Monthly Archives: March 2009

LDP's – a catalyst for change?

The good news is that there are more experienced, capable and innovative management people coming into law firms now. Particularly those new recruits from other business sectors who have more commercial influence, which can bring a breath of fresh air. Those who are good enough to adapt to the legal environment without losing the ability to innovate – and who are strong enough to justify their decisions – make a real difference.

But there are not enough of them yet working in IT, Marketing, HR and Finance in mid size firms. More respect, motivation (not just money, but maybe job satisfaction) higher salaries and performance-based bonuses can readily be justified by the impact they can make to bottom line profits. There are risks in bringing new people in and mistakes are made, but more could be done to get these appointments right.

There is a problem though that will be difficult to shift and it’s a bit of double hit. Partners have not been prepared to pay or respect good management people to the extent they should in order to get and keep the best talent. Just as crucially – particularly where the pool of candidates is limited by the rewards available – partners have not been effective in their selection (and development) of people taking on management roles. When a partner comes to draw up a job spec for a Practice Director, HR Manager or Director, it is difficult for them to know what skills and experience the right applicant should have, or what objectives they should be set; and beyond that, how to test the capability of applicants to meet those criteria in the interview process. Very often, replacement has been the easiest option, rather than a change of direction to help develop the business differently.

As a catalyst to help equip any practice to compete with ABS type ventures from 2012 onwards, partners who recognise the need to change their business over the next 3 years (which isn’t long) should focus on what management people and skills an LDP will allow them to pull together now to set out the path for the future. Then go get them, either by developing people already there, or by bringing in new talent; making sure they get paid the going rate for their skills and experience at whatever level.

I am getting two key messages at the minute from managers, which should be considered in the discussion of LDP’s. Firstly, partners are not good at managing and developing the capable managers who are capable of doing more. More effort should be put into setting their objectives, measuring their performance, increasing their authority and understanding of the business than in the past. Secondly, that this is a good time to cut loose the managers who are not going to meet the demands of more commercially driven legal business on the basis that there is a lot of good, experienced management talent from other areas of business on the job market now. People from a different background, with new ideas who can help to set a different agenda to change the culture and mindsets that will be needed …. but only if they are good enough to get respect.

Getting to grips with LDP's and ABS ventures

LDP’s (Legal Disciplinary Practices) will be a essential stepping stone for many firms en route to becoming an ABS (Alternative Business Structure) or in just continuing as a better and more stable legal practice.  

Lawyers in under-managed traditional legal firms will struggle to find the time to generate the vision, range of innovative initiatives, momentum and drive needed to improve the way they operate without the deep involvement of professional management that LDP’s will allow.

So it is time to take advantage of the breathing space allowed between now (with the introduction of LDP’s at then end of this month – March) and 2012 when commercially driven and supported Alternative Business Structures will be formally allowed.  But that’s just 3 years and the reality is that – in spite of warnings by the regulatory authorities that nobody should jump the gun to create ABS ventures earlier – there are ABS style ventures out there already.

Partners need to agree now – not in 2 years’ time when we hope the recession will be over – how the changed rules can help them build a stronger business.  Can they survive without changing?  Are they ready for a transformation or would a slower evolution to something different work better?  What needs to change on what timescales to capitalise on the opportunities now, in 2012 and beyond, when we expect ABS ventures to be reality?

That means reviewing the way you manage your business now and planning to improve it with better equipped management to lead development of the practice and to focus on all the underlying areas that need to be addressed – developing and motivating people in line with business priorities, growth, mergers, performance management, business processes, client management, management information, relationships, collaboration, business partnerships, refinement of services and pricing.

Tackling these areas doesn’t involve spending lots of money but they do require time and focused attention to make sure that the right steps are taken within reasonable timescales.

It‘s not easy to think longer term in the current recession but it has to be done. More firms that fail to make decisions and take action on the issues we discuss here will soon begin to flounder.  On the other hand, ABS ventures will create excellent opportunities for more lawyers to enjoy a better quality of life, a more interesting job and better financial rewards.  The tools are here, but it is up to lawyers to take the initiative to create the opportunities before others do. 

Read more about this topic in the article under this heading which you can download free of charge from the downloads section of our website at www.inpractice.co.uk

Definitions:

Legal Disciplinary Practices (LDPs), which are due to be authorised from 31 March ’09 – are the first new type of practice permitted by the Legal Services Act 2007, and will enable new forms of legal practice to develop both LDPs – firms involving different kinds of lawyers, and up to 25 per cent non-lawyers, but still providing legal services.

Alternative Business Structures (ABS’), which will allow external ownership of legal businesses (“Tesco law”), multidisciplinary practices – providing legal and other services – and many things in between are due to be authorised sometime in 2011 or 2012.

SaaS for Lawyers – it's been here a long time already

Use of “Software as a Service” (SaaS) is already a routine part of most legal firms and has been for quite a few years now with the use of hosted applications that deliver information to lawyers.  In the examples below, we show how much further this has moved, with law firms using a variety of software services via the Internet ranging from simple applications to the whole of their IT systems.  Adoption of SaaS solutions should be explored by firms of all sizes as there are now different solutions that can fit the needs of firms of just about any size and focus, but there are “horses for courses”.

Users are comfortable with SaaS.  The new generation of employees entering the workforce have not only been raised on consumer services, such as iTunes and YouTube, but also live on social networking sites like FaceBook and MySpace. These experiences are shaping their expectations about how they leverage technology and interact with their peers. These applications are all “SaaS”, even if much of it is free.

We see a steady move to use of hosted services in law firms, with the pace picking up as technologies and expertise on the part of hosting companies develop very quickly. Whereas the applications being used previously were related to just some aspects of handling legal work (conveyancing, searches, legal research), hosting of services has now moved much deeper into everyday management of the practice.  The comprehensive and integrated solutions we see developing now are a logical extension of the more “standalone” SaaS services that have been in use for some time; either in IT management or in working as a lawyer.

Key components of any SaaS solution are:

  • Use of software over the Internet.
  • “Pay-as-you-go” subscription licensing – on registration or a per user or transaction basis.
  • Centralised update, development and support, with investment in high levels of expertise by the provider.
  • Availability of extended (maybe 24/7) support for users by the provider
  • Access to the services anywhere, anytime.
  • Access to the system online by all interested parties

Those Early Moves

The seeds have already been sown in the legal sector.  Early SaaS services gave lawyers access to online systems managed by, for example, LexisNexis Butterworths (www.lexisnexis.co.uk) and other legal publishers for legal research for a fee; then we had Land Registry Direct (www.landregistrydirect.co.uk), which continues to expand the range of services that lawyers can access on their system.  Also, providers of property searches, such as Searchflow (www.searchflow.com), where case management systems are now often integrated, to feed information into online searches and then to place the information fed back into client files.  The alternatives here are for lawyers to employ their own people to buy and manage the reference books or go out to do the searches.  Online services continue to be more effective solutions here, where a third party does the work, providing access to their content to many other firms.

Moving On

One example of the radically improving technology that has just arrived is BT’s recent launch of its revolutionary 21st Century Network (21CN) programme.  A multi-billion pound infrastructure project that will create high bandwidth Ethernet networks nationwide to help customers simultaneously improve their business performance and save money.  Until now Ethernet connectivity has been largely limited to selected urban areas, with coverage based on just 60 points of presence (POPs) in forty metropolitan areas. But the roll-out of 21CN will increase this number to 600 POPs, covering 87% of UK businesses, by April 2009; rising to 1100 POPs a year later providing the option of next generation Ethernet services to 98% of UK businesses.

So this kind of incredibly fast and reliable connectivity means that lawyers (like any other business) can now have some or all of their IT resources securely locked away in a data centre, cared for and nurtured in a safe environment and managed by a team of experts with highly secure connections to the Internet that a law firm could not otherwise afford to build for themselves – all accessible via the Internet from anywhere 24/7 with support on tap. When employees leave your firm, the costs reduce immediately; when they arrive, there is a known cost per user for each person added.

This is happening now with law firms.  The question is not whether to use SaaS but which solutions to move, how and when – to create a more effective overall solution for the practice.  Microsoft has recently forecast growth in takeup of subscription software at a compound rate of 30% per year during the next 3 years, considerably outpacing the traditional software market.

Just a few examples of that progression:

  • Hosted case management applications are good examples that have been available for some time, from proven online providers like EasyConvey (www.easyconvey.com) and Ochresoft (www.ochresoft.com) in conveyancing.  They have allowed a low cost entry level for firms that do not have a lot of technical IT expertise; allowing them to use a system managed by the provider at a cost per transaction which has made the solution affordable and manageable, but generally without any integration into the other parts of the practice.  But users can work from anywhere and other parties can share the information as it’s all accessible, subject to security on the web.
  • Simple application-driven solutions that can be used as and when needed; many providing new low-cost tools to help develop your business.  For example:
  • Hosted practice management systems are now being offered by a number of suppliers, with hosting provided either directly or through specialist business partners. Just a few examples of suppliers and firms that have already made the move include:
  • Hosting of email is becoming increasingly popular.  An example: as part of overall improvements in managing IT services, Druces LLP (www.druces.com) moved their Exchange email services to be hosted by Network Si (www.networksi.co.uk), so they now deal with all aspects of management of email from setting up new users to security updates, archiving and encryption.  Hosting guarantees redundancy and availability for peak periods, and releases the in-house IT team from dealing time consuming updates to let them focus on other aspects of IT.
  • Hosting of the virtual office – the ultimate SaaS solution is a reality too.  Examples include Wolferstans (www.wolferstans.com), Morrisons (www.morrisons-solicitors.co.uk ) and Martin Kaye (www.martinkaye.co.uk), where all have their entire IT systems hosted at e-know.net (www.e-know.net) in Telford.  All employees at each firm access their usual desktop (hosted in Telford) with all their usual Microsoft Office applications, email, digital dictation, practice and case management systems (LexisNexis Axxia), SharePoint etc via the Internet.  All applications are integrated as they would be in their own office.  Centralising all applications and data in a highly secure environment with fast and reliable links to the Internet also facilitates seamless use of all methods of communications (mobiles, text, email, voicemail, fax, phone) producing more flexibility and improvements for users and clients.  It also creates an environment that can be easily replicated and brought to life for disaster recovery and business continuity purposes.  Although Martin Kaye made this move some years back, Wolferstans and Morrisons have made this move within the past 12 months.  The transition has allowed IT solutions developers working in-house at each firm to focus their time in developing better working processes, rather than fire-fighting day-to-day IT issues across their firm, with good results.

To keep abreast of the variety of solutions that are now evolving and developing very quickly, refer to the Suppliers and Case Studies section of the MSC website at www.managedservicesconsultancy.com

A version of this article first appeared in the March/April 2009 issue of the Internet Newsletter for Lawyers & Law 2.0 which you will find online at  www.infolaw.co.uk/newsletter

Generate cash now from sale and lease back of your IT

With a lot of capital tied up in many law firms that have invested large sums of money in IT hardware, software and in implementation, there is now – with low interest rates – an attractive option to release significant sums of cash, which is being taken up by quite a few law firms of all sizes.

Lombard Technology Services are offering to pay a cash sum based on both:

  • Hardware value (depreciated as you would expect); and also,
  • Software AND installation costs;

They then enter into a “Lease-loan” Agreement (lease for equipment and loan for software and services) allowing you to keep using the equipment and then pay regular budgeted payments for the term.  At the end of the term (based on the expected life of the equipment) there are a variety of options available from disposal by Lombard  to buying back at an agreed value.

This kind of arrangement is proving popular now.  If you want to know more, contact Bill Kirby at Inpractice UK bkirby@inpractice.co.uk or by phone at 07946 251277 and we will put you in touch with the right people to explore the options that would work best for your practice.  There are also a a variety of other steps we can help you take to improve cash flow quickly.

Why tackle your client database now?

If ever there was a time to appreciate the value of a client/contact/marketing database, it is now!  One partner or one lawyer on their own can’t do it all!  They need to share.  From discussions recently, it currently feels as though very sound managing partners are taking on too much responsibility for the difficulties that most firms (except some in niche areas, which are blossoming) face; primarily because partners have not been proactive, inquisitive or close enough to their clients in the past.  Now it’s showing, but with the right information, a plan and some persistence, it is possible to use that information to make some valuable turnarounds very quickly.

As a result, too many law firms have multiple and messy databases that are often impossible to manage and the problems are multiplied when there has been a merger.   So when times get difficult (as they are), people and businesses turn inwards on themselves when they should be talking to lawyers about issues.  Communications that could generate opportunities all round have been closing down and many lawyers don’t understand their clients well enough to react.

With new business in short supply in many areas of law, lawyers need to get closer than ever to existing sources of business – clients and referrers; getting under their skin to understand their concerns, to be able to adapt services to match what people and businesses need now to survive.  It will probably be quite different from what it was even 9 months ago – and it will be different again in the future.  Lawyers need the chance to open up as many opportunities as possible to do work for them … and to make sure that competitors prepared to cut their prices to get business don’t sneak in. 

To respond now, and quickly, lawyers need to share information, responsibility and the tasks involved in getting back in touch with clients and introducers to open up new opportunities.  That can be as simple as compiling profiles of a top 20 hitlist and getting around a table together to agree how the firm should adapt it’s approach to get more business from these existing prospects.  Even better – get out to see them with a challenging agenda to dig deeper under their skins to really understand them better and to help them find new options in your services that will help them.

Key Steps:

  1. Identify targets on hitlists – clients, prospects, introducers.  Those with most potential to give you most work now.
  2. Get out to see them now – complete the picture
  3. Record the information
  4. Share it
  5. Agree a plan of action
  6. Centralise the data, begin to build and extend it.

But not every firm can produce a top 20 hitlist easily, even now when this kind of focus was needed 6 months ago – at the latest!  This hasn’t been done before in any consistent / persistent way in most law firms, so the data that is available to share and act upon now tends to be minimal.  So we recommend that firms spend some time now – but not a lot of money – getting the information you’ve got centralised and knocked into shape so you have at least some top priority information available to all.

We have a range of affordable practical solutions to help, ranging from business development, cost reduction and performance management workshops to hands on support on getting databases organised with the recent appointment of Andrew Simmans to our team.  See the press release in the news section at www.inpractice.co.uk  He can help you tackle these critical database issues hands-on; also to improve presentation of management reports, key performance indicators and other information locked away in a firm’s practice, case, marketing and client relationship management systems to improve performance. 

Andrew also has has a number of other solutions to offer to help leaner practices work smarter, where the costs are well outweighed by immediate financial returns.  These include:

  • Outlook Smart Filer – for firms that no not have a Document Management System, this resolves the issue of how to file emails – ensuring that a full audit trail of emails received / sent is filed outside of the individual’s mailbox and is accessible to the other staff working on the matter.
  • My Enquiries – an Intranet based facility that makes it easy to gain real time access to key data such as WIP Listings, Unpaid Bills, etc. The data can selected by various criteria and sorted to provide quick and effective identification of areas such as matters / bills that need attention.
  • Visible Practice – to provide a tailored and yet cost effective way of displaying KPI’s and management Information, building on the “free” facilities already available in Excel and Microsoft SQL.
  • Word Printing Toolset – To ease the complexity of printing – these Macros automate formatting, printing and other repetitive Word tasks making it quicker and faster to generate, print and email documents.

For more input on your plans, email to solutions@inpractice.co.uk

Improving Use of IT? More than practice and case management

If you are thinking of changing practice or case management systems now, first take a long hard look at the systems you have in place and how they are being used to decide whether you are making the most of what you’ve already got in place.  Also, if you make a change – however good the new system is (and there have been major advances in user friendliness in the past few years) – whether your people are ready to make the use of it that they should to justify the investment.

It is well worthwhile working out some numbers to decide what financial improvements you can generate as a result of any changes you want to introduce to decide how much it is worth investing to give a decent payback over a period.  
Although this is about numbers, a focused approach in this way helps you to also identify who should change what about working practices in different areas of the firm.  Working out and discussing hard numbers (whether they are agreed in every respect or not) certainly helps partners in particular begin to recognise and understand why they should either be doing something different with what they’ve already got or why investment is justified.  In both cases, improving the bottom line.

We are not saying you shouldn’t invest in new systems.  It is often the right thing to do – but not always.  There is no question that many firms have under-invested in the past and need to make a quantum leap that will have an almost immediate impact on bottom line profits at a time when financing the purchase or paying by subscription can make very good financial sense.

There is an argument that now is a good time to change as the suppliers may be tempted to do better deals, but even if that is the case, there is no point in buying a fabulous new outfit cut-price at the sales if you never wear it!  On the other hand, it could be a great buy.

Going through this exercise you could find for example that  a better solution than wholesale replacement of practice or case management systems would be to improve use of what is already available in these areas and to add new solutions to manage other areas like HR or Marketing; and the same applies to CRM systems that can introduce big improvements in business processes that interact with clients, such as billing.

There are very large savings to be made by any firm with more than say 100 people by using dedicated HR systems – that allow, for example, people to book (subject to review and approval) their own holidays, for managers to see at the press of button who in the team is off when, to ensure continuity of service, to improve the appraisal process, to manage the cost of training practice-wide with better training needs information and co-ordination etc.  But much more also, where the financial benefits can be quantified and compared with savings and costs in other areas of the business.