Modern Law Magazine - Issue 1 by Charlton Grant

The Business of Law

July 2012 | Issue 1 | ISSN 2050-5744 Craig Budsworth assesses the likely effects of changes to the small claims limit. Rob Gurney reflects on the process of becoming an ABS 6 months after authorisation as the first designated ABS. The Institute of Professional Willwriters and the Council for Licensed Conveyancers shed light on reserved legal activities.

Jonathan Djanogly

“ABS’s are an opportunity for innovative fast-thinking lawyers to create exciting new enterprises and provide a better service for the consumer.” Jonathan Djanogly Supported by

Sponsored by

Charlton Grant Ltd ISSN 2050-5744

his unique new magazine is all about the business of law and how legal services will be delivered post-Legal Services Act. This ‘new world’ for the business of law brings more pressure on the traditional law firm to be more innovative and streamline to remain competitive. However it’s by no means a gloomy new era, the introduction of Alternative Business Structures (ABS) presents a golden opportunity for the current legal landscape to produce creative new services that benefit the consumer. The Modern Law team consists of some leading legal and business experts, who will report, analyse and debate how the legal marketplace will adapt to these changes. To do this each issue of the magazine will feature key areas of law, as well as interviews and columns from some of the biggest names in the worlds of law and business. So without further ado get page turning and take a look at what the key players are saying about the future business of law. Don’t hesitate to get in touch and let us know what you think; is there a topic you’d like us to cover? An article that’s begging to be written? Do you want to be involved in the conversation? We’d love to hear from you. Modern Law magazine: an exciting new title for an exciting new legal era...

Modern Law Magazine Issue 1 – July 2012 | ISSN 2050-5744 Editorial Department Antony Smith Emma Waddingham Stan Neal

Production Lindsey Thomson-Heley

Events Julia Todd

Design Richard Berry

Advertising Dean Thompson Kate McKittrick

Contact t: 01765600909 or e: info@modernlawmagazine.com

All material is copyrighted both written and illustrated. Reproduction in part or whole is strictly forbidden without the written permission of the publisher. All images and information is collated from extensive research and along with advertisements is published in good faith. Although the author and publisher have made every effort to ensure that the information in this publication was correct at press time, the author and publisher do not assume and hereby disclaim any liability to any party for any loss, damage, or disruption caused by errors or omissions, whether such errors or omissions result from negligence, accident, or any other cause.

ML // July 2012

Contents

CONTENTS 03-09 Intro & THE News 07 Kerry talks news

Kerry gives us an industry update and overview of the state of the legal market: looking at the changes to the small claims limit and legal aid.

11-16 The INTERVIEWS 11 Interview with...

Jonathan Djanogly

We catch up with the parliamentary under-secretary for Justice, MP Jonathan Djanogly, and get his views on the new legal landscape.

14 Interview with... Eddie Ryan

Co-op Legal Services’ Managing Director gives the lowdown on what the Legal Services Act and ABS means for his business.

and COFAs is underway Samantha Barras, Solicitor Regulations Authority

20 The Legal Services Board:

and funding

Steven Arundale, Natwest

21 Data mining - it’s not what you

know; it’s how you know it

Jo Hodges, Redbrick Solutions

22 Hourly billing is dead? Long live hourly billing?

Robert Parness, Paramount Legal Costs

interim report

Chris Kenny, Legal Services Board

22 Joint ownership

Angela Moores, Jarvis Family Law

23 The LASPO Act and

RTA claims

David Bott, Bott & Co.

23 Perfect storm will leave

dabblers with no place to hide

Eddie Goldsmith, Goldsmith Williams

20 Nomination period for COLPs

21 Spotlight on cash flow

24 It’s (still) the clients, stupid

19-31 The views

Charles Christian, The Orange Rag

24 The changing world

of regulation, risk management and PPI

Martin Ellis, Prime Professions Ltd.

25 Breaking the mould

Chris Owen, St Philips Chambers

Editorial Columnists Alan Nesbit Managing Partner Nesbit Law Group

Charles Christian Editor in chief of the Orange Rag

Elmear McCartan Solicitor Ralli Solicitors

Jo Hodges Managing Director RedBrick Solutions

Samantha Barras Executive Director Solicitors Regulation Authority

Andrew Stenning Managing Director Searches UK

Chris Kenny Chief Executive of the Legal Services Board

Faye Soden Director Legal Marketing

Mikes Ames Director Flair

Steven Arundale Head of professional services Natwest

Angela Moore Partner Jarvis Family Law

Chris Owen CEO St Phillips Chambers

Ian Hunter Managing Director Jellyfish Creative

Neil Huntington Director HuntingtonRoss

Antony Smith Director Legal Project Management

David Bott Managing Partner Bott & Co

Kerry Underwood Managing Partner Underwoods Solicitors

Nick Hodges Managing Director Oyez Professional Services

Bernard George Director Socrates Training

David McNamara Managing Director SOS

Mark Witter COO Anglia Research

Nick Ingham Legal Manager Anglia Research

Barry Talbot Managing Director Informance Limited

Eddie Goldsmith Goldsmith Williams Solicitors

Martin Ellis Managing Director of Prime Risk Solutions

Robert Parness Costs Lawyer Paramount Legal Costs

ML // July 2012

Contents

25 A helping hand

Nick Ingham, Anglia Research Services

27 The deadly sins of compliance

Bernard George, Socrates Training

27 Information security – the next big

compliance issue post-ABS

Andrew Stenning, Searches UK

29 Sales of cheap supermarket

47 Accident investigation under fire

Neil Huntington, Huntington Ross

31 May the best brand win

Craig Holt, Quality Solicitors

33-51 The Features 35 Raising the small claims limit

Craig Budsworth assesses the likely effects of changes to the small claims limit.

37 Becoming an ABS

Rob Gurney reflects on the process of becoming an ABS.

39 A confusing world for

aspiring lawyers?

Catherine Baker takes a look at the different options for prospective lawyers.

41 A new frontier

The lack of forthcoming details on the referral fee ban has lead to a business planning standstill for claims management companies.

43 The will for protection

The Institute of Professional Willwriters and the Council for Licensed Conveyancers shed light on reserved legal activities.

45 Where client is king

We shine the spotlight on Public Access and the Bar.

value claims

Katie Wilson (Towry Ltd.) discusses some of the changes that are affecting personal injury claimants.

54-62 BUSiNESS MANAGEMENT

31 Problem partners spell one thing Eimear McCartan, Ralli

The conveyancing industry verdict Searches UK have been surveying conveyancing practitioners to find out how ABS will affect them.

51 Financial solutions for high

suits are up

D.I.S.S.O.L.U.T.I.O.N

What are the pros, cons and implications of advancing technology for accident investigation?

49 To ABS or not to ABS?

Nick Hodges, Oyez Professional Services

29 Is your glass half empty?

54 Listen to the market

Anthony Smith

55 What is value pricing?

Anthony Smith

56 Making the most of business data

Barry Talbot, Informance Ltd.

56 Why do I need a personal profile?

Alan Nesbit, Nesbit Law

57 The mythical ‘S’ word

Mike Ames

57 Making the most of your brand Ian Hunter, Jellyfish Creative

58 Marketing in a recession

Faye Sodden, Legal Marketing Experts

59 The changing case for case

management

David McNamara, SOS Legal

59 Preparing for an alternative future Eclipse Legal 60 The relentless march of the smart mobile device

Roland Maguire

62 Why lawyers hate business

development Will Kintish

25 ML // July 2012

Kerry talks news

Kerry talks news Because I Do Not Hope To Turn Again Where are we now? D-Day is 1 April 2013 when: • recoverability of success fees and after-the-event insurance will be banned; • referral fees will be banned; • portal fees will be cut; • damages-based agreements will be allowed in contentious work for the first time.

owever the most significant change is the likely increase in the small claims limit for personal injury work from £1,000.00 to £5,000.00, and compared with this the ban on recoverability of success fees, which has provoked so much debate, seems almost irrelevant. The Government’s aim is to introduce this increase on 1 April 2013, at the same time as all of the other changes, but that may be optimistic.

In relation to the cut in portal fees the current stances are: Existing Stage 1 and 2 fee

£1,200.00

Labour Opposition’s proposal

£600.00

Government’s suggestion

£300.00

Insurance industry

£150.00

Real insurance position

£300.00

Expect a cut to around £500.00. If the small claims limit is raised to £5,000.00 then obviously there will be no portal costs and no old-style fixed costs payable on claims of £5,000.00 or less. The Government’s line on this increase in the small claims limit will be that it still leaves the personal injury limit at half of the normal limit, and when the general small claims limit rises from £10,000.00 to £15,000.00 as planned, then it will be just onethird of the normal limit. Put another way the personal injury limit will be £5,000.00 less than the general limit, whereas at the moment it is only £4,000.00 less.

“Claimant lawyers may not realize it, but the raising of the limit may be the best thing that ever happens to them as it will liberate that part of the profession.” ML // July 2012

Kerry talks news

“I have seen off Claims Direct and I have seen off the Accident Group. I will see off Alternative Business Structures.” Do not expect a public outcry about this change. Claimant lawyers may not realize it, but the raising of the limit may be the best thing that ever happens to them as it will liberate that part of the profession from its dependency upon insurance companies, just as everyone who gave up legal aid upon the introduction of franchising is very glad that they made that decision.

It is said that no firm that gave up legal aid every returned to it. There is no future in any business where the client or customer pays nothing and the control of work is in the hands of someone else. It creates a supplier dependency upon that someone else, for example the insurance industry or the Legal Services Commission or Sellafield or Windscale or whatever it is now called. The day that legal aid became a franchise where the Lady Bountiful Commission doled out the work, rather than a method of funding one’s own clients’ cases, was the day I abandoned legal aid.

As everyone knows – he who pays the piper calls the tune. Likewise, the banning of referral fees. The person or organisation which has the first contact with the client always has significant power and being at the top of the food chain, generally controls the destiny of those below. Estate agents have been in this position for some time. When I started work, in what now seems the distant past of 1974, I was an outdoor clerk and, as was usual in a solicitors’ firm then, most of my work was residential conveyancing. Solicitors’ scale fees were calculated in a similar fashion to estate agents’ fees and so were very much the same. Add on extra fees for mortgage redemption etc and the solicitors just edged it. In one of my firm’s very last conveyancing transactions last year we charged £1,800.00 profit costs – a high fee these days for residential property work. The 2% estate agent’s commission was £18,000.00. We decided to abandon residential conveyancing and, along with giving up legal aid work when it became franchised, that is one of the best business decisions we have ever made. There will be no going back. The speed with which personal injury lawyers have turned themselves into bottom-feeders is extraordinary, although I suspect that the individuals involved are, in many cases, those who undercut others in the conveyancing price war and thus wrecked residential conveyancing as profitable work. Claims Management Companies now control the low-value personal injury work in the way that estate agents, mortgage companies and so on control residential conveyancing, with solicitors being allowed the crumbs that are left. A rigorously enforced ban on referral fees, combined with the rise in the personal injury small claims limit to £5,000.00 may just make low-value personal injury work worth doing again. That brings me on to contingency fees and its bastardized Jackson nonsense of damages-based agreements, proof that the establishment still hates the ‘c’ word – contingency. In non-contentious work, such as pre-issue work and employment tribunal proceedings and CICA claims out and out contingency fees have always been permitted, or rather not positively prohibited. Solicitors working on a contingency fee basis, charging say 25% to 33% in lowvalue small claims personal injury work will earn far more than they will under what

ML // July 2012

will be heavily-reduced portal fees. Also, as the insurance companies will not be paying costs in small claims cases, except court fees, medical report fees and very low fixed costs - £100 or so – their richly-financed propaganda campaigns on costs will stop. They will not pay hundreds of millions of pounds to the Conservative Party to achieve no financial gain. Where there is no organized costpaying body, such as the insurance company lobby, the pressure is off on the costs front. Hear much from Lord Justice Jackson on Magic Circle firms’ fees for commercial work? No, I thought not. The fly in the ointment, and a huge one, is the apparent death-wish that many solicitors have. Contingency fees of 25% to 33% would work perfectly well. We know that clients are comfortable with a 25% deduction from damages as no-one ever complained when that percentage was taken by way of a success fee in prerecovery days. When I say no-one, I mean no-one, not one! However being a member of a profession where some of my colleagues feel it appropriate and necessary to bribe prospective clients with cash advances, iPads and the like I have little confidence that sensible percentages, and therefore sensible profits, will be maintained. If I am right then the wholesale deregulation of personal injury claims, valued at £25,000.00 or less is only years away. Solicitors will have only themselves to blame. That is why low-value personal injury work is not part of my firm’s future. So, what is left? Plenty actually – all of those areas of law where the individual solicitor is perceived as making an important difference, rather than taking part in a formulaic, commoditized, casemanaged factory transaction. Specifically such areas of work are employment law, family law and private client work, by which I mean wills, powers of attorney, probate, trusts, tax planning etc. That is work where you need to see and get to know the client, the client’s family etc. Any legal work where it is deemed unnecessary to meet one’s client is unlikely to survive as worthwhile work. Over the Jubilee weekend my firm had a stall at the Herts County Show. We

Kerry talks news

gave away tea, coffee and cake, with plenty of literature to hand. We got 224 new contact details, as well as visits by dozens of existing clients, other solicitors, brokers, estate agents etc. Judging by the Underwoods canvas shopping bags given away, we were visited by around 1,500 people. So, while you were maximizing your search engine optimisation to secure another crap client, who is

“Claimant lawyers may not realize it, but the raising of the limit may be the best thing that ever happens to them as it will liberate that part of the profession from its dependency upon insurance companies”

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not prepared to pay a decent fee, we were busy engaging in real time with real people. I have seen off Claims Direct and I have seen off the Accident Group. I will see off Alternative Business Structures. I have been asked to comment on value pricing. If I understood what it meant I would, but I don’t, so I won’t. All pricing is value pricing, but the trick is to give value or the perception of value. People will pay twice as much for a Mercedes as for a Ford, even though it is unlikely that there is twice the value in any measurable way. Legal advice is no different. Why should the price of legal services be controlled by the state any more than the price of cars? Now I am no believer in the concept of a free market, but I am even less of a believer in a free market for everyone except lawyers. A sort of Marxist state for lawyers but no-one else is a rather strange concept, but I suppose it is in tune with the Alice in Wonderland state that we are in at the moment. You carry on with your internet strategies and valuepricing and strategic flat-lining management speak bollocks and I will carry on being a lawyer. See you at the Herts County Show next year – ours is the stall with the un-value priced Mercedes outside. By Kerry Underwood

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Interview

Interview with... Jonathan Djanogly Jonathan took time out of his busy schedule, as the Parliamentary Under-Secretary of State at the Ministry of Justice, to talk to Modern Law Magazine about the Legal Services Act and the ABS era. How do you foresee the legal landscape post Legal Services Act? Well, of course the Legal Services Act deals with more than just ABS, we’ve put in place a whole new regulatory structure and I think it’s fair to say the regulatory side of things is settling down at the very high end of our expectations. The LSB is doing a lot of very valuable work and the new legal ombudsman seems to be very popular with all parties, with the consumers and with professionals, and they’ve been meeting all their targets and coming in under budget. So generally speaking, on the constraints and regulatory side, things have been going very smoothly. On the ABS side, I kept getting asked the question ‘is it going to be a big bang?’, and I would always say no. Firstly, because I think the law fraternity in general are more cautious than the American banks that rushed to London after the big bang in the city. But also because there’s a regulatory side, anyone who wants to go into ABS has to become regulated. The SRA has to operate on a timetable and rightly they have

been cautious in the speed of the applications; they have over onehundred pending applications. If you look at the structures they’ve had so far: they range from a husband and wife practice, where the husband is a solicitor and wants to go into partnership with his wife who was also a solicitor; to Australian listed firms, going into conditional acquisition agreements in the UK to buy English firms; to Italian firms wanting to operate as an ABS in London to Co-op, which is a financial services type operation. The variety is very significant and the regulator needs to tread carefully.

To make sure they do it properly? Yes, I don’t foresee a big bang and actually the other reason is that it’s important to remember when it comes to the provision of legal services Britain is arguably at the very forefront in the world. At the time of the big bang in the City, in the 1980s, the American banks were way ahead of the British banks; they came over and basically swamped the City. Whereas now, internationally, British firms are absolutely up there, if you look at the top ten firms a very

ML // July 2012

Interview

“On the ABS side, I kept getting asked the question ‘is it going to be a big bang?’, and I would always say no.” significant number of them are British. Also, if you look at innovation in terms of provision of financial services then we are way out there, so in some ways we’re leading on this.

How do you feel it will benefit the client experience? Well, it really depends on what type of client you’re looking at. The client of an international law firm is a very different consumer from someone who goes into their local high-street practice, but I actually see ABS being able to benefit every level of the profession. From the regional firm, who will be able to issue equity or open up new offices, to providers of financial services who will be coming into the profession and creating new brands. I think we’ll see branding, commoditization of products (which will lead to lower prices and a more consistent product), more competition and a general de-mystification of the product. I think that will be seen at all levels and it will have very strong benefits for high street type law. One of the great potential benefits of ABS is to cut through all of that and I think we’ll see more innovative pricing, more fixed pricing and more standardization of products. Your average person, going into your average high street practice, for an average conveyance, they don’t need some fancy products, they don’t want it and they don’t want to pay for it. I think the consumer will be in a better position. Everything I’m hearing from firms that I’m talking too, who have gone or are going into ABS, shows that to be the case. There’s no compulsion for a firm to go into ABS at all, but would I would say is that every firm would be well advised to very carefully look at their strategy. Firms are going to have to be much more focused.

Do you feel the ABS era is a threat or an opportunity for the legal market? It’s an opportunity for innovative fastthinking lawyers to create exciting new enterprises and provide a better service for the consumer. For the consumer it can provide a better service, a better product and a cheaper cost. We also want to have regulators, who keep up with all of this, which is happening at the moment.

ML // July 2012

Do you think the ABS era will drive down the legal services cost and do you think that will then have an impact on the service people receive? I do, again you can’t generalise, but certainly at the standard end of the market there will be competition and a cheaper cost as a result.

Do you think that will drive down services that people deliver to their customers though? Well no, I think it could improve the service because at the moment a lot of high street firms are struggling anyway. There have been a lot of pressures on the marketplace in recent years from the global economy, like any high street practice or business, it’s been affected by the ability to get finance from banks and the cost of legal insurance has gone up, which has led to a lot of small firms merging. Firms have had to look very carefully at their products and cutting out areas that have not been profitable anyway. That’s been going on very rapidly over recent years, so I don’t think in itself ABS will lead to any of those things. Also, if a high street practice was under threat they may now be able to merge with other professionals on the high street and provide onestop shops.

How important, in your view, is brand going to be going forward into a new legal services market? Very important, as we move towards standardization of products, and thereby commoditization, brand recognition will go hand-in-hand with that. You can already see that happening, not only in terms of ABSs, but also solicitors just grouping together for marketing purposes. There will be certain sections of the market where you’ll see increasing mergers and branding will become part of that.

In which sectors do you think there will be more of this? We’re seeing it in a lot of smaller areas, the criminal practices, personal injury and high volume markets like conveyancing. If you take conveyancing as an example, the market has had a very hard time in recent years because

Interview

house prices have been low and people haven’t been buying and selling properties. So I think a lot of lawyers will be getting together and looking for brand recognition as a way of attracting people.

You touched on it earlier on, but how do you think the public views the traditional legal services market? Do you think ABS de-mystifies the lawyer? Absolutely, that has to happen. The whole thrust of the Legal Services Act is to de-mystify the regulatory side and the complaints side. Before you had to go to different complaints bodies for every single profession, if it was a trademark agent, solicitor, licensed conveyancer or a barrister, now there is one telephone number for the lot. So we’ve had de-mystification of complaints and now we’ve got to move on to the way lawyers operate and ABS will force the change in that direction. As I’ve said before too many people are frightened of going to lawyers. We want people to see lawyers as friendly.

What advice would you give a traditional law firm, be it small, medium or large, considering application to become an ABS? The first thing is that ABS is not an end in itself; it is a vehicle towards an end. So they have to do what they should be doing anyway, which is identifying what they’re good at, what areas they see their local marketplace expanding in and then seeing whether ABS can be used to help them along the way. Take a rural area for example, if they want to expand from one small shop in a market town to shops in four market towns they’re going to need to raise finance to do that and ABS may provide a route through, for instance, raising equity, which they couldn’t have done before.

Who do you see as potentially the new entrants into the market? Well, as I said earlier, I think it’s going to be from across market, from the smallest firms to the largest. We haven’t yet seen the very large firms using ABS but I know that they’re now all talking about it.

“The whole thrust of the Legal Services Act is to de-mystify the regulatory side and the complaints side. Before you had to go to different complaints bodies for every single profession, if it was a trademark agent, solicitor, licensed conveyancer or a barrister, now there is one telephone number for the lot.” ML // July 2012

Interview

Interview with... Eddie Ryan Modern Law Magazine recently had the chance to speak with Co-operative legal services’ Managing Director Eddie Ryan and find out his thoughts on the new legal landscape. How important was it for the CO-OP to be at the front of what is looking like an ever increasing queue of ABS applications? Co-operative legal services was established with the intention of taking advantage of the deregulation of the legal services market. We were heavily involved in lobbying for this change, welcome the change and wanted to be at forefront of applications. We were delighted when we received one of the first 3 licenses.

How do you feel the LSA will benefit the consumer?

Legal services act is designed to improve access to justice. Sir David Clementii was asked to review the provision of legal services in England and Wales and concluded there was insufficient competition as a result of what was effectively a closed shop whereby only solicitors could provide legal services to the public. He found this unacceptable and so proposed the changes which are now embodied in the legal services act. The consumer therefore should see greater competition, improved quality of service and much keener prices.

Do you think the LSA represents an opportunity or threat to the traditional high street firm?

The act doesn’t pose a threat to good traditional firms. It will however increase competition and less effective poorer firms may well suffer but as result of their own inadequacies rather than the LSA.

What percentage of the market would the CO-OP have to capture for you to feel you have succeeded? I actually feel that we have already succeeded; we are one of the top 100 legal practises in the UK in terms of revenue, one of the largest PI practices and possibly the largest probate practice already. However, we would look to continue to grow our business and provide even more services to far more people and therefore capture an even greater share of the market place.

How important is “brand” going into the new legal era?

Brand itself is not important it’s the values attached to that brand and the way people see the brand. The Cooperative is fortunate in that we have a trusted brand and rightly so because of the ethics, principles and values of the Co-operative.

What lies at the heart of the CO-OP’s legal service offering – e.g. – is it clarity around pricing coupled with easy access or is it personal service? I constantly talk about legal services being a purchase of necessity or a distressed purchase. A necessity in that you need someone to complete a will or conveyance effectively. Or a distressed purchase if for example, you have been unfairly dismissed from work, you have a neighbour

“The consumer should see greater competition, improved quality of service and much keener prices.” ML // July 2012

Interview

“The act doesn’t pose a threat to good traditional firms. It will however increase competition and less effective poorer firms may well suffer but as result of their own inadequacies rather than the LSA.” dispute or need to settle the affairs of a deceased loved one. I believe the Co-operative is there to support you in these times of distress or need and provide the level of service that one would expect from a first rate organisation. We will try to provide upfront fixed price products and services wherever possible.

What three things do you think the consumer is looking for when instructing a legal service provider?

Primarily help, and someone to communicate to them in a way they can understand i.e not talk down to them. Ideally to offer the services at a price they can afford and they have certainty about.

How does the Co-op plan to remain compliant with legislation/regulation in such a regulated industry like law?

Compliance was a fundamental part of our ABS application and inline with the SRA guidelines and rules, we have appointed a COLP and a COFA and we will naturally abide by all the rules and regulations set out by the SRA. We would also hope to engage with the SRA on a regular basis to ensure we are at all times fully compliant.

Eddie Ryan - Managing Director Co-operative Legal Services Eddie is an accountant by profession and spent the first fifteen years of his career in Finance and Bank Commercial Lending before taking up the role of Head of Commercial at PPP, the private medical insurer. In June 1995 he made a career switch into the legal world when he joined RAC, first as General Manager and later as Managing Director of their Legal Services Division. After ten very successful years Eddie left in 2006 to establish the newly created Co-operative Legal Services, which is seen by many as one of the leading advocates for the introduction of Alternative Business Structures.

ML // July 2012

Interview

“I believe the Co-operative is there to support you in these times of distress or need and provide the level of service that one would expect from a first rate organisation. We will try to provide upfront fixed price products and services wherever possible.” How do you think the legal landscape will look in 12 months time? Not a great deal different from now. I think the introduction of ABS’ will be an evolutionary process rather than a revolutionary process.

Telephone: 01454 466 200 Facsimile: 01454 466 247 Email: info@theco-operativelegal.co.uk Website: www.co-operative.coop/legalservices

ML // July 2012

Yesterday the Royal accent was given to the LASPO act – what impact does this now have on your business model? How do you think it will change the industry? We’re evaluating what impact it will have on our business model but inevitably it will change our industry and people will have to adapt accordingly.

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Using CILEx qualifications to match staff training to business needs ‘Lisa has been developed from a likeable, committed administrator into a competent assistant at a cost of just less than £2,000.’ Claire Benneyworth, Partner, Bonnetts Solicitors. Alternative business structures are coming in all shapes and sizes, and so do the options for staff development through the Chartered Institute of Legal Executives (CILEx). CILEx qualifications are ideal for delivering staff competence in the areas of law and legal practice most relevant to their employers’ business activities. CILEx qualifications: developing paralegal staff and potential lawyers CILEx qualifications can be used to train staff for paralegal work: after one year of part-time study the CILEx Level 3 Certificate in Law and Practice converts an untrained employee into a competent paralegal. Available in eight areas of legal practice, the qualification also functions as the first rung of the Chartered Legal Executive lawyer training route, and helps the employer decide, which (if any) staff

to support through further training. The route to become a Chartered Legal Executive lawyer usually takes four years of part-time study (one year for law graduates), plus a period of qualifying employment. Several organisations have seen the benefit of developing their own staff by integrating CILEx qualifications into their in-house ‘academies’. The resulting Chartered Legal Executive lawyer will be a specialist in one or two areas of legal practice. A career path for law graduate paralegals Law graduates can use the CILEx Graduate Fast-track Diploma to acquire the practical legal and professional skills required to become a Chartered Legal Executive, and their employment to date can often be allocated towards the requisite qualifying period. It’s a real alternative to becoming a solicitor.

Using a training budget to best effect The cost of sponsoring an employee through the first year of training to become a competent paralegal is approximately £1,900, including course fees through ILEX Tutorial College, CILEx membership and exam fees. The full Chartered Legal Executive training route costs in the region of £6,000, or £2,000 for law graduates.

To find out more about training staff through the Chartered Institute of Legal Executives visit www.cilexcareers.org.uk.

Atrium Legal Services was established in 2008 and since then has grown into the largest specialist Industrial Disease Claims Management Company in the UK. We work closely with our Panel Solicitors to ensure that every case is of the highest quality.

Different. Not All Claims Management Companies are the same!

“

Having worked with the team at Atrium Legal Services for almost 3 years, I can confidently say that their prime concern is the wellbeing of each potential client who contacts them. From a solicitor point of view, they offer a very slick service enabling me to fully assess the merits of a claim at the outset.

Steven Eldred, Partner Thomas Eggar A Legal 500 firm

”

Thank you to all our staff and panel of solicitors for all their hard work in helping us win Claims Management Company of the Year 2012

“

Matthew Horne, Managing Director For a long time I have believed that working closely with our law firms and business partners will enable us to become a cut above the rest. This award is a true testament to that!

”

Ministry of Justice number CRM13045 .

Contact Charles.Cox@AtriumLegal.com

The views

19-31

The Views

ML // July 2012

The views

Nomination period for COLPs and COFAs is underway Firms must submit nominations for the role of Compliance Officer for Legal Practice (COLPs) and Compliance Officer for Finance and Administration (COFAs) between 31 May – 31 July 2012. Decisions on the nominations will be made by 31 December 2012, which means that Compliance Officers will commence their formal reporting duties on 1 January 2013.

xecutive Director, Samantha Barrass says: “Perhaps the most important element of this regime is the less obvious one. It is how the regime works to make sure that although the CoLP and CoFA are formal focus points for compliance, they should not be regarded as the sacrificial lambs. Others within the firm, particularly the most senior managers, cannot absolve themselves of their responsibilities. If the process did not work this way, the regime would fail its most important test - the creation of a firm-wide culture of compliance. “In many respects this regime, particularly in the larger firms, is about articulating our expectations of two groups rather than one - the most senior managers as well as the firm’s CoLPs and CoFAs and the nomination process has been designed to underline this point.” Firms are being asked to complete a short, webbased form, which is based on binding declarations by both a senior manager with authority to sign on behalf of the firm, and the COLP and COFA nominees. There are also declarations relating to the Suitability Test. The form includes: Confirmation that the firm has suitable arrangements in place to ensure that the COLP and COFA are able to discharge their duties, and Confirmation that the COLP and COFA declarations, including that the nominee has sufficient seniority and responsibility in the firm, is correct. The SRA will take a risk-based approach to checking individual nominations and will go back to a subset of firms, largely on a risk basis, but will also undertake some random sampling, to check firms’ judgement and approach to selecting their nominees. A range of support has been put in place – see www.sra.org.uk/complianceofficers. By Samantha Barras, Solicitor Regulations Authority

The Legal Services Board: interim report Every week, it seems, there is another new development reported in the trade press, prompted directly or indirectly by the LSA. Change seems relentless. But just what is the scale of that change? As the saying goes “it’s too soon to tell”.

artly this is because the most significant change, the introduction of alternative business structures (ABS), was only realised in October 2011. But it is also a consequence of no agreed benchmark with which to measure change. To remedy this, on 4 April the Legal Services Board (LSB) published an interim report describing the legal services market at the point at which ABS firms started to emerge against a number of indicators. The indicators cover a number of the outcomes for the legal services market that the Act seeks to deliver including, for example, the quality of legal services improving, a higher proportion of the public being able to access justice and the introduction of an efficient legal system delivering quality legal services at a reasonable cost. The report reveals major knowledge gaps which will need to be filled to help measure change. However it has been possible to track changes over the past five years in some areas. For example, we see that entry levels into the legal profession have begun to match the diversity of the population between 2006/07 and 2010/11. And while there has been a large growth in the supply of authorised persons as a whole, there has been relatively small changes in business structures running up to ABS implementation. So while some very tentative positive movement has been made, it is too soon to be able to tell with certainty what this reveals about the future shape of the market. Our interim report and the follow up we propose to publish in October 2012 will begin the process of shedding light on how the market is changing. This is work in progress, so any and all input between now and October is welcome. The report can be found at: http://www. legalservicesboard.org.uk/what_we_do/Research/ Publications/pdf/market_impacts_of_the_legal_ services_act_interim_baseline_report.pdf By Chris Kenny, Legal Services Board

ML // July 2012

The views

Spotlight on cash flow and funding In today’s competitive environment there must be increased emphasis on cash generation and how it finances your firm’s strategic ambition.

e understand that cash flow management continues to be one of the main pressures on businesses today and the legal sector is no different. Indeed law firms have the greater challenge of converting work in progress and debtors into cash whilst keeping discounts to a minimum. Talking with your bank enables you to manage their expectations and discuss any additional funding or support. If you have detailed and strong systems, and a business strategy, it will allow you to act on warning signs before they become a problem. It is also vitally important to demonstrate the strength of your firm to your bank when seeking financial assistance and how you can differentiate yourself from other legal practices. At NatWest our criteria for lending is supporting commercially viable firms that have strong business plans, quality management teams and a clear understanding of their market. Key areas of focus include key performance indicators, annual budgets, cash flow forecasts, projected profit and loss and balance sheets, aged debtors and creditors, levels of work in progress and unpaid disbursements, the split of work (which helps to assess if the firm is too reliant on one area of work or one particular client), and updated partner profiles. Firms should ensure they are investing in their future with a clear focus on staff, structure and client relationships but don’t forget your immediate needs around cash flow. By working closely with your bank you can get the right guidance early to achieve a range of ambitions – whether it is easing your cash flow, day-to-day business management or working towards your future ambition. It is important that you have access to advisors who understand your firm and can give you the confidence to achieve your ambitions. We work to your agenda, not ours, and provide solutions that are simple allowing you to free yourself from routine administration and concentrate on running your firm. Customers expect this – it’s the foundation to a good relationship.

Data mining – it’s not what you know; it’s how you know it. Knowledge management, business intelligence, data mining, it’s all enough to make your head spin!

hat is clear is that all of the afore mentioned are becoming increasingly popular, and rather than being something destined for geeks in the basement, forward thinking firms are now using internal data and knowledge to mastermind new, innovative ways to win business and retain clients. Increasingly, having a good grasp of your internal data is becoming essential to making your firm more efficient and driving competitive advantage. To do this firms are relying more heavily on technology as a tactical weapon, to enable them to stand out from the crowd. Data needs to be stored in one place so that figures can be easily analysed and displayed in an easy to interpret manner (no more poring over spreadsheets with complicated formulae for hours on end!) so we have seen a huge increase in the demand for seamlessly integrated systems incorporating front of house, back of house and client facing functionality with snazzy dashboards that show you just what you need to know in an easy to read format. Arguably the economic downturn has, in part, driven the demand for efficiency that has brought data mining to the fore. Firms need to ensure they have a good handle on their costs and profitability, even more so with the increase in Alternative Fee Arrangements (AFA’s). At the same time, clients are demanding better service and value and are generally more savvy as to the goings on of the law firm and in turn, demand more for their money. Firms that are going to not just survive but thrive in this competitive marketplace will be the ones that realise the value of effective data mining and see technology as no longer being a luxury but as essential to their success. By Jo Hodges, Redbrick Solutions

By Steven Arundale, Natwest

ML // July 2012

The views

Hourly Billing is Dead? Long Live Hourly Billing? In a recent keynote address to the Association of Costs Lawyers, Lord Neuberger MR criticised the use of hourly billing as “ … at best lead[ing] to inefficient practices, [and] at worst… reward[ing] and incentivis[ing] inefficient practices”.

is Lordship lamented the fact that neither Sir Rupert Jackson in his wide-ranging review of civil costs, nor anyone else had come up with an alternative to hourly billing as a method of charging for litigation. He advocated an approach based on value pricing rather than hourly billing, one where skill and experience are the commodities being sold, not time. As drivers of change the Master of the Rolls cited the advent of Alternative Business Structures (ABS’s), the financial crisis and technological innovation. He went on to posit fixed fees and Damages Based Agreements (DBA’s), or contingency fees, as potential alternatives to hourly charging. The value of some legal services is readily ascertainable and these are amenable to fixed fees. However, as Jackson LJ identified, fixed fees are not practical for most litigation because of the uncertainty as to the work involved or, on occasion, the value of the claim. In his speech, Neuberger MR suggested a menu of optional fixed fees depending which items of work were required. As regards DBA’s, Lord Neuberger drew on Lord Jackson’s reference to the model which operates in Ontario. However, nobody involved seems to know whether that model works well in practice or suffered similar problems to the CFA regime in England and Wales. It is unclear how Lord Neuberger’s comments square with his remark in Sibthorpe –v- London Borough of Southwark that: “There is… much to be said for a properly funded legal profession, which has no need to have recourse to conditional fees or contingency fees and the like.” What seems certain is that the debate on civil costs will continue to rage, at least for the foreseeable future. By Robert Parness, Costs Lawyer & Litigation Consultant

ML // July 2012

Joint Ownership There are some areas of law that lend themselves to standard packaged advice to limit costs but then again, there are some areas that do not!

he law relating to joint ownership of property by those that are not married, and their respective entitlements to share in that property upon the breakdown of their relationship, is a good example of one area of law that cannot be packaged up and sold as a commodity. We need only consider the recent case of Kernott and Jones which, after several costly court hearings, ended up in the Court of Appeal to know that even the judiciary have trouble untangling the legalities involved in joint ownership of property. The law seems to bounce between declarations, common intentions, constructive trusts and even the law of estoppel. Reported cases have done little to assist lawyers of many years standing in advising clients on this area of law, let alone those that attempt to simplify their advice into a mass produced product. In an ideal world every conveyancing transaction involving two or more purchasers would include the preparation of an express declaration of trust. This would prevent dispute at a later date as the shares in which each holds the property would be clearly set out at the start. However this means more time, effort and expense which does not fit with the fixed fee or the one size fits all legal produce that now seems to prevail in the conveyancing world. The sterile world that includes online and impersonal legal advice and fixed fee packages does not allow for time for individually tailored advice. What are we to conclude from this way forward? The more standardised and limited the legal advice given at the time of a purchase, the less likely pitfalls will be avoided upon the later breakdown of a relationship. Unfortunately this in turn is likely to lead to more litigation upon the breakdown of the relationship. A penny saved at the outset may not lead to a saving in the longer term. By Angela Moores, Jarvis Family Law

The views

The LASPO ACT and RTA claims As many readers will know, the Government is determined to bring in the LASPO Act by April 2013, even though (at this point) it doesn’t seem to have any idea of how QOCS will work with part 36.

ot only is the LASPO Act due in April 2013, but also the Government is determined to extend the current RTA claims process vertically, to £25,000, and horizontally. Yet none of the groundwork has been done properly and I am seriously concerned that most of the decisions appear to have been taken before the consultation has ended, and without the benefit of the long-overdue report on how the current portal is working from Professor Fenn. Fees for using the portal in the RTA claims process are part of the consultation and a recent leaked email from the ABI appears to put forward the idea that fees of £150 were appropriate. I like to think that my firm is pretty efficient but a figure of £150 is beyond ridicule and can only be an attempt to peg down one side of the debate. Another attempt to peg down portal fees may be the proposed increase in the small claims court limit for personal injury matters. Why is the Government talking about this now? In 2007 the then-Lord Chancellor, Lord Falconer, said that the RTA claims process was the alternative to an increase in the small claims court limit because the Government had been persuaded that an increase wasn’t appropriate in PI claims. Fair enough, that was a previous Government but the current Coalition Government said in February (in the context of portal extensions) that it wouldn’t be looking at increasing the small claims court limit for PI – presumably this was because it recognised that portal extension and an increase in the SCCL wouldn’t work. So what’s changed? On the face of it nothing, but that doesn’t seem to be relevant. By David Bott, ex-president of APIL and Managing partner of Bott & Co.

Perfect storm will leave dabblers with no place to hide There are a variety of pressures conspiring to create a perfect storm and we are likely to see a major reduction in the number of legal services providers as many begin to see conveyancing as an unviable business option, leaving only specialist providers in the market.

ddie Goldsmith, partner at Goldsmith Williams and Chairman of the Conveyancing Association, said “there is now a clear and significant disparity between the specialised players and the occasional dabblers in the conveyancing sector.” In the last 12 months we have seen the introduction of the Conveyancing Quality Scheme (CQS) by the Law Society. The CQS scheme recognizes firms who employ best conveyancing practices, with the aim of reducing fraud, supporting customers and improving overall industry standards: “Receiving the CQS standard is testament to the hard work of our staff, who are committed to delivering the highest quality conveyancing.” Goldsmith Williams welcomed the introduction of the scheme, which will drive standards across the industry, benefiting clients and will rightly give consumers confidence in those recognised law firms: “At a time when all lenders are reviewing their legal panels, CQS accreditation is likely to be mandatory for firms acting for lenders in the future, and we felt it was critical that we achieved it.” There are 1400 firms that have now received CQS accreditation, but this leaves around 3500 nonaccredited firms who do conveyancing. Only this week we have seen HSBC agree from August they will allow all members of the CQS scheme to act for it and the borrower, increasing their restricted panel to around 1443 firms. We witnessed a similar trend in the broker market a few years ago, where their numbers were cut by almost two thirds in a short period of time. Those who came out the other side were much stronger, leaner and better equipped to serve clients and the same will be true of the conveyancing sector. For further information please contact: Emma Mason on 0845 373 6058 or email emason@goldsmithwilliams.co.uk

ML // July 2012

00 24

????views The

It’s (still) the clients, stupid

ack in 1998 I wrote a book called Legal Practice in the Digital Age which had, as its big idea, the argument that law firms had spent the previous 25 years investing millions on computerisation and office automation projects that all approached IT from the wrong direction. With a few exceptions, all that money was spent on inward-looking, back-office administration-type systems (primarily accounts and practice management systems) when instead they should have been concentrating on outward-looking, client-facing systems that make life easier for their customers. That is, after all, what the likes of Amazon and Tesco did with their online shopping portals. Unfortunately law firms have never really understood this and are obsessed with internal procedures at the expense of client service delivery. The fact is most clients (corporate and private alike) couldn’t care less whether a law firm has the best computer systems on the planet or has its entire administration handled by monkeys sitting at typewriters who taking time off from retyping the entire works of Shakespeare. All the clients want is for their matters to be handled efficiently, on time and to budget. Now 15 years ago, when I was writing Digital Age, client extranet portals, virtual dealrooms, interactive case management systems and similar collaborative technologies were thin on the ground, so there was some excuse, but today? Well today, despite a stream of market research indicating client’s rate, speed of response and communications, law firms still don’t understand the concept of client service. In the age of social media and widespread access to high-speed broadband, there is no excuse for being unable to deliver legal services through whatever channels the clients find most convenient. In the early days of online services, Tesco and Amazon were quick to grasp this. Today, in the early days of the Legal Services Act revolution, law firms need to wake up to the fact that if they don’t get client services right, there are a growing number of alternative legal service providers out there (such as the Co-op and Eddie Stobart Barristers) who do understand the concept of keeping the customer satisfied. Charles Christian is barrister who has been writing about legal technology for over 30 years

The changing world of Regulation, Risk management and Professional Indemnity Insurance (PII)

he legal services sector is changing fast and the rules and regulations governing it are changing too, with Outcomes Focussed Regulation (OFR) and Alternative Business Structures (ABS) creating some of the biggest transformations the profession has ever seen. Being on top of these changes and if possible ahead of them is one of the key factors for success. Professional Indemnity Insurance Renewal: 1st Oct 2012 It is fair to say that the last few years have been difficult many firms of solicitors. With fee income under pressure the cost of professional indemnity insurance has seriously affected many firms’ profitability. All indicators point to this possibly changing at the renewal in 2012. With improvements in assigned risk pool (ARP) restructure and the risks of the “boom” years receding into the past, this is exactly the time new insurers will look to enter the solicitors PII market – insurers with good security ratings. Increased competition will lead to more competitive premiums. Existing insurers will have to respond to this threat and we are therefore expecting rate improvements for a number of firms. Although most insurers’ rates are driven by actuaries and so individual underwriters do have discretion and how they “feel” about the risk can have a significant impact on the premium offered. So how should your firm maximise the effectiveness of the renewal process? You must ensure that your firm is presented in a professional manner. Your broker should be able to advise you on what information to provide. Do not assume anything in this area. Make sure you obtain the right advice and ensure you provide the information required. The most common mistakes identified by insurers are: • Flooding the market • Using the wrong broker • Providing copies of procedure manuals (when a summary of key risk activities is preferred) • Not providing a complete and accurate claims history • Not explaining why claims have occurred and what lessons have been learned to avoid recurrence. These issues vary depending upon the size of firm, and of course the profile of work done. Ensuring you have access to all available options and obtaining truly independent advice is a priority. By Martin Ellis, Managing Director of Prime Risk Solutions

ML // July 2012

The views

Breaking the mould

A Helping Hand

As clients demand first-class service delivery and care, Chris Owen, CEO of St Philips Chambers, outlines a unique new direct partnership that cuts through delays, and ultimately cost, in fraud investigation.

How probate genealogists can assist PRs and practitioners tackling estate problems

t Philips Chambers and Deloitte LLP - two of the Midlands’ leading professional services teams - have joined together to provide a twenty-four hour telephone hotline and direct response service to organisations that suspect fraud or other financial irregularity. In response to increased incidences of fraud across the UK, Deloitte LLP, a leading business advisory firm, and our chambers (one of the largest barristers’ chambers in the country) are offering a joint service direct to companies, thought to be the first of its kind. I approached Deloitte with this idea as it cuts through any delays in communication and provides the corporate client, who may have suffered loss, a speedy and high level advisory offering. The conventional route would be to instruct a law firm or accountant and then a barrister. Our partnership will allow a senior barrister and senior forensic accountant to advise jointly, saving clients months of waiting. The initial consultation will be free and we can work together with the organisation to identify an appropriate and cost effective plan of action and assist in its implementation. As Adam Smith, lead forensic partner at Deloitte in Birmingham, explains “A suspected case of fraud or other financial irregularity can be extremely stressful to the organisation involved and we hope this helpline will provide immediate reassurance upon such discovery. Working together, our teams can quickly identify and advise on the steps that are needed and react quickly to developing situations, including mobilising forensic investigators at short notice. “‘Forensic’ simply means ‘suitable for use in a court of law,’ and our work regularly focuses on the collection, preparation, analysis and reporting of evidence to that end. Deloitte has one of the largest forensic practices in the world including forensic accountants, forensic technology specialists and asset tracing and business intelligence experts.” Modern, complex fraud investigations demand significant collaboration between client, legal professionals and the investigation team. We have joined forces to address fraud in a cohesive manner to provide the direct response that clients need. By Chris Owen, St Philips Chambers

robate genealogists specialise in tracing missing beneficiaries to trusts and estates. Ancillary to this core people-tracing activity, genealogists provide a range of additional services that can be used on either a standalone basis or, more often, to provide a total service offering to personal representatives (PRs) and practitioners. At a basic level, genealogists are frequently asked to check family trees prepared by PRs, or busy practitioners. Even if, as often happens, it reports back with straightforward verification of the information provided, the value of a professional check is that it enables the PR to proceed to the distribution stage of the estate administration process with far greater confidence. At the same time, it is surprising how often these basic checks reveal a potential beneficiary who was either unknown to the family, or who was believed to be not entitled. The probate genealogist will also be alive to law of succession ‘red flags’ in missing beneficiary scenarios - arising, for example, in the context of adoption, illegitimacy and half-blood relatives. PRs and practitioners may also be conscious of an estate problem. A beneficiary may have been identified but his/her whereabouts cannot be established or the PR may lack knowledge of the full extent of the deceased’s family. In either situation, the practitioner may advise the PR to purchase a Missing Beneficiary Indemnity (MBI) insurance policy. This has been held to be a proper testamentary expense in appropriate situations - see Evans v Westcombe [1999]. Such policies are designed to indemnify the personal representative and/or beneficiaries against future claims by untraced beneficiaries. However, MBI insurers seldom agree to take on these risks unless PRs can demonstrate that they have exhausted all possible research avenues. In practice, therefore, they normally require sight of a professional genealogist’s report before they will provide a quotation. By working with a firm such as Anglia Research, PRs benefit from its knowledge of the underwriting market, allowing for the most appropriate cover to be incepted on the basis of the firm’s report. Managing risk during the estate administration process is crucial for PRs and their legal advisors, and these are just a few of the ways the probate genealogist can help. By Nick Ingham, Legal Manager at Anglia Research Services

ML // July 2012

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The views

The Deadly Sins of Compliance For a compliance officer the good news is that there are five deadly sins, not seven. The bad news is that committing them is not fun. Putting it off How do you ensure something will never get done? Answer: wait for a quiet day. There is no end to fee earning. So set a deadline for sorting out your compliance work, then stick to it. Set a diary reminder for reviews, and for chasing up others who have particular responsibilities. Lack of clarity Does everyone in your firm know how they should record deadlines (so even if they are away the deadline will not be missed)? Is there an office standard about recording client instructions? What about costs updates? All quality systems boil down to “we say what we do, we do what we say”. If you have not defined what you expect of people you cannot grumble if they do not do it. Seeing the cost but not the opportunity It is easy to see compliance as a burden which distracts you from productive work. But the best and more profitable firms have well thought out procedures, and insist on compliance by all staff (yes, even the biggestbilling partners). Think how your firm would prosper if nobody ever made a mistake. Risk management systems can help make your professional life not only less stressful, but also more profitable. Trusting people The rules of golf assume that golfers will try to cheat, even though the vast majority would not dream of it. Likewise your procedures should be written on the assumption that not only clients, but also your colleagues, could turn out to be rogues. Tragically, countless firms have been let down by staff they liked and trusted, but who turned out to be involved in embezzlement, mortgage fraud or money laundering or who were simply ignoring proper procedures. File reviews are required by Lexcel and other quality standards, but in any case they are a must, if you want to sleep well at night. Reinventing the wheel A classic management mistake is to reject something because it was “not invented here”. At best you will waste your valuable time. At worst you will get bogged down and never get your systems sorted. So when possible use external training and documentation.

Information security the next big compliance issue post ABS At a time of rapid change, with the introduction of Alternative Business Structures and the new SRA Code of Conduct, comes the next compliance challenge for law firms - protecting personal and client data.

he ICO has, through enforcement notices and monetary penalty notices, repeatedly come down hard on businesses that fail to invest in proper internal systems and the legal profession is no exception. In the last 12 months the ICO has issued 3 undertakings - for cases of losing unencrypted laptops and leaving court papers on a train The landscape looks like it’s going to get even tougher. This year a new EU General Data Protection Regulation was proposed, recognising that harmonisation amongst EU countries was required as data now flows between counties. It could become UK law as early as 2014. This will add to the Compliance Officers’ responsibilities. Under the new proposals, a firm will have to inform the SRA of any breaches. They will also have to inform the Information Commissioners Officer within 24 hours. Incident response plans will need to be created, written policies, procedures and documents provided promptly and staff training and monitoring measured and reported in response to any inquiries from the Data Protection Authority. With fines of up to 1 million Euros, or up to 2% of global turnover, getting it wrong could become a lot more expensive than the current UK regime. As law firms look to the Compliance Officers for Legal Practice (COLP) to implement appropriate controls through risk assessments, security policies and compliance checks, the need for up to date guidance and knowledge of the regulations is going to become paramount as firms look to keep up to date. Law firms’ preparedness for current regulation is the subject of the most comprehensive survey of information security amongst law firms in England being conducted by Oyez Professional Services and consulting firm IAAITC Services Ltd. Those wishing to take part can do so by visiting www.oyez.co.uk. Participants will receive a free guide on information security and a copy of the completed report on publication in July 2012. By Nick Hodeges, OYEZ Professional Services

By Bernard George, Director, Socrates Training

ML // July 2012

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The views

Is Your Glass Half Empty?

Sales of cheap supermarket suits are up

With the introduction of OFR (Outcomes Focussed Regulation), CQS (Conveyancing Quality Scheme), ABS (Alternative Business Structures) and lenders increasingly reviewing their criteria for firms on their panels, there have certainly been a number of changes in the legal and conveyancing world.

Asdas £30 jackets and £15 trousers have become so popular, with a year-on-year rise of 22 per cent*, the supermarket is extending its range and styles.

he property market now seems to be picking up, which is great news and let’s hope this continues to improve over the coming months and years! Love them or loathe them, the fact remains that searches are an important and necessary component when dealing with property purchases. We have found that the majority of firms now order an average of 4 searches per transaction. So, when considering what search company to use, what should you be looking for? Well, firstly, you should ensure that the firm you work with is registered with the Search Code as this is something lenders do require and sadly there are still a number of search companies who haven’t secured this membership yet. COPSO launched a revised Code last year for search companies to follow and adhere to. Secondly, you may want to consider the service you expect to receive. As a firm we continually spend a lot of time reviewing our systems and processes to ensure we are able to provide a service which suits our clients. Firms want their search company to be able to provide on-hand support, prompt answering of queries and assistance, as required, in recommending searches needed for a purchase. Last, but by no means least, is cost. Given that most firms are now ordering an average of 4 searches, is your current search provider able to offer your firm a “pack price” for the regular searches you require? At Searches UK, we take the time to discuss our clients’ requirements and then put together tailor made options, knowing that what we have selected is what our client requires. So please do go away from reading this with a smile on your face, your glass half full and a positive attitude. Yes, things could be easier, but then again, they always could be if you only focus on the negatives!

his is leading to greater choice in the suit market, however, the strategy relies on a mass market that few law firms have access to. In both legal and financial services we are striving to add value to the services we offer to our clients, offering something different, something bespoke. Furthermore, it is clear that legal and financial services are moving closer together, as synergy between regulatory styles has encouraged relationships to thrive. Quite apart from the valued additional income streams that financial services can offer to law firms, it can also help engender a closer client relationship by providing a more comprehensive service and generate further opportunities for incoming client referrals. One area where opportunities to work in partnership are very strong is the new employer pension legislation. Starting from October 2012, employers will have to enroll workers into a workplace pension and make contributions on their behalf. Commencement dates are staged depending on numbers of employees and PAYE references. Larger firms employing 120,000 or more will begin contributions for eligible staff in October and firms employing less than 50 from March 2014. You may be aware that “NEST” (National Employment Savings Trust) has been introduced to accommodate those with lower incomes, but in our experience firms are often considering more than one scheme and need advice. Together both financial and legal advisers can provide a personalised, bespoke service with ongoing advice, creating something worth paying for and providing real value. *Source: Mirror 27th May 2012 *Source: Pension Advisory Service By Neil Huntington, Huntington Ross

By Andrew Stenning, Searches UK

ML // July 2012

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Problem partners spell one thing D.I.S.S.O.L.U.T.I.O.N Business partnerships are just like marriages. artners enter into a partnership bright eyed and bushy tailed, full of hope and optimism for the future. Unfortunately, just like a marriage, partnerships can sometimes end in a bitter and acrimonious mess. A partnership agreement is vital to ensure important issues are clearly articulated, including management of the partnership, retirement provisions, the handling of partnership disputes and how the dreaded dissolution and winding up of the partnership is dealt with at the bitter end. In particular, a well drafted partnership agreement should make sure that dealing with disputes between partners is clearly set out. When disputes arise, or partners ‘go rogue’, the options open in the event there is no partnership agreement are limited. Without an agreement, the unsatisfactory default provisions of the Partnership Act 1890 come into play. The default provisions allow for any partner to serve a notice to terminate the partnership. In addition, very problematically in practice, no majority of partners can expel a fellow partner and the options open to the remaining partners are stark and few. The reality of the situation is that the only solution to get rid of the unruly one may be to enter into a general dissolution. This will cause considerable upheaval and could eventually result in the death-knell of the business. Following dissolution, the assets and liabilities of the partnership must be dealt with and essentially the partnership is ‘wound up.’ Without agreement between the parties as to how dissolution is to occur, the courts may have to become involved and lengthy litigation may be the only outcome, resulting in blood, sweat, tears and costs. The situation is not all bleak. In the same way savvy couples enter into pre-nuptial agreements, savvy partners can ensure that with careful planning and management, the words of Dolly Parton’s ‘D.I.V.O.R.C.E’ will not be echoing in their ears. If you require partnership law advice please contact Eimear McCartan on 0161 615 0691 or email weimear.mccartan@ralli.co.uk Follow Ralli Partnership Law on Twitter @PartnershipLaw

May the best brand win Modern Law Magazine: many commentators have suggested that in the post-ABS and ‘solicitor brand’ world, the overall demand for legal services and so the market will grow. Do QualitySolicitors agree with this? If so (or, if not!) do you have any evidence for your view that you can share with our readers?

ualitySolicitors: There is undoubtedly a high degree of ‘latent’ demand for legal services. Many people who would benefit from legal advice avoid seeing a lawyer due to uncertainties around costs, a sense of intimidation and - pre-QualitySolicitors - difficulty knowing where to go. Often, seeking ‘formal’ legal advice is a last resort. For example, a recent QualitySolicitors’ survey found that 65% of businesses often leave it too late to seek legal advice for compliance issues. Being proactive about legal advice and planning is rare amongst all. Many arrangements that ought to be governed by a short contract – for example, a consumer instructing a builder to build an extension – are left as ‘oral contracts’, often ending in disputes as a consequence. The entry of brands into the legal market – especially those who frame their proposition in such a way as to address common concerns– will mean people feel more at ease accessing legal advice. Massive advertising campaigns, such as that which QualitySolicitors has recently undertaken, help create a widespread awareness of a legal service that counters some of the negative perceptions people hold and will inevitably increase the market size. The opticians market saw this effect following its own version of the LSA, where the introduction of Specsavers et al has seen the market grow exponentially. This is because, thanks to the ‘consumer friendly’ brands, we now feel much more at ease about going to an optician. So, yes, the market for legal services will grow. However, that’s not necessarily all good for existing law firms. Just like the opticians market where the 4 main brands now account for 80% of that market, it will be the well-known brands for legal services that are the main beneficiaries of this growth: there will be much more work but far fewer organisations doing the majority of it. Craig Holt founded QS, along with Saleem Arif, in 2008

ML // July 2012

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Raising the small claims limiT I’ve worked in the road traffic accident (RTA) field for nearly 20 years with changes in statute and case law seemingly never ending but I love the challenge! However, in the last 18 months changes have really taken off.

aising the small claims limit from 1,000 to £5,000 for injury claims has been one such change. Within three months the government made a massive U-turn and changed from failing to raise it in February to consulting on a change in May. The government made this U-turn following the second insurance summit. Unfortunately, at both of these summits there was no representation for victims of accidents: the only people around the table were insurers. Rightly so, they are concerned with fraud so when you read Jonathan Djanogly’s press release, the underlying reason to increase the small claims limit is to increase the defendant’s opportunity to easily defend fraudulent claims. However, I feel we need to adopt a more holistic approach to combating fraud, such as data exchange and better underwriting procedures. Simply increasing the small claims limit will only result in stopping genuine accident victims from recovering compensation. Increasing the small claims limit was initially considered by the Better Regulation Task Force in 2004 who concluded that better regulation was needed - resulting in the Compensation Act. During the consultation, the Motor Accident Solicitors Society (MASS) delivered 30,000 signatures to Number Ten confirming that innocent accident victims would not pursue the claim without the services of a lawyer. This position has not changed and is further proof that increasing the small

claims limit would unfairly discriminate against accident victims. Some detractors will say that this is typical of a claimant lawyer. I would say this because I’ve only got my own interests at heart. Apart from strenuously denying this, I’m perhaps not the most important person to adopt this approach. Lord Justice Jackson considered the small claims limit on page 179 of his report. Based on the fact that he had considered opinion from all interested parties, his conclusion was quite simple; do not increase the small claims limit at this time. He specifically says ‘at this time’ because of everything else that needs to be implemented first. If all his proposed changes are implemented, then savings will be achieved, reducing the cost of insurance and meaning that the small claims limit would not need to change. Now remember that Lord Justice Jackson anticipated that all his reforms would be implemented following publication of his report in January 2010. As we now know, this won’t happen until at least April 2013. Following on from this, a number of claims will still be backed up in the system and the full impact will not be realised until around April 2016. An example of this impact lag can clearly be seen in the introduction of the RTA Portal. Introduced in April 2010, this has meant that the full-year reports from insurers have not been fully factored in and the real difference is still unclear.

Furthermore, the 2011 results have also not been fully disclosed by all insurers, further disguising the real impact. Added to this is the fact that RTA Portal Company is yet to release its statistics showing what impact the process is having. However, while the true impact is yet to be seen, conversely, if the small claims limit is raised it would have an immediate effect on the accident victim’s rights. The Law Society reported back to LJ Jackson that 99% of solicitors thought that their clients would not pursue claims right from day one of the rise in the small claims limit. After speaking to many firms myself, I believe that around 60% of cases stay within the RTA Process. Whilst that obviously includes claims over £5,000, the majority will be under £5,000 and clearly fraud will not be that prevalent as these are accepted cases. Couple this with banning pre-medical offers, to ensure there is medical evidence to support claims, then this will reduce the small amount of fraud that seems to be disproportionately distorting the view of accident victims on claims outside of the portal. The government needs to be patient. The forthcoming reforms that have been hard fought for need time to bed in and results analysed before further changes are made. It’s important to remember that if fraud is the driver then this can be stamped out in other ways. By Craig Budsworth

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Features

Becoming an ABS IT is now over six months since Premier Property Lawyers Ltd made history by becoming the first designated Alternative Business Structure in England and Wales. Head of Legal Practice Rob Gurney reflects on what this has meant for the company during that time: WHILST October 6 2011 will always be remembered as the day the Council for Licensed Conveyancers became the first legal regulator to become a Licensing Authority, here at Premier Property Lawyers Ltd (PPL) we also had reason to celebrate, as we became the first ever Alternative Business Structure in England and Wales. Due to our existing ownership structure / external investment, we were required to convert our business to become an ABS within 12 months of the new regulations coming into force. In fact PPL, being a wholly-owned subsidiary of My Home Move Ltd, has been an ABS in all but name since it was first established in 2001. People have asked what benefits we have received since obtaining our licence. Well, certainly the past six months have seen our business receive record-levels of conveyancing work, surpassing prerecession volumes by some 80 per cent. Land Registry statistics confirm that we are now the largest mover conveyancing law firm in the UK by some margin. But can this increase in volume be attributed to our status as an Alternative Business Structure? Yes and no. We do not see our actual designation to be relevant to our growth per se, but clearly our ownership structure and investment has successfully enabled us to obtain critical market share during these tough economic times. Another big benefit that PPL has experienced in becoming an ABS is in receiving the endorsement of our Regulatory Body that we met their strict criteria for licensing ABS’s. The application process was found to be robust, time consuming and administratively challenging, but also entirely appropriate.

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“An increase in investment and innovation must eventually lead to an increase in quality and service to the consumer.” Anyone expecting to simply tick a few boxes on a few forms need not apply to the CLC for an ABS licence. However, if you are expecting a thorough examination of your business and its staff, you will not be disappointed. Each section of the application is designed to glean more information about the business, which will ultimately assist the regulator to make the final decision to licence. And in granting that licence and providing some much-welcomed feedback from the process, it gave me confidence that my firm is operating as expected in this new regulatory space. It is clear that the full effects of ABS will not be seen for some time, but from our point of view, the regulatory shift is a welcome one. An increase in investment and innovation must eventually lead to an increase in quality and service to the consumer. Regardless of current business model, I am sure most firms would agree that additional funding in staff, technology and systems would enhance their proposition and client experience. If conveyancers currently believe that the competition amongst them is tough, we believe that the next wave of competitors will be stronger still. By Rob Gurney - Premier Property Lawyers Ltd

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Features

A confusing world for aspiring lawyers? Much is talked these days about the wonderful opportunities and new potential routes that are on offer for aspiring lawyers. There is no doubt that the landscape looks very different now for someone with an intention to become legally qualified. However, is all this choice a good thing?

school leaver now, with an inkling that they might want to be a ‘lawyer’ when they grow up, can take so many different paths. The first decision, not a new one, is whether or not to do a law degree (figures change slightly year on year but generally about half of those who qualify as solicitors are non-law graduates). Even for those who choose to do a law degree, the path is not straightforward. Do they stick to a ‘traditional’ three year law degree or do they go for one of the ‘newer’ offerings such as those offered by the College of Law and Northumbria University. Degree in the bag, what’s the next stage? Even more choice now abounds for the vocational stage, albeit that many of the options are tied to particular firms. Of course all of this must be examined in the context of the ongoing Legal Education and Training Review (LETR). As has been widely publicised, more common training of would-be lawyers, abolishing the concept of a qualifying law degree, sector-wide CPD, and scrapping the training contract and pupillage are among the more radical options being considered by the LETR. With a core mission being to simplify routes in and around the profession, ensuring a “structure that increases choice over the processes of qualification, whilst delivering greater certainty to the professions and to consumers as to the quality of outcomes achieved”, it will be fascinating to see where the LETR will end up in terms of recommendations. Even limiting the discussion to the system as is, aspiring lawyers have a much wider choice now in terms of what type of organisation to work for once the academic and vocational

stages have been completed. Again for aspiring solicitors (within the obvious context of the difficulties involved in securing a training contract), should they look towards: • a traditional partnership? • a firm that has a corporate structure (according to a recent blog by Viv Williams, CEO of Legal Futures Associate 360 Legal Group, 25% of the legal profession now trades as limited companies)? • a firm that is non-lawyer owned and if so, does the identity of such owner inform their decision? For example, will the Co-operative Legal Services gain applicants because of its ethical stance? For those lucky enough to have a choice of training contract, they should be asking themselves questions such as how innovative are the firms, what is the likelihood of them merging, and so on. The picture for training contracts will undoubtedly be shaken up by the new external investment coming into the market. Currently, so many students aim for the big firms as these are the ones that can finance multiple training contracts. Will that still remain the case with new money coming into the market? For those unable to secure a training contract and so remain only partqualified, again there are so many more options. • Do you try and secure a job as a paralegal in a law firm? If so, do you aim for a volume legal practice, focused more on processes, or a more traditional firm? What about a new ABS entrant? What skills will

such organisations be looking for – more project managing ability than legal knowledge? • Might you look at opportunities at the fast-growing legal publishing companies (and not just UK ones – Legal Zoom isn’t the only US online publishing company looking to break into the UK market)? • What about working for a legal process outsourcer? It will increasingly be the case that failing to secure a training contract need no longer mean the end of the road for those wanting to work in the legal services market. Choice can be a wonderful thing, but I do hope that today’s aspiring lawyers do not find themselves too overwhelmed. By Catherine Baker

ML // July 2012

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Features

The new frontier The lack of detail regarding the referral fee ban led to a business planning standstill for most claims management companies. But as Emma Waddingham discovers, there are a strong few going where no CMC has gone before.

t appear the claims industry is frozen in time, with claims management companies (CMCs) awaiting definitions of ‘referral fees’ in the forthcoming April 2013 ban while canny solicitors store up their work in progress (WIP) and start direct marketing campaigns to avoid losing pace next year. Solicitors have been accused of putting the responsibility onto CMCs to solve the crisis, but they’re caught up in a business model dilemma of their own: do CMCs feast upon Alternative Business Structure (ABS) opportunities, seek joint ventures with law firms or call it a day? Alan Nesbit, Chairman of ARC (the Association for Regulated Claims Management - CHECK) believes that the new legislation will further define the wheat from the chaff but what model CMCs will operate through is unclear. “The ABS solution is fraught with danger for CMCs and is a seismic change to their existing business plan. Firstly, do they take option 1: move to have ‘pet’ lawyers in house? The problem with this is that real litigators are strong people and may not wish to do as they’re told without a stake in the company. So do they try option 2: form a joint venture with an existing practice? This would mean losing or sharing control and ultimately profits. Alan knows it’s a tough challenge. The SRA’s timeconsuming ABS assessments isn’t helping matters either, suggesting that if CMCs are looking for an ABS venture, they need to start the process now in order to have a chance to keep working from April. “Even then, an April go-live date isn’t guaranteed,” he states. It clearly depends, he suggests, what the motivation of the CMC is in the first place as to their appetite to venture into the ABS frontier. Kevin Rousell, Head of Claims Management Regulation at the Ministry of Justice, agrees that most CMCs report they’ve been left in limbo. “We expect the reforms – and other costs pressures - will drive consolidation in the personal industry (PI) sector within the year. Solicitors firms have already launched CMC trading styles to feed work back to their firm and it seems most CMCs are looking at joint ventures of some kind,” he suggests Clearly there has to be movement, adds Kevin and although outwardly CMCs appear to be ‘business as usual’ until the final hour, internally significant research and analysis is underway to cover all business model bases once the government has sorted the devil in the detail. Matthew Horne, Managing Director of specialist industrial disease CMC Atrium Legal, is one of those mapping opportunities, despite his frustration of the delay in information. “For CMCs, like us, who offer client-

“The ABS solution is fraught with danger for CMCs and is a seismic change to their existing business plan.” focused arrangements and work with specialist lawyers, it’s essential to keep working beyond the ban. It’s unfair that industrial disease has been scooped up with the need to reform the RTA sector but we’re here now and have to deal with it. “One of our latest moves is to place members of staff in the CiLEX programme. We support a community and of course I’m worried about my staff – that’s what drives us to line up our ducks,” Matthew says. He adds that CMCs haven’t built up their brand ‘simply to throw it away’ and that his company take advantage of regular Board meetings to analyse their potential ventures to ensure the one that ‘keeps us here in the future’ is the best one for Atrium Legal, staff, solicitors and clients. CMCs in this for the long-haul will be the most ethical, professional and client oriented, believes Karl O’Hare, Chief Executive of Intelligent Claims Management (ICM) – whose recent agreement to partner with the Quindell portfolio has fuelled the headlines about a ‘fourth way’ for CMCs. “We’ve created another model aimed at CMCs looking to avoid the ban – a workable, legal and ethical solution that avoids the unworkable ‘joint venture’ solution that the majority of CMCs believe will save them,” he explains. The cloud-based claims management technology network of ICM will also potentially be acquired by Quindell in the next few months, streamlining the ‘unique’ offering for CMCs. Karl is tight-lipped about the details and it stresses the ventures invite-only partnership means only ‘high quality, busy and ethical providers’ are offered to solicitors. They do say ‘it’s not what you know but who’ and in this industry, it is all about relationships. Hopefully for those with the right calibre of contacts, who can advise, support and help fund their new ventures, the research and development will pay off. If not, CMCs will just have to sit back and watch those with a propensity to take on a challenge, ride off into the distance. By Emma Waddingham

ML // July 2012

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Features

The will for protection Choice, accessibility of service and value for money are key, however so is client protection. Emma Waddingham speaks to the Institute of Professional Willwriters and the Council for Licensed Conveyancers to find out why Will-writing and estate management are in the regulation spotlight.

utting the client first is a high priority for both lawyers and the regulators. The current hot potato on getting the right balance between freedom of service delivery and protection is the recent proposal by the Legal Services Board (LSB) to regulate the activities of will-writing and estate administration. This spring, LSB announced proposals to make will-writing and estate administration reserved legal activities. Doing so will, it says, ‘deliver greater protection to consumers of the legal services of will writing and estate administration’. The LSB’s proposal means that anyone who writes a Will or carries out estate administration, irrespective of their professional titles, will have to be regulated with one of the eight professional bodies, such as the Council for Licensed Conveyancers. Gemma Butterfield, of the Council for Licensed Conveyancers, explains that the LSB carried out investigations into the different types of providers, and found issues with the service provided. She said: “The LSB reported their findings as showing ‘consistent patterns of sloppiness, simple errors and poor communication, which often resulted in unacceptable service’. These findings were found amongst both the regulated and unregulated community.” David Edmonds, Chairman of the LSB, recently said: “Making a will is something everyone should do. It is one of the most important actions that individuals take. We all should have a high degree of confidence in those entrusted with the task of writing our wills, advising us on the most

In times of uncertainty, it’s best to gather in numbers

appropriate actions and ensuring that our wishes are carried out.” Paul Sharpe, Chairman of the Institute of Professional Willwriters (IPW) welcomes the recommendation from the LSB to regulate Willwriting and Estate Administration. However, the question for the IPW and its members is how they can meet the challenge of developing a scheme that is effective for consumers yet affordable for IPW practitioners. “Most members of the IPW are small scale providers who ‘could easily be knocked down and out if their only option is to turn to one of the existing large regulators who have expressed an interest in regulating Willwriting’,” he says. Research indicates many practitioners have a strong preference to be regulated by a specialist regulator – ideally the IPW. “We do recognise that there are challenges. A Code of Practice which is outcome-focused, a separate board to deal with regulatory issues and whether we can convince the LSB that we are credible by virtue of our size are the main ones right now. So we have a few plan B’s up our sleeve,” adds Paul. Ultimately, both the IPW and Council for Licensed Conveyancers, believe that by introducing these activities to the list of reserved legal activities, greater protection will be provided for consumers, along with what will hopefully become and a more effective and greatly improved service. By Emma Waddingham

It’s not simply a case of consumer protection... Charitable legacies are an invaluable source of income for many of the UK’s best-loved charities, generating almost £2 billion a year for the sector. Yet while 74% of the UK population regularly support charities in their lifetime, only 7% currently leave a charitable legacy in their Will. If this rose by just 4%, it would create an additional £1 billion for good causes nationwide. Professional advisors have an opportunity to play a key role in increasing the number of charitable Wills. Research by Remember A Charity found that those advisers who always mention the option of a charitable gift to their clients, write significantly more Wills that contain a charitable bequest. As a result of this research, Remember A Charity launched its Campaign Supporter scheme. It’s aimed at solicitors and professional Will writers and is free to join. Supporters endorse the aims of Remember A Charity - which works with 140 of the UK’s favourite charities to encourage people to consider leaving a charitable gift in their Will. In return, details of the signature advisor’s firms will be listed on www.rememberacharity.org.uk. You can find out more about the scheme at www.rememberacharity.org.uk/join.

www.ipw.org.uk | 0345 257 2570 | twitter.com/Prof_Willwriter

Legal 500 2011 St Philips Chambers is a “commercially astute set” with clerks who are “phenomenal at securing the barrister clients wish to instruct”

Chambers UK Guide 2011 St Philips Chambers is one of the largest sets in the country and receives universal praise for its “practice and forward thinking approach”. It houses an “excellent clerking team” as well as a deep bench of highly proficient barristers.

St Philips Chambers 55 Temple Row, Birmingham B2 5LS T: +44 (0)121 246 7000 F: +44 (0)121 246 7001 E: clerks@st-philips.com DX 723240 Birmingham 56

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Features

Where the client is king The Bar has long been accused of not putting clients first but with the rise of Public Access models, barristers’ chambers have to deliver first-class services and client care initiatives. Emma Waddingham reports.

n a world where the client is king, there is one part of the legal profession that has had to catch up with the need to deliver the Rolls Royce levels of customer service and care, the Bar. As well as the clear expertise and authority, barristers have to invest in client-facing facilities, service functions and measureable client care initiatives to compete with peers and now the wider legal sector. It seems that Public Access (the ability for clients to procure legal services from barristers from case start to finish) can provide the plug and incentive to fills these gaps. The ability for barristers to own a case it in its entirety is not an easy concept for many at the independent bar to swallow. However for some, Public Access and the benefits it brings has already antiquated the traditional chambers model and has ‘opened up real competition,’ according to Stephen Ward, Managing Director of the Clerksroom. “In many cases, our Public Access barristers are providing legal advice for commercial clients on mergers and acquisitions – not simply litigation; opening up more opportunities to service clients,” he adds. Public Access requires a culture change. This view is served up by Chris Owen, CEO of St Phillips Chambers, who believes Public Access is a real commercial venture should incur the same level of marketing direction. A first class service demands specialist access to market too, ensuring chambers hits previously untapped work flow. Like Stephen, Owen sees choice and flexibility being two key mentalities for future-proofed

sets. He adds: “The Bar is about individual choice, for both clients and counsel. Public Access widens choice. Our Clerks are perfectly skilled and capable of managing Public Access clients under one roof – if this is the right solution for the client. It’s also undoubtedly a benefit for qualified barristers as it helps with the cash flow.” A cash injection is exactly what Stobart Barristers – a recently launched Public Access set – offers its panel barristers. Stobart Barristers, with Legal Director Trevor Howarth, was set up by the Eddie Stobart haulage group and uses a panel of barristers in practice in other chambers to avoid the ‘negative’ impact of direct competition felt by most sets. Trevor claims Public Access provides barristers with another way to develop their practice, often exposing them to grittier cases then their chambers can provide. “Our panel barristers’ identities are protected so they can continue their traditional practice and fill their diaries with our work, without endangering their relationships with solicitors,” he explains. He is currently ‘in talks’ with a number of local authorities who ‘should be looking to reduce their overall legal spend’ through this pay as you go service. The practice of putting clients at the heart of a business has forged entirely new business models for barristers, like Stobart Barristers. Riverview Chambers (the brainchild of DLA Piper) is another. Chris Baylis, CEO of the practice believes Public Access has benefitted barristers by giving them the tools to put the clients first. “In our model, we own the client relationship. We are the first port of call for the

clients, keep costs to a minimum and deliver what the client wants: their matter resolved in an efficient and transparent way and at a fixed cost.” As Baylis explains, Public Access ‘is as close as anyone can get to being customer-centric and the client being king under current rules’. This is a widely held view from all four leaders, along with the point that this is simply tool to increase choice, widen opportunities and focus attention to business planning and client care, for both consumers of law and the bar. Ultimately whether or not the Bar will tackle the issue of valuable client care via Public Access depends on the ability of barristers to commit to new service ideals and invest in the right leaders, skills and resources with which to compete. By Emma Waddingham

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Features

Accident investigation under fire Quality and efficiency in service delivery pull upon the best use of expertise and technology. But as Emma Waddingham discovers, the improvement and marketability of both elements are under fire in the bid to reduce costs.

echnology has and will undeniably continue to be a valuable component of the business, both in terms of back-end operations and business services.

Combined with the correct strategy, technology will increase efficiency and production but is often no substitute for knowledge and experience. In the claims sector, cost is also a driving issue, not only in the deliverability of services but also to fund the process of research and development into new technologies. In terms of procuring technical, expert advice in cases – ranging from vehicle forensics to investigating mobile phones and computers – technology has made things cheaper and more efficient for solicitors and the court system. However, this cannot ever fully replace the human element of expert evidence and assessments. The pitfall with technology is, largely, human error. So despite the advancements of facility and service technology developments (even over the last 10 years), the ability for specialists to assess the issue in a personal injury claim, the need for experts to understand the context of that fault or impact is essential. Peter Parry, Managing Director of Independent Accident Investigation, explains: “Within the personal injury sector we’ve experienced increased use of technology to evaluate the claim credibility. Technology has provided greater ability to identify fraud. This is progress, but through either misuse, misunderstanding or incorrect information, technology deployment has victimised many genuine claimants and that’s wrong.” He feels technology remains ‘in its infancy and requires nurturing, directing and managing’ as well as ethical governance of the process. “However,” he adds, “technology is only a tool in the craftsperson’s hands - it can’t beat face to face interviews enabling physical assessment of the interviewee.” James Shields, Business Development Manager of Laird Assessors – for accident investigation and forensic car

“Technology is only a tool in the craftsperson’s hands it can’t beat face to face interviews enabling physical assessment of the interviewee.”

inspections - agrees with the pioneering role technology has had for the claims industry but that there are plenty of barristers for these advancements to be used as a USP (Unique Selling Point) by experts. “The speed of reporting has been forcibly quickened by the demands of the sector – and we’ve met that challenge [to reduce costs and time] through huge technological innovation and the use of uploading assessments on site via tablet computers and unique applications,” James says. “However, it’s all well and good talking about technology. The speed of the process and the need to drive costs down has a huge impact on research and development for us (in-house) to deliver further solutions. This means that technological development will stagnate as it’s not economically viable to make those developments; so experience continues to be the prime USP, experience and service,” he adds. The standard accident damage reports for example, are linked to fast-track claims where costs throughout the process are being driven down to their lowest point. These assessments are the ‘bread and butter’ of the forensics sector and despite their relatively low value, require experienced inspectors who are all able to give evidence in court and translate the context and the report in front of a judge. The investment behind experience is as time consuming and costly as you would expect for qualified professionals, who require years of experience within the industry to qualify and be successful as an expert. This isn’t solely in the field of vehicle forensics, but any other area of expert witness services, James stresses. James is adamant that the further costs are driven downwards for the expert sector, the clearer it is that the level of expertise and innovation is under threat – having a knock-on effect for the wider claims sector.” A standard accident damage report could take two hours but cost limits mean we can only charge £50. As a sector we’ve been knocked down on fees but this isn’t cost effective.” To take a specialist off the floor and train as an expert involves time and cost and although there are clear needs of the sector, this expertise is valuable. Lowering fees to base-point may well have a knock on effect on the quality of the expertise available in the long term. It will clearly be essential in the long term to ensure expertise is protected along with technological advancements. Despite this, Peter believes that: “As every business strives to reduce costs and increase efficiency, we see improving market opportunities. Those who conduct greater quality preparation will achieve greater success and that’s where our quality expertise is. Expert investigators, experienced in previous claims evaluation, who know their business, can be a valuable part of your business team.” By Emma Waddingham

ML // July 2012

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Why choosing the right technology solution is critical for an ABS to be successful Depending on their drivers and the type of services they intend to offer, the structure of an ABS can vary wildly. For some existing law firms, becoming an ABS simply enables them to reward or appoint nonlawyers, for example Practice Managers to Partner level or create new CEO roles to help run the practice more as a business. For others, it is a vehicle to achieve investment from outside the market so that they can grow the practice through targeted acquisitions and realise the increased business value in the future. For new entrants to the market, the ABS model is a disruptive one – be it the large scale, high volume/low cost environment of consumer law (the Co-Op) or the fixed-price model and efficiency gains from housing barristers and solicitors under one roof. These firms are looking to break the existing paradigm in the market and by doing so gain that key competitive advantage.

hatever their drivers or business models, ABS’s will not achieve success without investment in technology solutions and, more importantly, the right technology, that supports their business structure and goals. There are some key needs that the technology solution has to satisfy.

Firm Management Key to managing the firm as a business is the ability to set budgets and Key Performance Indicators (KPI’s) and then capture, report, measure and track them across all aspects of the firm including departments, branches and practice areas. Managing positive cash-flow has traditionally been an area of weakness for law firms. In the ABS environment where cash is king, an automated system that enables firms to streamline bill to cash processes and manage the debtor process efficiently becomes a central pillar of success. Effective Marketing & Client Engagement Using inbound and outbound marketing technologies and

ML // July 2012

techniques is a must for any ABS as they seek to generate new business and drive growth in a competitive environment. Any solution should enable firms to not only automate marketing activities but also track campaign effectiveness and help nurture prospective new clients.

ABS’s will need to establish a greater online presence and ensure their workforces can remain effective when away from the office. The right technology choice has to not only enable access to diaries and email but also full case and matter detail and time recording.

Relationships are, and will still remain, an important part of law firm practice. However, clients are used to doing more things online and technology such as IRIS Legal’s ‘Client Self Service’ solution will enable firms to engage with clients online via a secure shared area where they can exchange documents, review and pay bills, update information, and track progress on a case.

Single Integrated Platform A single integrated platform that provides rich functionality across all the functional areas is a must when choosing the right technology solution. Systems such as IRIS Legal’s IRIS Law Business platform are built with an integrated practice and case management system at their core, enabling ABS’s to be truly efficient. Not having to re-enter data, maintain data integrity and be able to run workflows and report across all areas then becomes part of the integrated solution.

Practice Efficiency Much of practising law involves document generation and procedures and lends itself well to workflow based case management systems. Work-flow and document generation solutions can be tailored to deliver efficiency and competitive advantage for any ABS and will provide a key competitive advantage. Compliance The compliance burden on law firms and ABS’s is only likely to increase. The right technology solution will enable an ABS to introduce automation thus reducing the risk of non-compliance whether this is in their client intake and matter inception process or the wider business. It is therefore important that these tools enable them to translate their risk management policy into actionable items which can be monitored and tracked and which demonstrate compliance, or, alert where non-compliance occurs. Online and Mobile

In summary, technology will be critical to the day to day operation of any ABS, and investing in an integrated solution that fits their business structure and goals, both now and in the future, will play a key part in determining whether they are successful or not.

Features

To ABS or not to ABS? The conveyancing industry verdict How does the conveyancing industry feel about ABS? SearchesUK did a survey to find out… 1. Are you a conveyancing practitioner? If not please do not complete this survey. 94% Yes 6% No 2. How satisfied are you that you have received enough information to understand what an ABS is? 5% Very unsatisfied 22% Unsatisfied 23% Somewhat satisfied 23% Satisfied 27% Very satisfied 0% Other 3. How satisfied are you that this information has been made easily available to you? 18% Very unsatisfied 6% Unsatisfied 29% Somewhat satisfied 35% Satisfied 12% Very satisfied 0% Other 4. How do you feel about ABS being permitted for the provision of conveyancing service? 29% Very unhappy 29% Unhappy 12% Somewhat content 6% Content 18% Very content 6% Other 5. How do you feel this move will affect the conveyancing industry? 42% Terrible mistake – will lead to closure of many conveyancing firms 29% Not the best of ideas – small firms will close but medium firms will survive 0% Won’t make a huge difference to the current conveyancing market 29% Exiting opportunity for conveyancing firms 0% Other

6. Please state how you believe ABS are likely to impact, if at all, on your conveyancing business. Comments: • I believe that ABS is likely to be “in the pocket” of Estate Agents and Lenders and that referral fees will dictate that clients are sent to whoever will pay the referrer the largest fee. Furthermore, conflict of interest must be a great risk as the conveyancer may not be sufficiently independent of the introducer. • Competition is always good and the likes of Countrywide have been around for a while now anyway. • So long as rules such has those we have to abide by under the SRA are enforced amongst ABS firms and companies such as Countrywide and PPL then I cannot see a problem. 7. Do you have concerns that ABS will not be regulated to the same strict standards that law firms are currently expected to adhere to? 61% Yes 31% No 8% Other 8. Given that we have just witnessed a failure of regulation in the financial services and banking industries, do you believe that now is the right time to be introducing ABS? 24% Yes 65% No 11% Other 9. There are a number of organisations, including the SRA, Law Society and Council for Licenced Conveyancers, who have applied to become licensing authorities. Do you believe this will work? 29% Yes 61% No 10% Other

10. Would you have preferred to have seen just one body dealing with all licensing applications 71% Yes 29% No 0% Other 11. Is an ABS something that your firm is, or is likely to be in the future, considering? 47% No 18% Not at the moment but possibly considering for the future 6% Not at the moment but definitely considering for the future 29% Yes 0% Other 12. What is your overall opinion of ABS in the conveyancing sector? Comments: • For those firms that survive the current trends from the prime lenders, it is not a bad thing as long as anyone conducting conveyancing does so to a proper standard. Unfortunately, “bucket shops” are increasing and the standard for those suppliers is low to poor. • It should encourage competition so long as there is regulation and the lenders do not cause any problems. • It would be churlish to complain about something that benefits the consumer, but it remains to be seen whether or not this is the case. • The jury is still out. If ABSs think that conveyancing is a route to easy money then they are in for an unpleasant shock!

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Features

Personal Injury – catastrophic claims Katie Wilson, Advice Policy Manager at Towry, considers financial solutions for high-value claims.

he right to claim damages for personal injury was defined by the Scottish case of Donoghue v Stevenson in 1932, where Lord Atkin clarified the defendant’s duty of care, saying that “You must take reasonable care to avoid acts or omissions which you can reasonably foresee would be likely to injure your neighbour”. So in order to bring a successful claim for damages, an injured claimant must establish that the other party owed them a duty of care, breached that duty of care, and the subsequent injury was a reasonably foreseeable consequence of that breach.

“Future losses are those expected to arise after the date of trial or earlier settlement, and often continue for the rest of the claimant’s life.” General Damages for “pain and suffering and any loss of amenity” is the only element of compensation that does not relate to financial loss. It therefore provides a buffer that claimants can use to subsidise shortfalls in other areas, such as accommodation losses which are rarely compensated in full. “The aim is to award such a sum of money as will amount to no more, and at the same time no less, than the net loss” (Lord Hope). Special Damages are generally categorised as either past or future losses. Past losses are those incurred up to the date of trial or earlier settlement and include anything from the cost of clothing destroyed in the accident to money spent on carers’ wages. Future losses are those expected to arise after the date of trial or earlier settlement, and often continue for the rest of the claimant’s life. They include cost of care, loss of earnings, additional transport costs etc, and are ideally compensated by regular “Periodical Payments”. However, periodical payments can be prohibitively expensive for defendants, many of whom fail to satisfy the “reasonable security” test (Courts Act 2003); so with the exception of clinical negligence claims, take-up has been disappointing. Where periodical payments are unsuitable, or unavailable, the claimant receives a one off lump sum. It is assumed that by receiving all of the money now, the

claimant will invest it and will benefit from net investment returns equal to inflation, plus a factor of growth known as the Discount Rate. “It is... unrealistic to require severely injured claimants to take even moderate risks when they invest their damages awards” (Lord Chancellor Irvine, 2001). The Discount Rate is set and reviewed periodically by the Lord Chancellor. The current rate, set in 2001, is 2.5%, which effectively means a claimant is expected to achieve annual returns of 2.5% plus inflation, net of tax and charges. This equates investment growth of more than 8% per annum, year in, year out. Claimants are free to invest their lump sum as they choose, but no investment vehicle can guarantee longterm investment returns at the required level. So whilst the Lord Chancellor was right to say that claimants shouldn’t have to take even moderate risks, he’s left them with little choice. Historically, claimants were able to secure ‘top-up’ funding but many of these opportunities are disappearing, leaving claimants and their families with some difficult decisions. They may have to remain in unsuitable accommodation, rely on family members to provide care or cut back on important treatments and therapies. They may need to forgo the protection afforded by having a professional guardian or trustee, leaving them vulnerable to financial abuse. Some claimants begin with a false sense of financial security, mixed with relief that the litigation process is finally over, and over spend significantly. Tragically it isn’t unusual to meet claimants who’ve been spending 10% or more of their award each year, only seeking advice when the crisis has become obvious and the outcome irreversible. So what can a claimant do? The first and most important step involves comprehensive financial planning, ideally before the claim settles. Sensible investment advice will eventually be required but will never make up for a lack of careful planning. This starts by identifying a realistic budget. It is vital that all available benefits and allowances are claimed, including VAT exemptions, HMRC allowances and relevant benefits for the claimant and their carers. A company with the right experience and expertise will understand these options and will guide a claimant towards a solution that enables them to keep funding their needs for the rest of their lives. As well as helping their clients remain as independent as possible, this could also help reduce the strain on public resources. By Katie Wilson For more information on Towry, visit www.towry.com or email info@towry.com.

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Business Management

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Business Management

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Business Section

Listen to the market The best, and simplest, way to develop products and services is to ask existing and potential users in the target market what they want - and then supply that. This is the ‘outside-in’ way of looking at business development, listening to the market, rather than the ‘inside-out’ approach where internal views dictate what should be done.

t is really tempting, and this is found across all business sectors not just law, for business leaders who have been in an industry for quite a while to assume they know what their target users want. Business leaders do not consciously set out to do this of course, but the danger is that at some point the organisations become driven by their internal capabilities rather than the needs of the market. Now more than ever, lawyers need to become more market focused when considering the services they offer and how those services are delivered. How to become more market focused? A starting point is to review market data and use this as a driver for business development. For example, this year’s Legal Services Consumer Panel (LSCP) tracker survey confirmed the widespread belief that personal recommendation, previous use and referrals remain the most important influences on the choice of legal service providers so far as the

‘consumer’ legal market is concerned. Providing excellent service to existing clients helps finding new ones easier. Do you really know what your client’s they want from you? Competence in the law is expected by clients and being an ace lawyer by itself is not a market differentiator. Last year a survey by Peppermint Technology reported that 95% of consumers said that knowing the total cost of legal services in advance was important to them and that 43% of respondents would only engage solicitors on a fixed fee basis. Now it seems the majority of law firms offer fixed fees when quoting for private client work, as the LSCP found that 58% of clients paying privately were quoted on price this way. Although the LSCP found that overall satisfaction with lawyer service levels remained quite high, the cause for most dissatisfaction was lack of clarity of information on costs. The Legal Ombudsman has reported the same, citing poor costs information as the biggest S&G ADVERT 90x135 27/06/2012 14:51 Page 1

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ML // July 2012

Business Section

“Business clients seem to have a similar approach to lawyer selection and long-term concerns about costs, but the differences compared to the consumer market are fascinating.” single source of complaints received about legal services. Business clients seem to have a similar approach to lawyer selection and long-term concerns about costs, but the differences compared to the consumer market are fascinating. According to the Peppermint survey only 6% of businesses rank price as the most important factor when choosing a legal service provider. Other factors such as recommendation, reputation and perceived knowledge the client’s business problems rank more highly during the selection stage. A survey of large commercial organisations throughout Western Europe by Martindale-Hubbell corroborates this, but also provides a twist regards costs. Martindale-Hubbell found that if there is a single factor which would prompt a review of a legal service provider’s place on a (formal or informal) panel, it is the feeling that the lawyers concerned are not providing value for money. To quote directly from that survey: ‘This seems to suggest that once relevant sector knowledge has been proven at the selection stage, the overall importance placed on service delivery and the day to day management of the relationship increases significantly once things are underway’.

What is value pricing?

So what to make of this brief consideration of client need? I’d suggest, in the Consumer sector: • Provide as much certainty and clarity about costs as possible before the work begins • Quote fixed fees whenever you can • Keep communicating to clients through the lifetime of the matter about any cost variances, and seek their clear approval for any change.

• Manage Scope Creep (apply change control)

In the Business sector, be able to demonstrate: • That you understand client business needs • Are able to respond quickly with advice • That you have an ability to keep costs under control once work starts – let costs spiral out of control and this is likely to trigger a full service review. You may take the view that research such as that quoted above does no more than state the obvious. These reports (and others which are publicly available) have more detail than I am able to discuss here. The point is: do not assume you know what your existing and potential clients want. Ask them – before, during and after matter engagement – and then base your business development and service delivery activity around their answers. By Antony Smith Non-practising Solicitor, Legal Project Manager Director of Legal Project Management Limited www.legalprojectmanagement.co.uk

In his speech to the Association of Cost Lawyers on May 11 2012, Lord Nueberger suggested that litigation lawyers should consider pricing mechanisms other than the chargeable hour. One of the alternatives he referred to was Value Pricing. Value Pricing refers to quoting for work, with the price based on an assessment of value to the client of the work to be done. There are a number of well-known steps to follow when implementing a value pricing process: • Understand the Client • Develop Pricing Options • Present Options to the Client • Document the Arrangement (Fixed Price Agreement - FPA) • Manage matters being worked on • Review and Refine the process. It is necessary to understand client needs and wants, and then be able to scope and price these accordingly. After a value pricing arrangement has been documented properly as part of an FPA, the matter then needs to be project managed rigorously to ensure that client needs are in fact being met and that costs do not spiral out of control. Many lawyers are wary of quoting fixed prices, mindful that circumstances could change resulting in the original fixed price quote becoming inappropriate. What to do in such circumstances? The FPA should refer to the existence of a change control procedure whereby, if something unforeseen arises during matter progress, work stops and a change request is raised with the client. The change request should propose a revised fixed fee to take into account the further additional, or revised, work required. In operational terms, competent project management is the key to making value pricing work. Indeed, when you think about it, it is also needed to deliver legal services effectively regardless of the pricing method chosen. By Anthony Smith

ML // July 2012

Business Section

Informance: making the most of business data In the current economic climate it is vital that law firms can meet the unique challenges of their industry and maintain their competitive edge. In order to meet key performance indicators (KPI’s) and predict future results, they need information to be visible and easily accessible with a clear and accurate view of every aspect of the business.

s a provider to the legal services market, Barry Talbot highlights how technology, in particular the creation of applications that offer intuitive data analysis, can help law firms to improve their operational efficiency and provide cost effective client management. Partners and associates operate in a highly regulated environment, which places time pressure on them to manage both their client work-load as well as financial and general administration. This is why firms need to create a support infrastructure that will increase commercial focus and drive growth through greater transparency, as well as enabling staff to interact with data and monitor their financial performance more effectively. Information needs to be presented instantly so that management and staff can review performance and identify trends at the macro level. Then they can drill-down through the data to understand cause and effect by client, fee-earner, practice area and any other metric for which they hold information. All users should have a single view of information with a variety of graphical representations to ensure they are meeting their KPI’s along with the ability at the top level to see how they compare with peers on each KPI that is measured, such as utilisation and profitability. According to Barry, for some law firms, simply creating a consolidated client list can require them to call in their IT provider for help so understanding the profitability of clients, types of work and industry sectors can sometimes present a major challenge. Therefore, it’s vital that firms have a solution in place which provides complete business transparency using KPI’s available to all users. That way productivity can be improved and senior partners can receive instant and easily understood answers for effective strategic planning and decision-making. Barry Talbot is Managing Director of Informance Limited – the UK’s QlikView provider for law firms.

Why do I need a personal profile? Picture the scene - a lawyer fresh out of law school and ready to start his training contract at his new firm, all brighteyed and eager. Flash forward 10 years to the same lawyer leaving the office at 7pm, tired and ready to crash on the couch once he gets home. Most lawyers tread the same hamster wheel, starting at a junior level and aiming for partnership, but knowing there is only so much room in the firm and waiting for that one big chance to make the step up. There are over 150,000 qualified solicitors in the UK; it makes standing out from the crowd really tough.

o what can you do? The answer is to build an individual profile, one that promotes both you as an individual and also raises the profile of the firm. There are numerous ways to achieve this goal. Get involved with a trade body and push your way through the ranks, write in magazines or contribute to forums on LinkedIn. Another really important way to enhance your profile is to attend networking events and conferences. It is really important to both be seen and more importantly to contribute to these events. Be brave and ask the questions you want to ask. Firstly you will pick up invaluable information, but secondly people will remember that you were the one who asked the question. More importantly network like crazy, make sure you are as visible as you can be and speak to as many people as you can. So next time the opportunity to go to one of those conferences comes up, don’t pass that opportunity onto one of your colleagues, take it for yourself and embark on the road to success. By Alan Nesbit

ML // July 2012

Business Section

The Mythical “S” Word Many lawyers can’t seem to embrace the word “sales”; one lawyer actually said to me once “we’re professionals; we don’t sell”. Well here’s the skinny folks – you provide a service and you need to sell it because that’s what you’re competitors are going to do. But why sell now? Lawyers have always relied upon referrals to win clients. No bad thing but referrals are not under your control: they happen or they don’t. Building your firm on a new business channel you can’t control is not a good idea. Of course for a long time law firms have invested in marketing activities such as seminars, mailshots and newsletters. Fine unless you are trying to sell to medium to large businesses – can you honestly see the CEO of a large organisation hiring a lawyer on the strength of an email? I think not. So what’s the alternative? Sell your services in 3 phases: • Capture: using LinkedIn, showcasing, proactive referrals and a very special kind of direct marketing (that actually works) you identify and make contact with your prospects. • Convert: via an 8 stage process that enables you to understand their needs, establish your credibility, show your differentials and build a value proposition hopefully leading to a successful conclusion. • Cultivate: using a range of tools and techniques to maximise the ethical revenue (sweat the asset as our American cousins say) and protect from competitor attack.

In the new post-ABS world lawyers will have no choice but to become active sales people and I believe that great sales people are made not born. The sales life-cycle is made up of triggers and processes; tools and techniques and some simple controls that anyone can learn. The future will surely belong to those who can sell not just be great lawyers! By Mike Ames Over the coming months Mike will explore every aspect of a modern active sales environment providing the basic tools and techniques to enable you to become an extremely competent sales person.

Making the most of your brand... In today’s competitive legal sector an integrated approach to marketing has never been so important in enabling firms to sell their services to clients. In order to maximise new business opportunities and be pro-active in their marketing, firms need to develop a strong brand and a strategic vision that includes a number of initiatives for the promotion of their firm and its services.

ne of the foremost components to a firm’s marketing strategy is the development of its brand and the core values of the business. For most firms, re-branding is a process they will go through at some point in order to stand out in this crowded marketplace. As an expert in brand alignment and business strategy, Ian Hunter says ‘most firms are under the impression that the process of creating and developing their brand is a complex and often daunting task, but the truth is if you have an agency with an understanding of the legal sector and the expertise to extract a firm’s business-goals and absorb them into their brand, the process is very straightforward’. ‘A brand isn’t just a firm’s logo, it’s how individuals or organisations feel when they see, hear and experience a firm’s service. People gain trust this way and having the right brand will help new clients as it gives the firm an ethos to focus on for each type of prospective client.’ So why should your firm embark on a completely new brand or re-development of your existing brand? You certainly shouldn’t go through a re-brand just for the sake of it, but if your brand isn’t saying the right things to your prospective clients, then it’s time to adapt to reflect the strategy of your firm. It’s about creating desire around a need, so understanding who requires the need is essential. Ian Hunter is the Managing Director of Jellyfish Creative Limited – with over 16 years of legal marketing experience.

ML // July 2012

Business Section

Marketing in a recession Whilst it might be tempting to slash your firm’s marketing activities/budget during tight economic times, studies have shown that firms who continued to invest in marketing during previous recessions actually increased their market share/ profits significantly when compared to competitors. Continuing to engage in marketing means brand awareness of your firm is maximised. When brighter economic days return, your firm will be remembered and hopefully be the option of first choice.

ne of the best and most cost effective marketing options is to review your website/ SEO (Search Engine Optimisation). What do people type to find you? Does your website rank high on Google for these terms? Google Analytics is a free program which can be linked to your website very easily and shows you how people found your site, how they explored it, and how you can improve their visitor experience. By having this valuable information you can improve the return on your website and get more clients to contact you. By gathering this information it allows you to focus you internet marketing on what works for you. Search Engine Optimisation is a way of improving the visibility of your website on a variety of search engines. SEO considers how the search engines work, what people are searching for and the actual search terms and keywords typed into the search engines. SEO can take a few months to see results but once you start ranking higher on the search engines you will get more customers contacting you so SEO shouldn’t be ignored. If you are looking for a more instant result then you could look at Pay Per Click Advertising (PPC) which is a more immediate result but is less cost effective in the long run.

A new EU Cookie Directive has now been launched and you must comply with new EU Cookies Rules which came into force on the 26th May 2011 with website owners given until 26th May 2012 to comply with the new rules. Full information regarding the new rules can be found at the Information Commissioners Office (ICO).

Visit www.legalmarketingexpertsuk.com for more tips and services. By Faye Sodden, Legal Marketing Experts FREE CASE MAN_LAW GAZETTE_QP_FINAL_136x103 06/12/2011 10:31 Page 2

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Business Section

The changing case for case management With the impact of Legal Services Act and ABS it is widely viewed that case management systems will become even more of a necessity in order to improve efficiency and lower operational costs. Those are both sensible, enduring business drivers; but what about the wider business case for investing in case management and how is this changing?

years ago case management was typically department led; full services firms had specific busy departments – such as conveyancing or debt recovery – where they wanted software to help deal with volume, repetitive work. Automation was heralded as the main solution but many projects failed as some vendors’ products were either oversold or staff completely resisted the new ways of working, reflecting a lack of case management. Now when speaking to firms, all are thinking about case management for the entire business and compliance is a major factor also. A case has to be managed efficiently in every team – it is just the level to which this process is automated that is the difference between departments. Firms are now talking about business process management (BPM) and how they will engineer the system throughout their firm. For instance, some firms are already restructuring their workforces to ensure the case ‘flows’ through their firm and at every step of the way there is total clarity on who is looking after and updating the client. The threat of competition entering the market is also

impacting on business drivers for case management as firms look to the future. The mass volume work is most coveted by these new entrants to the market. To give law firms a competitive edge, improving the client experience needs to be central along with how systems can help lawyers deliver legal services most effectively. Check list of business drivers for case management: improving the client experience, delivering legal services effectively, standing out in the market, streamlining operations and efficiency across the entire firm, and of course, reducing costs and increasing income. By David McNamara, SOS Legal

Preparing for an Alternative future How Proclaim Case Management Software is helping Nesbit Law Group...

esbit Law Group is an 80-strong firm of solicitors dealing with PI claims. Managing Partner, Alan Nesbit (pictured), started the company in 2003 and has experience in both claimant and defendant insurance. How long have you been using Proclaim? Since day one! In my previous firm I was part of a panel tasked with analysing the different Case Management systems available and selecting the most suitable. The universal choice was Eclipse’s Proclaim, so when it came to setting up my own practice it was the obvious option. It remains an easy to use, powerful and extremely flexible system. How has the firm developed during that time? We’ve grown from a two-person set-up operating out of one office, to the nine location, 80-staff business of today. What makes Eclipse stand out from the crowd is the company’s ability to tailor software in line with individual requirements. We speak regularly with Eclipse’s developers who easily incorporate new features to improve efficiency. The result is a system that feels like it has been designed uniquely for our purposes. What are the benefits of Proclaim? Due to the competitive nature and fluid status of the personal injury sector, the main benefit is how Proclaim

allows us to minimise costs. The system is so straightforward and efficient to use that fee-earners can easily complete a great deal of the work that is traditionally carried out by support staff. Why is it vital to have the right Case Management systems in place? Nobody knows the full long-term impact of the Legal Services Act, but I am confident that once a business has formulated its plan for the future, using Proclaim will provide every opportunity for success. We would find it extremely difficult to compete if we didn’t have it in place. People often ask my advice when starting up firms themselves - my advice to them is always the same: first things first, get yourself Proclaim! Eclipse Legal Systems - Kelso House, 11 Burnett Street, Little Germany, Bradford, BD1 5BJ T: 01274 704100 | F: 01274 733409 | info@eclipselegal.co.uk www.eclipselegal.co.uk

ML // July 2012

Business Section

The relentless march of the smart mobile device Roland Maguire was a partner at DWF LLP and is now a director of iAccident Ltd. The iAccident app is available as a white label product.

martphones and tablets are now a ubiquitous sight on commuter trains, coffee shops and elsewhere. The crude definition of a smartphone is a handset with the ability to browse the web. To understand what is a rapidly changing landscape, I will look at the level of penetration of the market and how people are using them, before offering some pointers for those law firms who are looking to respond to user demand. Smartphone penetration Comscore reported in March 2012 that

smartphone penetration in the UK had passed the 50% tipping point. Whilst the rate of increase will inevitably fall it is still driven by the typical replacement cycle of phones at 24/36 months. Vodafone’s income from mobile services increased by 22% within 12 months. “Data services offer the single biggest growth opportunity for the mobile industry since the launch of voice services over 25 years ago,” said chief executive, Vittorio Colao. “Our success in data is absolutely central to our strategy.” Put simply, there is a shift from desktops and laptops to smartphones and tablets.

Mobile device usage According to a study published by Google in March 2012 the number of UK smartphone users who are “always on” whilst traveling is 85%. Mobile device usage can be brokendown to the following types:• Passive involving news sites, e-books, travel information sites; • Semi-passive interacting with email, Twitter, Facebook and other other social media, traffic navigation; and • Active transacting with banks, car hire, taxi, shopping, flight booking, etc.

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Business Section Mobile web/apps The mobile web is shorthand for those parts of the web which are designed for use on mobile device screens. Apps (shorthand for applications) are software packages which perform specific tasks. The success of the iTunes store illustrates the demand from users for high quality apps which leverage the power of their devices. The average UK consumer has installed 23 apps and used 8 within the last 30 day period. To illustrate the mobile web I suggest you look at your own website on a smartphone. The physical constraints of the screen make viewing of a conventional website a clunky and unsatisfactory experience. For comparison now look at the johnlewis.com site. Their server detects that a handset is being used and diverts to a mobile-enabled site. The content is stripped-down to the essential elements required to generate and process sales. The good news is that creating a mobile-enabled website is not difficult or expensive. Content does need to be tailored so, whilst an integrated Twitter-feed works, a 27-screen discourse on pension law is unlikely to find many takers. A fully-formed app can perform sophisticated tasks through combining various elements of functionality offered by mobile devices, for example GPS location, imaging, interaction with external servers etc in a managed environment. As an example, with the iAccident app we identified the haphazard way in which accidents are currently reported as a significant problem. With the app we have leveraged the capabilities of the iPhone, in a user-friendly wrapper, to create a user experience to encourage timely submission of high quality data backed-up with real-time call-handling assistance.

Existing law firm apps Currently the majority of apps released by law forms are passive or semi-passive. In respect of the latter employment law guides feature with basic functionality, such as redundancy calculators, included. For an overview of what is available worldwide the website lawfirmmobile.com is a good resource. Arguably, the best example of what can be done with the semi-passive model is HB Global from the Dutch firm Houthoff Buruma. Future trends It is inevitable that both mobile websites and apps will become more polished. To stand-out against their competitors, law firms need to work on keeping their content interesting and relevant. For the more ambitious, properly executed, active apps offer sophisticated real-time interaction in a manner which was impossible only a few years ago. Conclusion It is now a given that all law firms must have a website. Users are now migrating to mobile devices and to avoid being left behind it is necessary to respond. Whilst these devices may have limited screen size, the manner in which they are used offers an unprecedented opportunity to interact with both existing and potential clients. By Roland Maguire

Your App... WhiteLabelApp.co.uk

Business Section

Why lawyers hate business development …and how they can overcome this emotion! Thought for today... If ever there was a time to stop behaving like a baby chick in the nest, it’s now! There are only 2 ways to grow your fees. One is being reactive, waiting for the phone to ring from clients and introducers, and the other is to become far more proactive. The former behaviour is akin to the baby chick waiting for the food to arrive. If mummy doesn’t return the chicks starve. Relying on introducers and clients coming back for more was an okay approach to business development in the noughties but here we are with ABS looming. Non-legal businesses want your clients, are you going to give in without a fight?

What opportunities are there for you? This is where a massive mindset change needs to take place in your emotions. You have knowledge, expertise and experience and you are looking for opportunities (I call it the ‘ahaa’ moment) to share this with prospects and clients. In other words think ’help and support’ not ‘sell’. People will only use your services when they have a problem they can’t solve for themselves. That’s what all professionals and experts get paid for.

Business Development isn’t selling You hate selling; you didn’t go through the pain and heartache of becoming a professional then have to turn yourself into a sales person…did you? So what’s the answer? Networking. “Oh no I hear that awful word time and time again and really it’s a waste of time, money and effort”.

Skills and traits of top networkers So how do you do it? It’s easy - you have been practising these skills since you were a kid. To spot potential opportunities you ask good questions, listen carefully, be genuinely interested and if you think it is worth following up…follow up. “But you told me I don’t have to sell.” You don’t; you are following up because in the conversation they said they had a problem which can often include dissatisfaction with their present advisors. They need help; you are going to suggest you call them to discuss it further and then where appropriate to arrange a meeting.

Hang on a moment before you flick to the next page. Networking is something we all do from around the age of 2 every day. It is simply building relationships either new ones or reinforce existing ones . You can’t help yourself unless you spend all day in bed….alone.

“Networking is something we all do from around the age of 2 every day. It is simply building relationships either new ones or reinforce existing ones.” Demystifying the evil science of networking

Pestering –v- persistence The difference is you always ask permission to follow up. When you think it worthwhile ask for their business card, ask to call, ask which is the best day to call, ask which is the best number to call on. When you read the body language you will know they want you to call. So…call, meet and do your stuff. Here’s a system to follow: But when you turn down the invitation nothing is going to happen. Are you happy waiting and watching that phone?

There are 3 key steps to building relationships with new contacts: • The first is getting to know them which means leaving your office and attending events. • The second, for me, is the key if you don’t want the relationship to wither after 5 minutes. And that is building rapport, getting people to like you as a person. You know we all buy the person before we buy the service. All lawyers are the same in the eyes of the prospect; they assume you can do the technical aspect of the job but do they think they can get on with you as a person? • To build long term meaningful relationships the third step is trust. The way to build trust early in a relationship is to be reliable. If after you have met someone you promise to call, send them a report or broker an introduction always do it. And do it quickly; speed stuns.

ML // July 2012

By Will Kintish

Will Kintish is a leading UK authority on effective and c onfident networking both offline and online. T: 0161 773 3727. W: www.kintish.co.uk W: www.linkedintraining.co.uk & www.kintish.tv

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