Modern law magazine 11

The Business of Law

April 2014 | Issue 11 | ISSN 2050-5744 Interview with Bryan Hughes: Modern Law asked the Chief Executive at Eversheds, his perception on change, growth and innovation in the legal sector.

Sector Roundtable: Modern Law gathered together industry experts to put to them the most pressing legal marketing issues.

Lateral Hires: Mark Brandon deciphers whether lateral hires as means of growth for law firms are always the best way to go.

Modern Law Magazine | April 2014 | Issue 11

“Maintaining the flexibility to react quickly to challenge and take advantage of opportunity is a real concern. It is quite clear that the global legal sector remains ‘overlawyered’ with ongoing price pressures” Bryan Hughes

PAUL PHILIP “Professionalism depends on principals, not rules and this is what we need to focus on. I fully intend to get out there, role my sleeves up and engage with solicitors in my new role at the SRA” Supported by

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03

Introduction

TIC

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I

n this issue of Modern Law, there is a heavy focus on strategy, growth and business practice for law firms, as demonstrated in our interview with Bryan Hughes, Chief Executive of Eversheds (page 16) and in Mark Brandon’s feature, as he asks whether lateral hiring is always the best move for law firms (page 47).

We also have a regulatory focus this issue in our interviews with former SRA Chief Executive, Antony Townsend (page 11) and Paul Philip, the new Chief Executive, who took up his role at the SRA in February this year (page 14); they discuss the changes, the challenges and the future scope for regulation in the legal profession.

The second annual Modern Law Conference takes place on 29th April at the Royal College of Surgeons, London. There are a few tickets remaining and I would urge you to book now1 if you have not already done so. We have a truly exceptional line up of speakers, as you will see from the Programme (opposite) and this event really is not to miss!

I hope you enjoy this issue of Modern Law and as always I welcome your feedback, please do get in touch via: charlotte.parkinson@charltongrant.co.uk.

Charlotte Charlotte Parkinson, Group Editor, Modern Law. 1For booking enquiries, please contact ellie.campbell@charltongrant.co.uk or visit www.modernlawevents.co.uk

Legal Services: Evolution or Revolution?

Tuesday 29th April 2014, The Royal College of Surgeons, London 08.30 – 09.15 Registration & Breakfast 09.15 - 09.20

09.20 - 09.40 Keynote Address – Are we ready for a single regulator of legal services?

David Edmonds, Chairman – Legal Services Board 09.40 – 10.25 Keynote Panel – Are we ready for a single regulator of legal services?

Charles Plant – Chair of the SRA Board, Solicitors Regulation Authority Baroness Deech QC (Hon) - Chair, The Bar Standards Board Sheila Kumar – Chief Executive , Council for Licensed Conveyancers Desmond Hudson - Chief Executive, The Law Society Diane Burleigh OBE – Chief Executive, CILEx Nicholas Lavender QC – Chairman, The Bar Council 10.25 – 10.40

Remarks from the Minister Shailesh Vara MP, Parliamentary Under Secretary of State for Justice

10.40 – 11.10

Morning Refreshments

11.10 – 12.05

Why invest in legal services?

Paul Lester CBE – Chairman, Parabis Group Martin Wright – Senior Partner, JZ International Jordan Mayo - Managing Director, Smedvig Capital George Bull – Chair of Professional Practices Group, Baker Tilly Ben Holmes – Managing Director, Invest in Law

12.05 – 13.00

Does being an ABS make any difference?

Jeff Winn – Managing Director, Winn Solicitors Doug Crawford – Chief Executive Officer, myhomemove Helen Molyneux – Chief Executive, NewLaw Colin Ettinger – Partner, Irwin Mitchell

13.00 – 14.00

Lunch

14.00 – 15.00 The New Models Karl Chapman - Chief Executive, Riverview Law Matthew Briggs – Chief Executive Officer, Brilliant Law Lucy Scott-Moncrieff – Director, Scott-Moncrieff and Associates Ltd Shirley Brookes – Senior Partner, PwC Legal Christina Blacklaws – Director of Policy, The Co-operative Legal Services 15.00 – 16.00 Will there be a ‘second wave’ of ABS applications?

Andrew Grech – Managing Director, Slater & Gordon Andy Raynor - Commercial Director, Shakespeares Dan Cutts – Senior Partner, Weightmans LLP John Llewellyn-Lloyd – Head of Professional Service, Espirito Santo Investment Bank Prof. Stephen Mayson - Independent non-executive Director 16.00 – 16.20 Closing remarks Professor Richard Susskind OBE, Author of ‘Tomorrows Lawyers’ 16.20

Modern Law Magazine Project Director Kate McKittrick

Group Editor Charlotte Parkinson

Accounts Director Karl Mason

IT Crowd Consultant Editor Charles Christian

Chairman’s welcome Michael Napier CBE QC LLD

Drinks & Canapes

Issue 11 – April 2014 | ISSN 2050-5744 Events Director Julia Todd

Advertising/Head of Sales Rachael Pearson Design Matthew Phillis

Modern Law Magazine is published

by Charlton Grant Ltd ©2014.

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 // April 2014

04

Contents

16

CONTENTS 03-09 INTRO & THE NEWS 07 Christina talks news

11-18 THE INTERVIEWS 11 Interview with... Antony Townsend

Charlotte Parkinson, Modern Law, spoke to Antony Townsend, former Chief Executive of the SRA about the changes he has seen during his time at the organisation, the changing perception of the organisation in the eyes of the profession and the public and why the time was right to step down after 7 years.

14 Interview with... Paul Philip

The new Chief Executive of the SRA began his post in February 2014, Charlotte Parkinson, Modern Law, spoke to him about how his past experience has prepared him for his new role and his plans for bringing the SRA forward as a proactive organisation.

16 Interview with... Bryan Hughes

Charlotte Parkinson, Modern Law, spoke to the Chief Executive of Eversheds about his future plans for the firm, the challenges of managing exponential growth and their unique approach to delivering legal services.

19-39 THE VIEWS 21 A new way of thinking

Chris Kenny, Legal Services Board

23 The great social media revolution

Noel Inge, CILEx Law School

23 Would you lie to me?

Trevor Gilbert, Trevor Gilbert & Associates

25 If in doubt...

21

Sharon Denby, Ontime Group

25 A case of balance

Matthew Williams, AmTrust Law

27 Part of the modern world

David Bott, Bott & Co

27 Putting the consumer first?

Jitendra Valera, Advanced Legal

29 Increasing profitability

Rayne Tompson , Law League

29 The next generation

Simon Goldhill, Simon Goldhill Consulting

33

31 Is it time to feel the love?

Eddie Goldsmith, Goldsmith Williams Solicitors

31 A true reflection

Dez Derry, mmadigital

EDITORIAL COLUMNISTS Barry Talbot Managing Director Informance Limited Charles Christian Editor-in-Chief Legal IT Insider Charles Metherell Managing Partner The Corre Partnership LLP Chris Kenny Chief Executive Legal Services Board Darren Gower Marketing Director Eclipse Legal Systems David Bott Managing Partner Bott & Co

ML // April 2014

David Thorpe Director Financial Eye

Jitendra Valera Chief Marketing Officer Advanced Legal

Noel Inge Managing Director CILEx Law School

Sharon Denby Director of Costs Ontime Group

Dez Derry CEO mmadigital

Jo Hodges Head of Sales & Marketing Redbrick Solutions

Simon Goldhill Principal Simon Goldhill Consulting

Dolores Evelyn Sales Director Eclipse Legal Systems

Laura Tweedy Junior Property Barrister Hardwicke Chambers

Nick Hodges Managing Director Oyez Professional Services Limited

Eddie Goldsmith Partner Goldsmith Williams

Mark Brandon Founder Motive Legal

Ian Hunter Managing Director Jellyfish Creative

Matthew Williams Head of AmTrust Law AmTrust Law

James Molloy Operations Director Ontime Group

Mike Batters Technical Director & Co-founder Ros Innes NETprotocol Ltd Head of In-house and ABS Thomson Reuters UK & Ireland

Phil Snee Development Director Linetime Priti Mehta Group CEO Acuutech Ltd Rayne Tompson Director Law League

Tony Brown Owner AGB Legal Trevor Gilbert Chairman and CEO Trevor Gilbert & Associates

Contents

33 Change is brewing

Ros Innes, Thomson Reuters Legal UK & Ireland

Laura Tweedy, Hardwicke Chambers

33 Time saver or money drainer?

35 Reasonable steps

David Thorpe, Financial Eye

35 Missing the boat

Ian Hunter, Jellyfish Creative Limited

37 Moving the goalposts

Charles Metherell, The Corre Partnership LLP

37 A path or a barrier?

Nick Hodges, Oyez Professional Services Limited

39 Good governance to support investment funding

Tony Brown, AGB Legal

39 Three ways law firms can save money

Tim Hubbard, Altodigital

05

57-62 THE THEITITCROWD CROWD 57-62 58 That don’t impress me much!

Charles Christian, Legal IT Insider

59 Hedging your bets

Phil Snee, Linetime

59 A false economy

Darren Gower, Eclipse Legal Systems

60 Change in a new market

Barry Talbot, Informance

60 Global Reach

Priti Mehta, Acuutech

47

61 Amongst the clouds

Mike Batters, NETprotocol Ltd

61 Facing your fears

Jo Hodges, Redbrick Solutions

62 5 minutes with...

James Molloy, Ontime Group

41-55 THE FEATURES 42 Sector Roundtable: Marketing

Modern Law gathered together industry movers and shakers in legal marketing to get their tips for successfully marketing a law firm.

47 Is lateral hiring a good bet for an ABS?

Mark Brandon asks whether the favoured method of law firm growth – partner lateral hiring – will work for ABS law firms?

60

51 The Manchester Legal Awards

The annual Manchester Legal Awards took place at the start of March to celebrate established and emerging legal talent.

Charlotte Parkinson, Modern Law, went along to meet some of the winners.

53 The future score

The first annual Modern Claims Conference was held on the 25th March at Stamford Bridge, Chelsea FC. Charlotte Parkinson, Modern Law, spoke to Anthony Hughes about his thoughts on the day’s proceedings.

55 Ahead of the curve...

The recent upturn in the conveyancing market has meant that many conveyancers are beginning to reap the benefits of change.

Charlotte Parkinson, Modern Law spoke to Dolores Evelyn, Sales Director at Eclipse Legal Systems, about how conveyancers should be managing growth in a thriving market.

62 ML // April 2014

Christina Blacklaws talks news

07

CHRISTINA BLACKLAWS

TALKS NEWS

Disruptive Innovation: The Future is Now! A report from Harvard by Christina Blacklaws

I

was incredibly fortunate to be invited to speak at a conference held at Harvard Law School on 06 March. The conference was global in its interest and scope and attended by a hugely impressive cast of contributors: attendees as well as speakers.

I thought I would focus my report on the presentations from a couple of our esteemed colleagues from the States as their thinking may be less well known to a UK audience. The conference was hosted by Professor David Wilkins, Harvard’s Vice Dean for Global Initiatives in the Legal Profession. David kicked us off with some thought provoking ideas about what is happening in this incredibly rich and dynamic environment.

There’s been a huge amount of discussion in the States about the state of the legal profession, what constitutes a ‘legal job’ and what students are being prepared for. David argues that this is just a function of a series of much broader changes which are reshaping not just the legal profession but the whole economy not just in the States but around the world.

The driving forces We all know what those forces are: the globalisation of economic activity- the massive shift from the North and the West to the South and the East; the rise of information technology- the incredible speed of all forms of information and data processing and the blurring together of what we always thought of as traditional categories that were separate from each other such as law and business, the global and the local or the public and the private.

Law has traditionally been isolated from all of these changes. It’s been among the most local businesses

in the world- where you’re not just a lawyer in the States but in Massachusetts, not just in Germany but in Munich. It’s been one of the most technically resistant industries and one which has policed the boundary between the practice of law and other areas more vigorously and more effectively than any other occupation. Although they haven’t disappeared, these boundaries are not nearly as defining as they once were. The practice of law has become global, technology is at the core of what lawyers currently do and even more so about the future and the problems which we are asked to solve are increasingly multidisciplinary and require input from a broad range of disciplines.

A titan of innovation Professor Clay Christensen of Harvard Business School spoke next. He is a titan of innovation. The Economist said of his book ‘The Innovator’s Dilemma’ that it was one of the six most important books ever written! He set out his theory in a simple format using three concentric circles representing different populations of people in a market (any market). The inner circle represents those who have the most money, power and skill. The larger circles represent increasingly less skill and money. Almost always industries begin in the centre as initial products and services are so complicated and expensive that only the rich have access to them.

There are two trajectories which impact upon businesses in the core. The first is the production of better and cheaper products and services. Some of these innovations are incremental and others are of a dramatic ‘break through’ nature. The second trajectory, in any market, is the ability of customers to use the progress.

‘There can be no doubt that there is now a technological core in law’ Most innovations tend to be behind and then overshoot customers’ needs.

For example, processing speeds in the late 80’s meant that the quick typist had to wait for the computer to catch up with their fingers. Now we use less than 10% of the processing capacity of any computer. Not all changes are disruptive. Many fall into the category which enables the current incumbents who occupy the inner circle to develop and sustain their dominant position.

However, when ‘true’ disruption comes along, it does so from left field and often deals a fatal blow to all those sitting comfortably in the inner circle.

What his research has found is that ‘entrant’ companies almost always win at disruption.

ML // April 2014

08

Christina Blacklaws talks news

Disruption, in Clay’s terms, means innovations that transform products and services that, in the core, are complex and unaffordable into something that is simple, affordable and accessible for a larger population of people- bringing it to the outer circles. He gave the example of ‘mini computers’ (i.e. computers which are smaller than large mainframes but not personal computers). In 1988 every company (bar one) which produced these computers died in unison.

Why was this? The answer lay in the application of sound and rational

something different may be ablealthough unlikely- to succeed. Another important insight is that at the point of disruption the businesses that make the money flip. Before the disruption, again looking at the computer market, it was those who made the systems who made the money with almost no profit for the component makers.

In disruption, it is the makers of the components who come out on top. So whereas Dell made the money before disruptive innovation, it is now made

by Intel and Microsoft.

‘Disruption will allow new entrants to arrive and travel up the supply chain, eventually destroying the incumbents- no matter how established and powerful’ management principles. Although the public were starting to mass purchase personal computers at this time, this did not affect the mini computer end of the market. The management of these businesses were faced with the choice of making better and more sophisticated products for their core customer base (at a high profit) or to move to making worse products which their customers had no need or use for at a much lower profit.

Disruptive innovation The principles of good management dictate that you should always listen to your customers and you should always focus your investments where they will generate the best margins and those businesses followed the principles. But, when disruptive innovations come along, the traditional principles of good management just don’t apply. In the history of minicomputing, IBM was the only company that made the transition by setting up a separate business for personal computer development which had a mandate to kill its parent company. All the other mini-computer companies went bankrupt.

Clay states that the probability of businesses that are in the inner circle at the point of disruption succeeding without building an entirely separate business is zero. There is no precedent that he knows of in over 20 years of global study. Those who set up

ML // April 2014

So does this theory apply to all industries? No. There needs to be a ‘technological core’ to enable disruption so this doesn’t happen in, for example, the hotel market but online changes everything.

There can be no doubt that there is now a technological core in law.

At present, the money is made by those who practise the law.

It is professionally based, interdependent, proprietarial, with every client being seen as different.

Disruption is here- for example, IBM with their developments of the Watson system which enables the practice of law to be undertaken by a different group of people. It could be argued that disruption will allow new entrants to arrive and travel up the supply chain eventually destroying the incumbents- no matter how established and powerful.

No safe harbour Mike Rhodin who is the Senior Vice President for IBM’s Watson followed on from Clay. IBM has a 100 year history and most of its profit in the 1940s was made from paper punch cards. However, in the late 40s, they heard about magnetic tape and were faced with a decision as to whether to invest in a technology that would disrupt their primary profit mechanism. The answer was then and continues to be ‘yes’.

Mike believes that we are now at the beginning of a new era of computing.

Before computing was deterministic but now information has become so vast that all the data cannot be processed. Cloud, analytics, mobile, social are the four different disruptions which are happening simultaneously and are changing every industry.

Systems have to be developed which rely on probabilities and analytics and be cognitive. In other words, systems that think and learn.

IBM developed ‘Watson’- a computer which had many of these characteristics and which beat the all time champions on the US quiz show ‘Jeopardy’. At that stage, Watson was a clever ‘Q&A’ system which could answer more general knowledge questions than any human but those questions tended to be short (even if they did involve puns, analogies etc) but now Watson (thanks in part to the $1billion funding from IBM) has moved on to complex problems. Think of a complex degree level exam question of 3-4 paragraphs.

Watson can now answer these types of questions. This has enormous ramifications for a number of industries including law and medicine and will be disruptive and transformative.

There were many other innovative and creative speakers during the day who made it clear that we have entered a new era of legal services provision which will have dramatic, global ramifications for all legal businesses. No business- no matter how well established will be shielded.

There will be no safe harbour. I would recommend that all providers acquaint themselves with some understanding of disruptive innovation theories and their applications. Then think about how this might impact on their businesses and what their response might be- not in the future- but now!

Christina Blacklaws is Director of Policy at Co-operative Legal Services Please contact Christina on 07714230852 or christina.blacklaws@ outlook.com if you are interested in discussing these matters further

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Interview with... Antony Townsend

11

Interview with...

ANTONY TOWNSEND Charlotte Parkinson, Modern Law, spoke to Antony Townsend, former Chief Executive of the SRA, about the changes he has seen during his time at the organisation, the changing perception of the organisation in the eyes of the profession and the public and why the time was right to step down after 7 years.

Q

You have been Chief Executive at the SRA since its inception 7 years ago – why did you decide the time was right to step down, particularly in light or reform and proposed further reform this year?

A

There were a number of reasons why I decided the time was right to step down. The first reason is simply that I have done this job for over 7 years, which is a long time to be Chief Executive of an organisation. In one sense, this organisation was established from scratch but in another, it was borne out of an old regulator and it has been through a very intense period of transformation. After 7 years, we have put all the main regulatory tools in place and the preparation for reform has largely been completed, making now a good time to hand over the reins.

Q

What are the biggest changes the SRA has made/ come through since it was established and how has/is the perception of the role of the SRA changed and continuing to change in the eyes of the profession?

A

There have been so many changes but the biggest are two-fold; our approach to

regulation has moved dramatically from complaints handling to an attempt to ‘manage and mitigate risk’, which has meant we have had to develop new techniques and skills to supervise and manage these risks.

This shift is already bearing fruit as we have managed to avoid a number of high-profile interventions, as the amount of information coming into the organisation is increasing. We also now have a radically slimed down code of conduct and we continue to strip-out regulations. We have now established the SRA as a public interest regulator rather than simply a membership body, which enables us to focus on quality of service and consumer interests.

Q

Has the introduction of Alternative Business Structures (ABSs) at the end of 2012, as well as extensive reform to regulatory frameworks been the most instrumental changes which you have overseen/implemented during your time at the SRA – both for the SRA and the legal profession?

A

Yes, Alternative Business Structures signal big changes in the market but it is important not to over exaggerate that. They are more a symptom of change in the

market and consolidation and change are happening with and without them.

The way we approach firms has been our biggest change and I expect that to have the biggest impact on firms. The regulatory changes which we brought in coincided with an economic crisis and the introduction of ABSs, which has put strain on a lot of people, particularly firms who are not having a comfortable time. I hope, in the years to come, people will understand the changes we have made will be in the interests of the profession in the long run.

‘We want the members of the public, as well as the profession to know that we are working sensibly, intelligently and fairly, showing that we are not monsters and are actually doing a decent job’ ML // April 2014

12

Interview with... Antony Townsend

‘The organisation needs to have the confidence that it has the skills to continue to weather the storms which will no doubt remain prevalent in the sector for some time to come’

Q

Does Outcomes-focussed Regulation (OFR) work in practice? Are firms/COLP’s/COFA’s etc still too worried about being second guessed by the SRA – do you think the entire regulatory framework will need continued review/overhaul, if further reform is thrust upon the legal sector?

A

Yes, Outcomes-focussed regulation does work in practice; we have been running it for two years and in this time we have seen that it works as a supervisory and enforcement model and our surveys back this up. Large parts of the profession sighed very deep sighs when they were told they had to have COLP’s and COFA’s, which I can understand but in practice, the roles are working very well.

We are getting a lot of useful information from them and in the long term, firms will look back and realise that having COLP’s and COFA’s has been a good thing.

Q

What do you predict for the ABS market going forward – will we continue to see similar surges of growth of these models as last year (although ABSs still make up a small minority of registered firms)?

What about corporate players as well as Insurer/Legal JV’s/MDP’s?

A

On the whole, I avoid predicting markets because economic history shows doing so is a fool’s errand but it does look as though the growth is continuing.

The interesting area is MDP’s and we are certainly seeing this area grow, as Insurers are already making moves into the legal sector. The problem with MDP’s is dual regulation, as it is difficult to eliminate any overlap in the process.

‘Large parts of the profession sighed very deep sighs when they were told they had to have COLP’s and COFA’s, which I can understand but in practice, the roles are working very well’

Q

Last year, another member of the senior management team, Samantha Barras, Executive Director, Authorisation and Supervision, also announced her intention to leave the SRA in February – do your departures represent that the SRA is changing and in what way(s), if so?

A

It doesn’t signal any change in strategic approach, the board’s strategy is very well established. I am sure there will certainly be things that my successor, Paul Phillip, will want to do differently but he is working to a

ML // April 2014

board which has already indicated its strategic direction. The way we do things is also, to some extent is set externally by the Legal Services Board and the Legal Services Act.

Q

Do you think the SRA has struggled in the past and currently to create/nurture a transparent relationship with legal practitioners – do many firms simply view regulatory processes as an unwelcome and at times unnecessary burden?

A

The answer to both parts of the question is yes and to some extent it is a constant struggle. Most people accept that regulation is necessary but a large part of the regulated community don’t want to spend hours understanding the minutia of regulation, which means they sometimes don’t understand why we are doing certain things. We do try and spend as much time as possible speaking to the profession and when we do talk to them, the reaction is good. We also spend a lot of time speaking to sole practitioners and the City of London Law Society, who we spend a lot of time with. There is always more work to be done on the relationships but people are seeing (with things like the red-tape initiative) that we are pulling back on regulation. We have to keep explaining why we are doing things but people have to experience being regulated, as it is only through experience that people understand.

Q A

Are the SRA working hard enough to cut costs/ lengthy regulatory processes for their members in light of reform? Could more be being done?

We are working very hard on it and the number of regulations that were present in 2006 and the number that we have now, shows that we are pulling back. The latest part of our initiative is to hone and reduce the Education and Training Regulations and when considering our performance figures, in relation to authorisation processes, it showed that these are improving.

The running of the SRA has also been improved and despite it being a very difficult and intense period of reform, the record is good but we haven’t gone far enough yet.

Q A

What are the greatest demands (past, present, future) for regulators in the modern legal services field?

There is one specific demand, which is to get better at putting resources in place to prevent catastrophe.

The classic example of where this didn’t work was financial services. As a legal regulator we have to deal with the real problems, deal with what matters and then demonstrate improvements. Increasingly, the questions that should be put to regulators like the SRA should centre on preserving access to justice. The broader issue of trust also needs to be considered, as we want the members of the public, as well as the profession to know that we are working sensibly, intelligently and fairly, showing that we are not monsters and are actually doing a decent job.

Interview with... Antony Townsend

13

Q

Paul Philip, your successor, will take up the role of Chief Executive from February, what key issues must he address in the short, medium and long term moving forward at the SRA? What are your key hopes and fears for the organisation following your departure?

A

I am upbeat on these issues, Paul’s job is to mature the organisation; it has been through huge upheavals over the last few years. Over the course of the last 5 or 6 years, we have made 1/6th of our staff redundant and we have done a lot of re-skilling and our staff have responded really well to this change. We now need to see the fruits of this change and investment in the mechanics of the organisation. We have rolled out our supervisory function to some firms but we now need to role this out further; we also need to fully understand where the biggest risks are for firms and we have got some really good examples of supervision and working effectively in areas such as Financial Stability. Paul’s task, which he is very well suited to, given his background at the General Medical Council, is to start reaping the benefits from the substantial upheavals and evolution that the SRA has been through in the last 5 years. In every profession, the most important thing is to ‘hold one’s nerve’, there are all kinds of risks out there and no one quite knows how things will develop. The organisation needs to have the confidence that it has the skills to continue to weather the storms which will no doubt remain prevalent in the sector for some time to come.

Antony Townsend Antony took up his post in 2006, having been Chief Executive at the General Dental Council (GDC) from 2001.

At the GDC he led a large reform programme to modernise dental regulation involving legislative, structural and operational change and including the extension of regulation to new groups of dental professionals.

Before this, Antony held a number of senior roles at the General Medical Council, including Director of Standards and Education, and Head of Conduct.

In all these roles, he worked extensively with the regulators of other professions, consumer organisations, professional representatives and Government. His earlier career was with the Home Office, where he worked primarily on criminal justice issues.

ML // April 2014

14

Interview with... Paul Philip

Interview with...

PAUL PHILIP The new Chief Executive of the SRA began his post in February 2014, Charlotte Parkinson, Modern Law, spoke to him about how his past experience has prepared him for his new role and his plans for bringing the SRA forward as a proactive organisation.

Q A

How will you draw on your previous regulatory experience in your new role as Chief Executive of the SRA?

Paul Philip Paul took up his post as Chief Executive of the

The General Medical Council (GMC) do very similar things to the SRA, so there is lots of cross-over in terms of its responsibilities for professional ethics, regulation of people and the disciplinary aspect of dealing with the ‘bad apples’ and there are certainly lots of transferable skills. I have experience of dealing with a high profile, intelligent and professional work force and I will need all these skills from my previous role, in the weeks and months ahead.

SRA on 1 February 2014.

Q

Chief Operating Officer

He was previously the Deputy Chief Executive and Chief Operating Officer of the General Medical Council (GMC), where he was responsible for leading all corporate work programmes, as well as delivering all the organisation’s core regulatory work.

Prior to becoming the

You have only been in the role officially since the start of February 2014, how are you finding it so far, what have been the biggest surprises?

at the GMC, Paul led the

A

organisation conducts its

The biggest surprise has been the enthusiasm and energy of the staff group to do the right thing. It needs to be shaped and modelled a little bit more but the quality has been exceptional. They are eager to do the right thing but, what is the right thing?

GMC’s medical ethics and disciplinary functions, reforming fundamentally the way in which the business in these areas.

Paul has previously held senior roles in both the Legal Services Commission and the NHS.

Q

Why did you want to come into legal sector regulation now at a time of such great change? Are the potentials for opportunity overshadowed by ‘box ticking’ and red-tape?

A

It provided an opportunity to work for the sister organisation to the GMC as well as the opportunity to become Chief Executive and shape the future of regulation in the legal sector. The

ML // April 2014

‘The biggest surprise has been the enthusiasm and energy of the staff group to do the right thing.

It needs to be shaped and modelled a little bit more but the quality has been exceptional’

Interview with... Paul Philip potentials for opportunity are not overshadowed by red-tape; we have the opportunity to create an even more credible organisation by working with the profession in the public interest.

Q A

What are your immediate and future plans for the SRA and are you planning on ‘modernising’ the organisation and if so how?

My immediate reflections are that the SRA has been through and achieved a lot and that it could improve on customer care and operational effectiveness. The people who deal with us have (rightly expected) high levels of customer care, with the correct knowledge and response times and a professionalism that the organisation should be proud of. It is in the professional interest of the industry to have a credible regulator, so we will be focussing on operational efficiency and customer care in the first instance. We will then be looking at the wider more philosophical questions about the purpose of the regulator and whether we are achieving the aims and requirements of the legal services act. That is a big discussion that we will be having internally over the coming months.

Q

Your predecessor, Antony Townsend, was Chief Executive of the SRA for 7 years (since the SRA’s inception), do you think it will be difficult to fill his shoes?

A

I am not planning on filling his shoes, I have my own.

Antony did things in his way; I am a different person and will do things differently. I think that the current environment calls for a slightly different way of doing things and I plan on moving the organisation forward in a different way.

Q A

Do you feel there is increasing pressure on regulators to protect the consumer in light of reform to the wider legal sector?

We very rightly spend a lot of time on consumer protection work, which is evident from the Financial Stability work we have been doing. We need to continue to do that but there are other objectives like the introduction of competition, access to justice, enabling a diverse profession and institutional issues, which we are also focussing on. We need to look more at what these issues actually

15

mean and how our approach to facing them can shape the organisation going forward.

that we work to deliver independent regulation and this is something I will strive to do.

Q

Q A

The SRA have been heavily criticised for the length of time it has taken some firms/organisations to go from the application for ABS licensing to becoming a fully licensed entity.

While full and proper regulation/due diligence should remain of importance, have the SRA got any plans to streamline the ABS licensing process?

A

My attention will be drawn to high levels of customer care; we need to understand the whole process more. I have heard the stories of how long the ABS applications have taken at times and we do need to make the process quicker but without compromising due diligence.

Q A

What do you make of insurer/ legal partnerships? Do you think they could be potentially damaging to consumers?

It is too early for me to say but I can understand the inherent conflict and potential market management issues. It is a classic example of ‘where do professional ethics potentially clash with good business practice?’, in terms of maximising profits and we are going to have to give this some serious thought.

Q

There have been calls by many in the legal profession for one legal services regulator, how feasible would this be in future and how are relations amongst other organisations, such as the Law Society?

A

My initial thoughts are that it would be feasible to create a single regulator but it would take some time for that organisation to become confident. There is a single regulator of doctors in the health sector and there is lots of discussion about whether there should be soleregulators of doctors, dentists and physiotherapists and there is a similar discussion going on in the legal sector.

The health sector in Australia was consolidated about 4 or 5 years ago and it is not all ‘sweetness and light’ in terms of its effectiveness. I have no idea whether the government will move in this direction but I do think that we could make more of the present constitutional arrangements with the Law Society, to make sure

What do you anticipate the biggest challenges will be for you in your role at the SRA and how do you intend to overcome these?

Professions are only professions because society allows them to be and regulation is required to make sure professionals are reputable.

Regulation is a necessary evil at points and I think the organisation needs to be credible amongst the profession and the public. We could do more in terms of engaging with the profession, which would ultimately be in the interest of the public. We need to understand the problems they face and what it means to be a solicitor in terms of honesty, integrity and confidence.

Q

Many practitioners have claimed they are worried about being ‘second guessed’ by regulators (in the case of OFR for example). Do you feel that the profession has enough trust in the SRA as a regulatory body and how do you intend to improve the SRA’s relationship with the profession moving forward?

A

This goes back to my customer care point, for everybody who complains, there are another nine people who didn’t complain but who still proceed to tell another ten people how rotten and rubbish the service is and we do still have to further develop our credibility as a regulator. The move to outcomesfocussed regulation is about not being rule bound, although I can understand that solicitors like rules because they like certainty. Professionalism depends on principals, not rules and this is what we need to focus on. I fully intend to get out there, role my sleeves up and engage with solicitors in my new role at the SRA.

ML // April 2014

16

Interview with... Bryan Hughes

Interview with...

BRYAN HUGHES

Charlotte Parkinson, Modern Law, spoke to the Chief Executive of Eversheds about his future plans for the firm, the challenges of managing exponential growth and their unique approach to delivering legal services.

Q A

What are your short, medium and long term plans for Eversheds, in terms of strategy?

Our strategic direction is based on our 2012-2015 ‘One team, one vision’ plan which we are currently mid-way through. The key planks of that strategy are: to build a fully integrated international legal practice; to deliver consistently across that whole international network and new jurisdictions; to complete work of the highest possible standards in terms of technical advice and service quality and in doing so, live up to our 2020 vision of being the ‘global law firm that sets the standards’.

Q A

Eversheds has undergone huge growth over the last decade, what are the main contributing factors to this?

We start from the premise that you have to set and then deliver ambitious targets.

We constantly have aimed high and established an attitude of continuous improvement, looking forward at where we should go next. Based on that ambitious mindset, our growth has been driven by a number of inter-related factors. We have built significant international operations which we continue to invest in, year in, year out and we have built a strong platform in the City of London, where

ML // April 2014

our headquarters are based. The profile of our work and our client base has changed significantly. We now undertake ever more complex, high value and profitable work for our clients. As we have grown, we have retained the positive attributes of our culture and values while continuing to innovate and sharpen our business focus. Above all we have been successful in attracting and retaining the high-quality talent that is essential to our business. That journey has not been without its challenges, most notably the 2009 global credit crunch and world-wide recession which affected us deeply. However, we have emerged from that period a better and more robust business than we were before.

Q A

Africa expansion was a major part of the Eversheds growth plan in 2013, where next in 2014?

In 2014, we expect to see growth coming from a variety of directions as we have in previous years. Of course, geographic expansion is important and there are many areas of the world where we expect to see uplift. Africa will certainly continue to develop, as will the Middle East and Asia. However, it is by no means just about opening up in new countries.

We will see growth in different sectors, we will see growth through a different mix of work - winning more complex, higher value mandates. We will see growth through increased use our complementary innovative businesses such as Eversheds Consulting and Eversheds Agile.

Q

Yourself and Paul Smith (the new Chairman of Eversheds, who begins his term in May 2014), have talked of a ‘consolidated approach’ to international expansion and growth, what do you mean by this?

As you say, the growth of Eversheds has been huge over the last decade. When we talk about a ‘consolidated approach’ this really stems back to our strategy and our ‘one team, one vision’ plan.

We want to build a fully integrated international legal practice that delivers consistently high quality work across the whole of our international operations and new jurisdictions. We could go for being the biggest as most do, but that’s not our game plan and the problem with biggest is that the quality of work and the delivery of it is sporadic in different jurisdictions.

That’s not what we want.

A

Q

The legal sector is currently undergoing seismic changes, which are impacting the whole sector in terms of consolidation and new entrants, what differentiates Eversheds from the competition and other large firms in a swamped market, what are the biggest challenges currently faced by the firm and how have reforms affected your firm?

In terms of the biggest challenges the firm faces, while we are seeing signs of economic improvement in several markets, across many jurisdictions that recovery remains fragile. At the same time, the clients we are working with are internationalising rapidly themselves, with more operations

A

‘[The firm’s] journey has not been without its challenges, most notably the 2009 global credit crunch and world-wide recession which affected us deeply. However, we have emerged from that period a better and more robust business than we were before’

Interview with... Bryan Hughes in more parts of the world – and the challenge of servicing those client’s needs, wherever they do business is a very real one, including a consistent approach to pricing and invoicing.

The sheer speed of change in the marketplace is rapid and getting faster year on year. Maintaining the flexibility to react quickly to challenge and take advantage of opportunity is a real concern. It is quite clear that the global legal sector remains ‘over-lawyered’ with ongoing price pressures. Eversheds has a big, ambitious vision - to be ‘the global law firm that sets the standards’.

This is not an idle boast or a fanciful set of words, but a deeply held belief that we can have a profound and positive impact on the legal sector – doing it our way. That means constant innovation. It means real people, not legal robots, unlocking clients’ ambitions. It means one international brand, committed locally and connected worldwide. It means delivering the very highest quality and services, wherever we do business. There is an overwhelming sense that one of our most important differentiators is our positive, can do culture.

We are demonstrably supportive and collegiate and protecting this culture is essential to our success.

Q A

These changes have also made clients more demanding, expecting ‘value-add’ services, how are Eversheds working with/for its clients to deliver more?

Our first point of improvement has been to significantly increase the importance of the client partner as the key client interface of the business. We have re-orientated our marketing, sector and product experts to support client partners and their service teams. We have limited the number of client accounts run by one partner to ensure a focus on quality not quantity, increasingly the level of premium quality legal work. At the same time, we have been working to develop our global full service legal model, providing our clients with solutions for the provision of work across all work types which offers value and quality. Continuous improvement and innovation is at the heart of what we deliver. In particular, we continue our drive to promote complementary services such as Eversheds Consulting and Eversheds Agile. We have also invested in developing internal relationships across all work types and jurisdictions, promoting and rewarding cross-selling and client development.

Q

Technology is a topic everybody is talking about at the moment, how are Eversheds exploring opportunities presented here and what are the benefits/drawbacks of having to use technology to provide modern-day legal services?

Innovation and service excellence underpin all business areas at Eversheds, including the provision of technology services.

Eversheds has a long record of and reputation for embracing progressive technology and unlocking information technology, freeing up the investment so the fee earners begin to enjoy the experience rather than simply tolerating it. We have developed award winning and market leading client facing technology solutions and launched a technology consulting service for our clients.

A

Q A

‘Big data’ is already a talking point in 2014, how do Eversheds make the most of client data and ensure it is maintained in a secure way?

Our pioneering work with our clients on technology based billing systems means that significant amounts of data are available to clients and law firms to analyse the trends in spend patterns and risk profile. Analysing the data leads to identification of areas which can be made more efficient, risk can be handled more effectively and costs more predictable, even in traditional areas such as litigation where the traditional view is that it is difficult to give certainty of costs.

The number of global accounts that we manage on behalf of major multinationals demonstrate that they too are realising the benefit of big data and the part it plays in managing the delivery of legal services globally.

In addition, Eversheds has also established a ‘big data’ service for our clients called Big View, which analyses social media sentiment. It provides an early warning to our clients if their online reputation is threatened and will alert our clients to potential intellectual property infringements by trawling through all of the world’s social media noise, spotting important patterns, threats or other client related information. Client data and confidentiality is of paramount importance which is why we have ISO 27001 certification on our information security management system.

17

Q A

What are the core values within Eversheds, in terms of client service, ethos and strategy and how are these realised?

Our values are absolutely central to our success. They are the bedrock of what we do and what bind us together as a business.

We aim to be straightforward in all our interactions. We work as a team.

We will be accountable for everything we do and are founded on the idea of mutual respect. Our aim is to be unerringly client centred with a focus on continuous improvement. By adhering to these deep-rooted values day in, day out, we can deliver on our clear client proposition to provide a total legal solution based on quality and an absolute commitment to relationships.

Q

Eversheds places a big focus on corporate responsibility, how will this be approached over the next 2-5 years in terms of innovation and sustainable growth?

Our approach to Corporate Responsibility focuses on a number of areas under a theme of ‘Unlocking Talent’. This refers to both our own employees and those people that we work with in our communities. So the aim is that not only are we helping other people and ensuring their lives improve through involvement by people from Eversheds but also our employees are stretched and learn new skills. One of the best indicators that responsible business practices have been embedded within the culture of any organisation is when they start to become less visible, and simply ‘the way we do things’. Over the next 2-5 years we will continue to benchmark our progress against relevant key performance indicators, and integrate responsible business practice through our management structure. Across Eversheds, we engage in a wide range of community focused projects, programmes, and initiatives, such as our innovative charity partnership with the NSPCC in support of the ChildLine Schools Service. We will continue to focus on widening access to the legal profession through our Eversheds Unlocked and Unlocked Academy programmes and creating a sustainable pipeline of previously untapped talent, and on the diversity side, to strive to meet our target of 25% female partners by 2016.

ML // April 2014

The Views

19

19-39

THE VIEWS

ML // April 2014

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The Views

21

A new way of thinking Restricting numbers in legal services is not the way to proceed, as Chris Kenny reports.

T

he Chief Executive of the Law Society thinks that the oversupply of students studying law is a major problem. He suggests that the solution is a cap on entry to the profession. The Chairman of the Bar Council has actually suggested legislation to cap the number of places on legal professional training courses.

Given the levels of unmet legal need that has been identified among both individual and small business consumers, is it really the case that there are too many people trying to become lawyers?

Legal Services Board (LSB) research has shown that one in three individuals don’t get the legal help they need and less than one in five small businesses get legal advice when they have a problem.

It seems odd, when there is this level of unmet demand, to argue that we need less people trying to become lawyers. What I would suggest we need is a workforce that is organised differently with a much more diverse set of skills. We might also need many different new ways of becoming a lawyer.

It is also clear too that lower costs and better value for money are needed if we are to help more people and businesses deal with their legal problems.

A further additional factor to take into account is the financial importance of legal education and training as an export.

Students come from all over the world to study law in England and Wales, which also helps to cement our standing as the law and jurisdiction of choice for global business, trade and dispute resolution. Restricting the numbers of students would have a knock on effect on that position.

Enough Competition?

Professor Richard Moorhead has used data from the Law Society to show that, despite numbers of Legal Practice Course (LPC) students exceeding numbers of training contracts available in the recent past, overall the market works well. He goes so far as to doubt whether, up to 2007/2008, there was enough competition for training contracts, due to the number of LPC graduates being lower than the contracts available. The Law Society’s data also shows both LPC passes and numbers of training contracts dropping, in response to the recession. If LPC passes drop more quickly, or for longer, the so-called oversupply of graduates when compared to pupillages or training contracts will cease on its own.

There is no way of accurately predicting what the market for legal services will look like, the numbers of lawyers that will be needed or how services will be offered in the future. Professor Richard Susskind has suggested in his latest

book that as the market develops it is likely that new and different roles will emerge that require even greater flexibility from regulators. Given the regulatory objective to promote competition and protect and promote the interests of consumers it would be very difficult to accept any attempt by a regulator or professional body to restrict numbers.

Facilitating Growth I would suggest that the solution to the issue lies not in more restrictions and barriers to entry but in fewer constraints on the way people are able to qualify and the range of options open to individuals wishing to pursue a career in legal services. The more options that are available to train, the lower the costs of training are likely to be.

The LSB has attempted to address this in the statutory guidance on education and training issued in March 2014.

While it is the responsibility of each regulator to deal with education and training as they see fit, in broad terms the LSB suggests that: −education and training requirements should focus on what an individual must know, understand and be able to do at the point of authorisation −providers of education and training should have the flexibility to determine how to deliver training, education and experience that meets the outcomes required −standards be set that find the right balance between what is required at the point of authorisation and what can be fulfilled through ongoing competency requirements −regulators need to successfully balance obligations for education and training between the individual and the entity both at the point of entry and ongoing, and −regulators must place no inappropriate direct or indirect restrictions on the numbers entering the profession.

Regulators should focus on ensuring that individuals have the skills required for the roles they are authorised to do rather than letting availability of training contracts or pupillage be a blockage. Protectionism doesn’t work in the legal market any more than it did in manufacturing or in any other sector. Only through a flexible labour market will we get the excellence that typifies English and Welsh lawyers and the growth in the market that is needed to meet the needs of citizens and businesses.

Chris Kenny is Chief Executive of the Legal Services Board

ML // April 2014

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The Views

The great social media revolution Does social media have more potential to damage a firm’s brand than it does to promote it; is it too easy for customers to provide very public negative feedback if they are not happy with a service or has social media ‘raised the bar’ in terms of expectation and service delivery for law firms?

E

very law firm in the country must by now have had the debate about whether or not to engage in the great social media revolution. Bigger national firms are most likely to have the marketing support and resources in place to capitalise on the opportunities that these new channels bring, and most are using social media to positive advantage.

Smaller firms who make a big success of social media often have a partner or key employee who is a very keen advocate, and who takes ownership of the project.

However, there are also likely to be a great number of small to medium sized firms who have decided to foray into social media because they feel they ought to, without developing a proper strategy, or understanding the need for the whole organisation to engage with the process. It is unlikely that such lack of understanding translates into actual damage to their brands, rather than simply representing a missed opportunity. These firms will eventually suffer a loss of market share to those competitors who are achieving good search engine rankings by driving traffic to their sites through social media activity.

The extent to which a firm’s brand can be damaged by social media very much depends not on the resources in place to manage the social media machine, but on the procedures in place to manage the service being provided to clients. Any organisation, whatever its size, which enters into this public arena must first understand the importance of always adhering to published customer service standards to prevent a situation arising where clients are disgruntled. A well-managed complaints procedure is another essential, since dissatisfied clients are most likely to criticise publicly if they feel their issue is not being addressed. However, since all SRA-regulated organisations are obliged to have such a policy, the legal sector is less vulnerable than most to this risk.

CILEx Law School will shortly be launching a distance learning Business Development and Marketing course, which is aimed at non-marketing professionals in legal services organisations, including chapters on how to develop a social media strategy and the resources needed to support it. A crucial point is the need for commitment across the organisation in order that appropriate content can be developed for sharing.

23

Would you lie to me?

I

have spent the majority of my working life interviewing tens of thousands of people from a diverse spectrum including job applicants, disadvantaged young people seeking financial support, and claimants.

Although considerably uplifting, the downside of this experience is that I tend to weigh up everyone I meet in much the same way as a keen restaurateur will weigh the cutlery or look at the underside of the crockery whilst visiting a competitor’s establishment. See if you can spot it when you are next dining out, it’s a dead giveaway.

‘Employment consultants’ (God, I hate that tag and much prefer employment analysts or career profilers), broadly includes groups such as recruitment consultants, head-hunters, search and selection consultants and employment expert witnesses, all of whom consider themselves amateur psychologists, at least as far as understanding what makes a person tick in their job or career and, as research has shown, tend to make their mind up within 30 seconds of meeting the candidate.

Employment screening is big business and there are a myriad of psychometric tests used by recruiters, consultancies and employers alike, but at interview it is without doubt the skill of the interviewer which drives the application forward, or buries it. However, in my work as an expert there is little room for psychometric tests as they only measure the person’s attitude at the time of the test and add little value in my view.

A more global view is preferred and of some use is the study of body language, another tool used by interviewers which includes the evaluation of posture, head motion, facial expression, eye contact and gestures. Taking it a step further, the TV series ‘Lie to me’ is based on the works of Dr Paul Ekman, who specialises in recognising brief facial expressions, called micro expressions. His research has shown that these expressions which contradict words being spoken are often missed.

So avoiding the trap of the 30 second assessment, I watch and listen closely. President Reagan said ‘Trust, but verify’, which I do as it is important to hear the whole story, but as the great Japanese swordsman Miyamoto Mushashi wrote in his Book of Five Rings, ‘See that which cannot be seen’.

Trevor Gilbert, Chairman, Trevor Gilbert & Associates

Noel Inge, Managing Director, CILEx, Law School

ML // April 2014

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The Views

25

If in doubt...

A case of balance

Solicitors now need to adapt and sharpen their procedures or face the consequences of having claims struck out and paying compensation to their clients for negligence, how can solicitors avoid being caught out in light of Mitchell etc?

‘My clients are involved in a commercial dispute and are making a number of claims – some with considerably better prospects than others. Could this have ramifications for obtaining ATE legal expenses cover?’

F

irst and foremost, solicitors must write to their clients to advise them of Mitchell and that breaches of rules and orders may result in their case being struck out. Similarly make sure third parties involved in the litigation, such as experts and witnesses are advised. Clients should be updated whenever orders are made and their obligations spelt out.

Next, reliable systems are essential; all deadlines imposed by any court order must be recorded.

There is no room for error, the moment orders are received from the court, the time frames should be reviewed and diarised.

If there is any doubt about compliance, beware of trying to buy more time via CPR 2.1 which allows the parties to agree extensions in writing, and don’t assume consent orders will be approved. For now, at least, the only safe option appears to be to apply to the court promptly.

The starting point for the court on any application is to look at the nature of the non compliance and whether it can be characterised as ‘trivial’.

In Lakatamia Shipping Co Ltd –v- Nobu [2014] EWHC 275 a delay of 48 minutes in serving a disclosure list in accordance with an Unless Order was deemed trivial.

Also in Summit Navigation Ltd-v- Generali Romania [2014] EWHC 398 the claimant’s application to lift a stay imposed by the terms of a consent order where a security for costs bond was delivered one day late was granted as the breach was held to be trivial.

However, if the non compliance does not fall in to the category of trivial then you must show good reason. We know from Mitchell that the pressures of work will not constitute a good reason. Solicitors must avoid setting themselves up for a fall: cases should be prepared as fully as possible before proceedings are started with a strict directions timetable in mind; keep caseload numbers under review; ensure buddy systems are in place to cover holidays and other time away from the office; propose timetables for directions that allow for some wriggle room.

Sharon Denby, Director of Costs, Ontime Group

‘Yes – including ramifications that could give rise to more choice on case economics.’

T

he recent case of Adaptive Spectrum and Signal Alignment Inc v British Telecommunications PLC [2014] EWHC 80 (Pat) [2014] All ER (D) 13 (Mar) (ASSIA) is another case highlighting the fact that, even where a party is regarded as ‘the winner’, it is not automatically awarded 100% of its recoverable costs and is not without cost risk.

The case involved claims on three patents. One was discontinued and on the other two, the court found each patent valid and one infringed. The normal costs consequences were applied to the discontinued claim.

On the other claims, the defendants argued costs were incurred on arguments ultimately rejected by the judge.

The claimant was awarded 40% of its recoverable costs and the same percentage of the ATE premium.

It is common for an action to include various claims, with varying prospects of success. There may be a number of reasons for this, including a ‘belt and braces’ cover all approach and the inclusion of claims for negotiation purposes. Where not all succeed, costs consequence could include an ASSIA type percentage reduction and /or an issues based cost award.

Where ATE premium continues to be recoverable (either as a policy incepted pre 01.04.13 or by exception), there remains an obligation to file notice of funding. That notice requires an explanation of which heads of claim are ‘funded’. If cover is not specified to be for ‘all claims’, an opponent will doubtless draw their own conclusions on how excluded claims are viewed by the insurer! Conversely where there is no recoverability, no such notice is required. This could free up parties to opt for cover restricted to their ‘best’ claims, either by choice, or if that is all that is on offer.

The knock on effect could be a reduction in the amount of cover required, a reduced premium, and potentially a larger retention of the ‘damages’ pot (albeit with some retained risk on liability for opponent’s costs if uninsured claims are pursued). Practical points would need to be addressed by the policy, and claimants would have to ‘do the math’, but in this post LASPO era, those involved in the commercial dispute process need to be increasingly alive to options available, and to weigh up ‘risk/reward’ considerations when considering where best to commit resources.

Matthew Williams, Head of AmTrust Law

ML // April 2014

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The Views

Part of the modern world Does social media have more potential to damage a firm’s brand than it does to promote it – is it too easy for customers to provide very public negative feedback if they are not happy with a service or has social media ‘raised the bar’ in terms of expectation and service delivery for law firms?

I

have to go back to a conversation I had with a PR person in excess of a decade ago. In essence I asked what were the quick PR wins and the answer from the PR person, was “have you considered doing a good job for the client? Because if you have, getting that person to say something good about you, is worth more than anything that I can do.” Social Media is just another facet of your clients talking about you. But instead of three people down the pub, they can be talking to thousands or hundreds of thousands in cyber world.

So we have limited control over social media but how do we make it work for us?

1. Do a good job in the first place, then most comments about you on social media will be supportive of you. If there is a negative comment it will be in the minority compared to the other good ones in cyber world 2. If there is a negative comment, do address it, address it openly and transparently in the same media 3. Have your own page in the social media to get across your core values, so outsiders can come to an opinion upon you 4. Regularly update your pages to keep them relevant and up to date.

Let us be honest, if someone wants to complain, they will do so and they can do it via your complaints process, via the Legal Ombudsman or via social media.

So the social media aspect is just part of the modern world and if you do not monitor social media, it might be that you have let the world think something about you that is totally incorrect.

If you truly care about service, you will have very few complaint and bad words written about you. But the world expects more of us every day, so interacting with social media and dealing with good or bad comments within it, is more and more just a part of looking after and promoting the values of your business.

Social media is a part of the modern world and an increasingly big part of it too. The ability of social media to damage a brand exists just as much as its ability to enhance one.

David Bott, Managing Partner, Bott & Co

27

Putting the consumer first?

A key tenant of the Legal Reforms was to put consumers of legal services first - but are legal services providers still focused on themselves rather than consumers?

M

ost legal services providers are still trying to get their own house in order and have yet to really focus on putting their clients first. This isn’t for want of trying. It is just that the industry has been stagnant for such a long time that it has a lot of things it needs to change, and these changes, take time.

Alternative Business Structures have meant that providers have focused on changing their structures first, bringing in new capabilities and trying to organise themselves so that they are run more as a business.

They have also had to sort out their finances both in terms of funding and making sure that they are more focused on cash-flow and profit and that value is not tied just in WIP. The increased burden of Compliance has not helped either and providers have had to focus on getting their house in order to ensure that they are compliant across their business, having to spend time reviewing procedures and putting in place processes and checks that really work. Many have not invested in technology for some time and are therefore putting in place newer systems that enable them to not only automate many of their processes and be more efficient, but also enable them to get better management information to make informed decisions and be flexible in how they manage alternative fee arrangements. This too requires time to get it right.

Marketing and how clients are acquired, retained and nurtured is increasingly becoming important and many providers have had to re-think how they do this. They are having to acquire new talent, introduce new working practices and train staff to be more service orientated and client-centric.

An independent observer would say that providers of legal services have gone about it the wrong way – they should have started with the end consumer of legal services first. Those firms that focus on defining what they stand for (their vision) and what value they plan to deliver to their end clients (their mission), are more likely to get there faster as they can then align how they structure themselves and define the resources, technologies, processes and capability they will need to deliver on their promise. New entrants with little or no baggage have a head start but it will not be long before the rest of the legal service providers catch on and catch up.

Jitendra Valera, Chief Marketing Officer, Advanced Legal

ML // April 2014

The Views

Will asking for feedback increase my firm’s profitability?

T

he link between feedback, loyalty and profits is compelling and one that demands consideration because it makes economic sense, pure and simple.

Feedback based on clients’ experience of a firm gives an understanding of how that experience could be improved upon to ensure future loyalty. The driver for this is not just about more effective relationship building but the economic argument that an increase of as little as five per cent in client retention is thought to lead to as much as a 75 per cent increase in the average business’ profitability.

Requesting client feedback and the subsequent use of that information as part of a firm’s business strategy needs a top-down approach. From the SMT to front of house, staff need to see the firm’s senior figure(s) advocating a culture that listens to and learns from clients. Leading by example is more than a phrase – it changes behaviors and reinforces visions and values.

Using feedback to differentiate between satisfied and loyal clients is crucial to a firm’s retention strategy given that 50-70% of lost clients report being “very satisfied” or “satisfied” before defecting. Typically, loyal clients cost less to maintain than replacing them with new ones, provide repeat revenues, forgive the odd mistake and pay on time. They recommend their Firm of Choice providing low to minimal cost new business prospects. Surely increased profits through the provision of a fantastic client experience is the ultimate win-win situation?

Apart from the ability to increase revenues, decrease costs, define marketing strategy and produce working practices which deliver services that clients want and view as good value, what other reasons are there to gather feedback? Let’s return to the client experience. By providing you with feedback, your clients are investing their time in your firm as well as their money. Whether you act on their views will tell them how much you value their time, their money and, of course, their loyalty.

Like any research, feedback is only of use if it reflects the big picture, coming from the highest proportion of clients possible, the results of which need to be available in real-time to ensure that trends and issues (good and bad) are identified quickly and either built upon or dealt with accordingly.

29

The next generation One year ago, in an interview with Modern Law, Professor Stephen Mayson said: “For first-time users and the next generation of customer, ABSs present a better chance of getting their work – especially if it’s a brand already aligned with their lifestyle/attitudes and capacity of access legal services?.” Are ABSs sweeping work away from high street practitioners and where do you see the ABS market going in the next 1-2 years?

T

he answer to the first question is not yet. There are a number of reasons for this, including:

• the still very low numbers of ABSs that have entered this market • the size of the high street market and, hence, the scale of momentum that would be needed to create a significant change • the current rare event nature of the services offered by this market Those ABSs who have entered are also not quite the sort of brand that I think Professor Mayson had in mind.

Not many first time next generation users of legal services are likely to be attracted by the Saga brand!

My view is that this sector of the legal market will see massive changes in how legal services are accessed and delivered in the coming years. I would expect the seeds of this to start to emerge over the next 1-2 years. This will involve fundamental shifts in the traditional business model which are likely to suit the ABS approach.

The more interesting question is where this market will be in the next 10-20 years. I suspect that it will look very different. The opportunities and means are there to change the way that solicitors in high street access their work and deliver it. Lifestyle brands – but true ones, not just banks and supermarkets - will play their part and will help to open up the latent legal market. The traditional service areas of residential conveyancing, wills, probate and family will be supplemented by new unbundled services.

In summary, while frankly nothing too exciting has happened yet, it will soon. There are a number of new and very interesting approaches of which I am aware that are in the course of being rolled out. Watch this space!

Simon Goldhill, Principal, Simon Goldhill Consulting

Rayne Tompson, Director, Law League

ML // April 2014

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The Views

Is it time to feel the love?

“Lender Exchange” is set to launch in March this year, for the conveyancing sector, a move which the Law Society are currently apposing. Are you for or against the introduction of lender panels and why?

T

here can be no-one whose firm does any conveyancing that will not have heard of Lender Exchange and in addition will not have received an email from the Law Society either from Des Hudson or via CQS about the Law Society’s concerns around the launch and ramifications of Lender Exchange.

Let me put my personal position first, which accords with the Conveyancing Association’s position on this, that the conveyancing industry needs there to be a more simple approach to lender panel validation than individual multiple lenders requiring multiple individual applications back from conveyancers, containing the same information time and time again. On that simple basis the concept of Lender Exchange should be applauded and the launch supported.

What the Law Society is doing however, is what the Law Society should be doing on behalf of its members – that is raising reasonable and valid concerns around the terms and conditions of participation within the Exchange and probing the promoters of Exchange on issues of sensitivity, such as the use of data provided through the Exchange. They should also be applauded for raising these issues as the Representative Body for the largest group of conveyancers in the sector.

31

A true reflection Does social media have more potential to damage a firm’s brand than it does to promote it – is it too easy for customers to provide very public negative feedback if they are not happy with a service or has social media ‘raised the bar’ in terms of expectation and service delivery for law firms?

I

t’s now easier than ever for clients to discuss the service they’ve received from any business in any sector.

Whether it be positive or negative they can express their opinions in seconds to an audience of millions. However, the power to influence via social media does not rest solely with your clients.

While multiple social media channels have made it easier for client’s to express frustration over the service they have, or haven’t, received, remember that it’s probably a reflection of your firm in reality. The power to control your online reputation starts with what you do in reality.

This doesn’t mean that you can’t still turn things around though. Engaging with a genuine grievance on a social media platform like Twitter is a great chance to turn show how honest, open and compassionate you are.

You may decide to chat with them publicly or invite them to give you a call. Either way you’ve proven you’ll listen to your clients and act in their best interests.

Of course, if you’re not on social media then clients could still complain about you, you just won’t know about it.

What is not to be applauded is what could turn out to be a public spat between the Law Society and Lender Exchange, as to who said what and when and there is a danger of this continuing with potentially adverse effects on the very community which they are both trying to serve.

Investing in a social media presence means you can monitor discussions about you and react accordingly. Of course not all social media channels will be appropriate for you so you will need to research the options available. At the moment though, Twitter and LinkedIn are currently proving to be the best for law firms.

All conveyancers are now facing different issues than even 12 months ago – trying to cope with a hectic housing market, whilst trying to recruit to deal with an increased work load. We can do without, is being caught up in a battle between Lender Exchange and the Law Society over what could be perceived by some to be the valuable go to e- trading space for conveyancing for the future, it’s a valuable prize for whoever gets it but we don’t want the blood of conveyancers spilt on the way.

Social media has effectively placed all businesses under a microscope. Law firms must be amongst those who respond to this new level of scrutiny and raise their standards or they may well find negative comments online and that won’t be the fault of social media.

Dez Derry is CEO of mmadigital, online marketing for modern law firms.

To be continued...

Eddie Goldsmith, Partner, Goldsmith Williams Solicitors

ML // April 2014

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The Views

Change is brewing

One year ago, in an interview with Modern Law, Professor Stephen Mayson said: “For first-time users and the next generation of customer, ABSs present a better chance of getting their work – especially if it’s a brand already aligned with their lifestyle/attitudes and capacity of access legal services?.” Are ABSs sweeping work away from high street practitioners and where do you see the ABS market going in the next 1-2 years?

N

ot yet, but change is brewing. Many high street practitioners are poorly equipped to service the younger generation of consumers, who have grown up buying online and who expect high levels of customer service and consistent delivery. For them, brand is allpervasive and traditional practitioners can appear fusty, inaccessible and intimidating.

Often backed by Private Equity, with bigger advertising budgets and led by brand and technology savvy business leaders and marketers, ABSs are well positioned to take advantage. They will be able to offer the Amazon generation what they expect: consistent, multi-media, high-quality customer experience and accessible, ondemand legal advice.

As the concept of commoditised legal services or ‘supermarket-law’ becomes better known, the balance will tip in favour of ABSs – at least in the cities. They might not gain as much traction in the short term in smaller, rural areas where relationships between local customers and solicitors are likely to be stronger.

33

Lender exchange: time saver or money drainer?

L

ender Exchange is the new centralised web portal into which conveyancing firms must upload their conveyancing practice information if they want the opportunity to be chosen to be on the lender panel for Lloyds, Santander or RBS. Originally set to launch in March 2014, Decision First, the developer and private company implementing Lender Exchange, have confirmed that date has been pushed back to the second quarter of 2014.

The creation of Lender Exchange has put the Law Society, who have serious concerns about its implications for solicitors, into opposition with its proponent, the Council of Mortgage Lenders (CML).

The CML sees advantages to the new system, the obvious ones being reducing inefficiency and the cost of negligence and fraud that produced so many claims after the property crash of 2007-8.

From the point of view of conveyancing solicitors however, there are a number of obvious drawbacks to Lender Exchange, including the perceived lack of transparency in the assessment process and the fact that the terms and conditions of Decision First are still not available. These concerns have been publicly articulated by Des Hudson, chief executive of the Law Society, in an open online letter to its members.

We are already seeing the likes of Legal Zoom and Rocket Lawyer join the UK market, seeking to replicate here the great success they have enjoyed in the US. While not technically ABSs, they certainly offer a new, more accessible breed of legal services to UK consumers, including documents-on-demand. In the SME market, companies like Brilliant Law are doing something similar.

As well as these, the system creates other practical problems for solicitors:

The only thing holding back players like these is consumer awareness and confidence in buying legal services online. And this, I believe, is just a matter of time.

• Many other lenders still require firms to be part of CQS (the Conveyancing Quality Scheme), so that fee will still be payable as well as of the Lender Exchange fee;

What’s for sure is that consumer legal services market will look very different in 10 years time. In the short term, we will see a flood of new ABSs entering the marketplace, then in the long term, we might actually see a contraction, with the market being unable to sustain that number of players. In that case, some ABS players will win big, while others will fall away. The winners will be those that have managed to achieve the Holy Grail: becoming the trusted consumer legal brand.

• A firm must arduously log onto the system at least every 90 days. It is also not clear what the penalty for failing to comply with this requirement is - will a firm then be removed from the panel?

It’s certainly not the end of days for high street practitioners but they will need to think carefully and quickly about their own strategies for success.

• Whether a firm is chosen to be on the panel or not, the yearly application fee remains payable. That ranges from £342 for a sole practitioner to £1194 for a larger firm (inclusive of VAT);

Drawbacks aside, firms wishing to work for Lloyds, Santander or RBS are going to have to sign up to Lender Exchange. Whether the Law Society’s current concerns about the system will be justified will only be seen in due course.

Laura Tweedy, Junior Property Barrister, Hardwicke Chambers

I, for one, will be watching this space with great interest.

Ros Innes, Head of In-house and ABS Strategy, Thomson Reuters Legal UK & Ireland

ML // April 2014

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The Views

Reasonable steps...

The SRA are currently consulting over the role of compliance officers within law firms, will the role of the COFA become redundant and is a COFA really a necessity, given the potential cross-over in responsibilities with the COLP?

T

here has been much speculation recently over the SRA’s current consultation into the role of the COFA with some commentators speculating that the role may even become redundant. Well I have some news for you; the COFA is here to stay. What is more, you can expect to see even more regulations aimed in the direction of the COFA and an increase in personal liability in the event things go wrong. The SRA made this clear at the inaugural conference for COLPs and COFAs held in Birmingham last year. The role of the COFA is to take all reasonable steps to ensure compliance with the SRA’s accounts rules. In addition to this they must also take all reasonable steps to record all failures to comply and report material failures to comply to the SRA as soon as reasonably practicable.

In order to be in a position to discharge their role fully, the COFA’s must consider whether they have access to all accounting records including cash flow forecasts and have a firm understanding of the balance sheet. In addition to this they must have a COFA compliance plan in place that will demonstrate to the SRA that they are taking the role seriously and amongst other things have put a system in place for carrying out regular file matter reviews. The days of just worrying about a reporting accountants qualified report are well and truly over.

There is a lot more to worry about now.

In addition to the COFA’s role in relation to the SRA’s Accounts Rules, the SRA’s outcomes focused regulation makes it clear that there is a role for COFAs to report when the practice is in serious financial difficulties. This is truly at the heart of where the regulation is heading.

The SRA is keen to engage with firms before they get into financial difficulty and at present, they are often finding out about it when it is too late. By focusing on the role of the COFA, the SRA are sending a clear message that they expect law firms to get their finances in order and if there is any doubt, the COFA needs to be talking to them.

35

Missing the boat

M

any law firms today are concerned they are missing the social media boat, but remain sceptical of the benefits. They often get side tracked by personal opinions which are influenced by fear of the unknown or their own experiences and who can blame them.

If it’s not celebrities broadcasting their lives over the internet its teenagers tweeting about their night out or posting updates on their ‘relationship statuses. And as every day passes it seems another social media channel becomes flavour of the month - YouTube one day, Vine the next. Where does it end?

Social media is a great way for organisations to communicate, share and engage with others but it’s not about the technology that enables people to connect, but the interactive relationship a law firm can build with its clients – it’s immediate, interactive, responsive, and highly powerful and enables firms to strike up conversations with existing and potential clients. But unlike direct media channels social media enables a two-way conversation.

If used correctly, social media is a powerful communication tool, however firms need to bear in mind that it also has the potential to damage a firm’s brand if used incorrectly. There are a number of reasons I would recommend social media as part of a law firm’s digital strategy, but here are the 3 main ones: 1. Social media can help you understand what is right and what is wrong about everything within your firm’s business, from its brand and services, to its competitors and the legal industry as a whole. Using social media to listen and monitor what the public are saying about issues relevant to your firm and its business model can provide highly valuable marketing knowledge.

2. Social media can enhance the visibility of your firm’s brand such as its personality, proposition, specific talent and the services they offer by using people who follow you to spread the word.

3. Social media can help your firm’s website grow traffic.

Major search engines now include social media updates and posts in their results and this will help your firm to have a better chance of being found on the web.

Ian Hunter, Managing Director, Jellyfish Creative Limited

David Thorpe, Director, Financial Eye

ML // April 2014

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The Views

Moving the goalposts Banks are increasingly interested in assessing the fitness of legal firms against KPIs and against median benchmarks that look to assess performance. Do these techniques limit potential funding for law firms or should means for assessing firms prior to funding agreements be as robust as possible?

I

t would be doing a tremendous disservice to most enlightened bankers specialising in the legal sector to suggest that their requirements of law firms, in terms of the production of data and its analysis against KPIs and benchmarks are anything less than extremely thorough and exacting. What is not so clear in all cases however and which I often come across are issues with the following: • Is there sufficient transparency in terms of what is requested by a Bank and their understanding of the law firm in question?

• Are firms providing Banks with exactly what is required and when it is required to ensure that the firm and Bank are best placed to work together effectively with that information?

• How do Banks manage a firm’s expectations of their banking relationship during this process and what are the outcomes?

The Banks’ current processes are not particularly new techniques, although this is the view often formed by firms as a natural reaction to the more exacting requirements being imposed upon them by all the stakeholders in their business, namely the Regulator, the Insurer and the Bank. The often quoted reaction is one of bewilderment at both the extent and relevance of a perceived fishing expedition which reflects poorly on the rationale behind the requirement for such information.

The missing link as highlighted above often relates to the lack of transparency behind the request i.e. what is the background to the request, have the goalposts moved and if so why and how does the process add value to the firm / Bank relationship? A greater understanding of the respective drivers and demands of those being asked and those doing the asking for such information is required and is key to unlocking the difficulties that emerge throughout the process.

The techniques being adopted should not in theory limit potential funding, if they are fully understood and their relevance explained and law firms are given more comfort as far as this is concerned. Firms have to accept that Banks will become increasingly robust given the current economic climate and recent experience of law firm failure. Although new banking relationships are regularly explored, loyalty can still be the outcome of a more transparent approach delivered through a greater understanding on the part of all concerned.

37

A path or a barrier...

F

inancial pressures in the legal sector show no signs of easing and many small/medium sized firms realise they need to invest in technologies that will help them become more efficient and reduce practice costs. In many cases there has been some reluctance to invest. Technology is not normally a legal practitioners’ area of expertise and so there is a fear of making the wrong decision or choosing an inappropriate efficiency solution.

Speech Recognition is a good example of a technology that did not deliver what it promised when it was launched 10 years ago. A significant proportion of the legal sector (up to 30%) invested in Speech Recognition and then very quickly became disillusioned. Reasons for user dissatisfaction included integration difficulties, poor word recognition and problematic audio quality.

The product simply did not provide the benefits that had been promised and many felt that they had wasted precious time and financial resources.

There was one main reason for this failure to deliver – a perfect example of technology being ahead of its time.

Most firms did not have the technical infrastructure or user hardware to support speech recognition. In essence, the product was launched before its target audience had the tools that could support it.

Speech Recognition moved under the radar and many legal practitioners remained sceptical of its viability as a transcription alternative. In the meantime, office systems were changing. Hardware became much more powerful, more affordable and easier to use. Then Nuance, through a series of acquisitions, incorporated all the best features of many systems into one marketleading product.

Their innovative approach has allowed them to deliver a solution that modern law firms can easily, and costeffectively, incorporate into their daily workflow.

Now the big challenge for speech recognition providers is getting early adopters to take a second look. The argument for legal providers to consider this worthwhile tool is compelling. They can save as much as 40% on their transcription costs by using speech recognition for case notes alone. Easy to install and use, it’s a technology that can offer legal professionals greater efficiency and measurable cost savings.

Nick Hodges, Managing Director, Oyez Professional Services Limited

Charles Metherell, Managing Partner, The Corre Partnership LLP

ML // April 2014

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The Views

39

Good governance to Three ways law support investment firms can save a funding... lot of money

B

anks, have become increasingly challenging (and demanding) in requiring robust Management Information to see business performance in support of current and future lending and investment.

The need for firm’s to provide detailed commentary and a business plan that supports the numbers has never been more high profile in the context of proving the firm is Financially Stable and can demonstrate Good Governance.

A Bank makes its decision to support a funding or working capital request based on information the firm provides and it will either succeed or fail depending on the quality of the content and how it’s presented. Do not underestimate the importance of quality presentation and content, even if the numbers themselves aren’t that great.

The principles of Good Governance are fundamentally the same whatever the business model or size, however the variety and level of Management Information (herein MI) I have seen used, or not used, across a number of firm’s varies from the sublime to the ridiculous.

Ranging from none or hardly any to some all singing, all dancing, MI packs that weigh more than a small encyclopaedia. The latter looking magnificent with high tech graphs and complex ratios but unfortunately even the most qualified of minds would struggle to understand what some of the content actually means. Although personally I don’t believe you can have enough MI about your business.

Regular and accurate MI should ensure there are no surprises, rarely are they of a good kind in business, and will allow Partners/Directors to assess performance and act quickly to address issues or shortfalls. In the absence, or lack of timely and robust MI how do you know if there is a cash flow problem, a firm is profitable, is performing to budget or has individuals not delivering to expectations?

I’ve seen too many firms struggle with cash flow pressures that could have been avoided; identifying a problem early allows remedial action to be put in place quickly and is the key to Financial Stability, a phrase we continually hear from regulators and industry commentators.

The SRA (or yours truly) doesn’t buy into the theory that many firms’ financial or administrative problems are solely down to the economic and political environment. Poor leadership and financial management is very much an in house issue which many firms have addressed but sadly, far too many haven’t.

For law firms, competitive edge is gained by commoditising the processes that would otherwise eat into a fee earner’s time, especially when it comes to print and document management. Tim Hubbard, professional services specialist at digital print and document management company, Altodigital, examines three areas in which law firms can get this right.

Tip 1: Properly managing paper flow and storage Effective workflow management is a crucial step towards driving time efficiency in a law firm, and establishing a repeatable workflow process can increase productivity and ultimately reduce the costs associated with managing the litany of materials that every case generates. There are now a range of powerful scan-to-mail and scan-to-file programmes available, allowing employees to quickly and easily store all practice notes on a server, and convert scanned documents into a searchable and editable format for improved archiving, document retrieval, and productivity.

The time savings of this approach can be phenomenal, driving significant efficiencies when it comes to the flow and management of documents.

Tip 2: Tracking and recouping print costs Most practices, even if they’re of a modest size, will be required to print huge volumes of collateral, particularly when it comes to case notes and research. However, it’s surprising the number of firms that don’t adequately track these costs when it comes to client re-charges, or alternatively use time-consuming ‘manual’ methods to do this. The key to effectively doing this is implementing print management software. Such solutions allow the volume of print jobs to be unobtrusively tracked across an entire office keeping costs consistent, as well as calculating a cost on the volume of print work per client, allowing for accurate recharging.

Tip 3: Reviewing the way you use print There are major benefits to be made from an overall reduction in the volumes of print throughout a firm, not only from a cost perspective, but from a security and workflow perspective. With the right solutions in place such as law-specific intelligent print retrieval solutions - it is possible for firms to save up to 30% on paper costs and print/copy charges, with a similar reduction in manhours possible. One of the main functions of this type of software is the creation of a pull-print environment, meaning each print job has to be authorised at the device; also reducing the potential for sensitive documents to be forgotten about and left on the printer.

Tony Brown, Owner, AGB Legal Tim Hubbard, Regional Director, Altodigital

ML // April 2014

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THE FEATURES

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SECTOR ROUNDTABLE: MARKETING Modern Law hosted an animated Roundtable of Marketing Directors, industry forward-thinkers and innovators in the legal marketing sphere and put to them an agenda of industry hot topics, as Charlotte Parkinson reports.

Roundtable Guests * Chair: Steve Arundale, Head of Professional Sectors and Financial Institutions, Commercial Banking, NatWest * Dez Derry, CEO, mmadigital * Keith Hardie, Head of Marketing and Communication, Bird & Bird LLP * David Kempster, Owner and Managing Director, Clear Edge Communications * James Molloy, Operations Director, Ontime Group * Glyn Morris, Finance Director, Higgs & Sons * Tim Nash, Chief Executive, Edwin Coe * Charlotte Parkinson, Group Editor, Modern Law Magazine

MLM: In recent years, law firms have had internal focus on

Kempster: While multidisciplinary firms can have plenty

survival. Do you think that law firms need to understand more about what their clients want and need and have client’s needs moved on; what part does technology have to play in this?

to talk to the market about, the smaller the firm is, the harder it is to ensure there is a focus on driving capital into marketing. Firms have felt the hand of the SRA first and looked at the market second.

Nash: There is certainly a need to separate the tools we use from the needs of our clients, as fundamentally their needs never change but our means of achieving those needs, do.

Morris: How many firms have asked their clients if they are delivering what they are looking for, a lot are hesitant, but the answers can be surprising and even reassuring.

Kempster: There is a clear demographic divide between

Arundale: Technology now means that clients want

Morris: Across the board, the use of technology is on the

Molloy: In the PI sector certainly, usage of case view facilities is low. There seems to be something missing in the technological offering which means people either can’t engage with the IT properly, or can’t see the benefit.

the younger, always connected consumer and those who still have concerns about exchanging information online. Many traditional firms haven’t made the step up either. Access and reach has changed for innovative firms, as clients now want more than the traditional ‘9 ‘til 5’ service models.

increase and consumers will want consumer grade interfaces provided by their law firm, and probably through a mobile device.

Hardie: Certainly in the commercial market, law firms need to be focused on how their clients’ needs are changing.

Increasingly that means being better at pooling information and working with the data they have.

Arundale: But, are firms capable of looking after their uses of technology and trying to be ‘all things to all people’?

answers 24/7 and want to have conversations straight away, at any time.

Derry: It is demographically driven as commercial firms are working to develop portals and extranets; it is totally dependent on the client.

Hardie: Clients want to be connected to the right lawyer and the lawyers need to be accessible, and the differentiating factor is how law firms deliver exceptional client service.

Nash: Technology can join the dots and streamline the

Molloy: There is certainly a danger of us inflating the

process for the clients and fee earners are starting to accept that this will be the way over the next few years.

Nash: We are competing with traditional ways of delivering service and are under huge pressure as the ball has been put ‘back in our court’, by the clients who expect us to deliver the right service.

‘In the immediate future we are seeing a significant upturn in the economy and some of the ‘Zombie’ firms will survive but we would anticipate some further fall out’ Steve Arundale

importance of Smartphone apps, as from what I’ve seen many apps have been created by law firms, but I have yet to come across an app in the legal sector that has been massdownloaded. It should more be a question of doing the legal services right and then applying the technology.

ML // April 2014

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‘I have yet to come across an app in the legal sector that has been mass-downloaded. It should more be a question of doing the legal services right and then applying the technology’ James Malloy Hardie: The really big challenge is tailoring services for the client. Clever use of technology can help co-ordinate communication to the client more effectively.

Morris: It is also important to consider the ‘lifecycle’ of a transaction and where people interact with your firm. There are now opportunities to do this if firms look for customer touch points.

Kempster: Proper introduction of cheap, accessible cloud

services would be welcomed by a lot of people and there is now a need for firms to weld together case management and CRM systems, as in doing this, they can pick up on customer opportunities and follow up’s.

Molloy: Providers of legal services use of CRM data is not as granular as it is in other sectors yet, and in order to fully consider the lifecycle of the client and their needs, firms should be exploring bolt-on’s to case management systems, and technology companies should catch up with this.

Derry: It is about capturing and utilising this data in the

correct way too, for example, some firms don’t even use the most basic data for e-mail campaigns.

Nash: Firms are also having to make the case now for security as generation Y is less concerned with this.

Kempster: They assume that data is safe.

MLM: Can law firms achieve growth without having a marketing plan and the skills to implement that plan?

What strategy do you employ now to win work?

Nash: There are a mixture of strategies but increasingly,

potential clients go to the website first. In the area’s we have specialism’s we make sure we are page one on Google so that potential clients find us immediately.

Morris: Overall brand awareness is still exceptionally

powerful.

Kempster: Most people’s world view is still comparatively local and in terms of these local firms, it may simply be a case of a client walking down a high street and seeing the firm, the traditional ‘gold plaque recognition’. On the flip side, national firms are investing vast amounts in Google and similar channels.

Derry: It is important that firms cover all bases with their marketing and approach to winning work as this market is also all about recommendation. It is also key to ensure that websites have the right content in them so they are found in searches.

Arundale: Do you measure ROI for marketing and what level of return makes commercial sense? What about market intelligence systems?

Hardie: It is difficult to work out exact conversion rates and trying to measure specific ROI is a difficult task but it is getting easier.

Molloy: By nature, as an offline provider using online for acquiring clients, the legal sector will struggle to measure ROI as exactly as the e-commerce sector, for example.

Kempster: It is also a case of how the ROI is measured, whether it is on a case by case basis or the lifetime value of the client.

MLM: How important are new media channels when it comes to business development, for example, social media, internet and video?

‘Without the seismic change to the wider sector, law firms wouldn’t even be having these conversations and that can only be a good thing’ Glyn Morris Kempster: Many firms shy away from social media as the potential lack of control scares them. Twitter absolutely works when it is controlled and there is a distinct policy (written into contracts), which links with compliance.

LinkedIn is slightly less anarchic, it acts as more of a shop window for firms.

Nash: I think that Twitter has the potential to be

very dangerous, it goes beyond the reputation of the organisation, and it can affect the reputation of the entire industry.

Hardie: Law firms must have a clear policy and rules which are borne around common sense, people must be professional and sensible. It is also important to target feeds correctly. Few people will want to follow a law firm’s activities, but our sector and practice channels on social media are focused on what is interesting to clients and, at the level of individuals within the firm, clients can get to know their lawyers, enabling them to demonstrate their expertise and interests, which helps us win work.

Derry: Firms need to be aware of responding to and monitoring tweets on social media, internal communication must improve, as the way firms respond to complaints via social media is also completely exposed.

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Kempster: Trustpilot is great for this as it can show a

good rating for customer care as well as showing things like a fast response to complaints.

Molloy: Should complaints made on twitter and other

social media be considered as official? I’m not sure the SRA are up to speed on this, but certainly the proactive firms should probably be monitoring social media feedback, good and bad, and acting.

Derry: On the video marketing side, some firms marketing

teams cannot even watch the videos we produce because their internal red-tape doesn’t allow them to and that needs to change. It must be a top down approach, with partners in the firm understanding that this type of content now needs to be produced.

Arundale: Are law firms now more inclined to give things away for free because of social media, such as advice, for example?

Molloy: Certainly, I have observed some of our client

law firms are keen to engage with clients through social media but it is a case of them having the time to stop fee earning to be able to do so. Lawyers should definitely see marketing activity as central to their strategy.

Kempster: Where marketing sits in the ‘business of law’

is interesting as the practice manager will probably focus on administration and running the business and marketing will fall below this. Firms need a function to act as a communications hub directly out to the market.

Derry: Firms need to make sure they draft in the right

people with the right experience, they need to work with proper marketing professionals.

Nash: It is a case of balancing using business development and marketing professionals and ensuring they work with the partners, as they are the ones who know the clients and the business inside out.

ML // April 2014

Hardie: Agreed. And most partners have an entrepreneurial spirit - they are the ones running the business – so the trick is to ensure you engage them in working together to effectively marketing the firm.

MLM: What are SAGA, The Co-op and Riverview doing that traditional firms don’t do and could they do it?

Nash: The Legal Services Act has been an enabler and has resulted in rapid revolution as well as rapid extinction and the profession is still going through this. People are still experimenting with business models and we will see the results in years to come as the very essence of the law is that it is a trust purchase.

Morris: Absolutely, some retailers may potentially become the most successful providers of legal services in years to come, for example, John Lewis or Marks and Spencer, already have consumer trust. Without the seismic change to the wider sector, law firms wouldn’t even be having these conversations and that can only be a good thing.

Molloy: The big brands may have made a success of mining a rich seam among established loyal customer databases, but I believe traditional law firms have an advantage as they can be far more agile than corporate competitors, especially in terms of consumer legal services.

Derry: Smaller firms will struggle as brands will still have an advantage.

Kempster: The question now is whether high street firms

should be looking to diversify their professional services, collaborating with accountants and estate agents, especially if you are carrying expensive property leases. Why not have a professional services hub in the High Street?

Nash: Price is absolutely vital too.

MLM: Lawyers don’t sell legal services, what is the problem with selling and how important are channels such as T.V advertising in the future?

Features Molloy: It would be prohibitively expensive to establish a brand on television for all but the deepest pockets, and budgets are burned very quickly on that medium. Rich online content is where the promotional trend appears to be headed. I think there is still a certain embarrassment and hence reticence amongst some lawyers about ‘promoting’ their services.

Kempster: Although television has become cheaper, unless

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heart of this. This all comes back to what is considered as capital for marketing – it could be personnel, materials or outsourcing labour intensive activity.

All: Steve, from a banking perspective, how do you see the legal market playing out over the next 12-18 months?

Arundale: In the immediate future we are seeing a

Arundale: How do you up-sell between partners and skill

significant upturn in the economy and some of the ‘Zombie’ firms will survive but we would anticipate some further fall out, the saviour for all could be an increase in base rate and the returns associated with client balances. Consolidation will also filter down from top 100 to smaller firms. There is evidence that North American capital is coming into the market and this offshore capital injection may support some firms.

sets? How do you feel about multi-disciplinary ABSs, such as PwC?

Modern Law would like to thank all for attending.

a firm is going for a huge hit on brand recognition with their marketing spend, it won’t work.

Derry: YouTube are now selling advertising space and this is a very cost effective way of building brand awareness.

Nash: It is important, still, to consider the client. Just

because these organisations now have the capacity to do the work, it is not a guarantee for them winning it but they will certainly have their share of the market.

MLM: Is the development and delivery of a marketing plan a viable reason for seeking external investment?

Kempster: If firms are looking for external investment to

grow and, in time, acquire, they need a very clear idea of their target markets, the anticipated returns and build into their prospectus for investors. Marketing should be at the

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IS LATERAL HIRING A GOOD BET FOR AN ABS? Mark Brandon asks whether the favoured method of law firm growth – partner lateral hiring – will work for ABS law firms.

Smoke and mirrors One of the main reasons lateral hires sometimes don’t work is because the process of revenue-analysis is so poorly-executed, by the partner-candidates themselves, by recruiters and by the hiring firms. To begin with, many partners, if not most, have little real idea of the financial ins-and-outs of their own practices until they decide to move. Quite bluntly, they haven’t really had to bother much about it until then. They have been responsible for billing as much revenue as possible and – especially in UK firms – may not have had ultimate responsibility for the level of discounting, for instance, or even their hourly charge-out rate.

A partner’s business will rarely, if ever, be planned in the conventional sense. Rather, it will consist of a rag-bag of disparate clients who have drifted in over the years, with many partners proudly never turning away an instruction.

As a result, asking them to write a business plan describing their practice is often more of a question of holding a finger in the wind than an exercise in technical accomplishment; their grasp of the previous year’s revenue may be shaky enough, asking them to predict next year’s is akin to witchcraft.

F

or the last four years I have conducted an annual survey looking at the performance of lateral partner hiring in the London market. The full results are available from my website, so I won’t go into much detail here. Suffice to say that around 400 partners move between major law firms in London every year and the statistics would seem to indicate that around a third of them are not going to work out to the satisfaction of all concerned within the medium-term.

Partner lateral hiring is one of the three main areas of law firm growth (the other two being merger and organic or ‘grow your own’), and it is certainly the quickest ‘fix’ available for the law firm craving rapid expansion. The theory is simple enough: hire a partner – a ‘big-hitter’, in recruitment parlance, is preferred – and they will bring their ‘following’ with them, an active revenue stream consisting of clients who will instruct them in their new environment.

Yet while this is fine in theory, anyone with any experience in law firm management will tell you that it is far from a guaranteed hit. For an ABS, the challenges will be greater still. Yet the kind of financial projections and detailed analysis required by investors outside the legal profession is precisely what the process of law firm lateral hiring needs.

Partners in US firms, where partners have a much greater personal responsibility for client ownership, tend to be more on top of the financials, but not necessarily.

Recruiters, usually, but not always, lawyers who left the profession long before partnership, are rarely much help.

But the main responsibility has to lie with the hiring firms where few of the interviewing partners will have had to write anything like a proper business plan and so have little real experience in interrogating one in detail. Rarely do law firm partner business plans contain any kind of real market analysis, information on threats, or any kind of ‘Plan B’ in case disaster strikes and the promised clients do not arrive.

Law firms’ usual response to all this ‘maybe, maybe’ stuff is to conduct what has become known as ‘due diligence’, which effectively amounts to written or verbal assurances from the clients that they will instruct the individual concerned if they move. Alas, these assurances are far from cast-iron; the promised practice can literally evaporate before the hiring firm’s eyes. For instance, I recently learned of one partner hired with the promise of a £2m+ practice whose billings in the first year with the firm were in four figures. I daresay I could have collected more with my baseball cap out at my local Tube station.

‘Those who own the client relationship can simply walk away if they have had enough, taking large swathes of revenue with them’ ML // April 2014

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This can all be quite perplexing for those used to business plans with in-depth research, detailed revenue forecasts and proper information for the potential investor.

Caveat investor The concept of simply buying revenue piecemeal from another firm – which is, after all, what lateral hiring is at base – is almost unknown in other industries, and it gives a slightly woolly, organic feel to the sector which can prove treacherous for the investor. Law firms do not see themselves as ‘investors’ in lateral hires in the classic sense, even though they most certainly will be, in financial terms, for the first few years.

The lateral hire arena is highly-competitive for the best partners and teams, who will have multiple options, and the hire is more like a dance than a commercial acquisition.

Partners seem themselves as professionals first, businessmen second (if at all) and thus negotiations often take on the quality of a matching of equals rather than a grubby purchase of additional fee-earning capacity. Ask too many questions, require too much information, refuse to sweeten the deal quite well enough and you will lose them and the promise of revenue to one of your rivals.

For an ABS, there is the added complication that lawyers are, by nature and nurture, highly risk-averse. Scratch that; they are risk-aversion experts, herd-animals who have learned that the safest way to react to change is to wait until others leap, which is why the sector has been so stubbornly resistant to the forces of business evolution which have broken and remade virtually every other industry in the last few decades. Thus far, ABS law firms in the UK have concentrated on specific areas of the consumer market, where the reputations of individual partners – excellent as many of them may be – are almost irrelevant; brand reputation and consistent, efficient delivery of service are what matters to a customer who may only ever have a single interaction with the firm. A claimant personal injury partner, therefore, cannot really claim a following as such.

Where commercial law firms, BigLaw, are concerned, partner reputation is crucial to the maintenance and development of the ongoing commercial relationships.

The ‘big-hitter’, trailing substantial client following of corporates or banks, will have numerous options, and many of those options will be traditional law firm partnerships where financial matters – save for the totemic level of Profits Per Equity Partner – take a backseat. Faced with a choice between that and an ABS where the accent may be on detailed financial reporting, transparency and accountability, most partners will stick with perceived safety. Beyond that, a ‘BigLaw’ ABS will face the other problem with laterals: what can bolt-on, can just as easily bolt-off.

‘Potential ABS investors need to take a long hard look at what is on offer and take a large, large pinch of salt into any meetings involving partner business plans, in particular looking at how the client relationships are tied in, and who ‘owns’ them, if anyone’

ML // April 2014

Nedcor, a warning to the UK The augurs for ABS business looking to buy its way into BigLaw are not, unfortunately, that good. Back in 1999, South African bank Nedcor bought the country’s second largest law firm, Edward Nathan & Friedland, for something like £40m, the largest move in the country’s pioneering experiment into allowing external investors in law firms. The partners were locked in via a ‘golden handcuffs’ agreement, for five years. Alas, five years later, the bank was effectively forced to sell the firm back to the partners, many of whom had signalled their intention to depart once the handcuffs were off, taking their clients – and the future of the firm – with them. The purchase price was around £5m. I have for some time been of the view that the Nedcor experience should be a warning to investors looking at the UK market under ABS, that attempting to create commercially-led ABS practices is challenging to say the least, because those who own the client relationship can simply walk away if they have had enough, taking large swathes of revenue with them.

UK firms have long understood this, and have attempted to ‘institutionalise’ large corporate relationships, having multiple client relationship partners with restrictive covenants, garden leave and even revenue claw-backs in place for lawyers who dare to leave and try to take clients with them. US firms, by contrast, operate a highly-personal client origination system, with compensation linked directly to how much revenue a partner can drive through his/her ‘ownership’ of the client. Most operate ‘at will’ partnerships, with no notice and no restrictions, a model which can be highly volatile.

The challenge for ABSs will be convincing potential lateral partner hires currently sitting in either a UK or US firm environment that they and their clients will be better off if the partner is part of an ABS. My own view is that the difference between what is available, both to the partner and, crucially, to the client, via the ABS structure must be meaningful and demonstrable. Bluntly, partners currently sitting in moribund UK firms in parts of the extensive UK ‘mid-tier’ – what some commentators have labelled ‘zombie firms’ – should be most susceptible to hiring into a new environment where they have the opportunity to create a truly different service.

Whether they have the get-up-and-go necessary to get up and GO, however, remains to be seen. Potential ABS investors need to take a long hard look at what is on offer and take a large, large pinch of salt into any meetings involving partner business plans, in particular looking at how the client relationships are tied in, and who ‘owns’ them, if anyone. Unless you are hiring a partner or team simply for their skills, before you go signing on any dotted lines, remember Nedcor.

Mark Brandon is managing director of Motive Legal Consulting, a consultancy dedicated to helping law firms grow strategically. www.motivelegal.com for more information and free downloads of Motive’s exclusive research into partner lateral hiring.

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THE MANCHESTER LEGAL AWARDS 2014 The annual Manchester Legal Awards took place at the start of March to celebrate established and emerging legal talent. Charlotte Parkinson, Modern Law, went along to meet some of the winners. successes of the night, also winning the Crime and Regulatory Team of the Year categories.

Other winners on the night included, Coby Benson of Bott and Co, who scooped Associate of the Year and the firm also won Small Firm of the Year. Eversheds won the award for Corporate/Commercial and Property Teams of the Year, with 9 St John Street Chambers picking up the award for Pro Bono Initiative, amongst others.

‘If you push yourself and make sure you are doing your best for your clients, there is plenty to look forawrd to’ Raana Afsarpour There was certainly no shortage of young legal talent to be celebrated on the night and Express Solicitors Raana Afsarpour, who forms part of the firm’s Employers Liability

T

he cream of the legal crop turned out at a glittering ceremony for the Manchester Legal Awards 2014 at the Midland Hotel, Manchester. Swathes of legal professionals were welcomed from across the North West to the event which was steered by the exuberant Chief Executive of the Manchester Law Society, Fran Eccles-Bech and hosted by MEN Media Managing Editor Eamonn O’Neal.

‘Congratulations to all the winners who have demonstrated exceptional performance over the past 12 months and are no doubt set for great success over the coming year’ Fran Eccles-Bech Speaking of the night, Eccles-Bech, said: “Once again, Manchester’s legal community came together to celebrate the cream of the talent in our region, and what a celebration it was. Congratulations to all the winners who have demonstrated exceptional performance over the past 12 months and are no doubt set for great success over the coming year.” She added, “To win a Manchester Legal Award with such fierce competition is no mean feat and certainly one to be proud of.”

Mike Mackey, of Burton Copeland, who has acted on some of the most high profile criminal cases in Manchester over the past 40 years, scooped the prestigious Lifetime Achievement Award and his firm had some of the biggest

Team, won the award for Trainee Solicitor of the Year.

Speaking after the event, when asked if she expected to win the award, she said: “Absolutely not, it was an extremely difficult category and I was trying to convince myself I wouldn’t win to avoid disappointment. It feels great to be rewarded for something I feel so passionate about.” She also added that the future of the legal profession looks bright for people that take initiative, saying: “If you push yourself and make sure you are doing the best for your clients, there is plenty to look forward to.”

Modern Law would like to thank the Manchester Law Society for welcoming us to their event.

ML // April 2014

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THE FUTURE SCORE

The first annual Modern Claims Conference was held on 25th March at Stamford Bridge, Chelsea FC. Charlotte Parkinson, Modern Law, spoke to Anthony Hughes about his thoughts on the day’s proceedings.

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n array of industry experts from across the insurance and claims arenas flocked to attend the first annual Modern Claims Conference. With an exceptionally strong line up of speakers, it was no surprise that the delegate’s were made up of key industry players and influencers.

The day’s proceedings were expertly and indeed humorously chaired by Tim Oliver, CEO of the Parabis Group. Anthony Hughes of Jackson Hughes Consulting, who sat on the solicitor panel on the day, spoke to Modern Claims after the event to offer his thoughts on the day, saying; “As an independent and someone who has worked on the legal side of the insurance industry for over two decades, I found it extremely interesting to hear the insurers thoughts on how the Jackson reforms have played out so far for them and in particular to hear that they don’t believe that they are getting the benefits out of the reforms that they expected.”

Hughes went on; “The two key revelations that came out of the day were that the Insurers haven’t seen any meaningful drop in claims frequency and that motor premiums had not dropped significantly, nor were they now expected to do so.

Every insurer I spoke to prior to the LASPO implementation was saying that frequency was absolutely key, in that if the frequency of claims didn’t go down, they wouldn’t see the full benefits of reform.”

When asked how the government would be able to deal with the changes in the market, Hughes commented; “I’m not sure how the government are going to deal with the fact that there hasn’t been a corresponding drop in motor premiums.”

He went on, “If this is the case 12 months on, should we expect more to change or is this new status quo for the market place? If it is the new status quo, arguably a lot of people have gone through a lot of pain to achieve very little.”

Hughes believes that one of the main influencing factors as to why the market has not responded in the way that Jackson set out is because the reforms were not implemented as recommended; “A number of the proposed reforms (which were extremely important), did not become part of the legislation.” Jackson has since commented that he stands by his original recommendations that this had to be a package of interlocking reforms which, to date have not been implemented in the way he wanted.

The potential future impact on the consumer of further change to the market was also highlighted on the day and Hughes said of this issue; “There is certainly a wider political issue which must be considered but the main impacts on the consumer to date have been a reduction in choice because of market consolidation and an increase in the direct cost of claims services. Even though claims frequency is higher than many hoped, business models must still operate more efficiently and only the best businesses will survive as income levels have been slashed.”

A key theme from the conference was the increasing rise in technology and Hughes agreed the industry will significantly change because of it: “Ringing up a lawyer or claims professional between the hours of 9 and 5 will become the exception as clients become increasing comfortable with Apps and the like. I don’t necessarily agree that it will take 5 years to feel the full impact of reform because of technology driving change and turning it into the ‘norm’ much quicker.”

Hughes believes the uncertainly is set to continue in the short term and that cases such as Mitchell will add fuel to the fire in this regard; “the way that the results of that case are being implemented will continue to cause change and it will only be when we have a greater understanding of the procedural implications, that we will know how things will pan out.

People may treat Mitchell as a game and try and score points at the moment but we will reach a point of equilibrium, where people realise they have got to work alongside one another.”

Andrew Richie QC’s closing address on the day highlighted a key issue, which Hughes believes could change the scope of the market altogether; “The lack of resources in the courts system is a real concern, It is understandable that they will take a no-nonsense approach immediately post LASPO because they want to show they mean business but if they can’t deliver simple efficiencies such as electronic payment and e-filing, then users may vote with their feet. Claimant lawyers and insures who are sophisticated users, may well sign up for the type arbitration agreements recommended

by Ritchie as a result and so take control.” Richie’s closing remarks provided real food for thought and demonstrated a genuine alternative to court led dispute resolution, without this type of innovation arguably the future for the claims industry certainly remains blurry and only time will tell who the winners will be.

Anthony Hughes is a Solicitor and Consultant at Jackson Hughes Consulting

ML // April 2014

The Eclipse Proclaim Modern Law Awards were launched in 2013 to celebrate and identify sparkling talent and success in entrepreneurship, market development, business management and best practice in the modern legal services arena.

Nominations Open ABS 1 – 25 employees ABS 26 – 100 employees ABS over 100 employees Lawyer of the Year Non-Lawyer of the Year Team of the Year Rising Star of the Year Innovation of the Year Technology Innovation of the Year Entrepreneur of the Year Compliance Officer of the Year Client Care Initiative of the Year Deal of the Year External Investor of the Year New Entrant of the Year Best Marketing Campaign of the Year Law Firm of the Year Outstanding Achievement of the Year Lifetime Achievement Award

Wed 1st October 2014, The Dorchester, Park Lane www.modernlawawards.co.uk

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AHEAD OF THE CURVE...

The recent upturn in the conveyancing market has meant that many conveyancers are beginning to reap the benefits of change. Charlotte Parkinson, Modern Law spoke to Dolores Evelyn, Sales Director at Eclipse Legal Systems, about how conveyancers should be managing growth in a thriving market.

D

espite the recent changes to swathes of the legal sector, one area of the market that is certainly experiencing an upturn in work is the conveyancing sector.

So, for conveyancers who are now beginning to enjoy the benefits of the upturn, the question now is how they can manage growth and how they can be prepared to best take advantages of new opportunities in the market.

‘Conveyancing is reasonably low margin, so it is always vital to use systems that cut the fat from processes as well as enable endclients to feel engaged and part of the whole process’ Dolores Evelyn As well as a general upturn in what has been a tough period of economic downturn, government schemes, such as ‘Help to Buy’ and the offer of 95% mortgages for first-time-buyers, are also beginning to contribute to the sector’s success. While some predict that these new schemes will offer those who have previously struggled to make it on to the property ladder, that all important ‘legup’, cynics predict they will add fuel to the fire that will create a new housing bubble, that will burst once again.

Whatever happens in the market, conveyancing firms need to be aware and up to date with latest technology that can help them stay ahead of the curve of change.

skype, as well as enabling them to track the progress of their conveyance, making the overall process smoother and more enjoyable for the client. Another area in which technology can assist is during the recruitment process, as conveyancing firms looking to bring in new staff to growing departments can ensure they remain compliant with SRA regulations.

The real question now for conveyancers is how they can be best prepared and make sure they implement the right systems and processes, to make the most of the growing market and avoid the pitfalls of a potential downfall in the market in future. The sector must now modernise, keep ahead of change and learn how it can become more efficient in order to make the most of the new legal era.

Dolores Evelyn of Eclipse Legal Systems, comments: “It has been fascinating to see which conveyancing firms have been able to not only survive the downturn, but come through the other end with ambitious growth plans. There seems to be a real pattern - the successful ones are the firms that have carefully implemented case management technology to keep processes tight, and service levels up. Conveyancing is reasonably low margin, so it is always vital to use systems that cut the fat from processes as well as enable end-clients to feel engaged and part of the whole process.”

In the wake of change, for better or worse, conveyancers must always bear their clients in mind and one way for firms to do this is by ensuring they are utilising the best technology. This can enable current and potential clients to easily contact and interface with their solicitor, through a variety of channels, including, e-mail, telephone and via

ML // April 2014

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Features

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IT CROWD

ML // April 2014

58

IT Crowd

Call that disruption? That don’t impress me much!

Our resident IT guru Charles Christian writes…

We hear a lot about so-called “disruptive technologies” today but are there really any new technologies or business process models that could drastically change the legal IT landscape in the near future?

One of the topics on the agenda for the LexThink event (which took place in Chicago in March) was provocatively titled The End of Richard Susskind. Explaining himself, the speaker Will Hornsby said “Modern-day Legal Futurism started with the advent of the millennium and then gained steam from the books of Richard Susskind. With titles as provocative as the litany of Bourne movies, Susskind foisted his vision of The Future on us. Sure he was mostly right but should we be grateful for the narcissistic obsession of our futures that his progeny has generated: Evolutionary this, Reinvent that… Extinction, Disruptive Technology, Change or Die...”

I can sympathise with this point of view. As someone who spends his life immersed in the world of legal technology, looking at the type of IT systems law firms, law offices and legal service providers use, one of the biggest bugbears I encounter is the over-use of PR hype, marketing spin and buzzwords. In particular, I’d like to see an end to the use of the word “disruptive”.

Why? Because no longer can a company simply launch a new product or service. No, they have to launch a disruptive new product or service.

Now the invention of sliced-bread was disruptive, as was the launch of the first bank ATM hole-in-the-wall machines. But a new legal document management system that is based on Microsoft SharePoint or available in the Cloud is not disruptive, it’s just a variation on the same-old, same-old.

For instance, if a tech company pitches me a “the best thing since sliced-bread” new product or service that I recognise as being neither innovative nor original, I ask myself two questions.

The first is: do they think I’m so stupid and naive that I will fall for their marketing spin? And, secondly, if this isn’t hype, are they so far behind the curve they genuinely believe they are being innovative and don’t realise it’s all been done before?

Neither option inspires any confidence in me and, rather more importantly, nor will it impress law firm management teams and IT directors, who are equally astute and savvy.

Among the many mistakes wannabe innovators make is to focus way far much emphasis on the technology and not enough on the business processes this technology is meant to support. The phrase I’ve heard used to describe this is “throwing tech at a non-solution for a nascent or nonproblem.” This is the IT equivalent of those kitchen gadget catalogues that also provide solutions to problems you never knew you had.

‘Among the many mistakes wannabe innovators make is to focus way too much emphasis on the technology and not enough on the business processes this technology is meant to support’ This quest to be disruptive also often blinds software companies in the legal IT industry to two other characteristics found among successful innovators. The first is that you don’t have to be first, instead take something tried and tested – but then just do it better. Which is precisely what Apple has being doing for over 30 years.

This point was brought home to me last year when I was sitting on the judging panel for a national newspaper’s legal industry innovation awards. The entries almost inevitably were described by their advocates as being “disruptive”.

The second is to ask what law firm users want from IT – and the answer is usually they want convenience. They want to do what they’ve always done but quicker and easier than before.

Or, to put it another way, rather than reinvent the wheel, the innovator should aim to remove steps from an existing process to make it simpler, faster, better and, ideally, cheaper.

But here’s the thing: not only were the majority of the submissions distinctly non-disruptive but most of them were not even innovative. For example, there were a whole raft of online legal services that merely followed in the footsteps of the Blue Flag service Linklaters launched as long ago as 1996.

There were another set of products that were a rehash of the Epoch Software/Desktop Lawyer business model from the Dotcom Era.

For example, how many times have you encountered this situation: you exchange copies and collaborate on the drafting of a document digitally but when it is finally completed, you have to print off the signature page, sign it by hand, then scan it and add it back into the bundle?

The vendor who cracks digital signatures and makes them mainstream (esignature technology already exists but is still on the fringe) will win my best thing since sliced-bread award.

More to the point, this approach is also counter-productive.

Charles Christian, IT Crowd Consultant Editor and Editor in Chief, Legal IT Insider

ML // April 2014

IT Crowd

Hedging your bets Law firms are increasingly needing to support out-of-the-office and mobile working - what would you recommend as an ideal software and hardware bundle for what Americans rather dramatically term legal road-warriors?

Ideally there should be three optional methods within the bundle. A browser based access to avoid the need for locally installed software along with a traditional Windows option to provide richer navigation and more advanced functionality. Thirdly there should be the facility to download ‘a file’ or ‘files’ to allow completely disconnected access to selected data. The browser based option should be hardware independent, allowing the “warrior” to work from I-pad, I-phone, tablet or laptop, wherever they are. The Windows option, using remote desktop technology, enables access via any Windows platform e.g. notebook, laptop or tablet /I-pad (via Citrix). The disconnected option may download data to Excel spreadsheet or could take the form of a consolidated PDF file. This can allow isolated perusal or enquiry and the checking out of individual documents for remote editing. There should also be the facility to upload or ‘sync’ externally gathered information once connectivity is reestablished.

The ‘connected’ methods are increasingly viable due to the widespread availability of WiFi, however, the ‘warrior’ still needs to anticipate circumstances where there is no internet access.

From a hardware perspective, having the three optional methods of access give a user pretty much free range in terms of choice. It can literally boil down to personal preference. A notebook or laptop probably provides the greatest flexibility but a tablet is more portable and of course – more trendy. Smartphone’s are ubiquitous these days and need to be catered for but they are obviously limited in terms of display area and ease of typing. They are more suited to the checking of key performance indicators and notifications as opposed to full system access.

Software, such as our own Liberate suite, supports remote working in all three modes. This provides roving access to cases, documents, emails, time recording and more.

At the centre of much of this are pieces of software that facilitate the remote connectivity. Of course it is essential that firms offering mobile working consider the security aspects of the systems they deploy and this middleware forms a key part of the ‘bundle’.

59

A false economy IT training - do law firms really need to invest so much on IT training - and, if they do, how do you get lawyers to take the courses?

Ah, IT training… invariably the one area that is seen as ripe for cost cutting.

But to do so really is a false economy.

When looking at IT purchases, training spend is generally a smallish percent of the overall project spend. It’s by no means an insignificant amount, but when looking at the bigger picture it’s not where the bulk of the investment is going (that could be on software licensing, consultancy services, development work, and so on). But it’s often seen - by law firms - as something the IT vendor is layering on top, something that could really, surely, be dropped.

This is not the case, and it’s amazing that the one thing needed - up skilling and empowering staff - to really make an IT project sing is seen as disposable. After spending thousands, tens of thousands, or even (at the big end) hundreds of thousands of pounds on a software implementation, you need to know that the very people that are supposed to benefit - your staff know how to use it.

Lack of training is often a key element when firms are finding it difficult to generate buy-in for a new IT project.

Familiarity, hands-on use, and the ability to ask questions (and get answers) all help staff to connect emotionally with something ‘new’ - and to hinder this relationship is to make the project unduly difficult.

Part of the problem may be that the impact of new IT is underestimated. Perhaps oversimplifying here, but a belief that “hey, we can all use iPhones and Microsoft Word, so new IT can’t be that hard”, can be damaging.

New IT isn’t necessarily that hard, but if it carries with it a new way of working, then you need to be building in that emotional and intellectual attachment - and that’s where training comes in.

How do you get lawyers to take the courses? Maybe we should look at the investment required to make an IT project a success. The difference between a smooth transition, and a more challenging one, can often be quantified in the training costs. If the decision to spend on the project has been made, it does not seem wise to jeopardise its success by skimping on the one thing that is the key initial interface between your staff and your new technology.

Darren Gower, Marketing Director, Eclipse Legal Systems

So, our warrior needs to hedge his or her bets and choose a system that allows multiple methods of operation. That way they can wander free as a bird, yet still get some serious work done.

Phil Snee, Development Director, Linetime

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IT Crowd

Change in a new Global Reach market We hear a lot about so-called “disruptive technologies” but are there really any new technologies or business process models that could drastically change the legal IT landscape in the near future?

Law firms are currently being challenged by many internal and external factors as well as a continuous stream of changes that must be dealt with such as Alternative Business Structures and the Jackson Reforms. In addition, the increased level of mergerand acquisition activities and a greater demand from clients are all placing a strain on the financial resourcesof firms today. This means firms must keep on top of their financial position through a measureable improvement in lock-up, an increased realisation of fees and improved profitability.

To do this, they need the technology in place that offers a dynamic, real-time view of all their business information no matter how or where it is stored. This is where ‘disruptive technology’ such as Business discovery comes into its own as it integrates all of a firm’s missioncritical business systems into one and transforms data into strategic information for planning, decision-making and financial and performance monitoring. It improves business agility and manages key performance indicators better by empowering staff to monitor their own performance and recognise business development opportunities as they arise. Business discovery can be used as a powerful tool for firms as it enables them to identify direction and boost revenues through financial monitoring and the management of marketing, business development and HR. So how is business discovery a ‘disruptive technology’?

Business discovery is a new kind of business intelligence software as it lets firms stop guessing and start knowing how to make faster, smarter business decisions. It enables firms to analyse all of their data sources and answer any question about their business instantly as users can consolidate, search and visualise data for unprecended business insight. Driving business discovery is a patented associative search technology that sets it apart from other traditional business intelligence tools. Business discovery enables millions of lines of data to be pulled from multiple sources and analysed in real-time, enabling users to interactively explore their data and drill down from an organisation-wide view to single transaction level in a matter of clicks. It enables users to get answers to questions they hadn’t even thought of before as it fuels the creative, non-linear thinking that generates ideas and helps law firms stay dynamic and responsive in today’s challenging market.

Barry Talbot is the Managing Director for Informance www.informance.co.uk

ML // April 2014

Law firms are increasingly needing to support outof-the-office and mobile working - what would you recommend as an ideal software and hardware bundle for what Americans rather dramatically term legal road-warriors?

Mobile working introduces new challenges; staff want to use their personal devices known as (BYOD), bring your own device to work from anywhere anytime, global workforce and operations are the new drivers.

Therefore, is it a question of software and hardware? We all agree that on the majority of occasions, when staff are given the tools, a task in hand will be completed. Of course the road warrior may have personal preferences, not only to use their own tools but how they use personal online and file sharing accounts without any formal IT approval.

How do you control these factors; is the question just about software and hardware? Security, compliance and data leaks in the workplace present real IT challenges.

Looking at this from a firm’s perspective, we have to protect company data, assets and ensure security is met. How do we do this? Firms must consider asking for help with implementing managed IT infrastructures.

Architecture and design of the IT Infrastructure needs to leverage existing investments, mobilise workflows, such as SharePoint and network shares with no data migration. We are in a consumerisation phase of IT; it is very much about my workspace, my devices, my apps and my data. The adoption of Cloud means users are able to check out, edit, save and then check in documents into tools like SharePoint from their mobile devices. The Cloud is enabling such global reach for firms all within the data sovereignty regulations if IT infrastructures are designed and implemented correctly.

Ask for help, look at how data is stored, accessed, synced and shared. The road warrior needs instant file share and data access from any device and must be easy to use. Firms need to think about how they will protect the company data; a simple answer is with a combination of mobile device management tools and compliance based solutions. For collaboration, firms will not only meet the road warrior’s needs but incorporate data security, compliance with full reporting and auditing for control. To summarise, the benefits from device security include enabling remote wipe and device locking if a device is lost or stolen and not limited to include data expiration policies for mobile devices and data.

Priti Mehta, Group CEO, Acuutech

IT Crowd

Amongst the clouds Cloud storage and file sharing services have been widely adopted by law firms and businesses in general to provide a flexible and highly productive processes for staff on the move. The benefits of these services are without question and are increasingly in demand. Cloud storage services such as iCloud and Dropbox have become increasingly popular quickly, without any controls. Their popularity stems from the simplicity of use and in many cases; this has happened without the knowledge or approval of IT teams and information governance personnel. With all the benefits come several problems and risks, for example, compliance and how to regulate the data stored in these services, revocation of access as necessary and auditing of information sharing outside the business. Use of cloud storage also raises many challenges for businesses looking to achieve standards of information management.

However with proper principles of access and management cloud storage can be successfully deployed: • Control who has access to upload data to these services by all access methods. Regulating data copied to removable media, mobile devices, uploads to website and e-mails sent out ensures only approved individuals can utilise cloud storage services in any way. Limit access to cloud services to senior personnel with relevant use cases and review access regularly. Where possible selectively control what data can be transferred in to cloud storage.

• Specifically nominate the company approved service and then restrict or block other services available on mobile devices (tablets/ smartphones/laptops) via an MDM technology so data cannot easily be transferred to other or between “clouds”.

• Select and deliver a corporate service for all users. There are a number of corporate focused public cloud services available but a more secure and effective solution is a true private cloud offering giving all the benefits from a dedicated corporate solution without risks of a common shared platform. Select a service meeting corporate governance and audit requirements, allowing administrative controls to override any user behaviours, preferably utilising dedicated UK data centres or on premise storage solution which includes cloud antimalware and encryption. Retain control and visibility of your data.

• Implement a strict use policy and provide comprehensive education to ensure users understand how to use the services and situations to avoid such as downloading from web-portals to public access devices. If the private service is as easy to use as the public offerings adoption rates will be high.

• Regular audit to ensure services are used as expected and procedures are not circumvented.

Mike Batters, Technical Director and Co-Founder NETprotocol Ltd

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Facing your fears Predictions about the paperless office were first made way back in 1975 and today, Google will return pages of results promoting the benefits of the Paperless Office.

We all know there are huge savings to be made, the consumption of ink, stamps, envelopes and paper will reduce; as will staff time in preparing post and document bundles. Large filing cabinets and offsite storage won’t be needed, saving a significant cost to the firm. It’s more efficient; electronically stored documents are held more securely, can be retrieved quickly (without searching through files or retrieving from storage) and then shared more easily. And of course there’s the positive impact on the environment.

So why, in today’s technology enabled society are so many law firms struggling to embrace the paperless office? There are lots of barriers: the perceived cost of the equipment required to facilitate paperless working, a lack of trust in technology and fear of what will happen if the system crashes and work is ‘lost’ are just some of the challenges that need to be overcome.

Linda Heald & Co began their journey four years ago by ensuring they had adequate back-up services, both on and off site – so that documents can be efficiently stored and retrieved, and will always be accessible – even if disaster strikes.

They scan post immediately and save it in the appropriate file on their case management system. All incoming paper post is then kept in a small file whilst the matter is live (outgoing letters are not printed), but as soon as the file is closed, the paper is sent for confidential shredding (and is collected for free by the shredding company). Original mortgage deeds have to be retained for Land Registry applications; they are kept in a central place – filed according to lender and date.

Linda Heald, principal of Linda Heald & Co says she would never go back to a paper based working environment.

The benefits they have achieved in terms of storage costs, efficient working and the ability to retrieve documents instantly are enormous. This is turn enables them to provide a top class service to their clients. Linda offers a few words of wisdom for anyone wanting to achieve the digital case file, “Invest in good quality scanners and back-up systems. Use a good quality case management system (such as Redbrick Practice Management), train your staff to change their ways of working and go for it! You could even reward staff with a pay rise when the bills start to come down!” www.lindaheald.co.uk www.redbricksolutions.co.uk Jo Hodges, Head of Sales and Marketing, Redbrick Solutions.

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62

IT Crowd

5 minutes with... James Molloy, Ontime Group Q

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

A

I started working in legal services in 1988 and at that time, I doubt if the vast revolution in regulation and the impact of mass marketing we have since witnessed could have been predicted - I certainly didn’t see it coming!

Q

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

A

I honestly don’t believe we’ve seen it yet. We’ve seen various ABS organisations enter the market,

but much of what they’ve done is about the monetisation of existing customer bases. They really haven’t set about creating new customer bases or delivering legal services in different ways, which was what was intended by the Legal Services Act.

Q A

Who inspires you and why?

My personal hero is Brunel. He repeatedly butted heads with the forces of conservative thinking around him in order to deliver his vision and what he achieved in his relatively short career is aweinspiring. His ideas were out of step with those around him, but time has proven him right in many ways.

Q

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

A

Everyone I have ever worked for has been a mentor and I have learned something from each of them along the way. But I think the most valuable piece of advice I’ve ever been given by a mentor has been that ‘you only get one go on the merry-go-round’. It’s kind of a Carpe Diem sentiment and it really does inspire me to go out and grab more opportunities and get more done.

Q A

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

I’m really a frustrated engineer or an inventor at heart. Technically creative people like James Dyson fascinate me in terms of what makes them tick and what drives them.

Instead I just tinker with our system, driving the IT guys crazy!

James Molloy is Operations Director at Ontime Group

Unity Law Proclaim Practice Management powers multiple award-winning Disability Discrimination specialist.

South Yorkshire based Unity Law was formed by litigation expert Chris Fry in November 2010, with 6 staff providing a specialist service for victims of industrial disease, clinical negligence and work-related injuries.

The practice has since won numerous high-profile awards for its service and now has over 25 staff.

The Challenge: As a new start-up business, Unity Law needed to differentiate itself from more established competitors by providing a higher level of service and a unified approach to client care - “clients not numbers”. To achieve this, a Practice Management Software solution was needed that would free up fee earners to maximise quality time spent on each client case by automating administrative tasks.

The Solution: A Proclaim Practice Management solution was implemented throughout the practice to create a seamlessly-

ML // April 2014

integrated system providing an efficient and consistent approach to each case.

The inherent flexibility of Proclaim would also allow for straightforward integration with productivity solutions such as document scanning, and expansion into new work areas in line with the practice’s strategy for growth.

The Results: Time-stealing tasks have been eradicated, with Proclaim automating non-value adding tasks to enable fee earners to focus on the complex litigation cases taken on by Unity Law. Integration with document scanning now means that Unity law’s ‘document inception’ processes are seamless and enable fee earners to access all client and case related information digitally, onscreen.

Compliance is assured thanks to Proclaim’s controlled workflow processes which ensure that no action is missed and timely reminders are issued around legislative requirements.

Proclaim’s flexibility has allowed Unity Law to electronically exchange data with its costs drafting firm, Compass Costs, removing the delays

inherent in postal transit of bundled documentation.

Unity Law is looking to continue its growth with ambitious marketing plans, the goal being to become the UKs leading Disability Discrimination law firm.

Bullet Points: • Single dedicated Practice Management solution for Disability Discrimination work • Document inception process paperless operations • Automation of non-value added tasks • Seamless integration with costs consultants • Rigid compliance enforced through workflow “We saw Proclaim as the market leader. It has given us clear operational advantages, putting us ahead of our business plan aims.”

Chris Fry (Managing Partner), Unity Law For further information, please contact Darren Gower, Marketing Director at Eclipse Legal Systems via darren.gower@ eclipselegal.co.uk, or call 01274 704100.

Alternatively, visit www.eclipselegal.co.uk

Why switch to client-centric Case Management Software?

For less boring paperwork Proclaim is the UK’s leading Case Management Software solution, in use by 20,000 legal services professionals.

Proclaim streamlines processes to enable you to focus on what’s important - your clients and customers.

Deliver a superb experience for them and maximise profitability for you.

More profitable people work • Hugely configurable - have it your way • Manage your full range of matter types • Instant, slick online services for clients and customers • Automate procedures and document production • Access live KPIs and performance data • Integrate with business partners

Get the competitive edge

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