age, size or media type can be captured to create a cohesive, cloud-based information resource making pertinent information available at the touch of a button.

Despite common security fears, putting scanning or document management in the hands of a third party does not weaken the security chain. Firms actually reap multiple benefits from such an association, not least having the assurance that reputable document management firms have expertise to share, are DBS checked, and adhere to the highest of security standards.

With lower running costs, more time for profit making activities, and security comfortably guaranteed, legal businesses are encouraged to audit their current business practices in order to pinpoint key opportunities for automation.

In an increasingly competitive market, keeping one step ahead of the technological ‘luddites’ might make all the difference.

Paul Moonan, Managing Director, Restore Plc.

February 2017

Modern Law 29

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Don’t Get Left Behind What impact might the 2016 Chancellor’s Statement have on the legal sector? he Chancellor’s Statement, provided on 23rd November 2016, was Philip Hammond’s first and last Autumn Statement, replacing it in favour of a Spring Statement from 2016. Aside from this decision, which was not the most surprising of revelations, a number of announcements were made which are likely to have a significant impact on the legal sector in the years to come.

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Firstly, many firms in the legal sector will be impacted by the announcement that the Government plan to continue their ‘business tax roadmap’ laid out in March, with Corporation Tax set to fall to 17% by 2020. This could have a significant impact on firms currently operating as a limited company, and may see many more taking the plunge into incorporation due to the superior tax advantages.

Secondly, in response to the ever growing need in the UK for new homes, the Chancellor announced the allocation of a new £2.3 billion Housing Infrastructure Fund to deliver ‘…100,000 new homes in areas of high demand’. This announcement, alongside the revelation that plans to privatise HM Land Registry have been scrapped in favour of a more data-driven registration business, will come as welcome news to solicitors in the residential conveyancing sector who will see the potential for business growth and profitability in this area over the coming years.

Finally, linking to the announcement in relation to HM Land Registry, the Chancellor announced, most importantly in my opinion, an investment of over £1 billion in digital infrastructure.

This investment is going to benefit a number of businesses greatly over the coming years including, primarily, those in the financial and legal sectors. We have seen extensive development over the past five to ten years in the technology used by solicitors and independent financial advisers, including the transition into using ‘robo-advice’, online drafting tools and online based referral systems between firms. I believe the progression in this area will be beneficial for all companies involved, and will permit the streamlining and efficiency of a number of processes within the legal profession.

Many solicitors may be wary, initially, regarding the use of recently introduced technology due to their concerns of commoditisation that is ever present in the competitive world of the legal sector.

However, without embracing the evolution into the Digital Age and taking advantage of Government investment in digital infrastructure, I fear many legal firms will be left behind, with the majority of Millennials opting for advice from firms who made the correct decision to advance in a technological manner whilst they could.

What challenges will the legal sector face in 2017? new year means a new opportunity for “security” to stake its claim to being the biggest challenge facing the legal sector. Because as surely as the sun will continue to rise, law firms will continue to have large volumes of confidential and privileged data - which means that they will continue to be attractive targets for hackers and other bad actors.

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Making the situation even more challenging, perimeter defenses are no longer enough. Thanks to sophisticated social engineering techniques like phishing, hackers can acquire valid user credentials that allow them to entirely bypass a company’s perimeter defenses. With these legitimate credentials in hand, hackers can easily view and download all of the sensitive data residing on a company’s servers - in file shares, email inboxes, email sent folders, and other locations.

What’s a business to do when its biggest asset, its people, is also its biggest potential security liability?

The solution is to make sure that information is secure and governed at every step, to minimise risk and the potential damage that can be done by any one user. A document management system with multiple layers of security is called for here.

The system should have encryption at rest and in motion, which protects files from being viewed by a hacker with valid credentials either in a central document store or in transit throughout the firm.

It should also have audit trails that enable you to track the actions of each user in case of investigation, to see which documents they accessed, viewed, or downloaded.

An ounce of prevention is worth a pound of cure, so increasingly, any document management system worth its salt needs the ability to actively monitor for unusual activity in real time.

Big data analytics and machine learning, combined with a deep understanding of behavioral patterns of workers at law firms, can open the door to better, more effective tools in this regard.

These analytics can identify attacks in process, enable law firms to quickly audit and assess the damage or loss from any attacks identified, and analyse, and potentially identify, new patterns that, in turn, improve the ability to detect future attacks.

Law firms have a responsibility to their clients and an obligation to protect client data. By making information governance an integral part of their overall security strategy, firms will be well positioned to meet these security challenges and successfully navigate an ever-evolving cyber landscape in 2017 and beyond.

Geoff Hornsby, General Manager, iManage.

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February 2017

Modern Law 31

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Moving goalposts

An App for Everything

s 2016 draws to a close and we reflect on the year, we are perhaps left with a sense of uncertainty about the future of the personal injury sector. A week certainly proved to be a long time in politics! Earlier in the year, we were planning and presenting our response to the proposed Osborne Reforms. Then the apparently unforeseen Brexit vote caused political uncertainty that led us to believe that the Government of the day had plenty to distract it.

How do law-based apps disrupt and benefit the industry?

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All the while proposed reform remained a matter to be revisited, perhaps in 2018? We had a clearer picture of what was being muted, and we had more time to lobby against and argue our case. It’s fair to say that the 2016 Chancellor’s Autumn Statement came as something of an unwelcome shock to many, though by no means all.

Surely, the biggest losers will be the clients, who will see success fees go from 25% to 40%, potentially putting PI Firms back in the same financial position they are in today.

A comprehensive Triage system will be a vital component in identifying a soft tissue injury requiring treatment, a potential CBT concern, or hearing damage, as opposed to a “whiplash” claim.

ATE underwriters will need to provide a policy that will cover County Court legal representation, although of course the premium will not be recoverable. Sadly it will be the claimant who will once again foot the bill.

The whole claims process will require greater levels of automation in order to bring down the operating costs of law firms. We have long held the view that the key to the secure future of the law firm is to significantly reduce the firm’s workload per case, whilst at the same time eliminating any exposure to negligence claims by passing the risk to the MRO’s and Underwriters, which is, in our opinion, where it should have always been.

For the client,“Access to Justice” will be evidently harder to find, not least because there will inevitably be fewer law firms remaining in the market.

n ‘The Future of the Professions’, Richard and Daniel Susskind claimed that lawyers’ working practices “have not changed much since the time of Charles Dickens”.

Law has one of the lowest levels of technology investment of any industry, and its risk-averse stakeholders have traditionally been slow to adopt new practices. Despite this, lawyers are beginning to recognise the considerable efficiency and cost benefits that mobile apps can present, and adoption is increasing.

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Mobile apps can greatly increase the level of service lawyers provide to their clients, allowing them to gain competitive advantage. Communication apps such as Legaler and The Link App are providing revolutionary new ways for firms to connect with clients. Legaler allows legal professionals to hold secure online meetings with clients, eliminating the need to travel long distances for meetings, giving users more time in their day, increasing their availability to clients, and in turn allowing them to adopt more flexible working practices.

An increasing number or practice management software providers have mobile apps which benefit from the same functionality as their desktop/browser-based versions. Clio’s mobile app allows lawyers to track-time, manage their firm’s calendar, and access all their case files securely, allowing them to work from anywhere.

Reference apps such as Halsbury’s Legal Terms and iLegal are also making lawyers’ lives easier giving them access to libraries full of legislation and legal terms in their pocket.

Despite these examples, the UK and Europe still lag behind their counterparts in North America, where lawyers can turn up to court with nothing more than an iPad thanks to apps such as AgileLaw, TrialPad, and Fastcase. Thanks to growing investment in legal technology on this side of the Atlantic however, the gap should not take long to close, allowing disruptive mobile based technologies to flourish and legal professionals to gain competitive advantage, become more efficient and in turn increase profitability.

Ross Weldon, Marketing Manager EMEA, Clio.

We continue to invest heavily in a cloud portal to ensure that the cases placed with our funded firms have been subject to rigorous quality checks. Our triage process identifies only those claimants who have suffered real injuries, and our ATE partners provide the protection the client needs to pursue the claim with confidence.

So as we take time to reflect on an interesting year, let’s make sure that we approach 2017 with a positive attitude.

Exciting times lie ahead!

Andy Wells, Founder, BMS Funding Ltd.

February 2017

Modern Law 33

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The best of the best How can Universities reflect the 21st Century Legal Sector?

K Universities providing many undergraduate and postgraduate law-based programmes have a reputation for international excellence, research and publication, attracting as they do students from around the world. They maintain a contemporary touch through regular support and communication with legal and non-legal professionals locally, and more widely through acting as a successful conduit into public and private industry. Given that many universities address not only English law but also laws of other countries (especially European), this places them well for post-Brexit adjustment.

U

Higher Education Funding statistics illustrates how well many Universities function and achieve in terms of research and teaching, ensuring law is not separated from other parts of society.

Reputation for excellence is reflected in the UK being the largest provider of legal training in Europe, covering the entire spectrum of legal topics, and achieving high levels of student satisfaction and post-university employment.

Many UK Universities achieve high ratings on HCFC or RAE exercises. Most, if not all, aspire and plan for these high ‘excellence’ ratings. Perhaps due to apparent inconsistency in these ratings across the UK, the SRA have proposed a central exam or accreditation for all trainee solicitors to ensure they reach the same high standard of competence, regardless of training route to safeguard competence and quality. The process for qualification as a solicitor is key to safeguarding competence card quality.

Understandably, many law schools are ambivalent about the proposal, currently under consultation.

Law training needs to continue to broaden its base to include interdisciplinary contact, in areas such as medical law and ethics, criminology and social-legal studies, and encourage a sensitivity to issues of ethnicity, gender and class. The interface between Law and Psychology is a fundamental area for further development with issues such as fraud and deception detection; dispute resolution; and advanced face-to-face communication skills being seen as central to understanding a lawyer’s world and mindset.

21st Century training can provide an opportunity for law students and law firms to learn about Quality Management, how this applies to a law graduate entering the profession, learning about customer responsiveness and lawyer well-being – Therapeutic Jurisprudence (TJ) in action. New developing courses are well placed to establish a more positive and TJ-oriented teaching culture.

Assessing returns – what financial advice can do for you recently started using the services of a personal trainer, and have become interested in his business model. My trainer’s role is to make me a lean, mean, running machine.

He gives me the techniques and the motivation, and, if I do as he says, I will meet my objectives. That’s in theory. In reality, I frequently find myself failing at basic geometry and cutting a piece of a cake into an obtuse rather an acute angle, therefore he can hardly be blamed if I am not the next Usain Bolt.

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It occurred to me that my trainer’s job is the inverse of mine in many ways. He helps clients lose pounds, whereas an adviser’s job is to generate them. More importantly, unlike a personal training client, the client of a financial adviser doesn’t share responsibility for outcomes for the advice we recommend and implement. There is no grey area.

Advisers need to provide reassurance, excellent service and a holistic approach to our advice, but ultimately, our success in managing wealth is easily quantified in pounds and pence, giving a clear indicator of our performance. Therefore, the only important job for the client is in choosing the right adviser at the outset.

What criteria should you have in mind when comparing advisers?

At Saunderson House we use several benchmarks to measure each client’s individual portfolio returns. This means clients can clearly see how their money would have performed elsewhere, ensuring maximum transparency. Indices include: • Inflation to benchmark the purchasing power of their money • Bank of England base rates to show what cash has returned • The FTSE All-Share index (and other global indices) to show the returns gained for equity investments • And most importantly of all - we compare ourselves to an index group of our peers, which shows the returns given after all costs and fees, and how we stack up compared to them.

If your current wealth manager can’t offer a similar package of comparators, then it might be worth considering what they hope you aren’t noticing.

Joe Roxborough, Chartered Financial Planner, Saunderson House.

Both universities, at undergraduate and postgraduate levels, and the SRA share the objective to ensure legal education is responsive, and give students a wide breadth of training and skills. From here, they can apply their legal training to be mindful lawyers, with global and multi-disciplinary knowledge and skills for the challenges facing lawyers and society in the 21st Century.

Dr Hugh Koch, Clinical Psychologist and Director, Hugh Koch Associates and visiting Professor to School of Law, University of Stockholm.

February 2017

Modern Law 35

EDITORIAL BOARD

Exciting Times Ahead Where should the government’s focus on conveyancing lie following the decision not to privatise the Land Registry? he government’s decision not to privatise was accompanied by the suggestion that the Land Registry focuses on becoming “a more digital, data-driven registration business.” In fact, a quick look at the Land Registry blog demonstrates that it is already putting a lot of focus on digital products and looking at a whole range of services to benefit the conveyancing industry (28/11/2016).

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Alongside this, the Conveyancing Association has recently published a white paper on “Modernising the Home Moving Process”. Driven by the Government’s call for suggestions on modernising the process, it focuses specifically on creating greater certainty at an earlier point. Proposed solutions include centralising identity verification, property information upfront, review of CON29, provision of title prior to sale and removing mortgage barriers.

There’s clearly a lot going on, but when doing the research, what struck us is the lack of cohesion in pulling the various initiatives together. The government has already set an agenda, so perhaps what’s now needed is for the different stakeholders to work together to progress this?

There are some clear areas where a difference could quickly be made: Greater transparency Statistically, most of us only move every seven years or so.

Therefore the average homebuyer has little understanding of the conveyancing process. Stakeholders could make the process a lot clearer for the buyer and seller to understand the process so that the right information is provided upfront.

Greater integration of property information Many search providers are already working towards offering greater integration with Land Registry data, forms and services.

Expect to see more on this as 2017 progresses!

Better management of fraud ID verification still remains an area where there can be an element of box ticking, and email hacks of conveyancing transactions are the most common cybercrime in the legal system. Conveyancers need better systems to help them deal with this, and consumers need a greater level of information about the risks.

Secure portal Since the demise of Veyo, other case management systems have begun to offer some of its proposed features, yet there is no current development that delivers the full, original vision. A review by stakeholders could consider bringing together features such as ID verification, upfront property information, early indication of risks, recommended searches / data, Land Registry services and Local Authority data, as well as the incorporation of lender and consumer communication.

Now that the Land Registry decision has finally been made, 2017 represents a real opportunity to improve the process. Exciting times ahead!

What are the potential applications of ‘big data’ in law?

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ig data has been used in other sectors for some time, serving to identify trends and forecast future market developments and consumer behaviour.

For law firms, it’s becoming increasingly difficult to enhance efficiency and productivity whilst standing apart from competition and delivering an excellent client service.

This is where big data comes in; providing firms with opportunities to take an analytical approach as to how to stay ahead of the curve.

Below are some key applications of big data within the legal sector:

Determine profitability of cases

As part of the research stage, substantial amounts of files and other relevant information from previous cases, often going back years, needs to be collated and organised into a meaningful analysis. Making use of big data means this can be analysed instantaneously, serving to identify any correlations and leading to new insights and perspectives that may not have been previously considered.

Additionally, algorithms can offer predictions on cases based upon the results of similar cases, quickly determining whether it’s worth taking or not and ultimately increasing the chances of selecting a successful case.

Increase productivity

Big data can be a great way to obtain visibility of a practice as a whole. Partners and senior managers are able to see what tasks fee earners and support staff are spending time on and compare the rate of those tasks to the amount of revenue they generate.

By understanding the productivity of staff, it can enable firms to change how they operate, or if necessary, the role of each employee, to ensure efficiencies are enhanced and maintained.

Recognise trends

Nowadays many firms have a fully integrated CRM system within their legal software; however, with multiple channels now available for clients to ‘shop around’ before instructing a practice, it can be difficult for firms to truly pin-point where potential clients are coming from.

By combining web analytics with results of marketing campaigns, incoming enquiries and new instructions, law firms can now receive a holistic overview of how their potential clients are interacting with them, and via which channel. Using this in-depth analysis, management can then tailor any future business development strategies to ensure marketing messages are successful in obtaining conversions.

To conclude, investing in big data and analytics can – and will – make a significant difference to law firms and their success rates, including substantial savings in time and costs, and an increase in operational efficiencies.

Sarah Roberts, Marketing Executive, Eclipse Legal Systems.

Susan Fairbrass, Marketing Manager, Geodesys.

February 2017

Modern Law 37

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EDITORIAL BOARD

Stumped By Trump?

Is there a link between Brexit, Trump and the growing number of law firms going into administration?

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f course not.

Clearly there is uncertainty following the UK’s decision to leave the European Union. Combine this with the appointment of Donald Trump as President and the shockwaves that were sent through the UK economy, the financial sector in particular, and you can see why these two events are being cited as the reason for many things. The reality is that UK business has continued to perform and the stock market has risen to record highs, but there is a growing increase in law firms going into administration. The reason is uncertainty, (and lack of cash flow), but this is not driven

by Brexit or Trump.

The high street banks are the primary funders to the legal sector and do not like uncertainty. This is compounded by the rising numbers of law firms going into administration, making the banks even more nervous about the sector as losses are being incurred.

Well regarded law firms such as GT Law, Prolegal, Parabis and only this month KWM, are a clear demonstration that size, or profitability, does not prevent failure. It is the lack of cash, as the adage TURNOVER VANITY; PROFIT SANITY; CASH IS KING clearly reiterates.

For the modern PI law firm, and due to the very nature of their business, achieving certainty is not easy. From changing industry reforms that affect their business (outside of the law firm’s control), the financial management (within the law firm’s control) is critical, and it should not be underestimated how much reliance a funder will put on strong financial management.

Financial management is making sure the law firm has the appropriate resources, knowing how possible changes and reforms will impact the law firm’s business model and ensuring the company has access to sufficient financial resources to be able to continue trading though the peaks and troughs of the changing business.

The law firm therefore requires funding to cover these vagaries, however banks continue to be nervous of the legal sector.

Combine this with the fact that when a bank assesses the risk of a law firm (putting legal sector exposure/performance, regulatory and capital requirements to one side), they look to the balance sheet, stability, certainty, security and no surprises; they do not like change! This inevitably leads to a smaller facility being provided by the bank and less than the law firm actually needs; this is the paradox facing the law firm and a funding gap that the banks cannot bridge. This is the funding gap that can be filled, and is why alternative funders such as VFS Legal Funding are crucial to helping law firms achieve certainty in terms of cash flow.

Why is it so hard to build houses? n 2004, The Barker Review of Housing Supply noted that about 250,000 homes needed to be built every year to prevent spiralling house prices and a shortage of affordable homes. Three years later, the Labour government set a target for 240,000 homes to be built a year by 2016, which the UK has failed to meet. After World War Two, the UK began building more than 300,000 new homes a year. However in recent times, the number of houses being built has dropped by an estimated fifty per cent. The closest we have gotten to our 240,000 target was in 2006-07 when 219,000 houses were built.

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Last year the number of affordable homes being built in the UK had fallen to its lowest in 24 years. According to government statistics, the 32,100 affordable homes built in 2015/16 was less than half the 66,600 built the previous year, the lowest numbers since 1991/92. Only 6,550 homes were built for social renting (properties rented out by the council to those most in need), less than a fifth of the 33,490 houses built five years ago. Critics have called these figures “disastrous” and have called on the government to do more.

Phillip Hammond’s first Autumn Statement stated that £3.15bn would be pledged to create 90,000 affordable homes, including homes with rent at no more than a third of average local income for middle-income earners and more shared ownership homes. £2.3bn Housing Infrastructure Fund will provide 100,000 new homes in high demand areas. £1.4bn was pledged to deliver 40,000 new homes. Whilst this is all admirable, it has been noted that the goal of ownership remains out of reach for many and there was little detail on how the 40,000 homes would materialise.

The question remains: why is it so hard to build houses?

The planning system and local opposition to building were two of the main reasons cited for the lack of houses. The Home Builders Federation says that while things have improved recently the planning system is “still far too slow, bureaucratic and expensive”.

Shelter, the homelessness charity, believes it is due to a shortage of available building land. Residential land prices rose 170% from 2000 to 2007. Their spokesman said, “We fail to provide enough land at prices that make it possible to build decent, affordable homes.”

Sarika Sangar, Marketing Executive, Conveyancing Data Services.

Norman Kenvyn, Founder & CEO, VFS Legal.

February 2017

Modern Law 39

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EDITORIAL BOARD

If Trump has his way, we’ll all lose some freedom

Evolving Contract Packs in Conveyancing

t is likely you will have heard about President Trump’s executive orders, because in his first week and a half he has signed thirteen. In the hubbub surrounding the ‘Muslim ban’, another order has slipped past the mainstream press - an order that could rob EU citizens of their online privacy.

have a terrible habit of only opening post at the weekend.

It’s a task I generally put off until the weekend when I have a little more time, and research suggests I’m not alone. People now rely on the post less and instead expect paperless communication streams, including email and online portals, in which to respond. Certainly, technology has changed the way people now want businesses to operate, with people now demanding to use technology that is simple, easy and instant.

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The focus is on Section 14 of the ‘Enhancing Public Safety in the Interior of the United States’ order, which states: “Agencies shall… ensure that their privacy policies exclude persons who are not United States citizens… from the protections of the Privacy Act regarding personally identifiable information.”

The EU-US “privacy shield” promises EU citizens that their data, should it be processed in the U.S., is protected with ‘essentially equivalent’ privacy protection once there. Although only six months old, with one stroke of his pen, Trump may have wiped it out.

The European Commission has responded by stating that the privacy shield “does not rely on the protections under the U.S. Privacy Act” but also that they will “continue to monitor” the situation. Given that President Trump has previously voiced opposition to cyber privacy, most notably when he called on his supporters to boycott Apple after their much publicised case with the FBI, we all should be concerned that freedoms could be eroded under his administration.

U.S. based companies dominate our working lives. Microsoft’s Office 365 is expected to surpass 100 million users worldwide in 2017 and Apple’s iCloud has over 782 million users. If President Trump encourages U.S. tech companies to share customer data with law enforcement, the privacy of EU citizens is in real jeopardy.

It’s time to act. Technology, particularly cloud technology, is not going away and it is impractical to suggest we revert to storing data in ring binders and filing cabinets. It is practical, however, to suggest we store our files & data in the UK or EU countries. EU privacy law is far stronger than its U.S. counterpart and will afford the citizen far more protection. Invest some time in studying your technology partners. Do they store data overseas? Is your data subject to EU data protection laws?

Are you a legal firm relying on Office 365 email to handle your sensitive communications?

President Trump has already shown how tough he is prepared to be when cracking down on security, and has hinted he has little regard for cyber privacy. It is the responsibility of those who are privy to sensitive information to ensure it is protected. Are you doing all you can to protect your client data?

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It’s this thinking that we apply to the Contract Pack that conveyancers often post to their clients. The contract pack is an administrative heavy process for all parties, and it can be simplified by ensuring the process of sending, completing, receiving and exchanging is all electronic. That’s why we have built eCOS (Electronic Contract of Sale). eCOS gives conveyancers the ability to compile the full contract pack electronically, including the TA6, TA10, contract, title and plan.

The pack can then be sent to the seller through a portal to be completed before signing electronically and submitted back to the conveyancer. It’s simply an easier way of doing business that satisfies your clients’ demands.

This is our next stage of reviewing the cumbersome sections of conveyancing and evolving the processes so they are easier and more enjoyable. InfoTrack technology is already benefitting many conveyancers, as lengthy manual tasks, such as the submission process for the SDLT and AP1 forms, are made accessible online and with far less manual work required to complete them.

I believe that good technology should be a joy to use for all concerned and should provide a clear operational benefit, of course. So in order to ensure it works for your business, you should ensure that a series of questions can be answered first: does it add value to the customer? Does it reduce operating costs? Is it relevant? Will it help us excel in our core competencies? Will it reduce cost/improve quality/provide a set of functions that did not exist before? Those technologies that will be most valuable should respond ‘yes’ to all of those questions.

By improving the technology involved in the conveyancing process, it will ensure that the all-important TA6 and TA10 won’t be sitting waiting to be opened amongst a pile of post.

Adam Bullion, General Manager, Marketing, InfoTrack.

Tom Dodd, Marketing Team, entrustIT Ltd.

February 2017

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EDITORIAL BOARD

The rise of automation in the legal sector istorically, automation within the legal sector has been confined to linear and higher volume processes such as conveyancing, personal injury and debt recovery. This is changing. Providers of legal software systems are increasingly catering for a blend of “matter management” and traditional “case management”.

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Much of this has been driven by legislative change and onerous rules governing compliance. These days, even ad hoc work has to adhere to standard procedures and conventions. This has spurred the evolution of “bite sized chunks” of workflow and specifically targeted automation. Without such automation, it is increasingly difficult for the modern practice to compete and survive from an operational and business perspective.

It won’t stop there. The move to have standardised systems on “every desk” has created an opportunity for further and closer integration between different departments within the firm. Everything, ranging from requests for payments and the authorisation of bills through to the monitoring and notification of risk can be centralised and shared throughout the organisation.

Automation will progressively support more and more complex processes. By using artificial intelligence collected from historic cases, systems will evolve to prescribe the basis for charging, and indeed the approach to the work itself. Even with extremely variable work there will be the ability to configure case plans with automated components based on previous experience.

We are already seeing the progression of sophisticated software, “robots” that can make intelligent decisions and can be available 24/7 in an ever more demanding online society. Self-help tools that allow clients to interact with the firm and even perform parts of the legal process will be expected as standard going forwards.

The pressure on law firms to compete in this way and to provide an ever improving level of customer service will continue to propel the required level of automation. Automation will ultimately reduce costs, which will create an even more competitive market. That will in turn drive the need for further automation, and so the cycle continues.

Phil Snee, Development Director, Linetime.

Business as usual for Personal Injury lawyers in 2017? Not if you want to avoid failure What challenges will the legal sector face in 2017? he Government hit the sector hard on 17/11. The PI sector is considering its options. How all in the PI sector, including law firms, medical agencies, CMCs, counsel, costs lawyers and rehabilitation companies are going to be impacted cannot be overstated. Businesses that sprung up in the PI heyday have seen their work dry up in the last 18 months, and we will see market consolidation and business failures.

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Profit improvement, lean working and survival are on the business critical agenda.

Let’s be frank. Firms are facing insolvency. Those who’ve had their heads in the sand of denial now face the inevitable end – and that’s even before the Government’s proposed reforms kick in.

There are a number of businesses (and their funders) that have been kidding themselves about working capital requirements, realisable WIP and the operational and financial expertise and horizon scanning required to future proof them in PI.

What we see happening now is the repercussions of new market entrants in all PI sectors in the past 10 years who did not have a strong (or any) trading history and thought it was easy.

In fact, it is not easy. Since fixed costs were first introduced in 2003 and widened in 2013, when success fees and ATE recoverability was also lost, profit margins have been slashed.

Costs budgeting and proportionality have represented a significant challenge. Accountants advise on historical performance, which is irrelevant when profit goalposts are consistently moving.

Poor WIP books and businesses have been bought and sold.

Some banks have exited, but others (and private equity) have invested £millions.

Many have found cashflows don’t materialise, so additional cash injection is required. Parabis was the first PE-backed ABS top 30 law firm consistently capitalised by Duke Street Capital, until it crashed 12 months ago.

With poor performance, the veracity of DD and professional advice is under the microscope.

All firms with a PI element should look seriously at their business model. Nothing is certain in PI. Evidence can turn on a hairpin, meaning cases collapse. The same goes for Government reforms, banking policies, professional advisors and business viability. The “Yes men” who get deals over the line may not be the best to advise you at this crucial stage.

Debt reduction has got to be high on the 2017 business critical agenda, together with strong cash-flow, reducing WIP lock up, horizon scanning and avoiding insolvency.

Lesley Graves, Managing Director, Citadel Law.

42 Modern Law

February 2017

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AI in Business: It starts with the basics Kevin Gidney explains how legal professionals can use artificial intelligence to increase efficiency now, and why they don’t have to wait until the distant future to do so. e encounter stories and predictions about how artificial intelligence (AI) will fundamentally change a variety of industries on an almost day-to-day basis. In fact, it has become such an important topic that late last year the Council for Society and Technology wrote a letter to the Prime Minister advising how the UK could take advantage of opportunities created by the increasing convergence of robotics, automation and artificial intelligence. As more and more industries, including healthcare and financial services, adopt AI technology, we’ll continue to see increased benefits on our society as a whole.

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It starts with document management

Conversations about AI tend to have a sci-fi vibe: robot personal assistants, self-driving cars, you name it. But the real, day-today business value of AI is much less futuristic, starting with the hundreds and thousands of contracts that keep business deals up and running every day. Unfortunately, many companies have a problem finding and understanding what exactly is in their contractual agreements, which is a huge problem that can cost thousands, or even millions of pounds over time. For example, forgotten auto-renewal terms can hurt budgets and company departments often work in silos, and unknowingly have agreed to terms that are in conflict with each other.

While alternative resources were created to find and house contractual documents (think Contract LiveCycle Management, document repositories, etc.), those options still require manual reviews from in-house legal operations teams or having them outsourced to law firms. The problem with this is they are timeconsuming and expensive, and not accurate. Also, manual reviews are rarely up-to-date, meaning when data or values are extracted in the past, they don’t reflect changes in contracts, and when different data is needed, say for a new event or regulation, the reviews must be done over again. Fortunately, in recent years, new technology has been introduced to open up a whole new opportunity for contract discovery and management.

Using machine learning and natural language processing to “read” contracts Combining technology like machine learning and natural language processing (NLP) can automate the extraction and review process, taking the process from tedious and time consuming to relatively painless. Think about it: business users shouldn’t have to contact the legal team every time they have a question about a contract and then wait around for days to get the answer they need. This type of technology allows them to locate and view any contract, at any time.

Unfortunately, many companies have a problem finding and understanding what exactly is in their contractual agreements, which is a huge problem that can cost thousands or even millions of pounds over time those tasks allows professionals to do their work faster and focus on higher-value activities that their computers can’t do. Machine learning and NLP has opened the door for an ongoing process of automation, allowing business leaders to make more informed decisions based on insights derived from contract data.

When you think about contracts, you might think of the legal department within an organisation or lawyers in general, who are becoming more open to automating data review and management tasks, allowing them to focus their time on providing the high value strategic counsel they’ve been trained to give. But really, the legal teams aren’t the only ones who can benefit from this type of technology. The business intelligence that comes out of an automated contract data extraction and review process is being used to power decision-making for other levels of the business (c-suite, sales, procurement, facilities, etc.) across a variety of sectors. Contract data includes all of the terms, obligations, incentives and liabilities organisations have with external parties, on the buy and sell side. This data fuels better decisions overall, and can lead to a higher performing organisation.

Not only is AI a cost saving option for many companies, but the true value lies in the intelligence it provides to the business.

Companies now have the ability to make better business decisions, and manage contract data and data in other systems, in a way that they couldn’t do before.

Kevin Gidney is Co-founder and CTO of Seal Software.

Not only is this more convenient, but it can also be more accurate.

Machine learning technology is capable of seeing patterns in data that even trained professionals don’t always catch. Automating

February 2017

Modern Law 45

FEATURES

2017: Now we really need to identify and celebrate our modern law leaders Following on from his analysis of November’s Eclipse Proclaim Modern Law Awards in the previous issue of Modern Law, Chris Bull, who was the Chair Judge for the event, discusses the importance of recognising success in the legal profession in order to remain up to date with a changed legal sector. he legal world is not changing; it has changed. Despite the froth and fuss that attends every trial of software with an ‘Artificial Intelligence’ sticker on it, and every large law firm announcement of a tie-up with a tech partner, we should not understate the impact of the last ten years. Each area of law has already been altered dramatically by the self-same forces and technologies that have transformed, in much larger ways, how we consume, communicate, learn and entertain ourselves. The big law versus new law face-off that I wrote about in a recent Modern Law news piece represents just one segment of this movement.

But more disruptive and just as important, not least as it directly impacts many times more people and has an umbilical connection to the challenge to improve access to justice, have been the changes in consumer (B2C) legal services. Here it might be more appropriate to describe the forces in opposition as ‘small law versus new law’; the traditional, local, manual legal firm coming up against the consolidated, automated, branded new legal service provider.

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Modern Law Magazine and its sister publication, Modern Claims, are uniquely focused on this changed legal market, particularly, though not exclusively, the B2C market that receives scant attention from much of the established, mainstream legal press.

In 2017 the role of Modern Law becomes, I think, more critical.

The new models and services that have emerged and established themselves in recent years are developing into real market leaders and their success is now influencing the direction of many of the largest law firms, as well as new entrants. At the Modern Law Awards in November 2016, we recognised a number of alternative legal service pioneers who are now increasingly being cited, in the US and across the legal world as well as here in the UK, as role models for all legal businesses; they included Keystone Law, Gunner Cooke, InjuryLawyers4U and My Home Move. But now, as 2017 begins, is the time to take a more forensic look at the leaders, best practices and technologies that are fundamental to success in the new market.

The first reason behind the need to analyse and interpret these success factors more objectively and communicate them out to the legal market is to provide the tools and knowledge to support the growth and evolution of both new and well-established legal service firms. By identifying, cataloguing and explaining the range of critical success factors behind successful new law businesses we can create a modern, updated ‘narrative’ for anyone looking to create or grow a legal firm that replaces the outdated local professional partnership paradigm.

46 Modern Law

The new models and services that have emerged and established themselves in recent years are developing into real market leaders and their success is now influencing the direction of many of the largest law firms, as well as new entrants But the same work to examine the fundamentals of a successful modern legal business will also provide more information for clients and claimants about what to look for when they are selecting legal service providers; today there is little understanding out amongst consumers about what they should be looking for, beyond price and an initial first impression based on advertising, call handling or that short first meeting.

Recognising performance and success objectively using the medium of annual awards and polls is not always the most reliable or definitive approach. Too often, the challenge is getting the best, often inevitably the busiest (or those who feel least in need of the publicity boost an award nomination can bring), to submit nominations in the first place. The Modern Law organisation has committed substantial effort to creating not just the big annual set-piece of The Eclipse Proclaim Modern Law Awards, but also supporting two of the largest UK consumer legal service markets with their own awards recognising and celebrating industry leaders. The Doctors Chambers Modern Claims Awards will be with us very soon and the nominations will have already closed at the time of print. Each award criterion highlights the judges’ search for proven success, constant development of client service and experience and, overwhelmingly, innovation. A similar thread runs through the categories for The Eclipse Proclaim Modern Law Conveyancing Awards. The award ceremony itself takes place in Liverpool on 13th July, but nominations close 21st April.

Perhaps the most important point to recognise about the Modern Law Awards is that nominations are open to all. The convention,

February 2017

FEATURES

The first reason behind the need to analyse and interpret these success factors more objectively and communicate them out to the legal market is to provide the tools and knowledge to support the growth and evolution of both new and well-established legal service firms of course, is that we all self-nominate, sometimes getting inhouse marketing teams or contracted-in copywriters to refine the submission and provide some eye-catching sparkle. But all of the Modern Law Awards are open to anyone to submit a nomination, with some simple supporting text. The minimum is 300 words, which doesn’t take so long to put together. That means that clients, peers, partners and even rivals are able to make the case for anyone they feel deserves one of the awards. And they should; the more nominations we receive from as wide a spectrum of the market as possible, the more representative and objective the process becomes.

Awards alone will not embed a clearer picture of what the shape and key characteristics of the new law world are, obviously enough. Other ways of distributing content, including publications, books and events, need to play a part. There are plenty of these channels around the UK legal market today, but too often they focus in on the biggest, often B2B, law firms and those organisations with the biggest budgets or sometimes just the trendiest offerings. The performers with sustained, expanding success are the ones we need to read and hear about, with depth to these case studies, short of giving away the competitive crown jewels. I’m looking forward to taking on some of these case study reports this year and to sharing some of the insights I gain with Modern Law readers as the year progresses.

for looser amalgamations, networks or referral groups. In this way, the dynamism of large swathes of the UK’s legal sector is hidden from view. I’d like to see some new tables and reports that take a closer look at High Growth and new entrant firms, extending to the distributed/dispersed ‘fee split’ groups, volume claims and conveyancing businesses and collaborative networks.

The entrepreneurial and innovative drive of many of these organisations is not reflected in the picture of the legal market that is presented to us – by not being reported comprehensively in the same way that the biglaw world is reported, much of the success of modern law businesses is simply not visible. We need to see this success in order to celebrate it and I will be prompting and pushing for better positive reporting of the fastest changing parts of the sector this year.

Chris Bull is the Founding Director of Professional Services Advisory Firm Kingsmead Square.

The legal world is not changing; it has changed The final plank of building a better picture of our modern legal market and sharing that information is business intelligence. The UK and US legal worlds now seem to be inundated with reports, surveys and league tables that analyse and audit almost every aspect of the performance and vital statistics of the largest law firms. Many of our big legal publications regurgitate what is essentially the same data, usually at a healthy price tag, as each other. Typically, we are looking at the ‘Top 100’ UK or global firms.

It is much harder to get empirical information about the many midtier or high-growth legal service businesses that make up the next layer of the legal market by size. In particular, there is a tendency to ignore or mis-categorise legal service firms that are corporates rather than partnerships and to struggle with pulling data together

February 2017

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FEATURES

The Benefits of Comparison Lee Dixon explains why digital comparison tools are needed to prevent Millennials from falling into the latent legal market.

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egal service providers must embrace digital comparison tools (DCTs) in order to meet changing consumer demand, says The Law Superstore’s CEO.

The publication of the CMA’s final report in December identified a number of shortcomings within the legal sector. With just 17% of firms publishing their prices in 2016, the CMA made clear that the legal profession is far from being the open, accessible market that clients deserve. Furthermore, the competition watchdog highlighted that DCTs would form an important part of any solution.

Alongside the CMA’s study, The Law Superstore found that consumers in the UK could be overpaying by as much as £500 million a year on legal services. According to their own research, clients have historically been unable to compare legal costs and service levels side-by-side, making it difficult to gain value for money.

Matthew Briggs, CEO of The Law Superstore, says: “By now, everyone in the profession is aware of the challenges facing the legal profession. For many months the SRA, Legal Services Consumer Panel, and indeed the CMA have been warning the legal sector about falling further and further behind other industries, both in the way clients are serviced and the manner in which choice and competition is facilitated.

“This is evident in the size of the latent legal market. Each year we are seeing billions of pounds lost because individuals and businesses cannot understand and do not trust what they see as an overpriced and opaque sector. Instead of seeking assistance they are doing DIY legal work or simply opting to ignore their legal need altogether.”

Not surprisingly, Matthew Briggs believes that DCTs will be essential to changing the way consumers access legal services. He believes that not only will this benefit firms in attracting the clients of today, but will also safeguard the future of the industry.

“Firms are now servicing Millennials; consumers who have never shopped around in an era without Money Supermarket or TripAdvisor. They expect to be able to find and compare service providers online and at the touch of a button. Yet in the legal market, 49% of people currently have no idea how much firms charge for their service.

“Our own research has shown that for these reasons 85% of people under the age of 39 said they would use a DCT. “While there remains some nervousness around the use of DCTs from firms, we are beginning to see an openness towards our website, which represents a ready-made solution for those legal service providers looking to follow the guidelines set out by the CMA.” By enabling legal service providers to itemize service provision and showcase their accreditations, facilities and client ratings, The Law

48 Modern Law

With just 17% of firms publishing their prices in 2016, the CMA made clear that the legal profession is far from being the open, accessible market that clients deserve Superstore allows consumers to compare legal service providers side-by-side with all of the information they need to hand.

This functionality covers another important point raised by the CMA in relation to quality control and transparency on service delivery. The Law Superstore does not reveal any data held by regulators. However, it does offer a client rating facility to help consumers make informed purchasing decisions.

While the headlines from the CMA’s final report have focused on what is wrong with the current state of the legal market, Matthew Briggs is quick to point out that for those legal service providers currently doing a good job and offering their clients genuine value for money, the changes that are coming to the profession should be embraced as an opportunity.

“For the progressive law firms who have already started to embrace transparency and truly deliver value for money, they are in a strong position to capitalise on first mover advantage and perform extremely well working with The Law Superstore.

“Little more than a decade ago, the insurance, utilities and finance industries were resistant to DCTs. Now, every provider works with digital comparison tools to generate fast, cost effective new business.

“The legal landscape is set to undergo a similar change in the coming months and years. Already, legal service providers around the UK are using our platform to bring in new business and connect with clients in a more cost effective manner than is possible through traditional business development channels.

“Furthermore, our website collects valuable data they can use to control workflow and optimise fee earners; accurately measure the cost of acquisition and build up a picture of consumer preferences.”

Lee Dixon is COO of the Law Superstore. The Law Superstore is the legal profession’s first real-time comparison website. Legal service providers interested in joining The Law Superstore can register their interest at www. thelawsuperstore.co.uk/partners.

February 2017

FEATURES

Cloud, regulation and security — reaping the rewards With cyber security posing such a huge threat to businesses, Nick Hayne explains how migrating to cloud can potentially mitigate these risks and simplify a firm’s IT management. egal firms face a number of challenges in terms of a changing operating environment, compliance and regulatory issues, and security. Increasingly, technology is seen as a solution to many of these challenges, but its application, maintenance and management can often become a problem in itself.

Businesses in other sectors have long been enjoying the cost, scalability, flexibility and efficiency benefits of cloud technologies.

According to the RightScale Cloud Computing Trends: 2016 State of the Cloud Survey, 95% of organisations are making use of cloud, while 71% are using hybrid cloud, a leap from 58% in 2015.

However, companies in highly regulated sectors such as law and financial services have been slightly slower on the uptake.

One of the main reasons for this is security. If security is a concern around using the technology, how can it be used to overcome security as a challenge?

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Cloud comfort

Cloud computing has come on leaps and bounds and is more often than not the default option for modern businesses. It has evolved so rapidly that comfort levels are at an all-time high for users, and the technology itself has more than proven itself. When it comes to security, placing business-critical data in the cloud is, in fact, safer than hosting it on-premise.

Typically legal firms, as in other sectors, have generalist IT practitioners responsible for maintaining all aspects of IT infrastructure, including hosted solutions that are in-house. Budgets, skills and resources are restricted and very often this leads to significant gaps in security and keeping the technology fully up to date. This is reinforced by findings in the RightScale report; last year was the first time that security wasn’t the top concern regarding cloud adoption. Instead, lack of skills was cited as the number one challenge. Now consider if that same data was hosted by a reputable cloud provider, it would benefit from the skills and resources that the company has to offer; after all, the purpose of its main goal as a business is to ensure that its customers’ data is always safe and available.

In order to meet this goal and maintain a good reputation in the market, cloud providers invest great sums of money in infrastructure that is well-maintained, always up to date and managed by specialists that have the requisite skills and expertise. As a result, law firms save money (no hardware is required to host data in-house, which eliminates CAPEX and allows them to move to OPEX cost models) and enjoy simplified IT management as their staff can focus on other tasks.

Security, security, security

Cloud providers also have the desired credentials and accreditations

Cloud computing has come on leaps and bounds and is more often than not the default option for modern businesses when it comes to security. This covers both physical aspects (access control, 24/7 security) and data security (resilience, firewalls, encryption). Typically, they use a number of security frameworks, such as ISO 27001 (information security), CSA Star for cloud security and PCI DSS for datacentre sites. What these frameworks mean for customers is that cloud providers are aware of the threats and have the means to mitigate the risks posed. In addition to the security resources, a reputable cloud provider will also have the skills in-house to deal with the ever important topic of cyber security.

Beyond security, however, many legal firms are finding that structured business continuity and disaster recovery plans are becoming more important not only in terms of their own operations, but also when tendering for new business. Very often, these plans are a prerequisite of potential customers. Again, the cloud can help law firms create, implement and test business continuity plans with solutions such as disaster recovery as a service (DRaaS). In essence, cloud-based disaster recovery is a cost-effective and efficient way of ensuring a business can resume operations following a disaster, which can be anything from downtime as a result of human error, network failure or cyber-attack.

One of the true values of moving to a cloud model is the versatility that it offers. Whether firms want to go down the private cloud route, get the tremendous cost benefits of public cloud, or use a combination of approaches, the right provider can deliver the right benefits often with a bespoke solution that meets all their requirements.

Cloud has long proven itself to deliver these benefits, reduced costs, increased speed of technology deployment, disaster recovery capabilities, improved flexibility, scalability, and simplified IT management. Whether legal firms are thinking about migrating to cloud or are there already, thinking about changing vendors or broadening their scope, success comes down to understanding the technology and what is needed to leverage the benefits, often working with the right cloud provider to make it all a reality.

Nick Hayne is Business Development Manager at Pulsant.

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The Dangers of Complex Injury Claims Julian Chamberlayne examines the impact that catastrophic injury claims can have on a firm’s resources, and whether or not they are always worth taking on from a risk management perspective. ith the increasing financial pressures and threat of fixed costs in the multi-track, many firms view the arrival of clients with catastrophic injuries as a golden opportunity to earn some serious fees. However, it is crucial that firms consider at the outset whether they do in fact possess the skills, experience and resources to act in the best interests of clients with lifelong disabling injuries. From a risk management perspective, firms should also consider whether it is a good idea to take on occasional catastrophic injury claims alongside a busy caseload of lower value claims.

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The starting point is the Solicitors Code of Conduct. Principle 4: “act in the best interests of each client”. Principle 5: “provide a proper standard of service to your clients”. These are amplified by outcome 1.4 which requires a solicitor to have the resources, skills and procedures to carry out a client’s instructions, and outcome 1.5, which requires a solicitor to carry out a competent service to the client, ensure that the services are delivered in a timely manner and take account of the client’s needs and circumstances.

These provisions should cause the solicitor and their firm to consider whether they genuinely have experience in preparing claims that have a 7 or 8 figure value, which requires consideration of the pros and cons of Periodical Payments and Provisional Damages, identifying the best experts, and co-ordinating their evidence to make sure it is consistent, comprehensive and trial-ready.

One of the biggest practical issues is how to properly run 1-2 catastrophic injury claims against a caseload of 50, 100 or even more lower value claims. To prepare a catastrophic injury claim and ensure it makes progress on multiple fronts requires huge time and input. It is a well-known phenomenon that difficult and time-consuming cases are often left on the shelf for another day, but the trouble is, another day rarely comes. In addition, one of the most pressing needs will be for substantial early interim funding, the absence of which is a common reason for clients becoming dissatisfied and changing solicitor. If a client changes solicitor, it tends to reflect poorly on the first firm whose costs are severely chopped when it comes to any eventual Costs Assessment.

Over the years I have taken on numerous claims that were more than 5 years old, but far from trial-ready. In contrast, most of those claims, when prepared by an experienced catastrophic injury specialist with adequate time to dedicate to that client’s case, could be concluded within 1.5 to 3 years. It is rarely helpful when a client’s litigation becomes unduly protracted. Many catastrophic injury clients find it difficult to move on with their real lives until the litigation has come to an end.

Whilst we all hope to get the best result possible for our client, there is the ever-present risk of some form of oversight (classically limitation periods) or erroneous advice leading to a professional negligence claim With a client who is young, has seriously disabling injuries and a consequent high cost care package, it is feasible that the capitalised value of their claim, including Periodical Payments, could exceed £10 million. Some cases are now settling for values in the region of £20 million. Does your firm have PII cover at that level? If not, you should not be accepting instructions for cases within that value range.

Another question regarding financial arrangements for your client is whether you have an ATE insurance arrangement that is adequate for catastrophic injury claims. As the case proceeds to trial, with a team of perhaps 8-10 experts, there is a real prospect that the eventual disbursements for the Claimant will exceed £100,000. It is not uncommon for claims of this nature to proceed to a Preliminary Issues trial of liability and/or contributory negligence and then a second trial for quantum. The client may also be exposed to a Part 36 risk which again could exceed £100,000 in the worst case scenario. Does your firm have an ATE policy of at least £200,000?

These issues are not ones that can be plugged just by instructing a top QC. A further way in which you could sanity check whether it is a good idea to accept instructions from a catastrophic injury client is to ask the rhetorical question, if this were a close friend or family member, would I really recommend my firm?

Julian Chamberlayne is Partner and Head of Travel at Stewarts Law and Chairman of FOCIS (Forum of Complex Injury Solicitors).

One feature of client service that is rarely talked about is the extent of the firm’s professional indemnity insurance cover. Whilst we all hope to get the best result possible for our client, there is the everpresent risk of some form of oversight (classically limitation periods) or erroneous advice leading to a professional negligence claim.

February 2017

Modern Law 51

FEATURES

Interview with Brian Hall and Dominic Hendry Brian Hall and Dominic Hendry speak to Modern Law about the challenges, benefits and changing landscape of probate insurance, giving insight into its wider role in the legal sector.

Q A

What are some of the common complexities that arise in probate?

Brian Hall: A lot of what arises is driven by the fact that the process can be particularly time consuming, and sometimes more complex than it needs to be. Not only does it involve obtaining probate in the first place, but then very often probate solicitors go through a process of publishing a Section 27 notice to potential creditors of the Estate, and then need to wait for a response for that. They need to try to identify and trace the beneficiaries. They need to collect the assets, and in appropriate circumstances, monetise those assets. They need to deal with any ambiguities that there might be in the will, or indeed, deal with a situation where it appears there is no will.

So, there are a number of steps in that process where insurance can help and make things more straightforward.

Dominic Hendry: Many complexities can arise, but the important thing for the average probate solicitor is knowing who the experts are, and who they need to turn to. That’s why, for all these matters, we use an expert to help broker the insurance products.

Q A

How can insurance help to protect the parties involved in probate?

BH: We work very closely with the leading genealogists such as Estate Research to find out where there are beneficiaries that can’t be properly located to deal with the arrangement of missing beneficiary insurances. Often a situation arises where, although it’s believed that all of the beneficiaries have been identified, somebody pops up out of the woodwork and says: “Actually, I’m the long lost half-brother, and I’ve got a claim on this estate as well.”

So we provide insurance cover, both for known missing beneficiaries, and for unknown missing beneficiaries. We insure against specific issues that then crop up in connection with individual estates. In addition to doing missing beneficiary insurance, we can also provide missing will insurances. That’s where there’s a suspicion that there might have been a will but one can’t be identified, or there is suspicion that there’s a rather more recent will, because the only document that can be found is 20 years old, and the deceased was talking about redoing their will. We can also provide indemnities for a whole lot of things that arise out of specific issues in the will, whether it be ambiguity, missing trusts (where there’s a reference to a trust in the will document) etc.

We can and do, in a large number of cases, provide a policy that protects the executor and the beneficiaries against anything which may arise that may be unknown or not thought of at the time of distribution.

52 Modern Law

Over the last few years, many of the insurers who would have been seen as being the typical providers have withdrawn from the market, while others have changed their position Brian Hall DH: We find that, progressively, the probate solicitors we deal with understand the need to risk manage for their clients. So, when they’ve been instructed by an administrator, most solicitors tend to know that they should get the family trees checked and then seek a comfort policy to make sure that their clients are fully protected if something unexpected happens.

One thing some solicitors don’t always take account of is that missing beneficiary insurance policies can also help protect them and their companies as well. For example, when a solicitor is appointed as an executor of a will, we always suggest that probate solicitors get all class gifts and partial intestacies checked by a genealogist and consider putting in place a missing beneficiary indemnity insurance comfort policy, to make sure they’re protecting themselves. That’s something people are slowly becoming aware of.

BH: Solicitors are becoming more aware. It feels as though when there is something that goes wrong after distribution, the first port of call tends to be to go along to the solicitor firm and say: “You must have been negligent, therefore we want to claim against you.” Firstly, there may never have been any negligence; the solicitor might have done everything that can be reasonably expected of them. Secondly, the argument around demonstrating whether or not there was liability can be enormous, whereas with a comfort policy put in place to protect the executor and beneficiaries, all of that goes away.

Q A

How has the role of probate insurance changed in recent years?

BH: There has been a considerable broadening of the range of covers that are available from the insurance market. Going back a few years, there tended to be missing beneficiary insurance available where research had been undertaken and there was definitely a missing beneficiary, and it was quite narrowly defined.

Now, insurers will provide covers in respect of a considerably wider array of risks, but also provide cover where there aren’t any specifically identified risks, providing comfort to executors and beneficiaries.

February 2017

FEATURES

Since the family has been changing dramatically over the last 25 years, and fewer people are living in nuclear families, more and more beneficiaries we trace know less about their family Dominic Hendry We also deal with specialist insurances in respect of conveyancing matters, and there it seems as though most conveyancing solicitors come across the need for insurance quite frequently, and their knowledge is kept reasonably up to date. When we talk to wills and probate lawyers, we ask whether they’ve ever come across the need for a missing beneficiary or will insurance, and they say: “We had one of those five years ago, but we can’t remember what we did with it.”

So, there’s been a job in terms of trying to convey to probate solicitors the understanding of how much can be dealt with by way of insurance, and how much easier insurance can make their lives in terms of early distribution, which is what most beneficiaries are then looking for in terms of estates.

The complexity of the covers now available makes it increasingly valuable to use a specialist intermediary. This saves time and money, accesses the entire market and ensures that the best possible terms are obtained.

DH: Since the family has been changing dramatically over the last 25 years, and fewer people are living in nuclear families, more and more beneficiaries we trace know less about their family. We regularly speak to people who just don’t know if their father had more children once he divorced their mother, for example. Professionally checking the information provided by family members and Probate indemnity products are more vital now than even before.

Q A

What impact have recent changes to the wider legal sector had on probate?

BH: There is a wider group of entities involved in the process, and there is a development of specialist organisations dealing with the administration of Estates. There has been a growing tendency for there to be a distinction between those people that originally drew up a will, and those that handle the probate and administration, which has its own challenges. I don’t think there are fundamental changes to the role of an experienced probate lawyer in handling either as an executor, or advising the executors and administrators of an estate, in terms of the overall distribution.

quite old fashioned and structured in the way that they provide the covers, and there has been the emergence of a number of new insurers into the market, which has helped the broadening of covers.

Q A

Can insurance be of use in probate that doesn’t appear to have any initial complexities?

BH: It can, and I’m on a one man campaign to make sure that the vast majority of estates are covered by an executor and beneficiary cover which protects against a whole range of things, from the appearance of unknown missing beneficiaries, to the appearance of a later will, to the appearance of unknown creditors, to challenges from the family or the inheritance act and so on.

DH: Not only can the use of insurance in probate in matters that may not appear complex be possible, I would argue that it should almost always be used.

As genealogists, we often find that there are skeletons in the family closet that people don’t know about. At the very minimum, people should consider at least getting a quote for these kinds of insurance products, to make sure that you’re protecting yourself, your firm and your client.

Q A

How do you see the issues in probate changing in the future, and how will probate insurance adapt to meet these changes?

BH: At the moment, there appears to be a reasonable amount of stability in terms of probate law. The world is becoming increasingly litigious, and that presents an increasingly aware set of clients. We are working very closely with insurers to develop bespoke and one-off covers and responses to particular circumstances.

We’re going to see probate lawyers become more and more aware that insurance can provide potential responses. We’ll also see the growth of the comfort policy and the executor and beneficiary covers.

Brian Hall is Managing Director & Underwriting Director of LawSure Insurance, and Dominic Hendry is Private Client Manager at Estate Research.

DH: It’s not so much changes to the legal sector, but changes to society. In the age of the internet, administrators and clients are probably better informed now, therefore probate solicitors in particular have to be more on the ball in terms of knowing which experts to turn to when they need these insurance products or they need beneficiaries locating.

BH: Over the last few years, many of the insurers who would have been seen as being the typical providers have withdrawn from the market, while others have changed their position. Many are still

February 2017

Modern Law 53

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FEATURES

You are going to buy marketing software.

Great idea, but will anyone use it?

Our resident Tech commentator Charles Christian writes… hortly before Christmas I was in conversation with the Business Development Director of a fast-growing Top 100 law firm about marketing and CRM (client/customer relationship management) software systems.

S

He was picking my brains about one of the new Cloud/Salesforcebased systems, being of the opinion that the current market leader was now selling pretty much 20-year-old legacy technology, and, in the course of our conversation we got onto the more general topic of the implementation and user take-up of CRM in law firms.

Being an on-the-ball kind-of-guy in an on-the-ball firm, there was little I could tell him that he didn’t already know and I was particularly impressed that he “got” the whole bigger picture about law firm marketing technology.

So what is the bigger picture? The short answer is that while many law firms now have marketing software, they do not have the marketing “culture” to underpin its use. Yes, it’s the same old, same old trouble with lawyers again: you can put the latest technology in front of their noses, but you can’t make them use it!

The average lawyer (as distinct from a lawyer who has a specific marketing-related role within a firm) has no real interest in using any technology other than that which helps them with their dayto-day “lawyering.” Practice managers and finance directors will be only too well aware that even getting lawyers to complete their time recording reports on time is like getting blood out of a stone and that, consequently, the idea they are going to spend time loading the contact details on all the business cards they collect into a firm’s CRM system is ludicrous.

Unfortunately, most traditional law firm CRM software is based on this very premise: that everyone (not just the marketing or business development team) submits contact and relationship details into the CRM database, with the result that CRM has long held a reputation for being the most widely purchased, least utilised application within most firms.

It’s not that there’s an issue with CRM software per se, it’s just that what works in most industries is inappropriate for most law firms. If you are running a widget manufacturing business, you will have a sales force whose sole purpose in life is to contact existing and prospective customers to try to win orders for widgets from them. Superficially there is a similarity in law, in that the head of department or partner in charge of a particular practice area will also be the person who liaises with the client/prospective client when it comes to new instructions. But lawyers are primarily fee earners, not sales people.

While many law firms now have marketing software, they do not have the marketing “culture” to underpin its use process the order, and another department fulfills the order and bills them. However, most lawyer/client relationships are far more complex. Some matters may run on for years. Some clients may be simultaneously instructing you on multiple long-running matters.

Add to this the fact that CRM databases are high maintenance beasts. If their contact information is not kept up-to-date, they are useless (seen annually when firms send out Christmas cards to dead people), but expecting lawyers to act as data entry clerks is never going to happen, particularly with administrative things like notifications of changes of address or banking details.

Then there is the issue of cross-selling. The biggest source of extra fee-earning opportunities from most clients is not “more of the same”, but additional projects. If you’ve just handled a commercial lease for a business, then they are also going to have employment law, contract law, commercial disputes and a raft of other potential billable work. But, in most firms this means people in other departments being brought into the mix and introduced to “your” client. Once again, lawyers are not very good at this.

The fact is, law firms DO need a marketing/business development function, but just buying the software and hoping for the best is not the way to do it. You need a marketing/sales culture, and this requires marketing and sales people for whom business development is their number one priority, not something they squeeze in between fee earning. Get them onboard and then buy the software they need to help them do their jobs; but don’t waste your time on systems that expect lawyers to get involved as well!

Charles Christian is Editor-at-Large of the Legal IT Insider newsletter and also blogs about Tech at www.gonzo.news and on Twitter at @ GonzoNewswire.

Another issue is that if you are selling widgets, the relationship with the customer is clear-cut: they order the widgets, sales

February 2017

Modern Law 55

Thurs 13th July 2017 The Rum Warehouse Liverpool

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All sponsorship enquiries please contact Kate@charltongrant.co.uk | 01765 600909

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FEATURES

Can everyone benefit from digital mailrooms?

Among the numerous digital solutions available to the legal sector is the digital mailroom. Neil Maude explains what considerations firms should take before going digital, and how the relatively simple technology can greatly improve workflow. any firms use technology to streamline routine tasks and to make work more efficient. Current technologies offer a plethora of benefits, such as a simple system that notifies clients about their case via document management software.

Emerging technologies extend this to full-scale machine learning and artificial intelligence.

M

The breadth of technologies available for the legal market can often leave firms feeling confused. Which system is the right one? Will it deliver? What will the cost be over time, and will it do what it claims to? Do we even need a new/better/faster system?

Ultimately, what do we need to do to remain competitive?

While many businesses embrace technologies that work with documents and management of files, paper remains the main method of communication with clients for law firms. It is important to keep this in mind when looking to implement a new system; not every paper process is wrong, and not everyone is at a stage to embrace a completely different way of working.

When we talk digital, often this only seems to represent the digital space, not allowing room for ways in which we can embrace paper documents and make them work more efficiently for us alongside “born digital” information. Working with paper inputs, digitisation offers a multitude of benefits, not least of all a more succinct way of processing mail and/or archiving a case file. This does not mean, though, that working with digital documents has to include creating complex software applications or systems that are too difficult or have too wide-ranging features to understand.

Incorporating inbound paper into the digital workflow, often alongside case management software, is not an unknown process – in fact, many companies will scan documents every day for a variety of uses, from simple archiving to indexing and working digitally with data. However, the benefits of these systems are not fully realised with inefficient use of paper-to-digital workflow processes.

Often, technologies can work with our existing systems, rather than replace them. This is not only initially cost-effective, but can also make the path of becoming a digital office easier to navigate.

In a busy mailroom environment, efficiency is key to communication. Satisfactorily managing the client’s needs ensures the smooth operation of a case – and for some firms, handling and sorting of documents can take hours, which in turn delays communication and case progression between you and your client.

With a digital mailroom, sorting and automatically indexing paper documents removes the need for the manual sifting of information.

A digital mailroom, on its own merit but also when used alongside a case management system, can create faster, more efficient ways of working with documents. The outcome of this is greater visibility of information – the right documents land on the right desks far quicker – and clients are able to see their case move forward much faster. What this means for many firms is the ability

February 2017

When we talk digital, often this only seems to represent the digital space, not allowing room for ways in which we can embrace paper documents and make them work more efficiently for us alongside “born digital” information to expand their client base, take on more cases, and process cases at a faster rate.

The security of information is also vital when digitising documents and processes. With improved visibility, data can remain compliant with appropriate governance requirements. Client data is secure at all stages of the case management process, and retrieving the case or information is straightforward and remains safe.

Furthermore, the full document lifecycle should be considered – including production of outbound documents in a form for efficient capture when those documents are sent back to the firm. This final step can unlock significant efficiencies when those documents return to your process.

But what of the question – can everyone benefit from digital mailrooms? The answer is simple – if you have a mailroom, digitisation can only aid faster response times to clients because the right people have access to documents at the right time.

Even a simpler system, such as archiving documents into a case management system, offers increased security and ease of handling client information – something every firm can benefit from, regardless of how much mail it receives.

Using practical approaches towards creating a single view of a case file, those who need specific documents or information receive it without hassle. The key to making your case management system work more succinctly within a digital workflow environment is tackling the issue of usability of documents and delivery of information.

Neil Maude is General Manager for Electronic Document Management at Arena Group. He will be speaking at this year’s LegalEx event in March, discussing new ways of working through unlocking client service, efficiency, and profit.

Modern Law 59

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CASE STUDIES

Eclipse’s Proclaim Practice Management System selected in 6-figure deal by QualitySolicitors Copley Clark ualitySolicitors Copley Clark, part of a national network of law firms, has selected the Proclaim Practice Management Software solution from Eclipse, the Law Society’s sole endorsed provider.

Copley Clark will also benefit from a number of Eclipse integrations, including with the Land Registry’s Business Gateway (LRBG). The Conveyancing team will have full access to Land Registry services directly from their desktop, providing the ultimate in operational effectiveness as well as enhancing overall client service.

Based in Surrey, the multi-disciplinary practice offers an array of legal services to individuals and businesses, ranging from family and probate through to Darren Gower conveyancing and employment law. The firm prides itself on its reputation for providing clients with access to some of the best lawyers in the UK.

Taking this further, the firm has implemented Eclipse’s TouchPoint self-service portal to provide a device-independent and interactive experience for clients, enabling fee earners to deliver bespoke real-time data and information, resulting in an entirely personal ‘self-service’ experience.

Q

In a 6-figure deal, Copley Clark will be rolling out ready-togo Proclaim Case Management solutions across a number of departments, including Conveyancing and Probate, to provide a one-stop desktop application for fee earners. As part of the implementation, Eclipse will be conducting a full data migration from the incumbent system, allowing the integrated Proclaim practice accounting and financial toolset to be implemented, resulting in increased efficiency throughout all departments.

Esther Janalli-Brown, Partner at Copley Clark, comments: “As part of such an established network of law firms, we need to ensure our systems are the best they can be. Eclipse’s Proclaim software was the obvious choice, not only as the market leader, but also as the Law Society’s sole endorsed provider. With Proclaim we’ve found a solution that will improve our internal processes, financial management and compliance strategy, as well as enable us to enhance our client service – something that is crucial in order for us to continue staying ahead of the competition and maintaining our enviable reputation for incomparable client service.”

Furthermore, to ensure practice-wide compliance, the firm has opted to take Eclipse’s integrated compliance toolset, providing an improved risk management strategy.

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

What lies beneath? – The importance of mining due diligence Stephen Murray explains how mining data has improved and how the next generation of mineral extraction reports have evolved to give greater understanding of what may lie beneath our homes and businesses. n hearing the words ‘mining in the UK,’ your mind may be drawn to the extensive tin and copper mining industry of the south coast or the vast network of coal mines underneath much of England and Wales. What you may not know is that the UK is peppered with mineral extraction sites on a local scale.

O

What is the extent of the issue?

In the last 12 months, there have been 34 mining-related sinkholes in the UK, just 3 of those in Cornwall and only 6 related to coal mining. Recent case studies indicate the increasing liability exposure to conveyancers, lenders, insurers and homebuyers alike; considering our changing climate and more brownfield development, the risk will only grow in the property and land sector.

Progress been made over recent years to research and map all recorded historical, current and planned mining activity to allow us to screen, assess and interpret the risk from over 60 mining hazards across the UK. There are over half a million recorded coal and non-coal mine shafts, shallow underground workings and surface quarries littering our landscape, often lost beneath towns that have developed over the last century. This is a very real threat that finally deserves recognition in the conveyancing process.

February 2017

Why do you need to know?

Part 1 of the CML handbook at 5.4.2 says “…you must ensure that any other searches which may be appropriate to the particular property, taking into account its locality and other features are carried out.”

If you don’t sign off the property on behalf of the lender, then your client doesn’t get their mortgage: but you are open to be sued if you continue regardless - and lenders are litigious.

What can you do to protect the buyer and Lenders?

PSG is the only search provider to incorporate data from mineral extraction data provider Terrafirma into its search alert facility. This facility is free of charge and allows conveyancers to identify if there is any potential risk from mineral extraction hazards in the vicinity of the property or land in question. If there is, it will recommend reports to assess the risk and provide property and hazard specific conclusions, ensuring there are no nasty surprises down the line.

Stephen Murray is Director at leading conveyancing search specialists PSG. The full range of Terrafirma reports is available to order from PSG, for more information contact your local PSG office.

Find your local PSG Email: customerservices@propertysearchgroup.co.uk Visit: www.psgconnect.co.uk or Telephone: 01226 240 055

Modern Law 61

10 MINUTES WITH

Sheila Kumar Q A

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

I don’t believe anyone could have foreseen the way delivery of some legal services has changed since I started out. I was privileged to have played a role in the liberalisation that was delivered through the Legal Services Act 2007. I was Secretary to the Clementi Review and worked closely with Sir David Clementi to identify how the sector in England and Wales could be freed up to find new and better ways to meet fast-changing client expectation. I have no doubt that evolution will continue; our challenge now is to ensure that property lawyers can continue to innovate whilst clients continue to be afforded the protections implicit in dealing with a regulated person.

Q A

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

The 2007 Act changed the mood in the legal sector, speeding up recognition of the value that non-legal professionals can bring to the delivery of legal services: strengthening the offer to clients, improving the performance of the business and sharpening the focus on service in addition to the technical excellence that has always been the hallmark of lawyers in England and Wales. Things could perhaps have moved faster in terms of the new business models, but they are now embedded as choices available for business.

The 2007 Act changed the mood in the legal sector, speeding up recognition of the value that non-legal professionals can bring to the delivery of legal services

Our challenge now is to ensure that property lawyers can continue to innovate whilst clients continue to be afforded the protections implicit in dealing with a regulated person

Q A

Who inspires you and why?

I’ve been inspired by the professional and lay members of the governing Council of the CLC. They have given me tremendous support since I joined as Chief Executive in 2012 and have been full of insight, challenge and ambition for the profession of specialist property lawyers we regulate. Sir David Clementi too, when we were preparing his report that paved the way for liberalisation, was inspirational for the way he approached the task in hand and calm persistence in working to get beyond people’s knee jerk reactions to potential change to find the genuine opportunities for improvement.

Q A

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

Not formally no, but I have had the benefit of working with some incredible leaders and had the opportunity of learning from their experience, expertise and attitude.

Q A

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

I think that might depend on whether my lottery numbers had come up!

Seriously though, I am wedded to the importance of appropriate regulation, so I am sure I would still be in this field somewhere.

Sheila Kumar is Chief Executive of the Council for Licenced Conveyancers (CLC).

SAVE THE DATE Eclipse Proclaim Modern Law Eclipse Proclaim Modern Law Conveyancing Conference 2017 Conveyancing Awards 2017 Tuesday 23rd May 2017 Thursday 13th July 2017 Etihad Stadium, Manchester The Rum Warehouse, Liverpool CONTACT Event enquiries | ellie.campbell@charltongrant.co.uk | 01765 600909 Sponsorship enquiries | kate@charltongrant.co.uk | 01765 600909

62 Modern Law

February 2017

CONVEYA N APPRENTIC CING ESHIPS WITH DAM AR TRAINING

From 1st M ay 2017, re forms to a England w pprenticesh ill mean th ip funding at firms wit in £3m are e h an annual ligible for a p a y ro ll G b e overnmen low for every £ t subsidy a 1 spent on mounting a p to p re £9 nticeship tr time, large aining. At r employe the same rs will be a apprentic ble to acc eship train ess fully-fu ing via the nded In addition new appre , changes nticeship le to eligibility ru vy. existing st les mean th aff of all ag at new and es, includin g graduate use appre s, will be a nticeships ble to for skills d evelopme nt.

The chang es mean th at, from M a small firm ay, it will co no more th st an £900 to colleague support a wishing to take the C Conveyanc ouncil for ers’ new C Licensed onveyancin apprentices g Technici hip. Subse an q uent progre 6 Licensed ssion to th Conveyanc e Level er apprentices a further £9 hip will onl 00. It means y cost th at, for an in £1,800, it is vestment o now possib f only le to a chieve the stage of q academic ualificatio n as a spec For collea ialist proper gues not a ty lawyer. ble to follo route, we a w the app lso offer th renticeship e CLC qua standalone lifications on a basis via d istance lea rning.

Damar Tra ining has b een deliver to law firm ing apprent s for longer iceships than any o We offer a ther provid one stop sh er . op that incl udes: • Support with progra mme desig • Recruitm n ent • Delivery of apprent iceships a cross a rang fee-earnin g and leg e of key al support Paralegal, roles includ Conveyanc ing: ing Techni Conveyanc cian, Licens er, Chartere ed d Legal Exec Legal Adm utive and inistrator

We also pa rtner with Th e University new Solicito of Law on r apprentic the eship.

Our partner employers find that a are good pprentices for busines hips s.

Th ey benefit the energy hugely fro and ideas m that appre Don’t just ta ntices brin ke our word g. for it. Here 2017 Newco is what Da mer Emplo mar’s yer of the said about Year, Keog their progra hs LLP, mme: “Our appre ntices have had a ma our busines ssive impa s, not only ct on through th levels but eir perform also the w a nce id e recognitio apprentices n that are good fo r the busin have gener ess they ated. The su ccess of o apprentices ur current has create d a dema our organi nd within sation for more app rentices”.

To find out how to ma ke appren ticeships work for yo ur firm, ple ase conta Jonathan ct Bourne on 0161 480 8 jonathan.b 1 7 1 or ourne@da martrainin g.com

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