There’s no doubt that the pandemic has forced fundamental change within society, technology and business. As many have said, some of those changes have been difficult to manage but have frequently brought about worthwhile evolution.

Law firms need to seize the opportunities presented by this time, and in particular in the following main areas-

Embracing technology and efficiency advances- surely those firms who have stuck with paper based processes have seen that there is another, better way? Aside from saving space (and the planet!) going paperless is a key element of any sensible approach to remote working. The use of appropriate technology, which these days is far cheaper and easier to adopt, is the enabler. The final piece of that particular jigsaw is a detailed understanding of the processes the firm operates, so that people and tech can work in synergy rather than at odds.

Security and risk management- a collateral benefit of sorting out technology and process should be an improved approach to cyber and internal fraud. It isn’t as easy as simply sending people home with a laptop. As part of enforced modernisation, addressing cyber risk through technology will improve a firm’s risk profile at a time when insurers are looking very carefully at PII premiums.

Communications technology – whether remote working or back (safely) in the office, one thing that all lawyers will have experienced is the need for reliable telephony, broadband and video calling. Addressing issues such as weak signal, clarity of audio, and appropriate cameras would have been very low on the priority list at the beginning of 2020. Right now, they are all crucial elements to delivering a professional service.

Communicating with customers and clients- how are firms connecting with their market now? The old methods still have their place – local reputation and network development for example. But surely an obvious extension of the price transparency regulation is that firms need to be aware of the potential of online marketing. They need to blow their own trumpet with glowing reviews from customers. Case studies on their websites. And a website which is user friendly and informative. Up to date. Firms also need to consider how they communicate with actual clients- many case management systems now enable SMS updates. There are superb app providers out there who can create branded apps via which updating clients becomes easy and automated.

Wellbeing of staff – in all the rush to modernise, don’t forget the staff. They’re the driving force of a business. The present circumstances and no doubt the months to come have brought stress, loneliness and fatigue. Firms must embrace new ways of thinking and engage with their staff even more. Communicate plans. Be open about the business performance and goals. Get everyone on the same page, and listen out for those who are struggling.

This is not an exhaustive list of sensible moves. But wouldn’t it be a start to consider them? After all, the times they are a-changin’.

At the Cashroom we provide a full accounting service to the legal profession – from day to day entries, through compliance, management accounts, credit control, all the way to year end and Statutory Accounts. Additionally we are regularly instructed for our consultancy service to advise firms on the structure, compliance and efficiency of their finance function.

We have a unique insight into the requirements of delivering an optimised legal accounting function. Our senior team consists of Lawyers, Chartered Accountants, Lean Processing experts, Legal Finance Professionals and IT Professionals giving us an unparalleled breadth of knowledge from which to design and deliver the best possible solution.

If you would like any more information about The Cashroom and what we offer, then please get in touch. 

Alex Holt, Director of Business Development

Client money. Compliance. Cyber threat. Negligence. Business management. All these factors meet at the heart of the legal entity.

Many lawyers are humble people. They don’t like to shout about success. They downplay their innovations. Nowadays, that’s a weakness they need to rectify.

I had the pleasure of speaking at a Calico Legal Services webinar recently, supporting our friends at Locktons as they spoke about the PII market. My input mainly related to ways that firms can improve their risk profile by focusing on their finance function, which sits at the very centre of a firm’s risk profile, I’d say.

Firms have the regulatory headaches to manage – the regulations to adhere to. Speaking as an ex partner in a couple of large firms, I feel qualified to state that overseeing the level of compliance of a cashier’s work is not something most lawyers would want to do, let alone be capable of.

Then there’s the fact that the efficient and secure handling of client money falls squarely within that function, and again the compliant and practical operation of the process is something which the lawyers struggle to fathom.

You have to feel for the poor cashier in many law firms. If they do their job perfectly every day, swerving the cyber criminals, coping with spikes of activity on a Friday, accurately inputting the data vital to production of worthwhile MI, not a word will be said. Yet if they make a mistake, the consequences for a firm can be cataclysmic.

Brian Boehmer of Locktons spoke eloquently about the need for firms to go beyond mere form filling when seeking their PII renewal. More than ever this year every penny saved could be vital, as firms face premium increases of 30, 50 even 100%. Brian explained that the brokers need to be given the ammo with which to engage with insurers and explain why this particular firm is different and should be given a better quote than that one.

Tell your broker about training you implement on cyber risk.

Tell them about your recruitment processes which check new employees.

Tell them everything that differentiates your firm from others.

If your firm is doing something different, tell the story. If you’re a start up, do things differently from the outset.

An outsourced solution can bring ‘reflected glory’ – our clients can talk in terms of increased cyber security, increased internal fraud security, efficiency improvements, assured compliance, accurate data and MI, resilient, scalable service. If you’re using a digital dictation provider such as Documents Direct, the resilience of service and improved accuracy is something insurers will value.

There isn’t long to go before the end of September, so give detail and engage quickly, making your proposition look so attractive that the brokers will want to work with you because they will believe they can get insurance for you.

For many firms this will be a tough time for insurance, so it’s also worth considering how you can improve things for next year. Think innovatively and tell the world about it. Now is not the time to be hiding your light under a bushell.

Alex Holt, Business Development Director

The Cashroom Ltd

I recently attended one of the Armstrong Watson Legal Sector Breakfast Briefings, albeit they are no longer at breakfast time! An interesting point of discussion arose, which I thought I would share. The speakers for the session were Chris Moore of Moore Legal Technology and Ally Thompson of Hey! Legal, who both provided some insightful thoughts and tips for marketing your law firm.  But the point I wanted to discuss arose from a comment made by Stephen Vallance of HM connect.

As I say, the session was about marketing and sales for law firms, and Stephen used the analogy of a Wild West film. When setting about making one of the early films, a producer apparently asked the question… ‘Do you train actors to become cowboys, or cowboys to become actors? Interesting! The same conundrum, Stephen suggested, arises in law firms in relation to generating new business enquiries (marketing), and converting those enquiries into new business for the firm (sales).  Do you teach lawyers to be marketers and sales people, or do you teach marketing/sales/BD specialists to become lawyers?

I don’t know what the answer is, other than “it depends“! Probably not very helpful, I know.

But what I think is the way to approach it, is to play to peoples strengths. Where you have solicitors within your firm who enjoy and are good at marketing your services, writing blogs and article content, that are active on social media etc, encourage them to do so. If you have people who like taking new enquiry calls, are good at building rapport with people quickly, and converting them to clients, encourage them to do so too. Perhaps even allow some of their billable hours to be allocated to it!

For those who don’t have people within their firm comfortable or proficient at marketing, buy in some external assistance. It’s not expensive, and should be considered an investment in obtaining new business – the lifeblood of keeping your business afloat. And when it comes to converting those new enquiries into opened files… on the assumption you don’t have the volume to justify a specialist initial response/enquiry handling team, invest in some proper training for the key people who take incoming calls at your firm. At the very least, explain to them that each new enquiry should be treated as gold dust, and the importance of their role in bringing in business that in turn generates fees, that in turn pays everyone salaries. I think you will be pleasantly surprised at the uptick in ‘buy in’ from those people.

So, how does your firm deal with this? Actors turned cowboys, or cowboys turned actors?!

Gregor Angus, Senior Business Development Manager

The Cashroom Ltd

A while ago I wrote an article about why I didn’t think that Commercial Property investment (and in turn, legal work in that sector) was a sound long term “bet”.

I concluded by suggesting that the reason for its success in the past was the need for pension funds to generate secure, long term income streams. And I wondered what might replace them.

Well, I was reading something at the weekend that made me think about this again.

The curious thing is that, despite lockdown and the economic turmoil, the S&P 500 is at historic highs, and while the FTSE has a way to go to achieve that goal, it has recovered a lot of ground.

But the really interesting thing is that some of what’s driving that growth in the S&P, is the return of the IPO. Back in the good old days of the dot com boom, IPO’s were all the rage. I remember my partner pitching for a tiny investment round, and being asked if he could handle the company’s IPO ….. from a couple of guys who probably couldn’t afford the bus fare home!

But that changed, particularly in the last 5 years or so, with more companies being happier to stay private for longer, resulting in the growth of the tech “unicorn” i.e. a privately held company worth more than $1bn.

However, in 2020 so far, companies in the US have raised over $60bn through IPOs. In the whole of 2019, the total was just over $40bn. And there are more to come. On August 19^th, Airbnb filed for an IPO. Rumour has it that a number of other “unicorns” are lining up – Snowflake Computing, DoorDash, Instacart and Pallantir. Added together that comes to around $80bn.

But what has this got to do with Commercial property?

Well, I’m sure a number of factors push firms towards an IPO. However, I wonder if one of them is pure and simple supply and demand – i.e. there is a demand for investment in stocks and shares, because other traditional investments (e.g. Commercial Property, and Government Debt) are simply not providing the necessary returns.

And what has this got to do with Law Firms?

If I’m right, and there is a demand for “alternative” investments, or more simply, a lot of investors are looking for a home for their money …… are law firms a potential investment?

A while ago I was speaking to an investor, who invests in law firms. His take was that law firms were not a great investment if you were looking for capital growth. However, if you were looking for yield, i.e. a steady return on your investment, law firms were ideal, because generally they’re pretty good at generating cash. Which of course is exactly the sort of return that Commercial Property and Government Debt investors are looking for.

So, should we expect a flow of investor money into law firms?

David Calder, Managing Director

The Cashroom Ltd

I’m old. I don’t just mean old in the way that our kids always think of us as old. I mean I’m old in a ‘seen it all before’ type of way. I was a teenager when the first Live Aid happened for heaven’s sake!

I’ve lived through a few recessions, and I’ve worked both as a lawyer within law firms, and as an external supplier to law firms during recession.

One phrase is always repeated. The perceived wisdom in every such crisis. It’s a phrase we are hearing a lot at the moment.

“The profession will be healthier afterwards.”

The theory is that the harsh realities of a recession will effectively weed out those firms which were already in a poor state. It’s a fairly brutal view and while it does have some truth to it, I’d suggest that in fact it doesn’t tell the whole story.

There’s no doubt that inefficiency and old fashioned methods can be risky, and those risks are realised when times become truly tough for businesses. If the firm has too many support staff for what it really needs. If the premises are more expensive than necessary. If credit control is a verboten phrase because ‘we don’t want to upset the clients ‘. (Even the ones who aren’t paying?!)

All of these things can and will cause problems during recessionary times. They may indeed in extreme cases bring down firms.

However, every single post recession review features comments like “We will never go back to those inefficient ways”. But weirdly, people don’t seem to truly learn. If they did then the same issues wouldn’t crop up every time. They might be slightly different in their make up, however they will absolutely relate to inefficiency.

Good times breed lazy thinking. It becomes easy to relax into the old ways. Why expend time and money on new fangled systems, or more efficient resourcing models when ‘things are on the up’?

There’s no longer a burning platform, so difficult decisions get put off, the pain of recession recedes into the distance, and things move on. Until the next time. And the next time. And….you get the point.

A definition of insanity is doing the same thing over and over and expecting a different outcome.

I’d say that these bizarre and awful times are the ideal moment to try something different. To change.

If you had to design a law firm from scratch, I suspect many firms would not design the model they in fact operate at the moment. They’d use up to date technology. They’d outsource key operational functions. They may now facilitate home working.

While they do not of course have the luxury of starting from a blank sheet of paper, that thought process can help firms to spot areas where their present model differs fundamentally from what optimal would look like. Maybe there are small shifts which are possible. Maybe a plan for change can be put in place.

One of the most telling changes we have seen as a business is an increased demand for our Process Review team. Firms of all shapes and sizes, and increasingly bigger firms, have approached us to help them design their operating model for their finance function. It may or may not involve outsourcing the function in whole or in part, but it will always result in an improved way of working. Improved efficiency. Cost savings. Better, more accurate data with which to manage the business.

It’s a relatively small step, but at least they are looking to do things differently. To change. To evolve.

I’d say that more than ever, with on and off lockdowns and restrictions likely for quite some time to come, the ability to change and adapt will become a defining factor in the likelihood of a firm’s survival.

Alex Holt, Director of Business Development 

The Cashroom Ltd

As we all breath sigh of relief, and acknowledge that the world has not in fact spun off its axis, there is an uneasy consensus forming that, while we may have jumped out of the pandemic frying pan, we have landed in the fire of a global recession.

For law firms, one of the more pressing issues arising out of that recission looms in the new year.

For a number of reasons (explored in detail here https://calicolegalgroup.co.uk/way-to-recovery/) many firms are storing up a cash crunch for the first quarter of next year. Largely because most of the government support schemes will have come to an end and/or payments that were deferred (VAT and tax) will have all come home to roost.

To emphasises the point, this survey finds that 68% of firms have deferred their VAT bills until the first quarter of next year, and 31% have sought time to pay their July Tax bills, which will also fall due then (along with the “normal” January payments).

That’s a lot of cash “out the door” in the first quarter of 2021!

So, the question is – will you generate enough cash in the next 6 months to pay all the bills falling due in the first quarter of next year?

We want to help as much as we can.

First, we can help with forecasting. All firms (and I mean ALL firms) need cashflow forecasts. I was the Managing Partner of a law firm during the last recession and, in my (not an accountant’s) opinion the cashflow forecast is one of the most critical management tool a firm has. While profit and loss accounts are important, and balance sheets are interesting in a somewhat academic way (!)  …. your cashflow forecast is the thing that tells you whether you can pay the salary bill at the end of the month.

The problem is, it’s a continually moving target and, to be truly useful, needs to be constantly updated. In the survey referenced above, 54% of firms plan to review their forecasts weekly, and 28% will review them daily!

You can’t ignore your cashflow forecast!

However, the forecast only tells you when you’ll run out of cash. It doesn’t generate cash! To do that you need to fee your WIP and collect your fees. But we can help with that too.

We have recently released an update to our web Portal that automates your credit control function.

The most important part of a credit control process is consistency. Every bill needs to be chased at regular intervals, with increasing levels of “severity” until paid. Each one. Every month. No exceptions.

However, it’s a labour intensive, administrative task that often falls off the edge of a busy desks. The Cashroom’s credit control service is designed to automate you credit control process, allowing you to get back to your clients. It’s a simple, add on module to our Web Portal, that we set up to suit you, and your firm. Find out more about it here.

“We’ve been using the Cashroom’s Credit Control module for 4 months now, and it’s wonderful. As we come out of lockdown, cashflow will be critical, and the starting point is credit control. The Cashroom’s module automates the process, which makes keeping on top of chasing payments simple and efficient. It’s allowed our staff to focus on delivering our service as opposed to chasing for payments.  Fundamentally, it has automated the process of cash recovery and my company relies on it.”

Billy Smith, Complete Clarity Solicitors

If you want to find out more about the service contact

David Calder

Managing Director
E: David.Calder@thecashroom.co.uk T: 07876 236578

Alex Holt

Director of Business Development (based in England) E: Alex.Holt@thecashroom.co.uk
T: 07817 420 466

What will happen to Commercial Property?

In my last post I mentioned we were beginning to see some Green Shoots, particularly in Family Law, and Private Client law. This time I want to be a little more controversial and talk about one sector that I just don’t see coming back strong – Commercial Property.

The lockdown’s impact will affect business unevenly. We all know that hospitality and tourism/travel will be badly affected. Sadly, many businesses will go bust, and others may need to radically rethink their business model. However, if you were to make a long-term bet on those business coming back, your money would probably be pretty safe.  People will always want to “socialise with friends” (accordingly to every other CV I read it’s most people’s only interest outside work!). People will still want to go on holiday.

However, if there is one sector, I wouldn’t put money on, it would be Commercial Property. I just don’t see it getting back to any sort of normal, any time soon.

Up until relatively recently investment in commercial property has boomed. Apparently, since 2000 the global stock of investable commercial property has increased to $32trn. It was seen as a nice safe investment, for long terms steady returns – just the thing for pension funds to invest in.

But I wonder if the pandemic, and the resulting lockdown, has changed all that.

First, tenants simply stopped paying rent.

From what I’ve read, around half of all shop and business tenants in the UK simply didn’t pay their quarter’s rent at the end of March. And it wasn’t just shops and restaurants – average hotel occupancy has dropped from 70% before the lockdown, to 15% in April. Office rentals have held up, with many tenants being able to continue to work remotely (but is that really a good thing for the landlord … more on that in a moment!). Suddenly that nice secure income stream doesn’t look quite so secure!

Secondly, and more critically, the lockdown has accelerated existing trends. Bricks and mortar retail was struggling before the lockdown, with more and more people shopping on line. Judging by the steady stream of packages being delivered to my door during lockdown (!), that trend has continued. This will continue, putting more and more pressure on traditional business models. Debenhams went into administration in April, and Intu, which owns a number of shopping centres in the UK, appointed administrators on June 23^rd. Now, it appears Debenhams will continue in some shape, but only by because it “did a deal” with its landlords (although interestingly not Intu!) ….. I suspect that means they were pressured into taking a haircut on their rent! https://www.bbc.co.uk/news/business-52979759

Second, do we really think the office market will come back? There has to be a risk that businesses continue to work remotely, or at the very least more flexibly. Some commentators see a sharp downturn in high density urban office space. (https://www.moodysanalytics.com/videos-on-demand/2020/major-disruptions-ahead-office-sector). Indeed, at the Cashroom we have decided not to renew a lease on around 40% of our office space.

But how will it all pan out.

Bluntly, I’ve no idea. However, the problem that drove investment in Commercial Property in the first place has not gone away. Pension funds and insurers need a way to generate long term, secure income streams to meet their liabilities to pensioners. In fact, as we all get older, it will become more and more pressing. Government debt is not the answer. Interest rates at historic lows, with nobody (at least nobody I’ve read) predicting that will change any time soon. And the last attempt at solving the problem (collateralised mortgage debt) didn’t end well…!

So – how are we all going to convert out pension pots into secure income streams if Commercial Property isn’t the answer?

If anybody knows …. whisper it ….. we’ll make a fortune!

David Calder, Managing Director 

The Cashroom Ltd

It’s a rather tired metaphor I’m afraid, but I’m beginning to wonder …..!

Read More

The demand for legal process outsourcing has gathered considerable pace in the past few years.  In the next decade, it is expected to become vital in enabling law firms and in-house legal departments to grapple with the challenge of delivering a competitive, efficient, safe, and innovative service to clients.

What is Legal Process Outsourcing?

Legal process outsourcing enables law firms and in-house legal departments to utilise the services of external specialists to perform specific legal functions on their behalf.  Services such as eDiscovery, client billing, legal cashiering, management accounts, contract drafting, document review, and compliance assistance are now commonly outsourced to third-party experts, rather than being undertaken in-house.  There are many reasons for doing so, including handling a sudden influx of work for which there is insufficient internal capacity, to reduce wage costs, to drive efficiency, and ensure compliance with the latest standards and best practice.

Focusing on core competence

Legal process outsourcing enables legal teams to focus on what they do best.  This is important as modern law firms have to be agile, allowing them to move in and out of legal markets as demand changes.  Traditionally, providing new service offerings may have necessitated the hiring of new resources, training, and the implementation of new systems and processes, but in the age of legal process outsourcing, law firms can now focus on their core competencies.

According to the Law Society, legal process outsourcing “can allow law firms more opportunities to offer a wider range of services to clients, potentially attracting a broader client base”.  And crucially, they say that legal process outsourcing “allows lawyers to concentrate on the task for which they are trained and paid, free from the inevitable bureaucracy that surrounds any legal service”.  This is a win-win for law firms as by freeing staff to perform higher-level functions, without becoming bogged down with paperwork and administration, not only will the client receive a better service, but the employee will be more fulfilled in their role.

Ready to hit the ground running

The best legal process outsourcing providers will not only have experienced staff ready to perform the function required of them, but they will also do so in a manner which ensures compliance with GDPR, and all other compliance requirements.  That said, it is essential that law firms and in-house legal departments engage external providers with the necessary skills, experience, and compliance credentials to undertake work on their behalf.  For example, if a third-party will be processing data on behalf of the law firm, it is vital that they do so in accordance with GDPR.  It is also important to ensure that the scope of the work, timescales, and delivery expectations are set and agreed, thereby avoiding any confusion or problems at a later date.

Finding trusted partners is key

New legal process outsourcing providers are launching each year, offering new services in innovative ways.  By engaging with a provider you can trust and building a long-term relationship, the boundaries between the different businesses become seamless.  As staff from the legal process outsourcing provider get to understand the processes and the slight nuances of the law firm they are assisting, work can be completed with even greater efficiency and in higher volume.

Final words

Legal outsourcing offers transformative benefits for small and medium-sized law firms trying to compete with the big players.  Not only will legal businesses be able to operate with smaller cost bases, and those costs be better controlled than wholly in-house resources (i.e. due to fixed pricing arrangements), they can operate in a much more agile manner, providing greater strategic flexibility.  Make 2020 the year your law firm starts to leverage the potential of legal process outsourcing.

If you are regulated within the English and Welsh markets, then please contact:
Alex Holt E: alex.holt@thecashroom.co.uk T: 07817 420 466

If you are regulated by the Law Society of Scotland, please contact:
Gregor Angus E: gregor.angus@thecashroom.co.uk T: 07875 598 593

Merely months after I left high school, I was determined to get straight into the business world and gain experience that would open doors anywhere I go. I applied to start as a junior for The Cashroom. Now, over seven years later, I am a qualified legal cashier in a team servicing 28 clients – still with The Cashroom.

On a daily basis, I am responsible for ensuring that our client’s books are up-to-date. This is achieved by ensuring all transactions from the previous day have been posted to the client’s Practice Management System (PMS). We would then do a bank reconciliation on the PMS using their bank statements. The bank reconciliation will highlight any omissions or errors. Oh, and our clients do not all use the same PMS. There are several large businesses in the UK which provide a wide range of different systems. Compared to an in-house cashier, this means that my colleagues and I must be able to use and adapt to these systems.

Once these daily tasks have been done, we then focus on queries from our clients and ensuring any ad-hoc tasks are completed. This can range from our regular compliance checks (credit balances not moved in two months for example) to preparing a purchase ledger payment run. Different practice management systems are not the only challenge that we face. Our clients work in various locations and practice different types of the Law.

We also deal with various projects outwith the general cashiering tasks. For example, one of our clients may decide to move from one PMS to another. These changes can provide a lot of benefits to our client, but the changeover is not a simple procedure. As the cashiers, we need to analyse the data on the current system and work with the new provider to ensure it is dealt with correctly on the new system.

Another example would be to assist with a Law Society inspection. Whilst most practice units keep the prospect of an inspection in mind, it’s not always at the top of the list. This can make an inspection notice a stressful process. It is our role as cashiers to provide all the reports that an inspector will need and to assist with any queries or issues raised during the inspection. This allows the practice unit and its staff to focus on their work.

But I am more than just a cashier! Over the years I have expanded into several areas of the business. I volunteered to help our Service Transition team, joined a steering group for The Cashroom’s own web-based Portal, organised our ambitious social committee with colleagues, and accepted a place in The Cashroom’s Future Leadership Programme.

No day at The Cashroom is the same as the last. One day I could be helping my team ensure that all our clients are being serviced with the highest quality of care. The next, I could be in and out of meeting with the Portal developers making sure we are always innovating and deploying new features for our colleagues and clients.

There is no satisfaction in staying in the same place. That is why I push my limits each day to expand my knowledge base. A example of this would be voluntarily undergoing training with some of the UK’s best-selling practice management system providers for example. Doing this allows me to do my daily cashiering work with full confidence and assist our clients to unlock their system’s full potential. You may not be surprised to hear, that’s not all the training I do, I also help train juniors who start the same way that I did over seven years ago. My experience in all the aforementioned areas, combined with my personal journey through the same route that they are on, guides our newer staff in the right direction.

As you can see, there are many different aspects to my role as a Legal Cashier at The Cashroom, and it is the variety and great experience I get from all of these that keep me motivated at work on a daily basis.

Kyle Stratton, Legal Cashier

The Cashroom Ltd

The importance of innovation and law firm efficiency cannot be overstated.

The profitability of any law firm is proportional to the amount of time it takes to complete the chargeable legal work completed.

With many legal services moving toward fixed fee pricing models there is additional pressure to ensure as much work as possible is completed with the minimum of demand on fee earners. That said, law firm efficiency must be balanced with the need to ensure work is completed thoroughly and to the required quality.  For Solicitor Regulation Authority (SRA) accredited Solicitors, this means they must adhere to the Accounting Rules, Principles, and Code of Conduct.

The vast opportunity of increased legal innovation and efficiency

According to Thomson Reuters Legal Executive Institute, there are huge opportunities to be realised by increasing law firm efficiency.  A 2019 survey of small law firms revealed that many faced a wide variety of “significant challenges”, in particular the excessive amount of time being expended on administrative tasks; accounting for up to 40% of the average lawyer’s time.  As such, law firms are now focused on improving efficiency through a wide variety of means.

Technology is underpinning the drive for legal efficiency

The need for law firm efficiency is one of the primary drivers towards the widespread adoption of digital technology, including artificial intelligence (AI), electronic discovery (eDiscovery), data analytics, and online client portals.

The law sector, both locally in the UK and internationally, is experiencing a considerable technological shift.  Organisations who have maintained many of the traits we know as “traditional law firms” are under pressure from new dynamic entities which are able to deliver legal services in a consistent, rapid, and high-quality manner, and still with high levels of customer service.  To do this, fee earners need to be freed up from onerous and time-consuming work which can now be completed by automation tools and software.

Leveraging external service offerings

Law firms are also realising the importance of law firm efficiency by freeing up resources to work on more complex and, ultimately, higher-value work.  In addition to technology, outsourcing of essential business services is enabling internal legal resources to focus on what they do best – practice law.  Small, medium, and large Solicitor practices are increasingly utilising the knowledge and skills of external business services, including cyber security specialists, IT, and financials (invoicing, legal cashiering, and management accounts).  Such is the demand for ‘as a service’ expertise (e.g. software as a service, marketing as a service), each year more and more providers are starting up, with most offering fix price monthly pricing.  This approach to law firm efficiency also reaps rewards by reducing the demand for office space, ensuring adherence to the latest standards and legislation, and reducing internal headcount and associated costs.

Final words

As we enter a new decade, Solicitors of all types and sizes are focusing on improving law firm efficiency.  Whether it be through process analysis and control, digital technology, and outsourcing of essential business functions, there will be two primary winners for those who are ultimately successful; Solicitors who can engage in more meaningful and high-value legal work (and of course law firms themselves), and their clients who will benefit from the extra time that can be spent focusing on their needs.  Increased law firm efficiency provides a win-win for all concerned.

Established for over 10 years, The Cashroom are experts in helping law firms become more efficient when it comes to cashiering, management accounts and payroll. With extensive experience in the legal sector our solutions are tailored to the needs of the changing legal landscape.

Our investment in our products and services means we help to improve efficiency and security beyond the capability of many law firms.

For an introductory discussion please contact a member of our team.

If you are regulated within the English and Welsh markets, then please contact:
Alex Holt E: alex.holt@thecashroom.co.uk T: 07817 420 466

If you are regulated by the Law Society of Scotland, please contact:
Gregor Angus E: gregor.angus@thecashroom.co.uk T: 07875 598 593

The EU’s General Data Protection Regulations (GDPR), which were enacted into UK law by the Data Protection Act 2018 (DPA), place strict requirements on law firm data security.  While the GDPR relates to any business using personal data within the EU, given that law firms are required to handle often highly sensitive personal information, they must go the extra mile to mitigate any potential risk to their clients.

Data controllers vs data processors

Core to understanding law firm data security obligations in the context of the GDPR is interpreting the terminology used.  Firstly, both data controllers and data processors are required to adhere to GDPR.

According to the UK’s Information Commissioner’s Office (ICO), data controllers are defined as any “natural or legal person, public authority, agency or other body which, alone or jointly with others, determines the purposes and means of the processing of personal data”.  And data processors are any “natural or legal person, public authority, agency or other body which processes personal data on behalf of the controller”.  In other words, the controller determines what information should be processed and for which purposes, whereas the processor undertakes the actual processing work.

As such, law firms may find themselves acting in both roles.  As confirmed by the law society, however, law firms assessing their law firm data security should not just assume they are acting in the role of data processor when they may not be.  For example, for a law firm undertaking electronic discovery in-house, it is likely they would need to conform to the GDPR rules for both controller and processor.  If discovery is being contracted to a third party, it is likely the external entity would be classed a processor and the law firm would be the controller.  The European Data Protection Board provides some useful information to make this decision.

Seeking assurances from third party data processors

When assessing law firm data security risks where third parties are used to process data on behalf of the controller, it is essential to ensure that the processor is able to comply with their legal obligations under GDPR – this should not just be assumed.  Failure to verify this could lead to a ‘supply chain compromise’ whereby the third party fails to adequately secure the IT systems that hold your (and your clients) data.

The National Cyber Security Centre (NCSC) states that a vulnerable data supply chain can be avoided by adhering to its principles, under the following categories:

• Understanding the risks
• Establishing control
• Checking your arrangements
• Continuous improvement

For example, the NCSC recommend that where necessary, data controllers may wish to use the Centre for Protection of National Infrastructure (CPNI’s) Personnel Security Maturity Model to assess the effectiveness of their people security arrangements.  While this may seem onerous, to fully ensure law firm data security, it may be the only way to mitigate any risks fully.

Wrapping up

It is critical then that law firms take their responsibilities seriously, especially considering the financial penalties and reputational damage which may be levied for non-compliance.

To prevent “supply chain compromise” ensure you work with organisations who have a similarly transparent and compliant approach to data protection and proactively demonstrate this to you, providing you with full assurance for your law firm and your clients.

The Cashroom understands the potential pitfalls of data security. We take data security and protection seriously. To find out more about our approach to data security have a read of our recent blog here.

We’re happy to share our experience with our clients and our own data protection policy is available online here.

The Cashroom helps law firms stay on the right side of compliance, whether it be GDPR, data security and SRA or Law Society of Scotland Accounts rules.

We bring our extensive experience in the legal sector to you, whether you are looking for outsourced cashiering, help with the production of management accounts, or support with your payroll.

For an introductory discussion please contact a member of our team.

If you are regulated within the English and Welsh markets, then please contact:
Alex Holt E: alex.holt@thecashroom.co.uk T: 07817 420 466

If you are regulated by the Law Society of Scotland, please contact:
Gregor Angus E: gregor.angus@thecashroom.co.uk T: 07875 598 593

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In a leafy part of England a merry band of 70 suppliers of services to the legal sector gathered for the LSAS conference. It’s an annual event at which ideas are shared, contacts are made, and the occasional sherry is supped.

A theme emerged from the numerous excellent talks throughout the day…

The need for any sale of services to be a win for both parties.

It seems obvious doesn’t it? Yet when you think about it, often one or other of the parties comes away feeling not quite so happy. Either the client feels they’ve paid too much, or the suppliers feel they’ve been talked down on price. Perhaps the issue is the financial one.

After all, the cost of something is always relative to the worth it represents to the buyer, isn’t it?

So it’s crucial that a supplier takes the time to really understand their prospective customer- the needs of the firm, but also the requirements of the individuals within the firm who will be interacting with the product or service. A panel of senior people from law firms was gently grilled by Chris Bull, Legal Sector Consultant and it was slightly depressing to hear that often suppliers don’t think about who they will be talking to when they make contact. We were told in no uncertain terms that a call from a supplier who hasn’t taken the time to research the firm and the individual contact will receive a much cooler reception.

Crucially, the ‘buyer’ is often not the firm. It’s the individual for whom you will be solving a problem, or fulfilling a need. What do they need from you so that they can be convinced themselves, and what do they need so that they can take information and convince any other influential people within their firm? By treating each sales engagement as a collaborative process, and acting with respect and integrity throughout (essential elements for any relationship to work), the benefits to the individuals and the firm can be drawn out and supported, making the discussion around price a far more involved negotiation as the dialogue is now around a value proposition.

The final shift over the line to a sale is often, we were told, the vital addition to the conversation of stories. Case studies. Testimonials. Existing happy clients or buyers. Real people who have experienced your products and services and will speak glowingly of the benefits. They take the ideas and lists of promises from conceptual to real.

Coming away from a conference like this with more than just a headache is always welcome…on this occasion invaluable ideas were as plentiful as the wine.

Alex Holt, Business Development Director

The Cashroom Ltd

I’m no psychologist. So you’ll be delighted to hear that the ideas I’m about to put forward are not my own, but those of far more learned proponents of the science.

When engaging with your prospective clients, do you understand what their present state of mind is?

There are three modes that you should consider-

OK or Even Keel – This is when your prospective clients are basically happy with their lot. It does not mean they are not a potential buyer, just that they don’t perceive an urgent need for what you’re selling. With this kind of client, it’s important to stay in communication. Keep them informed of your services and products. Make them aware of the benefits of working with you. But don’t in any way go for the hard sell. You want to be in their mind when they move into one of the other two modes.

Fear or Problem – this is often the mode in which clients of law firms find themselves. Litigation. Divorce. Bereavement. Classic reasons for needing a lawyer. At the point when your prospective client is considering your services are you thinking about their state of mind? Are you shaping your products and messages to appeal to someone who is probably stressed and worried? Are you responsive and communicative?

Hope or Aspiration – these clients are a different challenge. Perhaps they are growing a business or trying to do deals. They have a big idea and they are buying your services as part of a strategic plan. You will need to convince them you can match their requirements and ambitions with a service that enables them to achieve their goals. Should you consider a more project based approach to deliver your services in alignment with the client’s timescales, and should that lead to a slightly different discussion around pricing?

It sounds so simple, yet so many sellers of services or products fail to put themselves in the shoes of their customer or client. What is the end goal they are trying to achieve when they consider your service? A conveyancing transaction is not how your client looks at it- for them it’s a move, against a removal deadline, into their new home. A litigation matter is not an intellectual challenge- for your client it is a stressful and unwanted expense. Your approach and manner of client handling should reflect such differences.

Alex Holt, Business Development Director

The Cashroom Ltd