Category Archives: Finance

Business Analytics and Reporting to help you run a better law firm – Bi24

C24, Wright Hassall

Improve the performance of your legal practice – fill gaps in the capability of your practice management system.

CASE STUDY:  Wright Hassall, solicitors implemented Bi24, which is C24’s business analytics and reporting solution for law firms, connected to Wright Hassall’s key data feeds across management reporting, practice management systems and marketing applications.

The Outcomes:  Easy access to data and insights has changed the way teams work at Wright Hassall, providing users across the entire organisation from Managing Partners to support staff with the ability to perform ondemand, self-service reporting whenever they need to. Data can now be pooled between different applications to drive greater insights across work in progress cases and ensure better returns on investment for marketing activities.

One of the most important developments is the ability for the firm to create dynamic client facing dashboards that assimilate information into one place; showing the client’s current billing position, work in progress, outstanding payments due, hours worked and activities undertaken. This enables Wright Hassall to keep their clients up to date and provide them with regular reporting so that they are aware of payments due, which is increasingly important in a post-recession era where maintaining healthy cash flow is a business reality.

Additionally, Wright Hassall are now able to extend their reporting capabilities out to customers of their clients, for scenarios where updates on legal matters are required to be reported to a client’s wider customer base. For instance, Wright Hassall can provide reporting via portals to the tenants of their property management clients with updates on tenancy agreements, disputes and queries. This enables Wright Hassall to differentiate itself by becoming a data services provider to its own clients, in a way that suits the business models and growth objectives of its key client base.

IT Director, Martyn Wells, highlighted the change in the business through the introduction of better reporting practices. “Data is now driving behaviours within the firm. When partners are creating their forecasts and business strategies for the year, they are now proactively seeking out data insights from the Bi24 tool to inform their strategies”, commented Wells. “We are also seeing how better reporting through Bi24 can allow us to stay competitive in an age of fixed price fees, enabling us to continually assess costs and margin positions for better business decision making. Data is now supporting us in achieving our ambitious growth targets.”

DOWNLOAD a copy of the full CASE STUDY REPORT here >>

For more information about other proven technology solutions that can improve the operation of your business, contact Allan Carton at Inpractice UK.

Tackle the Problem: Help fee earners get focused effectively on their own financial performance

Unlock CashThis is a big problem for many law firms, but here is one of our  solutions to enable you to address it effectively; capable of producing big returns for your practice.

Focused on results from the initiatives we introduce in law firms that include technology, client relationships, development of people and process improvement, we are very aware of the obstacles to performance improvement that result from fee earners not fully understanding the impact of their own day-to-day financial management of cases and clients.

Very significant benefits can be achieved if all fee earners understand the financial implications of their day-to-day actions.  However, this is an area often overlooked in developing the business and personal skills of lawyers … and support staff in contact with clients.  Appropriate communication with clients is a critical part of any improvements, so it’s not just about the numbers.

Fee earners have the potential to make the greatest impact on the financial performance of any law firm. If they aren’t aware of the financial implications of how they interact with clients and are not comfortable with having financial discussions with clients, how can law firm management teams expect them to demonstrate the right behaviours?

The Solution:  Inpractice UK has partnered with the co-authors of the Law Society toolkit on financial stability in law firms, Armstrong Watson, to help fee earners improve their understanding of financial management.  The key aim is to help them get fully in tune with what and why senior management want them to evaluate their own performance (and that of their teams where appropriate) and introduce very specific steps to help achieve better results; often the beginning of a continuous improvement process.  There will be some quick wins immediately but much more to gain by carrying plans agreed here through, longer term.

As the SRA CPD regime is changing, we are finding that more law firms are getting a better grip on training; being pro-active to identify gaps in competence – then planning a blend of the most cost-effective training to develop people with knowledge and skills better aligned to improve the performance of the practice.

In this area, there are very significant benefits to be achieved by arranging training that is very specific to your practice in small workshop sessions in-house.  Fee earners can then be introduced to very specific opportunities to improve (and the potential direct financial benefits that can be achieved) in the context of your practice and their work.

Armstrong Watson currently provide this in-house training to partner and fee earner teams within law firms to:

  1. Make them more financially aware,
  2. Increase productivity and recovery rates,
  3. Reduce lock up to free up cash.

If you think your people could benefit from these interactive workshops please contact Andy Poole at Armstrong Watson on 07828 857830 to discuss how this could be designed to work most effectively for you – no obligation.  Quote our partner reference: INP10.

If you want to speak to us first for more background, please complete this contact request form or call us on 0161 929 8355.

Update on development and use of “Cloud” and “Hosted” IT systems in law firms and the legal sector

This Cloud is not fluffyThere is now a wide variety of options available to law firms in the UK, to move away from the pain of managing servers and extensive IT on their own premises, whatever size of firm they are. Legal practice management system suppliers are still mostly at some stage on the journey from supplying dedicated IT systems on the firm’s premises (on the decline) to delivery of their software from a remotely hosted and secure (perhaps shared, making them “true cloud”) servers in a data centre managed by the supplier, the firm or a third party depending. All the firms that we work with are heading in this direction.

One size does not fit all, as firms have different requirements, concerns (sometimes unfounded) and limitations in what they feel they can and should do at this stage. For suppliers, the transition from traditional suppliers of on-premise solutions in the legal sector to deliver “cloud” solutions at maximum profit challenges their business model fundamentally; so some new entrants are likely to make an even more significant impact in the UK market soon.

Read the rest of our article providing an update on how far law firms and IT suppliers servicing the legal sector have come now – published in Jan 2015 here >>

What can you achieve and do you want to make happen? We can show you how and help you do it.

Unlock CashRunning a workshop for a group of partners and fee earners for one of our clients on Friday reinforced the need to quantify the benefits that can be derived from new initiatives aimed at improving the business. 

What does that really mean?  What can really be achieved and what needs to be done to achieve it? 

Which reminded me of these numbers produced by Jon Miller from his real world experience as an FD in a law firm and consultancy work since then.

Example:  Through better financial management – and without generating any new business at all – a typical 40 fee earner practice can:

      • Reduce your overdraft by £675,000 over 3 years
      • Generate extra cash and profit of £175,000.
  • Release £200,000 against your overdraft.
  • Release £500,000 against your overdraft … and more.

Double these numbers if you are 80 fee earners etc.

Here’s how – but you need to be able to get firm-wide engagement, monitor performance and work together on a daily basis to keep up the momentum and stay on track.

To find out  how this can work for your practice, contact Allan Carton or Jon Miller on 0161 929 8355 or complete this contact request form.  We won’t charge you or require any commitment from you for a free, confidential consultation. 

Productivity (Utilisation) Take, for example – 40 fee earners charging 1,000 hours each.

  • Suppose each charges just one more hour per week which is billed at the average £125 across 45 weeks.
  • Creates an extra £225,000 income, profit and cash.
  • Net profit from 25% to over 28%.

⇒ Reduces overdraft by £675,000 over 3 years.

Expenditure
  • You probably already have significant fixed costs, so in the short term – attack the variables.
  • Assume £1.75m of £3.75m costs are fixed in short to medium term
  • Reduce remainder by 3% each year over 3 years – not too radical

⇒ Extra cash and profit of £175,000.

Work in Progress
  • Examine procedures for moving work through quickly
  • Terms of business aimed at billing WIP at the earliest opportunity.
  • Aim to reduce WIP balances by only 5% over 3 year period.

⇒  This will release £200,000 against your overdraft.

Debtors
  • Agree billing period with clients – monthly if possible.
  • Communicate overruns before sending a bill.
  • Set standard collection procedures which partners cannot easily override.
  • Aim to reduce debtor period to 2 months in three years.

⇒  This will release £500,000 against your overdraft.

Disbursements
  • Paid disbursements are the issue.
  • Adopt “Zero tolerance” on unfunded disbursements where possible.
  • Ensure processes are followed in areas (such as Personal Injury and Litigation) where some funding is possible.

⇒  There are savings to be made: not added as they are variable

 If you want to find out how to make this happen in your practice, contact Allan Carton or Jon Miller or complete this contact request form.

Snapshot of the Current UK Economy from leading economist, Dr John Ashcroft

Dr John AshcroftFrom Dr John Ashcroft – Chief Executive of pro.manchester, a Director of Marketing Manchester, member of the Greater Manchester Chamber of Commerce Council and the AGMA Business Leadership Council. Also economics adviser to Duff & Phelps , the international and investment banking services specialist and authors the Duff & Phelps monthly financial updates.

It will be some months yet before interest rates begin to rise. Our current assumption is that rates will begin to rise in the second quarter of 2015.

40% of respondents in the latest Bank of England/GfK Inflation survey expect rates to rise over the next twelve months. No worries for the future apparently. Once on the rise, over 70% expect rates to be less than 3% in five years time. So much for the madness of crowds.

Clearly the general public have a much better grasp of the latest simulations of the “equilibrium real interest rate associated with a neutral monetary policy over the medium term” than is generally assumed. They must have been listening to the speech by David Miles last month.

Asked about the current rate of inflation, the median answer was 3.5% down from 4.4% in November. Excellent. So much for the madness and the wisdom of crowds.

This week the February Markit/CIPS UK PMI® surveys were released. The strong upswing in the UK manufacturing sector continued in February. Output and new business continued to rise at above-trend rates. The leading index at 56.9 was up from a revised reading of 56.6 in January.

In construction, the pace of expansion continued to rise sharply. The leading index scored 62.6 in February, down from a 77-month high of 64.6 in January. Still a very strong performance.

In the service sector, output continues to expand strongly in the month. The headline Business Activity Index recorded 58.2 during February, little changed on January’s 58.3 and indicative of a sharp rise in activity on a monthly basis.

Overall, output in construction, manufacturing and services suggest the economy continues to recover across the board at a very strong rate. The latest NIESR GDP tracker suggest growth increased by 3.5% in January. The Bank of England expects growth of over 3.5% in the first quarter. For the year as a whole, the consensus forecast is for growth of 2.7% this year.

We await the details of the latest GM Chamber of Commerce survey before raising our estimates of growth this year. The GDP(O) model is signalling growth of 3% for the year as a whole. The survey data will be a little more tempered, I suspect.

In the UK and the USA, growth is accelerating and the job market is “tightening”. The pay round will become more difficult by the end of the year. Earnings are set to increase significantly as critical job levels are breached by early 2015. Household incomes are set to improve and the recovery in spending will continue. There will be no “rebalancing”, whatever that ever meant.

Growth up, unemployment down, inflation down and borrowing heading in the right direction. Just the trade figures will continue to disappoint. If growth hits 3% this year, disappointment could turn to shock and alarm. Then all forward rate bets will be off.

Sign up for John’s excellent, readily digestible weekly “Saturday Economist” newsletter and more here.

Improve business performance with easy access for all to the right management information … real time, on screen.

Unlock CashLaw firms that have recently installed KPI dashboard management systems vary in size and the nature of work/clients they handle, but examples include: JMW, Lanyon Bowdler, Slater Heelis, Curry Popeck, Matthew Arnold & Baldwin, Fentons, Taylor Walton, Shepherd & Wedderburn and Horwich Farrelly to name just a few.

There are a number of suppliers of similar – but different solutions -designed to meet similar objectives.  We can help you to explore the options and particular benefits of each in this critical area of management where many lawyers haven’t yet got a handle on what can he achieved – which can make it difficult to differentation the solutions, benefits and challenges.

Easy access to financial management information gives you the ability to proactively manage your practice and your people to improve the financial performance of your business quickly; also continue that improvement into the future.

The technology needed to automatically compile and display meaningful management information (fully integrated with your practice managment system) with “drill down” to detail and its implementation is probably not as expensive as you think.  In any event, the financial returns from better and more proactive management of time and finances, can readily justify investing in one of these solutions through any combination of the following potential returns you can get, if implemented effectively:

  • Record more billable time (relevant whether working on fixed fees to maximise profit)
  • Generate higher revenue
  • Prompt Earlier billing and payment
  • Improve cashflow
  • Reduce lockup – wip, unpaid bills and disbursements
  • Better manage time spent on business development and management
  • Manage write-offs more effectively
  • More direct connection with performance appraisals

Most significantly, this easy access to real-time information helps your fee earners manage themselves and their own peformance more effectively.   They can do this with “real time” information on the defined Key Performance Indicators that really matter to your people in each department, available on screen (constantly, if you want; or at one click of  button), with the ability to drill deep into that information on screen if needed.

What matters and what is defined as “good” performance varies from one team to another depending on the nature of the work and the particular challenges in each area – but then all of this rolls up again to KPI’s for each office and the practice; again all available real time to the people authorised to see it – displayed graphically to get a clear overview, with drill down to get to the detail that has traditonally swamped lawyers.

For more information on the various affordable options now available, contact Allan Carton on 0161 929 8355 or at acarton@inpractice.co.uk

Hosted IT for a small startup law firm. Some advice today ..

Hosted IT services in the Cloud“We don’t actually provide the hosting service but advise firms on the options and help with the transition.  I’m happy to give you a couple of contact names to get this info direct from the suppliers we think would be the easiest options for you as a small start up as they would quickly understand your requirements and have solutions ready and waiting.

There will be other options though.   Be wary of just making a direct cost comparison between hosted and on-premise solutions as there a lot of softer benefits (admin, management, hassle, holiday cover, flex options to working remotely, disaster recovery etc. of hosting) and some risks (control and resilience of comms lines into your office in particular, retention of some local admin support) you need to take into account in the value equation too.

It would probably be worth meeting and running the proposals past Frank Manning here to make sure they really match your requirements and to get his tips on making sure it all goes smoothly – maybe half a day of input from him would cost you about £425 plus vat and expenses, so let me know if that could be of interest.  I suspect it would be money well spent at this stage to make sure you are on the right track.”

And … let me know if you need anything else in setting up the practice.  Jon Miller would be good to get the finances set up,

Allan Carton