Issue 24 June 2016 ISSN 2050-5744
The Business of Law
KATHRYN STONE OBE “We learned lessons from Judicial Reviews, and we are not going to hide away from that - they helped us fine-tune our process”
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Editorial BOARD Andy Poole Legal Sector Partner Armstrong Watson
Nik Ellis Managing Director Laird Assessors
Angelo Piccirillo Solicitor-Partner & Co-founder AVRillo Solicitors
Kevin Ferriby Managing Director Informed Financial Planning
David Simon Chairman Triton Global
Richard Burcher Chairman Burcher Jennings
Dr Hugh Koch Clinical Psychologist and Director Hugh Koch Associates
Ross Weldon Marketing Specialist Clio EMEA
Jo Hodges Director of Sales & Marketing Redbrick Solutions
Sarah McKay Senior Solicitor Robin Simon (a Triton company)
Ayesha Khan VFS Legal
Sarika Sangar Marketing Executive Conveyancing Data Solutions
Lesley Graves Managing Director Citadel Law Lloyd Ellison Director of Account Management and Client Engagement Specialist Tikit Mark Durkin Solicitor-Claims Advocate Willis Towers Watson Matthew Claughton Managing Director Olliers Solicitors
Scott Bozinis CEO InfoTrack Steve Arundale Commercial Head of Professional Services & Financial Institutions, Sectors & Specialist Business RBS & NatWest Commercial & Private Banking Steve Walker CEO Foojit Warwick Bloore Chartered Financial Planner Saunderson House
Noel Inge Managing Director CILEx Law School
elcome to the new look Modern Law Magazine! I hope you find the refreshed look easier to navigate, digest and more user-friendly.
In this issue, we have full coverage from the fourth annual Doctors Chambers Modern Law Conference, which this year moved from its former home in London, to the city of Manchester and the stomping ground of Manchester Utd F.C., Old Trafford. This year’s event, expertly chaired once again by Michael Napier CBE, QC (Hon), discussed the UK Legal Powerhouse – a theme selected following the reference by the Chancellor, George Osborne to the “Northern Powerhouse” - and the contribution made by legal businesses in particular to UK Gross Domestic Product (GDP). Full coverage from the event appears on page 44-47. Our regional focus this time concentrates on Surrey and I spoke to the President of the Surrey Law Society and Private Client Associate at TWM Solicitors, Daniel Church, who told me about how he plans to engage with young lawyers in the region, as well as his aims to maintain the relevance of the society by being there for members (see page 58 onwards for the full interview). Other stand out contributions in this edition include Matthew Briggs, CEO, The Law Superstore – which launches in August , who explains why legal comparison websites are set to become the legal sector’s new best friend on page 62. Finally, Richard Sawtell, Head of Centre – Manchester at Berwin Leighton Paisner considers why law firms might all soon be prioritising prospective processes for migration, based on volume, risk and complexity, in his news article on page 7-8. I’m delighted to announce the return of the Eclipse Proclaim Modern Law Awards on 10th November 2016, at the Hurlingham Club in London. Nominations will be opening soon so please keep an eye out for further details on how to enter. I hope you enjoy reading the new look Modern Law Magazine, and if you have any comments or suggestions on this, or a future edition, please get in touch with me via the details below. Happy reading!
Charlotte Parkinson, Group Editor, Modern Law Magazine.
Issue 24 June 2016 ISSN 2050-5744 Group Editor Charlotte Parkinson
Production/Editorial Assistant Brendan Gurrie
Project Manager John Margett
Events Sales Martin Smith
@modernchar email@example.com 01765 600909
Modern Law Magazine is published by Charlton Grant Ltd ©2016.
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.
Modern Law 03
7 Richard Sawtell talks news
The Head of the legal services delivery team for Berwin Leighton Paisner in Manchester considers why law firms might all soon be prioritising prospective processes for migration, based on volume, risk and complexity.
13 Kathryn Stone & Nick Hawkins
Charlotte Parkinson, Modern Law spoke to the new Chief Ombudsman and Chief Executive, to find out how they are settling in to their new roles at the Legal Ombudsman (LeO), and whether the organisation has recovered from the reputational damage suffered last year.
Mark Durkin, Willis Towers Watson
23 Why conveyancers must employ enjoyable technology Scott Bozinis, InfoTrack
25 NatWest releases Its 2016 Legal Benchmarking Report Steve Arundale, Royal Bank of Scotland/NatWest
17 Neil Buckley
23 Insurance act impact
Charlotte Parkinson, Modern Law, spoke to the Chief Executive of the Legal Services Board (LSB), about how the CMAâ€™s market study and the MoJâ€™s consultation could create an opportunity which could make a difference for consumers, and breaking down barriers to tackling unmet legal needs.
25 Keeping our moral compass
Dr Hugh Koch, Hugh Koch Associates
27 Trading sense for safety Nik Ellis, Laird Assessors
27 Part of the every day
Ross Weldon, Clio
29 The bigger picture
EDITORIAL BOARD contributors
Richard Burcher, Burcher Jennings
29 Japanese knotweed
Sarika Sangar, Conveyancing Data Solutions
31 Fixed fees
Andy Poole, Armstrong Watson
31 A whole new meaning
David Simon, Triton Global & Sarah McKay, Robin Simon
33 Approaching Apprenticeships
Noel Inge, CILEx Law School
33 Fixing the fixed fees AmTrust Law
Angelo Piccirillo, AVRillo LLP Solicitors
An AmTrust International Division
04 Modern Law
MODERN LAW Issue 24 June 2016 ISSN 2051-6495
35 How savvy are you? Steve Walker, Foojit
35 The power of your tax allowances
Warwick Bloore, Saunderson House
37 Is Access to Justice under threat?
Ayesha Khan, VFS Legal Funding
37 Can law firms boost agility through technology?
Lloyd Ellison, Tikit
39 Investing in your future
Lesley Graves, Citadel Law
39 Modernising the legal profession
Kevin Ferriby, Informed Financial Planning
41 Supervision standards
Matthew Claughton, Olliers Solicitors
41 Outsourcing with Confidence
Jasvinder Jhumat, alldayPA Legal.
43 Cyber security is a ‘People’ problem and, untrained, those people will get you in trouble. Andrew Taylor, BeCyberSure (BCS)
43 Lacklustre response to Modern Slavery Act
Yehuda Solomont, VinciWorks
46 The Doctors Chambers Modern Law Conference 2016
61 Cloud adoption and mobile “lawyering” going mainstream
50 Conveyancing Roundtable
62 Are legal comparison websites set to become lawyers’ new best friend?
The fourth annual Modern Law Conference took place on 14th June at Old Trafford, the home of Manchester Utd F.C. Charlotte Parkinson, Modern Law summarises the event.
Experts from across the legal and conveyancing industry gathered at the 2016 Doctors Chambers Modern Law Conference to discuss the changing conveyancing market, tackling issues around complaints handling, client expectations and ABS’s. Brendan Gurrie, Modern Law, reports.
53 The case for independence
In the interests of the public, the SRA should be accountable as a Primary Regulator, as Rachel Khiara reports.
55 Managing the complex role of being a lawyer
Adrian Denson, head of serious injury at Fletchers Solicitors, knows firsthand the challenges that come with leading and supervising teams to ensure the best outcomes for clients. He outlines his experience of running a large award-winning team and advises on how to effectively fulfill several roles within one legal firm.
58 Regional Focus: Surrey
As part of Modern Law’s regional focus, Charlotte Parkinson spoke to the President of Surrey Law Society, and Private Client Associate at TWM Solicitors, about engaging with young lawyers in the region, and his aims to maintain the relevance of the society, by being there for members.
Law firms have never been shy when it comes to adopting new technologies and, as Dean Sappey reports, there is a very simple reason for that.
The latest LexisNexis Bellwether Report on the legal sector ranks attracting new clients as the second biggest challenge for law firms, but few are embracing technology as a source of new business. Matthew Briggs explains why this means legal comparison websites are set to become the new best friend of the legal sector.
65 So does your technology match your firm’s ambitions?
Our resident IT guru Charles Christian writes…
67 A new approach to business
The third annual Legalex conference took place on 11th and 12th May 2016. Tess Henderson, Conscious Solutions, summarises the event.
69 Case Study - Eclipse Legal Systems
Progressive law firm, Slater Heelis, selects Proclaim Practice Management System in a 6-figure deal.
69 Title Problems Holding Up Your Transaction? Stewart Title Has The Solution.
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Modern Law 05
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Richard Sawtell TALKS NEWS The Head of the legal services delivery team for Berwin Leighton Paisner in Manchester considers why law firms might all soon be prioritising prospective processes for migration, based on volume, risk and complexity. onger ago than I care to remember, I attended a conference on “The Coming Change” in the financial services industry. The fact that it was a Building Societies Association conference, packed into the ballroom of a grand seaside hotel tells you all you need to know about how long ago it was.
After a succession of speeches by general managers of mediumsized societies, and assistant general managers of the bigger beasts, the Chief Executive of a small regional player took the stage, paused, and looked out across the room. “Today we’ve had some great speeches all about the importance of change, and being ready for change, and the need for change,” he began, (sotto voce, pause) “Change is here!” (Crescendo) “It’s happening now (slaps podium for emphasis) and if we’re not doing it (slap), if we’re not shaping (slap) it, then it’s being done to (slap) us.” The power of three in speeches, eh? And my point? I think you’ve probably twigged by now. Change is “here” for legal services. Are we shaping it? Are we doing it?
Reasons to be cheerful
I often hear that lawyers are cautious, they’re risk averse, they don’t like change. But oddly, I only ever hear it from lawyers themselves. As someone who has worked in many other sectors, I beg to differ. For me, and most others I know in business and change roles, working with highly intelligent people who make a living developing and responding to reasoned arguments is a genuine luxury. So, if a firm isn’t receptive to proposed changes, then we need to argue the case more cogently. “We’re not good business people” is a similar self-deprecating refrain. This just simply isn’t true. Law firms give expert business advice to sophisticated businesses every day, and the fact that it has been done on an hourly rate for so long doesn’t mean that must continue. The change that is here is being driven by clients and they’re looking to us to deliver legal services in a different way.
What are Clients asking for?
The biggest accrues lie in challenging and changing the resource mix, identifying the lowest cost competent resource capable of performing each step in the process
“Clients want change” is easy to say. We’ve said it so often that the phrase has somehow become devoid of meaning. There’s a danger that, without a clear vision of what clients are asking for, the means can be confused with the ends. An invitation to tender might invite us to outline what plans we have in respect of relationships with LPO providers, Northshoring, process mapping or Six Sigma. Does that mean these are our business objectives? Not necessarily, I’d argue. Instead, I’d suggest that the client is seeking to gauge the extent to which we are adapting to its needs, in effect measuring the process by which we get there, rather than the outcome itself. It’s up to us to listen clearly to what the client wants, then test whatever change projects we undertake against the extent to which they get us closer to our end objectives.
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Early ventures into offshore locations floundered when firms tried to lift and shift existing processes, simply taking the way in which they were done, and migrating them to a faraway location More for less
More for less is a useful catch all, but in truth, despite its use as a mantra, the phrase would never meet the requirements for a SMART objective in an individual’s annual appraisal. So how can we break it down into achievable, measureable outcomes? Less risk: How much of our work can be done at fixed fee prices, where the risk of getting it wrong (in terms of fees) lies with the law firm and not the client, where the experts (that’s us) should be the ones to calculate fixed fees for a wide range of work types? More consistency: All lawyers have a process, whether defined or as part of ingrained habits. The problem is that in a department of 20 lawyers there are 20 processes. Why should the client gamble on whose process is the most efficient? Less cost: As legal budgets become increasingly scrutinised, how do we help clients manage their work? More bespoke fixed fees: Individual projects are scoped out in accordance with project management principles fees, fixed in advance.
Process with purpose
conveyances or commercial contracts, security reviews and secured lending? Or, is it that we’re too worried about inconsistent approaches to doing them across the firm? It’s probably a little of both which sends us scurrying for the comfort blanket of hourly rates. “Process with purpose” can help here too, because one of the purposes of process is to lead us to what we need to measure, and if we’re measuring who performs a task, and how long it takes them, and how much their costs are, then we have our consistency, and our cost savings. Actually not just our savings; we also have a clear view of which components of our process cost the most, and where efforts to reduce them should sensibly be focussed. We now have enough data to inform a meaningful discussion on where we might work alongside clients on their processes to identify shared savings. Developing this knowledge of our “manufacturing costs” is the trigger to determining a “retail price”. Once we have a clear view of costs, the next challenge is the recognition that it’s unlikely we can set fixed fees which deliver market acceptable prices and generate margin every time, on every matter. Fixed fee pricing demands accepting that we make a profit across the portfolio whilst bearing the risk that sometimes matters don’t go according to plan.
Over recent years, the profession has developed a keen appetite for process, and an element of competition has crept in - firm X has mapped 70 of its processes but firm Y has mapped 80. In the time it takes to say Six Sigma three times without stuttering, we’re back to ends and means again. Process improvement is one of the key opportunities to align our delivery with the new expectations of clients, but we need to determine what outcomes we’re seeking before the projects start in order to avoid stumbling across some solutions by accident, and missing others entirely.
Location, Location, Location
Breaking legal transactions into detailed constituent parts can help with all the client requirements listed above and deliver consistency of approach, together with consistent quality advice. This deconstruction identifies cost-saving opportunities too, highlighting waste through duplicated steps or tasks that don’t add value.
Does this mean that the offshore option is dead? Personally, I don’t think so. Early ventures into offshore locations floundered when firms tried to lift and shift existing processes, simply taking the way in which they were done, and migrating them to a faraway location. It didn’t work.
However, the biggest accrues lie in challenging and changing the resource mix, identifying the lowest cost competent resource capable of performing each step in the process. These process tools are reasonably well documented now, so I’ll focus on a couple of other benefits which are perhaps highlighted less often.
One of the key tenets of offshoring is that if you try to outsource a bad process, what you get is a bad process done by people who understand it less. This applies to Northshoring and paralegal utilisation too. Law firms establishing centres in lower cost locations, at least those doing it successfully, will begin to understand and emulate the methodologies for migrating work across locations developed by specialist BPO and big consultancy firms, in order to optimise their returns from Northshoring.
One of the challenges of changing the resource mix in a particular process, empowering paralegals or apprentices to perform key tasks previously performed by associates, is in ensuring that the resultant cost savings aren’t eroded by overzealous checking by the associate. To illustrate, a task which used to take an associate 30 minutes takes a paralegal 35. If the associate then spends 15 minutes checking the work, suddenly the benefits dissipate. Process can help here too – by appraising key steps to a risk analysis, and according a weighting for incidence, impact and legal complexity. Such analysis allows us to challenge whether high incidence, low complexity tasks (such as spelling mistakes or formatting) should be reviewed by an experienced lawyer or be subject to peer-to-peer, or paralegal team leader checking. Expensive lawyer checking time is reduced, quality and control maintained and process improvement benefits optimised. Fixed fees and menu pricing are somewhere near the top of a client’s agenda, and our continued reticence to provide them is often a source of bewilderment to in-house lawyers. Is this due to the fact that we don’t understand the historical costs of providing advice on similar scope recurring work, such as commercial
08 Modern Law
The blossoming of firms establishing new offices away from expensive City overheads is further testimony to the fact that change is “here”. Northshoring is a catch all appellation (and not one that I am truly comfortable with as I feel it downplays this important change in legal services delivery) pointing to new operations set up in locations as geographically dispersed as Bristol, Belfast, Manchester and Glasgow by firms looking to achieve wage and occupational cost arbitrage.
Clearly most of the heavyweight BPO players have their own proprietary methodologies, but there are common threads which we can utilise to our advantage. Change is hard enough without reinventing the wheel. We might all soon be prioritising prospective processes for migration by volume, risk and complexity, creating detailed process maps to drive improvements and form standard operating procedures, evaluating envisaged benefits, estimating carrying out resource impact analysis, training and parallel running and then conducting our benefits realisation reviews. Once that operational rigour is second nature, it may be that some firms consider that looking further afield is the next logical step. Change is here indeed. Richard Sawtell is Head of Centre – Manchester, at Berwin Leighton Paisner LLP.
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Kathryn Stone & Nick Hawkins Charlotte Parkinson, Modern Law spoke to the new Chief Ombudsman and Chief Executive, to find out how they are settling in to their new roles at the Legal Ombudsman (LeO), and whether the organisation has recovered from the reputational damage suffered last year.
Why did the Office for Legal Complaints (OLC) Board decide to split the role of Chief Ombudsman and Chief Executive?
NH: The decision came from the Board itself. They needed the best Chief Executive and the best Chief Ombudsman they could find and they were not convinced they would find everything in one individual. My remit is to lead the organisation, leaving Kathryn free to concentrate on delivering high quality and timely decisions on the complaints we receive from consumers of legal services, and also engaging with the legal services industry.
Kathryn, could you outline your responsibilities as Chief Legal Ombudsman?
KS: I oversee the Ombudsman and the operational teams, always trying to improve the quality and consistency of decisions for our customers. I have to say customer experience is high on my agenda, so I’m working really closely with the Operational Insight and Engagement team we have in the organization to see how we can make the customer’s journey as smooth as possible, while at the same time getting an outcome that all parties involved in the complaint will agree was reached fairly and effectively. You might be aware that we have just published some new service principles, which give some real meat to the bones of our values. Something else I’m really keen on is stakeholder engagement, and I’m keen to go out and meet regulators, government, representative bodies, speak at events and participate in interviews. I want to make sure the learning we have within the organisation from the huge amounts of data and information that we have is passed back to regulated legal service providers and claims management companies, so that there is a process of continuous improvement and that as many people as possible are aware of the service that we provide.
Nick, could you outline your responsibilities as Chief Executive?
NH: The simple answer is that I do the bits Kathryn doesn’t. I oversee the corporate financial performance of the Legal Ombudsman, and I also manage our relationship with the Ministry of Justice (MoJ) and the Legal Services Board (LSB). Based on our recent history, a key part of that is getting their trust back. I am also the main point of contact between the organisation and the Board and I oversee the management team, ensuring that what we deliver is what the Board expects. On top of that I have a monthly meeting with the Staff Council who represent our workforce, which gives them a chance to feed into our decisions and gives me a chance to pick their brains.
I’m overseeing a number of service improvement initiatives that are going to have some obvious benefits for legal and claims management professionals Kathryn Stone
What was the first thing on your agenda(s) when taking on the new role(s)?
Modern Law 13
We’re going to stay involved in the future of CMC regulation, but in the meantime our existing relationship with the claims management regulator and the MoJ will continue Kathryn Stone
NH: The first thing on my agenda was reestablishing us as a mainstream public sector body and making sure we were fit for purpose, and that the people we dealt with could have faith in us and understand that we knew what we were doing, and that we were behaving like a proper public sector body. We’ve done an awful lot in the last six months and have dealt with our legacy issues, including paying expenses. The team here understand that we are here to serve the public. We’ve built a permanent management team, but we still have some way to go and need to ensure the MoJ are fully satisfied. KS: My agenda is slightly different. I was and still am very keen to get out and speak to people. To listen to them, to talk to them about how we can make the legal sector a better place for dealing with complaints. What that means is developing legal services that people have confidence in and making sure that there is a robust complaints handling system, from the first contact within firms, through to dealing with situations when things sadly go wrong. I’m overseeing a number of service improvement initiatives that are going to have some obvious benefits for legal and claims management professionals. We’re placing a lot of emphasis now on the quality of our decisions, and trying to balance that with timeliness and progression of the complaints through our process. In January we changed the name and the format of our recommendation report to preliminary decisions, and this new format provided a clearer, easier and shorter reporting process for people to follow.
How do you both work with Steve Green and the OLC (the LeO Board)?
NH: Both Steve and the Board are very involved with what we’re doing. The Board sets our objectives, but they’re also very happy to share with us their experience. One of their key focuses at the moment is making sure we make better use of our data. The Board also provide leadership, and support Kathryn and I as well as our management team in changing the focus of the organisation. The Board are very good at coming in and engaging with staff and in staff forums and also invite staff members to attend board meetings. There is a good level of interaction and it is all about building confidence and building trust.
LeO had a pay structure that incorporated a flexible benefits system that was causing concern in the Ministry, and we have now ceased that scheme, and put our salaries and our promotion structure back on a regular footing Nick Hawkins 14 Modern Law
The government announced they are considering transferring responsibility for regulating Claims Management Companies (CMCs) to the FCA. What do you make of these proposals and how is LeO coping with handling CMC complaints, and working with the CMRU and MoJ, currently?
KS: There are no immediate changes and we continue to deal with complaints relating to poor service provided by claims management companies. We’re going to stay involved in the future of CMC regulation, but in the meantime our existing relationship with the claims management regulator and the MoJ will continue, as they do at the moment. We have very good, very positive working relationships with both of them. We meet on a regular basis to share insights, to share information, to inform the work they’re doing. Over the last year we have also implemented some changes to the business process to refine and improve the service for both service users and CMCs, and these changes have been really positively received. We have launched professional learning courses dedicated to CMCs, and have been trialing relationship management programs, as well as producing webinar guidance. By doing this we’ve been able to share information about the highest areas of complaints, while offering guidance on how to improve in these areas, as well as examples of best practice in complaints handling. We are also continually aiming to drive up standards of complaints handling with the CMC sector.
Has LeO as an organisation recovered from the damage suffered to its reputation last year, and how are you approaching this issue moving forward?
NH: LeO had a pay structure that incorporated a flexible benefits system that was causing concern in the Ministry, and we have now ceased that scheme, and put our salaries and our promotion structure back on a regular footing. We have created a permanent management team and have in turn created lots of opportunities for staff to progress and move into different roles. Our reputation within the MoJ is well on the way to being restored. Only this morning I received a letter from the Permanent Secretary saying he was happy with our governance arrangements and our relationship with the Ministry, which is very positive. What matters is what our customers think of us and we measure that in a couple of different ways. We utilise customer surveys that are regular and ongoing, and we see no evidence that internal issues have damaged their perception of us as an organisation. Perhaps the people who see more of our internal problems are the legal profession, and 84% of lawyers were satisfied by the service we provide when we conducted our last survey. People have confidence in us, and I don’t want to sound complacent, but we are moving in the right direction.
When I interviewed Steve Green earlier in the year, he told me that LeO and the OLC Board were “looking to develop more sensible costs per case measures,” as the historical measures were not accurate enough. Have you decided on a new costs per case measure?
KS: Not yet. We are still working through the practicality of the revised methods for calculating costs per case. We have been looking at how we might incorporate the value of all the contacts with our scheme into a unit cost measure. We need to make sure the value of this work is considered alongside the actual complaints, which are accepted for investigation. Watch this space.
We now survey people while their complaint is being investigated to see if we’re providing the right information at the right time and dealing with people properly Nick Hawkins
How does LeO quantify the cost of its service to stakeholders and consumers, and how does the organisation measure its own performance?
NH: In terms of measuring what our stakeholders think of us, we have an awful lot of ongoing work on various aspects of customer satisfaction. We now contact both complainants and CMCs while the investigation is ongoing, because it’s easy to measure something at the end of the case, and the feedback you get inevitably is influenced by whether you get the result you want from the complaint. We now survey people while their complaint is being investigated to see if we’re providing the right information at the right time and dealing with people properly. The early feedback shows that people are reasonably satisfied. While it’s very simple and very easy to give ourselves numerical targets based on closing a case within so many days, our surveys and the research consistently said that complainants want a good decision within a reasonable timescale, rather than a rushed decision more quickly.
What’s next for you both, and for LeO, moving forward? KS: For me it’s timeliness and quality; we need to strike a balance between these two things when we’re resolving complaints. Our customer feedback tells us that complainants really do value that thoroughness, making sure that proper consideration has been taken of all aspects of their complaint, and they value that over getting quick resolutions. One of the most important things that we’ve been doing is involving our ombudsmen right at the outset of an investigation. That’s the timeliness and the quality, and ensuring consistency in the decision-making process. We learned lessons from Judicial Reviews, and we are not going to hide away from that - they helped us fine-tune our process.
Kathryn Stone was appointed Chief Ombudsman in January 2016, following her previous role as a commissioner for the Independent Police Complaints Commission (IPCC). Whilst working for the IPCC Kathryn had responsibility for seven police forces in the north of England. She was previously the Commissioner for Victims and Survivors in Northern Ireland, appointed by the First Minister and deputy First Minister. For 11 years Kathryn was also Chief Executive of Voice UK, a national charity supporting people with learning disabilities and other vulnerable people in the criminal justice system. Kathryn is a Chartered Director and a Fellow of the Institute of Directors.
Prior to joining the Legal Ombudsman, Nick was the Chief Operating Officer for the Independent Police Complaints Commission (IPCC). A qualified barrister, Nick joined the IPCC in September 2014. Prior to this he spent 15 years in the Crown Prosecution Service (CPS) as a Chief Crown Prosecutor. He earlier served 22 years in the Royal Navy, in seagoing and shore based appointments, retiring in the rank of Commander in 1999, after setting up the independent Naval Prosecuting Authority. He is also a visiting professor at the Institute of Criminal Justice Studies at the University of Portsmouth.
NH: The obvious thing to say as Chief Executive is providing value-for-money service. It is worth noting that our budget for this year is £11.5 million, that’s £5million less than it was five years ago. But we’re not resting on our laurels, we’re constantly looking at ways of being more efficient and we don’t want to pass the cost of our service on to the people who use the legal services industry. Again an obvious thing to say as Chief Executive is delivering our strategic objectives, because that’s what I’m measured on. But to me personally, the important thing is that every person who comes into contact with the Legal Ombudsman, and every person that works for LeO understands that we provide a good service for the public. We’re here to ensure that complaints are dealt with properly, and we’re here to drive up standards in the legal services arena and the claims management arena. If we come to work thinking they’re doing a great job, then public and professionals recognise that we’re doing a good job, then we won’t be doing badly.
Modern Law 15
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Neil Buckley Charlotte Parkinson, Modern Law, spoke to the Chief Executive of the Legal Services Board (LSB) about how the CMA’s market study and the MoJ’s consultation could create an opportunity which could make a difference for consumers, and breaking down barriers to tackling unmet legal need.
You have been Chief Executive of the Legal Services Board (LSB) since January 2016, what was first on your agenda when you began the new role?
Legal services are of vital importance to citizens and consumers. They also play a big role in our economy. The LSB’s goal is to reform and modernise the legal services sector, and to put the interest of the consumer at the heart of the system. The role of the LSB is to be an agent of change. My aim is to drive this forward and continue the modernisation of the legal services sector and to ensure that the approved regulators are operating effectively.
How have you drawn on your past professional experience, which includes your previous role as Director of Investigations at Ofcom?
My role as Chief Executive here brings together my different professional experience over the past three decades. I qualified as a solicitor over 25 years ago and I’ve also spent almost two decades working in regulation. In both roles, but particularly as the Director responsible for major Competition Act investigations at Ofcom, I’ve learned the importance of evidencebased decision making. It is careful and detailed scrutiny of the evidence that allows the LSB to take decisions and promote the regulatory objectives, including protecting and promoting the public interest, interest of consumers, and also the interest of legal professionals.
The Competition and Markets Authority (CMA) announced a review into legal services provision for consumers and small businesses. What are your hopes for the outcome of the review?
We very much welcome the CMA’s market study and agree with their analysis of the key issues that need to be considered. The LSB is a relatively small organisation, and we have a minimal research budget. We also welcome the fact that our national competition authority (with its team of experienced economists) is going to be undertaking a thorough review of the legal sector. The research work that we have produced over the past six years has already been passed to the CMA and that will help them reach some evidence-based conclusions. While the market has improved for consumers and legal professionals since the Legal Services Act, we think there is more to be done. Many people and small businesses experience legal problems but don’t obtain advice, and sometimes they view lawyers as being unaffordable. While choice has grown and shopping around has increased over the last few years, progress has been relatively slow. The CMA will look at these issues from a competition perspective but they have an understanding of other sectors of the economy, and that will allow them, we hope, to assess the underlying reasons why progress has been slow. Even though there have been all these positive changes, improved outcomes for consumers aren’t yet as widespread as we hoped they would be. We are very much looking forward to the results of the review when they’re published.
The research work that we have produced over the past six years has already been passed to the CMA and that will help them reach some evidence-based conclusions
Modern Law 17
Consumers are beginning to exercise more choice and becoming more demanding in terms of what they’re asking from lawyers, but the pace of change needs to quicken if the legal needs of all consumers are to be met adequately and affordably
What part will you and the LSB play in the review?
The LSB has quite a unique perspective in the legal services market in that we have been its independent oversight body for the last six years and we don’t have any vested interests. We’re engaging with the CMA and have been providing them with the research that we have undertaken during this time. Part of the reason the CMA decided to look at the legal sector is because of some of the evidence we have provided and the issues it has highlighted. In February, we made a formal submission to the CMA where we supported them undertaking a market study and highlighted the information we would be able to provide to them. Earlier this month we made another submission, and that followed the publication of our new research on the average price of a range of legal services. We highlighted the need for greater price transparency, because that makes it easier for consumers to shop around and to find some good deals. One of the things that we highlighted in that research was that currently only 17 per cent of firms publish prices on their websites, but interestingly those that do publish tend to be cheaper. We think that price trend is an important issue and we know the CMA are interested, so we keenly await the result of the market study.
What are the key issues relating to the provision of legal services for consumers and small businesses?
In the LSB’s three year strategic plan, we talked about breaking down regulatory barriers, tackling unmet legal needs, and our core role, which is about performance evaluation and oversight of the approved regulators and Legal Ombudsman. There are some signs that the market is becoming more competitive and we’re seeing some real innovation amongst ABSs and other traditional firms. There is some indication that consumers are beginning to exercise more choice and becoming more demanding in terms of what they’re asking from lawyers, but the pace of change needs to quicken if the legal needs of all consumers are to be met adequately and affordably, and that’s what we’re really going to be working on in the coming years.
What is the LSB doing to help address unmet legal need?
There is no silver bullet when addressing unmet legal needs for us but the first thing we need to look at is the causes of that unmet legal need, and our research program has helped us to understand this. There are a range of barriers to accessing legal advice, some of them are just about affordability but some of
Only 17 per cent of firms publish prices on their websites, but interestingly those that do publish tend to be cheaper 18 Modern Law
them are about accessibility and a lack of confidence that some consumers feel in dealing with lawyers. In relation to some of the possible contributions, some relate to unbundled services, some relate to new technology, which can help consumers to resolve some of their more straightforward legal issues as we’ve seen with the growth of online divorce. We recently published a report on exploring the non-financial barrier to access, which covered what would happen in other sectors, so that our own sector could learn from that. We’ve also been doing some research - which we’re close to concluding - which is the largest ever survey of the legal issues individuals face and how we deal with them, so we’ll be looking at that research and looking at what actions we can take from that.
Do you believe that frontline regulators, such as the Solicitors Regulation Authority (SRA) and Bar Standards Board, should be independent of government and the LSB as oversight regulator?
Independence of regulation from both government and representative bodies is clearly very important. We are an independent oversight regulator and we take our independence very seriously. Preserving the independence of the legal system is absolutely essential for the protection of the public interest. It’s also very important for the profession in relation to the sector’s international standing, and it’s also key to maintaining public confidence that lawyers will act for their clients without fear of favour. A question that arises is whether the current situation, where the representative bodies remain approved regulators but they delegate their function, remains tenable. The government is scheduled to consult on proposals which would require its separation in the near future. That is going to be a significant step and we very much welcome that consultation.
The Justice Secretary, Michael Gove has announced a possible review of the Legal Services Act (LSA) 2007. Do you think another review of legal services is required?
It’s obviously a matter for the government to decide whether a review is necessary and whether the time is right for such a review and we are on record as saying that. The Lord Chancellor’s commitment to review the LSA during this Parliament is a welcome development for us. In July of last year we published a paper that highlighted the problems that we think exist with the current framework and we set out options for reform, that followed discussions involving all the legal service regulators. A key issue is whether the current scope of regulation is the right one, and whether we have too many rules and sometimes no rules, where regulatory requirements might be needed. One aspect to consider is whether or not the rules that relate to activity should relate to the activities where consumers are most at risk. If that’s not the case then that should change. At the moment we’re considering these issues and of course we’ll respond to any consultation by the Ministry of Justice (MoJ) and the CMAs review.
What can the legal services sector learn from other sectors, in terms of making services more accessible?
The Lord Chancellor’s commitment to review the LSA during this Parliament is a welcome development for us
Other sectors have actually spent a great deal of time and effort looking at the information that’s available to consumers and helping them understand more about the services that they can expect, and the terms on which those services are going to be supplied. That’s why we look to these other sectors to see whether there’s something we can learn from their experience to help improve accessibility in the legal services market. More should be done to encourage providers to think about how they present their information in client care letters and other correspondence with their clients. In particular, complicated terms and conditions should never be relied upon to explain the service that is being provided; that’s not the point of a client care letter. In the financial sector, the Financial Conduct Authority (FCA) has pioneered its Smarter Communication Project, which has highlighted the benefits of user friendly presentation of information. Points to note from this initiative included summarising key information at the top of letters, which increases consumer engagement. Reducing the amount of text in a letter can also increase customer engagement. We have encouraged the approved regulators to work in this area and they have agreed to undertake consumer research into client care letters and other communication.
What is in the pipeline for you and the LSB in the coming months?
We are going to be very busy because there’s lots to do. We’ve set out our business plan for 2016/17 and we’re very excited about that. At the core of our activities is a Standards Report on the frontline regulators and we are shortly going to be publishing our reports on each of their performances. In our future work, we are going to be focusing on those areas where we can deliver most impact for consumers. This summer, we are publishing an evaluation of the impact of the legal services reform to date. The report itself is considerable because it brings together a substantial amount of research undertaken by ourselves and others and looks at the big issues such as access to justice, quality and competition, and highlights what progress has been made and those areas where there’s scope for further improvement. It’s going to be an important piece of work. We hope the CMA’s market study and the MoJ’s consultation are going to create an opportunity which will make a real difference for consumers and the public, and we’ll be active contributors to that.
Neil Buckley Neil joined the LSB in January 2016 as Chief Executive and as a member of its Board. Before joining the LSB, Neil was Director of Investigations at Ofcom, where he led a team responsible for enforcing competition law and the regulatory rules that apply to the communications sector. The team was also responsible for Ofcom’s dispute resolution functions. His previous roles at Ofcom included Director of Consumer Policy. Neil qualified as a Solicitor in 1990 and worked for a number of law firms in the City of London, specialising in international private arbitration. Neil has a Masters degree in Regulation from the London School of Economics and an undergraduate degree in law from Hertford College, Oxford University.
The CMA’s market study and the MoJ’s consultation are going to create an opportunity which will make a real difference for consumers and the public, and we’ll be active contributors to that
Modern Law 19
Corporate and Commercial
Supporting more British professional sector businesses than any other bank
of professional sector businesses
Source: Primary banking relationship from Experian’s database (September 2015), derived from filed accounts for businesses £2M – £1Bn turnover.
In 2015, we provided the sector with three new industry insight reports The Legal Benchmark Survey, the Accountancy Benchmark Survey, and the Legal 100 Report.
Over 700 professionals joined us at 8 of our legal sector conferences in 2015, providing insight on key sector focused topics
as at August 2015
We bank 23 of the top 25 Legal firms in Britain
Desire to help you grow
we lent £
to the sector, 15% up on 2014
Source: RBSG analytics.
Shortlisted for Modern Law Awards 2015 Supporting the Industry category
106 specialist relationship managers dedicated to supporting professional services businesses
20 South Wales & South West
North & North Wales
Midlands & East
Supporting the sector through partnerships
“Employing over 650,000 people, the professional services sector is a huge contributor to the UK and global economy. Our regional team of over 100 specialist relationship mangers work hard to support businesses and help them grow. We keep close to the sector and also produce a number of industry reports to provide specialist insight and help businesses track their progress against their peers.” Steve Arundale, Head of Professional Services Banking
Information detailed reflects support provided by NatWest and Royal Bank of Scotland Corporate & Commercial
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Insurance Act Impact The Insurance Act 2015 officially comes into force on 12th August this year. What impact will the implementation of the Act have on solicitors looking to secure Professional Indemnity Insurance (PII)? ll Solicitors’ compulsory PII polices have to comply with the SRA’s minimum terms and conditions (MTC). The compulsory level of cover is £2 million for traditional partnerships and £3 million for LLPs and other structures. The Civil Liability insuring clause is wide and the exclusions narrow and often not successfully deployed. The MTC state that “…the insurer is not entitled to reduce or deny its liability under the insurance on any grounds whatsoever including, without limitation, any breach of any term or condition of the insurance…” Consumer protection is the main motivation for having such wide terms in the MTC. The SRA’s consultation on the Insurance Act 2015 (IA) and the consequential changes to the MTC only proposed a modest change to incorporate the non-consumer standard of disclosure. Assuming that no further changes are made there will be little or no impact for solicitors when it comes to indemnity of claims. The most likely short-term impact of the IA might be that insurers are encouraged to explore whether the higher nonconsumer standard of disclosure will make it easier for them to pursue reimbursement recoveries against solicitors. It is important to note that the minimum terms and conditions do not automatically apply for covers above the compulsory level, and so excess layer policies that are not expressed as mirroring the MTC, or provide other more generous terms, will allow insurers to pursue the proportionate remedies provided by the IA. Imagine the scenario of a £50 million programme of insurance where only the first £3 million of any claim will be indemnified in full. Excess layers could avoid the £47 million layers of cover entirely (in the case of deliberate or reckless breaches) or reduce proportionately the amount that they pay on any claim. It may come as a relief to solicitors that certain excess layer policy wordings could prevent such a scenario. Although the IA comes into force on 12th August 2016, insurers and brokers have shown little appetite to contract any earlier. It is also important to note that any contract change made after 12th August 2016 will bring the IA into force (even if the underlying policy expires far in the future) and it is possible that future revisions to the MTC could see further erosion of the minimum terms.
Mark Durkin, Solicitor-Claims Advocate, Willis Towers Watson
Why conveyancers must employ enjoyable technology very day the amount of data created grows by 2.5 quintillion bytes. That’s 18 zeroes! Surprisingly, less than 0.5% of all this available data is ever analysed and used. The buzzword ‘big data’ is often used when referring to information of this magnitude, which simply describes structured and unstructured data.
According to ‘The Human Face of Big Data’, individuals now process more data in a single day than during a lifetime in the Middle Ages. The majority of this data is driven by the internet and the creation and sharing of content, however, I am more interested in how this impacts the world of conveyancing and what kind of effect this volume of information has on our lives. Taking time to process and analyse the multitude of data during our working day leaves us less time to manage operational or administrative tasks. This often finds us blurring the lines between our professional and personal lives as we turn to using mobile devices and work outside traditional business hours. In the conveyancing sector, there is a huge input and output of information generated throughout the process. This information then needs to be organised, analysed and stored in a way that is easy to access. That’s not easy when we’re constantly processing and filtering data, and pressure on conveyancers increases as clients demand faster and more economical services, so choosing a system that supports efficiency is imperative. We are accustomed to technology in our personal lives that helps us easily organise, analyse, store and access information. This begs the question, ‘why can’t the technology that I use in my personal life be available in my work life?’. Commonly raised data challenges in the conveyancing industry include filing matters, reconciling disbursements and rekeying information for long forms such as SDLT or AP1’s. While issues around the volume and management of information exist, the good news is that there is simple, intuitive technology built to evolve how conveyancers manage matters in the most efficient way possible. Choosing these systems means less logins and passwords to remember, eliminates the issue of lost disbursements, re-keying errors, and houses all information in a central system. The right technology for your firm gives time back to you and your staff, creates efficiencies and minimises risk - why would you work any other way? Changing to simple, enjoyable technology, can change the way you work, store and analyse information related to your matters, and take the headache out of the conveyancing process. Scott Bozinis, CEO, InfoTrack.
Modern Law 23
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NatWest Releases Its 2016 Legal Benchmarking Report aw firms across the UK saw a 6% increase in fee income last year, but should expect tougher conditions in 2016 according to NatWest’s latest Legal Benchmarking Report. The research is now in its fourth year and looks at the performance of law firms operating in the SME space with revenues below £46 million. 2015 was another positive year for law firms, with most measures of performance continuing to improve. However, this is at a slightly slower rate than we saw in 2014.
Early indications suggest that 2016 could carry some performance challenges for many firms. Business levels witnessed in 2015 could be described as the new, post recession norm; and many firms appear to be struggling to deliver growth levels achieved in the previous two years. Over 390 firms took part in this year’s research, produced with Robert Mowbray of legal consultancy Taylor Mowbray, showing healthy improvement in both revenue and profit levels. According to results, fees grew by 6% in 2015 - considerably above inflation. However, there is some regional variation with London achieving 10% and the North East and North West reaching 4%. Confidence is still strong despite dipping slightly for this year with 44% of firms predicting fee growth to rise by 10% or more in the next year, compared to 56% last year. Although growth appears to be slowing to a new operating norm, firms still have a great opportunity to maximise their operations and prosper. Leaders within firms need to make sure they are asking the right questions around operating efficiency, performance and reward and taking proactive steps towards investment around technology benefits. To download the report please go to: http://nw-businesssense. com/law-report-2016.html Regrettably, I am going to take a break from writing articles for ML. It has been a huge privilege to be involved with ML and to support the team in the creation of this successful publication. I wish the team at ML and the readers every future success. Steve Arundale, Commercial Head of Professional Services, Large Corporates & Sectors, Royal Bank of Scotland/NatWest, Commercial & Private Banking.
Keeping our moral compass How can lawyers and experts deliver valid evidence to the court? ow can lawyers and experts work together to ensure that the court receive evidence which is valid and reliable? Does the fact that one ‘side’ is instructing a particular expert and paying them inevitably lead to potential bias? Or are there sufficient safeguards embedded in the Civil Procedure Rules to ensure an expert provides an opinion on diagnosis, causation and prognosis which is independent and impartial?
Experts still face the iniquitous situation, in which their honest opinion is occasionally rejected by a lawyer who prefers to obtain a ‘better’ report, more sympathetic to his client, rather than having a robust discussion with that expert, and possibly counsel, to review the evidence, self-report, and medical records, to ensure the expert’s opinion is complete, rigorous and reflecting an appropriate range of opinion. Experts walk a tightrope in each case they see as to whether the information available is reliable (i.e. would the claimant say the same thing to two consecutive experts), valid (i.e. reflects or is consistent with a definitive diagnosis, attribution and/or prognosis) and truthful (i.e. reflects what actually happened or the claimant’s actual disability or impairment). There is an ongoing debate as to whether an expert should themselves comment on the last of these three variables, truthfulness, or whether their remit is to indicate inconsistencies, which the court may consider and adjudicate on level of truth. Truthfulness aside, a good practice is for experts and lawyers to provide arguments that could ‘oppose’ their own opinion before disclosing experts evidence. In doing so, they ‘inoculate’ their opinion against alternatives. It is a persuasive technique involving circulating and disproving alternative, opposing arguments, and hence increasing the credibility of an opinion, and potentially neutralising alternative views. It illustrates that the expert is not biased in favour of one side but is seeking the most robust opinion possible. Should claimants routinely be offered treatment for residual symptoms or should advice be given to encourage greater selfresponsibility, self-care and behavioural reactivation? Again, the expert, using their extensive experience of clinical treatment, will need to assess the appropriateness of treatment when giving their opinion on prognosis. Typically, most claimants can benefit from practical advice on managing or adjusting to residual psychological reactions. Way down the litigation line, the instruction for opposing experts to discuss and prepare a Joint Statement is a further ‘check and balance’ on the moral, ethical, overall evidential reliability of any one case. Maintaining a moral compass between these varied conflicts is a complex task undertaken by lawyers and experts, working together with independence, impartiality and logicality. Dr Hugh Koch, Clinical Psychologist, and Director at Hugh Koch Associates.
Modern Law 25
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Trading Sense for Safety
Part of the every day
How are autonomous safety features affecting drivers’ attitudes and their legal responsibilities?
American security company Flashpoint has issued an alert warning that a Russian cyber criminal has targeted 48 elite firms, including Hogan Lovells, Allen & Overy and Freshfields. Why are so many firms being targeted by cyber criminals and how should firms be protecting themselves?
hich car would you drive more carefully: one with an airbag in the steering wheel, or one with a spike? As more safety features are added to vehicles, a sense of complacency regarding responsibility grows. The need for the driver to pay as much attention is diminished as the car will sense and react to impending collisions.
The last few years has seen a significant rise in ‘autonomous’ features, or at least technology designed to reduce the risk of accidents. Most new vehicles have this new generation technology fitted either as standard or as an option. Radar assisted cruise control is common, allowing the vehicle to keep a set distance behind the vehicle in front. The system slows the car when required and brakes, bringing the vehicle to a complete halt if necessary. Some manufactures couple this with steering assistance. Lane change sensors are common too; most vehicles’ steering wheel will rumble in warning if it senses you wandering close to a white line. Blind spots are also covered with warning lights, often on mirrors, and audible warnings when things get more worrying. Tech only dreamt of a decade ago, such as driver sleep detectors, night vision and self-parking, are being introduced and not just to flagship models, but trickling through the ranks. Many manufactures are working on connected cars: vehicle-tovehicle communication to allow cars to know critical accident preventing information such as direction, speed and location of each other. These vehicles are amongst us now and are all but self-driving. Once laws and responsibilities are established I have no doubt we will see a huge rise in fully autonomous vehicles, in particular in the commercial sectors, where there is little driver passion or emotion to overcome. So the driver becomes reliant upon these systems and certainly has significantly less need to pay attention to the road. Could this lead to a lower volume of crashes, but a rise in seriousness? We must also consider who is responsible when the vehicle crashes? Current UK law generally attributes blame with the driver, but manufacturers such as Volvo are suggesting that they will take full responsibility for their vehicles. Within a very few short years, we are likely to see the most significant change in the way we move ourselves and our goods around since we traded horses for cars. With this comes the possibility of legal responsibility swapping from the driver to the manufacturer.
he primary reason for the most high-profile cyber attacks in recent years has been to gain insider information on mergers and acquisitions. While your firm may not be handling large corporate deals of this type, when it comes to your clients’ electronic data, confidentiality is still a major concern. A successful cyber attack exposes you to a financial liability, can ruin your reputation and put your law license at jeopardy.
Unfortunately, there is not one single step a law firm can take to ensure perfect security. Instead, each law firm needs to commit to a series of actions and reviews that can combine to create better information security. Use the Best Lock for your Data The single greatest action a lawyer can take to improve their information security is to commit to protective password practices. This consists of implementing two different password approaches. The first is using strongly designed passwords featuring certain types of characters and a minimum length. Passpack is an excellent solution as it creates complicated passwords and stores them all in one place. The second protective password practice is to enable two-factor authentication. Two-factor authentication requires the person attempting to login to prove their identity. Usually, this is done by submitting a code sent to the authorised user’s email or mobile phone. Make Data Theft Useless The second greatest action a lawyer can take to improve information security is to encrypt their data. Data sent through the internet should use SSL encryption, scrambling the data using one-time keys. This means that data is not transmitted in a readable format, but instead appears like gibberish to anyone that intercepts the data before its intended destination. All data on portable devices should be encrypted either through the devices own encryption system or by using a free program such as VeraCrypt. Revisit and Review Often Protective password practices and encrypting data in motion will protect law firms from many dangers that could breach confidentiality. However, these actions cannot be allowed to stagnate and firms should undertake a security review at least every three months. Firms must commit themselves to consistently reviewing their practices and implementing new ones when appropriate. Only when law firms make this a part of their normal business, should they consider themselves secure. Ross Weldon, EMEA Marketing Specialist, Clio.
Let’s hope the Government will finally increase the Sixties’ legacy speed limit. Nik Ellis, Managing Director, Laird Assessors.
Modern Law 27
increased court fees
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The bigger picture
egal fees investigation reveals huge disparities between law firms, screamed the Guardian (5 April 2016), based on the findings of a survey commissioned by the Legal Services Board. The article went on to cite two examples; a freehold sale where the lowest fee for the conveyancing was £250 and the most expensive was £3,200, ostensibly for exactly the same work. They cited a further example of uncontested divorce involving children ranging between £150 and £17,000.
apanese Knotweed was brought to Europe by a doctor called Phillipe von Siebold who found it growing on the side of volcanoes in Japan. He began to sell it to botanical gardens and high society figures in Britain. It was initially lauded for its beauty, and potential as animal feed. In 1847, it was named the “most interesting new ornamental plant of the year,” by the Society of Agriculture and Horticulture at Utrecht in Holland.
It is beyond the scope of this short article to eviscerate the appalling survey methodology, which we have examined in detail, but suffice it to say the scope for apples being compared with pineapples was enormous. Uncontested divorce involving children ranging between £150 and £17,000! Seriously? There are however two issues of far greater importance and concern. The first is that the high cost of lawyers’ fees impacts the affordability of legal services (correct), and that this is the legal profession’s fault and problem to fix. Wrong. Law firms are like any other business. Within the constraints of the law and professional and ethical obligations, they are entitled to operate as profitably as they can. If those law firms provide services that society and the government deem essential but which some cannot afford, then society and the government has to pay for it, unless of course there is a suggestion that we are to convert to a Marxist/socialist economy. The second concern is that the attitude of the LSB, judges and no doubt in the fullness of time the Competition and Markets Authority, which is soon to release a report on the affordability of legal services, is predicated on the assumption that the vast majority of legal services are commoditised, which means that they are completely indistinguishable by anything other than price. Common sense alone shows that this not correct. There are many other distinguishing characteristics, such as quality of service, quality of advice, seniority of the person providing the advice, location, parking, reputation, convenience, amongst others. The LSB’s and other’s efforts to deceive the public into believing that it is only about price, to the exclusion of all other considerations, does the public a great disservice. “There is hardly anything in the world that some man cannot make a little worse and sell a little cheaper, and the people who consider price only are this man’s lawful prey” (John Ruskin, 1819 to 1900, English art critic, prominent social thinker and philanthropist).
Japanese Knotweed’s spread – through purposeful planting and it escaping – went undetected for years. Once it escaped the confines of its “beauty” and “animal feed,” it began its destructive tirade around the UK. According to researchers at the University of Leicester, people sharing cuttings or disposing of unwanted plants was the “primary pattern of distribution.” Teamed with the movement of soil for construction and road building, it wasn’t long before Japanese Knotweed had spread. One of the earliest examples of it being planted purposefully outside gardens was in Welsh coal-mining valleys in the 1960s and 70s, as it was good for stabilising loose soil. In the Japanese volcanic landscape, the spread of Knotweed never arose due to the regular deposits of ash. This enabled the plant to remain small whilst surviving due to energy stores in its deep root system. The difficulties with Japanese Knotweed near property are due to its relentless growth and talent for emerging though concrete and tarmac. Furthermore, its roots can embed into the ground up to seven metres deep. At its most prolific, it can grow up to 20cm per day. Within a couple of weeks, what starts as a seemingly harmless plant, can be become a monstrous ambush of leaves. By ten weeks, its potential of becoming the size of two fully grown adults is undeniable, at an estimate of three to four metres. Underground, its roots, having spread up to seven metres, can compromise the structure of buildings. Japanese Knotweed is not just a threat to residential properties and their house prices. It can also badly affect the development and maintenance of commercial property and affect the ability to get a secured loan or insurance. It is estimated that Japanese Knotweed costs the UK economy £166 million per year for treatment and in home devaluations. A reputable trade association should provide you with details of local contractors who can tackle Knotweed. Professionals can charge between £1,500 and £3,000 to remove a severe problem. The treatment should involve repeat visits for at least five years and should come with an insurance backed guarantee that it will not be returning. Sarika Sangar, Marketing Executive, Conveyancing Data Solutions.
Richard Burcher, Chairman, Burcher Jennings.
Modern Law 29
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Fixed Fees Should all firms now offer a fixed fee option for clients, and whose responsibility is it to ensure firms are transparent about pricing? here is certainly a trend in the legal profession towards providing services on a fixed fee basis. It seemed to start with residential conveyancing, but has now spread across to virtually all legal services. Once fixed fees were offered in residential conveyancing, it appeared to start a race to the bottom as clients perceived the service as a commodity and compared prices between firms. That has benefitted few firms and you could argue has not benefitted clients either as service levels may drop to match the reduced income.
Clients appear to be the drivers of the move to fixed fees as they push for more certainty on cost, and you can understand their reasons. As clients drive change in markets, in general terms it takes a brave person to buck the trend and push back. That said, I have seen quite a few law firms quite successfully move back away from low cost residential conveyancing by setting out their differentiators. The assumption with most of the above, and of the question, is that fixed fees automatically mean lower fees. That needn’t be the case. We should learn from the move to fixed fees in conveyancing matters and avoid repeating the race to the bottom. Historically, law firms have reduced their risk by billing on an hourly basis, with that risk being passed to clients. Now that clients are turning the table, the risk is passed to the law firms. There should be a price for that and you could argue that fixed fee services should therefore be at a higher cost in order to compensate for the shift in risk. It is vital that law firms are transparent on fees and perhaps the best way to do that is to offer clients a range of fee basis options. Those options could include hourly rate, fixed fee or value based billing. Each option should be clearly thought through with fees potentially being lower for the options where risk rests with the client, and higher where risk rests with the law firm. Andy Poole, is the Legal Sector Partner at Armstrong Watson, specialising exclusively in advising law firms. The Law Society has exclusively endorsed Armstrong Watson for the provision of accountancy services to law firms throughout the whole of the North of England.
A whole new meaning The Insurance Act 2015 officially comes into force on 12th August this year. What impact will the implementation of the Act have on solicitors looking to secure Professional Indemnity Insurance (PII)? A2015 will change the law on non-disclosure and misrepresentation in relation to all insurance contracts. The current duty of utmost good faith will be replaced with a duty of fair presentation of the risk. An insured will still be required to disclose everything material which they know or ought to know, but IA2015 introduces an alternative lesser standard: to disclose enough to put the prudent insurer on notice that it needs to make further enquiries about potential material circumstances. Thus, some of the onus can be shifted from the insured to the insurer.
These changes are likely to have the greatest impact at the preplacing stage. Solicitors seeking PI insurance will be expected to have carried out a reasonable search to satisfy the duty to disclose what they ought to know. What is “reasonable”, will largely depend on the type and size of the law firm business. The knowledge attributed to the insured is that of senior management which has carried out a search and reasonable enquiries. Once the information is obtained it must be presented in a manner which would be reasonably clear and accessible to a prudent insurer (without “data dumping” which overloads insurers). We expect solicitors to find that proposal forms become more detailed and that a raft of additional questions are asked prior to a quotation. Under IA2015, fair presentation need not take the form of only one written or oral presentation, so ALL information provided precontract will be taken into account. So what are the consequences for a law firm that breaches its duty of fair presentation? Solicitors, after all, enjoy a privileged position by reason of the Minimum Terms and Conditions (MTC). There is a striking lack of clarity here. The SRA proposes to amend the wording of the MTC in order to align them with the Act but it has suggested that some remedies (e.g. avoidance) should not apply to insurance contracts covered by the MTC. However, insurers alleging breach may be able to cite ‘just and equitable’ solutions such as seeking reimbursement or compensation. In light of this, the only firm conclusion we can come to is that solicitors need to make sure they have robust procedures for enquiry as to potential risk areas and have an early (and on-going) dialogue with their insurers. David Simon, Chairman, Triton Global and Sarah McKay, Senior Solicitor, Robin Simon (a Triton company).
Modern Law 31
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Fixing the Fixed Fees
What do law firms need to consider before new ‘trailblazer’ apprenticeships become available for would-be trainees from September this year?
Should all firms now offer a fixed fee option for clients, and whose responsibility is it to ensure firms are transparent about pricing?
uch is the determination of the government to get three million new apprentices into work by 2020 that it is almost impossible not to be assailed by news of various linked initiatives. The situation is complicated because of the government’s desire to involve employers more directly in the payment of the providers of apprenticeship training.
The new system of apprenticeships is called ‘trailblazers’ and will be introduced this September. Qualification as a solicitor, Chartered Legal Executive or paralegal is possible through the trailblazer scheme. Most employers will now have heard about the apprenticeship levy, which will be charged in 2017 at 0.5% of pay bill (total amount of earnings subject to Class 1 secondary NICs) over £3 million. Against this, there will be an allowance of £15,000 which can be offset against this levy. To administer the system the government has said that there will be a digital apprenticeship service. It will enable employers to pay for the assessment and training of apprenticeships from April 2017. The funds managed by this service will attract a government topup of 10%. Irrespective of their size, employers can gain access to a government contribution towards the training of an apprentice. Depending on the age of the apprentice and the size of the employer, this could mean a zero cost of training a paralegal apprentice. In preparation, employers should conduct workforce projections and evaluations if they haven’t already. Discussion with other employers is also very valuable, since their experience of paralegal apprenticeships can overcome some of the uncertainties that surround this complicated area. Once the decision to appoint an apprentice is made and a job description created, then it is necessary to speak to an apprenticeship training provider such as CILEx Law School. We can assist with your recruitment, whether that is helping with school contacts or sifting applicants. You will also need to think about who is going to supervise the apprentice. It is really important that the induction for both apprentice and supervisor is correct: again, CILEx Law School can help with this. Making provision for study leave is essential too. The new trailblazers state that at least twenty per cent of the apprentice’s time must be spent in training.
ixed fees for clients are a great idea, but what about complications that may arise in a case and the additional work needed? Who pays for that additional time? If you’re working with a fixed fee, then the solicitor has to pick up the tab. So how does the solicitor balance setting a fixed fee in advance, which pays for their resources to ensure the job is done correctly, but is still a fair and reasonable fixed fee for the client? Does that mean that the solicitor has to pre-determine, at the outset, the most common possible complications that might arise in that transaction and quote higher to account for those potential risks, whether they arise or not? But wouldn’t that mean a higher fixed price initially? That pre supposes also that clients want a ‘cheaper’ fee. Going cheap is not necessarily the best solution for clients, so why is everyone so hung about the word ‘cheaper’. The Property Academy ‘Moving Trends Survey 2015’ looked at the number of consumers who base their decision on price. They asked, “Did you choose the conveyancer/solicitor who quoted the cheapest fee?” The result: only 11% quoted on price. So why do so many solicitors think their clients want the ‘cheapest’ when they don’t? Consumers choose their solicitor based on results, for getting the job done and doing it well. That means not to do it negligently. For example, around 40% of all negligence claims against solicitors are for property related cases. So a good job would be not to be a negligent one. Another source of complaint to the SRA is for lack of communication, so a good job would be to communicate better. Another is for not being transparent on costs. The pricing system is a complicated one that is not going to be changed over night.
So what’s the way forward? To have a fixed fee for a defined fixed case plan and quote a fixed fee for that. That will mean a cheaper basic quote because lawyers would not have to accommodate in the basic quote for potential problems that may, or may not, arise. The quote must be transparent and set out an estimate of the most common complications, and a way to calculate the cost of that additional work should it arise. Whether it is an hourly rate or a fixed menu of additional charges for additional complications, it needs to be clearly set out in the quote email and not later. The real key is for everyone to quote in the same way to allow the client a uniform way to compare before instructing. Angelo Piccirillo, Solicitor-Partner & Co-founder, AVRillo LLP Solicitors.
Noel Inge, Managing Director, CILEx Law School.
Modern Law 33
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How savvy are you? Why law firms still need to send letters – and why it’s not bad news n the legal and claims industries, there’s a drive toward paperless processes wherever possible. However, savvy providers still send a lot of their communications on paper, even though it carries costs in both cash and time, in a very competitive industry.
Here are some very abbreviated reasons why they do it – and why the burden of doing so needn’t be anywhere near as heavy as it’s been up to now. Paper ‘cuts’ The evidence of many studies indicates that people not only absorb but remember information better that they read on paper. Stavanger and Princeton universities’ research, for example, shows that when we read print we concentrate better and are less tempted to multitask. In short, if a firm wants what it sends to really penetrate, the effectiveness of paper significantly outweighs an email or a web page. Paper-‘weight’ Studies also indicate that we instinctively attribute more weight and credibility to information that we read on paper. The marketing industry knows this – that’s why business and marketing mail is growing even as personal letters are dying out. Not only that, but we process and remember it better as well. This applies to the younger, ‘digital’ generation just as much as to those who didn’t grow up with computers. Paper ‘chases’ How many unread emails do you have in your inbox? If an email isn’t read by a busy person within a short time of its arrival, it will be displaced by new items and disappear from view. ‘Out of sight, out of mind’? Not always, but often enough to be significant. By contrast, an unread letter usually clutters up the desk or coffee table until it’s dealt with. The more organised of us can get straight to reading and absorbing. For the less disciplined, paper sits there, annoying us, until we deal with it. A false dichotomy Fortunately, firms no longer need choose between the advantages of a paperless process and the benefits of printed delivery of information. Technology now allows legal firms to send letters paperlessly – without any compromise on security, quality or functionality, and in fact with improvements in all of them.
The Power of your tax allowances ollowing on from our article in February (Is this the end of pension saving as we know it?), there will be many higher earners for whom making pension contributions is no longer appropriate. The key attraction of pensions is their tax efficient status, and there can often be a perception that investing outside of this type of tax wrapper is burdensome from a tax perspective. However, with sensible financial planning, investors can very effectively utilise the relevant allowances available to them, and enjoy tax efficient growth in their non-pension holdings.
The relevant annual allowances are: • ISA allowance: £15,240 (rising to £20,000 from 6 April 2017). • Dividend allowance: £5,000. • Personal Savings Allowance: £1,000 (basic rate taxpayer), £500 (higher rate), £0 (additional rate). • Capital Gains Tax allowance: £11,100 (investors should be proactive in using this – they always have the option to purposely crystallise a gain by switching from one holding into a similar one). The relevant tax rates are now: • CGT: 20% higher and additional rate taxpayers; 10% for basic rate taxpayers. • Tax on dividends: 7.5% (basic rate taxpayer), 32.5% (higher rate) and 38.1% (additional rate). • Tax on Savings (or fixed income investments): 0%, 20%, 40% or 45%, depending on tax status. As an example, we shall consider a higher earner who has fully funded their pension and will now contribute £100,000 p.a. to an investment portfolio for the next ten years. Using cashflow modelling, we can estimate what level of tax they would pay on their investment growth if they take full advantage of all of the above allowances. Some may be surprised to learn that these allowances and rates would lead to a tax rate of about 12% on the portfolio’s growth over 10 years. If this individual had a spouse or civil partner who was a basic rate taxpayer then we estimate that the tax rate would be less than 5%. Such is the power of using the allowances sensibly and effectively. Warwick Bloore, Chartered Financial Planner, Saunderson House. Saunderson House Limited is Authorised and Regulated by the Financial Conduct Authority.
The savviest firms are now implementing technologies that give them the best of both worlds, with the results you’d expect in terms of effectiveness, competitiveness and profitability. How savvy are you? Steve Walker, CEO, Foojit.
Modern Law 35
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Is Access to Justice under threat? ith the passing of the Legal Aid Sentencing and Punishment of Offenders (LASPO) Act 2012 – it is believed access to justice for many has been lost. LASPO came into effect on the 1st April 2013. It falls into two distinct categories – Part 1 dealing with Legal Aid, in particular limiting the scope of matters covered by the scheme. Part 2 deals with the changes to the civil cost regime.
Part 1 of the bill has led to an increased number of litigants in person appearing before the courts. This has undoubtedly put more pressure on the courts. Part 2 of the bill - the changes to the civil cost regime - were brought about to make litigation more affordable and accessible to the general public. Changes to the cost regime for civil litigation cases have made lower value cases less attractive for law firms. This has led to law firms’ down-sizing or closing altogether. The cost of litigating higher value clinical negligence cases continues to rise with the court fee alone for many of these cases now at £10,000. Clinical negligence cases are lengthy and complex. Many claimants are not in a position to fund ongoing disbursements in such complex cases. Many firms don’t have the surplus cash flow available to fund the growing cost of court fees. Cash constraints means firms are unable to take on complex high value cases. These cost pressures may limit access to justice, with both the client and the law firm unable to fund ongoing disbursements. Solicitors and clients need to be aware of products available that could assist them in paying for costs associated with their claim. VFS Legal is a boutique funder providing funding solutions for such cases. At VFS, we offer two distinct products: Cost Advance Funding and Disbursement Cost Funding. By using VFS Disbursement Cost Funding (DCF) solicitors can pay for ongoing disbursements without dipping into the firms’ cash flow. The cash flow which would have been used to pay for disbursements can now be used to acquire new high value cases. With DCF funding the law firm only pays back the interest every month on the amount borrowed. The capital is repaid once the case has settled. VFS Legal funding is business to business lending. It is simple and the whole process can be completed within weeks. Ayesha Khan, VFS Legal Funding.
Can law firms boost agility through technology? ccess to innovative legal technology is driving change in the legal services delivery model. Low value work or repetitive tasks are increasingly becoming automated and outsourced. Key employees in the law departments are also moving up the value chain to focus on building client relationships founded on a deep expertise and knowledge.
As demand for year-on-year cost reduces, doing more with less is critical. Externally, changes in the market ranging from the accelerating pace of new regulation to increased competition are also presenting opportunities and risks. So where can law firms boost their efficiency? Here are some tips: 1. Automate routine tasks: Technology allows firms to computerise complexity to free up lawyers to focus on exceptions and on work that adds value. 2. Make predictions: Data is king and many legal departments and law firms already hold valuable data, which could be used to improve their services. However new technologies have yet to be fully exploited to deliver greater synergies and improved cost savings. 3. Time recording: Recording billable time and expenses is at the heart of legal services and the latest solutions collect some of that data automatically – such as time spent emailing and on the phone. Mobile solutions enable practitioners to log time working while on the move and that data may be integrated with central billing systems. 4. Go paperless (where you can): Network-based document scanning, e-signatures and intelligent mailboxes that help sort incoming and outgoing documentation. This will also speed up processes and approvals. 5. Go mobile: Legal knowledge based apps and databases will replace textbooks, but many business Apps are still desktop programmes. So getting the right platform or solution is key. A combination of user-friendly apps and better training support through their mobile devices will allow staff to access information 24/7 so that they are always up to speed with the latest regulatory updates and registrations. 6. Virtual departments: Traditional fixed departments with a hierarchical reporting structure will be replaced by new combinations of employees, contractors and Legal Process Outsourcing providers (LPOs) that will provide a flexible and responsive resource. Trend analysis based on real world stats provides firms with clear visibility of where all their key staff are and what they are working on when planning which people to deploy where. Lloyd Ellison, Director of Account Management and Client Engagement Specialist, Tikit.
Modern Law 37
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Investing In Your Future How should law firms seeking external investment best prepare themselves, and what are the advantages/disadvantages associated with taking in investment from an outside source? ince 2012 private equity (PE) investment has been hailed as a forward thinking route for law firms, aided and abetted by the Legal Services Act and facilitated by ‘alternative business structures’ (ABSs).
Advantages include cash injection and ‘non lawyer’ impetus to drive the business forward. Lawyers were told that we don’t make good business people – a low blow to the legal profession. But some took this with aplomb, believing PE investment would provide them with much needed business acumen and cash. Others considered the risks of losing control, profits and the unknown. At the London Law Expo in October 2014, former Dragon’s Den panel member James Caan stated that law firms were in fear of PE and that investors were keen to pump equity into the legal profession, but that most law firms were too frightened of external investment to take advantage of the opportunities it can offer. In August 2012, Duke Street backed Parabis Law became the first firm owned by PE to be licensed as an ABS. What PE investor would invest now following the Parabis fire sale that saw Duke Street write down their £21.4m investment? On the flip side many law firms who have taken up external investment have failed, or are failing, quite dramatically. In November 2015, following the administration of Parabis and ongoing laments of Slater and Gordon, the Gazette reported ‘ABS failures show law is no easy ride’, citing ‘Pioneers thought they had a game-changer, but this profession is a tough nut to crack.’ In April 2016 SRA Chief Paul Philip admitted that ABSs ‘haven’t worked’ and that it was the SRA’s fault. Are there any PE winners yet? Law firm owners exiting richer and PE investors doubling their money? Can’t say I know of any. For those keen on external investment please carry out due diligence on PE. What’s on offer exactly? Is this a long-term business relationship that will work within the complex and regulated legal profession? Make your business as attractive as possible, ensuring it is lean, profitable, has robust MI on operational and financial performance and a future. In doing this exercise you may realise you have that coveted business acumen to drive your law firm forward and make more cash – putting PE investment off your agenda.
Modernising the legal profession Should all firms now offer a fixed fee option for clients, and whose responsibility is it to ensure firms are transparent about pricing? he fixed fee debate in legal services continues to roll on; and I watch its progress with unrelenting interest as a business owner in financial services who participates in similar debates in our own profession around how fees should be charged to clients.
I was unsurprised by the findings in the paper released by the LSB; fixed fee services are likely to be cheaper than hourly rates or estimates provided. Commonly this is due to firms offering headline rates – particularly on Wills or Conveyancing– to get people in from the high street or online. A good strategy if the firm can turn such transactional business into a long term relationship, cross referring across their departments throughout the client’s lifetime; becoming a client’s trusted adviser. If not - and that client simply writes their Will for £100 - then it is perhaps not a great result, particularly if you have provided that service at a loss. Clients prefer certainty and therefore fixed fees can be appealing. Recent noise about whether there should be a cap or a caveat to that (client pays more if the matter takes longer or is more complicated), to me defeats the very objective and is not a fixed fee; it is an estimate. If you bill cases higher than the supposedly fixed fee regularly I would say the price is not high enough and this should be revisited. Quote a fixed fee where you are going to be profitable overall across the board and you will complete the occasional matter at a small loss but the majority at a profit for the fee quoted. A fixed fee with a caveat is not certitude for a client. As to whether all firms should now offer a fixed fee option, I think that’s down to individual business owners to decide what’s right for their business. Yes fees should be transparent and the SRA/ LSB should regulate that side of things but beyond that, different pricing models will work for different firms. If the pricing is wrong, clients won’t perceive value and the business will fail. Not many clients are motivated solely by price. But all clients want to know what something costs before they buy; it is down to firms to consider how best to package this to the public in a way they can understand. Marketing and innovation – coupled with an operational review of how your legal firm runs – can only be another positive stride forward for modernising the legal profession. Kevin Ferriby FMAAT FPFS Chartered Financial Planner, Managing Director, Informed Financial Planning.
Lesley Graves, Managing Director, Citadel Law.
Modern Law 39
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Supervision Standards The SRA have issued a fine of £2,000 to a solicitor whose lack of supervision contributed to a decision that a trainee’s two years of work did not count towards her qualification. Whose responsibility is it to ensure that trainee and junior lawyers are adequately supervised, and how could firms/training providers look at internal processes to improve the training process? s a training principal responsible for my 27th trainee since 1995, I appreciate the time, resources and supervision required to ensure that a trainee makes a worthwhile contribution during their training. We want our trainees to remain motivated and committed both to our organisation and their career during their training and beyond.
The precise structure, form and delivery of supervision is the supervisor’s domain. We aim to ensure that a holistic supervision package is in place, incorporating, amongst other things, regular reviews (both formal and informal), feedback sessions and appraisals. Only a comprehensive approach will enable a supervisor to properly assess whether a supervisee is developing the skills required to work and flourish in a given practice area. At Olliers, our trainees are supervised on a day-to-day basis by a number of other senior lawyers, including directors, as they move between departments. We recognise that our supervisors need to be given time and resources to supervise. Work allocated to a trainee is at an appropriate level. We aim to balance substantive tasks with procedural. Workloads are monitored so that the balance is right. Training records are monitored and reviewed. This is not a one way street. The trainee is encouraged to participate in the process and take ownership of career development. We appreciate and value feedback from our trainees who may have fresh and interesting ideas to put forward. Whilst the importance of the supervisor’s role in the above regard cannot be over stated, the reality is that an effective supervision package requires communication between supervisor and trainee. Furthermore, the firm needs to ensure that the supervisor is given time to perform their role effectively. The ability to supervise and mentor junior colleagues is something we appreciate in our experienced lawyers. At Olliers, 11 of our 20 solicitors trained with the firm. One of our biggest assets is our staff, and perhaps the biggest asset is a trainee with a long career ahead of them. If the firm and the trainee can work together during this crucial period then for many the training stage is only the beginning.
Outsourcing with Confidence n the last decade or so, outsourcing has become increasingly popular. The advent of online freelancing sites means there’s a wealth of young creatives for businesses to outsource jobs like web development, copywriting, and graphic design to. However, while the business and legal worlds are happy to outsource work to these MacBook toting young creatives, when it comes to outsourcing call handling many businesses view the practice with suspicion.
Outsourcing call handling gained popularity in the early 2000s when many companies started using offshore call centres in order to cut costs. While these offshore call centres did invariably save money, it was often at the expense of customer service. At the same time, people also began to use Interactive voice response (IVR) technology for their switchboard systems, but research shows that people find these systems to be annoying and untrustworthy. It’s no surprise then that with public opinion about both these services running so low, many businesses rule out the idea of outsourcing call handling altogether. However, any business that does rule out outsourcing completely is missing out on a great opportunity. In recent years many companies have been bringing their call centres services back to the UK, and there is a thriving UK call answering industry that is ready to take their calls. Outsourcing call handling to UK call centres can provide legal firms with a viable alternative to their current telephone answering system. The level of service UK call handlers provide is of the high standard expected within the legal sector, with staff undergoing extensive training to ensure they understand the requirements of professional industries like medicine, finance, and law. The best of these companies can even provide independent accreditation that verifies their good practice. Perhaps most importantly, UK call handling services are still cost effective while providing a high standard of service 24 hours a day, 7 days a week. With providers offering call handling by the minute and even by the second rather than at a fixed rate, outsourcing is a viable way to provide 24/7 call answering without employing additional staff on a permanent contract. In an industry like law where the highest standard of professionalism is a must, it is reassuring to know legal firms can be confident outsourcing their call handling to a dedicated UK provider.
Matthew Claughton, Managing Director, Olliers Solicitors.
Jasvinder Jhumat, Head of Corporate Business, alldayPA Legal.
Modern Law 41
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Cyber security is a ‘People’ problem and, untrained, those people will get you in trouble. “It is a very sad thing that nowadays there is so little useless information.” Oscar Wilde
Lacklustre response to Modern Slavery Act
ata protection regulators are increasingly aggressive. Criminal convictions are increasingly a real consequence of negligence. The UK Information Commissioner recently stated that executives should be personally responsible for negligent breaches and should be prosecuted. c.95% of breaches involve ‘user error’ (negligence) on the part of the custodian1. This translates into a huge risk. Regulators are determined to come down hard on anyone they deem guilty of negligent data care. Quite apart from any reputational damage and, potentially, big fines, how would you and your business weather a criminal conviction in the event of a negligent data breach?
ection 54 of the Modern Slavery Act 2015 requires organisations with over £36m in revenue to develop a slavery and human trafficking statement each year. The statement should set out what steps organisations have taken to ensure modern slavery is not taking place in their business or supply chains.
Cyber Security is an element of Information Security. Information Security is an element of Risk Management. Risk Management must be overseen by the board. It is NOT an IT issue.
This cautious ‘wait and see’ approach by most firms creates an opportunity for early movers to differentiate themselves as leaders in corporate responsibility. In the words of Home Secretary Theresa May:
Business interruption and reputational damage are the main concerns for all businesses. Criminals use the internet to gather intelligence for further exploitation, steal information or money or to create routes to more lucrative targets. They are looking for vulnerabilities to exploit – even your child’s phone or Facebook account could be used to get to you. Vulnerabilities don’t need to be digital. An open door or a weak procedure is as vulnerable as an unpatched operating system. Criminals will exploit whatever gets them there. The EU’s new data law (GDPR) will take effect in May 2018 (before Brexit). Recent statements from UK legislators indicate that this law will be retained in UK law after Brexit. GDPR is a seismic stepchange for data protection. Whether the data is stored digitally or physically it belongs to the subject. Custodians must know, absolutely, what they hold and where it is. If it’s trusted to a third party, responsibility does not shift with it from the custodian. The broad purpose of data protection laws is to encourage custodians to take care of data in their charge. Management must lead by example and regulators will punish those who don’t. Staff must be trained. ‘Finger pointing’ is not a defense for willful blindness. A well-constructed governance regime, proactive management and healthy security culture should be at the heart of any Information Security regime. Effectively executed, this will go far in countering the ‘insider’ threat leading to a significant lowering of general cyber risk. Think human before you think cyber, think security before you think compliance. BeCyberSure www.becybersure.com Andrew Taylor is the CEO of BeCyberSure (BCS). BCS offers a packaged, affordable, monthly subscription service, which delivers a full range of Information and Cyber Security support to SME’s and other businesses, both in defensive precautionary measures and in post-event mitigation support. ibm
Independent research conducted by VinciWorks has found that only 8% of the FTSE 500 have complied with the Act and published slavery and human trafficking statements so far. Opportunity for leading brands to emerge.
“The transparency measure will increase competition to drive up standards. More workers will be protected and consumers will have greater confidence in the goods and services they buy.” As more consumers hold companies responsible for their supply chain, robust modern slavery initiatives will emerge as a competitive advantage. What does this mean for law firms? Despite a seemingly low risk of slavery, law firms are not exempt from the provision. The focus of the provision is the supply chain, and law firms must perform a careful review of their suppliers to determine that they are not inadvertently enabling exploitation. Furthermore, law firms should be advising their clients to begin preparing a slavery and human trafficking statement as soon as possible. Forming a proper statement takes months of preparation. Policies need to be drafted, staff must be trained. Now is the time for all companies affected by the Act to start laying the groundwork for compliance. The statement should detail the steps taken to identify and eradicate slavery from the supply chain, including: • Slavery and human trafficking policies • Due diligence procedures • Risk assessments and KPIs • Staff training. Businesses with a year-end of 31 March 2016 will be the first businesses required to publish a statement under the transparency provision. The requirement for organisations to publish a statement commenced on 29 October 2015. However the government provided a grace period for businesses with a financial year-end date between 29 October and 30 March 2016. Those businesses will only be obliged to produce a statement with their next financial statements. Yehuda Solomont is the Director of Marketing at VinciWorks. VinciWorks provides compliance training to over 40,000 solicitors. A new online course from VinciWorks on the Modern Slavery Act will be available 30 June 2016. To learn more visit www.vinciworks.com/modernslavery.
Modern Law 43
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The Doctors Chambers Modern Law Conference 2016 The fourth annual Modern Law Conference took place on 14th June at Old Trafford, the home of Manchester Utd F.C. Charlotte Parkinson, Modern Law summarises the event. elegates from across the legal industry flocked to Old Trafford to hear from the world of legal business, regulation and politics. The conference, now in its fourth year was chaired once again by former Irwin Mitchell Chairman, Michael Napier CBE QC (Hon), and attracted many eminent members of the legal profession. This year’s event was created to discuss the UK Legal Powerhouse – a theme selected following the reference by the Chancellor, George Osborne to the “Northern Powerhouse” - and the contribution made by legal businesses in particular to UK Gross Domestic Product (GDP). This year’s Keynote speaker, Tony Williams, Principal, Jomati Consultants LLP and former Managing Partner of global law firm, Clifford Chance, addressed the delegates with his aptly titled presentation, ‘Lawyers in a Changing World’. Williams opened by referencing that the legal market had transitioned from a “buyer’s market” to a “seller’s market”, and outlined key considerations for firms in what he called a “mature” and “over-lawyered” sector. Top of Williams’s list was pricing as he argued lawyers are under pressure to “reduce the cost of their services” and ensure clients “understand the value of lawyers services”.
The increasing regionalisation rippling throughout the legal market is facilitating “opportunities for law firms”, argued Williams, but he cited Project Management and placing “technology at the front of the business” as key tools for successfully utilising these new opportunities. It is the unbundling of projects via low-cost centres (LCCs), explained Williams, that can enhance Project Management, by breaking matters down to what he called the “cheapest level of competence”. Williams also argued that firms need to continue to “explore new business models” and talked of a “new model firm”, in which he described an inversion of the traditional ‘pyramid’ model, where historically support staff have outnumbered feeearners and partners. In order to attract and develop talent, said Williams, firms need to realise that new entrants to the market in particular, often have “different career and reward structures”. Williams concluded with a cautionary note that “uncertainty provides opportunities” but that some firms have a “long way to go” in relation to consistency of delivery, and it is this consistency which “enhances” legal brands in the eyes of clients.
If [pricing] information available is not contextualised, it could be misleading Andy Foster, LSCP
46 Modern Law
Lawyers do not need to be masters of everything Mike Polson, Ashurts The rise of the LCC
The first panel of the day comprised of senior figures in major legal businesses and aimed to consider the increasing numbers of firms who are launching LCCs as a means of reducing City overheads and increasing operational efficiencies across their businesses. The eminent panel included Neville Eisenberg, Senior Partner, Berwin Leighton Paisner (BLP); Mike Polson, Managing Partner – Ashurst Glasgow and Director, Ashurst Advance; Mike Potter, Partner – Head of the Transactional Services Team (TST), Addleshaw Goddard; Professor Nigel Savage, Director, Savage Hutchinson Consulting, and Keynote speaker, Tony Williams. Chairman. Napier probed Eisenberg, Polson and Potter around their firms’ reasoning for establishing LCCs. Polson responded first, explaining that he “disliked the term” LCC, because the reference to low-cost, “connotates low quality” service levels. He went on, “it is not just about the cheaper option”, but rather, “better and faster business support”, which he argued the LCC facilitates. Polson explained the exponential growth of the centre since its launch less than 3 years ago, stating the firm now employs 235 people in Glasgow, and that whilst it does not operate with clients on a local basis from that location, it was “engaging internationally” with clients, as well as other Ashursts offices. Potter furthered the discussion by explaining that Addleshaws launched their first Transactional Services Team over 5 years ago as one of the first of its kind. Potter argued that a lot of the work done by lawyers doesn’t need to be done by them and it is important to “allocate the right work at the right level”. He, like Polson, stated the focus of their three transactional services offices (in Manchester, Leeds and London), was not merely as “back office support functions”, but rather on “legal work delivery”. He was clear to point out that the role of their TSTs had changed exponentially since their establishment, and outlined that they “are not seen as satellite teams”, are “very integrated” with the rest of the business, and now even have “an active role in winning new work”. Williams added that if a firm is thinking of launching an LCC, it is often a positive step to keep them separate from existing offices, to “avoid interference from partners”.
An agent for change
The third panellist whose firm has an LCC in operation, Eisenberg, highlighted the strategic correlation between BLPs reasons for launching, and the representatives from Ashursts and Addleshaws.
Michael Napier QC kicks off the conference with the Chairman’s Welcome
He explained that their Manchester office currently focussed on legal services delivery but was also “developing back office services”, although the operation was earlier in its lifecycle, having been launched less than 2 years ago. Commenting on the positive contribution of the new centre, he said, “it acts as a change agent for the rest of our firm”, and “creates more time for lawyers to spend on higher value work”. Savage joined the discussion with a slightly different perspective, having spent a considerable proportion of his career as President of The University of Law, and highlighted the need for legal education and training providers to “catch up” with the new workings of legal businesses, cautioning that “students should be prepared at law school” for this. Continuing the discussion around education and recruitment, Polson said that Ashursts were actively seeking to employ people from “outside the legal sector”, specifically looking at the “business market” as, he said, “lawyers do not need to be masters of everything”. However, whilst unbundling skill sets “can be effective”, said Savage, it is important that lawyers have a “clear understanding” of how to implement technology and the potential benefits.
Protecting access to justice
Following the morning refreshment break, the ‘People Power’ panel session (which had been put together to explore current issues of human rights, diversity, privacy and data protection, as well as the expectations of clients and resolution of their complaints), began. Panellists included Jonathan Bamford, Head of Strategic Liaison, The Information Commission; Andy Foster, Director of Regulatory Services, Capita plc and Panel Member, Legal Services Consumer Panel (LSCP); Rebecca Hilsenrath, CEO, Equality and Human Rights Commission (EHRC) and Kathryn Stone OBE, Chief Ombudsman, Legal Ombudsman (LeO). Napier first questioned Bamford and Hilsenrath around the relevance of their respective organisations to the legal profession, to which Hilsenrath responded, “we aren’t a frontline regulator”, but that the EHRC would take specific cases if it would have “an overall strategic impact” in facilitating access to justice. She added that the EHRC were considering moving their position “to the frontline” and that they had also recently published a guide for businesses in relation to Human Rights, which was highly
[Weightmans ABS licence] has facilitated a way of enfranchising non-lawyers into the business John Scorah, Weightmans relevant to legal businesses. Bamford was next to comment on the relevance of the Information Commission to the legal profession, explaining that security “needs to change” and that staff “being made aware” of security issues, needed to be backed up by effective training. He added that “regulatory incentives” for firms would be an effective way to reward those who do “get it right”. The discussion then turned to whether LeO should take complaints from clients of unregulated firms, to which Stone responded was “unlikely” to happen, as it would require “money and ministerial approval,” but that it should stay “on the radar” as it would facilitate a “more informed choice”. Turning to whether firms should be forced to publish data on complaints and pricing, Napier asked Foster whether he thought this should be the case. Foster responded by arguing it “should not” be firms’ responsibility to publish this data, but that “regulators should enforce” the publishing of complaints and pricing data. He also added that comparison websites “could help increase transparency” around pricing data but cautioned, “if the information available is not contextualised, it could be misleading” and added that consumers also need to be able to “measure” quality.
The past informing the present
The after lunch Spark Talk, given by Manchester United’s Director of Communications, Phil Townsend, focussed on the core elements of a successful communications strategy. Townsend began by outlining the three defining factors of their global communications strategy: innovation, youth and passion, and explained that at Manchester United, “the past informs the present and future”, a philosophy that can be applied to any business and one which resonated with delegates. Townsend also talked of “balancing
Modern Law 47
An expert panel discuss the pros and cons of alternative business models
resources”, revealing that despite the global size of the business, their communications team is made up of only 7 people out of approximately 800 employees. It is the ability to “know and understand our strengths”, said Townsend that provides “greater clarity” in our approach to business With the impending referendum on the UK’s membership of the European Union (EU) scheduled to take place just 9 days after the conference, Dominic Grieve QC, MP and David Brownbill QC, XXIV Chambers were brought together to debate for and against a ‘Brexit’ and cover the potential consequences for UK law, the legal system and legal professionals. Grieve – the former Attorney General for England and Wales - kicked off the debate, arguing for ‘Remain’ firstly by outlining his thoughts on UK citizens’ general quality of life since Britain joined the European Community in 1973, which he said had “generally gone up”. He also argued that Britain’s’ membership places us at the “forefront of economic development” and has “real benefits” in terms of the volume of inward investment, which he said was “circa £24bn” currently.
The vast majority of firms will eventually end up with some kind of ABS licence Chris Bull, Kingsmead Square Brownbill highlighted that in his view, if the UK remains in the EU, we will “lose the Civil Courts system” and “brilliant” Judiciary, because “where EU Law applies, Common Law dies”. After the debate, Napier asked delegates to raise their hands as to whether they were voting to ‘Remain’ in or ‘Leave’ the EU. The results made clear that the majority of delegates were seemingly still undecided as to which way to vote.
Demystifying the ABS model
Where EU Law applies, Common Law dies?
The penultimate panel of the day, ‘ABS Power’ was devised to consider whether Alternative Business Structure (ABS) legal businesses are enjoying advantages of their new structure, or whether there are unanticipated problems. The panel of representatives included some of the best known ABSs and was made up of Chris Bull, Retained Advisor, Kingsmead Square; Sarah Perry, Managing Partner, Wright Hassall LLP; John Scorah, Managing Partner, Weightmans; Adam Shutkever, Chief Operating Officer, Riverview Law and David Simon, Chairman, Triton Global.
Brownbill argued that the power of the EU is only likely to increase, and stated the pressure to conform would become “irresistible”. He also went on to say that the UK will be in a difficult position if the ‘Remain’ campaign is successful as “our reform is [the EUs] wrecking”. Concluding his argument,
Napier began by questioning the panel around whether there are any significant advantages enjoyed by each business as a result of their ABS licence. Scorah responded first, explaining that Weightmans had “made some money” since they secured the licence and that it had “facilitated a way of enfranchising nonlawyers into the business”. Shutkever emphasised that being an ABS does not necessarily mean the business will be “different” to others in the sector, telling delegates he wanted to “take the mystique” out of ABSs. He did say however, that raising external capital from “third-party” investors had been a substantial motivation for operating under the alternative business model. Bull - who previously advised accounting giant KPMG in relation to extending their range of legal services - interjected, claiming, “you don’t have to be an ABS to raise finance”, and that certain firms who had secured private equity deals “had not fared well”.
Grieve also argued that the UK will “find it difficult” to negotiate new trade deals and that counter-terrorism and security initiatives would be stronger if we remain in the EU. He continued, “how will the legal market survive if freedom of movement is stopped?” and ended by calling a Brexit a “delusional fantasy”, cautioning “the steps we take to damage our neighbours will ultimately damage us”.
Queens Council, Brownbill – who practises almost exclusively in international and cross-border matters – took to the podium to rebut his opponent’s arguments and defend the ‘Leave’ campaign. Brownbill opened by calling the wider public debate over Brexit “pantomime” and “a disgrace” and criticised Prime Minister David Cameron for “rushing through” a referendum to avoid issues with immigration. He went on to outline his belief that a fundamental problem with the UKs membership of the EU is that where an EU Law is passed it “stays forever”, and the UK Parliament “cannot revoke it”, which he called “inherently wrong”.
48 Modern Law
Dominic Grieve QC MP and David Brownbill QC debate a Brexit ahead of the EU referendum
It is not only for financial reasons that firms have applied to become ABSs though, as Perry explained. Her firm, Wright Hassall LLP – whose application was granted during the early part of 2013 - “had to” apply to become an ABS because non-lawyers take a “strategic role” in the firm and its future. Other firms, such as Triton Global, explained Simon, applied to trade under the alternative model in order to facilitate employee ownership schemes and “give all staff the possibility of ownership” of the firm. Innovation in ABS models has been widely discussed since the Council for Licensed Conveyancers licensed the first ever ABS in October 2011, and is very much still on the agenda today. “We are an ABS because we are innovators”, said Simon, to which Shutkever agreed, claiming that ABSs had “created greater competition”. Bull concurred, explaining that “generally” ABS firms are at the “more innovative” end of the market, and made bold predictions about the future of the model, saying, “the vast majority of firms will eventually end up with some kind of ABS licence”.
A question of independence
The final panel had been put together to consider the possibility of another review of legal services, following on from the sweeping regulatory reforms made in the Legal Services Act (LSA) 2007. Representatives from four professional bodies and regulators included Robert Bourns, Vice President, The Law Society of England & Wales; Chantal-Aimée Doerries QC, Chairman, The Bar of England & Wales, Dame Janet Paraskeva, Chair, Council for Licensed Conveyancers (CLC) and Paul Philip, Chief Executive, Solicitors Regulation Authority (SRA). Independent regulation was first on the agenda, as Napier questioned panellists about whether this could be a possibility. Philip responded first, arguing that the current regulatory system works “reasonably well in practical terms”, however the issue lies with the “perception of regulation”. Philip called for “full independence” and outlined that in his view the SRA would function more effectively as a regulator without the intervention of
Phil Townsend tells delegates how they can apply Manchester United’s success to their own firms
The Bar is and always has been modern Chantal-Aimée Doerries QC, The Bar of England & Wales its parent regulator, the Legal Services Board (LSB). Bourns added to the discussion that Law Society members were “reasonably satisfied” with the current arrangement, but that the society would have to “live with its parts” for some time yet. Doerries added that she is also “happy” with the current extent of regulation and outlined a slight difference between the regulation of barristers and solicitors, stating, “the Bar Council does not interfere with the decisions of the Bar Standards Board (BSB)”, and that “regulation is independent”, in the area of the sector in which she operates. Napier pursued whether another review of legal services was required, to which Doerries responded that, for the Bar, another review was not necessary, calling their regulatory system “unique”. She continued, “the Bar is and always has been modern”, and has “never resisted innovation”. Having spent 6 years as Chief Executive of the Law Society from 2000 to 2006 during the run up to the LSA 2007, Paraskeva made her views on independence clear as she stated plainly, “both [the SRA and Law Society] would be better if they were separate from one another”, arguing that the position is “muddied” for clients. Philip conceded “what we have done has not always been to the liking of the Law Society”, but agreeing with Paraskeva, maintained there are “viable alternatives” to the current model. Modern Law would like to thank all the sponsors, speakers and attendees who made the conference possible this year.
Modern Law 49
Conveyancing Roundtable Experts from across the legal and conveyancing industry gathered at the 2016 Doctors Chambers Modern Law Conference to discuss the changing conveyancing market, tackling issues around complaints handling, client expectations and ABS’s. Brendan Gurrie, Modern Law, reports. SW: How are clients finding their conveyancers? MB: We surveyed 220,000 consumers while building The Law Superstore. Clients’ choice of service provider is based on trust and reputation. Price was actually fifth in the criteria; being the cheapest is not a key driver for consumers buying legal services. The younger demographic are clearly more willing to use technology to seek legal service providers, while the older demographic are more akin to using traditional means. DBa: The geography and the value of the property also determine their approach. We find (in the higher value southern properties), the customer is more concerned about the service of the deliverer. A lot of aggregator websites will instruct firms based on price, not on reviews, and the lower down the table, the less enquiries you will get. MB: People don’t select purely on price. They look for similar attributes that providers give, whether it’s an extra value added to the product, or a brand they trust more than the other one. SW: A real challenge most clients face is that purchases of legal services are infrequent and so have very limited understanding about how to assess quality. How can firms present that quality? EG: Our objective is to make a better journey for the client. If you don’t provide a good customer experience then you’re not going to get repeat business. It’s down to individual firms looking at their own businesses in the modern conveyancing world, and a modern conveyancer can’t ignore customer satisfaction. MB: We asked 200 firms if they survey their clients and only 79% systematically review their clients, in terms of feedback and quality of service. EG: I find that very surprising, because under Lexcel and ISO27001 there is a requirement that you survey your clients; we’ve done so for years. KS: One of the things we at LeO know is that lawyers are not very good at communicating with their clients; there are all sorts of things they know, but their clients don’t. LeO receives the most complaints about conveyancing. Last year, 22% of our complaints were about conveyancing, and they were about failing to advise, not being given proper costs information, and not communicating effectively. DBa: There are reasons for the quantity of complaints. If I was to compare our conveyancing team, who are doing hundreds of transactions a week, to our personal injury team, who may conclude a couple a year, it’s bound to be higher. MB: Are the number of complaints ‘the nature of the beast’ in terms of the conveyancing service itself, because there are lots of links in the process that can break? RG: Consumer expectations are changing; a 2016 customer doesn’t understand why things aren’t available at the click of a button. SW: How do we communicate well with clients given the change in expectations? DBa: We found the Conveyancing Association’s video that sets out the conveyancing process very helpful. It’s about managing expectation in stages, instead of telling them the whole process on day one and bombarding them with information. SW: When I recently bought a property, the searches undertaken and the report I got back were very client friendly. Last time, they
50 Modern Law
Attendees Stephen Ward (SW) - Director of External Relations, Council for Licensed Conveyancers (CLC) - Chair David Baybut (DBa) - Head of Real Estate, Stephensons Solicitors LLP Darren Becks (DBe) - Partner, Angela Viney Conveyancing Services, Board Member, Society of Licensed Conveyancers (SLC) Scott Bozinis (SB) - CEO, InfoTrack UK Matthew Briggs (MB) - CEO, The Law Superstore Edward Goldsmith (EG) - Chairman, The Conveyancing Association, Partner, Goldsmith Williams Rob Gurney (RG) - Licensed Conveyancer and Head of Legal Practice, Premier Property Lawyers (MyHomeMove) Jonathan Smithers (JS) - President, The Law Society Paul Saunders (PS) - Partner, Shakespeare Martineau Kathryn Stone OBE (KS) - Chief Ombudsman, Legal Ombudsman
This is not about patronising or dumbing down, this is about communicating effectively Kathryn Stone OBE, Legal Ombudsman were very lawyer friendly. There’s been a lot of change in how to communicate the results of searches in a way that is more easily understandable. SB: The lawyers have driven that because they would like to make things presentable to their client, and that also cuts down their workload. It does help the client, but it puts more pressure on them to make decisions as well. KS: Similarly, the LeO first time buyers’ guide has had good reviews from the public because it sets things out clearly. This is not about patronising or dumbing down, this is about communicating effectively. SB: We’re all pseudo-trained now to see terms and conditions and
scroll to the very bottom where we can accept them, so when a client is presented with a big document they’re trained to ignore it. JS: Having all that documentation isn’t necessary if they trust you. Consumers are investing emotionally in you. MB: The nuance of the legal profession is that you can do a great job, but a client who didn’t get the desired settlement might give you a negative review. SW: Is there a role for information about complaints informing client decisions? DBa: You can’t judge a firm based on complaints alone. Complainants are more vocal than happy customers, and we’re living in a complaints-culture society. KS: We are an impartial organisation, so we need to be better at promoting where we see good practice, demonstrating how to improve and avoid problems. DBa: You’ve got to look at the culture of the practice as well. I’ve heard of firms where fee earners are targeted and rewarded by the number of exchanges per month. That doesn’t address the client journey. SW: What do you think of the government’s interest in reforming the conveyancing process? JS: The problem the government has is its deregulatory agenda. The professions work well to try and improve things. For example, mortgages take longer to come through than they did before because the lenders are doing much more due diligence, avoiding reckless lending. DBe: If people were made to have a mortgage agreement in principle before they were allowed to put an offer on a house, it would remove a lot of time wasting. JS: There are lots of things that can be done to improve the conveyancing process, incrementally, and by the profession itself, rather than from external influences. SW: How difficult is it to find good conveyancers? SB: Staff will be happier and stay longer if they like the technology they have to use. JS: And if they’re well trained and looked after. In traditional firms where there were just secretaries and assistants, there is now a career path upwards into doing this work and being properly supervised. DBe: We’ve got to maximise what we can get out of everyone. SW:What makes a good conveyancer? EG: A good communicator. RG: It’s easier to employ someone with great customer service skills and teach them conveyancing. DBa: We have a lot of trainee conveyancers that come through the CLC apprenticeship scheme. KS: Many young people are now making the decision not to go to university, so offering people opportunities to develop professional qualifications while training in the role is really important. SW: Why isn’t the ABS model more widespread, for example one-stop shops? JS: Private equities aren’t investing because there’s no extra return in a very crowded market. MB: Is there a risk that the big mortgage providers create their own ABS’s and then control that supply chain? JS: People don’t want to go to who their lender tells them to go to. They want a choice. EG: The public are very traditionalist. There’s not necessarily a huge appetite for a one-stop-shop. They like things compartmentalised and that’s the way the structure of the industry is set up. KS: It will be interesting to see how technology changes the market. Whatever happens, people will still want to buy and sell property. The fundamentals will still be in place but the way they’re handled will be radically different.
There are lots of things that can be done to improve the conveyancing process, incrementally, and by the profession itself, rather than from external influences Jonathan Smithers, The Law Society The Council for Licensed Conveyancers (CLC) A history of innovation in specialisation The Council for Licensed Conveyancers was established in 1985 to foster competition and innovation in the conveyancing market. 30 years on we are still helping legal businesses thrive by finding new ways to meet changing customer expectation. Our approach is to support firms to achieve compliance and to accommodate different ways of working where we can. Our experience as a specialist regulator of conveyancing and probate allows us to tailor our regulation to those areas of property law. There has also been no need for an accreditation scheme for CLC-regulated firms or lawyers. Specialisation and the scale of firms as well as the effectiveness of regulation have meant that such schemes are unnecessary. This history, approach and experience may explain why CLC regulated firms have grown to enjoy a market share of transactions that is far greater than their numbers would suggest. CLC regulated firms make up just 4.4% of Land Registry account customers but generate more than 10% of transactions by value. To find out more about qualifying as a CLC lawyer, or how to set up your conveyancing or probate practice under CLC regulation, please visit our website www.clc-uk.org or call us on 020 7250 8465.
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The case for independence In the interests of the public, the SRA should be accountable as a Primary Regulator, as Rachel Khiara reports. n support of its argument for full independence, the SRA is seeking direct public regulatory accountability to Parliament in the conduct of its activities. So does the SRA merit a greater level of public scrutiny?
In 2003, the turnover of legal activities was £19 billion. 90% of services were delivered by law firms. In 2014, the value of the legal service marketwas £25.7 billion. Non-traditional legal services businesses (ABSs) – only 4% of regulated firms - now service 25% of the consumer legal market. The legal services industry has changed beyond recognition, and the appropriateness of the SRA to continue as a front-line (or secondary) regulator needs to be addressed. The SRA regulates a business sector contributing, in 2013, 1.6% of the UK’s GDP yet is accountable only to the Law Society Council and the Legal Services Board (the ‘oversight’ regulator; that is, the statutory regulator of the front-line legal regulators).
A single super-regulator?
Some argue for wholesale reform, sweeping away the front-line regulators of the seven branches of the legal profession and in their place, a single “legal super-regulator”. Apart from the financial burden and regulatory disruption involved in so doing, this proposition only has merit where it creates an effective regulator; one with a deep understanding of those whom it regulates, and whose primary concern is consumer interest. Even within the solicitors’ profession, the diversity of legal services providers necessitates a flexible approach to regulation. This divergence of interests will only be exaggerated within a legal super-regulator whose remit spans all seven traditional disciplines, ABSs (in multiple forms, including multi-disciplinary practices, PLCs, private-equity funded businesses, and public sector bodies) and ICAEW regulated probate-service providers. A “one-size-fitsall” approach to regulation is unworkable. Under The Law Society’s legal super-regulator proposal, lawyers of all disciplines would be regulated legal professionals, but to retain the professional title “solicitor”, practitioners would be subject to an additional regulatory regime under The Law Society. The sceptre of the argument that regulation and representation of professionals can effectively co-exist, re-appears (the rejection of which prompted the Legal Services Act).
Allowing the market to develop
This leaves the question of whether the SRA is an appropriate regulator of the solicitors’ profession of the future and the ABSs subject to its regulatory jurisdiction. Consumer demands are changing. New business models and emergence of AI need to be accommodated within an appropriate regulatory framework. The SRA has proposed radical reforms to achieve that and has, as aptly demonstrated through its Innovate Initiative, matured as a
Consumer demands are changing. New business models and emergence of AI need to be accommodated within an appropriate regulatory framework regulator with good commercial insight and appreciation of the fact that “one-size-fits-all” is simply inappropriate. SRA reforms focus on allowing the legal services market to develop, thereby increasing access to justice, but with targeted and proportionate measures for consumer protection. Recent regulatory changes reflect this approach. There has been a substantial reduction in the regulatory burden, particularly on smaller firms. ABS applications have been simplified and accelerated. The obsolete separate business rules struck-out in favour of consumer protection and arbitrary restrictions on the activities of traditional law firms have been removed. The SRA is also the first regulator to have put forward a solution to the issue of consumer protection in unregulated entities. These businesses play a part in the overall delivery of legal services, and there is a consumer demand for the products they offer. The proposed solution is open-minded and effective; solicitors can provide unreserved legal activities within unregulated practices, giving their customers access to regulated professionals, the assurance of a code of professional ethics, and recourse to the Legal Ombudsman.
If it continues on its current trajectory, consumer interests will be well served by an SRA that is independent and fully accountable as a primary regulator. There is an important distinction between public policy and public scrutiny here. The SRA should remain independent in its regulation of the solicitors’ profession and the legal services market, but should rightly be publicly held to account, perhaps by Parliamentary Select Committee, for its conduct at a level that reflects the importance of its responsibilities to the public, and the significance of the economic market which it regulates. A regulatory and legislative framework which removes impediments to growth of the success of the sector should be supported by all those in and representing the solicitors’ profession. The SRA’s consultation on the revised draft Handbook is expected to be published in June, and it is hoped that the SRA delivers on its stated intentions. Rachel Khiara is a Partner at Khiara Law LLP.
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Managing the complex role of being a lawyer Adrian Denson, head of serious injury at Fletchers Solicitors, knows first-hand the challenges that come with leading and supervising teams to ensure the best outcomes for clients. He outlines his experience of running a large award-winning team and advises on how to effectively fulfil several roles within one legal firm. he traditional image of a lawyer locked away in an office examining the minute detail of case files is increasingly out of date, especially with the increasing demands of needing to supervise teams and run complex businesses.
The majority of lawyers will be familiar with long working hours and heavy workloads. Increasingly, senior lawyers are now required to carry out a number of full-time jobs all at the same time. When I first joined Fletchers Solicitors back in 2011, I was responsible for three different roles within the practice. Firstly, I took over an established caseload of catastrophic injury cases, including many severe spinal and brain injury claims, and I was also appointed to head up the Serious Injury Team. Alongside this, I joined the Leadership Team, which essentially managed the operations of the entire firm on a day-to-day basis.
A strong team starts with good leadership and it’s important to establish that quickly, especially when joining an already successful firm
My experience is typical of many senior lawyers operating in a modern law firm. With only 24 hours in a day, how can lawyers successfully handle more than one job role, in the same firm and at the same time?
In my case, I was extremely lucky to inherit an excellent assistant, Aimee, when I joined Fletchers. As well as her conscientiousness and hard work, Aimee’s knowledge of each file and relationship with existing clients was invaluable. We quickly formed a real partnership, enabling me to maintain my close involvement with the casework I love and with my other responsibilities to the firm. So between me, Aimee, and the other tiers of support that I introduced, we have been able to establish a fantastic work model.
Bring in support to manage casework
Implement a strong team structure
One of the main jobs for any lawyer is handling the casework that they are assigned. However, not all of this work requires your legal skills. As a lawyer, your day can also be filled with simple fee earning tasks such as reviewing things like records and reports. This is where support from junior lawyers is invaluable. Creating the right support team helps take off some of the pressure, and ensures that all cases receive greater care and attention. Some practitioners may feel that it is their duty to carry out every job related to a case. In reality though, this can often mean that the more simplistic, and yet no less important tasks, are frequently done in a rush or come a poor second to the core legal analysis. Often, these tasks might not even be done at all, which at best is a lost opportunity and at worst could mean something critically important is missed. This could have very serious implications for the client, the practitioner and the law firm. By using junior lawyers and support staff appropriately, we have found that case handling is much more effective and efficient. When senior lawyers come to make their contribution, they can be sure that all the records have been fully reviewed, basic statements taken and that everything on the file is in good order. These different tiers of support also provide excellent opportunities for the development and training of future lawyers.
A strong team starts with good leadership and it’s important to establish that quickly, especially when joining an already successful firm as I did when I arrived at Fletchers. With an existing team of ten very capable and well-established senior members of our Serious Injury Team, I must admit to being a little concerned about how to make my presence felt and be accepted as a leader. Our CEO and former head of the serious injury department, Ed Fletcher, offered some great advice, “just prove to them that you know what you’re doing.” He was right. By rolling up your sleeves and working alongside your team, you can really prove your worth and also get to know what makes each person tick; their strengths, areas for improvement and how best to motivate and support them. Once I had established a relationship of trust and confidence with the team, I could focus on development. Running a team is about planning and building in the right way from the start. Whether inheriting an established team or building up a brand new one, it’s essential to strip it right back to basics - there must be fastidious recruitment, proper training and support, supervision, quality control and checks, and a well thought out structure to promote an environment where everyone knows their role in the larger team picture.
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If the foundations of the team are solid, then no matter how many more team members are recruited, the model will hold its own In a thriving and expanding firm, it’s vital that the team can cope with the increased workloads. Creating a strong team that’s fit for purpose will help to ensure this growth is sustainable. This is achieved by strategically planning how the team is structured. If the foundations of the team are solid, then no matter how many more team members are recruited, the model will hold its own. During the start of my time with Fletchers, we had to consider how to deal with significant growth in the number of serious injury cases and also my desire to add new capabilities. I wanted to establish an in-house Court of Protection team - a team that can be appointed by the court if a client lacks mental capacity - to help deal with the financial affairs of vulnerable clients and ensure the money is always spent in their best interests. I knew that we couldn’t manage both of these objectives simply by recruiting and hoping for the best. After getting to know the team, I took the time to think strategically about how I wanted the team to take shape. I focused on planning how the team should be structured, introducing new roles in order to have the right person (in terms of ability, experience, and qualifications) working on any given task. I ensured that a comprehensive supervision structure was implemented, and a bespoke training and quality control plan for team members. As a result, we’ve been able to both expand and innovate, while keeping everyone on board over what could have been a very tricky period.
Learn from other members of the team
The legal sector is constantly changing and, as lawyers, this means that we have to be flexible and embrace new ways of working. During your career, you will be faced with challenges that you haven’t come across before and will need to find a viable solution.
group of people on the team who had been doing this for a long time, and it made me see decision-making from a wider perspective. It was a steep curve on the Leadership Team but I soon realised that you should never shy away from admitting that you are new to something and that you have a lot to learn, but also back yourself and suggest ideas whenever you have something to offer. The job of a lawyer is often challenging, but the key to success is to always surround yourself with excellence. This applies whether you are recruiting your own team, or learning from your peers. Having the right teams and a good support structure in place can take away a lot of unnecessary stress and pressure. Working as a team and learning from each other can help generate new ideas and better ways of working, which could lead to even better results for our clients. After all, everyone is working to the same goal so it’s important to support each other in this fast paced industry. Adrian Denson is Head of serious injury at Fletchers Solicitors. For more information, please visit www.fletcherssolicitors.co.uk
Everyone is working to the same goal so it’s important to support each other in this fast paced industry
Making a conscious effort to listen and learn from talented members of the team helps to provide a different perspective and perhaps ideas that you hadn’t considered yourself. For example, when I joined the Leadership Team a lot of the business side of running a successful law firm was very new to me. The role required me to be involved in operational matters such as marketing, commercial decision-making and strategy implementation. I found myself learning from a very talented
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REGIONAL FOCUS: Surrey Interview with...Daniel Church As part of Modern Law’s regional focus, Charlotte Parkinson spoke to the President of Surrey Law Society, and Private Client Associate at TWM Solicitors, about engaging with young lawyers in the region, and his aims to maintain the relevance of the society by being there for members.
What are the main challenges the Surrey Law Society faces at the moment and why?
The challenges faced by Surrey Law Society (SLS) are aligned with those faced by many other local law societies throughout England and Wales. The key issue is a general trend towards falling membership rates. Even more important than this is a fall in engagement with our members. I would anticipate that the key reason for this is that currently Solicitors in Surrey are extremely busy. Understandably fee earning is always a priority, and when people are spending long hours at the office, some of the ‘extra curricular’ activities will suffer. As President, it is my job to lead the committee into making decisions, which will benefit the society in the long term, and to make sure that we are engaging with our members in an effective manner. Another challenge for local law societies surrounds the changes to Continued Professional Development (CPD). The system is in the process of moving from a points based system to something more ‘outcome focussed’. It was feared that without a ‘minimum requirement’ for CPD that members may look to concentrate on fee earning work, or may look to enhance their knowledge in other ways. Clearly, we need to keep a very close eye on developments, but actually we are now confident that the removal of a minimum requirement won’t adversely affect us. The profession is always cautious to ensure that it is keeping up with changes in the law. The fact that we, as a society, can deliver relevant, cost effective and up to date courses should mean that people will continue to want to learn and develop through us.
What are your core aims during your tenure as President of the Surrey Law Society?
I am now half way through my Presidential term, having been voted in at our AGM in November 2015. During the AGM, I highlighted the key aims for the year. The first aim is in relation to our website. As a society, we recently decided to invest significant time and expense into improving our online presence. Our old site had not been significantly updated since 2006, and we recognised that it was time to bring everything up to speed – especially when you consider that our old site pre-dated the iPhone! Our new and improved website went live early in 2016, with a fresh new look and more emphasis on communicating with our members. We use the platform to inform members about upcoming training events, social and sporting events. We have introduced a ‘jobs board’, which members can advertise on without charge. This section has proved extremely popular, and has given our members a cost effective and fast way to seek employees for their vacancies. My second core aim was slightly less tangible. I wanted to improve communication with our members, our contacts, the Young Surrey Lawyers group and the national Law Society. The changes to our website have led to many improvements in
58 Modern Law
The profession is always cautious to ensure that it is keeping up with changes in the law. The fact that we, as a society, can deliver relevant, cost effective and up to date courses should mean that people will continue to want to learn and develop through us communication. I have also used my contacts within the Young Surrey Lawyers group to ensure that they are invited to every SLS Committee meeting from now on. This is one of the most important things that I wanted to achieve. Without these links with Young Surrey Lawyers, there is a distinct possibility that participation levels on committee will fall in the coming years. There is also a danger that we will not be discussing and acting on issues important to young lawyers in Surrey, simply because we are unaware. Lastly, I wanted to establish a COLP/COFA group within Surrey, to enable firms to come together and discuss the challenges that they face in this difficult area. I am pleased to say that our new group has now been established, and it looks as though it is likely to be a great success.
How have the needs of members changed over the last 3 years?
This is a tricky question for me to answer, as I have only been involved with Surrey Law Society for approximately three years in total! My rise to President has been a rapid one, given that I was only on committee for a year before being asked if I would be Deputy Vice President. Even so, the challenges for our members have been clear over the last three years, given the improving economy. The message from our membership is that things are generally busy in the legal world. This means less time for networking, training and socialising, as legal practitioners concentrate on their clients’ needs. At the other end of the scale, sadly we have Legal Aid practitioners, who have had a very tough time of it recently. Cuts to Legal Aid work, and pressure put on them by the government have had adverse effects on the numbers of Legal Aid practitioners in Surrey. In all honesty, the numbers in this area of the country were not high to begin with, but SLS is committed to reviewing the issues and we are currently in the process of reaching out to our members to see how we can help those that are being affected.
By being there for our members when they have any issues, and also supplying them with important information when needed, we stay very relevant to the profession
How do you and the team at the Surrey Law Society ensure the society maintains its relevance to the profession?
This question comes back to communication. We must ensure that we are speaking to our members to make sure that we are aware of their struggles. We do this through various lines of communication, and by being there for our members when they need us, we make ourselves relevant. Most recently, we have been speaking to our members directly about several Law Society consultations, especially those concerning changes to client account rules. We anticipate that many more consultations will be coming out soon regarding the regulation of Solicitors. These issues are fundamental to what it means to be a solicitor, and we need to make sure that our members have the opportunity to be made aware of them. By being there for our members when they have any issues, and also supplying them with important information when needed, we stay very relevant to the profession.
What are the aims of the Law Society 2020 Discussion and what do you hope it will achieve?
The Law Society 2020 Discussion is their attempt to engage with Solicitors across England and Wales to gather their thoughts on how the legal marketplace is changing, and how the Law Society can help with this change. In many ways, what they are trying to do is similar to what we are doing at a local level. They
simply want to hear from Solicitors in order that they can use the information to shape their future policy. The key aim of the discussion surrounds changes to the way that Solicitors are regulated. I recently attended the Presidentsâ€™ and Secretariesâ€™ Conference at the Law Society, where this topic was discussed. Currently, no one knows for sure what regulation will look like in the future, but that this process is aimed at getting views from those at the coalface. Similarly to our communication with our members at a local level, it is imperative that we obtain views on this topic, and all other issues. As a profession, we need to ensure that we are in place to shape the changes, and we can only do this by engaging in the debate.
How important is the role of regional law societies in representing, supporting and promoting the needs of practitioners on a national level?
I believe that we play a key role. Without local law societies staying abreast of news at Chancery Lane, there is a chance that legal practitioners might miss certain issues, debates or votes, simply because they have a busy day-to-day schedule. The information gap between the national Law Society and the average Solicitor in a high street practice in Surrey is wide. It follows that the further away from London, potentially the bigger the gap becomes. Local law societies play a crucial role in plugging this gap and making sure that important information is re-laid as and when it is most necessary.
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Without local law societies staying abreast of news at Chancery Lane, there is a chance that legal practitioners might miss certain issues, debates or votes, simply because they have a busy day-to-day schedule
How do you think solicitors are perceived by the public? Do regional law societies have a part to play in building relationships on this level?
I am certain that Solicitors are viewed as trusted members of society by the public. However, I am also certain that the role and importance of the work that Solicitors are carrying out is slowly being eroded. This is not helped by suggestions that Solicitors are expensive, and recent reports from the Competition and Markets Authority (CMA), claiming that legal fees need to be lowered. In many instances, legal fees are actually one of the least expensive elements of a transaction. More needs to be done to promote the importance of Solicitors in ensuring the smooth running of transactions but most importantly upholding the rule of law. Regional law societies play an important role in shaping public opinion. We do this by meeting with individuals from all levels of society at our events, including our sponsors, but also meeting with local MPs.
Do you feel that the Surrey Law Society has a voice in wider conversations with the Law Society?
I absolutely feel that we have a voice in conversations with the Law Society. Just in the past three weeks, I have personally met with Mark Hudson (Law Society Head of Relationship Management) and Bhavni Fowler (Law Society Relationship Manager – South East) and have had some very positive discussions regarding Surrey Law Society. I have also been in direct correspondence with the Law Society Regulatory Affairs committee, regarding the consultation on SRA Accounts Rules. Bhavni Fowler, in particular, will meet with us regularly and provides a crucial link to the Law Society. I should also mention that we are extremely fortunate to have two Law Society Council members, John Perry and Sushila Abraham, who attend every single SLS Committee meeting. As a result, our links with the Law Society are extremely strong.
What does the future look like for the legal profession, on a regional and national level?
On a regional and national level, the future of the legal profession looks very healthy. Locally I can only really speak about what I have seen in Surrey. From my experience, and from speaking to local practitioners from other firms, Solicitors continue to provide a very good level of service for their clients on a daily basis. Work levels are high currently, which may be slightly cyclical, but the fact is that on the whole, Solicitors provide a great service to the general public. Hopefully on a national level we don’t see any further red tape which has made our jobs as Solicitors slightly more onerous in recent years. Of course, we generally want to see regulation, but at the same time if we are to keep doing the best job possible for our clients, we don’t want to see excess barriers to what we want to achieve, which is a good level of legal service for our clients at a reasonable fee. There is a level of thinking that suggests Solicitors should continue to do what we do best, which is act in the best interests of our clients. Hopefully, the rest will follow, but local law societies are there to make sure that whilst we are trying to do our job, the interests of legal professionals are represented and protected.
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Daniel Church Daniel Church is an Associate Solicitor with TWM in Guildford. He trained at TWM and during this time worked at several different offices across Surrey. Daniel attended Law School at the College of Law in Guildford (now University of Law). Having trained and worked throughout Surrey, Daniel has a good grasp of what it means to be a Solicitor in Surrey, and the challenges that this brings. Whilst at TWM, Daniel has helped to integrate the firm into the local community by organising several charitable events, most notably the ‘Adventure Relay’. The various events that Daniel has helped run have contributed to TWM raising in excess of £40,000 for their partner charity, Surrey Air Ambulance. Daniel is the acting President of Surrey Law Society for 2015/16, an organisation which aims to support Surrey based Solicitors, whilst also providing a crucial link with Chancery Lane.
Hopefully on a national level we don’t see any further red tape which has made our jobs as Solicitors slightly more onerous in recent years
Cloud adoption and mobile “lawyering” going mainstream Law firms have never been shy when it comes to adopting new technologies and, as Dean Sappey reports, there is a very simple reason for that. nefficiency in a law firm costs money. Just consider all the administrative, mundane, repetitive tasks that are undertaken throughout the day. This is time spent away from billable work. Consequently, law firms have always been early adopters of technology.
Cast your mind back to the birth of word processing systems, personal computers, CRM and document management systems. Equally, law firms tend to embrace software like no other business — you only have to think of the Portable Document Format (PDF) and speciality applications such as document comparison and metadata management products. These are products that legal has made its own. Attending legal conferences allows me to see how new technologies might impact lawyers. At this year’s LegalTech in February, 2016, there were two particular technologies that stood out for me — cloud computing and mobile “lawyering.”
Forecast is for more cloud
We have been hearing for some time about the Cloud and online access to data. The game changer over the past year has been Microsoft’s aggressive move into this space with the introduction of the Microsoft Cloud. This has been evident with smaller law firms, who are quickly adopting cloud technologies for all aspects of their work to reduce client costs and response times. This has led to improved service levels and more nimble, client-focused lawyers who can grow their client base at the expense of larger firms. Initial success from the technology is likely to motivate mainstream firms to start looking into cloud migration more seriously. Much of the reluctance and fear of putting legal documents in the cloud seem to have abated thanks in large measure to the success of document storage firms such as Dropbox, Box, OneDrive etc. But also because firms are starting to secure documents more and more with password protection and cleaning of private and sensitive information from documents before uploading or storing to the cloud. The benefits now seem to outweigh the risks.
The mobile lawyer goes mainstream
Work patterns are also changing. Increasingly lawyers, both male and female, are working non-traditional hours to accommodate family and work commitments, often performing a higher percentage of their work at home, on the road, or just remote from their office. This shift in attitude and behaviour is driving the move to the cloud, but while larger law firms are restricting the move to the cloud for security reasons, smaller law firms are embracing it to the expense of the larger firms. This year’s LegalTech confirmed that the Cloud and the mobile lawyer have become mainstream. Cloud-based document
It will no longer matter whether the lawyer is operating when remote from an iPad, Surface Pro, Mac, or home desktop PC, they will have access to all their data and tools to deliver a better and faster service to clients management systems (NetDocuments, and Worldox Cloud), as well as online collaboration systems (iManage Share, SharePoint Online, and HighQ) and even online practice management systems (Clio) are delivering low cost, highly efficient technologies to law firms, driving down costs, and dramatically reducing setup costs for start-up law firms. Historically law firms have given up some of the customisation and productivity tools they previously used on the desktop in order to gain other advantages from the Cloud. This is changing. Vendor announcements on these productivity tools began to appear at this year’s conference. This trend will continue as more and more vendors start to offer cloud variations of the desktop products. It will no longer matter whether the lawyer is operating when remote from an iPad, Surface Pro, Mac, or home desktop PC, they will have access to all their data and tools to deliver a better and faster service to clients. Additionally, these applications will come with a different pricing structure. They will be significantly less to install than desktop installations. They will be rolled out faster and to more people as a result.
Cloud services and applications are starting to redefine how law firms work and interact with their clients. Gone are the days when a lawyer met his clients in the office. Technology and life/work choices are changing the very notion of the word office. We live in a mobile world - one that is always connected, always on. We are no longer confined to the office and the corporate network. Thanks to mobile devices, tablets, home broadband and Wi-Fi, we work from home, in cafes; we send emails from the train on the way to work, or on the way to the next meeting. Lawyers will increasingly demand that the applications they use on the desktop be available as mobile apps, enabling them to deliver a better, and more affordable experience to the client. Dean Sappey is Co-founder and President at DocsCorp.
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Are legal comparison websites set to become lawyers’ new best friend? The latest LexisNexis Bellwether Report on the legal sector ranks attracting new clients as the second biggest challenge for law firms, but few are embracing technology as a source of new business. Matthew Briggs explains why this means legal comparison websites are set to become the new best friend of the legal sector. he legal sector is awash with conferences that show you how to improve the performance of your practice, improve client relationships and implement the latest technologies, or improve your website. But one thing that never gets discussed is how to attract new clients.
And without new clients it doesn’t matter if your offices look fantastic following a fit out, or you’ve got the latest case tracking software, because you won’t have any clients to benefit from your investment. However, as lawyers would have you believe, it will all be OK because law firms will continue to get their business from the sources they have used since the sector was formed more than 800 years ago and borne out of the Magna Carta. The only hiccup with this theory is consumers, the advent of the promiscuous client, and a transformation in buying habits that started with comparison or aggregator websites for car insurance and now extends to just about any product or service a person can buy.
It’s no coincidence that financial and utility companies are offering their products and services via comparison websites following criticism from the CMA and it is naïve to believe the legal sector will emerge unscathed once it publishes its interim report in July 2016
A new source of business
The first aggregator site was launched in 2002 and insurance companies were sceptical at first. They had their tried and tested routes to market and didn’t think they needed the new kid on the block that was promising qualified cases at a quantifiable cost. Fourteen years later and aggregator sites are an established source of new business for travel, home and motor insurance, utilities, loans and credit cards. According to the latest figures from MoneySupermarket.com the total size of the motor, travel and home insurance market is at 75m policies a year – of which 24m are bought through aggregator sites. But comparison websites in any sector don’t equate to a race to the bottom from a pricing point of view - 50 per cent of consumers don’t buy the cheapest product they are presented with - instead they choose a provider based on criteria that are important to them. It could be the proximity of the company offering the product, or service awards they have won for how they handle claims, the ability to get discounts for multiple car policies, or just that the brand is one they know and trust. And lawyers are not immune to this changing consumer behaviour. Being able to search for companies providing a particular service
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and compare what is being offered online before connecting to the chosen provider is a very credible and deeply embedded way for people to buy products and services in the 21st century.
The Legal Services Board (LSB) agree. The LSB’s strategy states ‘Consumers will be given a greater choice of providers and service delivery channels. There will be a demand for intermediaries and comparison tools to help them do so’. And the Competition and Markets Authority (CMA), which has already imposed transparency on the utilities and financial sectors following studies into those markets, is currently putting the legal sector under a microscope. It’s no coincidence that financial and utility companies are offering their products and services via comparison websites following criticism from the CMA and it is naïve to believe the legal sector will emerge unscathed once it publishes its interim report in July 2016. But instead of being sceptical of a new, more transparent route to market, lawyers should embrace the changes, be early adopters, get ahead of the competition and open up completely new sources of revenue for their practices.
According to the LSB there is an access gap in the legal sector worth several billion a year – and the Federation of Small Businesses estimate it’s £100bn a year. Every adult in the UK has a legal issue once every three years but only 20 per cent use a lawyer. Similarly 40 per cent of SME’s have a legal issue every year but only 11 per cent will consult a solicitor. That’s a lot of legal advice to be sold if you can get your brand in front of those people. In addition to tapping into a new market, there are other benefits to being part of a legal aggregator – insight into what consumers want. Over time legal aggregators will collect insight about the things that are important to consumers, what impacts on their buying decisions, and share that insight to enable law firms to make smart decisions that enhance or align their proposition with changing customer needs. Not to mention it is a measurable. It allows firms to accurately work out their cost of acquisition and outsources the need for a law firm to invest in its own digital presence. Partnering with a digital specialist that understands the customer journey, user experience and knows how to get visitors to its website through specialist marketing leaves lawyers to do what they are good at – giving great advice and helping clients when they need expert guidance. Perhaps it’s the beginnings of a mutually beneficial partnership?
Matthew Briggs is Chief Executive Officer of The Law Superstore, the first legal services aggregator website. For more information lawyers should call www.thelawsuperstore.co.uk
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So does your technology match your firm’s ambitions? Our resident IT guru Charles Christian writes… t a recent legal industry conference, Simon Adcock, who heads professional services for HSBC Bank, said he “would like to see more IT directors” when law firms were applying for loans for major business transformation projects.
Adcock said there was “often not enough clarity” as to what a firm’s IT strategy was and how it matched up with where the firm wanted to be in five years’ time. He added “Law firms can cut costs and make gains only up to a point. Technology has a massive part to play going forward in creating efficiencies and driving profitability.” The issue Adcock raises is one that has been rolling around the legal space for many years – but sadly one far too many law firm partners still continue to ignore – and this the relationship between a firm’s practice/business development strategy and the firm’s supporting infrastructure. Let’s break it down into bite-sized pieces…
It’s about infrastructure
Yes, of course a law firm needs good lawyers – but that is no longer a key differentiator (except in some niche areas of legal practice) leading to commercial success in a competitive marketplace. And, yes, a law firm also needs a good partnership leadership team, who have the big picture vision of where the firm is going over the next five years. For example is the firm going to specialise, remain generalist, go for volume work, move out of some areas of legal practice etc, etc? (In fact, failure of the management visionthing has probably been the most frequent cause of failure of larger firms in recent years!) But, this is only part of the story. For a firm to hope to have a successful future it also needs to have a good financial management infrastructure (including billing, credit control and management reporting). This means good bean counters and good IT systems. A firm also needs a business development/marketing/sales function that can help identify, attract and win over all those clients who are going to be helping the practice grow and be a success over the coming years. This also requires good IT systems. And, a firm need a good IT infrastructure both to support the firm’s growth (see above) and to ensure the firm can deliver their legal services to their clients in the most efficient, cost-effective and client-friendly ways possible. (Yes, I am aware firms also need a good HR department to attract, recruit and retain the legal talent who will be part of the firm’s success story, however, except in larger firms, this does not require such an extensive IT investment.) As Simon Adcock points out, firms can only cut costs up to a certain point; after that technology has to play a role. Quite simply you cannot achieve more fee-earning with fewer fee-earners (the classic business profitability mantra for “doing more with
Too often law firm managements view technology as a back-office overhead that merits the minimum possible investment, with stuff only being replaced when it will no longer function less”) unless you introduce elements of office automation, which today can cover everything from speech recognition, to case management, to BI (business intelligence) reporting, to any one of a dozen other systems.
A false economy?
So is your firm’s IT infrastructure fit for purpose? Too often law firm managements view technology as a back-office overhead that merits the minimum possible investment, with stuff only being replaced when it will no longer function. Now I’ll admit that buying the latest tech for its own sake is a luxury no firm can afford – even if we may be guilty of this in our private lives! (Hands up those people who have upgraded to the latest iPhone models despite the fact they didn’t use all the functionality on their previous models.) Nevertheless there comes a point with tech where the failure to update, upgrade or replace can become a false economy, a liability rather than a cost-saving asset. For example, it is a common complaint by IT departments that they are always the last ones to know when a firm wins a new client and the partner-in-charge has promised the client all manner of online reporting functionality, WIP-transparency and matter collaboration portals. Similarly, firms launch into merger negotiations without considering whether their existing practice management system is either compatible with that of the other firm or else capable of accommodating the increased size of the practice. In both instances, this can result in a firm having to make a major unplanned investment in new technology that either punches a hole in the profitability of the new client work or undermines the cost-benefit assumptions of the merger. Yes, law firms need an IT strategy but it must be as part of a firm’s overall practice development strategy rather than viewed in isolation. Charles Christian is the Editor-at-Large of the Legal IT Insider & tweets about #tech and #legalit at @ChristianUncut.
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A new approach to business The third annual Legalex conference took place on 11th and 12th May 2016. Tess Henderson, Conscious Solutions, summarises the event. egalex is one of the biggest legal events of the whole year; so needless to say, we were very excited to see what 2016 had to offer. On arrival, the atmosphere was relaxed and friendly; people were there to learn new things, discuss innovative ideas, embrace what the new technological age has to offer to legal services and of course - have a bit of a gander.
Marketing for law firms proved to be a key discussion topic this year. In the Conscious Marketing Theatre, Lara Squires from Consortium Business Solutions focused on a common problem in her talk, ‘Marketing: Strategy or Tactics?’ On average, Industry Analysts suggest that law firms spend 10% of their turnover on marketing, but the question is, what’s actually worth spending money on? Sometimes, it’s worth scoping out what you can get for free. Shortly after in the Conscious Marketing Theatre, Trish Kinahan from Hazlewoods Accountants presented her findings from a range of law firms’ marketing budgets to create a bigger picture of where money is spent and how effective it is. Meanwhile in the Symphony Legal Theatre, Adrienne Halladay discussed the Top Tips for Implementing Marketing in Your Firm: how to create a solid marketing infrastructure in your firm and how to maintain it. More specifically, David Gilroy, the Director of Stuff and Things at Conscious Solutions tackled online marketing, where he discussed how law firms can fully optimise their website to boost reach, traffic and conversions. It’s all very well having a website, but it’s what you do with it after that counts. Meanwhile in Social Media land, Conscious Solutions’ Rich Dibbins explored the future of social media in his talk, ‘Social Media: The Good, The Bad and The Ugly.’ Now that law firms have got the hang of using social media, 2016 offers a new lesson: The social etiquette that comes with it. Similarly, on Thursday afternoon in the Symphony Legal Theatre, Peter Bowen examined how you can grow your social media following organically. Ultimately, in this busy social sphere, Content is King. He identified why some content receives a lot of social interaction, while others simply fade into the depths of the Internet.
Naturally, networking is an important skill for lawyers to have, but for some networking can be a struggle; frequently, you can find yourself asking: “How should I introduce myself?” and “How do I keep the conversation flowing?” Thankfully Rob Brown, a featured TED speaker from the Networking Coaching Academy was on hand on Wednesday afternoon in the Conscious Marketing Theatre, offering useful advice on standing Banner_190x50/Museo_Layout 1 07/09/2015 10:40 Page out 1 and
Legalex is one of the biggest legal events of the whole year; so needless to say, we were very excited to see what 2016 had to offer asking better questions. Meanwhile, Bernard Savage, Director of Size Ten and a Half Boots tackled networking in the Hot Topics Theatre on Thursday afternoon. He shattered preconceptions of traditional networking and addressed how the 79% of introverted people in professional service firms can network successfully, under the radar of their competition. As expected, cyber crime was a popular topic this year in the Practice Management Theatre. Although a terrifying threat, the general message over the two days was that of defiance and awareness. On Wednesday afternoon, Nigel Wilson and Mark Edwards from FINANCIAL EYE offered a list of strategies that law firms could explore to fend off cyber crime; highlighting the popular government-accredited audit and certification programme, Cyber Essentials. Likewise, Alastair Murray, Director of The Bureau took a no-nonsense approach in his talk titled ‘Cybercrime…Ignorance Is No Defence!’ Alastair showed how easy it is to hack into an office network, pretend to be a member of staff and email the rest of the team dangerous website links and Word documents. Overall it was an eye-opening experience, informing those in the legal sector that they simply cannot afford to take a back seat on the subject. Another fascinating subject that got everyone talking was Chrissie Lightfoot’s panel discussion on artificial intelligence in the Keynote Theatre. Instead of running away from the idea, Chrissie addressed the benefits robots could bring to a law firm. Do they have the potential of forming a more efficient, smarter workplace? Some beg to differ, arguing that we cannot replace the authenticity of human interaction...but only time will tell! Overall, Legalex 2016 invited us to consider a range of concepts and ideas to help improve law firms as businesses in our ever changing, fast-paced world. Whether it’s improving your social media strategy, networking with the right people or embracing new innovative technology, Legalex delivered a wide scope of thought leaders to inspire, motivate and advise. Tess Henderson is Marketing Executive at Conscious Solutions Ltd
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Progressive law firm, Slater Heelis, selects Proclaim Practice Management System in a 6-figure deal later Heelis LLP, which operates from Manchester and Cheshire, has selected the Law Society Endorsed Proclaim Solution from Eclipse Legal Systems as its new Practice Management system.
Slater Heelis traces its history back to 1773 and is well known for offering expert legal Darren Gower advice and exceptional client care. Slater Heelis provides multi-disciplinary coverage from Construction and Corporate Commercial to Family and Personal Injury, providing services to clients in the North West, the UK and abroad. With specialists across all fields of law, Slater Heelis has developed an enviable reputation for delivering results. In a 6-figure deal, the Proclaim Practice Management Software solution will be rolled out across the firm providing staff with instant desktop access and ensuring a secure and consistent approach to matter management. Proclaim’s integrated financial platform will enable a seamless approach to billing and overall
practice management, providing streamlined processes and full integration with fee earner activity. Eclipse will also carry out a full client and financial migration from the practice’s incumbent system, converting all relevant data into Proclaim. Mark Heptinstall, Partner at Slater Heelis, comments: “Eclipse is widely acknowledged as the market leader in providing legal software solutions and we are looking forward to a long and successful partnership with them. As an integral part of a full review of our IT infrastructure - following a period of growth by way of mergers and a resurging economy - Proclaim will be fundamental to our future success. The end result will mean we can increase efficiencies, reduce waste and streamline our business, whilst continuing to provide our clients with the exceptional service they have come to know us for.” For further information, please contact Darren Gower, Marketing Director at Eclipse Legal Systems, part of Capita plc, via: email@example.com or call 01274 704100.
Title Problems Holding Up Your Transaction? Stewart Title Has The Solution. any of our team at Stewart Title have experience of working in busy conveyancing firms and understand the time pressures that property lawyers face. To assist in managing these demands, Stewart Title has developed a new online ordering platform, which offers a wide range of title indemnity policies. We are pleased to introduce Stewart Online Solution, launching this summer.
When available, Stewart Online Solution will offer an intuitive system that gives you the ability, in 3 simple steps, to order over 150 individual title indemnity policies that provide cover up to £5,000,000. All the property risks you need can be combined within one quote and allow for a combined premium at a further discount. Like our bespoke policies, Stewart Online Solution offers cover for both residential and commercial properties in England, Wales, Scotland and Northern Ireland. As part of our aim of providing a real solution to your needs, most of our existing use policies provide automatic 10% inflation cover for the first 10 years of the policy.
Stewart Online Solution automatically generates a draft policy that you can save or email to other lawyers should you require the approval from another party or their lender. Once that approval is obtained, you need only enter the commencement date and issue the policy for cover to commence. Should you have questions or require any assistance, our Telephone Solution Team is ready to deal with your queries and can order a policy on your behalf. Where additional help is needed, our highly experienced Underwriting Team can assist and our bespoke policies are fully integrated with the new system. To make accounting and administration as easy as possible, the system allows you to keep all of your firms quotes, ordered policies, invoices and accounting history in one easy to access part of the site. For further information or to request a demonstration, get in touch with me by email (firstname.lastname@example.org) or by phone (07415 240703).
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10 MINUTES WITH
SARAH PERRY Q A
Did you expect the legal services sector to change so drastically when you started working in it? The legal profession had already started to change while I was at university. The financial deregulation in the eighties was a turning point for the legal profession, with the starting gun fired by the Clifford Turner / Coward Chance merger in 1987. Although the effects of deregulation were mainly felt by City law firms, the ripples did spread outwards. So, yes, I did expect change when I joined the profession, particularly as I had joined a firm with a very clear idea of where it was going. Peter Beddoes, our then Managing Partner, had realised early on that the transformation of Wright Hassall from a high street firm in a small town to a regional commercial firm with a national outlook was the way to guarantee the firm’s future. And he has been proved right – since then we’ve seen technology revolutionise the way we work, the Legal Services Act and one of the longest recessions in living memory.
What has been the key positive or negative impact of the liberalisation of legal services? On the whole, I believe the impact has been positive. The doomsayers predicted that ‘Tesco law’ would herald the end of the legal profession as we know it. Needless to say, this didn’t happen but it did make law firms undergo a period of selfreflection and encouraged the more entrepreneurial to review how they operated and whether they could do things differently. That’s certainly what Wright Hassall did. We decided early on that we were going to grow into a regional, heavyweight firm and this meant a degree of risk taking and being opportunistic. We also took investment in technology, business development and our people very seriously. As a result we have grown by 66% since 2007. The rest of the commercial world thrives on competition and I see no reason why the legal profession should be any different.
Who inspires you and why?
Entrepreneurs inspire me – and not just those who have taken the world by storm. Over the years, I’ve met and acted for many entrepreneurs who haven’t necessarily created vast business empires but have, over time, built up a business which serves them, their family and their community by sheer hard work, dogged determination and an ability to learn from their mistakes. As lawyers,
The rest of the commercial world thrives on competition and I see no reason why the legal profession should be any different we’re naturally risk-averse but, as a manager of this business, I have tried to take a leaf out the entrepreneurial book by relying on a combination of meticulous planning and a willingness to take a leap of faith. So far this strategy seems to be working!
Have you had a mentor? If so, what was the most valuable piece of advice they gave you? No, I have never had a formal mentor but over the years I have worked with a number of people I have admired greatly. The common factor has been an ability to listen, to be honest and to be objective. It’s too easy to lose sight of the wood for the trees when you get too close to a project – or a problem – and having someone you can rely on to stand back and re-evaluate the issue from another angle or perspective is invaluable. As you can imagine, I have been given innumerable pieces of advice over the years (much of it instantly forgettable or unhelpful) but the most useful was something I read while juggling two toddlers and a (near) full case load: “if you love your career, hang on to it – children grow up and leave home”.
If you were not in your current position, what would you be doing? I’ve always wanted to be a lawyer and even after many years I can’t imagine doing anything else. That being said, as a litigator I’ve worked with many, very impressive, barristers and so, if I had my time again, I would probably try for the Bar. Despite the bad press lawyers receive, being a lawyer is one of the most rewarding jobs anyone can do. It doesn’t matter if you are fighting on behalf of an individual or a corporation, if the issues matter to them, they matter to you too. Sarah Perry is Managing Partner at Wright Hassall.
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70 Modern Law
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