Tag Archives: Improvement

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

Apr 28

NEW PUBLICATION: Targeting Profitability: Strategies to Improve Law Firm Performance

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Targeting ProfitabilityI wrote a chapter for this book, published recently by Ark Group in association with Managing Partner.

The book comprises 110 pages of condensed content and brings together the views of 14 respected experts in law firm profitability from the the UK and US outlining specific areas within a law firm that can be targeted to introduce improvements, adapt processes and training – to generate an increase in profitability.  The other contributors are Tony Williams, Toby Brown, Robin Dicks, Susan Saltonstall Duncan, Steve Gale, Phil Gott, Brian Helweg-Larsen, Partrick McKenna, Simon Nash, Michael Roch, Joel A. Rose, Richard Tromans and Ori Weiner.

My section “Shifting the IT Focus to Developing Integrated Business Solutions” reinforces a lot of what we are doing with law firms at the minute to help firms address strategic issues where effective use of IT is part of the solution.  So there is commentary here to explain the rationale and give some tips on how to ensure the success of initiatives that are critical to most law firms now to ensure the business is sustainable and profitable.  Initiatives relate to:

  • Management of the new role of the in-house IT team
  • Management reporting, KPI’s and effective performance management
  • Client relationship management (CRM) systems and ethos
  • Proactive Performance management (again) and HR systems
  • Introduction of “lean” business processes
  • Adoption of technology on risk management and compliance; and,
  • Adoption of managed and hosted IT services

DOWNLOAD - Free Exec Summary & Sample Chapter and Buy The Book Here >>

Allan Carton

Apr 12

Launch of Legal Apprenticeships a “watershed moment” for law firms and students

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Firms now have ‘alternative recruitment choices’, Skills for Justice chief says Alan Woods, chief executive of Skills for Justice (SfJ) has said law firms now have ‘alternative recruitment choices’ following the launch of the new Higher Apprenticeship in Legal Services on Monday.

Woods described launch of the scheme as a “watershed moment” which could change legal businesses “absolutely for the better”.

The new legal apprenticeship, developed by SfJ, the National Apprenticeship Service (NAS), CILEx, Damar Training and Pearson, is equivalent to the first year of a degree and offers school leavers a professional pathway to becoming a qualified fee-earner or paralegal.

The launch came at the kick-off to National Apprenticeship Week, the National Apprenticeship Service’s annual drive to celebrate and promote apprenticeships across all UK businesses and industries.

Acknowledging the dramatic changes being experienced by the legal sector, Woods said it would only be with the benefit of hindsight that we could understand their full extent.

Woods said: “We will of course await final publication of the legal education and training review to see how alternative routes to accessing the solicitor’s profession will work.

“What is really important is that there are now opportunities for legal services businesses to develop alternative recruitment choices, and they do create a quality path for young people to work appropriately at all levels” he said, adding that the new framework was “developed for employers”.

In a speech the following morning at a seminar hosted by Lord Neuberger at the House of Lords, Woods expanded on the benefit of the apprenticeships for businesses, highlighting the government’s investment in apprentice training and saying “apprentices can change your business absolutely for the better”.

The government covers the cost of training for all apprentices between 16 and 18, up to their nineteenth birthday. Additionally, the Apprenticeship Grants for Employers scheme offers £1,500 for small businesses, under 1,000 employees, if they take on an apprentice and have not already recruited one in the past year.

Source: The Solicitors Journal

Jan 06

Test Drive 4 Key Initiatives for 2013 – CRM, KPI’s, Lean Thinking, IT

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As we head into a second critical transitional year for the legal sector, there is a driving need to be pro-active in developing any legal practice to meet the demand from clients to “do more for less” and to also maintain and improve profits.  These are challenges we are helping law firms meet in a variety ways for firms at different stages of development and with varying priorities. 

They are aimed primarily at medium sized and larger practices, but items 2 and 4 (in particular) are as realistic and appropriate for smaller (up to 35 people) practices, although the approach to implementation is different. 

The 4 key solutions we are working on across the country that you might want to consider as part of your strategy include:

1.  On Screen KPI Dashboards and Automated Management Reporting - giving fee earners, heads of departments and the senior management team easy access to the key financial, marketing and matter information (Key Performance Indicators) needed to drive performance of the business.  It enables fee earners to manage their own performance, record more time, bill more quickly, get cash in more quickly, progress cases faster and can radically improve the impact of  appraisal and performance management initiatives.  This fills a significant gap in performance management and delivers a quick return on investment.  The solution can also be moved to support any new practice or case management system you move to in the future.

Contact us to ask for a free online demo

2.  Client Relationship Management (CRM) – where getting closer to clients and introducers is essential for survival and success going forwards.  A variet of different initiatives here, depending on where clients are starting from, ranging from market research, through workshops with partners to implementing new systems.  We talk direct to clients of our legal clients and introducers of business to identify new business opportunities and strategies. We implement CRM systems that create the structure and tools to be proactive in developing relationships, where the starting point is to get an agreed single shared view to work with. 

Contact us to discuss how we have used client feedback to develop new business strategies and generate new business for law firms.

3.  Introducing “Lean Thinking“ to reduce operating costs whilst also improving clients’ perceptions of value and reducing work in progress - where we have brought in specialists in this area from business sectors to work with law firms … and it’s working well.  Clients have achieved radical improvements in internal operations and cleint communications, learning to roll the initiatives started in one department across the rest of the practice.

Contact us to request a copy of our FREE introduction to lean in the legal sector, “Lean for Legal Staff – The 7 Hidden Wastes”

4.  Radical Improvements in IT -  Infrastructure, Integrated applications, Processes and User Adoption.  Initiatives range from selection of new PMS solutions to implementing Microsoft solutions that incorporate legal-customised SharePoint and CRM solutions integrated with Office and Lync on premise and also in an affordable, securely hosted environment, incorporating full business continuity as part of the solution. 

Contact us to arrange a free demo of a hosted solution to see what it feels like

You can’t do it all at once, so which of these initiatives would produce the best returns for your practice and what is the best approach to making it happen successfully?

To find out more, just call Allan Carton on 0161 929 8355 to discuss how they might apply in the context of your particular business – or email acarton@inpractice.co.uk to set up a time for a preliminary telephone conversation. 

To take any of these forwards, please contact us to:

  1. Ask for a free online demo of the KPI dashboard and automated management reporting system.
  2. Discuss using client feedback to develop new business strategies and generate new business.
  3. Ask for a copy of ”Lean for Legal Staff – The 7 Hidden Wastes.”
  4. Arrange a demo of a hosted Microsoft-based IT solution.

Allan Carton

Nov 02

DOWNLOAD: It’s Official – The FT says clients want …

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An informative, concise 28-page report from the Financial Times to help understand what makes an effective client-adviser relationship, focusing on lawyers and accountants.  It taps into opinions on both sides of the fence; senior decision-makers on both the client and advisory side from 569 respondents. 
 
Conclusions confirm our experience in handling and helping law firms respond to independent reviews of client relationships over the years.  
 
Download, read and share it with your colleagues; but don’t stop there. Set time aside to talk to them about it.  What does this tell you to do differently, better or more going forwards?  
 
We can probably help you make that happen. 
 
 
Some of those key conclusions about what matters most for clients:
 
Clients want a more strategic, commercial dialogue with their advisers, particularly in a more complex, uncertain and global business environment. This isn’t a new issue: 87% of advisers already recognise that they need to develop a more commercial skill-set. But many firms have been slow to adapt to fundamental shifts in client needs
 
62% of client CEOs say that the impression of being a well-managed advisory firm is an essential pre-condition of selection; but creating a consistent client service and a culture of commerciality is next-to-impossible unless a firm is well-managed.
 
The only way to create the impression of being a well-managed firm is to become one, ideally through someone taking ownership and responsibility for delivering a more sophisticated and client-centric approach to client-adviser relationships.

To explore how we might be able to help your practice respond to the conclusions drawn here by implementing new initaitives, contact Allan Carton at acarton@inpractice.co.uk or on +44 7779 653105.

Oct 25

UK200Group Annual Conference 2012 – Lawyers Welcome

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The UK200 Group are the UK’s leading national quality assured grouping for independent chartered accountants and lawyers, who are looking to increase their law firm membership. 
 
Venue:  The Hilton, Newcastle-upon-Tyne
Dates:  21 to 23 November 2012
 
For background on the group go to the UK 200 Group.  You are invited to join their Annual Conference to experience how the network could benefit your practice. To find out who you are likely to meet, check out their Accountancy members and Law firm members listings.
 
This is an opportunity to explore new ways of developing your business and to create new connections that will help you generate new business through the people you meet.  They will mostly be accountants interested in developing working relationships with law firms, keen to collaborate with you.
 
The agenda can be downloaded below from our website.  Key highlights include speaking sessions, forums, Q&A’s and social gatherings with topics covering, for example: Business Strategy, Corporate finance, strategies to clarify thinking about the new world of business we are moving into post recession, profit improvement and successioin strategies for your clients … and much more.
 
To reserve your place or request more information – please go here
For more information contact Allan Carton.
 
 
 

Jun 12

Deal with financial stress before it’s too late

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Be honest – you’re worried about your firm’s financial position. You are likely to be managing a small firm of solicitors in the UK. Your firm probably provides a range of different services to clients, which may include some long-tail personal injury or similar work. Your firm is well established in your area and considered solid and dependable.

Like everyone else, your firm has struggled in the current economic climate and had to make cost savings in 2010. And of course you are aware of the current changes to the legal services environment – but the Co-op and Saga seem pretty removed from the world you inhabit (although QualitySolicitors’ recent funding announcement sounds a bit worrying).

So what’s the problem?  One of your partners is quite commercially minded and understands numbers better than the rest. He keeps a handle on the figures every month or so.  There is no senior financial input from within your firm as you can’t afford (and feel you don’t need) a full-time finance director or someone with that level of financial expertise. You have some idea of the overall billing each month  and you know that cash has been tight on occasions (remember two months ago when your drawings had to be deferred by a fortnight so the VAT payment could go out?).

That was a couple of months ago. Things seem to be even tighter now and your senior cashier is becoming more anxious as she tries to balance payments to receipts. What are you doing about those overdue receipts?  You know that your partners should be speaking to clients to resolve these issues, but they are all heads down in their work at the moment, so you’re hoping the clients pay up soon (they won’t).  Thinking about this, you realise there are other symptoms too.  It seems that, for the past couple of months, there has been a big panic whenever significant payments need to be made.

First it was the VAT, then last month … the payroll and the PAYE payments. 

Perhaps it’s time to push your drawings payments back so that these other payments can go out first?  There was also the firm’s professional indemnity insurance: you’ve never had a problem borrowing funds for this, to be repaid over ten or 12 months, but this time the lenders insisted on you all providing personal guarantees before they would lend your firm the money. You recall that they weren’t impressed about the lack of detail in your management accounts and the lack of any real cash forecasting at all.

Then there’s your drawings. These haven’t gone up for three years now and you’ve already noted that they are not always paid on time. It never used to be like this. You wonder what the problem is. You simply don’t have the information available to be able to work out that, for example, your business is now simply not profitable enough for you to continue drawing at the level you have been used to.

You reduced overhead and support costs in 2010, but you have not seriously looked at your fee earners yet. It seems that the ‘new normal’ fee income level simply is not as much as it was and keeping the current fee earners fed is proving increasingly difficult.  You could really do with analysingthe true value of everyone, but it’s not easy to know where to start. And it’s probably sensible to take another look at overheads too.

The bank doesn’t seem to be as supportive as it used to be. It’s made it pretty clear that it won’t countenance any increase in your overdraft facility and, at the previous renewal, it even mentioned the possibility of putting in place a formalised reduction in your borrowings.  The next review date is now looming and, to be honest, you haven’t a clue what its stance might be. Ideally you would want to prepare a business summary to support your renewal submission, so you could demonstrate your plans for the business and how you would want the bank to support you. But again you are struggling to get your thoughts together coherently and you are struggling to know how to model the financial implications of your plans.

If any of this sounds a bit like you, you are undoubtedly not on your own. Many medium-sized and small UK law firms are facing similar issues and it is those who recognise the symptoms early and do something about them that will stand the best chance of turning their businesses around quickly and successfully. These firms will take their heads out of the sand and appraise their businesses honestly and openly, because standing still is not an option.

To discuss your finances, call me in confidence and with no obligation on 07766 137759 

This article was first published in Managing Partner on 27th March 2012 and is reproduced by kind permission. See www.managingpartner.com

Jan 04

30 Successful solutions to make 2012 a good year for your practice

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2012 will see very significant change in the UK legal sector, when lawyers will need to be more agile, pro-active and innovative than ever before in developing the practice.  However, with the right focused initiatives and conviction to see them through, it could be a very good year for you.

For information on 30 pragmatic solutions that could help you implement your strategy during the year ahead please complete this contact form .   These solutions (number in each area in brackets) will help you to:

  1. Improve financial performance, strengthen your position in merger discussions, get more and better terms from your bank  (4)
  2. Improve your return on investment in IT, reduce cost of ownership, improve integration and user adoption … and productivity (4)
  3. CRM: Create new business opportunities through proactive management of client relationships, produce better results when adopting CRM “systems” (6)
  4. Reduce operating costs to improve bottom line profits, also improving service to clients. (5)
  5. Control manageable risks that impact on the performance of your practice (5)
  6. Adopt cost effective solutions for marketing & promotion (6)

To discuss your plans in any of  these areas informally and in confidence, please call Allan Carton on +44 (0)161 929 8355 or complete this contact form suggesting the best time/s for him to contact you.

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

Key Benefits: Membership of Greater Manchester Chamber of Commerce Legal Sector

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We are working with Greater Manchester Chamber in developing a “Legal Sector” as per our earlier post.   Here is a list of some of the key benefits that lawyers operating in the Greater Manchester area can tap into as active members.

Business Development

  • More than 5,000 businesses are members across Greater Manchester
  • Member list – to plan focused development of business relationships
  • Involvement in the local business community
  • Attendance at events, with increasing use of the Greater Manchester Chamber of Commerce LinkedIn groupto help develop relationships.  Events include, for example, Business Leader Lunch, City & Business Breakfast and Regional Breakfast meetings.
  • New member introductions – giving you the opportunity to be first to make an impression
  • 53 Degrees – to keep in touch with local activity and for promotion
  • Sponsorship of events - including “Legally Speaking”
  • Access to key business contacts operating in niche sectors for example, in Property & Construction
  • Use of the Chamber logo – for client empathy
  • Chamber Online – procurement website
  • Linkedin Connections on Legal Sector events, to keep in touch with legal colleagues.
  • Access to extensive market research on the local business community

… and more.

Direct Financial Benefits

… and more

People Development

… and more.

Added Value

If you are considering membership, please complete this contact form or contact Allan Carton for more information.