Monthly Archives: September 2014

Extend your services – create more opportunities to generate more revenue from clients and new prospects

From the feedback we receive in listening to FD’s, MD’s and CEO’s it would appear that many law firms are missing a trick by not broadening their business discussions with their corporate clients to engage them more strategically; where there is very often an opportunity to deliver a wider variety of joined up services to generate additional revenue, warrant regular contact and to protect the relationship from increasingly pro-active competitors.

Company secretarial services are just one such area, which we discuss here; but others include corporate finance for commercial clients and financial services for private individuals.  In all these situations, these additional options can – for the right firms and lawyers, who often need help to adapt their view of “relationships” – create new opportunities to establish a more secure source of more business from existing clients and prospects.

On company secretarial services … No professional services firm needs to be told about the merits of a retained client relationship, even more so when competition amongst firms remains as strong as ever; and we have all heard about the costs of winning new business which can be as much as five times greater than the cost of developing an existing client through good account management. With this in mind, it is puzzling that relatively few commercial law firms don’t offer company secretarial services to clients on an ongoing basis – when they are very often part of corporate transactions, a requirement of corporate re-organisations and relevant to commercial litigation.

Typically, firms will address the immediate company secretarial work required to complete a transaction or address a dispute, only to miss an opportunity to manage such work on an ongoing basis for the client. Clearly, it doesn’t make sense to handle such work using fee earners who could command higher hourly rates on other work.

However, there is a strong case to be made to offer fixed fee annual compliance services to clients, even if these are limited to the regulatory filings required by Companies House and their counterparts overseas. There is potential for law firms to outsource company secretarial services, making a direct profit from that work, whilst strengthening their hold on the client’s business at the same time.  This is a good conversation to have – particularly with FD’s who also have demanding administrative company secretarial responsibilities that few enjoy.

An example of the provider of this kind of specialist service capable of developing the right kind of relationship with lawyers and their clients – with no fear of them poaching any legal work – is London Corporate, who work with professional services firms to provide an outsourced or in-house managed company secretarial service on a ‘white label’ basis. These services are supported by business development and pro-active account management on behalf of the instructing lawyers, to engage with clients on a regular basis to perform filings and to manage director and shareholder registers.

This ongoing contact allows lawyers to maintain a foothold within a client’s organisation; also placing the firm in the best possible position to open up new fee generating opportunities when they arise.

The introduction of an outsourced company secretarial service can also be combined with fee earner training on corporate compliance, so they understand the opportunities to offer company secretarial services when they come into contact with the right people at your client as part of their business development and account management activity. This approach also recognises that existing portfolios of company secretarial work may be small or non-existent now.

However, developing a working relationship with partners like London Corporate is a low-risk opportunity to grow new business with confidence in the quality of service. London Corporate are affiliated to the Warwick Legal Network for the provision of pan-European company secretarial compliance where required.

Contact Allan Carton on 0161 929 8355 if you are interested in generating more business from existing clients or if you want to develop new service propositions for either existing clients and potential new prospects.

Mid Size Practices Growing Faster than the Top 10

Courtesy of TheBusinessDesk

THE top 100 UK law firms achieved a fee income increase of 6.1%, compared with the same quarter last year, largely driven by merger activity in the last 12 months.

According to the latest quarterly legal sector survey from Deloitte, this quarter saw differing levels of performance in the market with firms in the 11-25 category achieving an average growth in fee income of 6.2% while those in the top 10 suffered a reduction of 2.7%.

The strong performance for firms in the 11-25 category was achieved through increases in chargeable hours per fee earner of 3.5% and some improvements in rates. The reduction in the 1-10 category was due to a 2.1% decrease in fee earner headcount and a decline in the sterling rates achieved as a consequence of the strong pound.

Clare Boardman, partner in Deloitte’s professional practices team in Yorkshire & the North East, said: “The market for firms in the 26-100 size category continues to be tough with growth coming from mergers and lateral hires rather than increases in use or rates. While exchange rate movements have hit the global firms this quarter, we would expect the performance of the top 25 firms to improve as the economy picks up. This will continue to widen the gap in underlying performance between the larger and smaller firms.”

To find some of the solutions that help mid-size law firms perform better, go here >>

Transform the Profitability of your Law Practice – Little Used System Reduces Overdraft by £675K!

KPI Dashboards (missing from many legal practice management systems) can enable you to focus on transforming the profitability of your practice, providing access to live, meaningful financial information you can see, share, talk about … and ACT on!

For Example:  Through better financial management – and without generating any new business at all – you can readily:

  1. Reduce your overdraft.
  2. Generate extra cash and profit.

But you need some objectives to work towards and to monitor your progress against – so here are some hard numbers to get your teeth into.  Do these returns justify an investment that equates to a few chargeable units per month per fee earner to get these systems running in your practice?

To achieve this you need firm-wide engagement, to monitor performance and work together on a daily basis to keep up the momentum and stay on track … but that’s what this is all about.

1. 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 extra £225,000 income, profit and cash.
  • Net profit from 25% to over 28%.

 > Reduces overdraft by £675,000 over 3 years

2. 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

3. 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

4. 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

5. 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.

Now you know why KPI Dasboards are so important. CLICK HERE to find out the next steps to Make it Work for YOU!