OCTOBER 2017 THE MAGAZINE OF THE CONFEDERATION OF THE SOUTH WALES LAW SOCIETIES
end of summer ball See page 12 for more information
CONTENTS PRESIDENT REPORTS
It hardly seems like two months since writing my last report, but then time does fly, especially over the summer.
12 End of Summer Ball 2017
10 Chancery Lane News
David Dixon gives us a rundown of the latest developments from Chancery Lane as well as Cardiff & District.
14 “He Has His Father’s Nose” 16 The SRA Risk Outlook 2017/18 18 Outsourced Cashiering and Your Bottom Line
Before I took over the Presidency I was asked by someone why I wanted to do it.
20 Closer Together?
I am delighted to be writing this article in place of the current President Andrew Twomlow whom I understand has vast commitments currently, in addition to his Presidency Duties!
22 The Summer Palace Llandaff, Cardiff
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time does fly It hardly seems like two months since writing my last report, but then time does fly, especially over the summer. I trust you all had an enjoyable time and were able to fit in some time off to recuperate. I know that I certainly needed the latter!
e were not blessed with the best of weather this year and even September has turned out to be less of the Indian summer and more of the Indian monsoon. I have been told that we can expect more of this weather in the future. I am less clear on whether this is as a result of global warning generally (which of course does not exist as President Trump has decreed so) or whether this is one of the many hidden stings of Brexit. I suspect the latter and blame Boris for it! In any event, I managed to squeeze in a few weeks in the south of France as well as a long weekend on Mallorca for a friend’s wedding. As is common with such enjoyable periods, the memories are now dim and distant and we turn to the autumn and winter period. With the holiday period, the presidential activities have been curtailed somewhat as a result. It was, therefore, good to have a get together on Friday 29 September at The Confederation ‘end of summer ball. The event marked a return to the more formal dinner style, it being held again at the New House Hotel in Thornhill, Cardiff. A good number attended and, for once, the weather was kind in that we did not face pouring rain. As the dinner is held in the marquee at the hotel, there have been occasions on which I have attended events there when the wind has howled and the rain has hammered on the tent. We were fortunate not to have such issues this year. The event was ably compared by our own Michael Walters, who was in sparkling form as normal. My thanks must go to Michael for all his hard work in getting this year’s event off the ground. Equally, we were blessed with several sponsors for the occasion, including Prosperous Recruitment and Motor Republic. We greatly appreciate all our sponsors throughout the year but special mention should be made of these two who provided support to the event and created an enjoyable evening for everyone. We were entertained again by the talented vocals of the ‘sensational’ Aubrey and the roulette wheel was, as ever, an extremely popular attraction. Towards the end of the evening I clung to the vague hope that my wife might win the prize for the roulette and thereby pay for the taxi home. Alas, she was pipped right at the post at the end of the evening by a guest of the Vice President of Monmouthshire Law Society. Still, it’s not the winning but the taking part that counts! In all it was an extremely enjoyable evening and I got to meet many new faces. Mention has to be made of the gentlemen in kilts, one Scottish and one Welsh, for turning out in all their finery and adding such a touch of colour and class to the event as a whole. The food was to the usual high standard of the hotel and the wine flowed. I eventually crawled into bed at around 1am and slept soundly - surely the sign of a good evening? My thanks to all who attended and made the event such a success. This was the last of the dinner events for the current year and the Presidential diary is looking somewhat sparse at present. Unfortunately, the work diary looks no less packed than normal, so work will resume its pride of place for the moment. However, I understand (as this magazine advertises later on) that our partnering regional law societies have plenty of events lined up so I do urge you to visit their websites to take advantage of any member offers and free places. Over the summer I had the chance to mull over some more significant issues over the rule of law and access to justice. You know, the sort of things uppermost in everyone’s minds when on holiday in the south of France! My thinking on this was brought about by a number of experiences I have had this year personally. The first was reading that the Court Service had made some
astronomical “profit” from court fees charge to litigants using this service. My recollection is that it was over £100 millions. Two things occurred to me when I read this article. Firstly, that it is grossly offensive for this type of service to be making such profits in the first place. Secondly, why this has been allowed to happen at all? Clearly, this is yet more evidence that the current court fee levels are excessive. In a civilised society the state should not be attempting to profit from those who need access to the law and the courts, often through no fault of their own. Whilst I can just about understand the necessity of the Court Service being able to fund itself in the majority, excessive profit seems to me to be another form of stealth taxation and one levied at those often in extremis. This must be wrong. My second experience was with several clients who have had to abandon or curtail potential litigation due to the same being too expensive for them to contemplate. Costs are indeed a significant barrier to justice for the majority. I have often thought that, were I to need to access the courts, I would struggle to do so financially. What hope then for the majority of the public in England and Wales? The time may well be upon us to look at this issue and fundamentally rethink how we fund litigation moving forward. My last experience was the decision of the Supreme Court in relation to fees in the Employment Tribunal. The decision brought welcome relief for many. Several of my clients were able to take advantage of the decision and issue their claims in circumstances where they would have been unable to do so had the fees still been in force. However, we are left with the objectionable silence of central government on how and when (if ever) the fees unlawfully charged in the first place will be refunded. Now I may well be entirely cynical, having spent over 25 years in practice thus far but I am sure that, were I to attempt to issue any proceedings in court without the fee, I would be given short shrift. Why then cannot the Government, which is guilty of levying fees that have been declared to be unlawful, be prompt in explaining its intentions with regard to refunds? It is almost as if someone is hoping that time will effect a universal amnesia on this point! Not only is such a position indefensible, it is entirely unacceptable. I wait with bated breath for developments in this area, not least as it has a material effect for several of my clients. I trust that you all have a good autumn and that work does not prove to be too fraught. There are many issues on the legal horizon that we need to keep an eye on and be willing to challenge moving forward. I have mentioned some of them above. There are many others. It is worth remembering the old adage, ‘evil prospers when good (men) people do nothing’. Worth remembering in the run up to Brexit, with all the fallout that will come from that, if nothing else. My best wishes for an enjoyable autumn and a hope that there will be more treats than tricks in the period. l Jonathan Hine President OF THE Confederation of South Wales Law Societies JonathanH@jacklyndawson.co.uk
A GOOD QUESTION Before I took over the Presidency I was asked by someone why I wanted to do it.
good question and it gave me pause for thought. As a corporate lawyer I had managed for the past 20 plus years to get by without any real engagement with The Law Society and I’m sorry to say that the existence of Cardiff and District Law Society had largely escaped my attention (except for those nifty membership cards that give you discounts). To be honest, apart from reasons such as improving the profile of my firm amongst prospective employees, I was curious more than anything when I first agreed to participate. However, as I got more involved I came to realise that local law societies have an exceedingly important role to play in building legal communities across England and Wales. As a Society, we represent a varied and diverse membership. Small firms and sole practitioners from whatever area of practice can find a voice and a means to influence policy. Even the largest firms wield greater power when they collaborate than they could ever hope to do on their own. Our regulatory committee for instance has recently responded to consultations on the SQE, changes to the Code of Conduct, the SRA Accounts Rules and the new AML regulations to name a few. Our members have actively campaigned on issues such as access to justice, court closures and criminal legal aid tendering. Multiply these efforts across the whole of England and Wales and you can see how much stronger we are when we come together. Of course we aren’t listened to all of the time but sometimes important changes do get made as a result of consistent messaging across the board. As a profession, if we don’t make our views known and challenge what we see as the risks to us, our clients and the profession then frankly we forfeit any right to complain afterwards. There is much going on in Wales at present. From Brexit to the recently announced Commission on Justice in Wales and the Wales Act 2017, there will be much to debate. We need those debates to take place in a calm and considered way without the emotion and reactionism that polarises arguments. Whatever the outcome on many fronts, as a profession, as a business community and as a society, we need certainty. As a key stakeholder and contributor to the Welsh economy, the legal profession has much to offer those debates and we should engage and contribute. Otherwise it will simply be down to those who shout the loudest to decide. On a more domestic note, our challenge remains to ensure that Cardiff and District Law Society continues to be seen to be relevant to the firms and individuals within our geographical area and our Council and committee is working hard to ensure this is the case. We are just about to release our programme of events for the next six months or so and I hope there will be something for everyone from talks on GDPR, a workshop on growing your business, networking events to social events and the ever popular children’s Christmas party (with the real Santa Claus of course) plus more. Please look out for our newsletters and come to something if it interests you. It is not always that easy to find venues in the City centre to host our events
so if your firm has a room that you could make available for seminars and workshops please do let us know as that kind of support from our corporate members is invaluable. One of the perks of being President is that I get to choose a charity that CDLS supports through its events for the year. My choice for this year is Ronald McDonald House in Cardiff. The House, which has just opened, is close to Noah’s Ark Children’s Hospital and provides free accommodation for 30 families enabling them to stay close to their children whilst they are in hospital. Having had the benefit of using another Ronald McDonald House when my daughter was a baby I know from first-hand experience how much of a godsend it can be. There will be the opportunity to raise money at several of the events we have planned over the course of the year and I hope that you will have the chance to find out more from people at the House itself. It is a very worthwhile cause and I hope to be able to hand over a sizable cheque at the end of the year! l Rachelle Sellek President OF THE Cardiff & District Law Society firstname.lastname@example.org
a full calendar I am delighted to be writing this article in place of the current President Andrew Twomlow whom I understand has vast commitments currently, in addition to his Presidency Duties!
irstly, I wanted to thank all of our attendees and sponsors for supporting our very successful Summer Ball at the Celtic Manor in July. The evening was very enjoyable and I am looking forward to planning next yearâ€™s Ball during my own Presidency. We have a date fixed for 15th June 2018 and I do hope that many of you will join us â€“ please save the date and look out for further information soon. I have many plans to expand the growth of the Monmouthshire Incorporated Law Society following the great work of recent Presidents and I am already in contact with potential sponsors to assist us in this regard. I have been in discussions with other regional law societies and I feel a discount card for our members in many areas is something I would like to focus on next year. I am also keen to organise many events including wine and cheese tasting, a trip to Chepstow races and an event for the children. There is a lot to organise and with the assistance of our ever-helpful committee, I am sure this will be achievable. I am also very keen to arrange courses to keep us all up to date with
developments in the law. A notice on the upcoming educational and social events will be released soon. I feel it is important that we all recognise the Monmouthshire Incorporated Law Society is in place to assist us all and we all need to be involved in the further development in this respect so that our views have a voice and we can be heard all over the country. I look forward to attending the National Annual Conference for Regional Law Societies soon with the other committee members (as we have done over the years) as I find it is good to get together with other societies to share ideas and find what works in their areas as well as our own. I am looking forward to attending the many events throughout the year and voicing our views on behalf of MILS and I am fully committed to making this a great year for our society! l Mel Bevan-Evans Vice-President Monmouthshire Incorporated Law Society
chancery lane Council report Council met on 14 September 2017; it was the first meeting chaired by president Joe Egan. As there are 16 new council members, a benign atmosphere of welcome enveloped proceedings. Christopher Morgan of NewLaw Solicitors is the LGBT section’s first council member and this was his first meeting. He spoke during the discussion on the culture of the Law Society. It is hard to speak at your first meeting in front of 100 people and he made a useful and sensible contribution to the debate. Christopher, welcome to council! Law Society: Culture & Business Planning The distrust between the former Chief Executive and the majority of council, and the low morale of staff, evidenced by the 40% of staff leaving their employment in 2016, has caused the Law Society to examine its culture so it can improve its performance and retain staff. It costs a lot of money and staff time to advertise for, recruit and train new staff. This investment and corporate memory are lost when so many staff members leave. So the Law Society has consulted council and staff to develop an understanding of why the culture of the organisation is important and how behaviour shapes that culture. The purpose is to develop a culture which builds on the abilities of Council, boards, members and staff. The Society is also working on a business plan which focuses on promoting the profession, attaining influence on government, regulators, the media and other professional organisations, developing products and services which attract and benefit the membership, and building an efficient and effective business. Changes To Governance For 2018 Devising this change in culture is accompanied by devising a new governance structure for the Society. In early 2018 a new Law Society Board will be formed. Two new committees, the Policy and Regulation Committee and the Membership and Operations Committee, will support the Board. At the September meeting council agreed the composition and terms of reference of both committees. The Law Society is currently advertising to recruit the Board Chair. The size and composition of Council will be debated in December. I think the current size and composition of council is effective. In particular, Wales needs its current ration of 5 council members. Some people at the Law Society think council is ineffective because some members cannot speak during debates. But not all members wish to speak. One member, who has sat on council throughout my 11 years of service, has never spoken during a meeting though he attends them, votes, and talks outside the council chamber. Further, not all contributions are worth hearing. Many contributors to debates do little more than repeat what someone else has said already, using different words to demonstrate the size of their vocabulary and disguise the lack of originality of their thoughts. Good chairing of meetings can control this. As to the size of Welsh representation on council, some think that Wales is an irritating and self-important region of England. You know this untrue: Wales is a different country, the Law Society is the society of both England and Wales, and law which applies only to Wales is one of three strands of law within the jurisdiction of England and Wales. These points, and the fact that, unlike England, Wales has two official languages, justify Wales obtaining a disproportionately large number of council seats. Other considerations, such as the difficulties posed by geography and poor transport links which make it hard to travel to see and report to members if the geographic constituencies grow in size because they fall in number, also apply to primarily rural English constituencies, which are distant from London. Members from central London don’t see this as a bar to effective representation. My job, and that of council members from Wales and the distant English regions, is to persuade them that it is.
Brexit Action Council received reports of the valuable work the Society has done to help government and promote the interests of the profession and the public as the Brexit negotiations continue their stuttering progress. In August the government published its paper on co-operation on civil justice. All the major issues which had been raised by the Society were accepted by the government, including seeking a new cross-border civil justice agreement, the incorporation into domestic law of the Rome I and Rome II instruments on choice of law, and continued participation in the Hague and Lugano conventions. Regulation Council noted the Society’s response to the SRA’s consultation on the Solicitors’ Qualifying Examination (SQE), which was prepared by the education and training committee. I am a member of that committee. The response highlighted the importance of ensuring that academic and work experience requirements maintain sufficiently high standards. I am trying to persuade the SRA to require the organisation which will assess the SQE for the 10 year contract which will be awarded, to hold the assessment in Wales annually. It is important to obtain such a commitment. Holding the assessments in Wales will keep costs down for the individuals and firms who will pay for the assessment, will enable the SQE to reflect the law in Wales as well as that in England, and will enable Welsh speaking candidates to be assessed in the Welsh language if they elect to do so. Such a commitment will respect devolution and Welsh law. The Society has published a briefing on the implications of the changes to the SRA Handbook, a guide to the new anti-money-laundering regulations and a practice note to help solicitors to identify circumstances which justify a refusal to undertake legal aid work. The Lord Chancellor, David Lidington, refused an application from the Institute of Chartered Accountants in England and Wales (ICAEW) to regulate all reserved legal activities. The Legal Services Board had approved the ICAEW’s application. The Lord Chancellor was unimpressed that ICAEW is both regulator and representative body and questioned whether it could act independently. He even suggested that accountants might not be best placed to conduct civil or criminal litigation. Lord Thomas of Cwmgiedd & Sir David Lloyd Jones Lord Thomas of Cwmgiedd will have retired by the time you read this. During his four years as Lord Chief Justice, Lord Thomas has been a forceful, thoughtful and robust defender of the judiciary, the administration of justice, the rule of law and access to justice. As the father of Legal Wales, he has always been a strong advocate for the law in Wales, the administration of justice in Wales and the legal profession in Wales. We have been lucky to have had him in post. He has been a friend of the people of Wales and England. Sir David Lloyd Jones will become the first Welsh Supreme Court justice at the beginning of October. Sir David is a former chairman of the Law Commission. The last Welsh law lord was Lord Griffiths, who retired in 1993. By convention, seats on the Supreme Court are reserved for justices from Scotland and Northern Ireland but not from Wales. As Wales moves towards phase 4 of devolution when the reserved powers model of devolution in Wales Act 2017 comes into force, the need for a Supreme Court justice with knowledge of the law which applies only to Wales has never been greater. Congratulations, Sir David. l David Dixon DixonD@cardiff.ac.uk Twitter: @saldixie
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THE CONFEDERATION OF SOUTH WALES LAW
END OF SUMMER President of Cardiff & District Law Society Rachelle Sellek and guests
his year’s return to the formal dinner programme for The Confederation of South Wales Law Societies (The CSWLS) was very well received as a large number of guests joined us from across South Wales, from Bridgend to Monmouthshire. As well as lawyers who are members of one or more regional law societies, we welcomed clients and friends of the legal sector to our stunning venue at the New House Hotel, Thornhill, Cardiff. As well as solicitors, the President of Cardiff & District Law Society and the Vice-President of the Monmouthshire Incorporated Law Society, we were delighted to see the continued support and engagement of CILEx practitioners, the Bar, conveyancers and supporting professional advisors to law firms. Thank you all for joining us. Guests were treated to a three-course dinner, an array of masks (perhaps to help some confidently take to the dancefloor without being recognised!), chocolates and a charity raffleas well as the superb singer, Aubrey. This year’s charity was the Marie Curie charity – a well-deserved fund pot is winging its way to them now! Our roulette table went down a storm, with our guests taking their (fake) £50 worth of chips to the table to see who might bet their way to winning the cash prize. As you can imagine, the gambling got extremely competitive. Hats off to the croupier who kept his cool throughout the evening! After a final count, Nathan, a guest of Mel Bevan-Evans, Vice President of Monmouthshire Incorporated Law Society, won with a thousand or two chips to spare! Congratulations to Nathan. Finally, our sincere thanks to our two sponsors, Prosperous Recruitment / Career Recruitment and Motor Republic. Without your support, the evening couldn’t have happened. Thank you all and see you next year! l
Alexis Thomas, CILEx SE Wales Branch Chair and her husband Chris
R BALL 2017
Jonathan Hine, the CSWLS President with Tony Nolan, Motor Republic
Jonathan Hine, Claire Bowen from Prosperous/ Career Recruitment and Michael Walters
Jonathan Hine with Claire Bowen Prosperous Recruitment
THANK YOU TO OUR KIND SPONSORS:
Nathan, winner of our roulette challenge with Event Organiser, Michael Walters
He has his father’s nose… “You have your dad’s eye’s”, “your mum’s smile”, “and your grandfather’s ears”... We’ve all heard comments such as these; but do they have any basis in fact when attempting to assert paternity?
s a leading DNA testing company dealing with hundreds of paternity cases every year, these types of comments often are posed to us. These are generally by associated adults (parents and grandparents) who wish to emphasise a connection with a particular child. But can physical resemblances or indeed personality similarities be a reliable indicator of a biological relationship or is it just a case of “seeing what we want to see”? Upon the arrival of a new born baby or seeing a young child out with a parent, family and friends will often instinctively mention resemblances between parent and child. This deeply engrained “social mirror” enables parents to rely upon the resemblances seen by others as a reassurance of parenthood. It leads to varying degrees of parental investment: the expenditure and resources parents invest in their offspring to ensure their survival and success, which can often be at the cost of their own reproductive success. First to note is that this is not a new approach to the paternity issue. Questions of “likeness” amongst kin were considered by Pythagoras, Plato and Aristotle; the latter first noted bilateral heredity (that characteristics can come from mother and father) and interestingly, that characteristics could also skip a generation. These likenesses between parent and offspring help to reaffirm parental certainty, the degree to which you believe you and your child to be biologically related. In general, mothers are more certain of paternity than are fathers. Before the advent of paternity testing (historically using blood typing through to today’s sophisticated and highly accurate DNA testing), alleged fathers could only rely upon the social mirror to establish paternity, which of course is fraught with potential arguments and doubts. Mothers, in general, are keen to affirm the social mirror, whereas fathers are programmed to question it. In order to establish parenthood using the social mirror, fathers must rely upon the faithfulness of the mother. As a result, fathers tend to place credence upon the physical likenesses and behavioural similarities that they believe they share with their child to affirm their biological relationship. These claimed resemblances impact the father’s parental investment decisions, as he is more likely to invest in a child to whom he believes he is genetically related or with whom he shares similar characteristics. Mothers are less dependent on physical cues as an indicator of biological relatedness as in general, they do not need to be convinced of maternity. Instead, mothers tend to notice psychological similarities with their child such as likenesses in personality and are inclined to use family resemblances to their own evolutionary advantage. They may for example, use the presumed likenesses and similarities between alleged father and child to reinforce discussions surrounding paternal certainty. These claimed resemblances then serve to persuade the father of parenthood, which in turn ensures paternal investment for the child, thus increasing both the child’s chances of success (vs. peers) and the mother’s reproductive success.
Unfortunately, this also has undesirable consequences for the male who has been cuckolded into raising another man’s child since it has the effect of reducing or indeed eradicating, their own genes from the gene pool. This issue has never been more alive than it is today, as there has been a shift from social affirmation to social non-affirmation largely as a result of the use of social media. For example, comments posted on Facebook make the social non-affirmation very public, whereas before the advent of social media it was more likely contained to a close group of friends or family. This public display of clues to either paternity or non-paternity has the effect of raising the stakes for mother, alleged father, rival males and associated social destabilisers (who may have a variety of motives). To gain certainty and quell rumours, individuals often turn to a DNA test as the only means of delivering parental certainty. The question of paternity may then spill over into the legal/social services sphere as a tactic in family disputes, where one or more party is trying to reduce their responsibilities or undermine another’s position with respect to parental investment or indeed, vice versa. “More or less” parental investment is a key driver in the resolution of the dispute and a DNA based paternity test becomes a crucial piece of evidence providing clarity where only doubt existed before. The social mirror in the context of today’s society can be a dangerous weapon, but is one that can be effectively countered by use of an unequivocal paternity test from an accredited DNA testing company such as our own. l Ms Kate Donkin (Psychology Intern) Dr Neil Sullivan General Manager Both of Complement Genomics Ltd, trading as dadcheck®. www.dadcheckgold.com firstname.lastname@example.org tel: 0191 543 6334
THE SRA RISK OUTLOOK 2017/18 Around July every year, the Solicitors Regulation Authority publishes their Risk Outlook for the year ahead. It focuses on what the SRA see as the priority risks facing the profession and the public, and can be quite a mixed bag.
his year’s Risk Outlook is similar to previous years but with some emphasis changes and one new risk identified.
How can a firm use the Risk Outlook? Normally the firm would “hold a mirror up to itself,” examining its policies, procedures, client and employee data, identifying any gaps in any of these that could expose it to one or more of the risks identified in the Risk Outlook. The next step would be to develop a response plan, normally encompassed within the firm’s Compliance Plan. Whether there are gaps or not, it’s a good idea to have notes that explain why there weren’t any risk gaps (which would be unlikely for most firms). The usual nominee for this activity in a firm would be the COLP and/or COFA, as the risks can be closely related to the SRA Code of Conduct. One thing is certain; in the current legal services market place, firms cannot be complacent about any type of risk, but in particular those identified by its regulator... so, what are this year’s risks? 1. Lack of Access to Legal Services Identified in the last Risk Outlook, the SRA still believes this is a risk. It stems from one of the headline points regarding “unmet legal needs” (which is also a justification for changing the code of conduct for firms and solicitors in 2018 to “open up” the market, as they see it). Similarly to last year, while there appear to be multiple barriers referred to in the Outlook, the SRA believe evidence suggests that cost is one of the biggest barriers. Other issues associated with this are: Lack of local services; Lack of information to help people compare providers; Not being aware a problem is “legal”; Feeling a problem is too complicated and will never be resolved; Lack of trust in professional advice; Not knowing if the benefit of taking action is worth the time or cost. A Practice’s response to this risk has to be based on its commercial position and its targeted client base, and whether it is able to improve profitability by controlling expense so that it can be more flexible in its prices. 2. Standards of Service This is a continued evolution from a risk identified in previous Outlooks, where the SRA have considered the risk in their role as a protector of consumers. Previously emphasis was placed mainly on vulnerable clients, as the impact of poor service can be significantly greater for them. This Outlook mentions Immigration and Crime in respect to vulnerable clients. To improve this, firms need to ensure that an appropriate service level is agreed at the outset, and where vulnerability is identified, ensure it is suited to the clients’ needs. Obtaining feedback regarding the service will also help to determine whether other improvements can be made. 3. Investment Schemes This is a “new entrant” this year for the Risk Outlook, and has been identified following several high profile cases where solicitors have been involved with “questionable” investment schemes. This is also linked to firms using client accounts to provide banking facilities contrary to Rule 14.5 of the SRA Accounts Rules. Clients see solicitors as trustworthy, so their involvement with such schemes provides credibility that can persuade clients to become involved with them, often to significant financial detriment. Such schemes may include; New build property abroad; Hotel Room Leasing; Bank Instrument Trading; Carbon Credits; Diamond Trading.
4. Information Security Information Security is a hot topic for this Outlook as it has been for previous Outlooks, with continued reports of criminal activity causing problems for firms. This is not restricted to just electronic systems. Confidentiality breaches can come through physical means, for example files being moved on a train with client labels on them, or an overheard conversation. The whole issue around information security will become even more critical to firms and other businesses in 2018 when the General Data Protection Regulation comes into force. 5. Protecting Client Money For this risk, the SRA state that the number of law firms who misuse client money is low, however the impact where it is misused can be disproportionally high and therefore law firms should have detailed protections to ensure client money is safe. What some firms may not realise is that a failure to protect client money can have an effect on the overall sector by forcing higher contributions to the Compensation Fund, something that benefits nobody, and may lead to increased cost and a bigger barrier as outlined in 1 – Lack of Access to Legal Services. 6. Money Laundering Money Laundering is a mainstay of risk for the SRA and the sector, and is nothing new, however the Risk Outlook seems to suggest a complacency in law firms on the subject, with The UK’s National Risk Assessment highlighting that there are knowledge gaps about the sector’s role in money laundering. Couple that with the NRA noting that the number of Suspicious Activity Reports (SARs) from the legal sector has fallen every year since 2007, and the SRA seems to have grounds for concern. It is also yet to be seen how much impact the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 will have on the profession. 7. Independence and Integrity Independence and integrity is central to the rule of law, and from the SRA perspective, damaging to the interests of consumers and the public if a firm does not maintain either. The SRA see trends for either independence or integrity being compromised in litigation, notably Personal Injury but also in two newer trend areas, Payment Protection Insurance and Holiday sickness claims, where firms have been reported as charging disproportionate fees and not notifying clients of the Financial Ombudsman Service (for PPI) or paying prohibited referral fees or cold calling clients (for Holiday Sickness Claims). 8. Diversity Much like money laundering, Diversity is not really a new entrant into the Risk Outlook, but rather a perennial risk that reoccurs but with different emphasis from time to time. As a profession that deals with all walks of life, the SRA as a regulator encourages legal firms to represent the communities it serves and recruit the best available talent in order to do so. Research on the subject seems to show that firms are not as diverse as they could be, and no doubt this will feature in future Risk Outlooks as an area for continual improvement. While this is the case, current figures shown in the SRA Risk Outlook show an improvement in one area, the BAME area, where the general working population employs 13% of this group, and SRA regulated firms employ 18%. Given that the SRA intend to introduce a new code of conduct, now might be an appropriate time to review, as suggested at the start of this article, your firm’s systems, policies, procedures and data to see where you are against these risks, and take appropriate action where necessary. l Paul Jones cpm21
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Outsourced cashier and your bottom line
The ultimate marker of a successful business is the strength of its bottom line. Profitability is ev The route to healthy profits is maximising income and minimising costs.
ou don’t necessarily need us to tell you about the former of these – maximising income. Revenue generation is your forte, achieved by good marketing to create new business opportunities in the first place, and even better legal service provision and client care thereafter to secure a stream of repeat and referral business. Your legal software provider can assist in this area by offering solutions containing features such as automation to reduce your workload, application availability for greater uptime, intuitive time recording to capture more chargeable activity and advanced analytics to monitor performance, to name a few. But that’s not the main focus here. We’re concentrating on the latter – minimising costs. Where cost cutting’s concerned, we’re going to show you how outsourcing services, specifically outsourced legal cashiering, can help you to drastically decrease your overheads. In-house vs outsourced costs To begin, consider the standard costs associated with employing an inhouse cashiering staff member. Outgoings encompass recruitment and selection; induction, mentoring, training and development; annual bonus; overtime; pension contributions; temporary cover for long-term sickness, maternity and paternity; 10 metres of office space necessitating rent, rates and service charges; IT hardware equipment and office furniture; 1 user licence for legal accounts software; telecommunications; tea, coffee, sugar, milk, water and fresh fruit provision; social events including Christmas parties; other financial rewards such as referral, length of service and staff introduction awards; and miscellaneous schemes including car parking, healthcare and gym membership. This extensive list can easily run into tens of thousands of pounds. And it’s by no means the biggest expense which is, of course, salary. Average cashier earnings range from £19,000 in the regions to £32,500 in London. In comparison, outsourcing’s charged at a set affordable, monthly, transaction-based fee all-in which scales up or down according to your own level of busy-ness. Clearly, then, outsourced cashiering is by far the most economical way to manage this highly skilled, time intensive and heavily regulated business process. In real terms, outsourcing means doing the same job (better, we would argue, as your supplier is a specialist in its field), namely all the normal cashier duties, for substantially less cost. Other cost factors It’s also nigh-on impossible to plan for unexpected, sudden costs not originally factored into your annual allocation of monies. The possibilities are depressingly endless and could be anything from a staff member deciding to retire early to market-driven hike in office rent. Conversely, with a pay-asyou-go pricing plan, you know from the outset what your monthly outbound
spends will be, with no hidden extras on top, which can easily be absorbed into your overheads. The other cost-related factor to take into account is how outsourcing immediately converts fixed costs into variable costs. Scalability affords you much more flexibility and control of your budget. When you expand, you scale up and pay more. When you contract, you scale down and pay less. As a business, you become more agile and responsive to the changing demands upon you as a result. It’s glaringly obvious that your bottom line will be much healthier by moving from a traditional in-house set up to outsourcing agreement, but this isn’t the only financial aspect to take into account. It’d be an oversight to write regarding the costs associated with outsourced cashiering services without covering cash flow management generally. A steady flow of monies in and out are essential to keep your business running. This is about establishing good billing and payment practices, distinguishing between your client and office accounts, reviewing your key financial indicators regularly, and staying compliant with the SRA Accounts Rules and CLC Accounts Code. Your cashier will manage your books in their entirety from your bank accounts and ledgers to reports and VAT returns. They’re up-to-date in cashiering best practice so, with their input, you’ll identify any red flags immediately in order to keep your finances in the black and have actionable financial intelligence from which to grow your business. Security precautions There’s also the matter of security. As a law firm, you handle enormous sums of client monies. Conveyancers are an obvious target and scams relating to rogue house owners and buyer deposit redirection have made headline news over recent months. But it’s not only conveyancers who hold and pay monies from client account. Every law firm does. With fraudsters and cybercriminals trying their hardest to purloin your financial assets, you have to tighten your defences in order to keep them at bay and your finances intact. You’re reliant upon your cashier and accounts software to do so. It thus follows that you’re placing an inordinate amount of trust in your in-house cashier who’s required to fulfil an important role in the management of your finances. Amongst their many responsibilities are bank reconciliations, online banking, inter-account transfers and paying invoices. Your internal controls must be watertight in order to monitor your cashier’s actions and transactions so that if anything’s amiss, it’ll be noticed straightaway. In-house cashier fraud isn’t completely unheard of. While we don’t want to engender suspicion of your employees, it’d be naïve to assume it’ll never happen to you. It’s rare, admittedly, but not outside the realms of all possibility.
verything if you want to survive and thrive. With your accounts software, you can reduce the risk of fraud with antimoney laundering checks, credit screens, conflict of interest searches, proof of identity document capture and breach warnings to preserve your matters and their associated finances. There’s also data security in the form of ISO-accredited data centres, password access, SSL encryption, firewalls, penetration testing, system monitoring, replication, physical security measures and more industrial-strength security protocols. The significance of your software is not to be overlooked. With outsourcing, stringent measures are in place to supervise each cashier who’ll be subject to team, section and senior leadership controls. Regular reports showing potential or actual breaches, anomalies and late arrival of
monies keep your finances in check. There’s simply no room for error or deliberate deception in an outsourced set-up. Find out more While we appreciate outsourced cashiering may not be right for every law firm, if it does fit your business’s needs, just imagine the cost savings to be made. For further reading on this subject, access our ‘Essential questions to ask your outsourced cashiering provider’ article at www.quill.co.uk/ essential-questions and ‘Ten reasons to outsource your cashiering’ article at www.quill.co.uk/10-reasons. l JULIAN BRYAN MANAGING DIRECTOR | QUILL
closer together? Penguin, the preferred supplier of wealth management advice for Cardiff & District Law Society, has its fingers on the pulse in terms of the realities of legal and financial service cross-pollination thanks to its collaborations with leading lights in both sectors.
omething that recently caught the eye of Penguin is an article by David Ingram, the Managing Director of SIFA, following his work on a proposal coming in next year from the SRA. This article was published in a magazine that goes out to over 5,000 UK financial services professionals. The article is quite possibly a poor generalisation on how the legal profession and financial services profession work together around the country but Penguin felt it was worth sharing with you given its potential relevance to Legal News readers and your law firm. (DISCLAIMER: While Penguin knows David from our work with SIFA and all of the below are David’s own words and do not reflect the thoughts of the Penguin team in any way.) A new draft code of conduct from the solicitors’ regulator - expected to come into force next year - contains important provisions governing the referral of clients for financial advice The most common way in which financial advisers and solicitors currently work together is through some form of referral arrangement. Very few of these arrangements take the form of a formal agreement because any agreement would be between firms rather than individual practitioners, and would therefore require the involvement of other members of the firm - and the reality is that most law firms operate as groups of individuals rather than integrated businesses. Consequently, due diligence in the selection of financial adviser referees is pretty limited and not undertaken centrally by the practice’s compliance officer for legal practice (COLP) - indeed, solicitors continue to refer clients to restricted advisers despite the strong advice of the Law Society to confine their referrals to independents. Things may, however, be set to change. The Solicitors Regulation Authority (SRA) has recently issued a new draft code of conduct, which is expected to come into force in the autumn of 2018. This contains important new provisions governing the referral of clients for financial advice, stating the requirement that “the agreement is in writing”. Clearly, it would be both unworkable and unenforceable to require each individual referral to be supported by a separate agreement, and the SRA has made clear its intention that referral agreements should be formalised centrally by firms and should govern all individual referrals subsequently made to the appointed advisers. This should put a stop to the apparent ‘free-for-all’ that exists in many law firms, with individual partners and fee-earners acting on their own, instructing their personal friends and contacts with little or no discernible due diligence - giving rise to consequent risk to the firm from inappropriate referrals that result in client dissatisfaction and/ or loss. It should also empower firms’ COLPs to ensure referral arrangements are properly centralised and co-ordinated.
Ideally, advisers will be selected on the basis of their expertise and qualifications, which are relevant to solicitors and will have regard to the potential for two-way traffic, in the form of reciprocal referrals and perhaps even the sharing of fees, which is permitted by the draft code - subject to disclosure to the client. The SRA recognises the era of silo-based professional services is coming to an end and that solicitors need to look beyond their transaction-based remit and work with providers of complimentary services - particularly financial advisers - in order to provide a holistic client service. Referral arrangements are, and will continue to be, the main medium for interaction between the two professions, and some firms have entered into formal joint ventures. These have often proved unsuccessful, however, because of the difficulty in getting all the members of the law firm to agree between themselves on any firm-wide arrangements. Marketing agreements have in some cases been more successful, whereby the solicitors actively promote the services and marketing material of the adviser firm and participate in client-facing events, and are remunerated financially for doing so. The ultimate form of association is the ‘alternative business structure’ (ABS) created by the Legal Services Act of 2007, whereby firms that are jointly owned and managed by legal and financial advisers operate as integrated practices. The SRA regards the ABS as the business structure of the future but, if it is to be successful, any professional business needs to be relationship-based and managed on a commercial basis - and, in this respect, the adviser model has rather more to commend it than the solicitor one. In the 1990s, many solicitor firms employed advisers but, through lack of management control, failed to integrate their services as part of the practice. Now the boot is on the other foot and a few enterprising advisers are recruiting solicitors or even acquiring law firms. Penguin is running an event in conjunction with the Cardiff & District Law Society in November 2017, covering the opportunities and challenges that the legal and financial advice sector face going forward and how we can work together to ensure clients best interests are the number one priority for all of us. To be the first to book for this event, please visit the events page on www.cardifflaw.org or email the CDLS Marketing Secretary via firstname.lastname@example.org. l
the summer palace, llandaff, cardiff I confess a weakness for Chinese cuisine. First introduced to it in the 1970s by my parents through the ‘takeaway’, I have enjoyed the variety, texture and taste ever since. Nothing, however, compares with a good Chinese restaurant.
myself to try new things each time I visit. I have yet to have anything other than an excellent meal here.
Run as an exclusively family concern, from the front of house staff to the chefs in the kitchen, the continuity of staff, cooking and approach has served to establish a great restaurant and a well-deserved, excellent reputation.
The wine list is good and the prices very reasonable for a restaurant in the City, particularly the more robust red wines that my wife and I prefer. The premises are sufficiently flexible to accommodate the intimacy of a dinner for two as well as the more effusiveness of a larger celebration. In either eventuality, you can be assured of a warm welcome, attentive but discreet service and a standard of cuisine that is unsurpassed in the City, in my opinion.
ardiff has been blessed with a number of establishments over the years. Some remain and some have passed into the mists of time. However, the Summer Palace, opposite the ruins of the Bishops’ Palace in Llandaff, has endured for many years and must now rank as the best the City has to offer.
The menu is varied, extensive and interesting. While the normal set menus appear, in reality the real delight is to be found in the more unusual items on the a la carte section, both from the appetizers to the main course. It was at this establishment that I first came across Mongolian Lamb. I have been hooked ever since! The main dishes also have their delight, charm and flavour in spades. The extensive nature of the menu means that new experiences can be had every time you attend. I inevitably try and force 22
In all, an excellent restaurant well worth many a visit. My only advice, ensure you book well in advance. It is, perhaps understandably, extremely popular! l www.summerpalace.co.uk Zal Ho (Promoted on the retirement of Richard Fisher!)
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