Modern Law Magazine Issue 43 by Charlton Grant

Issue 43

THE BUSINESS OF LAW

ISSN 2050-5744

DON’T DICE WITH RISK! P07 Professor

Joan Loughrey Deputy Head of the School of Law, Leeds, on ethical risk

Supported by

P19 Colette Best P42 On the road… Director, Anti-Money Laundering, SRA, on being vigilant

With Price Bailey Chartered Accountants, discussing the future of the law firm

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Pete Ward

Hello… and welcome to my first edition of Modern Law Magazine. As the newest recruit to the Charlton Grant stable of publications, I’d like to say a huge hello to our readers – and a massive shout out to the wonderful contributors and interviewees who’ve helped the ‘new boy’ to find his way around this, my first issue of Modern Law Magazine.

decorator’s ladder to crossing the road. To mitigate the ladder risk you can walk around it but then there’s the risk of being run over. To mitigate the risk of crossing the road, you could follow the Green Cross Code (*does that still exist?) or cross via a zebra or pelican crossing. Risk mitigated – yes! But risk eliminated – no!

I hope to stamp my own tone & style on MLM, building on the successful formula that’s seen it grow into a much-respected publication on the business of law.

When it comes to the business of law, however, risk has a different set of criteria – and that’s what we’re looking at in this issue of Modern Law. We talk about compliance risk, regulatory risk, ethical risk, and operational risk, and our contributors tackling the diverse characteristics of risk facing law firms today.

A request… Please refer to me as Pete – as Peter with an ‘r’ was only used by my lovely late Mum when she was angry with me – and it still sends shudders down my spine! Anyway, to business… And Issue 43 of MLM, based around legal risk. What do we mean when we talk about risk? After all there’s an element of risk in almost everything we do that could result in an outcome that has unpleasant, dangerous, or even fatal consequences? In everyday life, risk can cover anything and everything, from walking under a

on the evolution of risk and how technology, training and investment help to mitigate it (P11). Senior Risk and Compliance Solicitor at Howard Kennedy, Amanda Croxon, takes us through the most common risk factors law firms should ignore at their peril, and how best to mitigate legal risk (P15). Then there’s MLM’s unique mix of Key and Editorial Board contributors, plus Features, Case Studies and our ‘10 Minutes with…’ slot. Finally, if you have any feedback, or ideas – please do get in touch. Meanwhile, I hope you find this issue a good read.

Professor Joan Loughrey, Deputy Head of the School of Law, Leeds, talks about the common response of partners and compliance personnel in law firms that ethical risk is created by a few ‘bad apples’ (P7).

(*Yes, it does still exist! I’ve just Goggled it to discover “The multimedia Green Cross Code campaign began in 1970 and continues today.”)

Pete Ward Co-Editor, Modern Law Magazine. 01765 600909 pete@charltongrant.co.uk www.modernlawmagazine.com

Michelle Garlic, a Partner at Weightmans responsible for its Compli service, and a consultant for the Law Society’s Risk and Compliance service, gives her thoughts

Editorial Contributors Stephen Griffiths, Griffiths Allen Alan J Smith, High Court Enforcement Group Limited Patrice Kennard, Wilson Allen Melody Easton, DocsCorp Dave Seager, SIFA Professional

ISSUE 43 ISSN 2050-5744

Adam Bullion, InfoTrack UK Jonny Davey, Geodesys Mark Holt, Frenkel Topping Norman Kenvyn, VFS Legal Funding Wayne Shinn, Unoccupied Direct

Jason Connolly, JMC Legal Recruitment Dr Matthew Terrell, Justis Yvonne Hirons, Perfect Portal John Dobson, SmartSearch

Co-Editor | Pete Ward Co-Editor | Poppy Green Project Manager | Martin Smith Events Sales | Kate McKittrick

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.

CONTENTS NEWS INTERVIEWS

KEY CONTRIBUTORS EDITORIAL BOARD

Professor Joan Loughrey Deputy Head of the School of Law, Leeds, Professor Joan Loughrey tackles the question of what creates ethical risk and is it a result of a few ‘bad apples’?

Michelle Garlic Modern Law spoke with the Partner responsible for Weightmans’ Compli service to get her views on risk management, and technology, training and investment.

Amanda Croxon Modern Law caught up with Amanda Croxon, Senior Risk and Compliance Solicitor at Howard Kennedy, to talk about her route into law and to get her take on reducing risk and achieving across the board compliance with regulatory and statutory obligations

Money laundering – we all need to stay vigilant Colette Best, Solicitors Regulation Authority (SRA)

Meeting risk head on – priorities for the risk-based regulator Neil Buckley, Legal Services Board

Avoiding SDLT mistakes Stephen Griffiths, Griffiths Allen

Mitigating financial risk Alan J Smith, High Court Enforcement Group Limited

Seeing the forest and the trees Patrice Kennard, Wilson Allen

Keeping pace Melody Easton, DocsCorp

Using social media is a must Dave Seager, SIFA Professional

Technology rEvolution Adam Bullion, InfoTrack UK

Good servant bad master Jonny Davey, Geodesys

Adapt to attract Mark Holt, Frenkel Topping

Time and investment the key Norman Kenvyn, VFS Legal Funding

The pros & cons of social media Wayne Shinn, Unoccupied Direct

EDITORIAL BOARD CONTRIBUTORS

EDITORIAL BOARD FEATURE ROADSHOWS TECH

PERSONAL INJURY

CASE STUDY

Learning from mistakes Jason Connolly, JMC Legal Recruitment

Future perfect? Dr Matthew Terrell, Justis

Competitive conveyancing Yvonne Hirons, Perfect Portal

Non-compliance not an option John Dobson, SmartSearch

Regulating the regulators Sarah Keegan, The CS Partnership

Navigating the future of your law firm On the road with Price Bailey Chartered Accountant in Norwich, Peterborough, London and Brighton

Risk: it is everywhere – including in your IT systems Charles Christian, Legal IT Insider

Going underground Rachael Hodge, Terrafirma

Confused about GDPR – don’t be! Robert Baugh, Keepabl

Source of Funds – let technology remove the risk Olly Thornton-Berry, Thirdfort

More questions than answers Susan Henry, Speed Medical

Fighting for the rights of service personnel, veterans and their families Hilary Meredith, CEO, Hilary Meredith Solicitors

Levelling the PI claims playing field Nicola Dickinson, Thorneycroft Solicitors

Dorset Orthopaedic and the benefits of residential rehabilitation Mary Tebb, Senior Physiotherapist, Dorset Orthopaedic

The litigation process matters to client outcomes Dr Paul McLaren, member of the Expert in Mind panel

Hall Smith Whittingham LLP tackles property transaction risk Nick Ball, National Sales Manager, tmgroup

10 MINS

10 Mins With… James Brockwell, Conveyancing Risk Management Ltd. (CRM Insurance)

EDITORIAL BOARD CONTRIBUTORS

NEWS

“Psychological research has shown that levels of misconduct in organisations are strongly correlated with how fairly people perceive that they are treated by the organisation.”

Professor Joan Loughrey Professor Joan Loughrey studied Law at Somerville College, Oxford, and was awarded a College Exhibition. She was admitted as a solicitor of the High Court of England and Wales, and of the Supreme Court of Hong Kong, practising as a solicitor in both jurisdictions before entering academia. She is now Deputy Head of the School of Law, Leeds, and previously Director of its Centre for Business Law and Practice. Ethical risk, bad apples and firm culture What creates ethical risk? One common response of partners and compliance personnel in law firms is that ethical risk is created by a few ‘bad apples’. Ethical failure is caused by a failure of individual character and values. Often when a scandal arises, organisations will cite this explanation. It limits reputational damage and is comparatively easy to address after the event by disciplining and sacking the individuals concerned.

NEWS

It also requires very little to be done in advance to ward off problems, since no matter what one does bad apples will find ways to break the rules. The best prophylactic is to make sure that one recruits the ‘right kind of people’. Research has shown that large law firms do indeed rely on this strategy to mitigate ethical risk. However, organisational incentives and culture also create problems. The Parliamentary Committee on Banking Standards blamed remuneration structures in financial institutions for incentivising misconduct and excessive risk-taking that led to the global financial crisis. The PPI mis-sellings scandal was caused in part by distributors of PPI products setting aggressive sales targets for staff. Similar problems can arise in the legal context: consider these two statements: 1. ‘You are judged by ‘every little bit of money you get’ and 2. ‘It’s all about money, this is the only measure of success’. One was said by a male equity partner in a large law firm, the other by Tom Hayes who was jailed for eleven years for manipulating LIBOR rates. A law firm that sets unrealistic billing targets and measures success only in terms of money creates significant incentive for fee padding and other forms of misconduct. This is not a theoretical risk: in Solicitors Regulation Authority v James ([2018] EWHC 3058 (Admin)2018) a junior solicitor was struck off for dishonesty. The Solicitors Disciplinary Tribunal found that the root cause of her misconduct was the combination of the culture of her firm and the pressures placed on junior solicitors, and her mental ill-health arising from the pressures of work and personal circumstances. The High Court agreed that the solicitor was working in abominable circumstances and a toxic work culture. She had, amongst other things, received a letter from the senior partner telling her that she had to work 18 hours a day, bank holidays, evenings and

weekends, to make her targets. However, while this was the explanation for her misconduct, it did not excuse it. How firms treat their staff affects levels of ethical risk in other ways too. Psychological research has shown that levels of misconduct in organisations are strongly correlated with how fairly people perceive that they are treated by the organisation. In other words, poor HR practices can encourage unethical behaviour. An important factor in influencing how fairly people feel they are being treated is the extent to which decisions around promotion and remuneration are made in transparent, procedurally fair ways. This can be a problem in law firms: criteria around promotions, particularly to partnership, remain opaque in many. Few women, BAME, working class or disabled solicitors make the grade to partner, still fewer to equity partner. The gender pay gap in the ten largest legal firms in the UK, is on average 43%, a figure that reduces to 27.6% when partners are removed. Meanwhile sexual harassment is reported to be widespread in law firms, a matter that has attracted the attention of the SRA. Not everyone succumbs to these pressures and influences. Most solicitors behave ethically. Blaming organisational context alone for misconduct places too little value on the importance of an individual lawyer’s character and the need for professionals to be held individually accountable when they behave unethically. At the same time though, anyone concerned with the management of ethical risk in law firms must take account of the risk posed by firm culture and incentives. COLPs, GCs and senior management will want to minimise the risk of conduct, whether dishonest or negligent, that jeopardises client interests, the client relationship, and the firm’s reputation. However research carried out by the writer and a colleague in the Leeds

“…anyone concerned with the management of ethical risk in law firms must take account of the risk posed by firm culture and incentives.” 8

University Business School, Dr Sundeep Aulakh, suggests that COLPs and others might not be in a good position to detect and respond to ethical risk posed by firm systems and cultural pressures.1 We conducted interviews with 24 COLPs/compliance personnel in firms that ranged from the Magic Circle to small high street practices, and across a range of practice areas. The research uncovered a number of positive results about the COLP role. We found that COLPs were key to promoting compliance with regulatory requirements by both firms and individual lawyers. Individual lawyers frequently sought ethical advice from them on the Code of Conduct and regulatory requirements. Some have criticised this phenomenon, interpreting it as evidence that the COLP role and entity regulation have led to lawyers failing to take responsibility for their own professional conduct, instead ‘insourcing’ it to COLPs. But our data and subsequent conversations with COLPs of the top 100 firms does not fully support this interpretation. Instead lawyers turn to COLPs because as firms grow larger and competitive pressures increase; pressure on lawyers to work quickly and to maximise billable hours leaves them little time to think through ethical issues; increased specialisation within law firms has led to ethics and professional conduct being viewed as areas of specialist expertise; and, finally the complexity of professional conduct rules (including Outcomes Focussed Regulation) makes it difficult for lawyers to understand what is required of them. In other words, rather than creating a demand for support, the COLP role addresses the need for support created by these factors. Furthermore, seeking advice from the COLP (or GC) does not necessarily signal an abdication of professional responsibility. Instead it might support ethical decision making, by alerting lawyers to ethical risks they might not otherwise identify and guides them towards ethically correct decisions. And certainly the fact that lawyers are turning to COLPs indicates that they are alert to, and concerned about, ethical problems. COLPs reported being used as ‘sounding boards’ to talk

NEWS

would typically be viewed of as commercial judgments about how to run a business. But times change and so do regulatory priorities. Solicitors’ mental health, and the extent to which firm culture contributes to mental health problems, is a subject that is increasingly recognised as a problem in the profession. The Junior Lawyers Division 2019 resilience and well-being survey found that 93% of respondents reported feeling stressed in their job with almost a quarter of those individuals being severely/extremely stressed. Key causes were high workload, client demands/expectations, lack of support and ineffective management. Over 77% respondents reported their firms could do more to support them.

through matters before the individual lawyers reached their own decision about what to do. COLPs, in other words, can act as a corrective to the pressures towards unethical conduct, or ethical blindness, created by firm cultures, and thus mitigate ethical risk. However, our data suggested that COLPs were not alive to the problems caused by firm culture and incentives, and they did not report taking steps to address the ethical risk created by these. Even when they themselves were extremely under-resourced, they did not recognise that this could be a breach of the firm’s obligations under the Authorisation Rules, rule 8.5 to institute ‘suitable arrangements’ to ensure that COLPs are able to discharge their duties. Rather COLPs’ efforts focused on the risks posed by individual solicitors and framed these in terms of isolated issues – in other words, ethical risk was seen as6/11/19 a ST_UK MLM-ad_190x50_v4.pdf 1 bad apple problem.

COLPs are not alone in this: other research has found that when problems arise, compliance personnel, including US GCs, and in-house lawyers in companies, overlook systemic problems, focusing instead on individual misconduct. This is likely to be an unconscious bias and be a result of viewing embedded market practices, long accepted across the sector, as unchallengeable and unchangeable: simply part of the unalterable status quo. We see echoes of this attitude in the dicta of Flaux LJ in the James decision. The learned judge commented that ‘it is sadly only too common for professionals to suffer such conditions because of pressure of work or the workplace or other, personal, circumstances’. These were not exceptional circumstances that could justify a lesser sanction than striking off.

As this article has argued, firms’ practices and cultures that create these kinds of pressures, also create ethical risk. Whilst firms may not yet be being disciplined for such practices, they will attract adverse media scrutiny, and reputational damage, and clients will be harmed, if their solicitors are disciplined for conduct that would not have occurred but for the pressures they were under. The problems created by law firm incentives and culture have always been present but the increasingly pressurised nature of law firm environments, and the link that is now being made between these pressures, solicitors’ mental health and, in certain instances, solicitor misconduct, means that firm culture, and the ethical risks it creates, is likely to attract increasing attention in the future. 1. Aulakh S, Loughrey J. ‘Regulating Law Firms from the Inside: The Role of Compliance Officers for Legal Practice in England and Wales’ Journal of Law and Society 45 (2018) 254, available on request.

Presently the SRA has not pursued firms who have caused their lawyers to work in ‘abominable’ conditions and it is likely to be 9:41 AM extremely wary of interfering in matters that

Professor Joan Loughrey is Deputy Head of the School of Law, Leeds

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INTERVIEWS

Taking the risk out of risk Michelle Garlick is a Partner at Weightmans responsible for its Compli service. She is a consultant for the Law Society’s Risk and Compliance service and is the current President of the Manchester Law Society. Modern Law caught up with her to talk about the evolution of risk and how technology, training and investment help mitigate risk. MLM: When did risk management become a focus of your career? MG: When I joined Weightmans as a Partner in February 2008, I was asked to head up and develop a team focussed on risk management. We were receiving a lot of instructions from insurers in professional negligence claims, and it was a logical progression to have a dedicated team that advised law firms on regulation and compliance. It tied in with the change of approach in the industry. The SRA was introduced in 2007, there was a new code of conduct, and a complete change of approach to regulation. Firms were asking for help and support with risk management and compliance in ways they hadn’t requested, or needed, before. I developed the Compli service to advise and support those working across the legal sector, on all aspects of regulation, compliance, complaints, and claims handling – whether law firms, ABS’s, CMC’s, barristers chambers, individual solicitors and barristers, and insurers. MLM: What involvements do you have with both The Law Society and the Manchester Law Society? MG: In addition to my role as a consultant for the Law Society’s Risk and Compliance service, and a committee member of, and contributor to, the Legal Compliance Bulletin, I’m often asked to speak at Law Society conferences and I wrote The COLP’s Toolkit published by The Law Society, and co-authored The Good Risk Law Firm published by the Solicitors Journal. Also, I’ve been a council member of the Manchester Law Society for six years, chair of its Regulatory Affairs Committee and COLP and COFA Forum and am honoured to currently be its President, which pleases me immensely when we’re celebrating 100 years of women in law.

“From a risk management perspective, everyone has to embrace ethics, apply common sense, ensure their firms have the systems and protections in place, and that solicitors understand what their regulatory obligations are.”

I have chosen topical issues from a risk and compliance perspective as my themes for my

year’s tenure as President. One is to raise mental health awareness within law firms, to encourage individual solicitors and lawyers to build their resilience and encourage a positive culture within their firms, and to encourage people to be open and to seek help and find support for any mental health issues. It’s something I’m very keen to promote and raise awareness of, not least because there have been a number of cases reported in disciplinary tribunals of lawyers acting inappropriately and dishonestly under extreme stress and toxic culture conditions. Another of my themes is around social mobility, diversity, inclusion and equality. MLM: Is the world of risk changing – what has been the evolution of risk and risk management? MG: Prior to 2007, before the SRA was established, the perception was that the Law Society would leave firms and solicitors alone, unless there was evidence of very serious breaches. The SRA was formed to improve public confidence in the profession by moving away from self-regulation and introducing a Code of Conduct to replace the Solicitors’ Practice Rules which had been in place since 1990. In 2011 the SRA approach evolved into an outcomes-focussed handbook, and the first time COLPs and COFAs were introduced, with emphasis on the importance of managing risk and compliance and running a business in accordance with these principles. As a result, a whole new industry of risk and support managers has flourished, with more emphasis on running a law firm as a business. And again, further new standards and regulations will be introduced in November this year, with the SRA keen to allow easier access to justice for consumers and SMEs. So, in 12 years we’ve had three different codes of conduct and standards of regulation, and law firms are having to keep abreast of the new approaches

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INTERVIEWS

and regulations. It has been a period of rapid evolution of change in regulatory terms. MLM: What are the biggest risk factor threats facing law firms today – and if not digital, what? MG: Undoubtedly technology presents one of the biggest risk threats, while also offering great opportunities to embrace technological advances that can make firms more efficient and free up lawyers to concentrate on legal work. Risk areas such as cyber-crime, GDPR and AML present major challenges and concerns, and the SRA are particularly alert to these risks and are regularly conducting thematic reviews especially on AML at the current time. New technology does get a bad press for facilitating criminal activity and therefore risk, but it also allows firms to greatly increase efficiency, from office systems to management information and audit purposes. As for non-digital risk, and from a risk manager’s perspective, the question of how firms will introduce and interpret the new Standards and Regulations is important. With its greater emphasis on ethics and what it means to be a solicitor, plus the importance of upholding the rule of law, firms will have to decide how to deal with situational ethics which no doubt will be open to interpretation. It’s definitely good to have more emphasis on the ethics of practicing as a lawyer. There will be very clear ‘black and white’ situations, where misconduct is obvious (or not), but it’s the grey areas that are going to test people and where there will be different interpretations of what’s right and what’s wrong. This could test risk managers when it comes to staff training, and this is also where the internal ethics of a firm and its culture comes into play.

“From the code of conduct perspective, the principles are still the same but the approach to risk and ethics will definitely be new to many firms, especially those that have not had a great deal of training on ethics.”

As for emerging technology, as yet a computer doesn’t understand ethics, so people-led risk management is still important. AI is a current hot topic and there will be some issues and it’s a case of balancing those issues against the positive benefits.

MG: My concern for the new regulatory code is that firms may just tick the box saying they’ve delivered training but only covering the technical changes to the new Standards and Regulations, without acknowledging that there is an emphasis now on ethics. Training against risk should be on every board, management and team agenda. But I’m not convinced that everyone is doing enough. Many are probably doing the bare minimum and they will need to ensure their procedures and training are robust enough, because if something does go wrong and the SRA starts investigating, while they may investigate the individual involved, they will also ask the firm what training and supervision had been delivered. MLM: What is the cost of being risk aware and where does it end? MG: That question should read ‘what is the cost of not being risk aware…’. When a risk team is negotiating its budget it can be seen as a drain on the firm’s finances – but that should never be the case. Because if a firm doesn’t embrace risk management and doesn’t take it seriously, insurers will have huge concerns about insuring the business. And by not taking it seriously you will have complaints and claims, and insurance premiums will rocket – or a firm might not get insurance at all. Plus the resulting reputational damage can have far greater negative financial implications. So the cost of not doing risk assessments on all aspects of your business can be massive. MLM: And the future?

MLM: How much can embracing emerging technology improve risk mitigation? MG: Without a doubt advancing technology will play a major part in risk mitigation, particularly in relation to AML, for example, where having the correct ongoing procedures in place is crucial, to ensure lawyers are thinking about the key AML risks throughout the whole transaction. But then it throws up the risk of those systems and procedures potentially being delegated to junior members of teams who don’t fully understand the importance, as a lawyer would, and that’s where the systems potentially fall down.

MLM: How big a part does training play in risk management – and is there enough?

“…if a firm doesn’t embrace risk management and doesn’t take it seriously, insurers will have huge concerns about insuring the firm.” 13

MG: From the code of conduct perspective, the Principles are on the whole still the same but the approach to risk and ethics will definitely be new to many firms, especially those that have not had a great deal of training on ethics. The other side of the Standards and Regulations changes, around opening up the legal market and solicitors practicing in freelance or unregulated business, will be very different. Whether it will be a huge game changer only time will tell. I doubt we’ll see many firms separating out the unregulated work from the regulated work, at least in the early days. From a risk management perspective, everyone has to embrace ethics, apply common sense, ensure their firms have the systems and protections in place (including documented risk assessments), and that solicitors understand what their regulatory obligations are. Whether that’s enough for the SRA at this stage we can’t be sure until we see how the new enforcement strategy will be applied under the new regime.

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INTERVIEWS

“Risk assessment needs to be tailored around what’s required by the regulations and also how your business operates, and the nature of your client base and the type of work undertaken.”

IGNORE RISK AT YOUR PERIL Amanda Croxon, Senior Risk and Compliance Solicitor at Howard Kennedy, is responsible for delivery of the firm’s objectives in reducing risk and achieving across the board compliance with regulatory and statutory obligations. Modern Law caught up with her to find out about her route into law and to get her take on matters ‘risk and compliance’. 15

INTERVIEWS

MLM: What (and when) was your route into law? AC: My route into law was not as conventional as many. I had a gap year after completing my A-Levels and took a temporary job at a Law Centre, which was due to have its funding cut three months later. I worked with a brilliant team of lawyers and legal advisers who were committed to social welfare law. We were defending the rights of the disadvantaged, providing advice and representation in housing, employment, welfare benefits and immigration matters. After a great deal of campaigning we managed to secure funding for the Law Centre for a further three years. As a result my contract was extended and I was persuaded to carry on working whilst at the same time studying for a part-time law degree. I was employed as a Legal Assistant, responsible for housing and employment case work, as well as administering all aspects of the old Green Form and Legal Aid schemes. My degree took five years after which I went to Law School for a year, followed by an 18 month training contract in private practice. I qualified as a solicitor in April 1994.

“Risk is an area that’s forever changing and evolving and it’s very difficult for the role of mitigating risk to be undertaken by anyone as a sideline of day-to-day legal work.”

MLM: How did your involvement with The Law Society come about?

MLM: What do you consider to be the most common risk factors law firms should ignore at their peril? AC: There are many risk factors law firms must consider so it is difficult to single

Another risk factor not to be ignored is the introduction of the new SRA Standards and Regulations, due to be launched in November 2019. In my view, firms should be familiarising themselves now with the key changes to ensure they are compliant when the new framework comes into force. The changes are significant and include the creation of separate codes of conduct for solicitors and firms as well as simpler accounts rules. The threshold at which reporting obligations are to be triggered is to be lowered, which is likely to result in more individuals reporting matters directly to the SRA, rather than leaving them to the Compliance Officer for Legal Practice. Another risk factor firms should ignore at their peril is the continuing threat from cyber criminals, who target law firms for the money and client information they hold. Cyberattacks can lead to disruption or even the cessation of a business and there is of course the reputational damage that can follow. It is therefore essential that firms have robust plans in place to mitigate and minimise the risk of attack.

AC: Howard Kennedy is a member of the Law Society’s Risk and Compliance service and I was invited to write an article for its Legal Compliance Bulletin which is published six times a year. In terms of how I came to my current role as a risk and compliance solicitor; after qualifying I worked in private practice for several years and had a varied remit as a newly qualified solicitor. I worked across employment and personal injury litigation as well as criminal defence work being a duty solicitor. I then decided to return to the voluntary sector and took up a position at another Law Centre as an employment and housing solicitor. Other roles in the public and voluntary sectors followed, before I joined the Law Society as part of a team investigating complaints about solicitors. Working at the Law Society within a regulatory environment led me to my current role at Howard Kennedy in September 2014.

out the most common. As a starting point however, it would be very dangerous to ignore the requirements of the Money Laundering Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 by failing to ensure that suitable policies and procedures are in place to guard against the risk of involvement in money laundering or terrorist financing. The 2017 Regulations require firms to carry out a risk assessment, which the SRA says should form the backbone of policies and procedures to prevent money laundering.

MLM: How can a legal business best mitigate risk?

“I think it’s possible that the use of AI will be able to improve and enhance people-led risk management at some stage in the future.” 16

AC: I think having a dedicated team, or individuals that can provide advice and guidance to the firm is the best way for a legal business to mitigate risk. Regardless of the size of the practice there should be an individual, or individuals, whose job is to manage risk. I think it is virtually impossible for a partner or sole practitioner to carry out this function as part of their normal day to day activities. At Howard Kennedy, we have a dedicated risk team responsible for managing risk and ensuring that we remain compliant in all respects. The team is headed up by our Director of Risk and Compliance and we have two solicitors, and two risk and compliance officers to provide advice and guidance across the business.

INTERVIEWS

We provide guidance and tools to help our staff stay compliant. We attend team meetings and provide advice and guidance notes on regulatory and legislative changes. We also conduct training sessions and have built up a good reputation within the firm for being approachable and creating a culture of trust that helps our solicitors to operate efficiently and within regulatory guidelines.

MLM: How important and how detailed should risk assessment be? AC: Quite simply, very, very important. Risk assessment needs to be tailored around the requirements of the legislation and how a business operates, taking into account the nature of the client base and type of work undertaken. There must be documented policies, controls and procedures in place to properly manage, monitor and mitigate the range of risks identified. When completing a risk assessment, all aspects should be considered, such as whether the client is high risk because they’re politically exposed, or sanctioned individuals, or they reside or operate in a high-risk jurisdiction. You need to assess the level of risk associated with the work you’re doing to ensure that your firm is fully compliant with the 2017 money laundering regulations. MLM: How often do regulatory issues impact on risk assessment strategies? AC: It’s a key requirement of any risk assessment strategy to bear in mind the relevant regulatory issues. So for example, there’s been a lot of press coverage relating to non-disclosure agreements in light of the #MeToo campaign and the impression that powerful people in organisations are using NDAs to cover up bad behaviour. The SRA issued a warning notice on the use of NDAs in March 2018, which acknowledges they can be used to protect commercial interests, confidentiality and reputation – and be of mutual benefit to both parties. However, there is a warning to solicitors that they should not be drafting NDAs that prevent people from reporting concerns to law enforcement agencies and where such clauses do come to the attention of the SRA, disciplinary action is likely to be taken.

MLM: Can a firm ever be close to being risk free?

“…it’s worth attending some of the growing number of risk and compliance conferences run by the SRA, the Law Society and other organisations, in order to keep up to date and avoid complacency.”

AC: Probably not! The regulatory landscape is constantly changing. But if there are effective risk management safeguards embedded within the culture of the firm, then the chances of contravening the regulatory legislative requirements can, in my view, be mitigated if not completely eradicated. MLM: And the future? Can technology assist, or even replace, people-led risk management? AC: Like all businesses, the legal market faces challenges and there’s an increasing expectation that technology will make legal work quicker and more efficient. I think it’s possible that the use of AI will be able to improve and enhance people-led risk management at some stage in the future. For example there are AI systems that have been developed in areas that include conflict checking and due diligence. What I would say however is that the risk issues I deal with on a day to day basis are very much fact dependent and rely on careful consideration of the relevant legislation or regulatory framework. So, whether or not this could be delegated to a robot in place of a human being remains to be seen.

Amanda Croxon

is the Senior Risk and Compliance Solicitor at Howard Kennedy

MLM: Which risk management techniques would you consider the most effective? AC: I think the culture of the firm is very important, so that there are open and transparent processes around risk management. As I mentioned before, having dedicated staff whose job is completely riskfocused is very important and essential for all firms. At Howard Kennedy we have an ‘open door’ policy so that we’re readily accessible to provide advice and guidance. Our objective is to be helpful and to provide a prompt and efficient service across the business.

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KEY CONTRIBUTORS

MONEY LAUNDERING – WE ALL NEED TO STAY VIGILANT Organised crime costs the UK economy at least £37 billion a year. Because solicitors and law firms are seen as highly credible, and because firms process very substantial sums of money, criminals are increasingly looking to target law firms as a means by which to launder their criminal proceeds into legitimate assets. This is why we consistently identify money laundering as one of the priority risks facing the profession.

onald Toon, formerly of the National Crime Agency, told delegates at one of our recent conferences that solicitors were on the front line in the war against money laundering. He did not just mean big city, magic circle firms – criminals can and do target smaller and mid-sized firms, and those in rural areas. As highlighted in the Government’s recent Flag It Up campaign, we all have to play our part to tackle it.

Money laundering is not a victimless crime - it can facilitate terrorism, people trafficking and drug smuggling. The vast majority of solicitors want to do the right thing and would be horrified if they assisted wrong-doing, but there is a very real risk that they could be doing just that. One of the key areas of work that criminals can target is the creation and administration of trusts and companies (TCSPs). This area is attractive to money launderers because it gives individuals the chance to obscure the beneficial ownership and control of assets and wealth, operate across multiple jurisdictions and avoid tax or duties. In response to this we recently conducted a review involving 59 law firms that carry out TCSP work. As well as reviewing 115 files, we looked at each firm’s compliance with the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLR 2017). The review did not find evidence of actual money laundering or that firms had any intention of becoming involved in criminal activities. However, we did find a range of breaches of the 2017 Money Laundering Regulations1, as well as poor training and

“Where we find noncompliance, we will judge each case on its facts, but if we encounter serious issues or a lack of willingness to resolve issues promptly, we will take strong action.” processes. This means firms could be unwittingly assisting or leaving themselves open to being exploited by money launderers. One of the biggest areas of concern was firms’ risk assessments. A risk assessment is required in legislation and should be the backbone of a firm’s anti-money laundering approach. We found that more than a third of firms reviewed fell short in this area, including four that had no risk assessment at all. There were also issues around appropriate customer due diligence. This included inadequate processes in almost a quarter of firms to manage risks around Politically Exposed Persons, known as PEPs. However, in some instances effective customer due diligence did result in firms turning down work. One in four of the firms had done this, with one of the main reasons being evasive clients. On the back of our review, we have published a warning notice highlighting our concerns, particularly in relation to firms’ risk assessments. And we have begun a further review of 400 other law firms to check compliance with the Government’s 2017 Money Laundering Regulations. This

review will be led by a new dedicated antimoney-laundering unit. Where we find non-compliance, we will judge each case on its facts, but if we encounter serious issues or a lack of willingness to resolve issues promptly, we will take strong action. In the last five years, we have taken more than 60 cases linked to potential improper money movements to the Solicitors Disciplinary Tribunal. These cases have seen more than 40 solicitors being struck off, voluntarily coming off the roll, or suspended from practising. We currently have a further 190 live investigations into law firms linked to money laundering issues. Approximately threequarters of these include potential breaches of the money laundering regulations or the Proceeds of Crime Act 2002. Of course, we all want to work together to stamp out money laundering and to avoid the need for any regulatory action. To help you to do everything possible to prevent your business from becoming a target, we have published a package of support on our website designed to help you understand both your obligations and best practice examples of what you could be doing to protect yourself. Any law firm, anywhere, can potentially be targeted by these criminals, and we all have a part to play in safe-guarding society. We are playing our part and I would urge you to make sure you and your firm are playing yours. Compliance is not optional.

Colette Best

is Director, Anti-Money Laundering at the Solicitors Regulation Authority (SRA)

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KEY CONTRIBUTORS

MEETING RISK HEAD ON – PRIORITIES FOR THE RISK-BASED REGULATOR Clients, colleagues and others such as insurers all need to be confident that the firm or lawyer they are dealing with understands the key challenges facing their organisation so they can be confident in the quality and service that a firm offers.

or providers of legal services, risk is a constant. As a solicitor and barrister myself I have an understanding of what all lawyers need to consider: that one of our most challenging tasks is to identify the risks and to take steps to mitigate them effectively. The same is true for regulators. The Legal Services Act 2007 sets out eight regulatory objectives, which, along with our powers set out in the Act and the principles of Better Regulation form the basis of our regulatory approach. For consumers and the public to have confidence in regulation, we must demonstrate that we have identified the key challenges and risks to the delivery of these objectives and focus our resources on mitigating them so far as is possible. In September, I will be stepping down as Chief Executive of the Legal Services Board. During this time the LSB has overseen vital regulatory developments including: significant improvements in the performance of frontline regulators; a sector-wide shift to the use of the civil standard of proof for disciplinary proceedings; and the introduction of requirements for price transparency. Where evidence has demonstrated that the market is not working as well as it should, we have worked with the frontline regulators to increase the information available to consumers. Where we have seen challenges to the independence of regulation, we have proposed new rules to ensure maximum possible separation; we expect to finalise and introduce these later this year. Every one of these actions has been taken to mitigate perceived risk – whether to the interests of consumers and the public, to access to justice and redress, or to the independence, diversity or effectiveness of the legal profession.

To do this we have to take account of the context in which we regulate. Empirical evidence was sparse prior to the inception of the LSB; over the last ten years, the LSB has worked to build an evidence-base for regulatory decisionmaking. This is the data that informs our understanding of the key risks facing the legal services market today. I am proud of what we have achieved as an organisation since I took up the role in January 2016, but, as a risk-based regulator, we cannot allow ourselves to become complacent. We want to keep a focus on the quality of legal services. While consumers can work out for themselves when they are getting poor customer service, many still do not know about their right to complain about the quality of the service they receive, and to take matters to LeO if they are not satisfied with the firm’s response. Our hope is that our work with the regulators to implement the CMA’s transparency recommendations will contribute to plugging this knowledge gap. Our research has also shown that a significant portion of the population do not recognise when they have a legal problem (only 25% of a sample of individuals with a legal problem initially considered it to be legal) and, even if they do, they do not know who to turn to (48%) or are too concerned about cost to seek professional help (5%). Once a professional has been instructed, consumers will find the technical quality of their work is harder to gauge. Given the potential harm that could be caused by poor work, consumers need to know that the professional they instruct is capable of delivering at the standard expected. Finally, as technology continues to take a greater role in our everyday lives, its role

as a tool for the provision of legal services is enhanced. With that greater role comes important questions of responsibility and ethics, as well as the potential for new or different risks to consumers and the public interest. Our latest business plan set out how we intend to respond to these challenges. As key markers of our success in delivering on our strategic priorities, our three new five-year policy objectives will focus our resources on: • ensuring that regulators have appropriate frameworks for continuing assurance of professional competence throughout the careers of professionals they regulate; • promoting responsible technological innovation that carries public trust; and • enhancing public legal education. Faced with the challenges that today’s market presents, we will continue to ensure that the basis for our actions under these work streams and our decision-making is evidence-based. The LSB remains committed to protecting the interests of consumers of legal services and managing the associated risks. Though I am stepping down in the early phases of the planned delivery of these objectives, I do so confident that the organisation is in a strong position to deliver real impact across all three areas, backed up by an understanding of the environment in which we regulate and the issues that affect consumers, legal professionals and the public.

Neil Buckley

is Chief Executive of the Legal Services Board

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EDITORIAL BOARD

Alan J Smith FCIM

Stephen Griffiths

and authorised HCEO at High Court Enforcement Group Limited

is the Tax Director at Griffiths Allen

Avoiding SDLT mistakes

Mitigating financial risk

How realistic or advisable is it for legal professionals to admit their own mistakes?

Much of the current dialogue about risk management and business continuity focuses on terrorist and cyber attacks. Whilst businesses undoubtedly need plans for these, much of the risk to business will come from more mundane quarters.

As a firm of Chartered Tax Advisers, it is our role to ensure the clients of conveyancers pay the right amount of SDLT – not too much and not too little. We know the profession is being bombarded with complex and tricky SDLT situations from all angles. It is extremely difficult to ensure clients pay the right amount of SDLT on matters going forward and conveyancers should not hesitate to seek advice from outside the firm. But what about historic matters which they were not too sure about at the time?

Cashflow problems, often caused by unpaid invoices, not only hamper growth but can also bring businesses to the brink of ruin, especially an SME. It doesn’t have to take much: a client withholding payment for a significant invoice, or a matter that gets caught up in a dispute.

Are you a conveyancer and did you err on the side of caution in favour of HMRC, or did you not make a claim for a relief because you were not too sure about it? In either case you are at risk from client litigation or HMRC enquiry. Both of which can be time consuming and very expensive to deal with.

Robust credit management is always key, but if that fails, prompt action is important. That may mean appointing a debt collection agency or making an N1 claim in court (via a solicitor or through Money Claim Online). Speed is so important because the debtor may be experiencing financial difficulties themselves and have limited resources to pay their suppliers. Prompt action puts you nearer the front of the queue for payment.

Client Litigation We are being asked to advise on an increasing number of historic matters that are being pursued initially through the Pre-Action Protocol for Professional Negligence regime because they relate to claims that are “out of time”. These mostly relate to historic Multiple Dwellings Relief claims which needed to have been made within 13 months of the completion date. There is nothing worse than realising that if you had only reviewed the file one month earlier, and sought help from a tax professional, that you could have saved the firm thousands of pounds in damages that would usually fall below the PI excess so are a real cost to the bottom line.

Should the matter go to court and judgment awarded, the court will give the debtor a set time period to pay. If they still don’t, the next step is enforcement of the judgment. One of the more effective routes is via a High Court Enforcement Officer (HCEO). HCEOs act under a writ of control. They transfer the judgment to the High Court for enforcement purposes – the majority do not charge for this – and start by sending a notice of enforcement, requesting payment within seven days to prevent enforcement from continuing.

HMRC Enquiry We have also seen a marked increase in the number of HMRC challenges when Code 02 has been used and the non-residential rates of SDLT applied. HMRC claim it is “their policy” to treat all land purchased with a dwelling as residential property, unless there is significant commercial use of that land. HMRC have never, however, published policy that suggests this view is correct; to the contrary their taxpayer guidance states that non-residential property is “any other land and property that is not used as a residence”. For those matters that have completed already you may want to double check what evidence you gleaned of mixed-use status on the effective date and that it is adequate based on current taxpayer guidance.

The next stage is an enforcement visit. If payment is made or an arrangement is reached at this point, the matter is closed. If not, enforcement moves to the next stage and goods are taken into control. The final stage is the removal of goods for sale, although most cases do not reach this stage. Making payment makes more financial sense for the debtor, as goods sold at auction tend to go for a fraction of their value. The enforcement fees are added to the sum recoverable from the debtor, along with judgment interest and court costs. If enforcement is not possible, all the claimant pays is a compliance fee (currently £75 + VAT).

In either case, time is of the essence and as far as SDLT is concerned it would always be our recommendation that a conveyancer should admit their mistakes before it’s too late and ensure their clients pay the correct amount of SDLT. If you don’t, somebody else will and you can be sure it will take more time, effort and cost to put it right.

High Court enforcement can be used to recover property, land, rent arrears and assets, as well as money, making it a powerful tool for the management of financial risk.

“Robust credit management is always key, but if that fails, prompt action is important.”

“It is extremely difficult to ensure clients pay the right amount of SDLT on matters going forward and conveyancers should not hesitate to seek advice from outside the firm.” 23

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EDITORIAL BOARD

Patrice Kennard

Melody Easton

is Senior Risk Consultant at Wilson Allen

is Marketing Director at DocsCorp

Keeping pace

Risk Strategy: Seeing the Forest and the Trees

Cloud Technology, AI and blockchain are some of the buzzwords we hear every day relating to technology. But just because they are out there, doesn’t mean they are what every firm needs right now.

How well does your risk management strategy protect your firm? Can you be certain it would prevent these kinds of inadequately cleared conflicts of interest which resulted in recent law firm disqualifications:

Legal technology advances quickly, and usually, these advancements promote smarter working. For example: 1. Agile working has empowered staff to work anytime, from anywhere, and not be tethered to a desk. 2. Cloud solutions allow firms to purchase and deploy technology in a matter of minutes (depending on the scale of the solution).

• Representing a company in litigation while concurrently representing one of the hundreds of defendants in a wholly unrelated matter • Representing a company in a creditor proceeding while concurrently representing the estate of the company’s deceased chief executive officer • Representing a company where – because of Outside Counsel Guidelines referenced in the applicable engagement letter – it was determined that the firm effectively had an ongoing attorney-client relationship with an affiliate of an adverse party in the litigation

And while it may be tempting to run out and buy all the shiny new toys on offer, we would argue, that it makes more sense to partner with vendors who are doing it for you. Not sure if your vendor is keeping up? You might want to ask yourself the following questions.

If your risk strategy doesn’t prevent decision-makers from missing the forest for the trees, it’s a strategy for risky business. And the financial and reputational stakes are high. Embedding enterprise risk management protocols into the firm’s processes for making business determinations is the only way to minimise exposure. The integral components are information sharing, consistent checks and balances, and visibility:

Does my vendor keep me informed about recent product updates? If you can’t remember the last time a particular vendor sent you an email about an update, then a reasonable conclusion to draw would be these updates aren’t a priority. You can be fairly confident they aren’t keeping up with the risks and changes to the industry.

• Share information to ensure robust conflicts checks; strengthen client communications with disclosures that promote mutually beneficial relationships and limit firm liability • Maintain consistent checks and balances that ensure your firm clears conflicts, aligns its practice area and office decisions with the larger goals of the firm, secures rock-solid client terms, and meets its regulatory and other compliance obligations • Provide visibility into the firm’s business development efforts, new client and matter onboarding, lateral hires, and compliance requirements. For example, screening memos, strategic goals communications, ethics training, and circulation of daily “new business” reports all serve as mechanisms for helping attorneys and staff identify and avoid conflicts of interest

The best vendors are those who regularly communicate with users about new features, bugs, enhancement requests, and technical support – whether it be via emails, blog posts, or on social media. Regular updates mean the vendor is listening to their clients and continuing to invest in their solutions, which in turn benefits your firm and makes the user experience a more pleasurable one. Is what’s important to our firm important to them? AI and blockchain won’t be right for every firm. But if you know it’s something that will benefit the firm, and you want to see it up and running eventually, you need to ensure it’s on the vendor’s product roadmap. Vendors who listen to your suggestions and want to work more closely with you, are the vendors who become more innovative and help drive the technology, and in turn, your firm, forward. Why invest more time and money in a product that isn’t going down the same road? We suggest you reach out to your account manager and find out what the product will look like in 12 months’ time and go from there.

Every firm is unique, but one constant applies in risk management: The best risk strategy is to give decision-makers the clearest view of the forest and the trees.

Legal technology is an investment. To get the best return, you need to make sure it’s still working for you today and will continue to in future.

“If your risk strategy doesn’t prevent decision-makers from missing the forest for the trees, it’s a strategy for risky business.”

“Vendors who listen to your suggestions and want to work more closely with you, are the vendors who become more innovative and help drive the technology, and in turn, your firm, forward.” 25

This is the range of professional services we offer:

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TH_62611_ML_Generic_Half Page.indd 1

21/06/2019 14:34

JOIN THE EDITORIAL BOARD Modern Law Magazine’s editorial board provides practical guidance to our readership about the latest market developments. Our editorial board members’ knowledge and insight is extremely effective and valuable to firms facing impending business challenges. The editorial board enables you to provide solutions through your editorial contributions, positioning you as thought leaders and granting excellent exposure in the legal sector. But don’t just take it from us: “Being on the editorial board of Modern Law has given me an opportunity to share ideas with the editor and other members of the Board. I have been made to feel that my contribution is unique and valued. It also has meant that the readership get the chance to hear a psychological perspective on law, legal practice and quality improvement, which I think is worthwhile and positive.” Professor Hugh Koch, Clinical Psychologist & Director, Hugh Koch Associates and Professor in Law & Psychology, Birmingham City University.

If you feel that your company is a legal leader then please get in touch – we would love to talk about the range of benefits we can offer with membership. 01765 600909 | martin.smith@charltongrant.co.uk Martin Smith, Project Manager, Modern Law Magazine

EDITORIAL BOARD

Dave Seager

Adam Bullion

is Managing Director at SIFA Professional

is General Manager of Marketing at InfoTrack UK

Using social media is a must

The Technology rEvolution

The SRA’s new ‘Transparency’ rules are over 6 months old and there is still evidence that solicitors’ practices are seeing the compulsory publishing of sample prices and what is included in those services for the price in certain key areas, as an imposition.

There’s a fantastic story about the American electrical engineer, Nolan Bushnell. For those who don’t know him, he founded Atari and for a while had Steve Jobs as an employee. Some years after Jobs left to start Apple, he returned to offer Bushnell a third of the company for just US$50,000. Bushnell turned him down and has since stated “I was so smart, I said ‘no’. It’s kind of fun to think about that, when I’m not crying!”.

Perhaps those in the ‘resistant to change’ camp on this are missing the reasoning behind the changes and failing to see that their regulator is acting to help solicitors attract new clients and win new business. The changes are driven by consumer research which strongly suggests that the public, who do not have a relationship with a solicitor, but find themselves in need of a legal service, want to be able to research the market and compare potential prices before they approach a provider.

Missing that opportunity must still be very painful for Bushnell with Apple valued last year at US$1trillion! This is just one example of a missed opportunity in the world of business and there are plenty more situations where businesses could have achieved greater commercial success. While missing opportunities will not necessarily send a business bust, it does prevent a company from growing faster and placing value in their business.

It is against this backdrop that one might argue that not embracing the changes and reassessing how you communicate with existing customers or potential new ones is the biggest ‘risk’ facing firms today. If you are not considering how your website is your shop window for key services, the risk is that other firms are. Equally, if you are not fully utilising the various appropriate social media to keep previous and existing clients up to speed with your core services, particularly, at the risk of being ageist, for the younger consumers, you risk losing existing or new clients to a rival who is.

There is a plethora of research readily available to law firms who want to be commercially successful and achieve growth. A customer 2020 report recently stated that by 2020, customer experience will overtake price and product as the key brand differentiator. More than ever before it’s important to separate experience from what it is you do. The expertise and knowledge legal professionals have is not in doubt. However, can we all honestly claim that our clients receive the best experience from finding us on Google, throughout the transaction and even any aftercare provided? In further discussion of high street stores, one key reason cited for the failure of Toys R Us was down to the experience within the store.

The Law Society has issued superb guidance on how best to portray the core services that fall under the Transparency rules on websites but surely that has to be the starting point and not the job done. Once the website is modernised, ensuring that the services are not only described but crucially who is delivering the services, with pictures, biographies, experience, qualifications and testimonials, the next challenge is attracting new customers to that appealing shop window. This is where social media plays its part and should be used to encourage visitors, who in turn might be your next clients, to your site.

85% of customers want to interact without a human by 2020, according to Gartner research. The truth is customers are demanding digitised solutions, especially when it comes to dealing with matters. Much of that is simply because we are busier people. So, consider how we send out care letters, property information forms or even simple questionnaires – if your expectation is that your clients have printers and scanners at home, then you’ve misunderstood your clients. They don’t. That means delays in sending back information to you, the law firm. We need digitised forms that negate the need for printing and posting in today’s world. Digital is not the future, it is now.

If you are writing articles to demonstrate expertise or blogs to highlight areas of interest then I say bravo but they need to be seen by a wider audience and Twitter, LinkedIn etc., are excellent mediums to get these out there, which will link back to your website shop window. Similarly, if your staff, fee earners, partners or Directors have attained higher qualifications, or been recognised by peers, get the good news into the wider public domain. If you work closely with other professionals on behalf of your clients, such as financial advisers, be sure to let your clients know by sharing content of interest that they can provide. Potential customers will be impressed to see you are considering your clients’ affairs more holistically as they increasingly seek a more joined up approach, particularly as legal and financial are so often inter-linked.

Firms most likely to succeed are taking advantage of this research, keeping an open mind giving them an opportunity to compete on a different level, and able to market themselves as a forward-thinking technology-driven firm. That’s a real benefit for firms of all shapes and sizes whilst it also ensures better efficiency for staff supporting their customers. Ultimately, law firms must think hard about how their clients want to interact and remain open minded to new technology that the workforce of today wants to use. Understanding your own customers will help you scale your business and avoid missing opportunities.

Growing a following on social media requires time and dedication but it can be hugely beneficial and in a world where initial impressions are important and consumers always begin their research with a google search, can your firm risk not beginning the journey now and embracing all avenues available. Putting your firm and your legal professional’s knowledge, approachability and quality services front and centre for your potential next client to see is not a risk – but not doing so just might be.

“We need digitised forms that negate the need for printing and posting in today’s world. Digital is not the future, it is now.” 27

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EDITORIAL BOARD

Jonny Davey

Mark Holt

is Product Manager at Geodesys

is Managing Director at Frenkel Topping

Good servant or bad master

Adapt to attract Is losing the talent war a major risk for law firms and should more embrace ‘agile working’ to attract and retain younger lawyers who are demanding a shift away from traditional high-pressure, long-hours culture, when looking for a better work-life balance? Mark Holt looks at how companies must adapt to attract.

The recent LawTech Adoption Research report found there is rising awareness that Law tech is important, and that the industry is on the cusp of technical change. However, this isn’t always translating into the adoption of new conveyancing technology, however. Jonny Davey discusses why this could be the case.

In a highly competitive market space, law firms face a tough job in attracting and, critically, retaining the best talent. In our current uncertain climate with Brexit continuing to create a challenge, it is more crucial than ever for firms to invest in the right people and retain the best talent.

Driven most recently by the 2017 Government consultation and the Conveyancing Association Whitepaper, conveyancers face an industry that is constantly changing and filled with uncertainty. Many new technical products have come onto the market and law firms are overwhelmed with choice.

Among the Millennials new factors come into play. With the appeal of a job for life firmly in the past, it is a company’s culture that carries new weight for this generation. The principle of creating an open and supportive culture that places importance on wellbeing, and where each individual is valued, is high on the agenda for many leading firms in the legal sector.

There are concerns about technology becoming the master and diminishing the role of the conveyancer, when actually the opposite is true. Much of today’s new conveyancing technology is starting to free up solicitors from the more timeconsuming processes, allowing them to use their knowledge to add more value to home buyers.

A blended training programme Creating a culture that enables diverse teams to flourish will appeal to the next generation workforce. A programme that blends more formal training with on-the-job experience offers significant advantages both for employers and employees.

The HM Land Registry Digital Street initiative has been looking at the wider conveyancing process. It covers four areas that will facilitate the conveyancing of the future – better upfront property information, secure establishment (and sharing) of identity, instant lending decisions and digitised exchange of contracts. The Land Registry regularly issue updates, so it’s one to keep an eye on.

Encouraging every individual to fulfil their potential is hugely attractive to employees at the start of their career, and delivers strong benefit to the employer in terms of creating a knowledgeable and committed team of people who can see their career progression mapped out. We work to support the legal industry in personal injury cases and expert witness provision, and attracting the best in talent to the business is essential to offer the best possible level of care to all claimants.

Legal matters are complex and attempting to shoehorn processes into software can be problematic. This is a scenario where upfront consideration and planning really pays off to ensure the technology does not become a poor master. To successfully use a case management system for conveyancing, it needs to align with the work processes of the conveyancing team and mapping these processes upfront is essential in ensuring that the software supports conveyancing needs.

Model of best practice Our graduate programme seeks to set a model of best practice. Every graduate associate undertakes an intensive, two-year training programme that is structured to give each individual the opportunity to develop their skill set, through industryrecognised accreditations, hands-on work experience and senior level mentorship. Supporting the work of lawyers in the personal injury and clinical negligence sector is a hugely rewarding role, yet graduates may find it challenging to break in.

Technology can be a great servant, but it does require management. Ensure you find the right systems and software for your business and be confident they are working with your culture and processes. Be aware that, although the market is currently inundated with confusing new technology, it’s likely that a handful of leading products will soon emerge.

Graduate associate, Ashley Howell, says: “When I was looking to start my career, I looked at what else a company offered as well as the salary. Extra training and personal development were key factors to me.”

In order to stay in the game, all law firms should engage now and establish how technology can help them meet their goals.

Continual feedback A key challenge for businesses is keeping staff engaged with a stimulating workload, and clear scope to progress within the organisation. Feedback is key. Rather than a set annual appraisal, individuals need continuous feedback to help develop their skills through open lines of communications.

Geodesys is part of Anglian Water and a leading provider of conveyancing searches for residential and commercial properties throughout England and Wales.

“Ensure you find the right systems and software for your business and be confident they are working with your culture and processes.”

Firms seeking to attract and retain the top talent must offer diverse career paths, representative of the evolving sector and, importantly, a progressive working culture that enables staff to develop and thrive.

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21/05/2018 19:19

EDITORIAL BOARD

Wayne Shinn

Norman Kenvyn

is Business Development Executive at Unoccupied Direct

is Founder & CEO of VFS Legal Funding

Time and investment the key

Social media pros & cons

The risks facing the modern law firm can look almost insurmountable at times – the combination of Brexit, rapidly evolving technology and new entrants into the market which are offering competitive legal solutions can make it look like the challenges require wholescale transformation.

Social media marketing is an avenue that’s been used for years now to market to potential clients from businesses across all sectors. But what should you think about when starting up a social channel for your business, or improving the ones you already have in place? We use social media marketing a lot for our brand, but what are the risks and benefits involved?

Of course, some of the perceived risks in the market will require law firms to evolve, but this should be seen as a positive – an opportunity to develop and grow. A lack of risks in the market also means it becomes stagnant and there is less of an imperative to push things forward.

Benefit: Higher rates of people using your services A significant element of utilising social media for your brand is the humanisation it can bring to your company, and the way this can attract new customers you may have not been able to reach before. Social media can help convert more of your existing customers too, making them aware of how they can use your services more efficiently, or to promote extra products or features they may not know you have.

However, to deal correctly with some of the latest risks facing law firms, proper time and investment is needed. One of the biggest challenges facing law firms in recent years is the rise of cybercrime, including phishing and the dreaded ‘Friday afternoon fraud’. The latter, so-called because fraudsters often strike on a Friday afternoon, when the majority of conveyancing transactions are completed, attempting to convince lawyers to transfer funds to fake accounts. It’s not just conveyancing firms however which are at risk – The Law Society reported earlier this year that 52% of firms reported detected cyber-attacks, with phishing emails, spoofing and viruses the top three threats.

Benefit: Increased brand identity and recognition Even if people skip past a post, they’ve still seen your advert and your brand name, meaning, should they need your service and see you again, you’ll have established that initial contact, even if it is simply in the form of a well-written tweet. You have full control over the images you post, the content you create and the articles you share, giving you high flexibility when it comes to portraying your ideal brand image.

Failure to deal with these sorts of threat could have untold consequences for law firms, as client money could be lost and important data compromised, not to mention the reputational damage a high-profile cyber-attack can wreak on a firm. Investing in software to ensure client data is securely stored, as well as very comprehensive IT audits are a good start. However, a strong IT team is only the first line of defence – regular and wide-ranging training for all members of staff is also very important so they recognise the risks and what not to do.

Risk: Open you up to criticism Using social media could open your company up to negative feedback in a more public way than before. Make sure to monitor the social media channels you use in order to address any issues before they gain support, and clear all responses with a senior member of staff before posting, at least at first. Risk: Work to establish brand guidelines It can be a risk that, when you or your employees/colleagues manage your social media sites, different people can have different voices and writing styles. To keep this in line with how you want your company to come across, make sure to have key messages and posts that set the tone and add to your brand image. Having a schedule is a good place to start, which will help you gain traffic at relevant times of year and increase your reach.

This is not a one-off investment either – these fraudsters are constantly evolving their scams and embracing new technology to try and stay one step ahead of law firms and their lines of security. But for many law firms in this modern market, a tight cash flow can really impede their ability to rapidly adapt their business to adequately deal with risks such as cyber-attacks. We have seen more firms approaching companies like ours in order to utilise a funding solution to provide much-needed financial stability and release cash so they’re in a much stronger position to deal with day-to-day challenges such as cyber-attacks. Our range of products allow law firms to release cash tied up in long-running cases to invest back into the business when it’s really needed – when something like a cyber-attack is threatened, there’s certainly no time to lose and a funding solution enables firms to be fleet of foot and respond quickly and effectively.

“Social media can help convert more of your existing customers too, making them aware of how they can use your services more efficiently…

The risks facing law firms may seem overwhelming at times, but with the right funding product in place, we’ve seen more firms well-equipped to not just tackle these risks, but turn them into opportunities.

A force to be reckoned with Hilary Meredith Solicitors specialises in all areas of military law.

We are proud of the legal advice and guidance we provide to service personnel, veterans and their families, securing life-changing financial settlements and campaigning for their rights. In recent months Hilary Meredith Solicitors has strengthened its links with the armed forces community through a range of appointments and initiatives.

Lifetime Achievement Award Armed Forces Ambassador We are thrilled to be working with Brian Wood MC, former Colour Sergeant, Princess of Walesâ&#x20AC;&#x2122;s Royal Regiment. Brian was awarded the Military Cross following his courageous leadership under enemy fire in Iraq. During a 16 year military career, he led British troops across the full spectrum of battle from training to fighting; from operations in the Balkans to high intensity combat in Iraq and Afghanistan. His compelling memoir, Double Crossed, is a Sunday Times best seller.

At the 2019 Manchester Legal Awards, Hilary Meredith received the coveted Lifetime Achievement Award for her work on behalf of armed forces service personnel, veterans and their families.

The Invictus Spirit We are pleased to announce the appointment of highly experienced solicitor Natalie Robinson as head of our Armed Forces Compensation Scheme (AFCS) team. Natalie provided specialist military legal support to the British Army for twelve years, reaching the rank of Major, before being medically discharged in 2015 after an injury on duty led to complex regional pain syndrome and the partial amputation of her leg. She went on to win a Gold medal at the Invictus Games.

www.hmsolicitors.co.uk

0800 124 4444 Meredith House, 25-27 Water Lane, Wilmslow, Cheshire SK9 5AR Hilary Meredith Solicitors Limited is authorised and regulated by the Solicitors Regulation Authority of England and Wales. SRA ID number: 561149.

EDITORIAL BOARD

Jason Connolly

Dr Matthew Terrell

is Managing Director at JMC Legal Recruitment

is Head of Marketing at Justis

Learning from mistakes

Future perfect? Within the legal sector, we often hear discussions about the impending future of the robot lawyer and how artificial intelligence will replace humans within the foreseeable future. Yet, we know this isn’t true, as we understand the intricacies of law and its interpretation that requires the cognitive abilities of trained legal professionals. How then should we perceive future legal technologies?

So, you are a few months into your new role, you have worked your whole career to date to get there, and out of the blue you notice you have made a big mistake. Suddenly you feel your stomach doing somersaults - what to do next? There is every chance you can resolve this easily, and no one need ever know. Often, we come across candidates who have done exactly that, and with the beauty of hindsight have lived to regret their actions for sometimes months, years or even a lifetime.

Legal technology is most importantly a good assistant, designed to make us a better version of ourselves. With the support of contract automation, intelligent legal research tools and advanced case management systems, a good lawyer can become even better. The time saved using these tools can be further invested into their client’s interests and needs, building new relationships or attending to others matters which may not usually fit into the very busy life of a legal professional.

Everyone makes mistakes in life, fact. I personally don’t feel it is the mistake that should warrant all a manager’s focus, it is the lesson learnt, and how this will be avoided in future which is important in the interests of moving forwards. I feel that a mistake should not always solely focus on the individual, but managers, training, and overall office culture. For instance, if you are in an environment where you haven’t received a proper level of training, or perhaps work in an environment where you do not feel that you have an “open door” to senior team members, then this could breed an individual into feeling they have to take matters into their own hands, rightly or wrongly.

According to survey results of over 2,000 trainees and junior associates at the leading law firms in London and the UK, published by LegalCheek, the average time for leaving the office can be as late as 10pm. In these circumstances, there is most certainly room to use technology not only to improve services, inform efficiencies and add greater value to the client’s experience; these technologies enable the individual employees to save time in their day-to-day which can be utilised to focus on other areas of work and invest in personal development.

All too often, throughout my career, I have come across Lawyers where an honest mistake has cost them reprimands on their practicing certificate. It is normally the cover up of the mistake and not making the relevant manager or SRA aware where the problems begin to occur.

While I am certain that many leading law firms take good care of their employees’ health and wellbeing, investing in legal technology to save time on tasks such as legal research will not only have direct benefits for the firm but also many indirect benefits for the employees using the technology.

So how do you prevent this as a manager, the simple answer is mistakes happen, although you should have a culture which promotes openness, staff development and integrity. Contingency plans should be in place so when a potentially damaging mistake happens there is a reporting process in place.

How do we ensure technology is utilised as a good servant and not empowered as a bad master? I’m sure many of us will know that it is easy to let technology and associated processes get ‘in the way’ and distract us or prevent us from simply dealing with the matter at hand. However, to ensure firms get the most from their technology, one suggestion is to look towards Agile Development, more specifically the values originally subscribed to the process. These values include Individuals and Interactions over processes and tools and Responding to Change over following a plan. While these may not be perceived as bureaucratically structured as some of us prefer, it is the essence of the ideals during the trial and implementation stages of your new technology that will ultimately ensure both your clients and staff are kept at the centre of the conversation.

I know I have made a mountain of mistakes over the years, and it is from these that I have learnt the lessons which have made me successful in business. In our business we have a totally people-centred approach, where mistakes are not something that are punished or frowned upon, but more an opportunity to learn, develop and share this knowledge to know how we can improve.

“Contingency plans should be in place so when a potentially damaging mistake happens there is a reporting process in place.”

“With the support of contract automation, intelligent legal research tools and advanced case management systems, a good lawyer can become even better.” 33

If you’re using any Drainage and Water report other than the CON29DW…

Good luck. A CON29DW uses all known water company information, including both free and paid-for data. This ensures that the FULL picture on drainage and water is presented. The Geodesys CON29DW presents the information in plain language; provides useful detail; includes two high-quality Ordnance Survey maps (one for water and one for waste and drainage); and uses an interactive format to make it easy for you to retrieve relevant information. Some Drainage and Water reports simply infer answers from the proximity of the pipes nearby, rather than checking the billing and connectivity data that the water company holds. Or they can ignore water company data, such as the information on whether a property is at increased risk of internal flooding. The lack of an answer to this question is often covered by insurance in some reports. Whatever the example, the home buyer, lender and conveyancing solicitor are all exposed to risk.

When it’s your reputation on the line, do you really want to leave it to luck?

It’s your call…

CON29DW from Geodesys.

No inferring, no ignoring, no insuring. Assessing drainage and water risk can be a tick-box exercise, but with the CON29DW you’re guaranteed a factual, reliable and secure approach. It’s a choice that impacts three separate, but connected, parties in the home buying process:

The lender Lenders need to focus on property risk as well as applicant risk – and a key concern is drainage and water. The CON29DW answers all 23 drainage and water questions from the Law Society, covering areas such as connections, pipe and drain locations, and risk of internal flooding. Other reports can infer and ignore answers, using insurance to cover the risk.

The conveyancer If a less than full picture of the property leads to drainage or water issues, a law firm’s PI insurance usually covers any remedial work – but it can’t cover the time and effort required, nor any damage to reputation. Plus the homeowner may have to carry out costly work in the future.

The CON29DW from Geodesys offers the following key features: • a crystal-clear front-page customer dashboard • clear identification of potential issues • easy-to-use interactive navigation • two formats: interactive PDF and usual print format • thorough information on drainage and water legislation • a ‘plain English’ guide • a modern design created by industry

The home buyer Whether a dream house, a desperately needed upgrade or a first-time purchase, complex drainage and water problems are a major setback for any homeowner. Even if covered by insurance, there’s still the pain of sorting out an issue that could have been identified before – and the buyer may not have gone ahead if they’d known. Call: 0800 085 8050 Email: customer.services@geodesys.com www.geodesys.com/con29dw-goodluck

Unoccupied Property Insurance

Solicitors, get cover now and pay later No immediate payment required – pay monthly invoices via cheque, Bacs or credit/debit card

CALL 0800 015 2211 - a member of the team will set up an account for you Unoccupied Direct is a trading name of Unoccupied Direct Limited. Unoccupied Direct Limited is authorised and regulated by the Financial Conduct Authority. Firm Reference Number: 797627. Registered Office: The Walbrook Building, 25 Walbrook, London, EC4N 8AW. Registered in England & Wales. Company Number: 10621712. Unoccupied Direct Limited is part of the Gallagher group of companies.

MSc in Construction Law & Dispute Resolution King’s College London - The Dickson Poon School of Law Centre of Construction Law

Applications are invited for this highly regarded post-graduate programme:

• two-year part-time, post-experience, multi-disciplinary programme for lawyers and construction professionals, now in its thirty-first year, covering the law and its application to construction projects, practices, people and problems • four taught modules and a dissertation, including foundation modules on law for construction professionals or construction technology for lawyers • international, multi-disciplinary student cohort with strong alumni association • nine full days’ tuition each term in central London (three weekends of Thursdays, Fridays and Saturdays) plus regular on-line tutorials • academic staff led by Professor David Mosey, Professor Renato Nazzini and Professor Phillip Capper, supported by leading academics and practitioners • access to leading UK and international research and high-profile Government and industry collaboration • specialist library resources and online facilities available to students • qualifies for professional CPD and, with the additional award-writing examination, exemption from the CIArb Fellowship examination • next intake September 2019 – early applications are encouraged (first application deadline 29 March). Applications will remain open if places are available and the programme will be closed as soon as it is full. Applicants must have a degree and/or acceptable professional qualifications plus, (for construction professionals and non-practising lawyers), at least two years’ relevant work experience; or (for practising lawyers), at least completed pupillage or one year of training contract. For further information on the Centre, or to download a copy of the prospectus, visit the Centre of Construction Law website: www.kcl.ac.uk/law/research/centres/construction/about.aspx, or contact Sue Hart on 020 7848 2643, email ccldr@kcl.ac.uk. Details on how to apply can be found via the main KCL prospectus pages at: www.kcl.ac.uk/study/postgraduate/taught-courses/construction-law-and-dispute-resolution-msc.aspx MLM33 Kings College London Ad.indd 1

04/01/2018 12:44

EDITORIAL BOARD

Yvonne Hirons

John Dobson

is the Global CEO at Perfect Portal

is CEO at SmartSearch

Competitive conveyancing

Non-compliance not an option

Using an online platform to provide fast conveyancing quotations avoids the risk of losing potential customers. It also leads to a speedier and more efficient conveyancing transaction process.

The Solicitors Regulation Authority (SRA) recently announced that it had put 26 firms into its disciplinary procedures following a review of their money laundering processes.

Today’s consumer demands, and deserves, fast results, whatever product or service they’re buying but especially when it comes to moving to a new house. Over 50% of home movers obtain two or more conveyancing quotes before instructing a firm, so in a competitive market getting an accurate quote and related information out fast to potential customers is the key to winning more new business.

The SRA reviewed 59 law firms, and while there was no evidence of actual money laundering, there were a number of breaches of Money Laundering Regulations and some ‘serious failings’. Following the review, which found 24 of the 59 did not have proper risk assessments in place, four had none and 14 were not properly managing risks around PEPs (Politically Exposed Persons), Paul Philip, SRA chief executive, said that “too many firms are falling short.”

But on average, in the UK, conveyancing firms only convert around 30-35% of their leads to instructions. So sending quotes out quickly to those leads is just the first stage in the process of winning new business. Sadly, much of the potential business lost is because firms are not following up in time or, worse still, are not following up new enquiries and are sitting back expecting customers to come to them.

He said: “Those firms should be on notice that compliance is not optional. They need to improve swiftly. Where we have serious concerns that a firm could be enabling money laundering, we will take strong action.”

Data is the foundation of decision making within businesses, so having the required information swiftly is imperative. Also, when many parties are involved in a transaction, keeping everyone updated throughout can be difficult and can take up valuable time.

As a result of its investigation, the SRA has put more than half (26) of the firms it reviewed into its disciplinary processes and will now review 400 other firms.

With the technology now available to law firms, it is possible not only to speed up the conveyancing quoting process, but also to engage more productively with clients when that business is won. By employing an integrated online platform, such as that provided by Perfect Portal, the customer experience is improved and the conveyancer-client relationship cemented. And by using the right online platform, branded and accurate quotes can be submitted within seconds, whether the client is with a referring partner, sitting at home browsing the firm’s website, or making contact directly.

Recent reviews into anti-money laundering processes have already seen more than 40 solicitors struck off or suspended in the past five years, so non-compliance really is very serious. There are currently around 7,000 SRA-regulated firms that fall under the scope of the money laundering regulations – if this latest review is indicative of the industry as a whole it could mean that around half of those have some failings. While some firms will be cutting corners on purpose, many will be trying to put the right processes in place, but failing, either through a lack of understanding, lack of resources, or a combination of both.

Today’s consumer also demands transparency and, increasingly, digital communication as a speedier and more efficient transaction process, so transparency of information at every step is required to reduce the risk of miscommunication and delay. Yet with only one third of home movers currently satisfied with the frequency of communication from their conveyancer, the need for improvement is clear.

Whatever the reason, not having proper AML procedures in place makes firms vulnerable, and criminals prey on these weaknesses. And the fact that 26 law firms have been put into disciplinary procedures shows that the regulators will act when they find businesses who are not compliant.

After instructions, customers expect digital updates on a regular basis, and by providing instant case updates and reminders throughout the transaction to all parties involved via email, SMS, a mobile app, or online portals, clients can see a case progress at all the key stages throughout the transaction. And when firms provide such transparent online access, enabling clients to track their case progress at their convenience, it eliminates miscommunication and reduces time consuming phone enquiries to the firm.

By employing an electronic system, regulated businesses can save time, money and ensure their systems are not only reliable but ensure that they are compliant with all AML regulations, now and in the future.

“Whatever the reason, not having proper AML procedures in place makes firms vulnerable, and criminals prey on these weaknesses.”

“With the technology now available to law firms, it is possible not only to speed up the conveyancing quoting process, but also to engage more productively with clients when that business is won.” 37

IS AML COMPLIANCE DRIVING YOU NUTS?

There’s no need to make life complicated, you have three problems; we have one solution! We deliver AML, Sanctions & PEP checks “all-in-one” search, individual checks take 5 seconds, business checks take longer, 1-2 minutes! Daily monitoring of all your clients for Sanction & PEP changes for the lifetime of your contract is included at no extra cost. Automatic enhanced due diligence, biography, adverse media and photographic evidence is also included in your basic AML price. You’d be nuts not to view our demonstration!

Call us now to book a free demonstration on:

0113 333 9835 Or visit us online:

SMARTSEARCHUK.COM SmartSearch delivers UK and International Business checks in the UK and International Markets with inclusive Worldwide Sanction & PEP screening, Daily Monitoring, Email Alerts and Automated Enhanced Due Diligence.

IS AML COMPLIANCE MONEYYOU LAUNDERING DRIVING A RISK-BASED APPROACH NUTS? T ADVERTORIAL

SmartSearch’s Martin Cheek explains how to prevent money laundering using a ‘risk-based’ approach. reliable and robust solutions and SmartSearch works with only the best data providers – Experian, Equifax and Dow Jones – as well as Companies House for incorporated business data.

he UK is a major international financial and legal centre, with a strong reputation for honesty and integrity. Sadly, it is exactly this reputation that makes professional legal practices attractive to money launderers who use them to turn their dirty money into legitimate income.

Our platform also delivers real-time biography, adverse media and photographic evidence to enable manual enhanced due diligence to be completed within a few minutes, and this enhanced due diligence will be automatically triggered if the system picks up a match.

Firstly, you must identify the money laundering risks that are relevant to your business. You then need to carry out a detailed risk assessment of your business and your customers.

All search activity and their outcomes are hosted within SmartSearch so all users can recall full information at any time to support internal or regulatory audit requests.

Once these risks have been identified, it is then up to you, as a regulated business, to put procedures in place to manage and reduce the potential impact of these risks. These procedures must be monitored, and it is your responsibility to keep a record of these procedures, including what you have done and why.

We have also developed Smart AML, a mobile app enabling clients to use their iPhone or Android to perform real-time AML checks on their mobile phones when they are out and about with clients or potential clients – particularly useful for law firms who often see clients in their homes or places of work.

Cumbersome process In order to carry out a risk assessment of your law firm, you need to consider the type of services you provide and the types of customers you have – including where they live, how they behave and how and why they work with you.

An instant result is given with the full data subject’s details and search outcomes are automatically loaded into the SmartSearch platform. SmartSearch has also developed Smart IDV for international clients and this mobile app enables individual verification of international documents such as passports, driving licences, identity cards, etc.

Most importantly, in terms of legal businesses, you need to think about where your clients’ money comes from, how that money is received by you from them, i.e. – transfers, cheques, cash – and where the money goes next.

There’s legal firms find the process of customer due diligence on noMany need both individuals and business clients can be highly problematic toandmake life very time-consuming. So, it is perhaps not surprising complicated, youthat many law firms are struggling to meet their obligations for a risk-based approach. have three problems; And whether law firms are trying to meet their AML obligation properly and failing, or not trying at all, the result is the same – we one and solution! theyhave are left vulnerable open to abuse by fraudsters.

The penalties for non-compliance The penalties for law firms that do not have proper money laundering and anti-fraud processes in place are huge, and that is before you consider the devastating consequences of enabling criminals by knowingly or unknowingly cleaning their dirty cash. In the last three years, the SRA has closed down eight firms because of their links to money laundering, and 49 solicitors have been referred to the Solicitors Disciplinary Tribunal resulting in 12 strike offs, 13 suspensions and fines of more than £800,000.

How to comply

WeThe deliver AML, Sanctions & PEP checks “all-in-one” only way to ensure you are complying with the ‘risksearch, individual checks take 5 seconds, business checks take based’ approach is to do proper KYC and due diligence on all most customers, and the easiest way to do this is to use an electronic longer, 1-2 minutes! Daily monitoring of all your clientsThe for simplest, Sanction & effective way to ensure your firm is meeting all its AML, KYC and customer due diligence identification platform. PEP changes for the lifetime of your contract is included at no extra cost. obligations is to employ a system like SmartSearch. The The 5th money launderingdue directive stipulatesbiography, that electronic adverse Automatic enhanced diligence, media and out photographic system is never of date, making legacy a thing of the identification shouldincluded be used wherever it is You’d evidence is also in yourpossible basicbecause AML price. toamounts view of time and money previously pastbe andnuts savingnot huge the most reliable way to check individuals and businesses. It spent doing manual checks. our demonstration! negates the need for manual documents, which not only can With over 3,500 customers, including 1 in 4 of the top 200 law firms; our electronic platform is rapidly becoming the solution of choice and recognised as the market leader in its field. And when electronic identification within AML regulations becomes compulsory, it will become even more important in the fight against money laundering.

be difficult to obtain, but are now so easily forged that manual checks often fail to spot the fakes.

With an electronic identification solution like SmartSearch, you

onlyus need to enter the client’s name,demonstration address and date of birth Call now to book a free on:

and it will automatically cross-check the person with a number of different credit reference agencies and other databases to verify they are who they say they are.

0113 333 9835 Quality data is of paramount importance in delivering the most

Or visit us online:

“The penalties for law firms that do SMARTSEARCHUK.COM not have proper money laundering and

Martin Cheek

anti-fraud processes in place are huge.”

is Managing Director at SmartSearch

SmartSearch delivers UK and International Business checks in the UK and International Markets with inclusive Worldwide Sanction & PEP screening, Daily Monitoring, Email Alerts and Automated Enhanced Due Diligence.

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FEATURE

REGULATING THE REGULATORS The Financial Action Task Force identified Law firms as amongst those greatest at risk of being exploited by criminals to launder money. Here CS Partnership’s Sarah Keegan asks if the industry is being proactive enough to identify and report suspicious activity?

ealing with anti-money laundering and anti-risk has always mattered, but now we are being held even more accountable as a profession.

Donald Toon formerly of the National Crime Agency (NCA) called us “Professional Enablers”. The NCA says that we are turning a blind eye. The Financial Action Task Force (FATF), a global body dedicated to combating money laundering, found in 2018 after assessing the UK that there are “vulnerabilities in the legal sector”. Why? Because we move money through our client accounts (no surprises there) and because the Panama papers clearly showed firms assisting their clients to avoid paying tax. There is £100 Billion a year being laundered through the UK, and an estimated 39,000 serious crime groups. Although there are a very small number of ‘bad’ lawyers, unwittingly we are involved as a profession in the laundering of money and we are going to be held accountable. All of our regulatory bodies (The Law Society; the SRA; The CLC; CILEx) are now being held accountable by OPBAS (Office for Professional Body Anti-Money Laundering Supervision) which was set up in January 2018. OPBAS has duties and powers to ensure that our regulators meet the Money Laundering Regulations 2017. It cannot be a coincidence that The Law Society will now be inspecting firms who hold accreditation for CQS, or that the SRA’s anti-money laundering thematic review of 59 firms is now resulting in 400 firms being assessed. For the first time, our regulators are being regulated and they are stepping up their inspections of law firms as a consequence.

“For the first time, our regulators are being regulated and they are stepping up their inspections of law firms as a consequence.” Our experience is showing us that the profession isn’t ready to be held accountable just yet. Our client law firms usually have excellent central compliance teams. Despite this, here are some examples of what we have seen in the last 3 months: • No risk assessments undertaken on files or risk assessments being a tick-box exercise carried out by unqualified staff only at the beginning of a transaction and never checked by a fee earner; • No proof of funds obtained (let alone proof of wealth); • Litigation client care letters sent out on property matters; • No knowledge of the SRA and CLC digital badges to enable fee earners to verify a law firm’s website; • No Lawyer Checker search undertaken before sending money to another law firm (Lawyer Checker is the only independent verifier in this regard - its competitors rely on a law firm to selfcertify, which seems pointless since fraudsters are going to fraudulently selfcertify their fraudulent bank details).

• “We don’t need to be as compliant as the residential team, we are commercial property lawyers”; • “Most of us comply but [xx] does what he likes, and has been here so long nobody can tell him to do otherwise”; • “I have enough work to do, without adding to it with all this nonsense”. There actually does seem to be a real mismatch between a firm’s compliance policies and risk assessments, and what fee earners are understanding and adopting within their transactions. It is as though we pressed pause as individual lawyers in 2002 and have not changed our habits and behaviours since. We have found that the only way to get lawyers to change is to repeatedly train them until they beg you to stop! And to take the behaviours that you want them to undertake and write them into your software. Then you will be ready to be inspected.

And here are some examples of what we have been told by partners in the past 3 months: • “It won’t be me going to prison, it will be the COLP”; • “I know this client”; • “We take ID, so we know who our client is”;

Sarah Keegan

is Co-founder of The CS Partnership

ROADSHOWS

Navigating the future of your law firm In May 2019, Modern Law took to the road in partnership with Price Bailey Chartered Accountants to discuss the future of the law firm. Gathering together individuals from across the sector, we visited Norwich, Peterborough, London and Brighton, and gained some useful insights about the legal landscape, debating the current challenges and opportunities facing the sector. 42

ROADSHOWS

2019

is going to be another year of transformation for the legal sector, especially with the perennial challenge of Brexit facing us, firms will need to react quickly and effectively. Against that backdrop, many firms are focusing on how to better the service of their clients; with ever-increasing client expectations, game-changing new technologies and calls for more transparent services, firms and legal professionals are calling into question how they can better run their business and navigate the uncertainties of the legal sector. Throughout these roundtable sessions, we explored a range of challenges and opportunities facing the legal sector, such as business expansion, mergers and acquisitions, funding, outsourcing and strategy. We found that many people are facing the same pressures, such as staff retention and recruitment, but also experiencing a change of pace in terms of technology. Ultimately, we wanted to understand how the sector has been affected by some of the current challenges and how they are responding, on both a regional and national level. I hope you find the discussion both interesting and insightful, and come away with a few ideas to bounce around the boardroom too. Poppy Green is Co-Editor at Charlton Grant.

The Price Bailey difference. As one of the market leaders in business advice to law firms, barristersâ&#x20AC;&#x2122; chambers and consultants, we are delighted to have worked alongside Modern Law Magazine and to have been a part of the â&#x20AC;&#x153;Navigating the future of your law firmâ&#x20AC;? roundtables. Price Bailey have been providing expert business accounts, tax and planning services to the legal sector for a number of years and as such, have developed a wide range of clients who are small and mid-tier firms of lawyers. Our clients find that what makes us special is the strong personal connections and relationships we have with them. Before we work with any clients, we listen and try to gain a deep understanding of their practice: how it works, their objectives and any obstacles. This personalised approach underpins all of our services so that we can tailor the work for each client as not one practice is the same, and just like our firm, each client is unique! Whether you are struggling with the demands of innovation, how to cope with the needs and requirements of the current generations in the work place, or how to manage a retirement and succession, we hope that you find the roundtable discussions of use and helpful for your practice.

ROADSHOWS

Norwich

James Hunter touched on organic and acquisitive growth throughout the discussion, explaining that “there is the type of growth that comes from doing more with what you already have, organic growth, but if you are looking at a step-change in terms of expansion – an acquisition or a new location – you must test it against your strategy and make sure are prepared to go through that change as a business.” Salena Dawson gave her own example, explaining how she had downsized her practice by moving location in order to remain profitable. She had found it to be a worthwhile decision, and the right thing to do for her practice. While some firms around the table are planning for normal, organic growth, a step-change, as Hunter mentioned, is more of a strategic move.

How can law firms ensure they are making the best, most productive strategic decisions? Rather than looking at one particular aspect of change – typically technology, culture or legislation – as the principal lens through which to consider the future, our first roundtable discussion acknowledged the complex interplay between various dimensions of the future firm, and recognised that there is not one single template to follow. Therefore our dialogue shared the multiple challenges that firms are facing, creating a framework to visualise and consider. With issues such as Brexit on the horizon and more present problems such as staff retention and the customer base, our conversation looked at how decision-makers in practices can ensure that they are improving their competitiveness and customer service through effective performance management and organisational structure.

Ed O’Rourke agreed, explaining that organic growth can be managed quite comfortably, but a step-change requires much more detail and analysis because it has a larger risk associated with it. “However, there is an emotional reason,” said O’Rourke, “for why many companies decide not to merge and make that step, and that is to do with the merging of company cultures. It can be difficult making a change and introducing new ways of working to an already established business who may want to retain their identity.”

The topic of growth was first on the agenda, with Howard Sears addressing the group with the following questions: “Do you feel the need to expand your practice? And if so, have you got the correct structure in place?” James Knight reiterated that there will always be a different approach to growth depending on what sort and size of business you are, plus who the ownership and the decisions in the firm belong to. Liz Collyer stated that she, like others around the table, were part of a small practice and that growth is always a tricky subject to consider and manage. “We have had to adapt from a traditional law firm,” said Collyer, “and embrace new ways of working and new technologies. Sometimes we have worried about having a knee-jerk reaction that we have got to grow, but we need to remember that our decisions are driven by what we and the partners see as the right thing for the future, not necessarily in order to compete with others.” She also commented that it was becoming increasingly difficult to attract new and younger talent to the practice. Andrew Nicholson agreed, explaining that it was difficult to recruit young people because they were drawn to the lights of the big cities like London, where they could almost double their salaries. The table appeared to agree that it was a challenge to prevent talent flowing away from the area, proving that getting the right people is becoming much more of a challenge.

“It seems that levels of outsourcing are increasing and it is something more people are considering when it comes down to marketing and business development more specifically.” 44

ROADSHOWS

Attendees:

“The table appeared to agree that it was a challenge to prevent talent flowing away from the area, proving that getting the right people is becoming much more of a challenge.”

Adrian Possener

Andrew Nicholson

Bruce Faulkner

Ed O’Rourke

Greg Allen

Hannah Lawley

Partner Birketts LLP

Director Rogers & Norton

Greg Allan pointed out that, like others, his firm had sourced outside input to develop its strategy for growth. Allan explained, “our strategy involves putting partners as the foundation of the business rather than at the top, with the focus looking to our clients. In doing so we are inverting the typical pyramid structure which is often slow to develop and change given the bottlenecking which can occur. With partners as the foundation, our role is to set the conditions for our staff to excel in and engage with our clients. Success in that is delivering our growth as a firm.”

Partner Birketts LLP

Managing Partner Barker Gotelee

CEO Ashtons

Senior Associate and Corporate Solicitor Cracknell Law

The group summarised that while growth is good, there are implications that have to be coordinated and planned for. Outsourcing for success

Sears asked the table their thoughts on funding; “do we need to invest in order to grow?” The question of the bank bounced between the attendees, with them coming to the conclusion that they believe that banks find the sector to be quite conservative, and that there appears to be a lack of specialist knowledge from the banks when dealing with law firms. Although banks have specialist teams, they are not always rooted with the knowledge they need in order to advise SMEs in the legal arena.

Howard Sears (Chair)

James Hunter

James Knight

John Warren

Lindsay Little

Liz Collyer

Matt Howard

Salena Dawson

Partner Price Bailey

Sears then opened the question more widely in terms of external influence, and asked the firms around the table whether they outsourced when looking for advice and/or when planning and implementing their business strategy. O’Rourke thought that while it could be beneficial to gain some outside knowledge, “you should know your business inside out and be able to make the correct and most effective decisions as an internal team.” Hunter told us that when they start putting their strategy together, they use external influences from other sectors to gain insights about trends and potential disruptors. It seems that levels of outsourcing are increasing and it is something more people are considering when it comes down to marketing and business development more specifically. Neither avenue can be deemed right or wrong as it ultimately comes down to what is best for your business.

CEO Spire Solicitors

Partner Capron & Helliwell Solicitors

Sears ended today’s session talking about the client; “While there is so much to strategy, it always comes back to client, as they are, of course, king.” Sears explained how Price Bailey has adopted a regime of Contact Time, used to encourage employees to engage more readily and frequently with their clients, face-to-face. It was part of their strategy to drive the right behaviours within the business and improve client relationships, ultimately improving business. A useful exercise and one that the attendees around the table were interested in adopting.

Partner Price Bailey

Partner Mills & Reeve

Partner Price Bailey

Partner Capron & Helliwell Solicitors

Principal Solicitor Dawsons Law

ROADSHOWS

Peterborough

“Organic growth was the key term throughout today’s discussion, with acquisitive growth only been deemed necessary if transformation was part of the strategic plan.”

What does growth mean? Businesses have two ways of growing – organic, or internal growth; and acquisitive expansion. Organic growth internally means increasing turnover and profits by improving the productivity of your organisation. There are a number of ways to do this, whether it be by product or service innovation, training and development of your people or implementing a new recruitment strategy, but it is important to remember that this avenue is not cost-free, it requires heavy investment and research, but it could be considered the ‘safer’ growth model of the two. Buying other businesses is more risky, although albeit much faster to improve your revenue. Acquisitive growth is challenging - you need funding in place and it is crucial that you act quickly when integrating the acquisition in order to make the most of synergies. The legal sector and those within it are currently faced with the question of expansion; we are living through a period of unparalleled technological advancement, which the profession needs to keep pace with while remaining mindful of the more traditional assets associated with law firms, such as human capital. We are facing a number of regulation and legislation changes as well as the potential effects of Brexit. It is no straightforward choice, as many of our speakers at our Peterborough event concluded; so what are businesses doing about their growth and business strategy?

it increasingly difficult to encourage their younger team members to enter into a partnership, stagnating that side of the coin too. Stephen Drake believes that there has been a change in terms of young people and their ambitions. There is now a much higher emphasis on a clear life/work balance and this is shaping the way teams and roles are evolving. Tom Lewis agreed saying that they were also having talent challenges, but he explained that the solution to that is employer brand: “why would people want to come and work for us? That’s the question we need to consider and find a solution for.” It was becoming clear from both our Norwich and Peterborough sessions that talent and recruitment were on the agenda for many firms, with many firms missing out on new talent due to competition from larger practices in the capital city. The question to consider then is, how do we integrate recruitment into our strategies and how can we make law firms that are not in central locations more desirable to the younger generation? The suggestions of “apprenticeships”, “appraisal systems”, “having conversations earlier” and “targets” were all thrown into the pile, but there was no clear winner. It seems we need to go

Nick Ash’s reason for expansion was retirement: “I saw retirement looming. Without me there was no business, so I chose to expand in order to develop the income streams with a view to either sell the business on when I retired or to take an income into retirement.” Duncan Nicholson explained that they had to change their business model due to personal injury work becoming increasingly difficult due to “lock up” and funding: “Our expansion looked at other areas of the business while reducing our exposure to PI.” But while he was looking for other areas of potential, he was finding

ROADSHOWS

Attendees: Duncan Nicholson

“The question to consider then is, how do we integrate recruitment into our strategies and how can we make law firms that are not in central locations more desirable to the younger generation?”

Managing Partner Tollers LLP

Matt Howard

Nick Ash

Robert Dillarstone

Managing Partner Will and Probate Services

Stephen Drake CEO Steeles Law

Organic growth was the key term throughout today’s discussion, with acquisitive growth only been deemed necessary if transformation was part of the strategic plan. Lewis explained that his business is following an effectiveness business model rather than an efficiency model as this enables them to look at the quality of their products and services, fundamentally changing their relationships with their clients and allowing them to compete on quality rather than price. Howard Sears summed up this part of the discussion, declaring that while growth is good, there are still many challenges: “Growth needs resources and the right business model in place – we need to grow through effectiveness because we want to grow with quality.”

Partner Price Bailey

John Warren

Partner Price Bailey

back to basics and get to know our employees and what they consider to be an attractive working culture in order to get to grips with what the up and coming generation want from their working environment.

Howard Sears (Chair)

Partner Price Bailey

Managing Partner Greenwoods GRM LLP

Tom Lewis COO LGSS Law

phase, and while they have grown rapidly, they are still working on getting the foundations right in terms of new systems and processes. Lewis explained that when they work on their strategy, they bring in people who have experience with growth – communication teams, marketers and client services – because they have the experience of growing a brand and growing a client relationship, and that needs to be reflected in a business strategy: “Strategy is a bit like skiing downhill – you have the shared goal of getting to the bottom, what you don’t know is every twist and turn on the way, so you need as many experienced bodies around that board room table helping you navigate it.”

What is your strategic business plan?

When asked the question whether the firms around the table had a strategic business plan, there were a variety of answers, from a five year plan to a ninety day plan. Drake stated that his team have more to do. The focus had been on short term strategic planning post-recession but the board are now focusing on the longer term too. Nicholson’s business has a three year strategic plan in place: “Our plan guides us but it is not so ridged that we couldn’t change our course if an opportunity cropped up. Our plan is all about enabling us to expand our business and give us a more balanced model.” Robert Dillarstone’s plan looks ahead to the future of 2025, but he suggested that “people overestimate how much they are capable of achieving in one year, but underestimate how much they are capable of achieving in five years.” Lewis agreed, quoting Mike Tyson: “Everyone has a plan until they get punched in the face.” Lewis is currently in a start-up

Brexit

The conversation briefly touched on the subject of Brexit. Sears asked the group for their thoughts, and what they believed would be the impact on practices in the UK. Dillarstone said, that when compared to other sectors, we are quite fortunate as we will be more protected. While Nicholson admitted that the residential property side has slowed slightly, there hasn’t been much change. He believes the main effect will be client’s appetite for business, but as we all know, we are just waiting to see what happens at the moment.

ROADSHOWS

London

Equity partnerships – the percentage interest that a partner has in partnership assets. In other words, an equity partnership represents the partner’s ownership interest in the business. Equity partnerships are not always the same between firms, the experience of holding equity as part of a small number of partners in a small to mid-tier firm will be vastly different to an equity position as one of hundreds of partners in a large international firm with all the equity structure. There are no right or wrong ways to determine how profits are divided, just different ways. Today’s session in London touched on the subject, with the general view from around the table hoping that as equity diminishes as partners move into retirement and part-time roles, that younger partners will take it over, feeding into the organic growth model that these practices are implementing. Moving into an equity can be a fantastic experience, but as an equity partner you are expected to share in both the pain and gain, and take the time to understand the firm, its values, financial state and have realistic expectations. Are the younger generation interested in that pathway, or would they prefer a role that fits their idea of a balance life/work life?

that firms wanted to encourage and motivate their people, and this came through in a variety of ways: flexible working, equity partnerships, bonuses, management positions personal development plans. We then moved on to strategy and strategic business plans – where a practice wants to go over a long period of time and how it is going to get there. Matthew Strain said they put a strategy plan in place, but it needs constant management as implementing it day to day is not easy. Stephen Goddard agreed, saying that while it can be hard to follow a strategic plan, it is imperative that a business has something to mark itself against in terms of achievements: “you need to know your direction of travel otherwise you tend to be too reactive and go off-piste.” Having a plan can help to focus a firm’s energies and outlining the key components of that strategy can be a good place to start. Ashton Hunt put new targets for 2020 into his practice’s strategy, which he found provoked more connected thinking between employees within the business and engaged people with a vision of the future. Hunt believes that consistency is the key when it comes to strategy planning: “having a consistent narrative that all employees are aware of really helps to hone the message and encourage a joined up approach, however, no strategy is delivered in a straight line, you have to be adaptable to opportunities, challenges and people.”

Talking of younger partners, Howard Sears, asked the table whether they had talent coming through the firm that would be the succession, and how they plan to attract and retain that talent? Dinesh Raja told the group that he uses an external consultant who speaks to all employees individually in order to understand their own personal goals and hopes for career progression, he then plans with the management team, how they can implement those aspirations into their structure and training. David Ingram also gave an example of his own practice, and how each partner, as well as their legal role, has a role to play in the practice that assists the firm in a particular capacity, such as HR or business development, as he feels that it enables partners to feel more invested and responsible for the management of the firm. The general consensus was

“Having a plan can help to focus a firm’s energies and outlining the key components of that strategy can be a good place to start.” 48

ROADSHOWS

Attendees:

“When considering your KPIs, it was suggested that they should reflect the firm’s strategy, they should be seen as the key to the firm’s success, and they should be quantifiable, but also specific to the practice.”

Ashton Hunt

Chris Godsave

Clayton Miller

Daphne Hemingway

David Ingram

Denise Cullum

Dinesh Raja

Howard Sears (Chair)

Managing Director Tees Solicitors

Partner Ketley Miller Joels

Partner Ingram Winter Green LLP

“When to extract money from the practice, and what is the safest and best way to do this?” was next on the list for our attendees. Practices extract money in all kinds of ways depending on their structure, either salaries/fees, dividends, pension contributions or benefits-in-kind. If your business operates as a partnership or as a sole trader, the profits it makes are what you are taxed on, subject to any expenses which are not deductible for tax purposes. When you work through a limited company, the total tax paid by the company and the shareholders will depend on the methods used to extract profits from the company and the amount withdrawn. Ingram explained that they are paid their monthly draw and then he sees what cash there is available; “don’t draw against paper profits but only the money that is available. It may be traditional and old school but it works.”

Managing Partner Bowling & Co.

What are the key performance indicators (KPIs) of a law firm? “We all have different KPIs depending on our responsibilities,” said Strain. Sears said, “We look at pipeline because that allows us to see whether the business is on track”. Daily productivity and time were all important KPIs for those around the table. These indicators are important sources of information for the management of the firm and its staff, and while it can be a challenge to identify them, they are critical to the overall success of the business. When considering your KPIs, it was suggested that they should reflect the firm’s strategy, they should be seen as the key to the firm’s success, and they should be quantifiable, but also specific to the practice.

Partner Price Bailey

Matthew Strain

Stephen Goddard

Steven Darlington

Head of Business Development & Marketing Woodfines Solicitors

Partner Price Bailey

Matt Howard

Partner Price Bailey

The impact of technology on practices was something that ran throughout the conversation on the day, with Raja stating that technology is going to have a profound effect on all professions, and if we don’t catch up, we will get caught out. Technology is pushing practices is all sorts of new directions, and while change can be unsettling, Chris Godsave reminded us that the next generation, our customers, expect and respect technology and we need to show understanding of this new, innovative environment and step forward towards the law firm of the future.

Partner Price Bailey

Senior Partner Strain Keville

Head of Finance Seddons Solicitors

ROADSHOWS

Brighton

“As each speaker addressed the question, it became clear that every business has their own, unique way of devising a strategy.”

“It is always a perceived wisdom that you should grow,” said Dean Orgill at our final session in Brighton, “but should you? Expansion should only be on the cards if it is going to add value to the practice.” As we have learnt from the previous roundtables, expansion is good, both organic and acquisitive, but they do come with their challenges. For example, Gilva Tisshaw explains how being a part of a much smaller firm, she has to consider the overheads of the practice: “We are more vulnerable as a smaller firm. For example, if a staff member leaves it could automatically reduce the profit of the firm by a fifth. We need to be savvy and get to grips with our local market and understand how it can support us in terms of work and vice versa.”

driven too, and many of the guests around the table agreed. Sears concluded this part of the session, summarising that there is an appetite for mergers and acquisitions if the right firm is available at the right time, but it is the post-implementation deals that are found to be the real issues.

Sears questioned the group about what challenges they have found in acquisitions. Miles Brown felt that the biggest challenge was cultural ethos: “in our first acquisition, we were culturally very far apart and unfortunately it took us a while to get it right. But one of the great things about geographic expansion,” said Brown, “is the ability to recruit from a wider pool of talented professionals, because there are more options available in terms of location, with our agile working culture enhancing this further.” Sears agreed that geographical expansion allowed for a wider talent search, but he found that the challenge was keeping the talent. Brown agreed, stating that “millennials are much more discerning about employer value propositions and fit with their individual lifestyle and tend to move around far more frequently than Baby Boomers/ Gen Xers.” Orgill asked the table whether they thought people, specifically millennials, are still interested in partnerships. Law is a tough profession to enter in to, but from the discussion around the table, skills sets are changing, and recruiters are wanting individuals who have skills in sales and that are client

The next question on the table was banks; “what are your experiences of banks?” said Sears. The noises around the table were relatively positive, with the majority of people finding their banking experiences to be efficient and helpful, however, it became clear that there are certain banks that understand law firms better than others, and it really depends on who you are dealing with. Dino Skinner doesn’t believe banks have much of an appetite for law firms at the moment, so solicitors who want to retain, or extend, their borrowing may have to work harder than usual if they expect a bank to fund them in the future. From the conversation today, it appears that the banks’ focus is to continue to offer support and advice to practices.

ROADSHOWS

Attendees:

“Law is a tough profession to enter in to, but from the discussion around the table, skills sets are changing, and recruiters are wanting individuals who have skills in sales and that are client driven too, and many of the guests around the table agreed.”

Chris Godsave

Dean Orgill

Partner Price Bailey

Partner Mayo Wynne Baxter

Dino Skinner

Gilva Tisshaw

Howard Sears (Chair)

James Chadburn

Manging Partner Healys

Partner Price Bailey

Should you have a strategy in place?

“What are your thoughts on having a strategic business plan?” asked Sears. Skinner explained that his strategy meetings are all about revisiting what they already have in place and re-evaluating their direction of business. Orgill and his team have decided to use outside help when organising their strategy as he believes it is useful to have “someone on the outside challenging us and making us think outside of the box.” As each speaker addressed the question, it became clear that every business has their own, unique way of devising a strategy, from Tisshaw writing her own, to the partners at Skinner’s practice presenting a number of draft plans, to Brown suggesting team away days. It is about getting the right people from the practice to act collaboratively to create a strategy. Individuals were interested in what an outside voice could offer, with Brown explaining that he found an outside voice to be an insightful experience that “brought shape and conclusion to the discussion while challenging us to address subjects that were particularly difficult, such as productivity.” Brown also put forward a useful suggestion of when discussing the strategy plan with staff members to introduce the app Slido, which enables employees to ask anonymous questions during a discussion, helping them to participate and feel involved in the decision making. Orgill agreed, suggesting that “your strategy plan should sit hand in hand with your culture, something that your people can buy into so it is important your people are aware and involved as much as possible.”

Solicitor Tisshaws Ltd

Partner Dean Wilson Solicitors LLP

Miles Brown

CEO Coffin Mew

becoming increasingly obsessed with millennials and forgetting about older employees who are a committed and highly valued segment of the workforce; “we need to make sure that we accommodate everyone and cater to different lifestyles and needs.” Chris Godsave agreed, saying that lifestyle is a big motivating factor for many workers and this needs to be utilised more. James Chadburn has introduced a lifestyle hour every week for every employee, which has become very popular, because it demonstrates that they care about their people and value their personal and professional needs. The issue of flexible and remote working was next on the cards, with many attendees agreeing that it is important to enable flexible working but it cannot be abused. Sears introduced their concept of Smart Working, allowing employees to be flexible with their working hours, but he found that a lot of people still like coming into the office because it is an enjoyable environment where people can interact socially and build on relationships with peers and clients.

Staff expectations

“Talent Management is a big part of our strategy,” explained Sears, “we want our teams to be high performing whilst understanding our cultural ethos, and we work hard with our employees to employ mechanisms that help them maximise both of those elements.” Surveys and questionnaires were the tool of choice around the table for employers to get to know their employees and their wants and needs, but instead of gathering data, should we be having face to face conversations? Brown made the point that the legal sector is

Today’s discussion brought forward lots of new ideas and showcased a variety of firms and their different styles of business and talent management, giving some great examples that others felt they could take forward and employ in their own practices.

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TECH

Risk: it is everywhere

– including in your IT systems Our resident Tech columnist Charles Christian writes…

hen it comes to security and risk management, most legal services providers tend to think in terms of dramatic occurrences… calamities even. What happens if our biggest client drops us in favour of another law firm? What happens if one of our major clients goes bust and leaves with a large amount of unpaid fees? What happens if one of our partners is found to have had their fingers in the till and defrauded our clients of millions of pounds? What happens if we get hacked by the Chinese or the Russians? What happens if the firm loses a major professional negligence action and the partnership and former partners are found historically liable for an enormous bill in terms of damages and costs? What happens if we fall foul of a cybersecurity event… such as a successful ‘phishing’ exploit and have our bank accounts emptied, or a ‘ransomware’ attack that locks us out of our own systems? What happens if the office burns down in a fire or is blown up in a terrorist attack? All these things have happened to law firms in the UK (as well as practices around the world) in recent years – although fortunately not all at the same time nor to the same firm – and they will continue to happen. For example, ‘state sponsored’ hacking is on the increase with advanced cyber attack methodologies being rolled out at a faster rate than cybersecurity companies can cope with. Welcome to legal practice in the digital age! But this is all very much at the dramatic end of the risk scale – and you readers are no doubt thinking to yourselves that it will probably not happen to most firms, especially those at the smaller, High Street end of the legal market. Well it’s a nice thought although it only takes one muppet to click on a dodgy link in a phishing email for catastrophe to strike. (Cybersecurity awareness training should be on every firm’s agenda.) However, what I’d like to focus on is a far less exciting, in fact a downright mundane form of risk that relates to our increased reliance upon IT systems.

“Cybersecurity awareness training should be on every firm’s agenda… it only takes one muppet to click on a dodgy link in a phishing email for catastrophe to strike..”

While it is certainly true that over the past 30 years law office technology has become far more resilient and reliable, it has also become far more ubiquitous, with the result we are all increasingly more dependent upon IT. Thirty years ago, if the franking machine broke down, you licked stamps and still got the post out on an evening. Today, if the email system goes down for just ten minutes, you’ll have partners calling for someone’s head to served up to them on a plate. And it’s not just core systems, such as practice management/ accounts, email, word-processing, document and case management, even the systems for scheduling appointments and booking meeting rooms are reliant on tech. It’s led to a concept called “keeping the lights on” – ensuring all the stuff we take for granted in a modern office environment keeps running. Never mind all the dramatic stuff that can expose a firm to risk, how will it cope if there is a power-cut, when not just the lights go out but also so does every piece of technology? Or when the guy (or gal) who knows everything about the network because they’ve been with the firm since forever falls under the proverbial bus? Yes, focus on the big dramatic dangers out there but in your risk management/disaster recovery contingency planning, do not overlook the smaller mundane risks that could still bring a firm grinding to a halt.

Charles Christian

is the Founder of the Legal IT Insider newsletter and talks about tech and geek stuff on Twitter at @UrbanFantasist

TECH

GOING UNDERGROUND

IMAGE(S): Rachael Hodge; fracking/mining-type graphic/image??

Environmental risks to property are constantly evolving. Here, Terrafirma’s Rachael Hodge gives her thoughts on conveyancing risks.

ontaminated land, flood and ground stability have all had their moment in the spotlight over the past twenty years. The future paints a different picture as hazards such as wildfires, coastal erosion, radon and fracking are starting to break their way into the headlines. As these risks develop, so does public interest, and potential purchasers look to their conveyancer for more information about how these hazards could affect their new homes. In a time where information is readily available online, conveyancers are increasingly expected to be experts across a broad variety of subjects including geology, environmental science and infrastructure, and also be clairvoyant as to what the future could hold. There has always been debate within conveyancing around whether you should give the client the option to choose which searches they would like, or dictate to them which you will be ordering as a policy of the practice. From a moral standpoint, does the client understand the risks well enough to make an informed decision about which searches they need and how their enjoyment of the property could be affected? On the flip side, as a law firm are you protecting your liability and minimising the risk of a PII claim?

At Terrafirma we specialise in risks associated with the ground, and for the past four years we have focussed on outreach and education to help property professionals better understand the ground. Ground movement due to past coal mining has been viewed as a risk within conveyancing for a long time, with the CON29M a staple for all properties within a coal mining reporting zone. With over 173,000 recorded coal mine entries in England and Wales, this is a justified hazard that purchasers and lenders rightly want to know about as part of the due diligence process. However, other types of mining have fallen under the radar, despite the fact there are over 210,000 recorded non-coal mine shafts that pose a bigger liability for homeowners and lenders. This is because damage from coal mining can be covered under the Coal Mining Subsidence Act, therefore not posing a financial liability to the purchaser or lender.

movement from past mineral extraction (such as chalk, gypsum and clay) can leave the homeowner with a significant financial and physical liability. As technology advances, our access to data and ability to model hazards greatly improves. Just last year, Terrafirma became the first ever company to commercialise ground movement data from the INSAR Sentinel 1 Satellite, and model it in a way that can validate sinkholes and move towards evidencebased risk modelling rather than a ‘best guess’ from historical data. One of our aims is to move the liability away from law firms and transfer it to Terrafirma as experts for ground hazards. So, whether it’s coal, chalk, landslides, fracking, or mines and minerals, Terrafirma can arrange a free of charge Ground Hazard Risk Audit for law firms.

However, for any other form of mineral other than coal, any financial liability following ground movement or collapse likely sits with the homeowner. Often, home insurance will only cover ground movement or collapse if it affects the structural integrity of the property, so

“As environmental ground risks develop, potential purchasers look to their conveyancer for more information about how hazards could affect their new homes.”

Rachael Hodge

is Senior Commercial Manager at Terrafirma

TECH

Confused about GDPR - don’t be! Keepabl’s Robert Baugh reviews the statistics on the Legal profession and GDPR, how the industry’s leaving itself open to data risk, and easy remediation steps.

DPR is now one year old, and with it the legal obligation to notify certain data breaches to the UK Information Commissioner’s Office within just 72 hours. How is Law doing as an industry? Well, not so good, judging by recent statistics. Aon’s December 2018 survey of UK SMEs found that 40% of the Legal industry is confused by GDPR and 68% of UK SMEs were unaware of the need to notify certain breaches to the UK ICO. This presents a real risk to law firms’ revenues and their client base, given the sensitive nature of client information processed by firms. More realistic risks for firms than fines perhaps, include not being able to answer the vendor due diligence that clients carry out, so work is lost, and the impact if a client’s data is put at risk by a breach. Speaking of GDPR fines, how does your firm measure up on these examples? • September 2018: the Austrian DPA fines a sports betting café €5,280 on its use of CCTV. It covered public areas, they kept no logs, they retained images without justification, and they had inadequate signs. • November 2018: a German DPA fines a social media organisation €20,000 after the organisation itself notified them of a breach. The DPA found that passwords were stored in plain text. The ‘low’ fine was due to the organisation’s exemplary co-operation and response, and the DPA estimating that, including the fine and remediation costs, the organisation’s total costs were more than €100,000.

“Many law firms are confused about GDPR. This puts client data, and even firms themselves, at risk.” • February 2019: Malta’s DPA fines the Land Authority €5,000 after investigating a breach (initially reported by a newspaper) as its website lacked the necessary technical and organisational measures to ensure the security of processing. • March 2019: the Danish DPA recommends a fine of £140,000 against a taxi company for retaining phone numbers for 5 years with no justification (having deleted most personal data after 2 years). The German social media example is a good reminder that the fines for a breach are likely to be dwarfed by other costs. There, the remediation costs (encrypting passwords, implementing secure backup, etc) overshadowed the fine by a ratio of 4 to 1. These fines may be well below GDPR’s maximums, but a £100,000 total cost will impact most law firms. You’ll also see the fines go beyond security, into privacy governance failures. So, what can firms do? The immediate, easy step is to encrypt data at rest (in the memory of phones, laptops, servers etc.) and in transit (e.g. by using HTTPS not HTTP). It’s very easy to implement, with most devices and services offering this by default or built in as an option. Encryption addresses the risk to your clients, and it addresses your risk as a firm. And many encryption services allow you to remote wipe lost devices. Win, win.

Next you do need to review (or probably implement) your Information Security Governance and Privacy Governance. For security, you can start by working towards Cyber Essentials. For privacy governance, plenty of providers (including Keepabl) offer a SaaS solution. You’ll need to implement policies and procedures for each, train on them and make sure you follow them. It may sound a lot, but so does £100,000. And there’s no real choice: GDPR requires you take ‘appropriate technical and organisational measures to ensure a level of security appropriate to the risk’. There are plenty of Managed Service Providers who can look after a law firm’s security needs and many can go beyond, and help with GDPR too, bringing in specialist technology without breaking the bank.

Robert Baugh

is CEO at Keepabl

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TECH

Source of Funds – let technology remove the risk Being sure of the origin of client money isn’t straightforward. Known as ‘Source of Funds’ checks, lawyers have come under increasing scrutiny by regulators and Government. Thirdfort’s Olly Thornton-Berry explains how to streamline the process.

aw firms must have detailed risk procedures to enable them to adequately spot those clients attempting to legitimise proceeds of criminal activity (money laundering) through high value purchases such as property. For lawyers, completing Source of Funds checks is made increasingly complex and time consuming by clients’ lack of understanding of the process. However, recent technological developments offer a way to streamline this admin while giving lawyers more reliable data on where their clients’ money comes from. Regulators insisting that law firms take a ‘Risk Based Approach’ to clients’ Source of Funds throws up sizeable challenges around what is and what is not an acceptable ‘Risk Based Procedure’. Without specific guidelines, firms design and implement very different risk policies. Most firms, predictably, have drafted their own ‘Source of Funds questionnaire’ for clients and request at least 6 months’ banks statements. This is a time-consuming and inefficient process with back and forth form filling that is tedious for both client and lawyer. Especially in the past 18 months (following the implementation of the Fourth EU Money Laundering Directive in June ‘17), firms have started to feel the heat of the added work of compliance due to these stricter requirements. The SRA and CLC have stepped up their rhetoric against firms that do not adopt robust risk procedures. The SRA announced in March they would be writing to 400 firms asking them to demonstrate their

compliance with Money Laundering Regulations while CEO, Paul Philip said, “They can expect us to be robust in our enforcement action where solicitors firms are involved in money laundering or are not complying with the relevant legislation”. So far, more than 40 solicitors have been struck off, suspended or have come off the roll following allegations relating to money laundering regulations. Legal activities particularly at risk are those such as Conveyancing, which involve high-value and high-volume transactions with clients. Conveyancing involves multiple parties to complete a transaction, including mortgage brokers, estate agents, banks and lawyers. While each has their own regulatory framework to operate within, lawyers undoubtedly shoulder most of the liability. Therefore, it is no surprise that preventative procedures and risk assessments have become so complex and onerous – with long client questionnaires and requests for original bank statements. Although relying on client provision of information and bank statements may be considered sufficient according to regulatory standards, how sure can lawyers be that documents provided are authentic? Faking a bank statement is remarkably straightforward and difficult for the untrained eye to pick up (have a look at www.banknovelties.net).

Often clients underappreciate lawyers’ regulatory responsibility and as a result do not put in the required effort to provide the necessary information and evidence first time around. This leads to back and forth correspondence that adds unnecessary days to the transaction. Technology can help streamline and improve the reliability of the process. With new bank linking technology, clients of lawyers can, with the click of a button, give read only access to digital bank statements. Within a secure encrypted mobile app, the client can give permission to read only access to statement data directly from the bank. This is far more secure than having to rely on printed bank statements. Furthermore, clients can enter information in a far more dynamic format through an app – with data fields displayed that are relevant to particular circumstances. This data can then be automatically matched with what’s in the digital bank statements to quickly and reliably ascertain a risk score for each client, saving the lawyer time. While this technology is early stage, it has already achieved real time savings and enhanced lawyer and client experience during the client onboarding process. Visit www.thirdfort.com to learn more.

Part of the challenge is clients understanding why lawyers need to request so much more information relating to Source of Funds compared with pre the ML Fourth Directive.

“…recent technological developments offer a way to streamline… Source of Funds checks… while giving lawyers more reliable data on where their clients’ money comes from.”

Olly Thornton-Berry is a Director of Thirdfort

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PERSONAL INJURY

More questions than answers! Speed Medical’s Susan Henry believes there are still more questions than answers as the deadline looms for the implementation of the ‘whiplash’ reforms.

the information returned should be presented. Currently only contact details are returned, but should more information about the provider and their service offering be provided? I believe that these claimants, if given the choice and little information, will opt for a DME, even though MROs will have more expert options, as well as availability, coverage and higher levels of customer service and governance. MROs are recognisable within the business to business legal sector but are relatively unknown to the wider general public. There are many options available to MedCo such as satisfaction surveys, service achievements, compliance ratings, which could easily be displayed as a quick overview, with a more in-depth explanation displayed for the public who wish to read the finer details.

hen I started to think about this article, my overwhelming thought was that it would be easier to write about everything we don’t know, rather what we do know about The Civil Liability Bill reforms relating to the provision of medical reports in Road Traffic Accident-related personal injury claims. The original implementation date was 20 April 2019 but, even after an extension to April 2020, there are still so many questions still to be answered in the remaining relatively short lead up to implementation. Yes, there are things we do know about the reforms, such as the tariff scheme for whiplash injuries, and the ban on pre-medical offers, but even these have some unknown outcomes at this stage. For instance, will the ‘whiplash’ reforms bring the perceived ‘claims culture’ under control? And will the pre-med ban reduce fraudulent claims? Such claims have dropped significantly over recent years and with this next tranche of changes, insurers will be checking the detail to see if that trend is likely to continue.

It seems the devil is in the detail to a large extent, but it’s the lack of detail about how the reforms will work in practice that is causing uncertainty. Not just from how medical reporting companies, like Speed Medical, will respond but also how solicitors and insurers will adapt and operate.

Regarding non-whiplash claims, if MedCo is extended to cover all types of medical reports for RTA-related personal injury claims, should other types of medical expert be added? As this is limited to claims under £5,000, I believe that the initial report should be completed by a GP, and any alternative specialists should be recommended within this report. The question of how an unrepresented claimant would decide on the type of expert required if alternative medical experts were available would also need great consideration in order to avoid unnecessary costs.

We already hear that solicitors are deciding whether to stay in the small claims arena, and recent press coverage shows that a high percentage are making redundancies or moving out of the sector altogether. Insurers currently benefit from solicitors doing a lot of the work upfront to ensure that the claim is sound and valid. So, will insurers suddenly find themselves inundated? We hear there are plans for a call centre in Milton Keynes, funded by insurers, but call handlers are unlikely to be legally trained and simply there to help callers find their way around the portal.

But if a major point of these reforms is to put the customer at the heart of the matter, I’m not sure how they’re going to find their way around the new system, unless more is done to educate the public about the options available and how best to make a decision – and so far there’s no indication as to how and when that education might happen.

So, despite the extension to the timetable, with less than 12 months to go remaining, there is an urgent need to address the detail required not only to arrive at desirable outcomes for all concerned – but also to ensure it’s right on the night!

The implications of extending the current MedCo search system to unrepresented claimants also throws up questions about how

“It seems the devil is in the detail to a large extent, but it’s the lack of detail about how the reforms will work in practice that is causing uncertainty.”

Susan Henry

is Operations Director at Speed Medical

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PERSONAL INJURY

Fighting for the rights of service personnel, veterans and their families Hilary Meredith Solicitors acts for armed forces service personnel, veterans and their families. Over the last 12 months, our team has secured a number of life-changing settlements for service personnel and veterans. £7.2 million for a Navy pilot Hilary Meredith Solicitors secured a settlement worth almost £7.2 million on behalf of a Navy pilot who suffered a severe brain injury, together with multiple fractures and internal injuries during the course of his duties. Although he has made a remarkably good physical recovery, our client has been left with major problems of fatigue, cognitive impairments and behavioural issues. The settlement provides for our client to apply for further damages should he develop post-traumatic epilepsy during his lifetime as a consequence of his head injury. In addition, he will retain an Armed Forces Compensation Scheme award for his injuries, together with index-linked Guaranteed Income Payments in respect of his future loss of earnings and pension. Terrifying mid-air ordeal A long-serving soldier who was convinced he was going to die after a terrifying midair ordeal has settled his claim against the Ministry of Defence for hundreds of thousands of pounds. Soldier B, who joined the Army in 2002, was one of 187 passengers in a RAF Voyager aircraft flying from RAF Brize Norton to Camp Bastion in Afghanistan. At 33,000ft, the plane suddenly plummeted towards the ground, subjecting the passengers to a terrifying ordeal. Following an admission of liability, Hilary Meredith Solicitors issued court proceedings on Soldier’s B behalf and the Ministry of Defence has now settled the claim. High value hearing loss claim A 29-year-old soldier has secured an out of court settlement of £420,000 as a result of damage to his hearing which resulted in him having to give up his career in the army.

“The settlement provides for our client to apply for further damages should he develop post-traumatic epilepsy during his lifetime as a consequence of his head injury.” The soldier, a Private, was on a training exercise in Kenya on the 30 October 2013 when pyrotechnics were exploded very close to him without giving him sufficient warning to put on his hearing protection. The soldier’s hearing deteriorated to such a degree that he had to be medically discharged in March 2015. The Army was a career he loved and one in which he aimed to do well in by progressing up the ranks. The soldier also developed tinnitus which is debilitating and impacted on his quality of life. Due to his hearing loss and tinnitus, he now avoids places where he is surrounded by noise and has taken more isolated work, which has meant that his earnings have significantly dropped. One of the highest ever NFCI settlements Hilary Meredith Solicitors recently secured one of the highest ever settlements in a Non-Freezing Cold Injury (NFCI) claim.

Ongoing matters Hilary Meredith Solicitors is currently acting on a range of ground-breaking cases. Our team is acting for hundreds of service personnel and veterans who were prescribed controversial anti-malaria drug Lariam and have suffered mental health issues and neuropsychiatric side-effects as a result. In a landmark case against the Ministry of Defence, NHS and police, Hilary Meredith Solicitors is also representing the widow of a war veteran who committed suicide. Jo Jukes says her husband Dave’s death could have been prevented if there was better communication between the agencies responsible for his mental health. Ms Jukes is the first widow to plan legal action following the suicide of a veteran with post-traumatic stress disorder.

In December 2012, Soldier D, aged 22, attended an exercise at a location in England. The exercise was to last five days with those attending sleeping outdoors in tents. The temperature at the time was very cold, falling below freezing. Taking into account the different aspects of the claim, including general damages and special damages, Soldier D’s claim settled for a figure in excess of £800,000.

Hilary Meredith

is CEO at Hilary Meredith Solicitors

PERSONAL INJURY

Levelling the PI claims playing field Nicola Dickinson, of Thorneycroft Solicitors, explains the pitfalls facing Claimants following changes in the Civil Liability Act 2018 which will apply to all road traffic accident claims.

nyone suffering a soft tissue injury to the neck, back or shoulder worth less than £5,000.00 may need to act for themselves after 1 April 2020. Injuries that last less than two years will be compensated by set significantly lower Tariffed sums. Ten months to go and the public seem unaware of this significant change to their legal rights.

Claimants may need to fund disbursements. Compensators may fund medical reports where liability is accepted early on. If not, a ban on pre-medical offers hinders, not helps, injured people where they cannot afford the report. If compensators simply adopt a policy of denying fault and refusing to fund reports, then the case may be lost.

Past changes to funding models still kept Solicitors in the process to explain these to clients. Sadly, these reforms mean this is unlikely. Economic realities mean there will be fewer Solicitors to help or advise in this area. Injured people will face the burden of trying to act for themselves. Sadly, many will not have the ability, time or confidence to do so.

Claimants will need to understand medical reports and treatment needs, and the need for follow up reports and how to value their injuries. Claimants will have to learn which financial losses can be claimed. Further, how to present and evidence them. Overvaluing any head of claim can lead to suggestions of dishonesty and/or Fundamental Dishonesty merely because they don’t know or understand the rules of evidence.

Claimants will need to log details of their claim on the Portal. They will need to understand this is an adversarial process as Defendants will still try to avoid or minimise payments made. I make assumptions on the Portal as no detail is available on its workings. Claimants will need to carefully word the form to explain why they say the Defendant is/was at fault. If not, they may innocently say something then used by the experienced Defendant claims handler which leads to an unfair denial of liability. At this point claims may simply be abandoned for a mistaken belief the denial is fair.

If the Claimant has not yet fallen at any of these hurdles and chooses to litigate, they have to fund Court fees. Litigants in person no longer have the sympathy of the Court. So, with Defences to understand and directions to comply with many may not get to final hearing without being struck out. Claimants fear Court at the best of times and unrepresented it will be an unequal fight with the fear of being found dishonest and/or costs penalties to pay. I imagine Defendant letters to them may be a touch frightening.

Claimants may have to pay for legal advice before they can even log their claims where complexities in the process exist. To name a few, where the Defendant left the scene and/or the Defendant vehicle was stolen or cloned and/or the Defendant Insurer is insolvent. Such complexities could lead to an abandonment of the claim.

Claimants will be discouraged at every step. Whilst the legal right exists, without legal support it is an ideal and not a reality. Injured people will find it harder to recover damages. Further, the damages they will receive may not justify the efforts. It is foreseeable that less honest Claimants with little to lose may be the most tenacious.

Claimants will need to know if a case is suitable for this Portal; a near impossible task for Claimants where there is no medical evidence and no knowledge of valuing claims. It is possible that their complex cases under settle on first medical reports because of low offers, appropriate treatment may not be offered. Further, if help was sought, Solicitors may not assist later if costs are limited because it was placed on the Portal in line with ‘Qader v Esure’.

Those that do succeed might consider applying for a career in law as they will have learnt near enough to get part way through a Training Contract!

“Injured people will face the burden of trying to act for themselves. Sadly, many will not have the ability, time or confidence to do so.”

Nicola Dickinson

is Director of Volume Legal Services and Legal Operations at Thorneycroft Solicitors

PERSONAL INJURY

The benefits of residential rehabilitation Residential rehabilitation is a service Dorset Orthopaedic has offered for several years, giving patients a chance to make major progress in their recovery, attaining specific goals in a short period of time. It’s a popular choice for solicitors and case managers who are keen to see their clients improve as soon as possible, and as part of the package, Dorset Orthopaedic’s experts not only offer the specialised one-to-one care but also a joint initial consultation with new clients together with their case manager and/or family or friend, a full expert witness report, an initial needs assessment with a letter of recommendations for future care. Patients can come to either our Southern Clinic in Ringwood, or our Midlands clinic in Burton-on-Trent, for a specifically tailored programme, with the number of hours per day set according to patient tolerance. They can be repeated at intervals over several months depending on patient complexity. Mary Tebb, senior physiotherapist at Dorset Orthopaedic’s Southern Clinic, said: “Overall, our patients make significant improvements in their skill levels and confidence and often, at the end of their week we’re able to relay their outcome measures and our recommendations to their case managers and solicitors.” To give an example of a patient’s typical week, “Sharon” has shared her experience. She came to the clinic following an elective above-knee amputation, after a knee replacement failed. After an initial needs assessment report was prepared for her solicitor, where suggestions were made on improvements to her prosthesis together with ideas on support and rehabilitation, she had a successful two-week trial of an Ottobock Genium microprocessor knee, after which she purchased it with an interim payment from her solicitor.

“At clinic she… practiced her entrance to a forthcoming appointment with a consultant who’d told her she would not be able to walk again if she elected an amputation.” Her residential rehabilitation began with a physiotherapy and prosthetic review whereby both subjective and objective outcome measures were taken and minor adjustments were made to the lining of the socket. Initial rehabilitation comprised a series of balance, lower and upper limb exercises. In the following days, she visited a garden centre and walked without a crutch, tried adaptive cycling and walking in the New Forest, practiced slopes and sand at a local beach, went swimming to practice getting in and out of the water, and tackled escalators and big crowds at a popular shopping centre.

felt she could do independently. All outcome measures were repeated and a prosthetic review was also undertaken, which was passed on to Sharon’s case manager, as well as recommendations that she be prescribed a waterproof Genium X3 for future activities. For more information on Dorset Orthopaedic’s Residential Rehab service, e-mail enquiries@dorset-ortho.com or call 01425 481743 or 01283 227893

At clinic, she practiced a number of exercises and relaxation techniques, and also practiced her entrance to a forthcoming appointment with a consultant who’d told her she would not be able to walk again if she elected an amputation. On the final day, she went through a variety of gym ball exercises with her physiotherapist and then a home exercise programme featuring strength training two to three days a week, balance activities most days and cardio-vascular activities, which we

Mary Tebb

is a Senior Physiotherapist at Dorset Orthopaedic with more than 25 years’ experience, including in the USA and New Zealand

PERSONAL INJURY

The litigation process matters to client outcomes Consultant psychiatrist Dr Paul McLaren, a member of the Expert in Mind panel, highlights the key role of psychological processes in personal injury cases.

he relationship between soma and psyche is as complex in personal injury as in medical practice and is susceptible to the process of litigation. The client’s experience of the personal injury litigation process matters. That is not just about timing and expediting an endpoint but creating an experience for the client which makes them feel that they are at the centre of the process and that their suffering is understood. Understanding a client’s distress and disability takes time and expertise whatever the setting. Psychological factors influence the relationship between the physical insult, the symptoms the client experiences, their explanation of their condition and the impact that their symptoms have on their functioning and quality of life. Those processes while widely recognised in medical practice are still poorly understood. We do know from prospective studies that there is not a linear relationship between the severity of the accident and the client’s outcome. Personal injury lawyers for the claimant in historic abuse cases may find that they are the first professionals to have taken a detailed history of the injury from the client. How and when that is done may have a significant impact on the client’s outcome. The client may have struggled with shame before they came forward

“Understanding a client’s distress and disability takes time and expertise whatever the setting.” or have had prior experience of their complaints being dismissed or ignored. We know that when symptoms persist in cases with proven physical injury that psychological factors are often in play and influence functional outcome. Chronic pain is associated with high rates of depression, which becomes a significant maintaining and exacerbating factor. Earlier recognition, diagnosis and treatment of psychiatric comorbidity will improve outcome. Where physical symptoms are prominent the psychiatric pathology may not be obvious. A client suffering pain and disability as a result of an expected injury which was not their fault may feel lost, alienated and demoralised. For them the positive impact of a kind and supportive professional listening to their story should not be underestimated. Disability and sickness absence with consequent financial loss can compound feelings of stress and insecurity.

Key steps in the process of recovery are feeling heard and understood particularly if the client’s symptoms are unusual and do not readily fit into recognised patterns of illness. Their symptoms may fall between the domains of different medical experts. In complex cases in which lawyers are instructing multiple experts getting the sequence right is important. There is often a reluctance on the part of clients and professionals to grasp the nettle of somatisation. If you need a psychiatrist or psychologist to provide a high-quality report for your personal injury matter, contact the team at Expert in Mind who can recommend practiced experts in the field of mental health.

The role of psychological processes in modulating physical recovery is time sensitive. Delays in the litigation process will affect the natural history of recovery.

“We know that when symptoms persist in cases with proven physical injury that psychological factors are often in play and influence functional outcome.”

Consultant psychiatrist

Dr Paul McLaren is a key

member of the Expert in Mind panel

CASE STUDY

Hall Smith Whittingham LLP tackles property transaction risk head on with tmgroup at their side Cheshire-based law firm, Hall Smith Whittingham LLP, has been using tmgroup’s tmconvey property search platform for almost 4 years to mitigate key risks and save precious time across the property transaction. From their two offices in Nantwich and Crewe, Hall Smith Whittingham LLP supports clients in everything from conveyancing and litigation, to wills and probate. Since introducing the tmconvey platform, their property team have been able to order the searches they need to satisfy mortgage lenders, better understand the risks surrounding their clients’ properties (thanks to search alerts), as well as request their AML checks and indemnity insurance – all in one place.

“The tmconvey platform is easy to use, even for the most “IT shy…”

For further information, please contact Nick Ball, National Sales Manager at tmgroup, via nick.ball@tmgroup.co.uk or call 07483 117483. Alternatively, visit www.tmgroup.co.uk

The tmconvey platform is easy to use – even for the most “IT shy” – and is supported by tmgroup’s experienced and reliable client services team, who have assisted in the delivery of over 20 million property searches since tmgroup launched in 1999. Michael Wright, Partner, Head of Residential Conveyancing at Hall Smith Whittingham LLP, who has been with the firm for six years, explains: “The tmconvey platform is a one-stop shop for managing risk, with everything we need to progress property transactions to completion.” Hall Smith Whittingham LLP also value efficiency and how the tmconvey search ordering platform helps to save

them time with search templates, prepopulated case information, and more. All of which helps their property teams to progress cases quickly. Michael Wright continues: “We don’t want to be wasting unnecessary time inputting data and ordering searches. Those extra 5 or 10 minutes here and there can all add up and slow property transactions down. That’s where the tmconvey platform really makes a difference, by giving us more time in the working day to focus on progressing our cases to completion and pleasing our clients.”

“The tmconvey platform is a one-stop shop for managing risk, with everything we need to progress property transactions to completion.” 65

Nick Ball

is National Sales Manager at tmgroup

10 MINS WITH

JAMES BROCKWELL Q A

Has the industry changed drastically since you started working in it?

The property industry is constantly evolving and the same is true of the legal indemnity insurance market that supports it. Our views on specific risks can change in response to updates in case law and our own claims experience. When I started working in legal indemnities the premium rates were much higher which I think was reflective of insurers’ attitudes to this class of business. Recently, more insurance providers have entered the legal indemnities market and there has been a greater drive towards self-issue policies, especially online. As more products have become available through online platforms, premiums have, for the most part, reduced and at the same time, in order to stay competitive, policies are offering more cover. On the flip side, lenders have become less inclined to ‘take a view’ on a risk and therefore legal indemnity insurance is purchased far more frequently than it used to be. This is great for the consumers as they are protected from title defects in relation to their property transaction, whilst keeping costs down.

“With changes in technology and conveyancers placing an increasing reliance on ordering legal indemnities online, everything is moving at a faster pace.”

With changes in technology and conveyancers placing an increasing reliance on ordering legal indemnities online, everything is moving at a faster pace. The demand for receiving policies quickly and at a low cost has increased, and not just for online products but for bespoke insurance policies too. The result has been that the legal indemnity insurance industry has needed to review its processes in order to continue to provide a high level of customer service and meet the demand for quick responses on quotes and policies. We’ve kept our online products simple so clients can be confident in what they’re getting and there’s a real personal and bespoke touch with the risks falling outside of that. Technology has also had a positive impact on the way that we underwrite, allowing us to review documentation more quickly and in the case of an enquiry for a property development, we can review the site without having to leave our desks.

Who inspires you and why?

Q A

What has been the most valuable piece of advice given to you?

Q A

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

Warren Buffett. The “Oracle” is renowned for his commitment to value investing and focus on good investments at fair prices. Interestingly, Buffett famously announced his “favourite holding period is forever” with regards to real estate investments, which complements our in perpetuity policies nicely.

Put yourself in the clients’ shoes. Property transactions can be so complex and stressful. What we do is only a small part of the process, but it really can be the last piece of the puzzle to get a deal over the line. That’s why it’s important for us to do as much as we can, as quickly as we can.

I am always talking about investing in funds so I would have to say a role in some form of investment vehicle. Then I’d have to put my money where my mouth is!

What has been the key positive, or negative, impact of change in your area of the market?

Q A

“Recently, more insurance providers have entered the legal indemnities market and there has been a greater drive towards selfissue policies, especially online.” 66

James Brockwell

is Development Underwriter at Conveyancing Risk Management Ltd. (CRM Insurance)

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