Modern Law Magazine - Issue 7

The Business of Law

July 2013 | Issue 07 | ISSN 2050-5744 Sector roundtable: Modern Law hosts a table of practice management and workflow experts to talk about the practical effects of the LSA on management structure and culture.

John Llewellyn-Lloyd explains why he believes people need to understand that there is more capital coming into the market and that the new legal era is not simply about ABSs.

Modern Law Magazine | July 2013 | Issue 07

“We tend to create these silly stereotypes and expectations that men are ambitious, focused and determined whereas women are kind, warm and generous...(that) couldn’t be further from the truth.”

Helen Grant MP

Matthew Briggs Brilliant Law “I’m proud to be a ‘non-lawyer’! I’m very focused on what corporate people can bring into the business; it’s a fundamental perk of the model.”

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Introduction

03

Welcome A

s The Apprentice and Lord Sugar fever sweeps the country again I can’t help wondering if he would accept a business plan for an ABS – especially if the potential ‘apprentice’ was a non-lawyer themselves. Would that put Lord Sugar off? Has it put off external investors?

No! So why are there still hang ups by some factions of the legal sector whose hackles were raised by the launch of non-lawyer-led ABSs? Brilliant Law – managed by a swathe of commercial entrepreneurs and invested in by Bert Black of Betfair fame - is just one of those ABSs which is proud to say ‘yes, we’re run by non-lawyers,’ and they are confident that this ‘perk’ will shake up the sector. Matthew Briggs, Brilliant Law, believes the LSA has given Clementi’s vision legs; that entrepreneurial and corporate governance experience offers not only lawyers added-value, but customers too (see pages 55-57 for our interview).

injury – is becoming saturated with newly-licensed ABSs who haven’t yet come up with anything innovative for the consumer. According to John Llewellyn-Lloyd, Espirito Santo, the problem is that too many people are focusing on ABSs as the route to growth in the legal market. There are ( he confirms on pages 8-9) pots of capital waiting to be injected into the market, it has just been deferred until investors have more certainty in some areas of the sector after the portal expansion and small claims limit are put into place later this year.

The role of the non-lawyer and non-fee earners in a legal entity is a key theme throughout this issue, especially in our practice management roundtable (pages 37-39), where we gathered a group of innovators in PM and workflow to see if the ABS landscape has helped to drive or put pressure on management and work process. My impression is that it’s certainly given non-lawyers a more vocal and recognised voice at Board level and, importantly, clarified their role and responsibility in the eyes of customers and investors.

But we don’t have to wait too long to celebrate the visionaries, leaders and innovators in the legal sector – lawyers or not – as the Eclipse Proclaim Modern Law Awards 2013 are just around the corner! Chair of the judging panel, Professor Stephen Mayson, rounds up the awards and why, now more than ever before, it’s so important to celebrate excellence and share best practice in the business of law (page 49). I hope to see many of you at the glittering awards ceremony, 25 September 2013, at The Dorchester, London. See www.modernlawawards.co.uk for details.

Speaking of investors, there has been some concern (at least in some circles) that the market – especially personal

Whether we see a legal or commercial professional touting their legal services vision in front of Lord Sugar in 2014, remains to be seen but it’s clear that external investors are still very happy to talk to entrepreneurs in the sector that have the combination of talent, drive and bite to be told, ‘you’re hired’.

Emma Waddingham, Chief Editor

Modern Law Magazine

Issue 07 – July 2013 | ISSN 2050-5744 Head of Events Julia Todd

Project Director Kate McKittrick

Chief Editor Emma Waddingham

Accounts Director Karl Mason

Editorial Department Events Manager Charlotte Parkinson Antony Smith Charlotte Parkinson

Advertising/Head of Sales Rachael Pearson Production Lindsey Thomson-Heley

Modern Law Magazine is published

by Charlton Grant Ltd ©2013.

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

ML // July 2013

04

Contents

03-07 Intro & THE News 07 Greg Talks News

Greg Shields, Founder & CEO, myblui, shares his views on the current UK Legal Market.

08-14 The INTERVIEWS 08 Interview with... John Llewellyn

Lloyd, Espirito Santo

John Llewellyn-Lloyd, Head of Professional Services at leading investment bank, Espirito Santo, speaks to Charlotte Parkinson about opportunities for innovation and advance in what he views as a new and exciting era post LSA.

11 Interview with... Helen Grant MP

Emma Waddingham speaks to the Minister about the challenges facing women in today’s legal sector.

17-33 The views

far behind other professions?

Charles Christian, The Orange Rag

21 Game, set and PII insurance

Colin Taylor, Prime Risk Solutions

23 Will it take innovative entrepreneurs

from outside the legal sector to deliver whole-scale innovation?

Nicol Garwood, Out There Marketing

23 Are ‘non-lawyers’ subject to

an initial cultural barrier when working with law firms and ABSs? Tony Brown, Pellys RJP Solicitors

24 How do you plan in a Post-Jackson

and Post-LASPO era?

24 It’s not what you know, but who...

Phil Snee, Linetime

Solicitors Regulation Authority

to solicitors?

Allan Carton, Inpractice UK

25 Affordable Services

and we don’t need them to Legal Services Board

20 Are non-lawyers more likely than

lawyers to introduce technological innovations into a law firm?

Jo Hodges, Redbrick Solutions

20 Does incorporation allow you to

11

Daivd Bott, Bott & Co

19 People don’t understand lawyers

08

25 Is good customer service alien

18 Enforcing the Ban

21 Branding: why is the legal sector so

have your cake and eat it?

Steve Arundale, RBS & Natwest

Jeff Dawson, Elite Insurance Company Ltd

27 What is happening with premium

rates for commercial after the event legal expenses insurance (ATE)?

Matthew Williams, AmTrust Financial Services

21

27 Is the legal sector flagging behind?

Matt Kreutzmann, Senior Director at FindLaw, Thomson Reuters

28 Opportunites for non-lawyers?

Noel Inge, CILEx Law School

Editorial Columnists Samantha Barrass Executive Director of Supervision Solicitors Regulation Authority Alan Nesbit Managing Partner Nesbit Law Group Allan Carton Managing Director Inpractice Antony Smith Director Legal Project Management Barry Talbot Managing Director Informance Limited Catherine Bailey Managing Director Bar Marketing Charles Christian Editor in chief The Orange Rag

ML // July 2013

Colin Taylor Director and Head of Risk Management Services Prime Risk Solutions David Bott Managing Partner Bott & Co Dez Derry CEO MMA Digital Professor Dominic Regan Legal commentator, trainer and costs expert Eddie Goldsmith Partner Goldsmith Williams Greg Shields CEO & Founder myblui Guy Hewetson Partner Hewetson Shah

Jeff Dawson Director of Sales Elite Insurance

Nicol Garwood Founder Out There Marketing

Jitendra Valera Chief Marketing Officer Advanced Legal

Noel Inge Managing Director ILEX Tutorial College

Jo Hodges Managing Director Redbrick Solutions

Phill Snee Development Director Linetime

Matthew Williams Head of AmTrust Law AmTrust Financial Services

Paul Bradley Consultant Legal Eye Ltd

Matt Kreutzmann Paul Wilkinson Sr. Director, Global Development at Managing Director FindLaw Lawclient Ltd Thomson Reuters Rob Hailstone Neil Hudgell Founder Managing Partner Bold Legal Group Neil Hudgell Solicitors Simon Goldhill Nick Hodges Principal Group Marketing Director Simon Goldhill Consulting Oyezstraker

Steven Arundale Head of Professionals Sectors, Commercial Banking RBS & Natwest Sue Nash Founder Omnia Legal Software Ltd Tim Springham CEO Tikit Tony Brown Chief Executive Pellys RJP Solicitors

Contents

28 Good Customer Service.

Eddie Goldsmith, Goldsmith Williams

31 Are lawyers still top dog?

49 The Eclipse Proclaim Modern Law

Sue Nash, Omnia Legal Software Ltd

31 Customer is key

Neil Hugell, Neil Hudgell Solicitors

32 The Digital Age.

Rob Hailstone, Bold Legal Group

33 Disruptive Legal Models

33 Will it take innovative entrepreneurs

Simon Goldhill, Simon Goldhill Consulting

35-49 The Features

Practice Management

Modern Law hosted its third sector roundtable to find out if the LSA and the rise of new entrants to market have had a significant impact on practice management and workflow structures, led to the rise of the non-lawyer entrepreneur and how firms can get around fermented, outdated culture from top to bottom.

41 Who sets the pace of change?

Sajid Hussain & Saurav Dutt discuss whether it will take innovative entrepreneurs from outside the legal sector to deliver whole-scale innovation – or at least quicken the pace of change?

43 Looking Up?

Charlotte Parkinson, Modern Law, spoke to Richard Barnett and Edward Goldsmith, about developments in technology and innovation and how the conveyancing market has evolved since the recession hit in October 2007.

45 Embracing the new era of

injury litigation

The time to refocus, adapt and change has never been more pressing. Zoe Holland explains how to have success in this new era firms will need to consider the value of their legal, financial and commercial expertise.

47 The Big Bang

Steven England discusses whether the world has dramatically shifted under our feet since HHJ Jackson’s Big Bang over 3 months ago, or whether the change is more akin to a gradual but inexorable shift?

RJWSlater Gordon

Neil Kinsella, Chief Executive of Russell Jones & Walker, part of the ABS, speaks to Emma Waddingham about its plans for further growth, what it is looking for and managing cultural as well as client transition.

47

55 Interview with... Matthew Briggs,

37 Sector roundtable:

Following the announcement of the Shortlist for the first Eclipse Proclaim Modern Law Awards, Chair of the Judging Panel, Professor Stephen Mayson, outlines why it’s so important to celebrate the sparkling success and talent in the new legal landscape.

52 Interview with... Neil Kinsella,

Jitendra Valera, Advanced Legal

from outside the legal sector to deliver whole-scale innovation

Awards 2013

51-62 BUSiNESS MANAGEMENT

Dez Derry, MMA Digital

32 The right office experience

05

Brilliant Law

Non-lawyer and CEO of Brilliant Law, Matthew Briggs, is adamant that he and the ABSs’ highly corporate Board have the magic ingredients for success and a non-conventional vision, which will secure Brilliant Law as the futureproof model for legal services. Emma Waddingham reports.

58 Mergers and acquisitions: the time

to make back office efficiencies.

Nick Hodges, Oyez Team

58 Innovation for the customer

Darren Gower, Eclipse Legal Systems

59 New technology in the legal sector

Tim Springham, Tikit

59 6 months for COLP and COFA!

52

Paul Wilkinson, Lawclient

60 Customer Service

Catherine Bailey, Bar Marketing Limited

60 Insourcing versus Outsourcing

Paul Bradley, Legal Eye

61 Be slick or be swallowed

Charlotte Parkinson spoke to Dolores Evelyn: Eclipse Legal Systems, about how technology can help firms remain competitive following the emergence of ABS giants.

62 Lawyers, collaboration and

consultants

Anthony Smith, Legal Project Management

62 Introducing TouchPoint by

Eclipse Legal Systems

55 ML // July 2013

Greg talks news

07

Greg Shields Talks News

The new UK Legal Landscape Social Trends

Sustainability and security. I believe that customers/clients want an emotional bond that lasts beyond the transaction.

Quality of service and a caring approach will create a bond between the brand and the people. This applies in the consumer or business to business space equally. Law firms exist to help people/businesses often when they are in great need. In that sense we are already well positioned as a ‘wellness service’, a force for good in the world.

Economic trends

The end of debt fueled consumerism means a return to traditional values, trusted brands and a demand for high service levels and value. Lawyers are well placed; the public still trust us but are perhaps a little bit afraid of us.

Environmental Trends

High awareness of a need to protect the natural environment. This includes the human environment. Do we care about our people, our community and our environment? This is incredibly important in a people business where the service is delivered over an often prolonged period of time by, you guessed it, happy people!

Technological trends

IT has revolutionised the law in ways that were unthinkable a short time ago.

IBM for example are already working in the medicare sector to transform how medical practitioners will make often complex decisions. It won’t be long before big city law firms and the rest look for emotional intelligence over a candidates degree score or caliber of University as they come to recognise that its ‘that human touch’ that clients want from a trusted advisor. The academic legal work is already becoming a process, easily bought and sold over international

jurisdictions uninhibited by time or space. Connectivity and citizen media has led to mobility and interactivity but with a human need for belonging on the increase. Perhaps this is the greatest challenge to conventional law firms.

Modernising IT systems as an enabler for clients is one thing but can we also lead and inspire our people to use emotional skills to build a genuine client relationship.

The new Entrants?

If you treat the customer as a commodity it is impossible to build anything meaningful, relevant or sustainable. In the consumer market, I haven’t seen anyone yet show any real sense of understanding their customer or market apart from some of the smaller high street firms who do it instinctively.

This is genuinely exciting however as the opportunity is there for a well funded, purpose driven and brilliantly led ‘brand’ to sweep the high street consumer space. I can only dream of the quality of law graduate that would be drawn to that model!

The franchise models haven’t worked because they are not true franchise models. Again there is a huge opportunity for someone to get this right.

There is no shortage of young passionate lawyers’ mad keen to go out on their own but who need help with funding, structure, process and marketing.

In the corporate world the disruption comes from fixed prices, seriously?

It is laughable to be told that the announcement of fixed prices is so ‘revolutionary’ in our sector. It is not. I have been the client of many city law firms over the years and most were excellent, cost effective offering capped or fixed fees. Quality was first for me.

I built really genuine relationships with people that I trust. They are more threatened by a lack of leadership at

“It is laughable to be told that the announcement of fixed prices is so ‘revolutionary’ in our sector. It is not.” the top which cascades through the business demoralising good people allied to a simple lack of sales. There just isn’t the same volume of work around so how do we compete?

The high street is fragmented and there are too many law firms both in the city and beyond for the shrunken UK economy. None of this as yet is being caused by or exploited by new entrants... and yet more and more young people want to choose the law as a career.

Kids leaving school after their A-levels dreaming of a career in law, it’s inspiring.

They still believe and see something that many of us have lost faith in or have become blind to...namely that we became lawyers to make a difference.

Greg Shields, Founder & CEO, myblui

ABS? You need Proclaim

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08

Interview

Interview with...

John Llewellyn-Lloyd John Llewellyn-Lloyd, Head of Professional Services at leading investment bank, Espirito Santo, believes people need to understand that there is more external capital coming into the legal services market, and the new legal era is not simply about ABSs. He speaks to Charlotte Parkinson about opportunities for innovation and advance in what he views as a new and exciting era post LSA.

Q A

With the flurry of ABS activity and new market entrants into the legal sector, is the market still ripe and open for private equity / private investment?

Yes, is the simple answer – to some extent the answer is within the question. We haven’t even scratched the surface yet for the potential of new capital coming into the market. The delay has been a function of regulatory processes taking longer and structural market uncertainty. This extensive uncertainty in the market has been caused particularly by protracted changes to legislation and the LASPO regulations, some of which are still to be decided.

We are still waiting for final decision on the small claims limit which will hopefully have been made by the end of this year. The result has been that a great deal of potential capital injection into the sector has been deferred and/or delayed, we are still waiting for a final decision.

Q

Is there enough innovation in the ABS market or do the best investment opportunities lie in those not completely re-inventing the wheel, but who are capable of growth with the support of investment?

This isn’t about ABSs – this is about capital coming in to the market and transforming the delivery of legal products. I think if one looks at it that way it is quite clear that, at the moment, capital is at a relatively early stage of being brought into the market. What you will see is more and more innovation in terms of how that capital is deployed. The obvious areas

A

ML // July 2013

for this are various parts of volume legal services; these will have to start moving towards a lower cost product delivery and will begin systematising their functions. Obviously that has quite a significant capital requirement. Our contention on this would be that it is now significantly more likely that such capital requirement will start to come from the external capital provision, rather than from Partners. This is a time when the banking market itself is probably looking to decrease its lending to the sector. If you look closely, there are three broad accesses to capital: bank debt, external capital and partners’ capital. Given the pressures of the partnership model and individual partners’ cash flows, partners’ capital is unlikely to increase. This is particularly due to the fact that a lot of partners who might be in the best position to invest will probably be in the later stages of their careers and thus see less benefit from investing. There is clearly an

“Everyone would agree that the route to market will be different over the next 10 to 20 years; the question is, how different?”

Top Tips for firms looking for External Investment Q: What are the top tips for those firms and entities looking to attract new private investment?

A: Build a business plan and financial model; this is key. Create an internal investment and investor culture. If your existing Partners and key employees are not enthusiastic about their investment return then I doubt external investors will be. Finally, be prepared to communicate; there is a lack of knowledge surrounding investors and it is important for law firms to articulate their financial case and educate investors on opportunities as well as risks.

You must demonstrate you are a business as well as a law firm.

Interview

09

“Create an internal investment and investor culture. If your existing Partners and key employees are not enthusiastic about their investment return then I doubt external investors will be.” increase in capital need and that now has to come from external provision.

Capital will become a clear competitor in the market place, and those who are able to access suitable capital will have a competitive advantage.

Q A

What types of ABSs are increasingly attractive to the private investment market?

Again, this is really about capital, not ABSs; fundamentally investors are looking for attractive returns. If you then focus on certain business areas, a very attractive one is the whole consumer market. It is a very large market place, with circa £13 billion revenues and there are some areas of this market like personal injury, probate, family and conveyancing (being some of the biggest) that are going through some dramatic changes.

These will prove the most attractive areas for investors over the coming months and years. Changed business models, consolidation pressures and a new approach to customers will create major winners and losers. Backing the winners will yield excellent returns.

Q A

Are private equity firms interested in funding acquisition plans / mergers from the outset in a new ABS? Yes, provided a sufficient track record is demonstrated. To all intents and purposes, you are referring to ‘start-ups’ and smaller businesses looking to scale rapidly.

The important point to focus on is the requirement for strong management expertise –investors realise that this is a disrupted marketplace and therefore there is going to be a lot of consolidation together with new business model opportunities. What investors will look for is a plan that is based upon an evidenced track record. However, early stage or scale models should not be deterred; many investors may be more comfortable investing in smaller structures where the corporate culture can be established and built more quickly.

Traditional partnerships can appear cumbersome to private equity investors.

To an investor in legal services David may be just as attractive as Goliath.

will never’ it is much more of a ‘let’s talk about it’.

Q A

Q A

Does this mean due diligence is carried out before investment on all companies or after investment but pre acquisition?

In terms of the strategy of the business, the due diligence is carried out at the outset. You have to have a clear business plan over three to five years which demonstrates the returns the investor will get for their capital investment. That plan will of course be due diligenced by the investor. It may be that there is an element of this plan that looks at investing more money at stages, possibly in mergers and M&A; and clearly those would have to be due diligenced at a later date. In this sector, what is important to understand is that investors will have to do a lot of due diligence on the general market conditions because of the changes I referred to earlier. A typical diligence period could be expected to last up to 10 weeks (commercial, accounting, legal, etc).

Q A

Are external investors shocked or surprised at the processes and management structures in law firms? If so, why, and are these off-putting to external investors?

This is a good question.

Firstly, any business that can demonstrate it is clearly run as a business and has a managed structure to do it will be more appealing as those types of businesses talk the investors’ language. Secondly, there is an issue within the sector that private equity investors have more difficulty with the consensual Partner business model; these more traditional firms will have to look carefully to the type of capital they look to involve. They will also have to educate both internal and external investors to make sure each can see the benefits of the other.

We talk to a lot of private equity firms who can see there are good quality law firms out there that have a consensual model so it is not a ‘we

Do online legal service models provide a more or less risky investment for external investors, and why?

Online legal services will attract more of a technology based investor who is used to assessing the particular characteristics of a technology investment or a start-up. I think these are inherently more risky but there will be a different set of investors who are already in the online space and are ‘risk knowledgeable’ to look at these models as they will see online legal services as simply another area to expand into. For online services it is innately more difficult to assess how the market will develop. Everyone would agree that the route to market will be different over the next 10 to 20 years; the question is, how different?

Q

What next for private investment in the legal market – has this resource got the power to help achieve the first proper Multi Disciplinary Partnership (MDP) or will lessons need to be learnt / profits made elsewhere?

If we are talking about MDPs you then bring in a different strand of capital investment. In essence, this introduces the notion of the ‘trade’ external investor who will look to integrate legal services into a broader offering. It may be that those transactions will be ‘self-funding’ – examples here include Co-op, Abbey Protection, Stobarts and DAS Legal, who have set up their own legal services ABSs. All of these have said and demonstrated that they will be looking to create multi-disciplinary firms of which legal services will be a part, and because of this one might look at providing finance as a trade investor. Our view is that such investment will be a major part of the capital to be deployed in the sector.

The natural cross-synergies will give enhanced returns.

A

ML // July 2013

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Interview

11

Interview with...

Helen Grant MP In her dual role as Under-Secretary of State at the Ministry of Justice and for Women’s and Equalities issues, Helen Grant is not short of areas to prioritise but one of her most vocal issues is that of the diversity and equality of roles for women in the professions.

Emma Waddingham speaks to the Minister about the challenges facing women in today’s legal sector.

Q A

Which females in legal services have inspired you?

I love being a lawyer and am very proud of my profession.

Over the years there have been a number of senior female judges who have been an inspiration as well as barristers and solicitors that I have worked with or been opposed to – as well as a long list of very fine female lawyers who are in the sector now.

Q A

Have we moved on in the last decade in terms of women’s’ roles in the sector and the number of women in leading positions in law?

I think we are seeing more women enter the market. In 2010-2011 over half of entrants into the profession were women (59%) and 49% entrants to the Bar were also female at that time. This is good for the profession but there’s still more to be done.

Q A

What are the key barristers for women looking to either start a career in the sector or progress to the top posts?

There are big issues and barriers to women staying and developing in the profession.

The main barrier remains that women remain the primary carers in the home, struggling to juggle domesticity with a successful career in law. It is often a step too far for clever, capable women.

The legal profession, especially at the very top levels – like the Bar and the Judiciary – are still very much a man’s world and tend to recruit in their own image. We tend to create these

silly stereotypes and expectations that men are ambitious, focused and determined, whereas women are kind, warm and generous. That’s rubbish and couldn’t be further from the truth.

Q A

Whose role is it to widen equality and what are the solutions for today’s sector?

Solutions need to come from the Government, the profession and from individuals; both men and women. Offering solutions to help in the workplace have come been endorsed by the Coalition Government with recent policies on part-time and flexible working conditions. This has been specifically applied in the Courts Bill that enables part time working practices in the High Court and above.

In addition, the recently launched Think, Act, Report programme1 is a voluntary scheme that provides a simple step-by-step framework to help companies think about gender equality in their workforces, particularly in relation to recruitment, retention, promotion and pay. This is a very helpful programme that helps companies create opportunities and support for women in their workplace and is driving real change. Over 100

“We tend to create these silly stereotypes and expectations that men are ambitious, focused and determined whereas women are kind, warm and generous. That’s rubbish and couldn’t be further from the truth.”

ML // July 2013

12

Interview

“What we can’t do in terms of a solution is use enforceable quotas for women in the workplace. These have a detrimental effect on women and alienate men at the same time. Quotas simply treat the symptoms and not the causes.” law firms have signed up to this already, including Linklaters [as well as Microsoft, BT, Accenture, IBM, Network Rail and Marks & Spencer].

The Women’s Business Council report2 published on the 3 June 2013, also made a number of recommendations for business and for the Government to broaden goals, aspirations and job choices for women.

In terms of the profession; many in the legal sector are committed to addressing the gender divide / balance and methods have been applied very well. But there are secondary targets now and best practice should be shared, especially in terms of part time working arrangements, to improve the retention of women in law (especially when they have young children). In my own law firm, we employed a large number of women so we found it easy to retain them as we were able to be flexible. I know first-hand that model works.

What we can’t do in terms of a solution is use enforceable quotas for women in the workplace. These have a detrimental effect on women and alienate men at the same time. Quotas simply treat the symptoms and not the causes.

Finally, what can women do for themselves? Perhaps some may need to be more assertive and not feel afraid to take credit for their achievements.

Some women lack confidence in the workplace, perhaps due to a lack of role models from an early age – although there are also women who are incredibly confident and are coming through as fantastic role models in senior jobs so hopefully this will change. So long as women do their part, making the most of the solutions offered.

Q A

Is the legal sector, like parliamentary roles, a familyunfriendly career option (especially for women who are the main income earners) than other sectors?

This is looked at across government departments to try to encourage ideas and working practices to help women achieve a work-life balance. As a mother of two

ML // July 2013

(now pretty much grown up) lads, I understand the pressures on women who have younger children and this is again something we need to address with flexibility.

The Law Society has its Diversity and Inclusion Charter3, to which over 300 firms (almost a third of all solicitors in practice) are signed up to, to look at factors to commit positive, practical actions in their business to help women.

These are very good initiatives.

Finally, the Government is launching Flexible Parental Leave4 in 2015 to enable both parents to share parental leave, in order to move away from traditional stereotypes that assume women stay at home with the children.

Q A

There seems to be a significant number of women leading firms and ABSs in the personal injury sector. Why here, over any other area of practice in legal services?

We know that the number of women in practice for 10-19 years and over is less than men (who make up 75% of 10-19 years qualified).

It’s a good question but what we need is better data to understand why some areas of law are more attractive to women. Steps need to be taken to ensure that women are equally represented across all areas of law, rather than simply looking at overall data.

Q

Are you concerned about even fewer opportunities for women to come forward in top legal positions, considering the limited number of trainee solicitor opportunities / pupillages and the increasing recruitment of paralegals, who may be less likely than before to develop into the top jobs?

The legal services market is changing, offering challenges and opportunities. But whatever route you take into the profession, there is no guarantee of a job at the end of training – even if you get it. It was hard for my generation and it’s even harder out there now but if you choose wisely, the opportunities will be there for the taking. ABSs may well offer more diverse opportunities too.

A

Q A

What about the Bar and the Judiciary?

Common themes for the Bar and the Judiciary and legal progression for women is the competitive imbalance. Some barristers to the Judiciary are unique, with women thinking that ‘it’s just not for me’, combined with a lack of role models. We need women to aspire to these roles but there is a lack of understanding about what judicial roles entail, which requires more information and effective support when women are considering an application. Baroness Neuberger’s report in February 2010, having chaired the Lord Chancellor’s Advisory Panel on Judicial Diversity, made 53 recommendations, which are being taken forward and having a positive effect. But there is more to be done.

Helen Grant is the Under-Secretary of State at the Ministry of Justice, UnderSecretary of State for Women’s and Equalities issues and MP for Maidstone and the Weald.

1. Launched by the Department for Culture, Media & Sports and Government Equalities alongside the Women’s Business Council 2. Maximising women’s contribution to future economic growth: www.gov.uk/government/publications/ womens-business-council-report-maximising-womenscontribution-to-future-economic-growth 3. www.lawsociety.org.uk/Advice/Diversity-Inclusion/ Diversity-Inclusion-Charter/ 4. www.gov.uk/government/uploads/system/ uploads/attachment_data/file/88476/13-619modern-workplaces-shared-parental-leave-and-payadministration-consultation.pdf

Interview

13

Think, Act, Report T

hink, Act, Report is a voluntary framework established to to help companies think about gender equality in their workforces, providing solutions to recruitment, retention, promotion and pay.

Those signed up to the scheme are encouraged to share best practice in the promotion of gender equality with data that could be made public if they so wish and in accordance with their own business data sharing principles.

Companies supporting the initiative range from those just starting to think about gender equality issues to those with action plans and reporting mechanisms already in place. What they share is a common desire to be more transparent about workforce issues and disseminate best practice.

Companies including Tesco, Unilever, Eversheds and BT are already involved. Those involved in the legal sector include: The Co-operative Group; Berwin Leighton Paisner; DAC Beechcroft; Eversheds; Linklaters; Pinsent Masons LLP; Robinson Hambro and The Law Society.

Why get involved?

There are obvious reputational benefits (which are hopefully more than lip-service if female employees challenge and work with the organisation on equality matters) for acting on barristers for women and reporting on progress made. The Think, Act, Report website states: ‘it helps to make your organisation a more attractive place to work, thereby helping you to recruit, retain and develop talented female members of staff.’

It also adds that ‘if you are already one of the best employers for women, why not champion the principles of Think, Act, Report? Be a leader in your sector and encourage others to follow’. More details via the Gov.uk website on Think, Act, Report.

Women’s Business Council report 2013 The recently published Maximising women’s contribution to future economic growth report from the Women’s Business Council, chaired

by Ruby McGregor-Smith, CBE, makes a list of recommendations for

Government, business and women themselves on issues including: • attracting women into professions and work from an early age (targeting educational institutions) and broadening aspirations; • retention of female employees through embracing the benefits of flexible working and support for working parents • Equalising men and women’s economic participation rates, especially in an ageing society.

Helping women in the ‘third phase’ of their working lives and accessing the ‘tremendous untapped potential for economic growth • Helping support female entrepreneurs in the start up and maintenance of their own businesses These ideas are addressed through three key focussed: Starting out, getting on and staying on.

‘We see the tangible business benefits that come from ensuring that women enjoy the same opportunities for meaningful work and career development as men’, states the report.

For the full report, please visit: www. gov.uk/government/publications/ womens-business-council-reportmaximising-womens-contribution-tofuture-economic-growth Flexible Parental Leave The way maternity leave and flexible working requests are handled within businesses is set to change due to new government proposals which will come into play by 2015. Flexible Parental Leave is part of the Charities and Families Bill, published on the 5 February 2013. It is a new system for split parental leave and will allow new parents to ‘mix and match’ childcare between the two parents, dividing a year’s leave between them, with the option of alternating where possible. In addition, the right to request flexible working will be extended to all employees who have worked for their employer for 26 weeks or more in 2014.

Shared Parental Leave Under the new system: • Employed mothers will still be entitled to 52 weeks of maternity leave as a day one right

• Mothers can choose to end their maternity leave after the initial two week recovery period; working parents can then decide how they want to share the remaining leave • Fathers will gain a new right to take unpaid leave to attend two antenatal appointments • There will be new statutory payment for parents on shared parental leave with the same qualifying requirements that currently apply to statutory maternity and paternity pay • Those who have adopted a child will be entitled to the same pay and leave as birth parents.

Flexible working The government wants to remove the cultural expectation that flexible working only has benefits for parents and carers, allowing individuals to manage their work alongside other commitments. This will improve the UK labour market by providing more diverse working patterns. The new system will: • Extend the right to request flexible working to all employees • Remove the current statutory procedure for considering requests.

Instead employers will have a duty to consider all requests in a reasonable manner.

Judicial Diversity Taskforce Second Annual Report 2012 The Taskforce was established in 2009 as a result of a recommendation made by the Advisory Panel on Judicial Diversity, chaired by Baroness Neuberger. This is only the second report from the Taskforce on the barriers to women in the judiciary although perceivably the cause is gaining momentum with events across the country being organised to help address some of the knowledge / expectation issues, as raised by Helen Grant in her interview.

Lady Hale, the most senior female judge in England & Wales stated that ‘the UK is out of step with the rest of the world’ in an address about judicial diversity in February 2013.

She believes there may be instances where positive discrimination is used to redress the gender imbalance (see table on the next page).

ML // July 2013

14

Interview

2012 Judicial Diversity statistics - Gender, Ethnicity1, Profession and Age As at 1st April 2012

Gender

Total in post

Male

Female

% Female

5

5

0

0.0%

Lords Justices of Appeal

38

34

4

10.5%

High Court Judges

110

93

17

15.5%

Judge Advocates

8

7

1

12.5%

Deputy Judge Advocates

5

4

1

20.0%

Masters, Registrars, Costs Judges and District Judges (Principal Registry of the Family Division)

46

32

14

30.4%

Deputy Masters, Deputy Registrars, Deputy Costs Judges and Deputy District Judges (PRFD)

67

41

26

38.8%

Circuit Judges

665

551

114

17.1%

Recorders

1155

967

188

16.3%

District Judges (County Courts)

447

330

117

26.2%

Deputy District Judges (County Courts)

754

507

247

32.8%

District Judges (Magistrates’ Courts)

141

100

41

29.1%

Deputy District Judges (Magistrates’ Courts)

134

97

37

27.6%

3575

2,768

807

22.6%

Appointment name Heads of Division

Grand Total

Source - Judicial Database 2012 NB The figures have been taken from the judicial database and are shown according to an office holders ‘primary appointment’.

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The views

17

17-33

The Views

ML // July 2013

18

The views

Enforcing the ban We may only be a few months on from LASPO and the Referral Fee ban but the SRA is concerned that there a lack of clarity in the market on what is acceptable and what isn’t, leading to potential misconduct and enforcement. Richard Collins from the SRA, explains.

T

he ban on the payment of referral fees in personal injury cases was introduced in 1st April this year and, understandably, there has been a significant focus on compliance with the ban and on the lawfulness, or otherwise, of new arrangements for the acquisition of clients in PI cases.

To give effect to the statutory ban, the SRA introduced two new mandatory Outcomes to the Code of Conduct, Chapter 6 and Chapter 9 respectively, and which state that ‘you are not paid a prohibited referral fee’ and that ‘you do not pay a prohibited referral fee’. In addition to the two new Outcomes, the Code of Conduct defines a ‘prohibited referral fee. We also made a range of further resources available on our website at http://www.sra.org. uk/sra/policy/referral-fees-ban.page. Our enforcement strategy for the referral fee ban can also be found here and notes will be updated as required.

Clear compliance support The SRA has seen a number of schemes. We have also seen independent legal advice on many schemes, obtained by their proponents and an almost equal number of opinions contradicting the first. There are seminars, training courses and specialist software available for firms working in the personal injury market; designed to maintain access to clients whilst maintaining compliance with the specific provisions of the ban.

Many firms have remained in the PI market with changed business models. We have seen a number of conversions to ABS, sometimes through joint ventures with non-law firms that had traditionally referred PI clients. In considering applications for the authorisation of new entities, our focus is on compliance with the specific requirements of the authorisation rules and on the ability of those entities to identify and manage the particular risks to regulatory compliance arising from their business and business models.

Getting it right However, all of this activity directed towards complying with the ban does not, in any way, reduce the need for firms to continue to ensure compliance with the other Principles and Outcomes in the Code of Conduct. Worryingly, we are beginning to see some examples of firms that - in their desire to maintain a volume of new clients in a manner compliant with the referral fee ban - have not paid sufficient attention to compliance with the broader, and longstanding, regulatory requirements regarding referrals.

Here is just one example. Some firms have sought to establish arrangements that involve the introducer carrying

ML // July 2013

out certain work on clients’ matters and the firm paying the introducer for this work. Provided the payment is for a genuine service and is reasonable, it may not breach the LASPO. However, before entering into such an arrangement, you need to consider carefully whether it is appropriate, and in the client’s best interests, for the introducer to carry out this work. It may, for example, include advising the client on the appropriate means of funding their matter, or explaining, and asking the client to sign, a conditional fee agreement or damages-based agreement. Outsourcing this work, particularly to someone who is unqualified and unsupervised, may present a significant risk to the ability of firms to achieve the Outcomes in Chapter 1 (client care) of the SRA Code of Conduct and to comply with Principles 3 and 4, which require a firm to act in the best interests of their clients and to provide a proper standard of service.

“Worryingly, we are beginning to see some examples of firms that - in their desire to maintain a volume of new clients in a manner compliant with the referral fee ban - have not paid sufficient attention to compliance with the broader, and longstanding, regulatory requirements regarding referrals.”

Acting proportionately It is clearly very early days in terms of enforcement; we are only a few months into the ban. And while there are those that may like to have seen hundreds of firms thrown instantly before the SDT on 1st April, we are taking a more proportionate and constructive approach to enforcing the ban wherever possible.

The enforcement strategy is focused on active supervision. Where we have concerns, we are engaging with firms to ensure compliance is achieved. Where we have significant concerns, we are talking to firms to help them put things right. We are also working very closely with our partners such as the Ministry of Justice and the Financial Conduct Authority, providing information to each other and raising issues as they emerge.

Of course we will take formal enforcement action against any firm flagrantly breaching the rules. Those unwilling to change their practices and who fail to cooperate will face action. If you are unsure of what to do now, call our Supervision or Ethics Guidance teams who will be more effective than investing in software, or expensive training seminars.

Richard Collins, Executive Director, SRA

The views

19

People don’t understand lawyers and we don’t need them to Latest research commissioned by the Legal Services Board highlights key consumer behaviour that can influence and support legal service providers in supporting and maintaining customers, as Chris Kenny reports.

A

s the oversight regulator for legal services, the LSB has a wide regulatory remit, but at its heart its role is to ensure that regulation of legal services works in a way that ensures the protection of the public interest.

Central to this is ensuring that people can resolve their legal problems.

Ensuring access to justice For regulators, access to justice has to be considered in its widest context – are consumers resolving their legal problems effectively, regardless of how services are delivered? In June 2012, the LSB published its biggest consumer survey to date, summarising the results of interviews with over 4,000 consumers and over 9,800 legal needs1. A startling finding was that people only went to legal services regulated lawyers for 21% of the legal problems they faced. Which begs the question, why is this? We also commissioned two further research reports to consider these questions. The first exploring with consumers how they made choices2 and the second reviewing the physiological literature available to understand more about the drivers for behaviour3.

Lessons from consumer research The first report suggested that consumers tend to pigeon-hole lawyers as purveyors of transactional justice.

Key reasons for not choosing lawyers in these other cases centred on concerns about the damage lawyers do to wider relationships and concerns over the perceived cost and quality of services provided. For those areas where lawyers were seen to be the answer, trust had little impact on the choice of whether to use a lawyer or not – it’s their reputation for competence that counts. In other areas trust was a factor, but had a limited role compared to the availability of ‘best-fit’ services.

Understanding the psychology of consumers and suppliers can help to ensure that the design and implementation of legal services takes account of the different agents’ motivations – and the incentives created by regulation reinforce this. This in turn can encourage access to justice and can help firms consider what they can do to expand their reach.

In psychology, there are two principal ways in which people take decisions. System 1: intuitive thinking based on experiences, biases or subconscious rules of thumb (heuristics). System 2: a lengthier, more analytic approach of weighing the pros and cons to develop an informed decision. These of course are all features of most legal problems. The solution is not education or changing consumers but understanding decision-making,

to ensure regulation helps create a market where those decisions lead to good outcomes for all.

Examples from behavioural economics Behavioural economics spends much of its time exploring System 1, thinking and providing models that help us understand the types of influences on individual decisions and how these might be harnessed to improve consumer choices: Representativeness: when faced with a problem people will instinctively compare it to previous problems they have faced or heard about others facing. Commonly they will over-estimate the similarity of the issues and choose to act in a similar way, even if the problem is different.

Lessons for firms are obvious: reputation and brand matter but they need to be backed with skills to do a wide range of work or a strong professional culture to ensure that work is not taken on outside of competence; Anchoring: when thinking about the cost of services or likely settlement, individuals will start off with a ball park estimate based on an external factor or previous experience, then work from here to the value they expect. Given the extent to which costs are a driver for unhappiness with legal services, this suggests that firms need to handle cost disclosure clearly and upfront to avoid potential misunderstandings.

Framing – small changes in the presentation of information can have significant impacts on the action people take. Where a legal problem is presented in terms of losses (e.g. divorce settlement) the individual is more likely to keep fighting while when presented with gains (e.g. PI settlement) - they are likely to seek to settle early. This has important implications for lawyers, in the way they communicate and handle their clients and in turn their clients’ subsequent satisfaction.

Don’t change consumers, change the market In a challenging economic environment such insights are invaluable, consumers don’t understand the law, and it is the job of regulators and firms to ensure that the market and law works for them.

For more information go to the LSB research website: reserach.legalservicesboard.org.uk.

Chris Kenny is the Chief Executive of the LSB. 1. Legal services benchmarking report. https://research.legalservicesboard.org. uk/wp-content/media/2012-Individual-consumers-legal-needs-report.pdf 2. Consumer use of Legal Services: Understanding consumers who don’t use, don’t choose or don’t trust legal services providers. https://research.legalservicesboard. org.uk/wp-content/media/Understanding-Consumers-Final-Report.pdf 3. Understanding decision making in legal services: Lessons from behavioural economics. https://research.legalservicesboard.org.uk/wp-content/media/ Behavioural-Economics-Final.pdf

ML // July 2013

20

The views

Q: Are non-lawyers more likely than lawyers to introduce technological innovations into a law firm, or be the first to adapt to changes inspired by technology?

Why is this?

A:

Technological innovations continue to transform all aspects of our professional and personal lives. Within the legal sector, like any other, great advances are being made; there are people who are quick to recognise and promote the benefits of technical change and those who are more cautious.

To suggest that non-lawyers are more likely to introduce technological innovation would perhaps be a generalisation too far, although it is true that with ABSs opening up the law firm to management from other sectors, new areas of experience are being introduced.

With that comes insight into how technology is assisting other sectors run more efficient businesses.

Of course, introducing new technological innovation into a firm requires a degree of IT knowledge and some understanding of how it can, or how you would like it, to improve your working practices. But even if lawyers lack detailed IT knowledge or experience of how technology has been applied in other sectors, the vast majority agree that it has a key role to play in today’s legal market.

Huge efficiencies can be realised by moving to a paperless (or paperlight) environment and the right technology can help businesses deliver first rate customer service. Systems which deliver accurate reports and timely management information will help shape strategies for profitable business growth. The advent of cloud computing and mobile devices has brought about significant benefits in terms of ‘anytime’ access to emails, documents and applications.

At Redbrick Solutions, we are increasingly finding ourselves talking to non-lawyers about the introduction of new technologies, but this doesn’t suggest that lawyers are slower to embrace technological innovations. It just reflects the fact that more and more decision makers in the legal industry now come from a non-law background and that there are plenty of firms who employ IT specialists to help them procure new systems and keep abreast of technical developments.

Regardless of whether we are talking to a lawyer or a non-lawyer, we ensure we offer clear and straightforward advice and on-going technical support, to any firm wanting to use new technology to work smarter and more profitably.

Jo Hodges, Sales and Marketing Director, Redbrick Solutions

ML // July 2013

Q: Does incorporation allow you to have your cake and eat it?

A:

There appears to be a significant increase in the number of legal firms now incorporating. In the NatWest legal benchmarking report published this February, 15% of the input was provided by firms with incorporated status.

Incorporation may be driven by ABS with share capital employed as the sustainable method to support external ownership but it may also be in favour given that for some it could provide a more advantageous tax structure.

Typically, legal firm owners will look to crystallise capital and an element of future super profit on incorporation via the creation of Goodwill. By way of a balancing item, goodwill is set off against directors loans which can provide an extremely tax efficient way for directors to draw personally.

However, firms need to be careful not to adopt a strategy that will strip all the asset value from the balance sheet. Most banks will provide debt facilities against a gearing calculation recognising the net worth of the business detailed by way of capital and retained profit. Banks will tend to fully discount goodwill when calculating gearing although they may consider directors loans as quasi capital.

So if the directors of a firm decide to extract all profits by way of salary or dividend at the same time as drawing down directors loan, it won’t be long before the asset value of the firm has been fully stripped. In which case, the bank may be unable to support the firm’s working capital needs, given the negative impact on the firm’s gearing ratio.

In summary, incorporation does not necessarily provide the opportunity for legal firm owners to have their cake and eat it. In order to avoid potential difficulties, firms should discuss their strategy for directors loans and profits with both their accountant and their bank.

Steven Arundell, Head of Professionals Sectors, Commercial Banking, RBS & Natwest

The views

Q: Branding: why is the legal sector so far behind other professions?

A:

If you Google ‘Top 500 UK brands’ you will find there are no law firms among the top 500 consumer brands and only a handful within the top 500 business brands*. To make matters worse, the first law firm entry is for Linklaters at number 175, whereas the ‘big four’ accountancy are all clustered between 10th place PwC and Deloittes at number 26. Even The Law Society, never the most dynamic of organisations, manages to make 69th place in the top 500.

So what is going on here? How come even beancounters have greater brand recognition than lawyers?

Law firms have spent millions on branding since the rules on advertising and marketing were eased about 30 years ago – but all apparently to no avail.

Far too much of the promotional budget seems to go on peer-to-peer activities, primarily aimed at attracting new recruits and lateral hires. This may create waves within the narrow gene-pool that is the legal world but it is failing to break through into the wider commercial sector. Frankly, this is not surprising. If you look at law firm shop windows – which in the digital age are their websites – the majority are dull, dull, dull, with little to differentiate one firm from another. Never have so many pixels died in vain.

But does this matter? The answer is ‘yes’ because branding is the legal profession’s Achilles Heel.

True, it didn’t really matter in the pre-LSA era because client choice was restricted to picking one dull grey law firm or another dull grey law firm. But today it would only take one or two true super-brands to enter the market offering legal services and most of the UK’s High Street firms could shut their doors for good.

There’s Virgin at number 6 in the business top 500 or Marks & Spencer at number 17 in the consumer superbrands chart. Even Eddie Stobart, which admittedly has recently been getting a rough ride in the press about its legal arm, is ranked 160 places higher – at number 15 in the list - than Linklaters.

Branding may seem like flim-flam – but only to people trapped in their own insular circles. Outside in the real world, it is a key commercial differentiator. * Business Superbrands Official Top 500 2012 Charles Christian, Editor in Chief, The Orange Rag

21

Game, set and PII insurance

O

nce more, as we enter the month of July, we experience the summer rain delaying events at Wimbledon, the start of an Ashes test series and, the highlight for most solicitors – yes, the start of the solicitors’ professional indemnity insurance (PII) renewal process.

Just as we have seen upsets on the courts of Wimbledon this year there are likely to be upsets for a number of firms in this year’s renewal period. It is fair to say that this year is a step change in PII for Solicitors.

Before the renewal season has even begun in earnest we have seen regulatory issues surrounding the unrated insurer, Balva. This has caused much concern for its many policyholders and, although not as yet classified an ‘insolvency event’, all policyholders will have to find alternative cover from 1st October 2013. The use of unrated insurers is a hot topic. The SRA this year will change the classification of insurers from ‘Qualifying Insurers’ to ‘Participating Insurers’ as they seek to clarify that they do not ‘qualify’ insurers. This should alert anyone considering placing their insurance with unrated insurers that they must understand the significant risks involved before taking the plunge.

The major change to the market this year is the closure of the Assigned Risks Pool (ARP) and the introduction of the Extended Indemnity Period (EIP). Insurers have lobbied for this for some time and, although it seems straightforward, there are serious implications for firms that do not secure cover before 1st October 2013. Like the issues surrounding Balva, this is more likely to affect smaller firms rather than the medium to larger firms. The abolition of the ARP removes the need for a common renewal date and you are now able to choose (with the approval of your insurer) your preferred renewal date. This again needs careful consideration as there are as many arguments against changing as there are for it.

There are effective solutions out there for the well advised and well prepared. Just one word of caution; although there are many brokers purporting to be specialists there are in fact only a handful with the experience, the resources and the skills necessary to professionally and properly advise solicitors in this area.

Choose wisely and you greatly improve your chances of navigating your way through the changes and renewing with a rated insurer at competitive terms.

Colin Taylor, Director and Head of Risk Management Services, Prime Risk Solutions

ML // July 2013

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The views

Q: Will it take innovative entrepreneurs from outside the legal sector to deliver whole-scale innovation – or at least quicken the pace of change – and why?

A:

Frankly, no. Although, it will take an ‘entrepreneurial mindset’ within the new and competitive legal sector to deliver innovation.

In the ‘new economy’, possessing an entrepreneurial mind-set will be the great divider between the successful and unsuccessful, because more change, more challenge to old ways, more disruption and yes, even more crisis is likely to occur.

ABS, rapid changes in technology, fast-changing client demands, the commoditisation of legal services by the internet, all make for a very high-threat environment.

An entrepreneurial mind-set therefore, is the solving of the never-ending stream of problems.

If then, the answer to the above question is ‘yes’, then this implies that lawyers can’t develop for themselves the skills required to relentlessly convert problems into opportunities and deliver whole-scale innovation within the sector; and that simply is not true.

Being a superstar lawyer and having an entrepreneurial mind-set are not mutually exclusive; in fact they are wholly compatible. But it starts with a decision. Yes, you might think entrepreneurs are paid for developing great ideas and providing innovation in flat economies but these achievements are easily attainable for anyone who can master the management of solving problems by making decisions.

Andrew Carnegie, one of America’s first self-made billionaires and the inspiration behind my entrepreneurial bible, ‘Think and Grow Rich’ by Napoleon Hill, spoke of the need for a secret sense of superiority. That is, the sense that ordinary rules and restrictions are for ordinary people. This explains why super successful entrepreneurs such as Sir Richard Branson quite literally change the entire industry or profession they’re part of by making a DECISION to reject limitations, rules and industry norms. A very disconcerting thought for people who think they have to secure academic or other credentials to be successful.

But here’s the secret juice: every successful achievement whether in life or in business begins as the product of someone’s decisions. Decisions of self-reliance, responsibility - not waiting for ideal or better timing - or even help from ‘entrepreneurs outside the legal sector’ are what will ultimately quicken the pace of change.

That’s it. Mystery solved.

23

Q: Are ‘non-lawyers’ subject to an initial cultural barrier when working with law firms and ABSs – especially when it comes to getting their ideas / opinions across in meetings – and how are they overcome? Is it always a bad thing; can lessons be learned?

A:

For anyone going into a new job or profession it can be daunting, even more so when a ‘non qualified’ person is moving into a ‘qualified’ arena. So, for anyone thinking about a career change and entering the bear pit of an industry that largely argues for a living it pretty much tops the list.

Let me deal with the qualification bit first. The nonqualified distinction comes from not being a lawyer. I’m not sure I agree with the term non-Lawyer. It sort of creates a ‘them and us’ obstacle before you even start!

However, to get a foot in the door, a non-lawyer has to be qualified to do something that adds to the business dynamic.

Legal services is a unique industry, but the reality is it is just like any other business. The words may be longer and many in a language that hasn’t been spoken since Elizabeth 1st was on the throne, but essentially it’s a business like any other. It takes a team of people to make a business successful and some of the most successful have a diverse skill set. Whatever the sector, background or qualification.

Is there a cultural hurdle to overcome? Of course there is at the outset, but none more so than if you were moving into any new profession. Its called the ‘new boy/ girl’ syndrome and we’ve all been there.

For any non-lawyer aspiring to be part of the industry its imperative that you understand the sector, the industry and it’s people. It’s vital to have the ability to speak knowledgably about issues that face the sector and lawyers today. Lawyers qualified because they wanted to practice law, obviously, but there is a need, and a part to play, for those who have the drive and acumen to bring fresh thinking to achieving commercial success.

Every business needs an objective and critical ‘best friend’ uncluttered from being in the lawyer mindset but you have to earn the right to be that friend!

Tony Brown, Chief Executive, RJP Pellys Solicitors

Nicol Garwood, Founder, Out There Marketing

ML // July 2013

00 24

????views The

Q: How do you plan in a PostJackson and Post-LASPO era?

A:

I strongly suggest that the first bit of planning that you should have already considered is compliance and most of my February and March was spent making sure that my firm was LASPO compliant. The process was as follows:

• Having quite a few meetings with our compliance lawyers; • Moving the advice out of the theoretical into the practical; • An in-depth review of all of our work sources to decide which were capable of continuing with (possibly/probably with changes as to how we interact) and which to politely decline; • A total re-engineering of our systems and processes, including the rewriting of all client care letters, and; • A slow migration of money to the compliance lawyers.

So once you have compliance and your processes sorted, I suggest your next conundrum is how much work can you take on and how much is that work worth in the new era?

The final Protocols for RTA and EL/PL came out in May and the figures for all of this work up to £25K are now published. There is an ‘overhang’ on RTA work above £10K and EL/PL work as the trigger date is date of accident or letter of claim for disease work. However, for RTA up to £10K the trigger date is date of Claim Notification form on the Portal so the new £500 stage 1 and 2 fees have been in place since the end of April. I have also sat down and tried to plan where EL/PL cases that start in the Portal will end. Clearly there is no data so the planning has more than an element of thumb sucking but what is clear is that most firms will issue as soon as possible.

I think that the considerable drop in claimant costs twinned with the Court’s view of proportionality and almost no leeway in ‘relief from sanctions’, will lead to a higher litigation landscape in which there is no goodwill in any direction.

I will do a monthly review see how many claims settle in the portal/out of the portal/in litigation/which point of litigation and I hope that I have mainly been right.

Time will tell on that and I have nothing but empathy for anyone else trying to plan in world without data.

David Bott, Managing Partner, Bott & Co

It’s not what you know, but who...

I

t has never been truer to say ‘it’s not what you know but who you know’.

The prime source of business for any law firm is from its existing client base. Intelligent maintenance and “mining” of the data every firm has on its existing clients is without doubt the best place to look for repeat business.

This, however, cannot be relied upon to grow the client base and we therefore need to look outside the firm for new clients. All firms have a restricted marketing budget, some more than others; how and where to spend it is the key.

The best ambassadors for the firm are the partners and staff. Getting out and about, networking, puts the face(s) of your firm in front of potential sources of business be it potential new clients or better still referrers of new business.

Networking comes in many and varied forms from the formal such as Business Network International (BNI) which claims: ‘BNI is the most successful business networking referral organisation in the world. We have over 13,000 members in the UK and Ireland alone, passing 680,000 referrals worth over £300 million every year! It is quite literally the best way to build a better business’.

Very impressive numbers, but it’s not for everyone. In your local or target market area decide who you want to meet and make yourself known to them. Prepare your so called ‘elevator pitch’. You have 20 seconds to make your first impression. Say who you are, who the firm is and what you are aiming to achieve. If you want business from them, ask for it. If you want an introduction to someone, ask for it. If you want a business referral, ask for it.

Even more important is the need to record each and every contact you make in your Client Relationship Marketing (CRM) system. Not only does this keep your memory intact but shares the value with your colleagues. A practice management system with an inbuilt CRM suite ensures you get the benefit of being able to market both clients and prospective clients.

It really doesn’t matter if the network environment is a formal one where you have to do a stand up pitch or a one to one, it is all networking and it really does work.

Phil Snee, Development Director, Linetime

ML // July 2013

The views

Q: Ian Mackie, Sales and Marketing Director, Cooperative Legal Services, recently stated that concepts of good customer service are ‘alien to solicitors’.

While CLS has distanced the brand from Mackie’s comments, is there some truth in what he said in Marketing Week?

A:

There is an unrecognised failing in managing delivery of good customer service at support staff level in many legal practices but also a big opportunity to make radical change for the better - with funding available to support it.

More champions of customer service are needed amongst support staff as they increasingly become more client-facing, but to develop here requires training, management and lawyer support; incentives and motivation to really want to do it.

Failings stem from resistance and reluctance to invest (perhaps time, just as much money) in developing the client service skills of support staff. Also in lack of, a) confidence that they have any interest in being part of the service experience and, b) motivation for them to want to be recognised as a part of that process.

Management can choose to change these inhibiting attitudes but, I don’t see enough drive across the profession to make this happen.

The depth of the problem was highlighted when we recently promoted a fully government-funded 12 month training programme for support staff who do not already have higher legal qualifications such as a university degree. This results in a Diploma in Legal Client Service Management. The training involves about three workshops over the year, out of the office, on completion of work-based assignments and learning and mentoring on site at work. From 31st July it is limited to support staff, aged under 24. See http://blog. inpractice.co.uk for more information.

Some law firms are taking this up, putting a good percentage of support staff through the programme.

However, most weren’t interested because they couldn’t make time to get it organised, couldn’t see the value, didn’t think they had people who would be interested and/or didn’t want to lose the support staff from their desk for the small amount of time they would need.

This does not make business sense. Support staff are an integral part of any legal service and need to be helped as much as lawyers do. More investment of time and motivation here has potential to radically improve both the work environment and client’s perceptions of value of your service.

25

Q: Are we about to see an influx of significantly more disruptive legal models that will make services more affordable and accessible to the market?

A:

On the one hand, legal firms are mindful of the need for innovative thinking and new strategies in the light of LASPO reforms, which has resulted in uncertainty about where business growth will originate. On the other, we see many law firms not making the necessary steps of reconstructing their models with most making only modest changes of direction.

Many firms are spending huge amounts of time and taking risks with dubious ‘referral fee work-around’ due to the pressures of finding new growth. We hear plenty of opinion formers describing market opportunities but very little evidence of any points of difference has emerged.

Despite times of change, the legal sector has a number of reasons to be upbeat about its future effectiveness and profitability providing it develops the necessary strategies to future proof itself. We don’t doubt the task is immense; with the benefit of hindsight, the industry should have been ready to embrace change years ago.

As LASPO reforms become embedded into everyday practice, the process of customer profiling and analysis will have to become more advanced creating the requirement of a new generation of legal models. Customers will naturally gravitate towards those companies that can provide them with an easy to understand solution and seamless relationship management.

There is often a tendency to focus on the larger legal establishments and ignore the developments of the smaller, more agile players in the industry. To stay ahead, any business should evolve at the same rate as the legislation unfolds and live and breathe its customers’ expectations.

We have already seen the emergence of the ABS sector as a direct consequence of legal reforms.

These businesses promise accessibility, growth and manageable policies. In reality however, they appear to demonstrate very little in the way of innovation and clarity for the customer. As a result, there’s a lot of opportunity out there.

Some law firms definitely have the potential to be disruptive and may shake up the traditional legal industry.

As long as customers are being offered a solution that fits their changing needs, they will likely succeed.

Watch this space!

Jeff Dawson, Director of Sales, Elite Insurance Company Ltd

Allan Carton, Director, Inpractice UK

ML // July 2013

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The views ????

Q: What is happening with premium rates for commercial after the event legal expenses insurance (ATE)?

A:

For the right cases, more options and more choice.

For commercial cases, the post LASPO landscape for ATE continues much as before (save that ‘recoverability’ is no longer available for most policies taken out after 31.03.13). In the run up to the changes, insurers were struck both by the number, and in many cases the quality and range of cases being presented for cover. Whilst the rush for policies was a ‘one off’, it was illustrative of the increasing awareness of lawyers and their clients of the diversity of cases suitable for cover.

For the right case, ATE remains attractive regardless of recoverability. From a claimant’s perspective there is heightened awareness of ‘price’ because they will end up paying the premium. From an insurer’s perspective, the risk of the case remains the same, regardless of who pays. However, the changes have altered expectations and ATE is beginning to look and feel more like ‘normal’ insurance. One advantage of this is that insurers are better placed to consider a more comprehensive range of premium options and terms, and this is likely to have a knock-on effect on pricing.

At one end of the scale, premium can be paid in full at the outset (as for other insurance). At the other end, a small upfront premium could be all that is initially required, with the balance being payable contingently on ‘success’. A fully contingent premium, (used for much ATE up to 31st March 2013), may still be available where that is the only practical alternative, but it could prove less attractive. The price for ‘upfront’ is likely to be lower than the price payable on success, where an insurer takes on all the risk and may end up paying a claim without ever taking any, or very little, premium.

Between these alternatives there is considerable scope for ‘hybrid’ solutions with premium split between upfront and contingent in different proportions, with provisions for staging and rebates that can be tailored to each case and each claimant.

Whilst the market continues to adjust, the likelihood is premiums will increasingly include an upfront element and be structured to allow for the commercials of a case.

Matthew Williams, Head of AmTrust Law, AmTrust Financial Services

00 27

Q: The first Cooperative Legal Services (CLS) TV and radio advertisements have been launched but are they getting it right? If not, why is the legal sector so far behind other professional sectors in terms of pitching its services?

A:

The most advanced approach to legal marketing views the website as an integral part of an overall marketing strategy that includes offline advertising, branding and online presence.

The recent TV and radio ads

by CLS are an example of this advanced approach, and appear to make the most of offline advertising by linking it with their online efforts – ensuring their website can be found by branded, non-branded and direct searching. This form of integrated campaign ensures that a firm’s web site is optimised for searches on key words related to the television and radio ads that are currently running on-air.

At FindLaw, part of Thomson Reuters, we recently looked at some best practices when it came to the ways a firm can evaluate the performance of their marketing efforts, particularly online marketing, and came up with a short list of ‘takeaways’.

A fundamental starting point for any firm seeking to promote its services is to keep in mind the circumstances of their typical customer and incorporate these into all online marketing solutions.

Prospective clients are often suffering some adversity, are uncomfortable at the prospect of hiring a lawyer, sensitive to cost and unsure of how to proceed. An online presence should engage and reassure them.

When it comes to the right way to evaluate the performance of online marketing, one would normally look at measures such as return on investment (ROI), but similar to other areas of marketing, calculating online ROI for a legal practice can present many challenges. An alternative approach would be to incorporate a balanced view of several proxies for measuring ROI, including visibility, traffic, engagement, conversion and cost per lead.

Key takeaways: Finding a lawyer can still be a difficult process. Legal marketing is unique in the online space, as most performance measures tend to focus on transactional behavior while legal marketing involves more relationship building. As firms invest more in their online marketing, online solutions become more complex and the online space becomes more competitive, they should be looking at more detailed measures of performance.

Best practice for measuring performance is a combination of ROI and fit with objectives. Several metrics should be used to evaluate performance, including visibility, traffic, engagement, conversion and cost per lead (CPL).

Matt Kreutzmann, Senior Director at FindLaw, Thomson Reuters

ML // July 2013

28

The views

Q: How are educators / training professionals and colleges providing legal sector training / qualifications reacting to the changing landscape? Are there opportunities for ‘non-lawyers’ to train in certain legal areas?

A:

Changes in formal legal training have arguably not kept pace with developments in the legal services industry.

The recently published Legal Education Training Review demonstrates this, recommending that there should be new routes to qualification as a solicitor, using legal apprenticeships as a possible alternative. However, the introduction of legal service apprenticeships is lagging behind changes in the sector, although the CILEx qualification already has a partial answer for employers who want to use more specialised staff.

CILEx’s Level 3 and 6 qualifications are ‘consumed’ in unitised form, so these employees are trained for specialisation. This compares with the broader brush training of law degree plus LPC. The introduction of the new legal service apprenticeships will mean that training professionals and colleges have to educate a new type of worker.

Apprenticeships bring young people and the professional environment together in novel ways, which will demand from legal service providers who employ apprentices, more intense supervision.

CILEx Law School is offering supervisor training as an option with its apprenticeship courses. For other training providers- university law schools in particularapprenticeship will demand greater engagement with employers. Logistically it will be difficult for those organisations whose business model is classroom based training: the brave new world will require a much sharper focus on the employee’s vocational education and what the employer actually requires to add value to the business.

From some ABSs there has been an increased interest in training programmes which may help nonlegally qualified staff with their supervisory duties. It may be that such training is in the shape of a short legal practice course, such as a CILEx Level 3 unit in civil litigation. There is little evidence to suggest there is a great demand from managers for more extensive or higher level law programmes though.

These are trends that CILEx Law School is responding to, with the launch of its distance learning business development and marketing programme in the autumn. It is designed for those who may be starting off in a small to medium size legal business and are given responsibility for marketing and business generation. It is in this area that perhaps legal trainers and law schools will eventually catch up with the industry they serve.

Noel Inge, Managing Director, CILEx Law School

ML // July 2013

Q: Ian Mackie, Sales and Marketing Director, Cooperative Legal Services, recently stated that concepts of good customer service are ‘alien to solicitors’.

While CLS has distanced the brand from Mackie’s comments, is there some truth in what he said in Marketing Week?

A:

I’ve been around in the legal industry for over 35 years and I think I can say, in that time, I’ve seen the best and the worst of legal practice.

When I first qualified clients did as we lawyers told them, they never questioned a decision and to even suggest to a client that you could complete a conveyancing case in less than four weeks would be a disciplinary offence. Back in the 1970s, the Practice Rules for solicitors were brief; there was no Conveyancing Quality Scheme, no Client Care details and clients hardly ever complained to the Law Society. How times have changed!

The legal profession is now focused on client care and its provision and this starts as the client instructs us when we inform them how to complain if they are not happy with the service they receive. All solicitors have to have a complaints procedure and in that they have to make clear how the client would escalate their complaint to the Legal Ombudsman (LeO) if they are unhappy with their solicitor’s approach to their complaint. And LeO will charge for dealing with all such complaints unless we can show the client had no grounds for their complaint.

Thinking about my own firm, we recognise we’re in a very different world to the 1970s. If we didn’t treat client care seriously we wouldn’t still be trading – quite simply the third party referrers upon which our business model relies wouldn’t use us. While I can’t speak for the whole profession, I can say that all members of the Conveyancing Association who have signed up to the Conveyancing Association pledges take client care extremely seriously.

I know that CLS rapidly distanced itself from Mr Mackie’s comments as a result of the ensuing outcry and I’m sure, with hindsight, Mr Mackie himself regretted his comments. If he’d said that the public still find dealing with solicitors a stressful experience then I for one would not have disagreed with him. For me the really big issue is not whether solicitors understand the concepts of good customer service but rather that the profession as a whole becomes more customer centric; dispelling the old myths about the aloofness of the legal profession – now that’s a job worth doing!

Eddie Goldsmith, Partner, Goldsmith Williams

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The views

31

Q: Does the term ‘non-lawyer’ for professionals working in a legal entity suggest that lawyers are still ‘top dog’ when it comes to authority in a legal entity? Will the legal sector be able to attract Tier 1 commercially/ professionally skilled people if it fails to recognise them as equals to lawyers?

A:

Many of the newly licensed ABSs already recognise the value of ‘non-lawyers’ to their practice and have converted to bring them in as owners/partners. I believe this is a trend that will become unstoppable once lawyers come to realise and appreciate the value that other professionals can bring to their practices. Legal project/process managers, business development experts, IT professionals, accountants and costs lawyers are, for example, some of the professionals who can bring value to a law firm and help make them both more efficient and more profitable.

There has been much talk of ‘de-lawyering’ legal practice but I dislike and disagree with this term. The skills and knowledge that a lawyer brings to the table are and always will be the core of a legal practice. However, to run a legal business effectively and profitably, other skills are needed; the views and opinions of other professionals brought in on the financial and management side of the business are worth (and should be given) equal weight. Practices will suffer if their contributions are ignored or under-valued and the talent pool firms may have created will swiftly disappear – probably to a competitor!

Solicitors are intelligent people and I believe that most will come to realise that other professional expertise is vital to the survival, growth and profitability of their practices. Unless law firms are able to compete in a business sense, they will not be able to offer clients the legal services they need. By learning to value and work alongside other professionals - on whom they will be able to rely for business management (and profitability) - they will be able to concentrate on what they know and do best. Practices can then retain, strengthen and expand their client base and will be in a position to compete with any of the new legal entities that have come into being as a result of the Legal Services Act. Sue Nash, Founder, Omnia Legal Software Ltd

Client Care: Alien to Solicitors?

I

wouldn’t say good customer care is alien to solicitors as a profession on the whole, but it certainly is to a section of them. I think I have probably had 200 conversations and visited 50 lawyers’ offices over the last 12 months as part of our ‘webuyanyfiles’ project for acquiring personal injury work. My experiences have been mixed, from the very good to the bad to the plain ugly.

When I walk through the doors of a firm for the first time, I’m pretty confident what I see will be a good reflection of how the files look, and how and to what extent the client experience is managed and monitored from beginning to end.

Consumers want 24 hour instant response. The reality is that you are in a race with several other firms; the first to respond and sell their services to the client is more than likely to prevail. You then have the inevitable “we are known for our excellent client care” which every firm trots out, including my own! I’m not sure though that misspelling clients name and address, never returning calls, writing in legalese and taking an eternity to progress matters ticks that box.

A fair few business owners haven’t invested in IT, so can’t communicate regularly and effectively with their clients by way of cross sell, or monitor what their fee earners are doing. All modern forward thinking businesses can run off weekly reports which demonstrate the efficiency of a firm.

The proper use of IT can throw up some surprises in terms of individual and comparative performance, much better and more accurate than your own hunches and observations.

And then we come to the senior partner, who doesn’t want to know about any of this. He’s a solicitor you see, the font of all knowledge to whom any client needs to be grateful for being granted an audience. Although a dying breed they are still out their yielding that power under old style partner structures that stifle growth and innovation.

There’s nothing earth shattering or scientific in any of this is there? It’s easy ground for us to make up as a profession, and some are doing it very well. Those that aren’t will fall away under the new rules and in the post ABS world. But for those left behind we are more than a match for the CISs of this world with our expertise and unique position as a profession.

Neil Hudgell, Owner, Neil Hudgell Solicitors.

ML // July 2013

32

The views

The digital age: With more people on the go how can law firms engage with remote users?

G

one are the days when law firms could rely on a nicely presented letter to gain prospective clients. Gone too are the days when people actually read the mail that lands on their door mat.

The digital age is here and is well and truly in full swing. And, with so many people on the go how can law firms really engage with their prospective clients? As with anything these days it is all about keeping up with technology. A law firm who fails to do so could find themselves being left very far behind.

But there are a two ways that you can engage with your remote users.

How are you responding?

Mobile search has grown by over 500% in the past two years. Alongside that it is believed that mobile phones will overtake PC’s as the most common web access device. These two statistics alone show you the direction that the market is heading in. If you pick up your phone and type your URL into the search field wait to see what happens. Are you still waiting? If your website is taking a while to upload, or failing to fully upload at all, then you don’t have a responsive website.

Adopting a fully responsive website means that your site will automatically shrink to fit the screen you are using. Be that an iPad, tablet or iPhone. Your website will also load quicker which means your prospective clients won’t get frustrated.

Be social Another way to engage with your remote users is to be social. This doesn’t mean chatting away to the people you meet in the street, it means using the social media networks available to you to engage and interact with prospective clients. Do you tweet every day? When was the last time you shared an interesting article or blog post on Facebook?

If you have to stop and think about it then it has been too long. The world is constantly checking its social media accounts. If you are not out there then how will they take note?

It is time to respond and engage. It is only by doing so that people will wake up and listen.

Dez Derry, CEO, MMA Digital

Q: Ian Mackie, Sales and Marketing Director at the Cooperative Legal Services, said recently that concepts of good customer service are ‘alien to solicitors’.

While CLS has distanced the brand from Mackie’s comments, is there some truth in what he said in Marketing Week?

A:

Unfortunately, yes. Over the last two months I have visited over 30 law firms of differing sizes. Some were Bold Group members, some were not.

Just over 70% of the firms offered a warm friendly welcome from a smiling and attentive receptionist who was working efficiently in a clean and bright office. Tea and coffee was offered and the magazines and papers were current. Calls were answered promptly and dealt with politely. This pleasant front office experience made me feel confident that the service provided by the lawyers tucked away in their rooms was likely to be as good.

Some of the other firms were not so impressive. I entered one building and saw what can only be described as a complete shambles. The office looked dirty, you could not see the receptionist behind a pile of files, there were boxes everywhere, phones were left ringing for ages and old magazines and newspapers were strewn across a shabby table. I took my seat and then spent a few minutes listening to one of the lawyers (with his office door open) talking about one of his client’s pending court cases.

I was ushered through to the lawyer I was due to visit and I could not see one square inch of his desk through a jumble of papers and files. While I was with him he carried out a telephone exchange of contracts on the purchase side of a property transaction. He could not locate the file so wrote down the details of the exchange on the corner of the first piece of paper he could find and promptly covered it up. When I enquired how long he had left to exchange on a related sale, he said 45 minutes. As an ex-conveyancer my heart began beating quickly! What really concerns me is that the firm above had pretty much every kite mark and accreditation certificate available, giving the outward impression of efficiency and professionalism.

I am currently developing a legal brand, Bold Legal (www.boldlegal.co.uk), and for obvious reasons am now insisting that I visit every firm that wants to join us. If Bold Legal sounds of interest to you, please contact Lynne: lh@boldlegal.co.uk Rob Hailstone, Bold Legal Group

ML // July 2013

The views

Q: Are we about to see an influx of significantly more disruptive legal models that will make services more affordable and accessible to the market?

A:

The simple answer has to be yes. What we have today are the early adopters who have seized the opportunity to gain first mover advantage. Some will survive whilst others will not. If we are to look at how other industries and services have evolved, then there is no doubt that we will see another wave and an influx of more disruptive models; the second and third generation legal services models that will be better refined and highly tuned.

The first generation legal services models have evolved more around the market opportunity and threat. Network models, such as Quality Solicitors, addressed the threat of big brands entering the market and provided its members the brand and clout to compete with the promise of increased case work.

Some new entrants focused more on addressing the lack of transparency around fees and have built their disruptive models around fixed fee and subscription based arrangements. Others, that include a number of barristers’ chambers, have adopted ‘direct’ models.

The fact is that more and more non-legal players are now becoming aware of the opportunities the legal market offers them to build profitable businesses. Many have been operating in adjacent markets and have already successfully developed models that they now believe can be applied to the legal services market.

These second and third generation models are more focused on the financials and efficiency gains. They are looking at ways to maximise cash-flow so it is not tied up in WIP, outsourcing back office functions that are not core (e.g. IT infrastructure). They are also looking at ways to break down the delivery of legal services into a factory - so that it does not require expensive lawyers to do the basic work – and are then able to pass on the savings to customer through lower fees. Others are looking at ways to get more share of the wallet and packaging legal and non-legal services for their clients.

An example of this is the bundling of wills, probate and wealth management into a seamless offering – effectively moving to a one-stop shopping experience for the client.

Experience in other industries tells us that the influx of more disruptive models is more likely to come in waves, with each wave bringing in newer or better refined models aimed to make legal services more affordable and accessible.

Jitendra Valera, Chief Marketing Officer, Advanced Legal

33

Q: Will it take innovative entrepreneurs from outside the legal sector to deliver whole-scale innovation – or at least quicken the pace of change – and why?

A:

Without doubt, for these reasons: 1. Because those inside the sector are lawyers. Lawyers are not by nature innovators; you don’t get people wanting to enter the profession just so they can change it. They become lawyers because they want to advise, assist and represent those who aren’t. Few have the unwavering iron-clad determination directed towards re-engineering the entire existing business model that you need for entrepreneurial change.

2. Because the traditional partnership model and the way that solicitors judge success within it operate to stifle innovation. The two main measures currently are gross fees (vanity, not sanity!) and the meaningless profit per equity partner. EBITDA and return on capital anyone? Within a practice, individual partners are expected to go out and find work, then undertake lots of billable work and also be involved in managing the practice – three separate and very disparate activities that are not always happy bedfellows within one individual.

On top of that are the personal and commercial drivers of an internal partnership dynamic, which are not naturally conducive to the creation of a highly focused collective leadership dedicated to innovative change. Yes, you do get good management teams, but then management is not the same as innovation.

3. Because innovative entrepreneurs are starting to recognise the nature and extent of the opportunities that the newly liberalised market has to offer. Listen out for talk of fragmented distribution, brand creation, disruptive models and customer service. Successful businesses outside of law do tend to be structured and focused in rather different ways. Functions are specialised.

Management is seen as a dedicated full-time role in itself for the senior management team. The measure of successful management tends to be innovation, growth and constant improvement across the entire business model.

This is not a message of doom. Innovation does not spell the death of lawyers – far from it. The new models that I expect to see entering the market, and in time dominating it, will actually free them up to focus on what they want to do and do best. They will provide better structure and career paths for lawyers coming into the market. And there will be opportunity for some of those to become the next phase of innovative entrepreneurs.

Simon Goldhill, Simon Goldhill Consultancy

ML // July 2013

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The Features

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The Features

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Sector roundtable: Practice Management & Workflow Modern Law hosted its third sector roundtable to find out if the LSA and the rise of new entrants to market have had a significant impact on practice management and workflow structures, led to the rise of the non-lawyer entrepreneur and how firms can get around fermented, outdated culture from top to bottom.

MLM: How has your practice management model developed since Clementi and the LSA (or for other reasons) and why?

Do you feel the legal market has been forced to address new leadership and management culture or is change due to natural evolution in the business of law?

Tatton: ABS status gave us the opportunity to revisit the structural model, to recognise the positions of nonlawyers in the firm. It hasn’t changed the way our firm is managed too much as it was established 10 years ago as a very structured business, rather than a traditional law firm model. However ABS status has brought forward some very interesting people for us to have conversations with – people that might not otherwise have come forward, such as potential investors.

Post: Does the firm feel differently now it is an ABS? Tatton: No, the only thing we have now is a board of directors. This, incidentally, is entirely made up of women.

It wasn’t planned that way though! I feel better having the Managing Director title and the credibility that gives you, especially as a non-lawyer.

Wynne: We had a traditional structure for 13 years which was partner-run, but we outgrew the model and needed to change. Lots of lawyers in the firm asked questions when we started to use non-lawyers to change the structure, such as ‘why should a non-lawyer tell us what to do in our law firm?’ and ‘why do I need someone from IT or finance to tell me how I should work?’. But managing a law firm isn’t about law. There are of course many entrepreneurial lawyers, such as our Managing Partner who understood why we needed to bring non-lawyers, such as HR and marketing professionals, onto the Board. ABS status allows us to do this and we should as they are as valuable to the firm as fee earners. Lawyers resistant to change have now come round and accept the culture that comes with being an ABS. Bostoff: Lawyers struggle to see things like IT and marketing as anything but an overhead...

Douglass: The problem is, there’s no management or business development training at law school. Culture change is a big challenge and with barristers, even more so.

“Some non-lawyers in the firm have overtaken lawyers in terms of their position in the company, with partners now known as directors to make things clearer externally.”

Roundtable Guests

Chair: Emma Waddingham, Chief Editor, Modern Law Barry Bostoff, Senior Sales Consultant, Thomson Reuters Neil Douglass, CEO, Parklane Plowden Patrick Hurley, Vice President, Global Expansion, Thomson Reuters Elite Frans Post, CFO, Gates & Partners LLP Luigi Salzano, Associate Director, Systems Development, Panonne LLP Stevie Tatton, Managing Director, Hillary Meredith Solicitors Liam Wynne, Operations Partner, Express Solicitors Tom Wormald, Operations Director, Carpenters Solicitors Wormald: Carpenters has been in practice for 20 years and it evolves over time, with a mix of lawyers and non-lawyers.

Some non-lawyers in the firm have overtaken lawyers in terms of their position in the company, with partners now known as directors to make things clearer externally. That’s why we dropped ‘solicitors’ from our former brand name, Carpenters Solicitors, as the majority of people in the firm are not qualified lawyers.

Douglass: Has anyone found it’s going too far the other way?

Post: I used to be the Financial Director at Clifford Chance which is streets ahead of most law firms even 20 years ago and making the changes ABSs are influencing now.

Unless we break through the concept that partners own and manage everything, then nothing will change in a firm.

Success in transforming the management culture of a firm also depends on the size of the firm and the time it takes for new management to establish credibility.

Hurley: People coming into the legal sector from outside don’t always see the move as all that attractive, mainly because of the lack of importance given to posts such as HR marketing and business development.

ML // July 2013

38

The Features

“Unless we break through the concept that partners own and manage everything, then nothing will change in a firm.”

Douglass: But the structure of the firm changes the dynamic quickly too. Look at firms made up of vast call centres, the majority of people in those firms will be non-lawyers anyway!

Wormald: We also have to admit that not all lawyers make good managers; and not all managers make good lawyers!

Wynne: We have mixed some of our LPC students with people who have sales experience so they can learn from each other, which has been beneficial.

MLM: How have management strategies and tactics had to change?

Tatton: Technology and the way you contact clients has significantly changed the way we do business.

Clients want an instant response.

We use iPads and Skype to speak to clients but they are also taking on some of the responsibilities themselves where they can to reduce costs.

Wynne: Clients are savvier now.

Salzano: The consumerisation of law and the fact that clients are now consumers is equally important as the professionalism of lawyers.

Hurley: How many of those around the table undertake customer satisfaction surveys?

All: All of us, all of the time.

Hurley: Interesting as that wouldn’t have happened 10 years ago, which supports the fact we recognise the consumerisation of law.

Wynne: True, the best marketing tactic is relationship building. For us, it’s about service and reputation management. We go that extra mile and put in the TLC – we’re not a sausage factory. The idea is to get the highest potential damages for the client and our cost is justified to the client because of our extremely

ML // July 2013

high levels of service. Technological investments have enabled us to provide that service cheaper and faster leaving us time to spend looking after the client, not process. For example, we now send text messages to clients to update them on their case.

Bostoff: This is where technology comes in. You can go online and check on case progression, or a text or however you communicate it to the client. That builds the relationship with the client who understands that you get what you pay for.

Douglass: Relationship-building is different for us as we get referrals.

Relationships and client feedback tends to be handled through the senior clerks.

Wynne: Yes but it’s sometimes the barristers who let firms down as they don’t always understand why relationship building is so important.

Tatton: But all lawyers do need to understand the sales aspect of their role.

Wynne: Although lawyers get frustrated if they don’t see an immediate investment into ‘non billable’

“I am increasingly surprised by how little lawyers seem to not want to improve things for themselves. There seems to be no real concept of cost efficiencies either, people are not focused enough on their business structure.”

work such as business development.

Douglass: Some of that comes down to how you monitor data after seminars and marketing activities. You also have problems when just one or two people think they bring in all the big clients.

Salzano: We have a fairly clunky but good CRM system but the lawyers don’t know how to use it properly. The business development people bang their heads against the wall!

Hurley: We should really be encouraging our younger lawyers to be better managers and understand the business as they will be the managers of the future.

Post: In the future, firms will no longer be built by lawyers. They will be the employees and it will be run by the non-lawyer entrepreneurs.

People will stop hiring trainee lawyers but paralegals instead who are paid a lot less to do the same.

We’ll be relying on these and practice management systems.

Wynne: Firms want the lowest initial intake cost now so they can train lawyers up to the standard they need.

We are going to diversify, put ourselves on par with our competitors, such as the Cooperative Legal Services.

MLM: What helps you to adapt in new and existing markets?

Wormald: IT investment has led the way for us in this respect.

Wynne: From day one you should be looking for results in all markets. You need to have a good Financial Director, operations and IT to adapt quickly, with results.

Bostoff: What about Lean [project management systems], has anyone looked at this?

Wynne: You can’t simply implement Lean however; you need to change process and efficiency in all markets through the culture of the firm as well.

Salzano: You can drive positive change by using Lean systems; it makes it more process driven. We have done a lot of things with Lean and it’s unconvincing as lawyers don’t always use it properly.

From a workflow side of things, Lean works, but not always from a case management point of view.

Douglass: You have to be careful in the way you persuade people to use new systems so they can see the benefits for themselves.

Post: I am increasingly surprised by how little lawyers seem to not want to improve things for themselves. There seems to be no real concept of cost efficiencies either, people are not focused enough on their business structure.

The Features

39

“We should really be encouraging our younger lawyers to be better managers and understand the business as they will be the managers of the future.”

MLM: Which areas outside of the legal sector inspire you in terms of operations?

Post: Jack Welch [former chairman and CEO of General Electric], he is straight / simple behaviour oriented but with a level of toughness around him. I don’t find lawyers particularly inspiring! We need a more simple management structure for law firms but this isn’t happening at the moment. We also need to be more candid and open about management decisions in firms.

Douglass: It helped when changes such as the LLP came in. Publishing business plans to staff is another way to encourage support. Firms need to make their business plans clear to engage staff.

Wynne: I come from a manufacturing background; if something wasn’t working or looking right, we’d take it off the line. If it’s a good model, we’d sell it.

We should take a similar production line ethos into a law firm to work out which services are cost effective and need to be rolled out and which cost us money and need to be thrown out.

MLM: How do you manage people and the culture to sustain effective work models?

Tatton: Regular information from management helps. We train our staff to look at the business in the same way we do. Management information is shared across the firm (minus confidential issues) to the right people, which is then fed down. We allow for ideas and feedback to permeate at all levels and this has been highly beneficial. We give people the opportunity to form teams and present a business case to management; everyone from fee earners to secretaries have had some fantastic ideas implemented.

Bostoff: That’s a great idea, to give people that level of responsibility and, hopefully, a positive outcome.

Douglass: Once people understand the context of the information available to

them, then they can understand why any changes need to be made and their part in that process.

Wynne: We hold ‘back to the floor’ days once a month for senior management to talk to the different teams. This means we can identify and fix problems far quicker than if we left it to the teams themselves, who often don’t even realise they have a problem in the first place.

This also means the staff are much happier as things get done to make their working day less frustrating.

Wynne: It’s essential to ask staff at all levels what can be done to improve things. They know their job and what can be done to improve things.

MLM: Where do you go for knowledge and leadership skill sets? How do you assess need?

Tatton: There are some great opportunities for brining management role into law firms in the future and firms need to look at where there is the most need before applying investment into skills. This might require the use of a consultant in the short term but you might also be able to train existing staff who have the ability to fill certain roles.

Douglass: Some skills are self-taught though; management can sometimes be about basic common sense.

Wynne: Spending time in different departments can help managers identify where the gaps are for themselves. All too often, departments fail to crosspollinate ideas. Floor walks can help you to get a different perspective to the one you’re told at management level.

MLM: Can you see firms moving away from the lawyer-manager model more quickly due to the new landscape?

Tatton: It has to be the right person; you need to assess things on an individual basis. You can’t rush that.

Wynne: I don’t think you can have a fee earning figure head. I think you should

either manage your firm or your case load.

Wormald: Our Chief Executive is a non-lawyer and five out of six members of the board are non-lawyers so it’s happened already.

Hurley: The former CEO of Thomson Reuters was a lawyer, so it shows that lawyers do have other skills and can bring them into the commercial sector too.

Wynne: One of our partners earns us £1 million in fees every year and we’re very happy for him to continue to do that! The key is – as well as skills – to keep the decision-making team small.

Douglass: The Bar will have to become more corporate, undoubtedly.

Salzano: We have five divisions, like mini-law firms, who operate autonomously. There isn’t a co-ordinated push towards anything sometimes within silo-d firms. That can be difficult.

MLM: What new opportunities are there for legal service providers postLSA, or is it simply business as usual?

Wynne: We are trying to explore what you can / can’t do with the firm.

Realising the opportunity for external investment is all ABS and the LSA means to us at the moment.

Wormald: New opportunities and how to build on them are a key driver of ABSs, not resorting to type.

Wynne: Although a lot of people have said that becoming an ABS hasn’t affected them that much yet, but in 10 years time I think they’ll say it has benefitted them hugely.

Tatton: Change is refreshing, it’s good for business. I don’t think we should be so doom and gloom. If you get your management structure and process right and change quickly, then it’s just a case of getting on with the work. As a non-lawyer I think the LSA has had a hugely positive effect on the industry.

Modern Law would like to thank everyone for attending and sharing their views.

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ML // July 2013

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The Features

41

Who sets the pace of change?

Will it take innovative entrepreneurs from outside the legal sector to deliver whole-scale innovation – or at least quicken the pace of change?

T

he fundamentals of innovation in practice, from idea generation to execution are material elements of quickening the pace of change as well as delivering whole-scale innovation to the legal sector at large. This innovation has not only led to the proliferation of the ABS but also underlies the most fundamental and prescient features of the legal sector. Innovation is key to long-term survival for law firms and the legal sector – and it goes beyond simply new product development. It means radically re-evaluating areas of your business, such as strategy, business processes, operations and management models.

Entrepreneurial spirit Innovative entrepreneurs outside the legal sector bring a commercial awareness, resolve, constructive ideas and business focus that the legal sector direly needs in this commercial climate; in the post-LSA/LASPO medical negligence industry, for instance. Take data analytics, for example. This is crucial to the sustenance of a law firm and its profitability. It is barely existent in the legal sector and whilst those within the sector may traduce such conceptions as immaterial, the reality is that these tools and platforms are integral to progress and are large factors in other commercial markets.

Everything from a company’s entire email archive to the information that exists in all the briefs and filings that solicitors create, reinforces the fact that data is abundant in the legal profession. Right now, the vast majority of this data simply sits idle, untapped and unused. What in inherent in this data is the potential for creating products that predict outcomes in cases, quantify and qualify lawyer performance, and create transparency within the legal process itself.

What is undeniable is that the legal sector is getting more complex, not simpler. There is more need for oversight and compliance, cost recovery, need for innovation, gearing of profit and increased leverage in markets. Outside entrepreneurs can create alternate paths or avoid problems, not to mention create huge opportunities.

Collaborative innovation However, it cannot be overlooked that innovation comes from a variety of places and the synergy between the traditional lawyer and an outside entrepreneur is the reason that innovation is the difference between profit gains and stagnancy. Lawyers are exceptional at what they do, and by playing a major part within litigation and legal processes to the extent that they do often means commercial opportunities and niches in markets are missed.

This synergy I mentioned can be invaluable. Lawyers are working more frequently with individuals outside the sector who work in fields as diverse as: IT, finance, banking, business development and private equity. Lawyers were

secure prior to the LSA and this outside involvement was not a prerequisite to managing their businesses. The legal landscape has changed and so lawyers are increasing their involvement with entrepreneurs outside the legal industry so as to add to the bottom line. While nothing can replace the skill, expertise and experience lawyers bring to the legal work they do-the more progressive lawyers and firms are working with outside entrepreneurs from different sectors and disciplines, but importantly, they don’t ignore them.

This is evident in the appointment of legal services CEOs who come from a non-legal background.

“It cannot be overlooked that innovation comes from a variety of places and the synergy between the traditional lawyer and an outside entrepreneur is the reason that innovation is the difference between profit gains and stagnancy.”

The complexity and demands on time and resources that lawyers have to engage in often means the ability to spot commercial opportunities and market gaps is compromised.

The inception of the Outspire Group was built on this kind of lateral and active thinking, in that we decided to work within the niche market of clinical negligence, being reactive to the needs for innovative IT (Clinical Connexx), focused costs solutions and financial portfolio packages for both clinical negligence firms and clients alike. We decided to harness the experience and skill of specialist clinical negligence lawyers, costs lawyers and financial advisors; by working with such partners and joint venture initiatives, we have met a significant market need. This kind of innovation addresses concerns of credibility and market knowledge that are often directed at those outside the legal sector. The key to success here is that it ensures specialists do the specialist work and entrepreneurs work with the best, to provide cost-effective and game-changing commercial solutions.

The legal sector is a landscape where leveraging technology to attack e-discovery, legal research, data analytics, practice management, social media and much, more makes the difference between lagging profits, embracing regulatory reform and being one step ahead.

Sajid Hussain & Saurav Dutt, Outspire Group

ML // July 2013

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The Features

43

Looking Up? Charlotte Parkinson, Modern Law, spoke to Richard Barnett (RB), Barnetts Solicitors and Edward Goldsmith (EG), Goldsmith Williams Solicitors, about developments in technology and innovation and how the conveyancing market has evolved since the recession hit in October 2007.

Q A

How has the market changed since the recession hit in 2007?

EG: If there is anything that should be learnt it is that business never stays the same and that survival depends on planning for change. The sector is very much more polarised with a decline in the traditional high street models and an increase in the specialist direct market.

RB: Long past are the days when conveyancing in practice very often ‘subsidised’ other areas, it is little wonder that probably fewer than 3000 firms now undertake meaningful numbers of transactions.

Q A

What impact has the introduction of lender panels had on the market?

RB: One of the aims of the Conveyancing Quality Standard (CQS) was to create a trusted community for solicitors run by solicitors. The lender community saw solicitor conveyancers as a disproportionate contributor to mortgage fraud. Recent court decisions, such as Davisons, and the FSA’s call for ‘know your suppliers’, has lead to either some revisiting either separate representation or a culling of open panels altogether.

EG: The reduction in the overall mortgage market has seen other side effects which directly impinge on the state of the market and lenders have taken this as an opportunity to review their panels. The main effect has been for firms to question the viability of conducting conveyancing in small volumes only. With the CQS setting the basic level for lenders the reduction is only likely to continue.

Q A

What implications have/will technological advance and an increased awareness of client care have on the conveyancing market?

EG: Firms in the conveyancing sector need to review their business models; gone are the days when it was not necessary to market your practice. Firms at the fore are utilising technology such as internal case management processes, client/introducer progress screens and also smart technology. It is vital to keep ahead of the game in terms of client offerings and innovation will continue to aid firms to offer their own USP’s.

Q A

How is the sector as a whole combating fraud?

EG: A further fallout from the recession has been the rise in fraud in property transactions and an increased need for improved security processes; firms are therefore adopting continuous vigilance and innovative products such as lawyerchecker will continue to be adopted by firms in the fight against fraud.

Q

What do you anticipate the sector will look in 5 years time?

(L) Richard Barnett: Chairman & Senior Partner, Barnetts Solicitors Richard Barnett is the senior partner of Barnetts, a volume conveyancing and litigation firm based in Southport. He is the immediate past Chair, and current member of the Law Society’s Conveyancing and Land Law Committee. He is a Law Society Council member representing Merseyside and district. Richard is a regular conference speaker, and contributor to the media on property related topics.

(R) Edward Goldsmith: Founding Partner, Goldsmith Williams Solicitors Edward is a partner in Goldsmith Williams Solicitors based in Liverpool City Centre and founded Goldsmith Williams with Chris Williams in 1984. The other partner Simon Cottrell joined in 1986. Edward was President of Liverpool Law Society in 2001 one of the largest Law Societies in England and Wales. His firm is a founder member of the Conveyancing Association and Edward is the current Chairman of the Association which represents 50 of the largest conveyancing firms in the country. Goldsmith Williams are Founder Members of the Equity Release Solicitors Alliance.

A

RB: Without a doubt conveyancing will continue to be undertaken by fewer and fewer firms and the trend for market share to be taken up by the larger conveyancing firms will continue. The referral fee ban we have seen in PI is unlikely to spread into conveyancing and if it were then there would be a rush towards ABS. To date there has been very little interest shown by third parties in taking advantage of ABS investment but once work gravitates towards larger firms and the household names start to compete, it will be very hard for us to keep hold of market share.

EG: Nascent fee comparison websites will continue to have a greater influence on the market and in 5 years from now the market will have moved on even further; we will see a continuing increase in the market share of big players and the traditional high street needing to differentiate themselves through their local and personalised service.

ML // July 2013

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The Features

45

Embracing the new era of injury litigation The time to refocus, adapt and change has never been more pressing. Success in this new era will need firms to consider the value of their legal, financial and commercial expertise.

M

firm may not feel the real pain of its lack of expertise until year 3 or 4. By this time WIP and disbursement writeoffs can be significant.

any firms have embarked upon a positive process of adaptation at varying degrees. Given that there is still some uncertainty on the horizon, this must be applauded. How they will fully evolve and whether there will be a string of resounding successes over the next 12 months remains to be seen. Early signs suggest reducing income amongst a good proportion of firms.

Over the last few months, there has been a clear “fight or flight” response.

Most volume based specialist PI firms have implemented structured changes.

For those firms that don’t have all of the answers; all of the skills and clarity of vision, many have opted to bring expertise in from external sources or collaborated with each other and shared ideas.

How is the focus of work changing?

Searching for ‘golden nuggets’ In a growing number of firms, there is a desire to increase the number of cases with settlement values above £25,000 with an appetite to expand multi-track work with good quantum value. For some, this has been looking at sifting higher value cases as early in the process as possible, and also to maximise quantum and push cases out of fast track. This is easier said than done. The ability to identify a chronic pain syndrome; a more entrenched psychological injury or even a subtle brain injury is a skill in itself. There are certain indicators to look out for and it will require a more detailed analysis and a closer relationship with the client. This may not necessarily be within the immediate skill and experience set of a volume based, process driven fast track team.

Niche areas & serious injuries

The burgeoning PI retail sector Over recent months, Zebra Legal Consulting has been involved in numerous due diligence reviews, valuing and risk profiling WIP for sale.

This has included both vendors due diligence (getting the WIP healthy for sale) and acquisition projects (valuing and risk profiling WIP for purchase).

Some firms have decided that they will actively recruit serious injury practitioners and develop niche areas such as Noise Induced Hearing Loss.

In many ways this makes sense, but it needs to be considered carefully. The market has some exceptional niche players. Researching this market fully is critical. Further, the implementation of case cost budgeting will have a significant impact in serious injury cases. Without historical data, experience and skill, firms could feel the financial pain if their teams lack experience in having a commercial handle on cases of this complexity and value.

Clinical negligence Recent projects include firms looking to expand into the area of clinical negligence. Understanding the risk profile of this very specialised area of work is critical to cash flow and profitability. In the post Jackson era, managing and monitoring this work effectively will be critical to its ability to generate cash and profit. As this work can have a 3-year lead in, the

The largest project this year was the due diligence for Neil Hudgell’s £1million purchase of Quality Solicitors firm, Lockings in Hull. More recently, Zebra carried out the due diligence for Sheffield law firm, Atteys, our instructions were joint with the bank.

Buyers with cash are available and willing to pay the right price for ‘healthy WIP.’ It is clear that WIP values are driven by the quality of the recoverability of the WIP. The historical 20% to 30% WIP valuation approach does not necessarily reflect the current deal making. A high value multi-track caseload, with a healthy portion of admitted WIP may well achieve a higher commensurate value than a fast track caseload. The key is to understand the overall risk profile, complexity of the caseload and the future potential for building future healthy WIP. 12 months ahead Most firms are taking positive steps to flex, adapt and evolve, even if this does mean that PI is not a future investing area of their practice. In 12 months time, the PI sector will look and feel different. The exact future profile of the sector is an unknown. If only we had a crystal ball…

Zoe Holland, Managing Director, Zebra Legal Consulting

ML // July 2013

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The Features

47

The Big Bang

HHJ Jackson’s Big Bang was over 3 months ago now, Steven England asks whether the world has dramatically shifted under our feet or whether it is more akin to a gradual but inexorable shift?

“We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten. Don’t let yourself be lulled into inaction.” Bill Gates₁

aka predictive coding or automated first pass review. Here, the technology uses binary decisions made by a senior reviewer, not necessarily a Partner but someone who knows the case, on a sub-set of the documents (up to 10,000) to make decisions as to the relevance of the remainder. This technology lends itself to greater predictability, meshing neatly with the other tranche of Jackson’s reform costs. This is the future and will, in all likelihood, be the norm within 5 years.

Technology should be used for what it can do well and the same is true for human review teams.

I

t could be argued that not much has changed. The response I get from legal practitioners seems pretty much the same, with varied levels of knowledge, understanding and willingness to participate in electronic review of documents. As well as this, everything I have heard suggests the majority of judges do not want to become involved in helping opposing sides reach agreement on their approach to disclosure. ‘Agree before the CMC and you won’t get any objection from me’ appears to be the line.

So what is the point of the Jackson reforms and what have they achieved in the context of disclosure? Well what has changed is that those lawyers who have knowledge as to what electronic disclosure can do for them and their clients, how it works and how to do ‘it’ without spending the earth, have finally got the upper hand! Ultimately, in a world where clients are demanding higher levels of service, more efficiently delivered and at a lower price, how can a process that involves saving time and cost continue to be regarded by some as nothing more than a last ditch option?

The answer is that reviewing documents electronically prima facie undermines the business model of many law firms. It potentially removes, or significantly reduces the bottom tier of the charging pyramid – the very profitable first pass review.

Furthermore, the uncomfortable truth is that there is now little justification where a set of documents originates electronically, not to keep them in that format until at least you have received the disclosure from the other side.

Why? De-duplication.

When you retain and work from the source electronic material you are not only able to review more documents per hour, easily search for words or phrases at the click of a mouse but you also only need to review each document once.

Given that the other party are likely to disclose many of the same documents as you; even if you were only to remove the duplicates and print what you had left this potentially represents a major saving in the cost of review.

Electronic review presents, in equal measure, an opportunity and a threat to law firms. We all work in a world where our clients are demanding more from us at a lower price. A lawyer could take the view that, by becoming proficient in the dark arts of electronic disclosure, they might be able to service existing clients in a more cost effective way or possibly go after more prestigious work that otherwise their firm would not have the resource to handle.

Jackson’s reforms to the rules governing disclosure do not represent the death knell of litigation lawyers or even a threat. Jackson reflects that a shift has occurred in the way documents are created, distributed and stored and has simply replaced the outdated and inadequate concept of ‘standard disclosure’ with a menu of options of which standard disclosure is one – as is paper disclosure.

In common with all ‘progress’ there will undoubtedly be winners and losers as a result of the increased emphasis on electronic review. However a far greater loss would be the gradual demise of litigation through the refusal of those practising it to acknowledge that times have changed. Technology, when used correctly, should complement not compete with, the work of the litigation lawyer.

Steven England, Litigation Support Consultant, K2 Legal Support ₁ Source: investigatinganswers.com

A new technological era.

Conversely lawyers still firmly wedded to the war room full of boxes in the run up to disclosure should note that to date we have only seen the tip of the technology ice berg. The latest ‘thing’ to get excited about is assisted review,

ML // July 2013

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The Features

49

Eclipse Proclaim Modern Law Awards 2013 As the Shortlist for the first Eclipse Proclaim Modern Law Awards has now been announced, Chair of the Judging Panel, Professor Stephen Mayson, outlines why it’s so important to celebrate the sparkling success and talent in the new legal landscape.

T

he legal marketplace is experiencing unprecedented challenges and change. We have the longest and deepest recession in living memory. From the Jackson reforms to the shift to outcomesfocused regulation and the new mindset and emergence of new entrants and ABSs, there have been dynamic changes to the competition. There are also media reports of high-profile collapses, of regulators’ concerns about the financial viability of some law firms and the lack of regulatory compliance by others, and of large-scale redundancy programmes.

These are certainly not quiet times!

The need for innovation

Against this background, there has never been a more important time for providers of legal services to be absolutely clear about their strategy and business model. And yet, despite all the market and organisational turmoil, some things remain constant. The need for high-quality and useful legal advice does not diminish. The expectations from clients that they will receive excellent client service and value for money do not change. The drive for providers of legal services to innovate their structures, processes and pricing in order to deliver good value and profitability has not reduced – and nor will it.

These critical factors – quality, client service and innovation – underpin the first Eclipse Proclaim Modern Law Awards, to be presented at The Dorchester Hotel in London on 25 September and hosted by Giles Brandreth.

Building on the success of Modern Law Magazine, the awards set out to recognise those legal services providers, teams and individuals who - in the opinion of the judges - demonstrate best their commitment to, and achievement of, these enduring characteristics.

Especially in a market that is noticeably changing the ‘rules of the game’ (and probably the game itself).

A unique opportunity

The awards will appeal to all types of

businesses, teams and individuals who are active in the legal marketplace.

The judges want to celebrate success rather than mere longevity, achievement rather than background, and impact rather than reputation.

The awards

• The 15 award categories cover: • ABS (up to 10 employees) of the year • ABS (up to 100 employees) of the year • ABS (over 100 employees) of the year • Lawyer of the year • Non-lawyer of the year • Team of the year • Rising star of the year • Entrepreneur of the year • COLP of the year • COFA of the year • Innovation of the year • Client care initiative of the year • Best marketing campaign of the year • Deal of the year • New entrant of the year In addition, there are two other awards that are within the sole discretion of the judges: for outstanding achievement, and for lifetime achievement.

The judges

The judging panel (which I have the great honour of chairing) is drawn

from the worlds of law, business, medicine, accounting, regulation, and politics: Steve Arundale (NatWest), Samantha Barrass (SRA), George Bull (Baker Tilly), Jaunita Gobby (Legal Eye), Edward Goldsmith (Goldsmith Williams), Jonathan Gulliford (former director of Cooperative Legal Services), David Jabbari (Connect2Law), Michael Napier (former senior partner of Irwin Mitchell), Bridget Prentice (former MP and Minister of Justice), Adam Sampson (Legal Ombudsman), Lucy Scott-Moncrieff (Scott-Moncrieff & Associates and President of the Law Society 2012-13), Bippon Vinayak (Doctors Chambers), and David Wolfe (Matrix Chambers). Collectively, the panel members bring a wealth of experience and insight to their task.

This year’s Modern Law Awards’ headline sponsor is Eclipse Proclaim, the leading provider of case management software to the legal sector. Their support is welcomed, and allows us to consider such a comprehensive range of awards.

So, the stage is set, the venue waiting, and the judges ready for their challenge. There are many exciting things happening in the legal marketplace, as well as some possibly unsettling developments. There is much to celebrate, alongside changes and uncertainties that rightly prompt a wary or sceptical response; whether it is to entertain clients or meet with friends, the Eclipse Proclaim Modern Law Awards promises to be a night to remember. I therefore look forward to seeing you at The Dorchester in September as we leave the fright, uncertainty and wariness to others and (if only for one night!) share the sense of excitement and celebration.

To view our Shortlist and for more information and tickets, please visit www.modernlawawards.co.uk Professor Stephen Mayson, Chair of the Eclipse Proclaim Modern Law Awards 2013

ML // July 2013

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Business Management

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51 -62

Business Management

ML // July 2013

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Business Management

Interview with...

Neil Kinsella Slater & Gordon is referred to as one of the ABS leaders in the new legal market, first in Australia and now in the UK. Having pushed further along the acquisition trail this year (announcing the intended purchase of Simpson Millar, the personal injury practice of Taylor Vinter and Goodmans Law), Neil Kinsella, Chief Executive of Russell Jones & Walker, part of the ABS, speaks to Emma Waddingham about its plans for further growth, what it is looking for and managing cultural as well as client transition.

Q

What is the most complex matter to address in terms of mergers / acquisitions in legal services culture, branding, client retention and how does Slater Gordon fair in terms of its experience in acquisitions to manage these challenges?

Identifying a firm that is a good cultural fit is the condition precedent to any successful acquisition. Knowledge of the target, the markets and practice areas their people operate in is also vital but values are not something that can be assessed with a one-off litmus test. As a business we are pretty clear what we are and are not. In our case we are looking for people with a long-standing and deep rooted commitment to supporting individuals and their rights. We take a lot of time to understand the motives of the owners of businesses we want to acquire and who all the key people are within that firm. Completing due diligence with these people, that sets out what will change and what will stay the same after completion, is a painstaking and detailed undertaking that can take months as there is no substitute for one to one, face to face meetings.

A

Q

Will the brand operate out of Manchester as an HQ and will the regionalised branches retain a sense of localisation – or is this irrelevant in the Slater Gordon model?

Slater & Gordon UK is managed from our London office; however we have long recognised that our firm will have a large geographical

A

ML // July 2013

spread because we need to be where our clients are. We foresee between two and three regional centres, which will support centres of excellence in each of the major cities of the UK, as well as client meeting facilities in places which are primarily convenient places to travel to. It is a cliché but one which is underpinned by ‘think global act local’. If the Slater & Gordon brand stands for anything, it is not one size fits all; it is about being highly adaptable and innovative. Clients will want to access legal services in many diverse ways in the future, the most obvious being online, but there is no substitute for a face to face meeting with an expert when someone is dealing with a crisis in their life.

Q A

Are ABSs and other legal entities doing enough to innovate legal services for the customer or are they simply changing the window dressing?

It’s true to say we have not seen too much by way of innovation, but capital investment is allowing organisations to develop new ideas. ABS structures have only

ever been one vehicle for getting investment into legal businesses, but I think it is fair to say that the spotlight which the Legal Services Act and the LASPO reforms have put on the legal profession have alerted a broader spectrum of businesses to the opportunities in this market. I am confident we will look back in even a decade, with a sense of amazement at just how much things will have changed – hopefully for the better!

Q

Will the legal sector be able to attract Tier 1 commercial / professionally skilled people if it fails to recognise them as equals to lawyers? Is this also true in terms of lawyers’ perceptions of the role of the investor?

I think that the legal sector has been attracting Tier 1 professionals for some time, albeit mostly at the top 100 level. If anything I think too much reverence can be given to non-lawyers at that level.

In other countries lawyers would be regarded as the commercial equals of accountants and undertake the same sort of management and business

A

“If the Slater & Gordon brand stands for anything, it is not one size fits all; it is about being highly adaptable and innovative. Clients will want to access legal services in many diverse ways in the future, the most obvious being online, but there is no substitute for a face to face meeting with an expert when someone is dealing with a crisis in their life.”

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Neil Kinsella, Chief Executive, RJW Slater & Gordon He is responsible for the running of the firm and the setting and delivery of its strategy to ensure it remains a market leader in personal law and litigation. He is currently focused on how best to capitalise on the opportunities that will be created by the legislative changes that are reshaping the legal market. Prior to being appointed as Chief Executive in 2002, Neil specialised in PI and sports law became a partner in Pannone Napier in 1986 before joining RJW in 1991.

education. Legal education needs to embrace the idea of lawyers becoming business leaders and not just in the legal profession. Having said that, in our business we benefit from having the skills and expertise of people from outside the profession in our management team. We have managers who are at the top of their game in areas outside the law, such as HR, marketing, IT, Property & Facilities, and finance.

Q

Are we about to see an influx of significantly more disruptive legal models that will make services more affordable and accessible to the market? What will those ‘disruptive’ models look like and does Slater & Gordon class itself as a disruptive model?

I think that the new investment in the sector is bound to mean the answer is yes. Which of those models will work remains to be seen. It is impossible to predict what disruptive models might emerge as by their nature they come as a surprise and succeed by taking the existing model off-guard. One thinks of the revolution in the change in the use of old-school cameras and photographs, and the current dominance of smart phones. In the legal sector we have already seen franchise models and BPO models but none of that is essentially new. Online offerings and comparison sites are already out there but no-one has come up with a ‘killer’ offering as yet. As far as Slater & Gordon is concerned, we are looking at all means available to create both affordable legal services but also access to world class representation for ordinary people - not just the rich and

A

famous! In these days of demonising injury lawyers, that may be considered as a pretty radical and disruptive (if not obstructive) model in itself.

Q

The first Cooperative Legal Services (CLS) TV and radio advertisements have been launched – is Slater & Gordon’s marketing focus going to venture into traditional advertising streams or is it focused towards online lead generation?

Branding in our sector will be about being first-in-mind when someone needs legal advice.

We want to be one of the leading consumer law firms in the UK and advertising will of course play a role in that. We anticipate building that sort of recognition through all channels, as well as by a natural awareness created by the often very high profile work that we do.

A

Q A

What is the next growth challenge for the firm?

We have always said that the sort of legislative change that we are experiencing at present is a once in a lifetime opportunity to consolidate independent consumer legal services in the UK and to make advice and representation better and more affordable. Nothing has changed. Our first priority is to grow the firm to critical mass in the UK by investing in the brand through organic growth and strategic acquisitions. If we focus on the current opportunity we should be in good shape to meet future challenges and opportunities.

Q A

What do firms need to do to position themselves as an attractive option for buyers / investors such as Slater & Gordon?

They must share our values and our vision. They must be independent and have their own work sources based on their reputation for doing good work rather than ‘buying’ work from intermediaries.

They must be committed to acting for individuals and focused on genuine areas of expertise. They must have good business fundamentals including maintainable earnings after paying principals a market wage, (if they are still working in the business), and the bottom line is that there must also be a maintainable viable proposition for potential investors.

Q A

What can the UK ABSs and new entrants offer an international marketplace and are there opportunities off home soil?

At present only Australia and the UK have embraced ABS. It is anachronistic that external capital is excluded from investment in this particular sector elsewhere in the world. But becoming an ABS is no guarantee of success for a business unless the capital it facilitates is backing a good strategy. Microsoft and Apple did not succeed because they were listed companies but because they were good at what they did. Having said that, I have no doubt that the process of opening up other jurisdictions is likely to happen more quickly if ABS is seen as a success in Australia and the UK.

ML // July 2013

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Business Management

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Interview with...

Matthew Briggs Non-lawyer and CEO of Brilliant Law, Matthew Briggs, is adamant that he and the ABSs’ highly corporate Board have the magic ingredients for success and a non-conventional vision, which will secure Brilliant Law as the future-proof model for legal services. Emma Waddingham reports.

Q

This issue is all about corporate leaders, i.e. ‘nonlawyers’ and the impact and role they have had in the changes so far for legal services. Has it always been your vision to work with disruptive innovators outside of the legal sector and what kind of energy / ideas and mindset have they brought to Brilliant Law? Are lawyers not capable of thinking / behaving this way?

Non-lawyers bring a different attitude as well as a skillset of being entrepreneurial business leaders to legal services.

Brilliant Law, aside from me, includes people like me [such as: ex-Sky Director, John Singewood; former BSKYB Director, Jeremy Fenn and the Director of Mandell Corporate, David Mandell], who have been at the receiving end of legal services over the years and haven’t been isolated from the real world. We have experience in the business sectors in various roles over the years and have all experienced solicitors, spotting significant opportunities for improvement. We saw a better way, then, an act of Parliament [the LSA] allowed us to make that difference to the marketplace. We’re passionate about providing legal services in a very different way, ways in which consumers take for granted in other sectors.

A

Q A

Should we even call those with skills, qualifications and experience outside of the legal sector, ‘non-lawyers’?

From a regulatory point of view, the term is explicit and understandable but we make no bones about the fact that Brilliant Law is run by non-lawyers. The conversations we’re having show that this has been well-received, mainly because I can talk to them in a language they understand and can do business with. Regardless of regulation, I wouldn’t want to profess to be a legal professional or need to be to run the company; I’m proud to be a ‘non-lawyer’! I’m very focused on what corporate people can bring into the business; it’s a fundamental perk of the model. Those who have joined so far are invigorated and excited to work for Brilliant Law; we’ve got a fantastic blend of lawyers and non-lawyers, a) for the technical ability and b) to bring in a whole different perspective on what makes a successful business. We’re a commercial enterprise and it just so happens that we sell legal services.

Our ability to offer a fantastic customer service and our ways of attracting and processing work are components that make a successful business, which comes from being an entrepreneur.

“I wouldn’t want to profess to be a legal professional or need to be to run the company; I’m proud to be a ‘non-lawyer’! I’m very focused on what corporate people can bring into the business; it’s a fundamental perk of the model.”

Q

How quickly did the vision for Brilliant Law come into being and what is it like working with the private investor, Bert Black (who became a multi-millionaire after founding online gambling brand, Betfair)?

Prior to the LSA, around the time of Clementi, we saw legal services as the place we needed to be. Fortunately an Act of Parliament came along and we were able to take our macro view of the sector, combined with the things we are good at (digital lead generation) to market. We presented Bert Black with the Brilliant Law concept to get the initial funding. Two years ago, when we pitched the concept out, everyone wanted to be involved. We chose Bert because of the value-

A

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Business Management

Matthew Briggs, CEO, Brilliant Law

“What purpose does it serve to ‘dumb down’ the profession through Brilliant Law; how are we to attract talent into our business if we do this Professionalism, to me, is hygiene. In our business it is a matter-of-fact.” added benefits he can offer the business as well as the commercial investment, skill-set in online marketing and the fact that he is one of the most prolific businessmen in the world. We were in a fortunate position; to have lots of interest in a concept is a nice problem to have!

Bert was very clearly the person at the top of our list and while he has a light touch approach, strategically, at board level, he can really add value to the debate and is regularly available to meet his commitments. Once of the benefit of Brilliant Law’s model is the fact our governance and rigour comes largely from our corporate backgrounds. We made sure the parameters were in place with Bert for what we can and can’t do – which is essential when working with investors.

Would a traditional firm have these pre-agreed parameters in place - to ensure there is no ambiguity in the decision-making process between partners? I don’t think they would.

ML // July 2013

Q A

What inspired you to come into the Brilliant Law fold from Minster Law? I never had the opportunity to own Minster Law with no skin in the game. I was an employee reporting into the majority shareholders. Minster Law was onedimensional; we were successful at what we did, but to a level. Brilliant Law is a broader proposition. It allows us to do the things we all wanted to do with a law firm, to create a platform of more strength and depth than other business we have been involved in.

Q A

Is there anything in the quick growth of your former firm that you can bring to Brilliant Law, any lessons learnt?

Lots! The benefit of working in corporate business, large and small is that you know what growth indicators and accelerators are. There are three core areas.

Firstly, funding: You need the financial

Having been an executive director in both Aviva and Capita, together with helping run the sale of the RAC in 2011 for $1.6bn, Matthew has earned his entrepreneurial stripes and experienced the many sides of corporate leadership and results driven cultures. He has also helped turn around a PLC for a 300% share price increase, and build the UK’s largest insurance assessing company from scratch.

He was the youngest nonlawyer CEO of Minster Law, which has become the UK’s largest personal injury law firm. As CEO of Brilliant Law as CEO and as a nonlawyer, Matthew sees things very differently in terms of delivering legal services. With other members of the Board and its Chairman, Brilliant Law aims to ‘be a law firm which does not follow convention but become the most future-proof model in the legal market’. shop.brilliantlaw.com power to grow and understand where it comes from: from PNL to profitability per matter and per fee earner - this should all sit below the internal business development of any law firm. My view is that currently, law firms’ financial assessments are somewhat lacking. Secondly, people: At Minster Law we have significant growth in a short space of time. You need to develop the employer aspect of the brand, to develop yourself as a destination employer to attract talent for growth. Thirdly, you need to underpin all this with scalable systems and IT platforms to facilitate growth without layering in unnecessary costs.

Q

There has been a mixed reception by the existing profession to, pretty much all ABSs. Do you think the LSA has

Business Management

highlighted the existence of an underlying elitist and self-preserving nature in parts of the legal sector (those unwilling to change and against the LSA) or do some of them have a point, that the LSA has deprofessionalised the industry?

I’m not sure about it being deprofessionalised. Brilliant Law is run by both lawyers and nonlawyers, bringing in a methodology and processes which focus on how to run a business successfully. I’m not willing to compromise on the technical ability of the solicitor and fee earners either. We invest heavily in their careers to arguably heighten the level of professionalism in Brilliant Law by: how we analyse customer feedback; how we align the brand to our target market; our ability to manage and mitigate risk, and; using our collective experience to assess how the business is behaving financially in a non-reactive manner. Raising the bar for legal services runs through the entire DNA of Brilliant Law. Additionally, what purpose does it serve to ‘dumb down’ the profession through Brilliant Law; how are we to attract talent into our business if we do this? We are one of the fastest growing law firms and want to build ourselves up as a destination employer. That is in complete opposition to the view that ABSs will meltdown the profession and only employ lowgrade professionals without expertise.

Professionalism, to me, is hygiene. In our business it is a matter-of-fact.

A

Q

Fixed fees, rather than packages, are not new. What is it about Brilliant Law that differs and is able to capture the attention and work of the commercial sector (and also consumers)?

You’re right, fixed fees are passé now. We differentiate from others in our ability to explicitly showing customers what products we offer, what they get and how much they will pay. We’re keen to provide tangible products: where the customers know what they’re getting; drafted to the exact requirements and; offer service level agreements to the price agreed – all minimising wriggle room and the fear of distrust that the legal sector has created for itself over the years. We want to dispel the perception that solicitors charge by the hour. Our approach is to help customers be selfsufficient, to be their ‘best friend’ and help improve business performance.

Our packages have been created in laypersons language so customers

A

57

“Amazon has created an ecosystem where people have a consumer experience and never leave; why would you go anywhere else? You want to create fans not customers of your brand and digital is a critical part of how we are going to achieve that route to market.” can relate to the services for a range of legal requirements, in a proactive way. For example, our employment law services go beyond reactive services.

We help businesses to reduce their overall legal spend – an idea converse to those of traditional law firms.

terrorist. If the relationship is disruptive then this can have a negative effect, regardless of talent. For our employees to have a shared purpose, vision and value is fundamentally important to Brilliant Law. As I said before, professionalism and technical ability is hygiene.

Q A

Q A

In which area(s) do you anticipate initial growth and why?

Growth is achievable in a number of areas but we’re still in build mode and treading carefully to build platforms into the sector. The promotion of Brilliant Law has only just started so it’s conceivable that we will see growth in a number of service areas to start with, at the moment, simply by word of mouth.

Q A

Is online marketing and social media the key to brand development for new entities such as Brilliant Law? Yes, this is a fundamental route to market for us. We have the experience of former Marketing Director of We Buy Any Car [Paul Coulter] who has developed different marketing initiatives based on his online marketing expertise. Look at Amazon and the model it has created.

Amazon has created an ecosystem where people have a consumer experience and never leave; why would you go anywhere else? You want to create fans not customers of your brand and digital is a critical part of how we are going to achieve that route to market.

Q A

What kind of people do you want to work with in Brilliant Law? We hire for attitude and train for skill. It is a commonly used phrase that people are a businesses’ greatest asset but we believe the greatest asset is the relationship people have within the business. You can have a fantastic Financial Director, technically, but if they don’t get on with the people in the organisation, they can be a cultural

What happens when others follow suit, offering packagebased legal services, along with the expansion of DIY law?

We are very clear on where we see Brilliant Law sitting in the marketplace. It is not at the DIY law end, nor is it at the £400 per hour silver circle end. We sit in the middle ground, offering high quality legal services where you can speak to a paralegal or a solicitor and receive bespoke document drafting and litigation, but at a set price. The benefit we have is our USP, structure, people and territories that can be covered by the Brilliant Law model. You need to be quick to pivot when something changes – not always 180 degrees but you do need the internal structure to allow for debate on where to go next and have the agility and ability to go forward.

Q A

Where do you see the sector going in the next 12-24 months?

Some law firms will go to the wall. Those operating within the areas of law under the most pressure from reform will see the deepest cuts and there will be some closures. I’m not sure all of the models out there will work – there are some basket cases, but there will be further consolidation. It’s too early to say what will happen now but you can gauge by looking at other sectors, which have been through what the legal services sector is going through now, 10 years ago. The ABSs attached to prolific retail brands will out themselves soon and that’s when we’ll see more innovation in the sector, led by those in the corporate world – like us – with a long-term understanding of consumers.

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Business Management

Mergers and acquisitions: the time to make back office efficiencies A: Rationalising suppliers or combining back office functions after a merger or acquisition is surely a quick fire way to make savings and improve profitability; but is this what happens in practice?

As a supplier of office products, supplies and services to the legal sector, we have seen examples of the best and worst. We have seen firms making substantial savings and improving processes, but seen others fall into common traps with little worthwhile being achieved.

So what do the good firms do? They create realistic plans. They set timescales and phases for the project.

They enlist the help of key suppliers at an early stage.

They appoint an implementation team, with clear lines of management, and work hard on communication both internally and externally.

Sounds simple so what can go wrong? One of the most common pitfalls is assuming the larger partner in the merger has all the answers. So rather than review the best practice in both firms, the right way must be the larger firm’s way with the consequence that the team in the smaller firm become worried. They set about thwarting the plan. Worried management can even go as far as signing

binding new supply contracts just before a merger to protect jobs.

A second common pitfall is to simply follow the path of least resistance. Rather than reviewing the future needs of the business, inconveniencing the fewest number of people can become the policy. This can be very common where change is perceived to be more problematical, such as technology or records management. The danger here is that the future needs aren’t addressed, and costs aren’t reduced either.

What savings can be made? In our experience, merging firms can save as much as quarter by rationalising their back office supply chain. With spend of up to £500 per white collar worker on office products and services, the direct savings can be considerable - and this doesn’t include the cost savings by staff rationalisation.

The lesson is to work with trusted suppliers and involve them at an early stage. Don’t be put off looking at all services. Some of the biggest savings can come from surprising areas such as archive storage. Look for suppliers who offer a broad range of outsourced services, and hence ease the pressure on already stretched implementation teams.

Nick Hodges, Managing Director, Oyez Team

Q: Are ABSs and other legal entities doing enough to innovate legal services for the customer or are they simply changing the window dressing?

A:

By ‘innovate’, I’m going to make a bit of a leap here and suggest that a key way to do that is to make the ‘buying’ process for customers easier. Generally, the simpler and more convenient the ‘buying’ process is, the happier customers will be… and the more ‘buying’ they will do.

To illustrate this, one of the best places to look is the big online retailers and how they do it (so Amazon, for example). Despite operating in a very different sector, what facets of their service make the buying process easier? Generalising (again), it comes down to: • Simplicity of finding the right product (service) • An easy and streamlined way to buy the product (service) • A clear and simple way to keep track of the transaction • An easy and convenient way to stay in touch (via a range of devices, e.g. iPhone, tablet, etc)

In the days when everyone spoke of ‘Tesco law’, everyone assumed that the new wave of legal service providers would roll out this more ‘retail’ based approach to buying legal products. And the assumption was that it would happen on day one.

In reality, the change has been more ‘subtle drip, drip’ than ‘big bang’. Yes some organisations are moving more towards this ‘make the process easy’ model for their customers. But it’s a slow transition, and the likes of Tesco have not marched along and transformed legal service provision overnight. So the scope for innovative service delivery is still there, and that - for me - is very exciting.

And note that there is nothing to stop ‘traditional’ law firm structures from innovating here - it’s just a mindset change and a marketing focus that is required.

The market is waiting!

Darren Gower, Eclipse Legal Systems

www.eclipselegal.co.uk

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“As non-lawyers continue to enter the sector, what technologies or working practices will they bring with them that will make a difference for law firms?”

L

aw firm IT departments have a reputation for reticence when it comes to tackling the challenges of data and network security. The “Dropbox phenomenon”, over which much ink has been spilled, serves as evidence. Advancing awareness of that threat, creeping adoption of hosting and the cross-pollination of non-lawyers into the workforce are trends that combine to mean that the security issue is now moving up the priority list. When we talk to clients about our hosting and network offerings they are now interested in private clouds, in knowing exactly where data is held and in making sure that contracts have privacy clauses in place. We’re talking more and more about the resilience and failover that’s built into the site, guarantees around the connectivity, how much external penetration testing is going on and what additional security offerings we have. That’s evidence of changing attitudes and changing priorities, driven at least in part by the entry of non-lawyers into the sector.

Cash injections from private equity into law firms, like the deal between Knights Solicitors and Hamilton Bradshaw, are another driver of technological change. With investment decisions decoupled from the partner model, we will see ABS firms and those backed by non-lawyers expecting IT infrastructure and applications to sharpen their competitive edge, particularly where work is high-volume, transactional

or outsourced. Knights have announced that there will be investment in IT as well as headcount as a result of their deal, and we can expect them to seek process efficiencies to magnify their profitability. Serious automation tools and therefore serious cost savings are out there – document drafting, client self-service, integration with government portals and automated risk and compliance management are being incorporated into leading-edge PMS systems and sold with a clear ROI. We’re also seeing that technology born in financial and insurance sectors is becoming commonplace as law firms strive for “Lean” processes. Major banks use software that maintains legally compliant templates for forms and for narrative documents (like wills), and quickly builds those clauses using responses to simple questions. Saving money on keeping the precedents up to date, saving time combining precedents into new drafts – they’re suddenly front of mind for law firms, which often aren’t as far along the journey towards “Lean” as, for example, financial services firms.

Technological change is now being encouraged from two directions. Internal “pull” factors like non-lawyers bringing expectations from their previous jobs, whether that’s as endusers or as IT specialists, as well as industry “push” factors like vendors offering application, network and hosting from under one roof, and customising technologies from other sectors to accelerate the efficiency effort.

Tim Springham, CEO, Tikit

Six months for COLP and COFA! I t is now July and fortunately this headline is not a recent sentence imposed by a court for breaching the SRA Code of Conduct, rather it is a gentle reminder that a full six months have now passed and perhaps it is time for reflection.

At a recent meeting of COLPs and COFAs from the Middlesex Law Society the overwhelming concern expressed by members present was whether they were fulfilling their roles effectively and their duties were being performed and Outcomes achieved.

Plans and Registers.

While not an SRA Code of Conduct requirement, having an up to date Compliance Plan and holding monthly Compliance meetings, maintaining registers is indicative of your having at least made an effort to embrace OFR. It’s a risky business being a law firm.

Even if you have completed your Risk Analysis and Risk Index back in January, it may well be time to review and update these, to review the risk registers, to monitor the progress you

have made in reducing any risks identified and to record the changes you may have made to your procedures.

Money laundering risks from politically exposed persons reminder.

As HM Revenue and Customs states: ‘You will need to check your risk assessment and to take the steps necessary to ensure you continue to meet your legal and regulatory antimoney laundering and reporting obligations’. Remember risk analysis should also apply to your clients too!

How do you know if what you are recording and or reporting is required?

What you can be sure of is, if you are not recording anything, you will be unable to report material and nonmaterial breaches when you are required to do so. Whilst non-material breaches may only be required to be reported

by ABSs, all firms continue to be required to record such breaches. One useful guide to help you decide about reporting a breach is if you ask yourself: In the event that the SRA might have cause to visit tomorrow, would I have wished that I had already reported the breach?

Paul Wilkinson, Managing Director, Lawclient Ltd

ML // July 2013

60

Business Management

Q: Ian Mackie, Sales and Marketing Director at the Cooperative Legal Services, recently said that concepts of good customer service are ‘alien to solicitors’. While CLS has distanced the brand from Mackie’s comments, is there some truth in what he said in Marketing Week and are his comments as applicable to chambers?

A:

CLS might not have invented customer service but as a large retailer they do it fairly well. They understand customer needs and they market accordingly. Whilst client care plays a major part in chambers life, it is often limited to the requirements of the BSB - with a little bit of hospitality thrown on top.

Is this really understanding the customer needs so that sets can improve their service? How many chambers know exactly what their clients want? How often do they survey their clients and do they ever survey their prospects?

Below is an extract from the new whitepaper ‘Client Service for Chambers’ which looks at what buyers of legal services really want and what chambers need to provide if they are to differentiate themselves.

Speed, Clarity & Understanding – Clients want you to understand their business and they want a speedy resolution to their problem – they want answers from Counsel, not a series of back-covering hypothesise. Give

them options and projected outcomes in a jargon free manner so they can make the choice that is right for them.

Approachability, Relationships & Trust – Clients want to work with someone they like and trust. Admittedly it’s difficult for direct access barristers to get to know their clients well, but remembering personal details and asking about the clients personal lives, make is obvious that you care. If you care about them, then in their eyes you are more likely to do a good job for them. It also dispels the myth that barristers are ‘above’ mere mortals and makes you more approachable.

For sets with long-term clients, taking time to build those relationships at all levels (from clerks and juniors to QCs) will pay dividends in the long run…

You can read more of the new whitepaper ‘Client Service for Chambers’, which also covers a practical approach for chambers wishing to improve their client service, at www. barmarketing.co.uk or request a free copy of your own by emailing info@barmarketing.co.uk Catherine Bailey, Managing Director, Bar Marketing Limited.

Insourcing versus Outsourcing: what non-lawyers can bring to the table

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hether it’s due to the financial climate, increased regulation or potential challenges from wellresourced outsiders entering the market, many small and medium sized firms find they are increasingly facing the future with trepidation and feeling pressure to work harder.

In light of this you may be evaluating whether your existing model is fit for purpose and considering the benefits of employing non-lawyers to senior management positions or alternatively, outsourcing some of your firm’s functions.

Lawyers are often taken away from their core duties, in order to attend to areas which they have been assigned responsibility. A key benefit of reassigning responsibility for these areas is that lawyers can then concentrate on being lawyers.

Employing an industry specialist who has the skills and experience to be fully accountable for their area can avoid decisions being made jointly across the board. It also means they are able to take full accountability for the function.

Having to gain consensus for decision making can stifle innovation and be a barrier to successful change. As the old maxim goes, a camel is a horse designed by committee.

ML // July 2013

Senior people from other industries will also bring with them knowledge of methodologies and frameworks in use in other industries. This influx of new ideas has the potential to fuel innovation.

On the other hand - core functions such as IT, compliance, HR, finance, sales and marketing are frequently outsourced to third parties with great results.

Outsourcing can be a sound and cost-effective way to access skills and knowledge.

Outsourcing is an area that is growing within the legal industry and requirements of Outsourcing are now included in the Code of Conduct and Lexcel 5.

It is often more flexible and efficient for firms to outsource certain business functions. Firms may not be looking to adopt legal process outsourcing but they could easily outsource certain business and operational functions to take advantage of the cost advantages and the benefits of the expertise that accompany the service.

If firms are currently assessing their business model then it’s worth considering appointing non-lawyers or looking to outsource some functions. This could help to drive the innovation and improvements in efficiency and keep their practice ahead of the new breed.

Paul Bradley, Consultant, Legal Eye

Business Management

61

Be slick or be swallowed Charlotte Parkinson, Modern Law Magazine, spoke to Dolores Evelyn; Eclipse Legal Systems, about how technology can help small to medium sized firms retain competitive advantage following the emergence of ABS giants, since the ABS Act was passed through parliament at the end of 2011.

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t has been just over a year since the ABS Act cleared its final hurdle and was conceded through Parliament and already some big players within the legal services sector have began to emerge. The appearance of ABS firms such as BT Law, Quindell, The Co-op, Thompsons, Admiral Law, Ageas Law and Stobarts, has left many smaller law firms wondering how they can streamline their service offerings in order to retain competitive advantage and avoid their clients being swallowed up by these new ABS giants.

While it is feared that many of these newly emerging industry heavyweights will begin to swamp the market, some consumers feel as though firms of this size can lose the personal aspect of service which can often be instrumental to success in an exceptionally competitive market. The client may be afraid of being subject to endless options on an automated telephone service for example. Although there are some larger corporations, such as NatWest, breaking the mould with their innovative NatWest Mobile Branch Banking, which creates an accessible service for its customers in rural areas by providing them with access to banking without having to travel to towns and cities, many larger firms have neglected the personal aspect of customer service.

A pro-active approach.

So, what are the ways in which the smaller law firms can remain at the

“Firms must listen to their service providers in these times of change as they can help them remain slick and efficient and give them the advantage they so desperately need.” fore of the market now that these huge ABS corporations are in play? The average person will use a lawyer four times in their life and this will broadly be across four consumer areas of law; conveyancing, probate and possibly family and personal injury. As it will be a necessity for most people to use these services at some point in their life there is certainly the demand for the service, so it is the competitive edge for the small to medium sized firms that is vital.

Technology has advanced beyond recognition within the last 10 years and has changed the scope for possibility within the legal sector. Many firms are therefore looking towards their technological service providers to aid in giving them the competitive advantage and market share and while some of these firms are being

“Technology has advanced beyond recognition within the last 10 years and has changed the scope for possibility within the legal sector.”

pro-active in the way they approach market uncertainty and change, there are some firms where this much needed pro-active nature is lacking.

They must listen to their service providers in these times of change as they can help them remain slick and efficient and give them the advantage they so desperately need.

Dolores Evelyn, Director at Eclipse Legal Systems, comments: “One technology recently revealed - which perfectly fits this ‘service’ ethos - is Eclipse’s own ‘TouchPoint’ client self-service portal. TouchPoint provides a secure, online, deviceindependent way for clients and customers to manage their own cases. The TouchPoint ‘experience’ and client journey has simplicity at its heart, and carries the none-too-small advantage of providing great savings in administrative costs.

As the market changes, clients will demand a different ‘type’ of service - one that is ‘always on’ and provides the most hassle-free way of staying in contact. TouchPoint is open to firms of all sizes, enabling smaller operators to really level the playing field and provide a ‘big firm’ self-service portal experience.”

ML // July 2013

62

Business Management

Lawyers, collaboration and consultants

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rogressive law firms appreciate that professionals with skills and experience outside law can make an enormously positive contribution to the firm’s growth. However in the present economic climate, firms of all sizes struggle to justify the cost of employing a (perhaps large) number of non-lawyer professionals full-time.

The obvious suggestion therefore is for such firms to engage consultants with relevant technical expertise and who understand the market the firm serves.

What should law firms look for when seeking a consultant who can bring non-legal skills to bear?

• Paradoxically perhaps, the first thing to look for is whether the prospective consultant has experience of working in the legal industry and understands the way law firms work. Regardless of the expertise being sought the consultant will need to translate skills, techniques and methods into the legal services industry.

• Clearly the consultant should have a comprehensive understanding of the subject area expertise - a good indicator of this is academic qualifications, the more advanced the better.

• Try to find out how long the prospective consultant

has studied their area of technical expertise. Lots of qualifications can now be acquired after attending just one or two days’ training and taking a multiple choice test at the end – hardly indicative of deep expertise borne out of being a ‘reflective practitioner’.

• As with practising solicitors, continued professional development should also be demonstrated. In my own field for example, the two main professional bodies, the Association for Project Management (APM) and the Project Management Institute (PMI) run many accreditation courses and CPD events.

• Finally, there is often a perception that many consultants simply want to make a quick financial killing and then move on to the next job. In my experience this is untrue. Most consultants would prefer to develop a deeper relationship with their clients so that all parties concerned can work on improvements which are sustainable in the longer term. If you still need to be convinced about this point, why not structure the engagement so that the consultant has to put some of their own ‘skin on the game’? It should not be beyond the wit of the parties to create an engagement framework where the consultant is rewarded, at least to some degree, proportionately to the law firm’s success.

Antony Smith, Director, Legal Project Management Ltd www.legalprojectmanagement.co.uk

Introducing TouchPoint by Eclipse Legal Systems

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egal services provision is changing - clients, customers and business partners are demanding more for less.

More information, more quickly wherever they are. And at a lower cost.

Eclipse’s new TouchPoint system puts them at the centre, providing a personal ‘self-service’ experience. Personalised interactive tiles enable you to deliver bespoke real-time data, information and applications, via any device.

An example Conveyancing Journey Buying a house is one of the most stressful experiences in life – especially for those not used to dealing with the legal profession. But for those using Touchpoint, the whole experience changes for the better. TouchPoint means they are involved, in touch and in control.

Client capture Meet Sarah – she’s buying her first house and she’s looking for a conveyancing quote. One conveyancer she visits is a TouchPoint user, so rather than phoning or visiting them, an active tile on the firm’s site takes her to a quote calculator. Sarah gets her quote using her iPhone - and once accepted, her information is pushed automatically into the firm’s Proclaim Case Management system.

From here, workflows can be triggered that get things moving for Sarah. A welcome SMS and an email give her secure access to her new TouchPoint self-service area.

ML // July 2013

Keeping in touch At any point, Sarah can contact and chat with her conveyancer, and behind the scenes all queries and questions can be sucked into Proclaim, to trigger workflow or be rerouted to relevant personnel. For Sarah this means no more leaving messages, wondering if and when someone will call back.

Using TouchPoint’s ‘FileView’ tool, Sarah stays informed and in control. She can check on her file any time and from anywhere. It’s a transparent view which gives Sarah the full picture and a greater understanding of the process. The data she sees is secure, and in real-time - her conveyancer decides how much (or how little) is shown - whatever is right and appropriate for them.

Marketing TouchPoint helps to build a closer, more positive relationship between Sarah and her law firm. Once her house is bought and all the paperwork is complete, Sarah can then take part in a Client Satisfaction survey embedded in TouchPoint. The results are automatically captured in Proclaim, triggering relevant workflow tasks inside the firm.

And of course, subsequent data analysis helps the law firm continually improve customer service – which Sarah, or the friends she recommends to the firm, will appreciate when they want to buy or sell their homes.

Driving efficiency and compliance ILB from Advanced Legal, the right partners for your ABS ILB is a single, fully integrated case management solution with best practice functionality built-in. Making it the perfect fit for demanding ABSs.

• Consistent firm-wide access to a single information stream • Wide-ranging automated processes assist with risk management & compliance • Workflow & document management deliver improved operational efficiency • Powerful reporting capabilities allow detailed analysis, tracking & reporting of critical KPIs

advancedcomputersoftware.com/legal | 0844 815 5575

Law is changing Reboot your law firm: Give clients and customers self-service control, 24/7

Don’t get left behinD

Create a superb experience to maximise recommendations Gain the competitive edge with the only solution of its kind Spend less time on admin and more time maximising profits

The ultimate self-service solution has arrived With NEW TouchPoint from Eclipse Legal Systems, you can give your clients, customers and partners true self-service control. TouchPoint enables a device-independent, interactive experience – securely and in real-time.

Providing access to a huge range of information, TouchPoint is an ‘always on, always visible’ solution. From contact management and targeted cross-selling, through to visual KPI presentation and dynamic report commissioning, TouchPoint sets you apart from the competition.

You’ve just been handed the competitive edge

Call 01274 704 100 Visit eclipselegal.co.uk or email info@eclipselegal.co.uk