The Business of Law
November 2012 | Issue 3 | ISSN 2050-5744 Dominic Regan begs lawyers to budget in the multi track, avoiding the ‘frightener’ of recent judgements Sector Roundtable: MLM gathered experts, regulators and champions of the conveyancing sector to find out what’s affecting the market, who has the advantage and how to maintain success Man on a mission: Antony Smith interviews Mitch Kowalski on his latest book that’s causing a stir across the globe and online
Modern Law Magazine | November 2012 | Issue 3
“People are generally frightened of lawyers and feel they can’t get access to justice if they’ve been treated wrongly. This is due to a fear of the cost of legal services – too often presented to customers with language they don’t understand” David Edmonds, LSB
Michael Napier “We must not forget the purpose behind reform; that clients need to be put first by the legal profession. If this results in a more competitive marketplace then this can only be good for the client” Michael Napier
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Introduction
Modern Law Conference
ABS – One Year on - The New Legal Frontiers 27th March 2013
The Royal College of Surgeons, London
03
EAR B LY TIC IRD KET S
£13 0
Welcome I
t’s been just over a year since Alternative Business Structures were given the green light for licence applications. Yet some believe we won’t see real innovation until April 2013 - the next predicted ‘big bang’. A view David Edmonds, Chair of the Legal Services Board agrees with (see pages 11-12).
LAW CONFERENCE : ABS – One Year On – The New Legal Frontiers – is the platform for those who have rapidly embraced change through a fascinating variety of new structures and innovative alliances. It combines the experiences of those leading the business of law with feedback from the regulators and expert opinion.
However, there has been some ABS impact to date: it has motivated existing, traditional and high street firms to reassess their value to the market, how they can meet clients’ needs and deliver in the future. That’s the view of specialists attending the first Modern Law Sector Roundtable which in this issue focuses on the conveyancing sector (see pages 37-39). Our guests told me it’s imperative for representative discussions to take place outside of consultation. The lack of opportunity to do this is mainly due to hectic schedules so I’d like to take the opportunity to thank all those involved and the hospitality of Goldsmith Williams.
We’re lucky enough to have captured the imagination of Michael Napier, a consultant (and formerly Chairman of Irwin Mitchell Holdings Ltd), who will chair the unique and timely event in March 2013. I recently had the pleasure of tapping into Michael’s unlimited ABS and legal growth knowledge (see page 14-16) and I’m looking forward to welcoming him to the stage next year.
Never has there been a more pivotal year of change in the delivery of legal services. It seems essential then for us to invite the first ABS movers to an interactive arena and share their experiences. The first MODERN
Modern Law is the place to share in an exciting new era...
Modern Law Magazine
The MODERN LAW CONFERENCE : ABS – One Year On – The New Legal Frontiers - will be held at the Royal College of Surgeons, London on the 27 March 2013. For further information on the conference please visit www.modernlawmagazine.com.
Emma Waddingham, Chief Editor
Issue 3 – November 2012 | ISSN 2050-5744
Chief Editor Emma Waddingham
Production Lindsey Thomson-Heley
Events Manager Julia Todd
Publisher Kate McKittrick
Editorial Department Antony Smith Stan Neal
Design Richard Berry
Events Co-ordinator Charlotte Parkinson
Advertising Rachael Pearson
Modern Law Magazine is published by Charlton Grant Ltd ©2012.
Contact t: 01765 600909 or e: info@modernlawmagazine.com All material is copyrighted both written and illustrated. Reproduction in part or whole is strictly forbidden without the written permission of the publisher. All images and information is collated from extensive research and along with advertisements is published in good faith. Although the author and publisher have made every effort to ensure that the information in this publication was correct at press time, the author and publisher do not assume and hereby disclaim any liability to any party for any loss, damage, or disruption caused by errors or omissions, whether such errors or omissions result from negligence, accident, or any other cause.
ML // November 2012
04
Contents
07
CONTENTS 03-09 Intro & THE News 07 Dominic talks news
Dominic Regan begs lawyers to budget in the multi track, avoiding the ‘frightener’ of recent judgements and landing in chilly waters before the judiciary.
11-16 The INTERVIEWS 11 Interview with... David Edmonds
Emma Waddingham speaks to the Chair of the Legal Services Board as he calls for regulators to cut detail to the quick to ensure consistency and high standards from all bodies - ultimately delivering variety and choice for consumers.
14 Interview with... Mike Napier
Emma Waddingham speaks to the former Irwin Mitchell Chairman turned consultant on the real impacts of external funding and the fast pace of change in the legal sector
20 Track changes: ethics
Chris Kenny, Legal Services Board
20 High on the agenda:
PC Renewals
Richard Collins, Solicitors Regulation Authority
Ready entity
Steven Arundale, RBS & Natwest
21 Inspired reactions: LeO’s
List of Shame
Jo Hodges, Redbrick Solutions
22 Work ready
Noel Inge, ILEX Tutorial College
22 Outsourced for success
Robert Parness, Paramount Legal Costs
11
23 Bind experience with advice to
avoid LeO’s list...
Angela Moores, Jarvis Family Law
23 Transparency is nothing to fear
David Bott, Bott & Co.
24 Bolstering the armoury
Eddie Goldsmith, Goldsmith Williams
24 It’s not the IT, it’s the culture
19-33 The views
21 Delivering an Investment
Charles Christian, The Orange Rag
25 Risk profiles a priority
21
Martin Ellis, Prime Risk Solutions
25 LeO: the List of Shame realities
Chris Owen, St Philips Chambers
Jaunita Gobby, Legal Eye
27 The Risk Register
Editorial Columnists Alan Nesbit Managing Partner Nesbit Law Group
Barry Talbot Managing Director Informance Limited
Professor Dominic Regan Legal commentator, trainer and costs expert
Lorraine Harrison Solicitor Ralli Solicitors
Andrew Stenning Managing Director Searches UK
Charles Christian Editor in Chief The Orange Rag
Eddie Goldsmith Partner Goldsmith Williams
Martin Ellis Managing Director Prime Risk Solutions
Angela Moore Partner Jarvis Family Law
Chris Kenny Chief Executive Legal Services Board
Guy Hewetson Partner Hewetson Shah
Matthew Williams Head of AmTrust Law AmTrust Financial Services.
Allan Carton Managing Director InPractice
Chris Owen CEO St Philips Chambers
Ian Hunter Managing Director Jellyfish
Neil Inge Managing Director ILEX Tutorial College
Antony Smith Director Legal Project Management
David Bott Managing Partner Bott & Co
Jaunita Gobby Director Legal Eye
Nick Hodges Managing Director Oyez Professional Services
Bernard George Director Socrates Training
David McNamara Managing Director SOS Legal
Jo Hodges Managing Director Redbrick Solutions
Richard Collins Executive Director Solicitors Regulation Authority
ML // November 2012
Rob Hailstone Bold Legal Group Robert Parness Costs Lawyer Paramount Legal Costs Sean Gordon Senior Solicitor Neil Hudgell Solicitors Steven Arundale Head of Professionals Sectors, Commercial Banking RBS & Natwest
Contents
27 Identify, target, comply
Bernard George, Socrates Training
49 Get in sync
29 Keeping up with the changes
Andrew Stenning, Searches UK
29 LeO: is this the best we can work to?
Allan Carton, In practice
52 Innovative Delivery
31 Revolutionising the Bar: do or die
Guy Hewetson, Hewetson Shah
33 ATE, still on the agenda: implications
for commercial cases
Matthew Williams, AmTrust Financial Services
33 Overhaul to come
Rob Hailstone, Bold Legal Group
37-51 The Features 37 Sector Roundtable: Conveyancing
MLM hosts a roundtable of experts, regulators and champions of the conveyancing sector to find out what’s affecting the market now, who has the advantage and what is needed of the sector and of regulators for that light at the end of the tunnel.
41 Great Expectations
In the conveyancing process, clients’ expectations of flood risk investigations ‘as standard’ are misaligned, despite insurance risks and change set for 2013, as David Mole reports.
43 Referral fee ban: Titanic disaster?
The orthodox view is that the ban will be for the worse. Optimists may find helpful guidance for the future by looking to the past, as Tony Walton suggests.
Antony Smith sheds light on LawSync – a scheme by academic institutions to deliver commercialised and work-ready graduates into a reformed legal services sector.
51-62 BUSiNESS MANAGEMENT
Lorraine Harrison, Ralli
31 Change or get left behind
Emma Waddingham hosts a quickfire round with those pushing the boundaries of ABS software forwards.
53 Take a scythe to non-billable hours
Anthony Smith, Legal Project Management
54 Holding lawyers to account, poorly
Sean Gordon, Neil Hudgell Solicitors
54 Underpin business processes
to success
55 Act before it’s an issue
Barry Talbot, Informance
55 Create a robust system or add to
your problems
Alan Nesbit, Nesbit Law
56 Complaints & avoiding mistrust
(Ian Hunter, Jellyfish)
57 The Bar: focus on client experience
Catherine Bailey, Bar Marketing
57 New era in client-centric legal services
Eclipse Legal
58 Man on a mission
A mission nothing less than to fundamentally change the way law firms practice. Antony Smith interviews Mitch Kowalski on his latest book that’s causing a stir across the globe and online.
60 Designs on a tribe
47 Best in breed
62 Compulsion to mediate
ABSs and the shift from input to outcomes in regulation has had a resounding impact on personal development plans. Modern Law offers some practical guidance. Key to the ABS model is to be best in breed for clients through the consistent delivery of high quality and client-focused services. Mr. Bippon Vinayak outlines how the medical and rehabilitation solutions for PI ABSs are integral to this strategic vision.
41
David McNamara, SOS Legal
45 People first
05
52
Modern Law looks at how the new legal landscape and the rise of the ABS will see more firms build a tribe of outsourced suppliers to gain a commercial edge. Anthony Glaister MCIArb
62 Are changes creating new
procurement and outsourcing models?
Nick Hodges, Oyez Professional Services
48 A case of tortoise v hare
It’s been 12 months since the introduction of Alternative Business Structures (ABSs) by the Legal Services Act 2007. So what impact has this had on partnership structures? Eimear McCartan reports.
58 ML // November 2012
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Dom Regan News
07
Dom Regan news
Budget, don’t bodge it
Professor Dominic Regan begs lawyers to budget in the multi track, avoiding the ‘frightener’ of recent judgements and landing in chilly waters before the judiciary.
T
he requirement to prepare litigation budgets and seek court approval for them is a massive development coming to most multitrack cases issued from 1st April 2013. Indeed, two recent decisions mean that budgeting, which is described in detail below, will have more dramatic consequences than Lord Justice Jackson anticipated. The frightener is Henry v MGN, 16th May 2012, an early and ominous warning for practitioners. It was a defamation action and, as such, was caught by an early budgeting pilot scheme. At the outset the claimant prepared an estimate of proposed litigation spending which the court approved. After winning at trial 10 months later the claimant submitted a bill which was 18 times higher than budgeted for witness statements, and eight times higher for disclosure. The extra costs were nearly £300,000. Despite expressing the clear view that the additional spend was justified, the Senior Costs Judge held the claimant to the budget in terms. What is the point of a budget if one is then going to ignore it? Leave to appeal has been granted. Incidentally, the assessment was of base costs. It would be no surprise if there was a conditional fee agreement in place, so the lost costs in just this action would be about £600,000. Ouch. In Safetynet Securities LTD v Coppage, 15th August 2012, HHJ Simon Brown QC, the doyen of case and costs management as we shall see, decided that since the winning claimant had come in on budget a detailed assessment was futile, and so he ordered there and then that costs be paid in 14 days. Whilst the case is on Bailil this aspect is not reported, but I have it from the Learned Judge himself, to come away from trial with costs in the bag will do wonders for cashflow. The tidy disposal
‘Within the Ministry of Justice is an evil mastermind. A party which fails to file a budget when obliged to do so will be taken to have relinquished all claims to costs apart from court fees payable.’
of all issues at the conclusion of a trial is desirable, admirable. This just goes to emphasise how vital it is to work long and hard so as to perfect the content of the estimate. Sir Rupert recommended budgeting for he perceived that litigators launched off without considering the numbers. Where else, he asked me, would one embark upon a substantial project without first determining whether the enterprise was viable? There is also the risk of optimism – we will win so what we spend we will recoup – whereas almost invariably there must be a loser. Budgeting will apply to multi-track actions whether issued in the County Court or in the High Court Chancery / Queens Bench Division. Excluded are the Admiralty and Commercial Courts. One should remember that the Commercial Court overhauled it’s
ML // November 2012
08
Dom Regan News
If the costs do not exceed £25,000 then one gets off lightly and need only complete the first page of the precedent. Somewhere out there is a man who should be elevated to the status of saint for suggesting this to Sir Rupert’ procedures four years ago in a manner compatible with the thrust of the imminent, general Jackson reforms with tighter controls on the length of speeches and documents, for example, intended to curb excesses and make justice achievable at proportionate cost. The purpose of costs management is to enable the court to manage both the steps to be taken and the costs to be incurred by the parties so as to further the overriding objective. The prompt - proportionate disposal of dispute - is what underpins Part 1, the most important segment of the entire CPR. Unless the court orders otherwise, all parties (except self-represented litigants) must both file and exchange budgets within 28 days after service of any defence. Whilst the court can direct that budgets need not be served in a particular matter I consider that few such exceptions will be made. I was fortunate enough to be present at the publication of the final Jackson report and what struck me then and stays with me was the passionate support for it voiced by the Lord Chief Justice and the then Master of the Rolls who has now, rightly, been appointed to head the Supreme Court. The judicial muscle backing Rupert Jackson is formidable. Precedent H is the normal form to complete. If the costs do not exceed £25,000 then one gets off lightly and need only complete the first page of the precedent. Somewhere out there is a man who should be elevated to the status of Saint for suggesting this to Sir Rupert (although I would be happy with a large cheque). If the estimate exceeds £25,000 then the full form must be completed. In essence, the form seeks two critical pieces of information. One is required to identify the team that will work on the matter with relevant charging rates specified. The second element is a breakdown of the work to be
ML // November 2012
performed, be it on disclosure, witness statements or whatever. Thus, one can see the proposed expenditure intended for each and every aspect of the claim. Since they could not quite afford Lord Sumption at £8,000,000, Lord Neuberger MR and Sir Rupert kindly asked me (£0) to monitor the Birmingham Mercantile Court costs pilot scheme ,run by His Honour Judge Simon Brown QC. This embittered cynic was captivated by the effectiveness of the process and reported accordingly. Having heard one barrister sneer at the very idea of budgeting – ‘who knows what it will cost?’ - I was smitten by the simplicity and efficacy of the process. The Judge was charming yet surgical in his approach: “Case management is costs management and vice–versa,” was what he said to me as we entered court for the first time. It was chilling to see how some lawyers had not thought things through. An inheritance claim worth £250,000 generated costs estimates of like amount. “You do realise, don’t you, that if this goes to trial there will be nothing left?” asked the Judge. The advocates nodded yes but their faces contradicted the body language. That grenade triggered mediation and an early settlement. As an aside - the benefit of an informed outsider - the Judge stepping back and taking a pragmatic view was incalculable. The typical hearing in Birmingham lasted about 45 minutes. This does not permit an intricate preliminary detailed assessment to occur. Rather, the Judge was on the alert for any element of expenditure which stood out as extreme or extravagant. He would compare and contrast the respective spend and seek an explanation as to discrepancies. The aim of the court is to approve a budget, and the impact of that is to be seen from the Henry and Securitynet decision which I described above. If the court thinks the spend
A few practical tips Above all else, talk to your opponent(s) before going near the estimate. You need to consider what the issues are, and then how best they can be resolved. This will shape disclosure and evidence, lay and expert. Electronic disclosure is growing in importance so reflect upon whether it might assist in this dispute. If you are looking to involve expensive experts you ought to consider seeking tenders. Let them pitch for and give quotations. No one in the Birmingham court considered this, apart from the Judge. Getting a sound budget in place requires collaboration between the person running the matter and their costs lawyer, internal or external. I urge everyone to start thinking now about this new duty to budget. One must have in place systems to promptly identify when and where a budget might be breached. It is permissible to go back to court and seek leave to revise a budget. That might have helped the hapless claimants in Henry. There are of course some individuals with an anarchic tendency, who might decide that filling in the budget form is a tedious chore that might bring on the vapours and so they will ignore it. Bad news. Within the Ministry of Justice is an evil mastermind. A party which fails to file a budget when obliged to do so will be taken to have relinquished all claims to costs apart from court fees payable. I have a subtle sixth sense which tells me that an awful lot of practitioners will complete the pesky form. And it shall be verified by a statement of truth signed by a senior legal representative. Be afraid... improper it will decline to approve, which is the clearest warning sign of a troubled outcome and an aggressive assessment if that party succeeds. Professor Dominic Regan www.profdominicregan.blogspot.com
Interview
11
Interview with... David Edmonds Chair, Legal Services Board
Q A
It’s been a year since the ABS model was first introduced as an option for the legal sector. What benefits have ABSs and other new legal entities brought to the legal market? We’re looking at a world changing on a faster time scale than people expected – not quite the ‘big bang’ moment but there’s time yet. The legal landscape is now fundamentally transformational in that there are national brands for the first time - with the likes of the Co-op gaining ABS status as well as potentially the AA, Direct Line and Saga making applications for licences. For consumers these are trusted, well-known brands with legal advice offerings that are of a different kind to the ones they’ve had before. The guarantee of fixed / agreed prices may remove some of the anxiety for customers too. Research shows that people are nervous about going to lawyers and concern over price is part of the problem. ABSs provide variety and new offerings for legal services. However the introduction of ABSs has also led to – and will lead to further - innovation on the high street (i.e. will drafting for a set price). This has the potential to flourish once the high street firms work out how best to respond to the competition. Traditional law firms will have to look at life in a different way. The Quality Solicitors brand is a prime example of high street innovation and looking beyond the solicitor shop window to attract work. Quality Solicitors has linked with other high street companies (WH Smith) to give those in the network a different dynamic in the marketplace and reach people in new ways.
‘It’s fair to say we do want to stimulate pro-activity amongst the regulators; the ‘fear’ of creating a competitive regulator market ought to raise the level of quality across the board, rather than diminish standards and price’
Q A
The optimology sector is often referred to as an indicator for how the legal high street market will look like once the ABS licensing dust settles. Is this a useful comparison? Optimology has been totally transformed by three key brands. There is still a high street offering for those who want those services; for those who want to response in a niche marketplace, the opportunities are there. It will be the same for the legal sector; solicitors will see the opportunity once they have worked out their niche or USP.
David Edmonds Chair, Legal Services Board David Edmonds was appointed as the inaugural Chairman of the Legal Services Board (LSB) in 2008 by the Lord Chancellor and Justice Secretary, after consultation with the Lord Chief Justice. David has extensive experience of senior teams in commercial and public sector organisations, in both Chair and Chief Executive roles. After a career in the senior civil service and as Chief Executive of the Housing Corporation, he spent seven years as a Managing Director within the NatWest Group. David’s regulatory experience includes five years as Director General of Telecommunications for the United Kingdom, and two years as a founding member of the Board of Ofcom. He was the Chair of the Board of NHS Direct from 2003-2008. He was a Commissioner at the Legal Services Commission for four years. He was also Chairman of Wincanton PLC from August 2008 to December 2011. David is Chairman of NHS Shared Business Services Ltd and a non-executive director of several PLCs as well as the London Legacy Development Corporation. David has recently been appointed as non executive member of the board of Barchester Homes.
ML // November 2012
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Interview
Q
Putting the client at the heart of the experience is more than a marketing strap line – what does the research by the Legal Services Consumer Panel indicate in terms of what clients really think of legal services and where law firms can improve?
A
The recent Legal Services Consumer Panel research output shows that people are generally frightened of lawyers and feel they can’t get access to justice if they’ve been treated wrongly. This is due to a fear of the cost of legal services – too often presented to customers with language they don’t understand – and the hourly billing system, which few fully understand. Do people really know how long a piece of legal advice should take, and therefore how much it should cost? ABSs are generally predicting how many hours they’ll need upfront and the cost per hour. People may then be encouraged to use legal services in a new way through a better understanding of the offer and their choice in the process.
Q A
Is this a complex time for the regulators – juggling ABS licence approval with regulatory change?
Yes, it’s a complex time and there have been three key stages. Firstly, we have forced all regulators over the last three years to split the old representative role clearly from regulation. It’s been a huge achievement to get to where we are now, which we do take credit for. Secondly, there is a strong focus on the quality and standards of regulation. The LSB will be significantly ramping up the pressure on regulatory bodies to increase the standards of regulation going forward. Thirdly, the focus on Outcomes Focused Regulation (OFR) means that regulators need to look at what firms and groups actually deliver, and move away from the detail. This is an important part of the theology: it’s too complicated and it’s time to clarify things. Regulations have to have a clear idea on tasks in a firm, look at the wider entity and ensure the firm delivers for clients against a clear set of objectives. There will be problems catching up with regulation – for example, there is a much bigger issue at the Bar than for solicitors. The Bar Council is walking backwards, slowly, in terms of its response to regulation. Culturally the Bar has always done things one way and rebels against change.
Q A
Is there, or will there be a marketplace for regulation thanks to ABSs?
In theory the LSB allows for different regulators regulating across boundaries. However we don’t want to see competition between regulators on standards or on price. And I don’t think there will be. Des Hudson may be concerned (see MLM’s
ML // November 2012
‘There will be problems catching up with regulation – for example, there is a much bigger issue at the Bar than for solicitors. The Bar Council is walking backwards, slowly, in terms of it’s response to regulation. Culturally the Bar has always done things one way and rebels against change’ Conveyancing Roundtable coverage on page 37) as some firms may opt to go to a different regulator but it’s our job to ensure there will be the same quality assurances across the board, to ensure a competitive regulation market won’t occur. However, it’s fair to say we do want to stimulate pro-activity amongst the regulators. The ‘fear’ of creating a competitive regulator market ought to raise the level of quality across the board, rather than diminish standards and price.
Q A
In light of the faster pace of change, what are the key focuses for the LSB going forward?
What we must focus on is quality standards in OFR. Everyone needs to understand what OFR really means and how it is measured. Underpinning this is directness and simplicity in regulation rules. OFR should be presented in a much smaller rule book, for clarity, and this is something we’ll look at. Finally, we’ll be asking, is the basic regulatory process a quick, accurate and high quality one for clients? This is a very clear campaign for the year ahead and essential to ensuring clients of the regulators get a consistent and high quality service from all bodies.
ABSs: as they currently stand*... • Approximately 230 bodies are in stage 1 of the ABS licensing process • Approximately 200 bodies are in stage 2 of the ABS licensing process • 29 bodies have been given licences by the SRA and 9 by the CLC • 21 bodies are in the second half of stage 2 of the application process (i.e. have provided all the information required for the SRA to take a decision) *As at time of going to press
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New Tricks
14
Interview
Interview with... Michael Napier Michael Napier, one of the industry’s most highly regarded thought-leader on costs policy and the business of law, spoke to Emma Waddingham about his thoughts on the fast-paced changes to legal services. Since stepping down as Chairman of Irwin Mitchell Holdings Ltd he is a consultant to those in the sector looking to embrace change and explore opportunities for growth internally and with investors and funders.
Q A
Are there opportunities for real growth in 2013 onwards or will reform (especially costs) create the need to sustain rather than grow?
Even in a recession there are always opportunities for growth in well run law firms and recently published results show that many of the major firms reported respectable single digit growth last year.But from next April the costs reforms are certain to pose growth challenges for litigation firms.So it would be quite wrong to generalise that these are good times for all lawyers.Many firms will want to concentrate management time on sustaining their bottom line first, pursuing growth a close second. Exploring opportunities in the new ABS world will naturally be core activity for entrepreneurial firms but the priority focus should be to concentrate on what lawyers know best – the law and serving their clients well - which is not rocket science.
Q A
Is leadership undervalued or overlooked in the current legal profession?
Leadership is not part of legal training so its importance can easily be overlooked. Some lawyers have leadership qualities as a natural part of their DNA. Others are best left to concentrate on the law and the client.And some can combine being a good lawyer with the skills of leadership and management. The Clementi report recognised that today non lawyer managers play a crucial role in the efficient running of successful firms. Hence the advent of the LDP,now superseded by the
ML // November 2012
ABS, providing encouragement to non lawyers to bring financial,marketing and other management skills to legal businesses with the incentive of sharing in the profits.
Q
Should law firms look to the rest of the private sector for leaders and managers, rather than rely on Partners / technicians to assume the role?
A
In the modern business of law the traditional partnership model is under strain,some would even say out dated. Now that we have crossed the Rubicon of lawyers being permitted to share profits with non lawyers its a natural progression to look beyond the partners and to bring in the skills of non lawyer managers, and possibly to combine with investors who will only be prepared to risk their cash in legal businesses that are well led and managed.
Q A
What makes a great leader / manager?
Law is a people business – even corporate law. And leaders of law firms need to remember that they are also running people businesses where the culture that runs through the partnership and the staff is central to success.Trust in the people at the top is paramount and takes time to earn.The CEO whose task is to maintain profitability and cut overheads requires buy in from everyone in the business and will not get it unless a clear vision of where the firm is going is regularly communicated to all.
Q
Why is the legal sector an attractive opportunity for investors, such as the private equity houses - particularly as some lawyers are feeling less positive about their own sector?
A
The early signs are that external investment in ABSs that want to go down the investment route ( not all do ) is already attracting the interest of private equity houses and other investors.That is no real surprise and the pace is likely to quicken as more ABS licences are granted.The attraction to investors is that successful legal businesses have healthy profit margins and generate cash that is a positive in today’s economic environment. Private equity is always interested in a new sector that is deregulated and likely to consolidate which is what is happening now to the supply of legal services.And law firms shouldn’t worry about the traditional fear that all private equity investors simply want to get in for a short while,sell and then get out.A private equity investor will not only bring capital funding but will also bring management focus to grow the business steadily,possibly leading to an IPO or to a subsequent sale to another private equity investor or even a trade sale to another firm.
Q
How slick are law firms at marketing, capturing work and building competitive USPs (or will they all rely on price). Will investment help with marketing potential?
A
Successful law firms are particularly good at marketing and business
Interview
15
‘We must not forget the purpose behind reform; that clients need to be put first by the legal profession. If this results in a more competitive marketplace then this can only be good for the client’ development,especially in the personal injury area which is highly competitive and will become even more so when referral fees are banned next April.Personal injury firms know that they have to compete to stand still let alone grow and because marketing legal services is very expensive this is an area ripe for external investment to help pay the bills.
Q A
Is client experience a real priority to the processing of legal services?
Client experience and satisfaction is the top priority. In a B2B situation client relationship management ( CRM ) is key. All clients,individuals,SMEs or large corporates are consumers of legal services. The title of the Government white paper that heralded the Legal Services Act was “ Putting Consumers First “. All firms need to remember that. If you don’t look after your clients in the manner they expect today they will go somewhere else.
Q
Should wider investment (such as external funding) be used to improve client services / processes and crossselling techniques?
A
Each ABS that decides to take in external investment will have its own priorities for using the extra capital that will be available. But the voracious appetite of IT is always going to be high on the list of how good businesses can improve their systems to serve their clients better - and that doesn’t only apply to volume or so called commoditised services.On the wider scale of things the single most important factor for firms to confront in the new ABS world is how to compete on a level
playing field. By that I don’t just mean a level regulatory playing field because the regulators will ensure that the external commercial organisations ( for example Co-op and Direct Line ) that are entering the supply of legal services via the ABS route are also covered.It is the financial playing field that is out of balance.Law firms simply don’t possess as much capital muscle as the external competition for example to merge with or acquire competitor businesses.The solution to redress this imbalance is for law firms to take in external investment that will allow them to compete financially.This dynamic is similar to the external third party investor who creates a level costs playing field by investing funds in support of a case in return for a share of the damages if the litigation is successful
Q A
What will be the direct result of the Legal Services Act?
The LSA was passed five years ago and only now are we seeing direct evidence of the the arrival of ABSs on the legal scene amid activity that is bringing rapid change to the supply of legal services to consumers. We must not forget that purpose behind the reform;that clients need to be put first by the legal profession.If this results in a more competitive market place then this can only be good for the client. Now working with the likes of Habour Litigation Funding (see page 16), Michael is also going to chair the MODERN LAW CONFERENCE : ABS – One Year On – The New Legal Frontiers, on 27 March 2013 at the Royal College of Surgeons, London. For details, please visit www.modernlawevents.co.uk
Michael Napier Highly regarded for his role as a practitioner in many landmark cases, Michael Napier is probably best known for his transformation of Irwin Mitchell during 30 years as senior partner. A progressive thinker and strategist, he has influenced many reforms in the civil justice system as well as the fundamental changes now taking place in the legal market. He worked on the implementation of Conditional Fee Agreements and has been involved in the development of policy relating to litigation funding since 2005. He has also written extensively on funding options and access to justice. Michael was voted ‘Lawyer of the Year’ in the Legal Business Awards 2012 for his work at Irwin Mitchell, helping it develop ‘from a small Sheffield practice to the national powerhouse it is today, on the brink of becoming a pioneering ABS firm’. Since his Presidency of the Law Society in 2001, Michael has been the AttorneyGeneral’s pro bono envoy and having recently stood down as Chairman of Irwin Mitchell Holdings Ltd he is now a freelance consultant. www.michaelnapier.com
ML // November 2012
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Interview
What Michael did next… H aving moved into a specialist consultancy role after stepping down as Chairman of Irwin Mitchell, Michael recently announced his latest role with Habour Litigation Funding. Michael has joined Harbour Litigation Funding’s investment and advisory team as a consultant to support the company’s growth strategy. He is also there to help consolidate it’s pioneering position in the UK funding market. As well as offering his significant experience on costs policy matters (including damage based agreements), while assisting the investment team in it’s review of cases for funding. “Harbour is at the forefront of third party litigation funding which is now a well-established and increasingly important route for
solicitors and their clients. So, with massive changes to the funding of access to justice only months away, I’m happy to become a consultant to the Harbour team at this crucial time for responding to the funding needs of litigants,” outlines Michael. The reason for using Michael, says Susan Dunn, Head of Litigation Funding at Harbour, is to access a “brilliant and influential legal mind who shares Harbour’s views on the access to justice that funding can bring to cases”. Brett Carron, Harbour’s Chief Executive adds that Michael “has an ability to see through barriers and develop new markets and opportunities” and will “help Harbour develop further as a market leader and innovator in litigation funding.” The Harbour investment and
Susan Dunn Head of Litigation Funding, Harbour
Brett Carron Harbour’s Chief Executive
advisory team already includes former High Court Judge Sir Gavin Lightman, former London Wragge & Co managing partner Nicola Mumford, and leading insolvency barrister Stephen Davies QC. The Harbour team features Stephen O’Dowd who joined from BT, and John Kingston, ex-head of litigation at Travers Smith.
‘Michael has an ability to see through barriers and develop new markets and opportunities, and will help Harbour develop further as a market leader and innovator in litigation funding’
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The views
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The Views
ML // November 2012
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The views
High on the agenda: PC Renewals
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nsuring that the 2012 round of Practising Certificate renewals is a more reliable experience than last year’s has been at the top of the SRA’s agenda. We recognise that the last renewals round was not acceptable and since then we have undertaken significant work to enhance the system and the
user experience. The planned enhancements have been implemented and we are confident that the system is now stable. By engaging with a large number of representatives, from sole practitioners to those working in large global firms, we have listened to the views of those we regulate and used this feedback to decide how best to reshape the system in a way that is practical for all branches of the regulated community. Because of time constraints, it has not been possible to include all the changes that we would have liked this year, but with the help of those we regulate, we have prioritised the issues to ensure we addressed those that mattered most. These include: • Making applications simpler and easier to complete. This includes an overhaul of the flow and wording of questions and related guidance text • Making it possible for organisational contacts in each firm to process the bulk applications on behalf of colleagues, giving firms greater control over the way they complete the PC renewal exercise • Enabling one-click ‘record complete’, allowing multiple records to be confirmed as correct during bulk renewal applications • Improved searching and sorting of an individual’s records to make viewing and editing easier • Increasing the support available within our Contact Centre so that queries can be answered more promptly. We have been communicating extensively with all firms and individuals to ensure those we regulate are aware of the changes and know how to process their applications. We believe we have a system that will make the 2012 renewals process more streamlined and efficient. This does not mean it is perfect. We will continue to improve our online systems and to move more application services online during 2013. PC renewals will commence on 1 November and close on 14 December 2012. This will give firms two weeks longer than the traditional one-month period allowed for completion of renewal applications, to assist firms in scheduling the process. Full details of the renewals exercise can be found on our website @ www.sra.org.uk/mysra/services/renewal.page By Richard Collins, Executive Director, Solicitors Regulation Authority (SRA) www.sra.org.uk
Track changes: Ethics
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ne of the many myths around Alternative Business Structures is that they aren’t necessarily going to lead to a decline in ethical standards. Those consumers swindled in the miners’ compensation scandal might be forgiven for thinking that the status quo couldn’t get worse. But, of course, that’s no more the experience of the vast majority of legal consumers than it is the experience of the consumers in the wider economy. Strong business and professional ethics have to be at the heart of any successful long-term business, especially in legal services. They ensure that the interests of customers, the legal system, and providers are considered equally. This has ensured that legal services in England and Wales are among the best in the world and the first choice for international legal transactions. But how do we get beyond a picture of ethics which varies between Pollyanna at one extreme and the Big Bad Wolf at the other? Whether the risks presented by change are real or imagined can only be monitored by considered, robust and independent research. In September 2012 the LSB published a report by Professor Richard Moorhead that considers how it would be possible to benchmark and track changes in the ethics and behaviour of providers of legal services. The model developed in the report analyses how the character of those supplying legal services, the context in which they work, and the capacities they have, interact to influence their behaviour. The report does not propose developing a simple l score or single number to represent a global view of how ethical providers are. But the approach would allow changes in ethical norms to be tracked over a period of time through analysing responses to ethical concepts or scenarios. Benchmarking ethics is complicated both by the range of legal service providers and the complexity of the subject matter itself. Moorhead proposes a range of approaches to getting the information, ranging from surveys to individual interviews, to using the data that regulators collect. Together a range of sources can provide a rounded overall picture of change in the market which could highlight emerging risks. Whether in the traditional professions, or in new businesses entering the market, understanding how attitudes and behaviours change is vital. Behaviour in complying with regulation is driven by the principles and ethics of those managing and supplying the services. Benchmarking is clearly complex, but we believe worthwhile. While we do not consider that carrying out the benchmarking itself is necessarily the role of the LSB, we hope that others will take the tools developed in this report and use them to monitor over time the attitudes of suppliers of legal services. For the full report, please visit: www.legalservicesboard.org.uk/what_we_do/Research/ Publications/pdf/designing_ethics_indicators_for_legal_ services_provision_lsb_report_sep_2012.pdf By Chris Kenny, Chief Executive, Legal Services Board
ML // November 2012
The views
Delivering an Investment Ready entity
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n recent years I have read numerous articles suggesting that there was a long queue of Private Equity (PE) Houses carrying large wallets with an overwhelming desire to invest in legal firms. Whilst it is still early days in the evolution of the Alternative Business Structures (ABS), initial statistics would suggest that it may be more challenging for PE Houses to achieve positive investment decisions than originally anticipated. Having worked with many businesses over the last 20 years, I have seen all too many fail in their pursuit of external investment. In terms of vision, strategy, product and delivery channel, many of those businesses that failed were light years ahead of your standard traditional legal practice. That is not to say that legal firms can’t be attractive investment opportunities but many simply don’t know how to present themselves as an attractive proposition, for that is what they are – simply another proposition. If legal firms are truly serious about achieving ambition through external investment then they need to present themselves in a way that makes them look different and attractive to the investor. Potentially there are 4 key things for a firm to consider: Investors are attracted to capital value uplifts. Accordingly firms seeking investment must have a vision, a strategy and a plan that will deliver short term improvement in capital value. Capital values do not need to be based on the here and now, they can be linked to future opportunity and those firms who are exploring innovation, new markets, efficient delivery and profit maximisation are likely to carry the highest level of attraction for investors. The business world is full of good people who have shaped businesses to secure external investment. So why do lawyers think that they need to perform this task as well as delivering legal services? Those firms who employ relevant people with appropriate experience and capability to secure external investment will stand a much better chance of being successful. Consider how external investors like to place their investment. PE’s are far more comfortable working with Ltd’s and PLC’s so in all probability conversion to this type of business structure will give the firm a greater chance of winning investment. Run your financial affairs as an investor would expect you to run them. Look to develop Balance Sheet value by retaining profits. Measure profitability in terms of Earnings Before Interest Tax and Depreciation and Amortisation (EBITDA), and have a clear understanding as to how you deliver a return on equity. PE Houses and other external investors are accustomed to investing in corporate style businesses. To carry maximum appeal legal firms need to look corporate, behave corporate and think corporate. By Steve Arundale, Head of Professionals Sectors, Commercial Banking RBS & NatWest
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Q: Will the ‘List of shame’ and forced powers by the Legal Ombudsman (LeO) raise standards of customer service work and focus their efforts to effectively deal with complaints in-house?
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After many years of waiting, delays, deliberations and consternation the LeO has finally published a list of firms about whom complaints have been made. Dubbed the ‘List of Shame’ the names of 772 law firms that have been the subject of a formal decision by the LeO have been put into the public domain. Rightly or wrongly it seems is a debate that will run for a while yet. Worth noting is that of 992 decisions made, remedies were ordered in less than half, meaning the LeO was actually satisfied with the law firms’ actions, customer service and remedy offered in the majority of cases. I wonder whether Joe Public will be able to easily discern that being on the ‘List of Shame’ is not necessarily a bad thing and whether those firms who were deemed to have done no wrong yet still appear on the list will have the marketing nous to turn the negative spin into a positive. A recent report by YouGov found that the most crucial part of the complaints process was the solicitors’ initial response. A simple apology in plain English was found to do wonders in diffusing the situation and could turn a negative consumer experience into a positive one, making them far more likely to recommend the solicitor. There are many things law firms can do to ensure they provide a good customer experience. Robust customer service processes are essential and are made easier to implement if one person (or a team of people) own this responsibility. Most B2C organisations have a customer services dept. Why not law firms? As we’ve seen above, the ability to deal with complaints efficiently and effectively has a huge impact on the outcome of the matter and the clients’ lasting impression. There are numerous customer service and complaint handling courses available online, is it not time solicitors were required to spend some of their professional development quota learning to keep their clients happy? A good case management system will reduce the number of complaints by ensuring matters are carried out in a consistent, compliant manner. Initiatives such as Lexcel and CQS also go a long way to giving consumers the confidence that they are choosing a reliable, trustworthy, quality solicitor. Better still; choose a case management solution that is Lexcel compliant! By Jo Hodges, Redbrick Solutions
ML // November 2012
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The views
Work ready
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ILEx’s qualifications have long been accepted by many legal services providers as the most effective training route for technician-level support staff, fee earners and lawyers. The great advantage of the CILEx qualification, which has its roots in work-based learning, is that staff are learning how to do the job alongside their studies. Employers can use the CILEx qualification to ensure their staff are work-ready in the shortest possible time. Take the example of an employer who recruits school leavers with good GCSEs and/or A levels. Using a CILEx Level 3 Certificate delivered by ITC’s supported distance learning, these employees can be taught substantive law and practice in complementary disciplines such as tort and civil litigation (there are eight certificates in different practice areas to choose from). They will also acquire professional skills, such as client care and legal research, all while continuously working in the office. This training, coupled with in-house mentoring and support, will produce a competent technician level member of staff in approximately one year. The payback, if not instantaneous, is rapid. Sponsoring employers can use the achievement of the paralegal Certificate, and the aptitude and characteristics displayed at work during this period of study, to select staff members for higher-level training who they know will benefit the organisation. This approach is being adopted by many firms in favour of employing graduates with excellent academic credentials and high salary expectations, but with no experience of the working environment. There are options for preparing higher level staff too. The CILEx Graduate Fast-Track Diploma (GFTD) delivered through supported distance learning can be used to train law graduates in complex matters of law and practice, as an alternative to recruiting LPC graduates. This compact qualification leads to expertise in two legal practice areas and incorporates client care skills. Typically, a GFTD takes a year to complete and can be fitted around work duties when delivered through ITC’s supported distance learning courses, so the return on investment is usually very quick. At a time when training budgets are tight, it is more important than ever to create a productive work-ready employee as economically as possible. By Noel Inge, Managing Director, Tutorial College
Q: Outsourcing is being sold as a key part of success for high street firm sustainability. Why and where does outsourcing really make a difference?
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‘Horses for courses’, ‘the right tool for the right job,’ choose your metaphor; both business and legal process outsourcing are on the increase as law firms strive for commercial advantage. In today’s competitive world it makes sense to employ a specialist to deal with costs. The bottom line - that’s what business comes down to. More and more clients, particularly corporates, are looking to cut their legal services budgets, which in turn puts pressure on law firms to reduce costs. That pressure is only going to increase as megalithic multinational ABS’s begin to enter the legal services market. The benefits of instructing a Law Costs Draftsman, for example, can be summarised briefly as cost, quality and objectivity. The rates charged by a Costs Draftsman will almost certainly be lower than those applicable to your fee earners, freeing your staff to do more profitable work and reducing the cost to your client. In terms of quality, a specialist Costs Draftsman will be aware of the latest developments in the rapidly evolving law of costs, and be able to advise you both to be wary of certain aspects and to take advantage of others. Furthermore their experience permits the expert to deal with matters more quickly and, quite possibly, to achieve a better end result. In these days when claimants do not expect to pay anything, what is obtained from the other party may be all that the solicitor will make from a case. It is not unusual, therefore, that solicitors can become too personally involved in a matter once costs are the issue. Equally, where a paying client disputes his solicitor’s bill, the situation frequently becomes bitter and can spiral out of control so as to consume far more time and money than are warranted. A fresh pair of eyes or a new voice on the telephone who does not have a history with the other party can sometimes move forward a case which has become bogged down in acrimony. In short, outsourcing is a no-brainer, providing both efficiency and preserving expertise excellence for your client. By Rob Parness, Costs Lawyer, Paramount Legal Costs Ltd
ML // November 2012
The views
Q: Will the Legal Ombudsman (LeO) ‘List of shame’ force lawyers to raise standards of customer service and focus efforts to effectively deal with complaints in-house?
Q: Will the Legal Ombudsman (LeO) ‘List of shame’ force lawyers to raise standards of customer service and focus efforts to effectively deal with complaints in-house?
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We all now have access to the website for the legal ombudsman www. legalombudsman.org.uk/aboutus/ complaints which sets out amazing data about the nature of complainants, the sort of legal transactions complained about and the nature of complaints received and failure to follow instructions. But what does it mean? Firstly, the data highlights that the general public is far more aware of its right to complain: 95.3% of complaints received by the LeO between 1 April 2011 and 31 March 2012 were from members of the public and of those complaints the majority, 95.65%, were about the service provided by solicitors. The next thing to consider is the areas of law attracting the most complaints. Amongst the highest were wills and probate (13.74%), residential conveyancing (17.52%), and family law (17.87%). Conversely the areas of law attracting some of the lowest number of complaints was commercial law (1.26%). One has to wonder why? It might also be asked why solicitors are not handling complaints sufficiently to avoid the general public feeling a need to refer to the LeO. There is no evidence that solicitors are not handling their complaints sufficiently well. All solicitors are required to notify clients at the outset of complaints procedures and those procedures must be strictly adhered to. However if at the end of that process a client does not obtain the outcome they sought it is open to them to gain what might be considered a more independent view from the Legal Ombudsman. Why would a dissatisfied client not adopt that route if they have not achieved the outcome they want? The data provided by the Legal Ombudsman is to be welcomed. It should raise all sorts of questions in the minds of law firms. It is not the manner in which complaints are dealt with or the level of customer service that needs addressing (although that may be the case in some circumstances) but rather the qualification and experience level at which legal advice is provided that should be our overriding concern. To provide the correct legal advice backed up by good customer service is surely the answer to successfully avoiding being one of the Legal Ombudsman’s many statistics.
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When the LeO ‘list of shame’ came out, I like every other legal manager, checked to see if their firm was on the list. I am pleased to say that the firm wasn’t, so no ‘shame,’ but ultimately is that the definition of success in client care? What does not being on the list mean? It could be indicative that you have a commitment to service and quality, or that you are very small or maybe that you are very good at dealing with complaints. All or none of the possibilities may apply. Further, does being on the list mean the opposite? Also, what weighting should we give to referrals with no finding against you versus actual findings against you? Do 10 referrals with no finding against you equal one finding against you? What struck me first about the statistics is how few firms were on it. So not damming, but actually proof that most people are happy with their legal advisors. Second was how few referrals were upheld. So again reasons to rejoice. What lessons are there to be learnt? All you can say is that if you were the complaints partner at a firm in which you had lots of referrals but no findings, then on the face of it, you are doing great. But you are being dragged into LeO and it is sapping your time. So put some energy into better communications with the client to avoid it coming to you. If the complaints are being upheld, then you have to look at everything and maybe the list is further impetus to solving the problem. Is publishing the list good or bad? On balance probably good, as transparency has to be the way forward. However, it is impossible for me provide proper analysis of the data as it is very limited. I leave that analysis to the individual firms on the list, as they will have in depth data on the causes of their own complaints. What the list actually shows is that the vast majority of solicitors are doing a good job in the teeth of austerity, increasing client demands and constant change. By David Bott, Immediate Past President of APIL and Managing Partner of Bott & Co
By Angela Moores, Jarvis Family Law
ML // November 2012
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Q: Will the Legal Ombudsman ‘list of shame’ force lawyers to raise standards of customer service and focus efforts to effectively deal with complaints in-house?
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When you stand in an airport queue at the Ryanair gate and see someone go to the front for priority and then return shamefaced, they have just completed the dreaded “Walk of Shame”, to the amusement and gratification of all those non priority customers patiently waiting their turn. As lawyers we now have our own equivalent in the “Hall of Shame” published by the Legal Ombudsman (LeO). A quick review of the Conveyancing stats show there are 124 Firms on the list with a combined 137 decisions. From the 124 firms there are only four firms with two or more entries. The overwhelming majority of firms are therefore showing one decision only. Again my calculations suggest out of the 124 firms there are one or more remedies registered against some 49 of those firms. That means again the majority of the conveyancing firms in the list had no finding of any sanction. According to the FAQ’s this means either that the LeO was satisfied with the service the lawyer or firm provided, or that the ombudsman’s decision was equivalent to what the lawyer or firm had already offered to do when it dealt with the complaint. Where a decision has been made there are details of the range of the compensation (but not the actual amount) or other remedy. I know that statistics are there for interpretation. It seems to me however that what is there is unlikely to be a deciding factor in the choice process of a firm of lawyers by a client. That is not to say I view the process as not having any benefit. I do see how firms will wish not to be added to the list (their overriding wish will remain however not to be referred to LeO in the first place). I also see that this list could easily grow in importance. (I am not aware if searching for a lawyer would throw up any list reference in Google yet or in the future). Will it focus firms to hone their in house complaints service ? – I think the answer is that this is one more weapon in the armory to encourage lawyers to deal effectively with complaints and for all of us that of course is a good thing. By Eddie Goldsmith, Partner, Goldsmith Williams & Chair of the Conveyancing Association.
Q: Will the Legal Ombudsman ‘list of shame’ force lawyers to raise standards of customer service and focus efforts to effectively deal with complaints in-house?
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I’m looking at this question solely from the technology point of view and how it can impact on the legal practice areas attracting the highest numbers of complaint: residential conveyancing, personal injury and will & probate work. There are two core issues here where technology can assist: (1) Practice & Client Relationship Management in other words the customer management side of the relationship with the client and (2) Case & Matter Management, which looks at the process management side of the relationship. With regards to the first technology, it doesn’t matter whether it is an old green-screen Unix accounts system or the latest CRM software, somewhere within your firm you have the ability to contact clients and prospects about your terms and conditions, fee structures etc. Treat your clients with respect and give them the facts: explain about all the extra costs that can arise and unforeseen delays. Then, if something does go wrong, they are fully in the picture and are not taken by surprise. There is a well-known marketing concept called super-pleasing – being prepared to do just that little bit extra in the client relationship, including being proactive when something goes wrong. Super-pleasing and client relationship management are both techniques we can expect alternative legal service providers to have in their portfolio. Traditional law firms also have the tools to do this. You just need to look at matters from a customer satisfaction point of view rather than a fee maximizing perspective. As for case management! Per-lease! This technology has been around since the late 1970s so there is absolutely no excuse for any forward-thinking law firm not to be using it! A good case management system is simultaneously a performance standards compliance and risk management system. If you set up the system to ensure that deadlines are not missed, clients are kept up-todate with progress, steps are not inadvertently omitted in a process, then you are also minimising the risk of any of those things ever happening by ensuring your staff comply with your best practice standards. So, to go back to the original question: law firms already have at their disposal the software applications to prevent many complaints from ever arising and for adequately responding to them. As with many aspects of modern legal business processes, it is not a technology problem but a cultural issue. Charles Christian is a barrister who has been writing about legal technology for over 30 years.
ML // November 2012
The views
Tackling risk profiles a priority for PII renewal success
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Q: Will the Legal Ombudsman ‘list of shame’ force lawyers to raise standards of customer service and focus efforts to effectively deal with complaints in-house?
he professional indemnity insurance (PII) renewal for solicitors in England & Wales was, for most firms, a relatively smooth process. For the smaller firm, rates typically fell as the insurance market became more comfortable with the exposure presented by firms in the Assigned Risks Pool, and insurers recognised that the claims position has improved. Not all firms, however, were offered a great choice of insurers; we found that firms with a questionable claims experience and/or high levels of conveyancing exposure struggled to secure competitive quotations. In addition, placing insurance with unrated insurers in the PII market is still very much up for debate. The recent failure of Lemma Europe and the growth of Latvian insurer Balva, both unrated insurers, illustrates that market share can dictate premium. At the time of writing we wait with interest to see how the pot of PII premium will be apportioned between insurers, but what can be done to improve your risk profile over the coming year? We expect most firms to have secured a reasonable and acceptable premium in 2012. The rates applied by insurers have definitely stabilised, although it must be appreciated that there are over 11,000 firms, all of which have a very different risk profile, renewing on the same day. No one firm is the same. Insurers still consider firms with conveyancing exposure as presenting a higher risk, despite the number of conveyancing claims for negligence and fraud reducing during the last 18 months. The heightened fraud risk which arose from a trend to pursue litigation in a time of recession has also, from an underwriting perspective, subsided. “Don’t rule anything out!” say insurers! This is perhaps fair comment, but we have hopefully seen the back of this unfortunate trend, for the time being anyway! The main concern for insurers is that PII is underwritten on a ‘claims made’ basis. As a result, insurers are exposed to claims arising from all work undertaken by the firm since its establishment. A number of firms have recently introduced robust risk management processes and systems. Whilst this introduction assists in reducing risks attached to current work, risk management processes are prognostic; they do not always address risks associated with work carried out in the past. We encourage firms to do ‘all they can’ to demonstrate a consistent approach to the management of risk.
The recent decision by the Legal Ombudsman (LeO) to name and shame the decisions regarding complaints about lawyers has taken many by surprise and produced split opinions on the subject. The list will be published on a quarterly basis showing the collated names of lawyers or law firms involved in complaints which had led to a formal decision by an ombudsman. The recent list contains over 900 decisions involving 770 law firms across England and Wales. The authority to publish is contained in the Legal Services Act 2007 and the reasons behind the disclosures are to promote consumer interests, transparency and to encourage higher standards within the legal profession. Commenting upon the decision, Adam Sampson said: “What we are trying to do with this policy is give objective information about the way the market is operating”. Elizabeth France, Chair of the Board, said: “We hope this information will help manage consumer expectations of what the Legal Ombudsman can offer and encourage improvement in complaint handling by lawyers”. A completely different take comes from a senior lawyer in the North of England who believes that all this will do is take complaints ‘underground’ and most law firms will not want to be named and shamed for fear of losing market share. Law firms will, he says, simply ‘buy off’ most complaints which fail to reach a satisfactory conclusion. If he is correct that means the Ombudsman will receive fewer complaints and assume his policy is working but the opposite will be true, and of course nobody will be able to assess the true situation. Getting an accurate picture of this if law firms take that course of action will be virtually impossible to ascertain although every law firm has to keep such records. Consumers will undoubtedly champion this breakthrough and hope the views expressed by the LeO are correct, now that the law has come into line with the practice of other Ombudsman schemes. Many will undoubtedly feel that the jury is very much out on this subject and it will be interesting to see what happens in the next 12 months to the Ombudsman’s statistics.
By Martin Ellis, Managing Director, Prime Risk Solutions
By Chris Owen, Chief Executive, St Philips Chambers
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ML // November 2012
The views
Q: Dealing with compliance is still the devil in the detail, with the Risk Register proving to be a new headache. So, how best to tackle them?
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Important dates have come and gone with more diarised for the coming months. I don’t think this will change for us in the near future as the legal sector is all about new requirements, amendments, updates, changes and reviews. Great to see firms prioritising compliance and enquiries regarding outsourced services are at an all time high. New firms we are working with are going through compliance reviews. Firms that have completed the corrective action required and have their compliance plans drafted are going for Lexcel. One area we are working on with all our firms is the Risk Register. Registers that we know well include those used for Declined Instructions, and High Risk Instructions but the Risk Register is something new. So how to go about drafting one? You firstly need to consider the main categories: Strategic Risk, Disaster Risk, Regulatory Risk, Financial Risk and Operational Risk. Then consider the generic risks per case type that you deal with: Residential Conveyancing will include Regulatory risks including Money Laundering and Mortgage Fraud. Negligence claims and Conflict of Interest will also be applicable. List these for each case type that you deal with. Then move onto the detail. The way we are approaching this is in the format of a table and each risk is listed and the grading of the risk is then stated. You need to consider what the starting risk is and if this changes due to the processes and policies you have put in place. So as an example Money Laundering may be high risk to start off with but due to the policies and procedures that are in place, the risk may be downgraded to medium or low. Other specific risks could include failure to report breaches to the COLP and COFA, the risks of being removed from lender panels, losing clients and tenders. Finally, bear in mind that the Risk Register is a working document that should become a valuable tool and an important part of your Risk Management. By Jaunita Gobby, Director, Legal Eye Ltd
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Risk: identify, target, comply
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isk assessment is compulsory* but how do you do it? Looking at your firm’s claims history is OK as far as it goes. After all lightning often strikes twice in the same place. But remember only a tiny proportion of mistakes produce claims, so your claims data does not tell you enough. Also look at complaints. Losing a good client can cost as much as paying out on a claim. So scrutinise your firm’s own complaints records but also check out the data from the Legal Ombudsman (http://www. legalombudsman.org.uk). This shows that clients mostly complain about a failure to crack on, rather than mistakes (i.e. failing to advise or keep the client informed, or to make progress accounts for half of complaints). Do you have adequate training, guidelines and supervision to address those issues? Also check your records on time written-off. Again, firms lose more money through write-offs than claims. The people who are writing off time and producing complaints are probably the ones who are creating other risks too. Use a structured approach There are many potential risk areas, so think carefully about all your management systems. Socrates publishes a questionnaire that takes firms through the key areas. People issues are often neglected, but that is where big risks can lie. For example do you have some rogue elephants in your firm, who refuse to submit to normal procedures and supervision? Do you have anyone who is serially unreliable, or has a drink problem, or (whisper it quietly) you do not trust? These are tricky problems to resolve, but the first step is to acknowledge that they exist. For each risk identified, estimate its likelihood, and the seriousness of the potential consequences. When you have identified the risks with serious consequences, which have a significant likelihood of occurring, you have to set about mitigating them. But that is for another day. By Bernard George, Director of Socrates Training Limited * Code of Conduct Outcome 7.3 requires that you: ‘identify, monitor and manage risks to compliance with all the Principles, rules and outcomes and other requirements of the Handbook, if applicable to you, and take steps to address issues identified’.
ML // November 2012
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The views
Keeping up with the changes
A
s happens in all business sectors from time to time, key terminology and phrases can be updated almost overnight, and the search industry is no exception. From October this year, we will now see Personal Searches being referred to as Regulated Searches and Official Searches being referred to as Council Searches. It’s important to understand the very sound reasons for the changes being implement to avoid them being overlooked amidst a cacophony of groans about the time and work involved in updating systems. The Council of Property Search Organisations (CoPSO) made the decision to change the terminology in respect of searches to reflect the realities of the post HIPs world. Member companies, such as Searches UK (which subscribe to the Search Code), operate in a tightly regulated environment -recognised in the language attached to their search products, now termed Regulated Searches. Equally, CoPSO believes it is a little misleading to use the term Official when referring to searches produced by Local Authorities. There is no basis for the use of this word in any statute and it implies that any search not produced by a Local Authority is, in some way or another, unofficial which could be prejudicial in the minds of lawyers and consumers buying searches from regulated providers. CoPSO has therefore decided to implement the term Council Searches to describe searches provided by Local Authorities. James Sherwood-Rogers, Chairman of CoPSO, said: “It is important that property lawyers have a clear choice in selecting where to source their searches, and are uninfluenced by outdated language. We hope that the distinction will enable lawyers and consumers to make a more informed decision about which search to opt for.” There are pros and cons for both type of Search and the subject has caused much debate as to which is best for clients and why… ultimately, there are no definitive answers, just personal views either for or against one or other. Whatever type of search you prefer, when ordering through CoPSO members, you are guaranteed quality data, obtained either directly from the Local Authority or (in the case of Searches UK) by a qualified network of locally-based Search Agents. Andrew Stenning, Managing Director, Searches UK www.searchesuk.co.uk
29
Q: Will the Legal Ombudsman ‘list of shame’ force lawyers to raise standards of customer service and focus efforts to effectively deal with complaints in-house?
A:
A decision has been made to publish quarterly information relating to complaints about lawyers, which is now available to the public. The list shows the names of law firms involved in complaints, which have led to a formal decision by an ombudsman in order to create greater transparency, promote consumer interest and provide objective information. When looking at the information published, it may be difficult to draw a conclusion about the law firms which appear on the list, particularly when complaints are made and no remedies are ordered. This ultimately means that the lawyers had in fact dealt with the matter properly. I believe it is important for consumers to make an informed choice about which legal provider they use, but the information published in the current format will in all probability not make that choice for them. The legal ombudsman does not have jurisdiction over all legal service providers, many of which are unregulated, such as will writers. The name and shame approach may not give the consumer a true reflection of the market. If greater transparency is required it may also be beneficial to publish positive client testimonials. Another area for concern is the lack of data in relation to the size of firms and/or the number of transactions they undertake. For example, a sole practitioner may have the same number of complaints as firm which employs over 1,000 lawyers. We have to ask ourselves, has a balance been struck between protecting consumers and encouraging independent and strong legal advice? And has the information published added value to the consumer, or does this system need to go back to the drawing board? By Lorraine Harrison, Head of Compliance and Client Care, Ralli On Twitter? Follow Ralli: @RalliSolicitors
ML // November 2012
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The views
Q: Will the Legal Ombudsman (LeO) ‘list of shame’ force lawyers to raise standards of customer service and focus efforts to effectively deal with complaints in-house?
A
: On 6 October 2010 the professional rules of the SRA were amended to oblige those regulated by the SRA to draw attention to or ‘signpost’ the existence of a new destination for clients’ complaints about their solicitor. It is hardly surprising that with “signposts” in terms of business, on bills and firm’s web sites clients should follow the signs and began to complain, some 35,000 in the first year alone. LeO eventually resolved to publish the names of those law firms which had been the subject of a decision by LeO since April 2012. The first publication occurred on 17 September 2012 and comprises the names of 772 law firms. There were some 992 decisions, of which 490 (53%) did not lead to a remedy being ordered. Of the 47% which led to a decision the average award was in the band £299-£499. Name and shame provides those running law firms with a challenge and an opportunity. While the statistics show that, for the most part, law firms provide an excellent service that hard earned reputation may be threatened by publication. The commercial implications of publication should spur managers to create a focus throughout their firms on avoiding complaints which emphasises the importance of treating clients with respect. Even in the best run law firms things do occasionally go wrong and in those cases fee earners need to strive for outcomes which leave no bitter taste and therefore less likely to lead to referral to LeO and the dreaded publication. Competing with businesses like the Co-Op with a primary focus on the customer experience ensuring their clients are not just satisfied but delighted to have been a client. Law firms must adopt a similar approach and encourage that in all staff at all levels. Publication of complaints should change the focus on complaints handling from reactionary catch up to embedding a pro-active consumer positive attitude in all fee earners. If firms do not change they are likely to find the market has left them behind. For further information on this and other regulatory moves, read the Legal Practice Management Solutions blog (blog.inpractice.co.uk)
31
Revolutionising the Bar: do or die
T
he Bar is in the midst of a revolution of change. There are typically three types of barristers’ chambers – the trailblazers - those who have been waiting to see what others do and those who feel they want to remain the same. Much of the Bar is where law firms were some 20 years ago but trailblazing sets are becoming more progressive than even today’s law firms. The understanding and need to run as a business has largely been driven by the Commercial Bar and this has been filtering through to the Publicly Funded Bar. Chambers have had to consider whether they are structured strategically enough to stay ahead of the curve – in light of reform and new competition. A number of sets now have Chief Executives, Chambers Directors, Chambers Administrators and Marketing Managers in situ. Most chambers who have gone down this route have seen the benefits from separating the administrative arm from the clerks’ room, enabling the clerks to focus on what they do best (clerking!). The Bar has a very unique culture and the lynchpin of this is the clerking team. The complexity of its role is like none other you would find in any industry sector. For as long as the Bar exists, so will clerks in playing a key role in a set’s success. However for sets who have been looking to instil a business culture within chambers it has been only fitting to inject business acumen from outside of the Bar. The creation and implementation of business plans, marketing strategies, tenders/bids are often not areas many barristers or clerks have had years of experience on. Business leaders that have therefore been brought in have assisted sets define who they want to be and where they want to go in the market. The sets that continue to be the most successful are the ones where members view their clerks and support staff as business partners. Not all sets need a CEO – but look at any of the leading commercial sets at the Bar and they increasingly have a comprehensive support structure, ensuring that being a business in an honourable profession does not have to be a dirty word. By Guy Hewetson, Partner, Hewetson Shah LLP
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ML // November 2012
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The Views
ATE: Still on the Agenda - Abolition of recoverability and implications for commercial cases
A
bolition of recoverability of ATE premiums and CFA success fees has been much heralded. It is anticipated to be effected by the April 2013 implementation of parts of The Legal Aid, Sentencing and Punishment of Offenders Act (LAPSO). Much of the focus on repercussions has been on the impact for personal injury claimants and on the introduction of qualified one way cost shifting (QOCS). There has been significantly less debate on the impact for commercial cases. Impact of changes on ATE for commercial cases The end of recoverability does not mean the end of availability of ATE insurance for commercial or other cases. Neither does it mean the end of the need to address the merits of applying for cover, at the outset and/or as a matter progresses. QOCS will not apply to commercial cases and cost shifting will continue to apply. A party to a commercial dispute will continue to run the risk of being required to pay a successful opponent’s costs (and be responsible for the entirety of their own), should their case fail. With recoverability in place, the advantages of obtaining cover are obvious. Where payment of the premium is contingent on success, and is then recoverable from an opponent, seeking cover may be considered something of a ‘no brainer’. When recoverability goes, that position will differ to the extent that the premium will be payable by the insured either from damages or otherwise. That is the new factor to be considered and weighed in the economics for each case, but the advantage of risk protection remains just as clear. Dispute resolution lawyers are acutely conscious of the need to give clients the best information about the costs of their matter from the outset and throughout. Where that risk can be offset by ATE cover, then irrespective of the abolition of recoverability, a client will want to understand the relative benefits of cover in the commercial and economic context of the particular claim. If the claim involves a funder, that funder will often require ATE cover as a condition for funding. The new ‘post recoverability’ world may alter some dynamics of ATE considerations but commercial ATE cover should remain firmly on the agenda.
33
Overhaul to overcome
A
s part of the service I provide for the Bold Legal Group members I attended, and reported on, the National Property Law Conference that took place in October. The topics covered included; the SRA’s Conveyancing review; Joint Ownership in light of Jones v Kernott; the new Property Information Form; Mortgage Fraud; Lender Panels and the Conveyancing Quality Scheme. If you thought that the run up to last October, with the new SRA Handbook, OFR, the Legal Services Act and Alternative Business Structures was hectic, think again. The next fourteen months will be even worse. The way conveyancing is carried out and delivered will, in my opinion, change dramatically. High street law firms really must start paying attention now and make sure that their own houses are in order. There are new market entrants (Co-op, AA, SAGA, Direct Line) and there will be more. Say what you like about them but they will, over time, have a negative impact on your businesses. Many firms will need to give themselves a complete overhaul. What do your offices look like from the outside? How welcoming are they inside? Are your front line staff as approachable, friendly, helpful and knowledgeable as they should be? Are you telephones answered promptly? Is the help and advice given by those answering the phones really as good as it can be? Are verbal estimates followed up in writing and then followed up again by a phone call? Your fee earners might be good when it comes to the areas of law they deal with but are they good enough when it comes to interacting with the public? All of these things, as small as they might seem, are important. There are many things I can help you with (for example keeping up to date with industry changes and new market entrants) and there are many things you can help yourselves with. However, the first thing you need to do is acknowledge that as times change so must you. If you are interested in joining the Bold Legal Group and/or coming to any of our CPD events (next one 15.11.12), please email: rh@boldlegal.co.uk. By Rob Hailstone, Bold Legal Group
By Matthew Williams, Head of AmTrust Law at AmTrust Financial Services
ML // November 2012
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35-51
The Features
ML // November 2012
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Features
37
SECTOR ROUNDTABLE: CONVEYANCING Modern Law asked some of the leading commentators and practitioners in the conveyancing arena to have a rare meeting of minds and give their thoughts as to where the sector is, where it’s going and what’s needed to stave off the competition. MLM: What is the present state of the conveyancing market?
Harris: Conveyancers have really led the way in getting information from the Land Registry. Of the 7,500 reported conveyancers, probably around 18% of those do significant levels of conveyancing. It’s important to ask what makes a ‘top 100 firm’. According to the June 2012 Land Registry data, 45 firms in England and Wales are doing over 100 transactions pcm. It takes roughly seven people in a department to do over 200 transactions pcm so a leading firm would have at least this number of conveyancers in their department, doing residential and commercial property transactions. Hailstone: What we need to ask is why the larger firms seem to be increasing market share – what are they doing differently? It’s partly access to distribution and panels. Not only can some of the small firms not get on the panels – as we saw with the HSBC affair – but it seems they don’t even choose to. Possibly because they simply can’t meet the requirements. Barnett: There’s no easy answer to this. In the 1980s, conveyancing went through the estate agency route, now we have a maturing marketplace with lenders and estate agents controlling the marketplace. Consumers need to understand the value in the conveyancing process – and about the choices available to them. Consumers also have higher expectations of the technological access to conveyancing – along the lines of information on iphones and tablet computers. Technological innovations are essential. Goldsmith: Estate agents have become better at encouraging clients to use panel solicitors - they are the first point of marketing. Olowe: Referral fees are more profitable than selling houses as it’s all profit - it’s an attractive by-product.
MLM: So what are the problems?
Hailstone: Despite the fact that consumer feedback on the conveyancing process is positive, the polarisation of the market has led to power flowing into a small number of hands means. It’s questionable if the system is in the best interest of consumers.
Roundtable Guests
Chair: Eddie Goldsmith Partner, Goldsmith Williams Des Hudson Chief Executive, The Law Society Mike Okenden Thornbury Associates John Turner Regional Manager, Landmark Information Group Rob Hailstone Founder, Bold Legal Group Chris Harris Today’s Conveyancer Victor Olowe Managing Director, Winzest Consulting Ben Harris Sales & Marketing Director, TM Group Richard Barnett Senior Partner, Barnetts
Hudson: It’s interesting to see the perceived outrage by the consumer regarding the HSBC panel. This was a poorly executed move and people voted with their feet. However, despite the concern, consumers wouldn’t be worried until they are informed. Unless they are told by solicitors, the public will be unaware of problems arising. Panel problems with lenders will continue unless regulatory action is taken, which is unlikely. Hailstone: The benefit to the consumer isn’t necessarily about reduced fees but about value – the process and lawyers’ role needs to be articulated.
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system including over 75 different searches, instant title insurance policies and a sophisticated anti-money laundering solution. TM Secure provides mortgage lenders and their panels an effective and efficient way of managing the conveyancing process and its associated risk. Many search suppliers also rely on TM’s efficient technology to access searches for their own customers. For further information please visit www.tmgroup.co.uk or call 0844 249 9200 Or email info@tmgroup.co.uk
ML // November 2012
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Features MLM: How is the high street market looking?
Harris: The cottage industry still remains – roughly 70% of transactions still remain with the high street but this is disparate in apportionment. The Consumer Panel reported this year that the public is increasingly satisfied with the local high street solicitor conveyancing service, suggesting that locality and face-to-face is sellable. High street firms need to get together and get to grips with where the market is going and their role in it. They’ve got to be savvy and pick up the excess work. Hudson: The UK opticians sector is used as a parallel to the current conveyancing situation. It saw significant change in regulation in the owner managed companies. It’s taken to the mid-2000s for the number of employed opticians to get back to the number seen pre-1985, when regulation hit the market. It’s taken 20 years for this to happen, however while employment in the sector has increased, for owners the situation has worsened. Owners of law firms will have a choppy ride. This is a personal view but the implications of ABSs will be seen on the high street. Perhaps we’ll see a shift in conveyancers diversifying and expanding to pick up other areas of work and then return to conveyancing after time. Hailstone: But work in progress funding is hard to get and challenges for work in other areas, such as personal injury, may limit this.
MLM: What has been the impact of The Law Society’s Conveyancing Quality Scheme (CQS)?
Goldsmith: 1,725 firms have qualified at the moment and 2,100 are in the pipeline. The questions are: why so few compared to the overall number of providers and will this change? Hailstone: Some aren’t looking to the CQS until they’ve seen what the benefits are. They’re waiting to see whether it will evolve and survive the initial flurry.
Goldsmith: But if they’re a serious conveyancing solicitor then the have to have the CQS accreditation...You’d have to be living in a vacuum to not want to be on the CQS – it’s essential for lender panel applications as much as the client. Olowe: CQS comes back to understanding what the client wants and adapting to deliver that. If you’re not a CQS firm, it’s difficult to pitch yourself as customer focused. Hudson: It has to evolve. I have written to the CQS firms to tell them protocol will be enforced and some will be rejected for reassessment if they aren’t followed. If member firms aren’t complying then other member firms need to tell us. Whatever happens in the market, there’s no reason for solicitors to go down market in quality and standards of service. There is another element to the CQS of course. The decision to open up regulation is massively important. I’m concerned this will – in the future – lead to a competitive regulator market competing on standards and price. A licensed conveyance can only get the CQS appointment if it’s regulated by the SRA – a useful quality assurance. Barnett: On the lender panel point, it’s got to be noted that the work Des has achieved with the lenders in terms of the CQS is tremendous and we wouldn’t have got where we are without him. It’s not said often enough.
MLM: What about the future of the CQS?
Hudson: We’re planning to create a consumer facing brand – similar and linked to Find a Solicitor. It will be the equivalent of the CORGI (gas safe) accreditation for technicians, although it would require a significant amount of money to get the brand out there. Olowe: The problem is, most of the work comes through a third party – is it the best thing to market to the general public? Hudson: The message needs to get through at the point of sale – by the estate agent or the lender, using
39
powerful at sale communications. Also to use social media as a cost-effective way of spreading the brand and go viral. Olowe: The solicitor brand is a valuable one – the CQS is a subsidy of that and would be effective. Hudson: It’s quite a task to set ourselves but we’ll get there.
MLM: Is Separate Representation (Sep Rep) going to happen?
Olowe: Sep Rep is only there for the interest of lawyers, not the consumer and until it is, it’s not going to happen. Barnett: It’s difficult seeing it happen as per the full blown system being discussed at the moment. Sep Rep light might be different... Okenden: The sector needs to focus on the how and why Sep Rep would be in the best interest of the consumer – it might be a positive move for high street firms at some point but only if the its on the agenda for consumers. Goldsmith: The issue with Sep Rep is that until we have the systems in place to deliver conveyancing quickly and cost effectively, it might not be as attractive. However it does bring back face-to-face meetings with the customer. It would also have a positive effect on PII insurance. Hudson: We have an open door approach to Sep Rep ideas – client choice is a benefit. However we do need evidence to sway the regulators to do something.
MLM: What are the key messages to practitioners?
Harris: Make sure you act in the consumer interest, not just your own. Okenden: Conveyancers need to focus closely on diverse consumer needs and then deliver. Turner: Capture and retain consumers by meeting their needs Ben Harris: The high street needs to address it’s commercial needs. Hudson: Survival isn’t compulsory but doing nothing just isn’t appropriate. Hailstone: It’s game on not game over. Get involved now and focus on the client. Barnett: Make a decision: who do you want to be and focus on that.
Landmark Information Group Landmark Information Group has quickly developed into the market leader in the field of property related environmental risk information and digital mapping since the inception of the business in 1995. Landmark has an unrivalled source of large scale current and historic digital maps together with high quality environmental risk and planning information. The focus on quality data enables Landmark to provide solutions that create peace of mind for our customers when using one of our products. Working closely with data providers including Ordnance Survey, the Environment Agency, the Coal Authority and the British Geological Survey enables Landmark to offer current and historical environmental risk management information and desktop mapping solutions for the property industry. Since 1995, approximately £20 million has been spent establishing the Landmark database which exists as one of the largest geographical information databases in Europe. For further information please contact Jacki Norbury Direct Dial : 01491 414 823 Office : 0844 844 9952 Email : jacki.norbury@landmark.co.uk
ML // November 2012
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Great expectations In the conveyancing process, clients’ expectations of flood risk investigations ‘as standard’ are misaligned, despite insurance risks and legislation changes set for 2013, as David Mole reports.
• 55% of buyers expect their solicitor to investigate a property’s flood risk automatically as part of the conveyancing process • 80% of UK homeowners would not buy a house that was at risk of flood but only 42% of people investigated their flood risk before buying their home The CML states that, in order to protect both the borrower and the lender, it is a requirement of all mortgages for the property to be covered by standard buildings insurance, including flood cover, for the full term of the contract. If insurance is not available, then it is likely that a purchaser will not be able to obtain a mortgage. The Statement of Principles: Impact on Insurance The Statement of Principles, an agreement between the insurance industry and the Government which committed insurers to continue to provide flood insurance for most homes and small business premises (even in areas of significant flood risk) is scheduled to come to an end on 30 June 2013 and will not be renewed. As a result, the ABI declared insurers would return to ‘risk-based’ pricing following the end of the Statement of Principles unless they and the Government come up with an alternative. The impact of this is that owners of properties with significant or high flood risk are likely to find that their premiums or excess increase or that certain conditions are imposed on cover. I know of several cases whereby insurance has
increased by two-thirds and the excess amount has risen to as much as £15,000£20,000 – and they are among the lucky ones; those at greatest risk may not be able to obtain flood cover at any cost. Added to this, where flood insurance is not available, the property owner may be in breach of their mortgage. Flood Risk Assessments It is crucial, therefore, for legal professionals to encourage their clients (whether the purchaser, tenant or the lender) to obtain a desktop flood report for any property they are considering purchasing or taking a lease of. This will highlight any potential problems, enabling legal professionals to research whether insurance cover will be available & affordable and to discuss flood resistance or resilience measures at a stage when it is still possible to renegotiate the purchase price or cost of the lease. Solicitors need not, however, become data or mapping experts, or even hydrologists, to understand the various types and levels of flood risk; help is at hand. Desktop, conveyancing-ready reports are easily available to solicitors, making their job of providing a comprehensive service for their clients very straightforward.
Common myths, such as “I don’t live near a river or the coast so I can’t be flooded” and “I live on a hill so it won’t happen to me”, need to be dispelled. I strongly urge solicitors to recommend clients obtain a comprehensive flood report as standard practice. Common myths, such as ‘I don’t live near a river or the coast so I can’t be flooded’ and ‘I live on a hill so it won’t happen to me’ need to be dispelled. The flooding which occurred in Wales during June of this year took place in some
areas that have not flooded in over 80 years. Flash flooding is the most frequent type of flooding in the UK and, as demonstrated by the rainfall this summer, homes do not need to be near a river or the coast to be affected; it can happen anywhere to anyone, often with little warning. Every individual has a different risk profile and offering a comprehensive flood report as standard practice removes the assumption of risk on their client’s behalf. Our Homecheck Professional Flood Report, www.homecheckpro.co.uk, is a desktop, conveyancing-ready flood risk screening report designed to enable property professionals to assess the risk of flooding at residential properties. Following feedback from our customers, the report has recently been significantly enhanced to ensure the clearest risk analysis possible and includes new data sets to provide a comprehensive assessment covering all types of flooding. From 1 July 2013 onwards, if a property is ‘at significant risk’ it may prove extremely expensive - if not impossible - to obtain flood insurance. If a property cannot be insured, the solicitor will be unable to provide the necessary Certificate of Completion to the Lender to release the mortgage funds and the buyer will be unable to complete the purchase. David Mole, Director of Environmental Due Diligence for Landmark Information Group
ML // November 2012
* OnePoll survey, August 2012.
A
recent survey has revealed that 55% of property owners in the UK expect solicitors to automatically investigate a property’s flood risk as part of the conveyancing process. The survey, commissioned by Landmark Information Group, has also highlighted that, despite 80% of UK homeowners stating that they would not buy a house that was at risk of flooding, only 42% of people actually investigated their flood risk before buying their home.
Features
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Referral fee ban: the Titanic disaster? The imminent ban on referral fees in personal injury claims will transform an industry worth at least £3 billion per annum. The orthodox view, at least amongst readers of this magazine, is that the transformation will be for the worse. Optimists may find helpful guidance for the future by looking to the past. As Tony Walton writes. Scene: April 1912, North Atlantic
Warner: Good evening Mr. Cholmondeley. Cholmondeley: Good evening, Warner. I was just going to re-arrange the deckchairs. Captain Smith was telling us over dinner it’s going to be sunny tomorrow. Warner: But Mr. Cholmondeley, haven’t you seen that iceberg over there? We’re heading straight for it! Cholmondeley: (Looks out to sea) I don’t think it’s clearly enough defined yet. It’s probably just a shadow. If it was an iceberg, we’d have heard something from the bridge by now. Warner: I’m sorry Mr. Cholmondeley, it’s definitely an iceberg. We must tell everyone and make sure they’re all saved. Cholmondeley: (Looks again) Hmm, yes I can see now it is an iceberg. Not to worry. We haven’t had any trouble so far and anyway don’t you remember how they said we were unsinkable? They’re bound to find a way through, they always do. Warner: Don’t you know what icebergs can do to a ship?! Cholmondeley: I don’t believe a word of it. Besides, there are still a good couple of cables before we hit it. Warner: A couple of what did you say? Cholmondeley: Cables, they call them. I’ve been travelling by sea for years, I know my stuff. Warner: We can’t miss it now. Even if we just scrape past it, we’re heading straight for those three much bigger icebergs over there. Can’t you see, one’s shaped like a capital A, the next a capital B and that squiggly one? Cholmondeley: You worry too much, Warner. There’s plenty of time to steer round. Warner: I’m sorry, Mr Cholmondeley, I’m heading for one of the lifeboats. Won’t you come with me? Cholmondeley: Me? In a lifeboat! Don’t you know who I am?
(Pauses) Maybe I’ll come along after I’ve finished with these deckchairs. There are bound to be plenty of lifeboats to go round, though I must say it’s looking quite chilly out there. Mr. Warner escaped in one of the lifeboats. Mr. Cholmondeley and Captain Smith failed to recover their success fee. The inquest into the sinking recommended the implementation of modern design, technology and procedure on all future crossings. All the survivors, chastened by their experience, learned the importance of continuous innovation and forward thinking. As a result, many of them achieved greater success later in life than they had previously expected. One hundred years later, there are amazing new ways to allow many more people to cross the Atlantic, safer, quicker and cheaper than ever before. Tony Walton, Managing Director of Questus, the Legal Outsource Specialists. www.questus.co.uk
The Tipping Point Early in WWI, it was still possible to witness cavalry charges. Soldiers would wear coloured tunics for opponents to recognise. Within a few short years, everything was tanks and khaki. I have little doubt that soon, some traditions in the legal profession will appear just as naïve as dressing up in bright colours, sitting so your enemy can get a better look at you. For example, why do law firms continue to have teams of senior fee earners in expensive locations? Look no further than the hourly rate regime
for an explanation - there has been no need to evolve to make a profit. Profitable hourly rate work, above all in the field of personal injury, now comprises less of a typical work profile. Incessant salary demands have eaten into any profit ever to be had from fixed fee work (and that’s before portal fees fall off a cliff). Many in PI are laying down their flags and running to the hills. A new strategy is essential for those choosing to stay and fight. Outsourcing of mainstream fee earning work, even to a location where
it can be done both profitably and competently has up to now been a forbidden zone. The existential changes under way require that line to be crossed. Legal services are no longer ring-fenced from modern business pressures. Today we are at tipping point. It is certain that non-lawyer owners will introduce outsourcing and white labelling to their law firms as a matter of routine. This is not a war and lives are not at stake; however careers are in jeopardy for those who do not match this fire power.
ML // November 2012
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Features
45
People first ABSs and the shift from input to outcomes in regulation has had a resounding impact on personal development plans. Modern Law speaks to two experts on the impact of change and asks for some practical guidance.
The impact
A strategy in practice
The existing system of personal development via CPD is increasingly under fire as being unfit for purpose. It embodies the box ticking that the new broom of outcomes focused regulation (OFR) is designed to sweep up and bin. This makes it all the more astonishing that it often remains the primary, or only, investment in people development, and given that a firm’s intellectual capital is the only real differential in an acutely competitive market, it is under resourced at great cost. It may have had to take something dramatic, like the de-regulation of the entire sector, to raise investment in people higher up the strategic agenda. But with competition coming from nontraditional corporate entities, aligning people development strategies with the corporate strategy is now an imperative. In a sector that relies on the quality of its intellectual capital for its profit - there is a pressing need for a presence at Board level. OFR places competencies at the heart of the regulatory framework, developing individuals to reach and maintain competencies appropriate to their work, and it is not about what the firm deems competent but what the client deems competent. Add to this the fact that complaints by clients can appear in the published ‘List of Shame’ by the new Ombudsman; this is deeper than a tick box exercise. Developing people under a penalty system is not ideal, but anything that ensures genuine investment in a firm’s most valuable resource has to be cheered. People development strategies must take a place at the Boardroom table and, when they do, the next generation of lawyers and their clients - will be the better for it.
Here are three very old adages: legal practice is a people business; people buy people; a firm’s greatest asset and investment is in it’s people. Why then are we so reluctant to continue investing in them when the relationship with the bottom line is such a direct one? No, we’re not just talking money/benefits packages (although both are important and helpful in maintaining motivation and productivity). How much time do we invest in identifying strengths and weaknesses, what makes partners and staff tick, skills development, and contribution to the firm’s future productivity and profitability? Key is the firm’s Personal Development Review (PDR) scheme. Better known as the oft-scorned appraisal system, it is as relevant as ever to a firm’s well-being – even more so when there are significant changes to be implemented in the way we work.
By Bernadette Lyons, qualified solicitor and corporate coach. Founding P.Manners Strap Ad.pdf Director 1 04/07/2012of 09:38:30 Platinum Leaf.
Key attributes an effective system should deliver: B uilding potential I dentification of weak spots, blindspots, strengths S pecifying objectives C ontinuity of process (follow-up) U plifting staff (motivation) I nformation feedback T raining needs An effective system should be fresh, forward-looking and relevant. Motivated people with the right skills are essential in delivering workable Business Planning and agreed objectives. Without them how can you do so? Some key pointers: Have some idea where the firm is heading; ascertain where skills gaps lie – they’ll highlight internal development needs and/or who to recruit (and at what level); arrange PDR’s before annual strategy reviews – you’ll need the raw material; timing, preparation, ambience, the right questions, empathy, and mutual involvement in follow-up are crucial, and; listen! Combined, these will tease out priceless nuggets of information, which should then be collated at a partner/manager level review session so they can be fed back in to the broader strategic process. Your format needs to work for reviewer, reviewee and firm. Is it time to redesign yours? You don’t have to be a new legal entity to justify it! Matthew Tasker, Principal, Taskers Law Management Consulting
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ML // November 2012
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Features
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Best in breed Key to the ABS model is to be best in breed for clients through the consistent delivery of high quality and client-focused services. The medical and rehabilitation solutions for PI ABSs (often providing the first opportunity for face-to-face interactions with clients) are integral to this strategic vision and can help ABSs meet their outcome focused regulatory requirements. Mr. Bippon Vinayak reports.
T
he ABS experience is currently limited to a small number of diverse business structures ranging from private equity backed, international listed companies, to the long established specialist PI firms. Despite the lack of meaningful market information, it is highly likely that the new breed of ABSs will be looking for bespoke solutions when sourcing medical evidence and rehabilitation services. These services are currently largely provided by a small number of medical reporting organisations (MROs). The medico-legal reporting provision has evolved over the last 20 years to reflect changing needs and dynamics within the personal injury market. The MROs have worked with solicitors and insurers over many years and are now an integral part of the personal injury process. In fast track cases involving soft tissue injury, the MROs provide rapid turnaround of reports at a cost agreed with the Insurance industry (MRO Agreement). So, what are the next challenges for the medico-legal market? The Government has muted the introduction of court appointed experts and this may lead to a very different medico-legal landscape. I will cover this in a future article. Apart from service provision, the MROs have provided commercial benefits to their customers in the form of commission payments, extended credit terms and write off facilities. The legal market is bracing itself for a reduction in top line revenue from lower portal fees, loss of commissions from ATE, medicals, rehabilitation etc. So, can the gap be bridged? In my view it is inconceivable that
the highly developed, technically savvy and streamlined MROs will not come up with LASPO compliant commercial solutions to continue to play an integral part in the industry. The likelihood is that the more advanced MROs will form collaborations with the major work providers and law firms, to ensure they can provide a highly integrated solution with significant commercial benefit to the lawyer and referrer. Many structures are being considered and will be subject to counsel’s opinion over the coming months. These changes may lead to much tighter and longer term partnerships between the various parties. There is every chance the new arrangements may even provide enhanced commercial benefits for the various stakeholders in our industry. Is this optimism misplaced? The influx of institutional investment in this area amidst confused market conditions must indicate underlying belief in the sector opportunity. The market is likely to experience unprecedented investment that may radically change market dynamics. The sector has always been profitable, but cash flow has been an enormous challenge and a barrier to entry and growth. Although a handful of ABSs and law firms may explore developing in-house capabilities to deal with various parts of the claims process, most will look for ‘best of breed’ solutions to compliment their core competencies in the provision of legal services. The synergies from various collaborations could result in unique market offerings and advantages resulting in an opportunity for greater market share. The ABS is driven by a strategic agenda. They will want to establish a distinct brand associated with excellence, in an attempt to cross sell a variety of legal and associated
services to the consumer. Striving for excellence will need to be embraced at all customer touch points. The medical and rehabilitation service is an important part of the claimant personal injury experience, as it may be the only time the claimant comes face-to-face with a professional person, as many will never meet their legal representative. The administration service provided by the established MROs needs to reflect the business, customer values and ethics of the ABS. Rehabilitation has seen a significant growth in the market and will form an integral part of the service customers will expect and demand rather than receive in an ad hoc manner. The development of proactive rehabilitation makes the service readily accessible at the very time it is needed and when it is most beneficial. Efficient administration of medical assessment and immediate provision of rehabilitation leads to a highly positive customer experience. The emergence of Damage Based Agreements may result in the claimant looking for additional value from their chosen supplier of legal services. The legal industry will need to review all their service providers to ensure they are providing the best the market has to offer. There has never been a greater need to differentiate from the competition. All stakeholders need to put the customer first and subscribe to world class service. If the end result of the various changes is a better customer experience and greater customer focus, then the changes will have reached the desired outcome and pass the outcome based regulation test. Mr. Bippon Vinayak, FRCS, is Chairman and CEO of Doctors Chambers Group.
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48
Features
ABSs: A case of Tortoise v Hare? It’s been 12 months since the formal introduction of Alternative Business Structures (ABSs) by the Legal Services Act 2007. So what impact has this had on partnership structures? Eimear McCartan, reports.
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rior to the Legal Services Act 2007 being introduced, speculation about the effects such radical changes would have, were rife. In particular, those pessimistic about the changes lamented the undermining of the legal profession via the introduction of so-called ‘Tesco law’, combined with the ringing of the death knell for the high street firm as we currently know it. For individual partners of the traditional partnership model, there were concerns that their hard-fought position would become increasingly redundant and outdated as a more fluid model was introduced. At present, the evidence suggests that for individual partners, the gloom predicted has yet to come to pass. Recent assessment Two pivotal pieces of research have been recently carried out which assesses the consequence the introduction of ABSs has had on the legal world since introduction. The consensus is the practical implications to date have been somewhat underwhelming. In June 2012, research was carried out by Jures on behalf of law firm Fox Williams which involved a major survey of 100 commercial law firms. The results are an interesting indication of the current mentality of partners in commercial law firms and suggest, at present, there is reluctance to medal with the status quo. Of those surveyed, 62% identified loss of control as the biggest barrier to change, whilst 51% identified resistance from partners as an obstacle to introduction of the ABS. The findings of the second piece of research carried out by accountants, JW Fisher and Company, following a survey of 75 small-medium size firms in the South East, were equally
ML // November 2012
cautious. 89% of those surveyed were not affected by the Legal Services Act 2007, with 52% expecting the Act not to affect them over the next 12 months. In spite of the slow pace of change to date, some of the findings of the research carried out do demonstrate a potential willingness to embrace opportunities in the future. In the Jures research, over half of those surveyed found the prospect of private equity compelling or very compelling, and 39% have already changed their management strategy as a result of the implemented changes. Such findings suggest that whilst there is an initial reticence about evolving, the seeds of change are planting in the minds of many. Thoughts for the future The consequence for partners of this willingness to embrace change could be far reaching. The underpinning ethos behind the Legal Services Act 2007 helps to shed light on what the consequences for individual partners may be in future. The drive for introducing the ABS was to encourage law firms to become more streamlined and competitive by offering combined legal and non-legal services, with the opportunity for outsider investment. For individual partners, the worrying word here is ‘streamlined.’ This would suggest that those partners not quite fitting the bill - those underperforming or those resisting the alternative structure - will be ousted. Partners need to be prepared for a de-cluttering of the traditional partnerships as lacklustre performers are replaced by non-lawyers with innovative skills, business acumen and commercial minds. Obstacles partners may experience in future, or indeed may already be experiencing as more flexible legal structures are embraced and the traditional partnership model is chipped away, includes a loss of control of their firms as outsider investors’ takeover. Alternatively, lock-in clauses may be used to ensure high performing partners
stay on after investment by a private funder. Others have bemoaned the likely loss of loyalty, commitment and trust between partners which will come with the move away from the trusted partnership model to a more modern and commercial legal environment. The need for change The changes implemented by the Legal Services Act 2007 to date can hardly be described as revolutionary; indeed they have been more sedate than sensational. Despite this, the signs are emerging that changes are afoot and attitudes are shifting. What is very clear for partners is the need to adapt to these changes to survive in future. Already in today’s climate, partners are expected to be multi-disciplinary; they need to be lawyers, managers, marketers and business developers. The introduction of the ABS reinforces the need for partners to broaden and hone their business skills, perhaps by undertaking further formal training. In this way they can add increased value to a more commercial business environment. In addition, a clear vision and plan for the firm, defined roles within the partnership and transparent processes will also help to ease partners into this new setting. A word of warning at this stage; partners also need to be prepared to relinquish control to some extent in future if outsider investors are to play a role; a certain loss of independence is inevitable. For some partners, adjusting to this may be very difficult to accept. Overall, the effect of the introduction of ABSs is akin to the tale of the tortoise v the hare. Whilst the changes have been slow to impact the legal sector, ABSs are still likely to have their day; ultimately the tortoise will win out. Eimear McCartan, Partnership Law Solicitor, Ralli On Twitter? Follow me @ PartnershipLaw or @RalliSolicitors
Features
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Get in sync ‘Anthony Smith sheds light on LawSync. This scheme, created by academic institutions, ensures courses are in tune with sector needs in its delivery of graduates and upskilled practitioners with the rapidly changing world of legal services.’
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ome readers may recall in the last edition of Modern Law Magazine, James Caan was quoted as saying that: ‘…a message does need to be sent out to academic and legal institutions to invest further in communication skills for new and existing lawyers.’ Some law schools around the world are already starting to take up this challenge and, indeed, going further. Mitch Kowalski, author of a new book about what a law firm of the 21st Century might look like and member of an initiative known as LawSync, has said that while James Caan’s observation is a good starting point: ‘law schools need to stop teaching students about law as it used to be and teach them how it will be.’ LawSync aims to do this. This is a project driven by the Department of Law, Criminology, and Community Justice at Sheffield Hallam University (SHU). The name of this project reflects participants’ desire to see a better synchronisation between law as an academic discipline and professional practice. The core LawSync team is made up of Richard Whittle, Peter Griffiths and Peter Smith from SHU and three contributors from outside legal academia: Mitch Kowalski, Stephen Allen and Antony Smith.
So, LawSync: • Exists to identify and anticipate trends and issues arising from the evolving legal services market. • Seeks to understand, chart, and enable innovation in legal services. • Is non-partisan and aims to help all those involved in the legal services industry through developing and promoting new techniques for legal service delivery. LawSync promotes innovation and innovative thinking as key elements of legal education and legal services. It aims to achieve this through an undergraduate teaching module and a collaborative network that brings together a range of stakeholders and ‘whole market’ perspectives from around the world. The LawSync teaching module asks students to respond to challenges in the provision of legal services resulting from a mix of regulatory, technological and consumer driven changes. As well as studying legal service markets, with a particular focus on recent developments and the trajectory of future change, students are afforded the opportunity to be innovators themselves and to reflect carefully on the growing range of opportunities that legal study offers them. LawSync’s collaborative network also provides a range of training, consultancy and CPD products to a profession that is currently undergoing profound changes. Collaboration is a key theme at LawSync. At LawSync’s inception, the SHU team felt that to help promote understanding of the myriad of factors influencing change and help plot a
course through the new legal services landscape, it was vital that other voices be heard. In particular, the SHU team were (and remain) keen to tap into insights offered by practitioners and others working in the legal services industry. The team of collaborators continues to grow, including some organisations very well known in the IT and associated services industry. In his book The End of Lawyers? (2008) Richard Susskind pointed out that law firms can adapt to new challenges and lawyers can prosper: ‘even if they are not occupied with the jobs that most law schools currently anticipate for their graduates’
‘law schools need to stop teaching students about law as it used to be and teach them how it will be.’ James Caan It has become increasingly common in recent years to see qualified lawyers working in law firms in nonfee earning capacities – most obviously as professional practice lawyers, providing fee earning staff with research and other back-up resources. The expectation must be that the range of non-fee earning roles for people with legal skills will increase. Susskind also listed some alternative roles that legally trained staff might play in future, such as: legal knowledge engineer, legal risk manager and legal hybrid with skills in, say, project management or marketing as well as law. This list is by no means exhaustive. The point is that today’s law graduates need to know far more than black letter law if they are to forge a meaningful career in tomorrow’s legal services industry. LawSync is designed in part to give SHU law graduates some of those ‘other’ skills. It is also designed to contribute vigorously to the on-going debate about the nature of legal services in the 21st Century and the way those services can impact positively on the development of a society which should continue to strive to be fair, just and equitable for all. Anthony Smith, Director, Legal Project Management Limited
To find out more about LawSync, visit www.lawsync.com and if you would like to collaborate with the team or otherwise contribute in some way please contact Richard Whittle, email: r.whittle@shu.ac.uk.
ML // November 2012
Are your partners trying to get rid of you?
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Business Management
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Innovating delivery Innovation in resources for ABSs – such as software – could be a little chicken and egg. Are the providers up to speed with the demands of those seeking an ABS venture, are they simply focusing on bespoke solutions or can smaller ABSs also benefit to help innovate delivery? Modern Law debates the key issues with Paul Wilkinson from Lawclient and Darren Gower from Eclipse Legal Systems. Q: Have ABSs and new legal entrants created wider software needs and led to more innovative / exclusive solutions?
Paul Wilkinson
Darren Gower
PW: From my discussions with a number of law firms and commercial companies seeking to become an ABS, their prime requirement is for a case management system that supports an efficient workflow, so as to be in a position to compete with ABS’s already up and running. This legal workflow should also be coupled with CRM tools to enable a strong customer focus, as there is no doubt that PPI Claims companies score very highly in this area. What new entrants generally lack are experience in legal firm policies and procedures and in particular detailed knowledge of SRA Accounts Rules and COLP and COFA compliance experience. DG: New organisations have certainly changed the marketing direction for a lot of software vendors. We at Eclipse have always promoted
the client relationship benefits of our software, and it is this focus - client management and client relationships - that other software providers are now starting to recognise the importance of. Q: Has there been a focus on developing client management or case management software? PW: The priority is normally in client management of a high volume caseload although recognition of the need for compliance and efficiency in case management follows. DG: The lines between them (if there were any!) have blurred and the priority is twopronged - to manage cases effectively while at the same time providing the ultimate in client (or ‘customer’) service. This has always been the holy grail for legal service providers but the priority seems to have been crystallised and is now not just a secret held by selected, forwardthinking organisations.
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ML // November 2012
Business Section Q: Is the legal sector catching up with the software innovators (in realising the full benefits of innovation) or has the software sector had to catch up with the ABSs? PW: An issue for most established software vendors is their legacy systems, some having originally been developed several generations ago and the reluctance of their core clients to embrace new innovation. As business continuity, risk management, data security and encryption of emails are only just being addressed by the smaller law firms’ innovations such as CRM, in other sectors, will take a considerable time to be introduced. DG: I would say that the gap between what legal service providers want, and what IT providers offer, is narrowing. Yes the legal sector is catching up and there are now a few law firms that are pushing developments and really testing what is out there. This is great to see - this type of aggressive innovation can only be good for the sector as a whole. Q: Is software that allows for the commoditisation of services increasingly popular? DG: This has always been popular in areas such as personal injury, conveyancing and debt recovery - areas where throughput is high, margins are slim, and accuracy / efficiency is therefore paramount. I don’t see demand for this type of solution waning, in fact it should increase as more players enter the sector and seek to provide the ultimate in low-cost, high-service propositions.
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Q: What has the impact of ABSs been to date? PW: I think it is too early to measure the impact, at present most firms are just thinking about the changes. Most ABS’s are just talking about what they will do. As Andrew Woolley, a family lawyer, remarked in his Woolley & Co blog about the Co-op Legal Services ABS launch, transparent fixed fees and three ring telephone answering are hardly startling innovations, they have been around some considerable time. Change will only be embraced when clients are lost and profitable revenues decline. DG: The overall impact is that the focus on client management and client experience has been pushed to the fore. Not before time - one of the big things that ABSs will bring is to break down barriers between ‘clients’ and service providers and make the whole relationship more ‘personal’, probably rebranding the ‘client’ into the ‘customer’ while they do it. Q: Are ABSs a ‘storm in a teacup’ or are they here to stay? PW: The innovation and investment that will result from ABS’s entering into the legal sector will be a very welcome addition. Not all ABS applications will be successful, and of those that are, not all will have an impact as indeed not all law firms succeed. There are on the MoJ website around 2,500 registered claims companies many of whom are considering what to do next after PPI and reviewing the impact on their business of the ban on personal injury referral fees from April 2013. If the lead time to become an ABS is some 6-9 months and there are several hundred applicants already in the pipeline, then the sooner a firm or company decides the better.
????? Take a scythe to non-billable hours
S ?
urveys of at smaller law firms (less than 20 fee earners) in the USA by LexisNexis have shown that ???????? lawyers there spend between two and four hours per day on non-billable time. According to the survey data the ???? activities which take up most of the non-billable time are tasks related to practice management and administration. It is fair to assume that similar results would be found ??????? from a survey of comparatively sized UK law firms. Two to four hours is a long time in a working day. Carrying this much non-chargeable time can become very expensive. How to reduce the amount of nonchargeable or ‘wasted’ time? An increasingly popular approach is to review standard processes through the lens of a formal project management methodology which emphasises ‘waste elimination’, known as Lean / Six Sigma methodologies. There is little doubt that such methodologies, especially when applied by qualified project professionals, can result in impressive elimination of ‘waste’ and duplication so leaving more time to be spent on chargeable activities. However it is not an essential pre-requisite to be an expert in Lean / Six Sigma in order to see at least some increase efficiency and effectiveness as a result of administrative process review. You may be surprised at how far you get with an inquisitive mind, a willingness to shine light on some dark recesses of existing procedures, a determination to put in place new streamlined processes and, most of all, persistence to follow through. There is no point in spending time re-designing more
streamlined practice management and administration processes if they are not going to be adhered to by all concerned. You could perhaps make a start by simply following the paper trail of a typical bill, from inception of the initial draft to receipt of payment; my experience suggests that you will uncover some inefficient practices along the way.
‘There is no point in spending time re-designing more streamlined practice management and administration processes if they are not going to be adhered to by all concerned’ Over the last few years many firms have cut back on staffing (particularly support staff) and other resources; those left in the firm are working much harder than before. Some mistakenly then believe that they have a ‘Lean’ law firm. Not necessarily so. Some Lean / Six Sigma professionals have a saying: ‘lean, not mean’. To become more efficient firms need to re-design existing processes and probably change working practices. This should apply to everyone, fee-earning and support staff alike. By Antony Smith, non-practising solicitor and Director, Legal Project Management Limited www.legalprojectmanagement.co.uk
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Q: Will the Legal Ombudsman ‘list of shame’ force lawyers to raise standards of customer service and focus efforts to effectively deal with complaints in-house?
A:
Nobody could sensibly dispute that those solicitors found guilty of providing poor service should be held to account. Of more immediate concern is the fact that the process, as it currently stands, is both unfair to solicitors, and potentially misleading to those it is intended to assist. To start with, it is possible under the new scheme for a law firm to provide truly atrocious service, but not be named and shamed online. Such a firm would have the chance to settle the complaint in house, or failing this to settle the complaint informally by agreeing with any initial recommendation made by the Legal Ombudsman (LeO).
Complaints resolved in this ‘informal’ way are simply closed at that point, and not passed to the Ombudsman proper to make a final decision or recommendation. It is only matters passed through for this final decision or recommendation that are recorded on the web site. Firms subject to serious and/or serial complaints as such have a chance to effectively buy off any reporting of their poor service, thereby completely negating the true value of the data available to clients. Of more direct concern to solicitors must the fact that refusal by them, or the complaining client, to accept the initial recommendations of the LeO at the ‘informal’ stage of the process, will automatically lead to publication of the fact of the complaint, regardless of whether that complaint is subsequently upheld.
As a result, firms keen to keep their names off the published list may take a commercial decision to simply go along with recommendations which they don’t actually agree with. The more serious result is that whether the matter progresses to the next stage rests entirely with the client. If they refuse (however unreasonably, and for whatever reason) to accept the recommendation to resolve the matter at the ‘informal’ stage, then the matter must progress to the Ombudsman for a formal decision, with the resultant publicity that come with it, regardless of outcome of that final decision. The aims of this new process may be laudable, but it’s execution is poor to say the least, and looks set to be challenged in the months ahead. By Sean Gordon, Senior Solicitor, Neil Hudgell Solicitors
Q: Will the Legal Ombudsman ‘list of shame’ force lawyers to raise standards of customer service and focus efforts to effectively deal with complaints in-house?
A:
Whether a firm is for or against the Legal Ombudsman’s recently launched “Decisions and data” complaints list, they will want to avoid being on it - especially if they are serious about adhering to the outcomes in the SRA’s Code of Conduct 2011. It has long been reported that many complaints against law firms largely relate to failures in processes, rather than to the legal advice given. In the new legal era, robust case management technology can help on three levels: At a fundamental level, case management workflows that underpin legal processes can help ensure clients experience a consistently high quality legal service and so reducing the likelihood of complaints in the first place. Thus relating to outcome O(1.4): “You have the resources, skills and procedures to carry out your clients instructions.” Firms can also revisit and widen their use of case management to be more pro-active towards recording client satisfaction, and so helping to indentify and rectify potential complaints. For example, as every matter is completed, a survey can be automatically despatched to the client and certain staff tasked to review and act on feedback. Also, at
ML // November 2012
the outset of the matter, the file opening process can trigger an engagement letter that includes details of the complaints process, so adhering to outcome O (1.9) of the code. Resourcefully efficient firms can also use case management workflow to run their actual complaints process. Each complaint can be set up as a matter with appropriate workflows scripted to inform the client about the Legal Ombudsman’s procedure, enabling the complaint to be tracked internally and ensuring the client is kept informed. Thus helping to adhere to outcomes 1.10 and 1.11 relating to complaints, and also demonstrating indicative behaviours relating to Complaints Handling IB (1.22-24). As firms adapt to the new legal era, innovative firms realise that good case management systems are not just for workflows around the legal matters themselves. Progressive firms are revisiting their use of workflows, to underpin wider business processes across their entire firm, which can include complaints handling and proactively monitoring client satisfaction – which in turn will help prevent complaints, reduce the potential of being on the LeO list and adhere to outcomes-focused regulations. By David McNamara, Managing Director, SOS www.soslegal.co.uk
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Q: Will the Legal Ombudsman (LeO) ‘list of shame’ force lawyers to raise standards and what can business discovery tell firms about how to comply
A:
It has been an offence for law firms to ignore their customer complaints since Batman decided to clean up Gotham City! But the fact that everyone within the legal sector is still talking and legislating about it suggests that we’re still not managing this process in a satisfactory and timely manner. And we all know how important compliance is! Suffice to say, compliance as far as COFA (Compliance Officers for Finance and Administration) and COLP (Compliance Officers for Legal Practice) are concerned has certainly got everyone in the industry thinking about how they plan to implement their compliance procedures before they become the lead in the soap opera that has started now that the list has been published by LeO. For firms, implementing good practice around the appointment of these vital people should result in a reduction in complaints and therefore prevent the ‘embarrassment’ of them being named. So let’s look at an easier way to ensure compliance across the entire firm. First, let’s assume that a firm has the right software installed to make the capture of breaches
and complaint types easy to record. Most vendors of practice management systems have introduced specific modules that ensure that processes can be changed, in order to provide easier ways to introduce the compliance culture that is needed. Second, once these processes have been implemented the next question is to see how quickly and easily a firm can produce the reports they need to ensure that compliance is in place. It will become normal practice for firms to review any customer complaints and ensure that the management structures are in place to deal with the complaint internally and prevent other complaints from being made in the future. As the compliance processes that have been implemented will produce new data, it should then become an easy task to get all the data points together and produce a report that everyone in the firm can use to ensure compliance is in place. I have spoken to a number of my QlikView customers about using business discovery software to create a ‘living’ dashboard that is updated at least once a day, so that the people who need to know about compliance breaches are informed on a daily basis and the firm is in a position to act before the complaint becomes an issue. By Barry Talbot, Managing Director of Informance
Q: Will the Legal Ombudsman (LeO) ‘list of shame’ force lawyers to raise standards of customer service and focus efforts to effectively deal with complaints in-house?
A:
There is no question that seeing the firm’s name in a ‘list of shame’ will be a shock to the system for most law firms. However, on the basis that these lists will be released
regularly, I suspect that the shock will begin to wear off after the third or fourth list. Whereas there has been significant copy written amongst legal circles, there appears to be little in the way of public information to ensure that consumers are aware of the issues. This is a service that is for the use of consumers but I wonder what surveys have been carried out to ensure that the public are aware of it. Of course solicitors must publicise this information on retainer letters and on websites, but this simply gets lost in the masses of information provided to a new client. In any event how mainly claimants thoroughly read the same or even if they do retain a copy should they have need at a later date. If anything I would expect the solicitor brand, particularly in residential conveyancing and PI circles
to take any hits on reputation in it’s stride. Let’s face it they have become more than used to riding with the punches in recent times. Nevertheless, the powers that the LeO has at it’s disposal to award compensation will be a far more significant reason for law firms to ensure that their internal complaints procedure is sufficiently robust and to invest some time effort and energy into ensuring that their customer service programs are effective. With the threats of regulatory change, Jackson and referral fee bans all looming, I would hope all law firms are doing all they can to keep hold of their clients and ensure that they limit their exposure to bad publicity. By Alan Nesbit, Managing Partner, Nesbit Law Group LLP
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Q: Will the ‘List of shame’ and forced powers by the Legal Ombudsman (LeO) raise standards of customer service work and focus their efforts to effectively deal with complaints in-house?
A:
If you look at this with regards to building a credible brand, then any regulation that makes a firm look at how it delivers on its promise can only be a good thing. In the end your firm’s brand values are not what you think they are but what your clients and prospects believe them to be, particularly when they see, hear and experience the services of your firm. The latter is the single most important aspect of true brand delivery as it’s where trust is gained and lost. Creating transparency within and about your firm can be a good thing. It focuses the mind and will create a
better product and experience for your clients. Many of my legal clients agree there should be freedom of choice and access to information so that clients can make an informed decision before they use a firm’s services. However, in an era where people are more willing to complain, the question is: are these complaints justified? There are two processes to the complaints procedure: one, internally to compliant partner and two, externally to the LeO. It is true to say that often complaints received internally are just an attempt to get the bill down. However a decision needs to be made on what information is made public and when this information is released in order to provide a helpful resource for the legal profession and clients and prospects alike. Information on matters or cases
that have been upheld either by adjudication or settled by conciliation should be published. But complaints that have not been substantiated should not - unless they are there to show the clear difference between the two. Complaints should be supported by an overview of the firm – size being an important factor as an indication of the total number of fee-earners will provide a valuable reflection on the proportion of claims per workflow and firm turnover. After all, three complaints against a sole practitioner would reflect much more badly on that firm than three complaints against a national firm with hundreds of fee earners. By Ian Hunter, Managing Director, Jellyfish (Strategic brand communications)
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Q: Will the Legal Ombudsman (LeO) ‘list of shame’ force lawyers to raise standards of customer service and focus efforts to effectively deal with complaints in-house?
A:
Looking at the latest ‘list of shame’ published by the LeO I notice that already for 2012 the number of chambers unable to effectively process client complaints in-house is at 50% of the total number for the entirety of 2011. Whilst the actual number of complaints is low (in comparison to law firms) the ability to provide the highest levels of customer service is becoming an essential focus for chambers, particularly for sets engaging in direct access. Chambers can ill afford the damaged reputation and bad publicity resulting from poor service levels. There is the potential for the ‘list of shame’ to be used as a tactical marketing tool by law firms to discourage the public from seeking direct access with chambers, thereby retaining the business themselves. To combat this, chambers need to be proactive in dramatically improving their customer service. How do they do this? Strict adherence to chambers’ client service policy and the Code of Conduct is the bare minimum. Chambers need to be more focused on client care by placing the client centrally to the workings of the set.
Chambers need to routinely ask for feedback from clients and look for ways in which to improve their service offerings. Using programmes such as the Net Promoter Score, they will be able to focus on the parts of the business that contribute to a negative client experience and fix them accordingly. Once resolved, they need to communicate the improvements and the resultant positive comments to all clients and the wider public. Communicating the message that chambers is serious about their client experience helps to retain clients, increase instructions and negates any negative spin that could be created by aggressive competitors. Chambers also need to take a more positive position on the processing of complaints in-house. Appointing someone in chambers to be responsible for the whole of the client experience gives focus for both the set and the clients. This person needs the support of all members to address the issues raised and have the authority to implement appropriate solutions. As a result, chambers will see their reputation for client service improve and they will avoid any embarrassing future appearances on the dreaded ‘list of shame’. By Catherine Bailey, Managing Director, Bar Marketing www.barmarketing.co.uk
A new era in client-centric legal services
T
he UK’s largest independent provider of legal software, Eclipse, has announced a unique new solution for legal services organisations. Currently in the final stages of development, ‘TouchPoint’ will provide a deviceindependent, interactive experience for legal service providers, their business partners and clients, using data (taken in real-time) from Eclipse’s core Proclaim Case and Practice Management solution. Providing access to a huge range of live information, TouchPoint will provide an ‘always on, always visible’ solution. Functionality will include contact management; social media aggregation; dynamic data mapping; visual KPI presentation; dynamic, fluid report / MI commissioning; targeted news feeds and blogging. The solution carries a consistent Windows 8 feel for maximum accessibility and will enable easy view configuration for prioritising what is displayed, where, and how.
Steve Ough, Eclipse’s Chief Software Architect, explains: “The way in which legal services are being provided has changed.” “Clients and business partners need to have an interactive relationship with their data. This access has to be ‘on demand’, available whenever and however it is wanted (desktop computer, iPad, tablet, or smartphone). Legal service providers that can provide this will win far more business.” “TouchPoint puts the user (service provider, business partner or client) at the centre of operations and allows them to ‘decorate their own office’ with whatever information and applications they need, on the device of their choice. Whether it’s a law firm director checking MI on an evening via iPad, a lawyer working in a BYOD environment or a client engaging with a blog on a smartphone, TouchPoint provides an instant and convenient experience.”
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Man on a Mission The mission is nothing less than to change - fundamentally change - the way law firms practice law. Mitch Kowalski (international innovative thinker, lawyer and writer - pictured right) has published a book which led to a stir on the legal blogosphere, entitled: Avoiding Extinction: Reimagining Legal Services for the 21st Century. The UK publication of the book was launched officially at Blackwell’s bookshop in London on 9 October 2012 where Antony Smith interviewed him for Modern Law Magazine. MLM: Could you tell us a little about yourself and professional background? MK: I’ve had a very eclectic career to date. I practiced law with Baker & McKenzie and Aylesworth LLP in Toronto for about 13 years before moving to an in-house position with the City of Toronto. I then had a business role in a large title insurance company before returning to open a small boutique property and corporate practice. I also write a legal blog for Slaw.ca and for the Legal Post and speak regularly on innovation in the delivery of legal services.
MLM: How did the book come about and why now? MK: The book had it’s genesis in an article I wrote for a Canadian legal magazine in 2009 in which I sketched out what I thought the successful law firm of 2020 would look like. The reader response to the piece was so positive I decided to turn the article into a full length book. In many ways both the article and the book provided me with an outlet for my extreme frustration with a profession that had lost it’s way - a profession that had become overly obsessed with billable hours and profits.
MLM: What are the core themes of the book? MK: The book is written in a narrative style - a novel. We meet a harried general counsel who is fed-up with her outside law firms and is being pressured to do more with less from her CEO. She calls her team together to reassess what they want from their law firms to allow them, the in-house lawyers, to provide better service to the company. Next we meet a new hire at Bowen Fong & Chandri (BFC) who is frustrated with his career
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ML // November 2012
Business Section
at another firm and is seeking a firm that does things differently. As he goes through his orientation we learn that BFC has turned the law firm model upside down in a way that increases profits, stops lawyer attrition and maximizes client retention - it has become a firm that is greater than the sum of its parts with a corporate structure and independent board of directors. Finally we meet Sylvester Bowen the CEO of BFC an learn of his philosophy of stewardship and custodianship, his desire to relentlessly focus on ploughing profits back into the firm to ensure that BFC is constantly improving it’s service levels and seeking the next innovation to make it’s services better, faster and cheaper. MLM: Your book has been published in the US before reaching the UK. Have there been any key reactions and differences in reception across the world? MK: The book has been published just in the USA but distributed everywhere on Amazon. The reaction has been much more positive in the UK than in Canada and the US which doesn’t surprise me as the UK is years ahead of the rest of the world in terms of legal innovation. In Canada and the US law firms and GCs have been polite but not particularly interested in change. MLM: Well before the official publication date in the U.K your book has caused quite a stir here in the blog and twitter-spheres. Were you surprised by this? MK: I was very pleasantly surprised and delighted! It was totally unexpected.
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MLM: From your perspective, how is the liberalisation of legal services in England and Wales viewed in other jurisdictions? MK: Unfortunately in the US and Canada, liberalisation of legal services is viewed with suspicion, particularly by lawyers. My view is that they see it as a threat to their longheld monopoly rather than having any legitimate reason to turn their noses to it. MLM: What do you think have been the most significant early developments of the liberalisation of legal services in England and Wales? MK: I think that the ABSs that have been created, especially Riverview Law, will radically shake up that middle band of legal work that lies between high-end complex bespoke work and low end commodity type work for corporate clients. This is a market that I am watching with great interest! MLM: What general advice would you give to those solicitors in England and Wales now trying to survive and prosper the new regime? MK: The simple truth is that lawyers in the UK need to embrace a new model and the new way of practicing law as set out in my book sooner rather than later, because the playing field is shifting and if they are not part of this re-shaping they risk being out of a job. Tweaking things is no longer an option. Mitch Kowalski’s book, Avoiding Extinction: Reimagining Legal Services for the 21st Century, is available via amazon. co.uk and other online retailers.
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ML // November 2012
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Designs on a tribe Modern Law speaks to a series of experts from leading outsourced providers to find out if the new legal landscape and the rise of the ABS will see more firms build a tribe of back office suppliers to gain a commercial edge.
F
inancial, big brand competition and legal reforms put increasing pressure on many firms – putting those with the commercial advantage ahead of the game. In the bid to run and maintain a highly successful firm, that advantage often comes down to price, particularly in terms of back office functions and supply. Outsourcing also gives firms the capacity to pay suppliers based only on requirements, rather than a full time wage. Some larger law firms are even getting in on the game, supplying back office support to smaller firms that don’t have the capacity to handle administration or lower value claims on a widespread scale. Mr. Rakesh K Sharma, CEO, Draft n Craft Legal Outsourcing, explains: “ABS has brought with it the need of more financial investments and partners and tie ups with outsourcing companies to sustain in the current market. 15% of the law firms in UK are already outsourcing. This number is bound to grow with the changes
which have come in.” Mr Sharma adds that the changing landscape for lawyers means that those setting up new entities and ABSs ‘to join hands with outsourcing companies at the very beginning to become partners for growth.” Skills bank Being able to dip in and out of outsourced services allows firms to be able to invest in highly skilled experts, cutting edge technology or systems that allow for faster, more effective case management solutions that firms couldn’t justify supporting or creating in-house. As Kate Oliver, Director, The John M Hayes Partnership Ltd explains: “In our area of expertise - legal costs - we know from experience that overheads are reduced, profits increased and cash flow improved by outsourcing this work
to a knowledgeable fully trained costs team. “Firms gain time to focus on new and existing business without losing fee-earner time dealing with matters with which they may be unfamiliar and freeing up thinking time to innovate and make better business decisions. Outsourcing means that firms pay for high quality services on demand. There is no employee burden: sick pay, national insurance, pensions, holiday pay or training costs, no staff retention plans, succession issues firms also free up valuable desk space providing an opportunity to recruit fee-earners or to reduce your office space,” she adds. Global delivery Like it or not but the legal market is a global collaboration. As Allan Carton, Director of Inpractice explains, providers of managed and hosted IT services ‘have been able to radically reduce their costs by use of virtualisation to make systems easier to manage, with some hosted providers now reducing their own hosting costs by up to 50% through these improvements’. These are then passed on to the businesses that use their services. So, for LPOs such as Draft n Craft, IT has made it feasible for operators from an organisation sitting in Ahmedabad or Belfast to work as an integral part of a law firm in Manchester or London and to cope with compliance requirements. Has the shifting market and ABSs changed the face of outsourcing? Allan believes: “Outsourcers have improved because better tools have become available and they’ve learned from experience to use them more effectively. That’s where their business priorities are focused – which is not true of law firms. “The various ABSs in the private client sector are also promising reduced prices and better value, to which law firms must – and can – respond. Lawyers have to be prepared to change the structure of their business to find the best way to deliver better value to clients; and that means that many should look very closely at what they do best and what they can do to improve the areas they could do better – opening their mind to very different ways to improve.” Kate agrees: “In these changing times it pays to develop strong working relationships finding outsourcing partners who can help you build your business”.
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ML // November 2012
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Compulsion to mediate
M
ost mediators would like parties to come to the table voluntarily. Forcing them to try mediation isn’t a frightfully good idea as it might dent the very high settlement rate. Recent moves to make mediation compulsory have produced some surprising results in the small claims courts across the land with a settlement rate of over 90%. In family mediation it is now virtually a pre condition to try mediation very early on. Why does it work there, yet most commercial mediators aren’t keen on forcing parties to mediate. Empowering control Years ago Leonard Riskin wrote that ‘mediation could do much to improve the quality of life in our society, not just because of the savings it brings, but because it fosters interaction among people, and empowers them to control their own lives’. If in part a lawyer’s role is to encourage dialogue to encourage settlement so that their clients achieve an early, satisfactory and relatively inexpensive resolution that is their own and not an imposed one, why should there be any drawbacks to forcing them to try mediation? Why should the courts not impose hefty penalties against parties who refused to try mediation when they perhaps should have done, a la Dunnett v Railtrack and Burchall v Bullard?
‘If in part a lawyer’s role is to encourage dialogue to encourage settlement... why should there be any drawbacks to forcing them to try mediation?’ Parties have an inalienable right to self determination. In one mediation, the Claimant turned down a very generous offer from the bank with the words ‘I’ve got my rights’. Well he did indeed and it wasn’t my role to prescribe what he could do with that! But he wasn’t coerced into mediation nor was I prepared to say directly he was foolish. The court could not apply the unreasonable refusal to mediate as he did get there. Dyson LJ’s dicta in Lord Malmesbury v Strutt and Parker that the courts should know and punish a party behaving unreasonably in the mediation would not wash as it was all confidential. But having said that solicitors should give appropriate advice and encourage using mediation as it is so often more appropriate more holistic than the alternatives. Anthony Glaister MCIArb, resolve@anthonyglaister.co.uk
Q: Are legal market changes creating new procurement and outsourcing models?
A:
If the harsh realities of being competitive in a tough market are not enough to spur firms to look at their procurement and outsourcing practices, increased competition from new market entrants will make this essential. However good procurement is not just an issue for ABS’s and newly merged ‘super-firms’ but a critical issue for firms of all sizes. The changes taking place are profound. Long gone are the days of the commercial rep visiting every law firm in town in a single day - taking orders while consuming copious amounts of coffee (one benefit = reduction on the coffee bill!). As professionalism has increased firms aren’t just relying on their own facilities management and procurement teams but also looking outside for expertise. This expertise comes from cost reduction consultants with their finger on the pulse of the best sources of supply or directly from large outsourced suppliers, such as Oyez Office Team. These suppliers produce guaranteed savings by consolidating purchasing across multiple supply areas – or like Williams Lea and Mitie - are able to take over back office functions and undertake facilities management. Even innocuous looking areas such as archive records storage have pitfalls for the unwary. It is common to talk to firms who wish to change suppliers who discover onerous clauses in their contracts. In one case a £300,000 exit penalty to move archive supplier with an annual contract value of £50,000. The lesson is to supervise the signing of any long term contract. Another way firms reduce their costs is by tendering outsourcing contracts and procurement requirements, increasingly common amongst merged larger firms but even smaller firms are getting in. Tenders are becoming more onerous, putting potential suppliers through their paces. This ensures the supplier has the lowest total cost of supply and that compliance and risk management issues are assessed. However, the more onerous the tender, the more difficult it is for the firm to manage the process. We have seen tender processes which must equal the recent West Coast mainline fiasco - and we all know what happened to that! A balanced approach to procurement and outsourcing is usually the right approach for law firms, but the choice of doing nothing is not really an option. By Nick Hodges, Managing Director, Oyez Office Team
ML // November 2012
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