Category Archives: Outsourcing

May 07

ABS – Take time to know your investors; they will certainly take time to get to know you

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I attended the Modern Law Conference, which focused on the new world of ABS’s last week; a well attended and interesting event; particularly because there was a good number of unfamiliar faces there.  The most interesting session for me was the one involving a panel mostly of investors who have actually invested in law firms, which included:Allan Carton (Hi Res) SMS, Sept 12 - small v2

  • Iain Kennedy from Duke Street (Parabis)
  • John Llwelleyn-Lloyd from Espirito Santo
  • Jordan Mayo from Smedvig Capital (MyHomeMove)
  • Steve Arundale from NatWest
  • Trevor Howarth from Stobart Group

The two key messages from this for me?

  1. For whatever reason, and we discussed a few - it has taken a long time for each investor and law firm that has taken up external investment to establish enough trust and a relationship between investor and law firm to get all parties comfortable enough to do a deal that can work for all.  For both Parabis and MyHomeMove, there was a gestation period in the region of 6 years before any deal was done.  This may accelerate now. However, well considered business relationships take time in any business sector and it would be normal in any sector for a relationship between business and investor to take at least a year to develop.  Anyone acting hastily should be regarded warily.  A key conclusion was that law firms that want to secure investors within the next two years need to be initiating discussions now.  Lawyers need to recognise the role of investors in developing the business and their own role in what can become a quite different and faster moving business world once investment has been secured.
  2. Until now, the number of attractive investor deals has been very low.  Jordan Mayo of Smedvig commented that they had probably had discussions with up to 100 firms over the years … but have only done one deal!

A useful resume of other key points from the Law Gazette …

Law firms will continue to be unattractive to private equity investors until they improve how they present their financial situation and partners invest their own cash, leading investors said recently.  John Llewellyn-Lloyd, head of professional services at investment bank Espirito Santo, said external investment was the best way to ensure the future of firms, but potential backers were often put off by uncertainty over financials.

Llewellyn-Lloyd told the Modern Law conference that up to 8,000 firms will seek mergers or disappear altogether over the next five to 10 years. ‘Bank debt will be far less plentiful in the future – the professional services industry is going to see less debt and if partners won’t put their hands in their pockets you will have to go to external investors,’ he said.

‘But they need to feel there is a culture of internal investment. It’s very important to have your existing revenue generators all keen on owning shares in the business – if they’re not it’s highly unlikely they’ll be first in the queue for investment.’

Jordan Mayo, managing director of equity investor Smedvig Capital, said a number of firms had approached his company about additional finance, but market uncertainty and the firms’ business plans had prevented any deals. ‘We’ve spoken to 50 to 100 firms in the last year but have not invested in one yet,’ he added.

Llewellyn-Lloyd said it was inevitable that medium-sized firms would reduce in number in the coming years as non-lawyers enter the market and big brands dominate. ‘The legal profession has 20 times more firms than accountancy, which itself is still consolidating,’ he said. ‘There is no way to go but efficiency and consolidation – there are likely to be a handful of firms left in the middle market.’

More interesting commentary on this article here

Allan Carton

Sep 19

Get your timing right for international conference calls, webcons and webinars

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Check out  www.timeanddate.com and bookmark it for future reference as this tool will come in very handy for you some time soon. 

I guess most of us are dealing more and more with people working in different time zones around the world.  This great free tool helps you to convert times, work out what time it is with all your contacts when you’re trying to set up calls or attend webinars .. and  much more.

Aug 17

Masterclass – Legal IT for the Non-Technical Manager

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Understanding technology is critical to how law firms can adapt and respond to meet the new demands of clients who want more value for less money; particularly with the increasing variety of legal services options available to choose from.

6 business-relevant CPD points for lawyers involved in management

Lawyers and managers in law firms now need to work hand-in-hand with IT to find new and better ways to improve and support legal services; then to work together to introduce new solutions to capitalise on the significant advances in technology that can open up many new and better options in delivering legal services.  This advanced level seminar will give you the opportunity to leap ahead of many competitors not yet prepared to take up the challenges and opportunities that technology can present.  Presented in layman’s terms, this master class will enable non-technical lawyers and managers to:

  • Evaluate and improve the performance of the current IT team;
  • Communicate more effectively with the IT team to improve results and shorten development time
  • Recognise and develop new opportunities where IT can add value
  • Review your IT strategy and its alignment with business strategy
  • Pre-empt obstacles in planning how best to introduce new IT supported initiatives
  • Work with and develop the right technology and IT team
  • Focus on outcomes – what solutions technology can support and deliver
  • Bridge the gap to integrate legal skills effectively with the IT team.
  • Integrate your IT team into a broader business development function

Who should attend: Heads of Departments, Managing Partners, Senior Partners, Practice Managers, Practice Directors, Business Development and other managers or anyone else with responsibility for ensuring continued improvement in the delivery of services, performance and productivity of fee earners in law firms.

What You Will Learn:  This seminar will cover the following topics:

  • Why the frustration with IT? – strategies, alignment of the business, piecemeal development, issues with suppliers and more;
  • Impact of New Business Drivers on IT – mergers/acquisitions, the role of IT, implications of external investment, secure hosted, cloud and managed IT solutions, demand for legal knowledge;
  • Key technology developments – Opportunities;
  • New priorities lining up – ISO 27001 – data security;
  • The Changing role of the IT team – managing the IT function, business development, recruiting the right team, focus on business process, understanding outsourcing, practical project management;
  • Redefining IT strategy into practice – where to start? Key components – infrastructure and applications, management information, CRM, workflow;
  • Getting focused on the best IT opportunities (practical exercise) – barriers and obstacles and how to address them and much more.

Presenter: Allan Carton Solicitor, MBA, MD at Inpractice UK. Inpractice UK is a multidisciplinary team of specialist consultants working with a wide variety of legal practices to develop new business opportunities, where most initiatives, that range from HR and IT to client experience management, benefit from the more effective development of IT introduced in this seminar.

Book Direct with MBL Seminars HERE

May 07

MMU Law School – a unique and proven way to develop top level management skills in your legal practice

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All the Managing partners and others I have met and worked with who achieved this qualification to date have sung its praises - they all feel they’ve benefitted a lot from it; not just in added knowledge and tactics, but also from the relationships formed with others attending.  They learned from experts in the legal sector about Strategic Planning and Alignment,  Clients & Markets, Using Financial Analysis to Build Profitability, Motivating and Managing Teams, Leadership and Managing Change and Developing and Implementing Strategy.

If you or one of your colleagues want to do this, you still have time, but you need to get your skates on as the first “Induction” session starts on 26 June 2012.

MMU Law School’s CPD accredited post-graduate Certificate in Legal Practice Management is a 10-month, part time course of study for senior managers (lawyers and others) in legal practices who want to add more good management know-how to their practical experience – and to develop their understanding and skills in a safe, open environment, supported by active participation of others in a similar position in other law firms.  It is led and very actively supported by tutors with extensive management experience in legla practices – so everything here is relevant and real – where participants can work through common issues and potential solutions together.

Designed specifically by legal services market experts for managing partners, senior managers and practice managers to enable them to tackle significant change.  See MMU Post Graduate Certificate in Legal Practice Management for more detailed information.

The sessions are delivered by a combination of business school and external practice management experts who have extensive experience of working with and understanding the needs of law firms and legal departments.  The unique programme includes:

+  Six modules specifically tailored to allow students to meet the challenges of today’s legal services market.

+  Intensive Teaching Days that are interactive and practical, delivered by experts in leadership, strategy, finance, marketing, client service and managing people;

+  Extensive Reading Lists and Case Studies (see notes on the website);

+  Practical assignments that enable students to target specific issues in their firms or departments so as to implement real improvements; and,

+  The opportunity to share best practice with other managing partners and practice managers across the UK

For 2012, Modules and Teaching Days cover: Induction Day (26 June); Strategic Planning and Alignment (27 June); Clients & Markets (12 Sept);  Using Financial Analysis to Build Profitability (7 Nov); Motivating and Managing Teams (16 Jan); Leadership and Managing Change (13 March); and,Developing and Implementing Strategy (TBA)

Direct Business & Personal Benefits, according to last year’s students have been: achieving clarity of strategic direction and buy-in across the firm and department; targeted market expansion of client services and enhanced people management;  enhanced financial performance; improvements in team dynamics and quality of performance; greater confidence in leadership and management abilities; better personal coping strategies as a result of improved communication and trust; and, sharing of best practice with other leaders in the legal services market place.

Tangible Outputs to apply in practice include: detailed formal analysis of market trends relevant to your particular business; client service audits to identify key clients and performance improvements; financial management review; high performing team criteria and performance measures; agreed common values and a strategic plan with critical success factors and key performance indicators.

What they say about it – for example, Philip D’Arcy, Joint Managing Partner, Blandy & Blandy LLP  who attended the programme last time around is just one of their enthusiastic supporters, commenting  “I found the course to be of real value in providing a good overview of relevant management theory and combining this with very practical considerations and real life examples of applying the theories in practice.  I would recommend this course for anyone involved in the management of a law firm.  The combination of a deeper understanding of management theory with the practical application of the theory is of real value and has certainly helped me in my management and leadership role.” 

For more background go to the MMU site here  or contact Deborah Walker on 0161 247 2420 / 07917 370341 or deborah.walker@mmu.ac.uk for further information and place availability.

Allan Carton

Mar 30

Our Top Five Fixes for shaping up to OFR

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Lost in acronyms?  Struggling to know where to start?  If so check out our Top Five Fixes to get closer to compliance.

Prepare a business plan

Principle 8 of the SRA Principles states that you must “run your business or carry out your role in the business effectively and in accordance with proper governance and sound financial and risk management principles”. There are also relevant provisions in Chapter 7 of the 2011 Code:  Outcome (7.4) states that “You maintain systems and controls for monitoring the financial stability of your firm and risks to money and assets entrusted you by clients and others, and you take steps to address issues identified.  The SRA will therefore expect you to plan well in advance if you are considering any change to the structure of your firm and to have a business plan in place which shows that you have considered and regularly review the financial viability of the firm.  The new approach enables the SRA to concentrate its resources on business models that rely too heavily on, for example, introducers of large volumes of work, or on models that have a slim profit margin, potentially endangering the business viability of the regulated entity. It will also be necessary to review your business plan periodically to assess its effectiveness and consider possible changes.

Prepare a whistle blowing policy

Outcome (10.4) states that: “you report to the SRA promptly, serious misconduct by any person or firm authorised by the SRA, or any employee, manager or owner of any such firm (taking into account, where necessary, your duty of confidentiality to your client).”   This is supplemented by Indicative Behavior (10.10) which states that “having a “whistle-blowing” policy” may tend to show that you have complied with the principles. You should therefore develop such a policy which explains the process which a person within the firm should go through if they encounter misconduct either within or outside of the firm. In both situations this should includes clear reporting lines and the people responsible within the firm for reporting to the SRA.

Prepare an interest rate policy

Rule 22.3 of the SRA Accounts Rules 2011 states that: “You must have a written policy on the payment of interest, which seeks to provide a fair outcome. The terms of the policy must be drawn to the attention of the client at the outset of a retainer, unless it is inappropriate to do so in the circumstances.” Rule 22.1 states that: “When you hold money in a client account for a client, or for a person funding all or part of your fees, or for a trust, you must account to the client or that person or trust for interest when it is fair and reasonable to do so in all the circumstances.” There is a large degree of flexibility given to firms when deciding on what interest will be payable to client’s on money held client account.  It is also possible to contract out of the obligation contained in Rule 22.1, under Rule 25.1. When contracting out the client must give informed consent and therefore all relevant information must be made available to them at the outset to enable them to do so. The policy should therefore be included in your firm’s terms of business and any existing clients will require a letter explaining the policy and requesting their agreement. The policy should also be included in your firm’s Office Manual.

Comply with provisions relating to outsourcing

Outsourcing can provide for lower costs associated with accounts, disclosure, ICT support and consultancy and digital dictation services. However when using such services you must now ensure that clients are informed in your firm’s terms of business that you do not provide such services. You must also ensure that you make adequate arrangements with the entity you are outsourcing to so that the SRA will have the same access to the information which they store regarding your firm as they would if the service was being provided by you. This will mean altering your contract with them to reflect this necessity.

Select a COLP and COFA

The new SRA handbook requires both ABSs and solicitors firms to appoint a COLP and COFA in order to become or remain authorised.  The SRA Authorisation Rules for Legal Services Bodies and Licensable Bodies make minimum requirements as to who may take on the role of COLP: “8.5 (B) An authorised body must at all times have an individual:  (i) who is a manager or an employee of the authorised body; (ii) who is designated as its COLP; (iii) who is of sufficient seniority and in a position of sufficient responsibility to fulfil the role; (iv) whose designation is approved by the SRA.”  Similar provisions exist in relation to the COFA. However Rule 8.5 (g) states that the COLP must be a lawyer in order to be designated; no equivalent provision exists for the COFA.

The selection of the COLP and COFA must be approved by the SRA. The SRA will apply the Suitability Test when deciding whether to approve a non-authorised person candidates.  Whilst it was previously understood solicitors would be passported the SRA web site has a case study indicating that full screening will be applied to solicitors. The possibility of full screening of solicitors has been confirmed to us by the SRA (29.03.12) and that entails enhanced CRB checks. This process may present issues for those solicitors who have not previously undergone the Suitability Test or its predecessors. This may pose particular issues for the smaller firm with more limited choice of candidates for the COLP and COFA roles. Sabina Rinker has acted for those experiencing issues arising from the Suitability Test and she is very familiar with the jurisprudence which is developing at a pace.

We hope our Top 5 give you a starting point.

As always, if in doubt — take advice!

Tony Guise

Mar 22

Client relationships and CRM systems – now is the time to make some decisions

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If you have a CRM system that isn’t working well enough for your practice, or if you are looking at options to improve your management of client relationships, we can help you.

CRM is high on the agenda for most legal practices right now … and also a critical area of weakness for many, both in the lack of use of the technology AND because lawyers often struggle to understand why and how best to develop strategic relationships with clients.  If you are interested in Client Relationship Management (CRM) systems whether for a first time implementation or to improve what you already have in place, we can make sure you know …

A]  Which CRM system is the right one for you at your current stage of development, with your people and with your plans going forwards?    Is it …

  1. Your Practice Management System (PMS) supplier; 
  2. Microsoft CRM;
  3. LexisNexis InterAction
  4. Conscious (Sugar CRM)
  5. SmartCRM
  6. Microsoft CRM4Legal
  7. Microsoft xRM4Legal
  8. Sage Sales Logix / e-metis
  9. SalesForce
  10. Tikit ClientConnect
  11. Thomson Reuters’ Hubbard One
  12. CDC’s Pivotal; or,
  13. Do you think you should build your own? 

These are the key players in the legal sector right now, but how do you know which is right for you? We can save your people a lot of time in researching and evaluating all these options as we already know their strength and weaknesses in features, implementation and usage.

B]  How your people should make most effective use of CRM within the business?  This should of course be decided before you buy a system to meet your needs, to make sure you make the right selection.

We can help you make the right decisions to get your people actively engaged in using CRM effectively and earlier than if you try to handle all of your CRM projects internally.  External objective involvement in these projects makes a crucial difference for the better.

If you want to find out more … call Allan Carton on +44 (0)161 929 8355 or complete this contact request form suggesting some times to talk and I will call you.

Dec 29

Legal Process Outsourcing (LPO) – first steps?

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When it comes to outsourcing legal process, I suspect there’s a misconception of what is actually being outsourced to third parties.  Much of what I see being outsourced is legal administration work – the routine and mundane work that lawyers really don’t want to do; discrete parts of the process, not the whole process itself. 

A couple of examples – in clinical negligence work, there tends to be a huge amount of documents, where it helps the lawyer to have the notes summarised into a concise document they can digest quickly to identify and reference key facts and issues.  There are also wider opportunities to deal more effectively with e-discovery of documents – where data held in multiple formats (from paper to electronic) can readily be searched, compiled, indexed etc to make all the information and evidence more readily accessible to the lawyers.

Both of these examples improve the process and the ability of lawyers at all levels to focus on getting the legal advice right – also reducing the cost of doing the job. 

Lawyers should be looking harder at every opportunity to improve the way they work to home in on more opportunities like these. For now, there should be more focus on the specifics of legal administration components of legal process to decide what can really be outsourced to benefit everyone involved.  Maybe establish a relationship with a legal process outsourcing company by doing some of this (or just transcription – as many have done) for starters to establish a collaborative relationship … and work with them from there?

To discuss, call +44 (0)161 929 8355 or contact Allan Carton

Nov 24

NW lawyers under pressure, but new initiatives are working … for some

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A recent survey by PwC showed that the average profit margin for law firms operating in the NW has dropped to 13% (2010: 16%), although average profit per equity partner in the North West increased to £246,000, with 60% of law firms reporting an increase in profits in 2011. Nationally most firms outside the top 10 reported a fall in profits.

The 40% of firms most likely to report falling profits have been the high street operators most likely to be impacted by the introduction of Alternative Business Structures (ABS). The working capital performance of most law firms has held up well, with practices reporting improvements both in the number of debtor days and the length of work in progress – but this is an area where many firms have performed badly in the past so it’s no surprise that financial pressures have forced firms to focus more on these areas. They are the easiest to control internally.

Worryingly, a trend revealed by the survey is that “despite market conditions, headcount has started to drift up again. Utilisation rates for professional staff have been flat or even in slight decline. Equally surprising, given the focus on support costs, has been the renewed upward trend in the numbers of back office staff for many firms.” Larger firms have started to look at more efficient ways of operating their own business, looking towards legal process outsourcing, offshoring and even “North shoring” – ie. maintaining work in the UK, but carrying more of it out in the North where office space and salaries are cheaper.

Greater Manchester Chamber of Commerce, Legal Sector can help law firm members in Greater Manchester (all sizes and sectors) to improve and develop their business – to reduce operating costs, increase profits and launch effective new business development initatives. These are areas where we can deliver radical reductions in operating costs and improvements in service to clients. All part of the rationale for the work by the Greater Manchester Chamber of Commerce in supporting the Legal Sector.

To get involved, any employees of legal practices that are members of the Chamber can join their LinkedIn Legal Sector Group here, participate in LinkedIn local “Special Interest Sub-Groups” each relating to Legal Technology, Financial management, HR & People development and Facilities management. We are also organising local forums for members of each SIG like this one for people involved in Legal Technology scheduled for 11th January 2012. To check if your practice is already a member of the Chamber, all you need to do is apply for membership of the LinkedIn Legal Sector Group here and we will take if from there.

Your practice could become members if any of your offices are located in the Greater Manchester area.

Download membership fee details here.

Allan Carton

Survey information courtesy of the Business Desk

Nov 07

FREE Online Time Zone Converter, Global Meeting Planner and much more – really useful!

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I’m sure more an more of you find that you are are setting up and getting involved in online meetings (telephone and webconferences) with people located in a variety of time zones around the world.  Personally, these now regularly range from the east and west coasts in the US to India, Australia, South Africa and even South America – in addition to Europe and the Nordic countries. 

So this little online tool has been a great point of reference in co-ordinating people – and there are a lot of other useful tools here to help with meetings across time zones and travel – all FREE, even if you register for extended tools.

Please check it out at http://www.timeanddate.com/worldclock/converter.html  and let me know what you think.

Allan Carton