We’ve been with Cashroom for quite a few years now, and I would never go back. In any business, and particularly in times of uncertainty, it’s important to control your costs, and that’s exactly what you help me do.
There are some events that just grab your attention. A meeting of some of the leading conveyancing firms along with many of the main players from the world of estate agency was always going to be fascinating.
The event was superbly run at a great venue – the Grosvenor Hotel in London. There is still a buzz around face to face events, as people get that thrill of networking again. Seeing old friends and making new ones. It’s basically the sort of thing I live for!
For those of us with an interest in the conveyancing world, the first point of note was to see whether the two ‘factions’ could play nicely together.
I’m delighted to say they could! Rob Hailstone and Ian McKenzie set the tone with their head to head chat. They exemplified the whole event for me- There was some good natured verbal sparring, but the overall atmosphere was collaborative. In the end, it suits all parties if property transactions can move more speedily and efficiently.
There was spirited debate about the place of technology within the whole process, with many solutions that were discussed rightly looking at tech that interweaves the estate agency process and the legal process. The clever use of data flows and communication tools.
Two of the talks were stand-outs for me. The first was Dan Salmons of Coadjute who delivered a fascinating and highly polished presentation on the opportunity for collaboration. His background with the world of contactless payments lent huge credibility to his subject matter.
The other talk that stood out was the one that dragged the elephant in the room into the light. Do estate agents and conveyancing lawyers respect each other?
A great line up of people from both sides of the divide led to a sparky and informative debate where I believe the answer to the question posed was “Yes, but in some cases grudgingly”.
As always some of the best discussions happened outside the conference room, and for me there was an overall sense that the industry realises that the challenges coming over fees and resourcing will all mean that a change in approach is vital. The caveat is that one person I spoke with, who had last been at one of these events two years before, made a point that others echoed. “Let’s hope that there really is action on these points now, rather than just talk”.
It’s that time of year again where the spring flowers are blooming and the spring clean is being negotiated. You may not have considered a spring clean of your IT security knowledge or corporate network security. So, we have put together a few quick tips to help you remain safe online and tidy up your corporate access.
It’s easy to get lost in a checklist when someone leaves your organisation. So much of our day to day lives are now online. Individuals will have accounts and sign in credentials for numerous websites, portals, and systems. With the rise in working from home knowing where your equipment is and what it is being used for is eve more important.
- Are you certain that all the credentials relating to your previous employees have been disabled?
- Is their email address still active?
- If you use The Cashroom can the leaver still access the Cashroom Portal?
- Can they still access your CMS/Bank accounts/other software remotely?
- Do you have an accurate asset register, so you know what equipment is in people’s homes?
- Are you able to remotely manage your devices in case of theft or other mishap?
Cyber-attacks are getting increasingly complex, and fraudsters are always developing new strategies to try and separate you from your sensitive information. It is important that you don’t succumb to paranoia, but everyone should always try to remain vigilant when it comes to IT security.
- Be wary of spam and suspicious emails – this includes emails that look like they are from someone you normally communicate with, but the content may be asking for something out of the ordinary.
- Only open an email attachment or click on a link if you’re 100% certain of its source & you were expecting it. If you’re unsure, don’t open it.
- Look out for changes to phone numbers, email addresses and bank account/payment numbers etc. Don’t be afraid to double check any changes with the email sender but call them at a number you know exists or begin a new email chain from scratch. Don’t click reply or use the details in the suspicious email – you may end up “verifying” the change of details with the fraudster!
- When accessing the internet, check the web address has “https” in front of the address (sometimes shown with a padlock icon). The “s” means that the site is secure. Also check that the address is spelt correctly and is the usual web address that you use for that site.
- We are always told never to reuse or write down our passwords. Have you considered investing in a password management software, which can securely store and remember your passwords so that you can always have a unique and complex password every time you need one?
Social engineering is an increasingly common type of confidence trick for information gathering, fraud, or system access. Fraudsters know we are savvier when it comes to dodgy looking email attachments. They are now playing on our personalities and common human foibles. They will rely on humans wanting to help each other out or taking advantage of our natural intrigue.
- Examples of social engineering tricks can include a fraudster sending an official-looking announcement to the company that says the number for the help desk has changed – when employees call for help the individual asks them for their passwords and IDs thereby gaining the ability to access the company’s private information.
- Another example of social engineering would be a hacker leaving a USB stick on the floor in or around your office, possibly titled “cute puppy pictures”, “2022 promotions” or “payroll data”, hoping someone will pick it up to see what is stored on it. Malware would often then be automatically downloaded to the computer and the wider network.
Two-factor authentication is recommended by the Nation Cyber Security Centre for use on important accounts and email. Utilising two-factor authentication makes it harder for cyber criminals to access your online accounts. It also adds extra security to your accounts.
- Two factor authentication can be done through authenticator apps where the app will give you a unique code each time to log in.
- You can use your phone number where the account will send you a text code or ring you to verify it is you.
- Using two-factor (2FA) or multi-factor authentication (MFA) also helps your firm achieve compliance with guidelines such as GDPR. This is particularly important as law firms are subject to strengthened confidentiality regulations due to the data held.
- Software providers and companies are increasingly asking customers to use multi factor authentication (MFA). Do any of your systems allow this?
Law firms of any size hold valuable and sensitive information that can be exploited by cyber criminals. You should ensure you are backing up your firm’s data to secure servers. This includes all firm data such as client and case data.
- A common way to back up firm data is through the cloud. This is where a copy of all data is sent to the cloud. Either in real time, or periodically as files are uploaded. This provides extra security and protection of your data.
Conduct and plan regular reviews of your IT security and ensure everyone in the firm is aware of your policy.
We hope that this “spring clean” list is of some use. Obviously, this isn’t intended just for springtime. You should use these tips throughout the year to ensure that your systems are constantly reviewed. Check your IT security is working well for you and your business.
For more information on cyber-attacks, social engineering and how to keep your firm secure, pleased contact your IT provider.
For all Cashroom clients with leavers please contact your Cashroom representative if you have any staff that need removing from the portal. If you would like more information on how to do this yourselves, please refer to the portal help icon. In the Help Centre, you will find articles on how to add a new user and how to disable a user.
Rachel Faris, IT and Data Protection Administrator at The Cashroom Ltd
Accounting and technology may not naturally appear to go hand in hand, but Cashroom is committed to utilising technology to improve efficiency and security beyond the capability of many law firms.
Our unique, secure portal
Cashroom’s portal is a web-based, secure, and encrypted means of communication between us and our clients. The portal was initially developed to remove communication from the insecurities of email, and to protect our clients from the rising threat of fraudulent payments by using authorisation workflows. Requests are made in prescribed forms with certain mandatory fields. This ensures all necessary information is provided, in compliance with the Solicitors Accounts Rules.
Our platform is being constantly developed to become so much more than a secure communication tool, providing clear audit trails of all communications, which are searchable, allowing transparency of requests made, and their progress through to completion. Clients can access and view the progress of their requests in a visual format. In a way that emails or manual, paper-based ways of working simply cannot.
Continuous innovative development
This year we have further developed our Cashroom portal with sophisticated integrated open banking technology and integrations into four of the leading practice management systems. Creating an even more secure and risk-free payments method for firms. We committed to the importance of our expert service being delivered by good technology by investing in a full-time technology development team within the business.
Having an in-house technology team that is on hand working hand in hand with clients to deliver continuous improvements and developments in our technology is something that no other legal accounting provider is giving the legal industry.
In June 2021 we launched our first set of Practice Management integrations where our Cashroom portal will link directly into your PMS. Client matters will be updated automatically, and fee earners can easily go between client ledgers and setting up payments with clear visibility of their matters. We have successfully integrated with Clio, LEAP, Denovo and Klyant. Prior to this we collaborated with test client groups throughout our beta testing phases. Client feedback was listened to and taken on at every stage of development.
Our expertise on numerous practice management systems, means that we are able to help firms optimise their processes for their own system use, helping with data flow, accuracy of data and efficiency, all as part of our standard way of working with our clients.
Allowing law firms to use Cashroom services alongside the system of their choice gives firms the benefit of our industry best processes and efficiencies, along with using the best system for the firm.
We listen to our clients
Here at Cashroom we consistently ask our clients for feedback and ideas for further advances to our client portal. We have a ‘suggest feedback’ button within our portal for easy access. We send out monthly client surveys to check in and get feedback and we also have client relationship calls where we ask for any feedback. Listening to what our clients need and want is of the utmost importance in all of our technology developments.
With some of the very large pure play volume start up legal firms, we have worked with the client to design the right automations and system processes, which we then support with our teams to enable huge volumes of work to be processed efficiently, compliantly and removing risk.
Supporting the Legal sector
Following the most difficult and challenging year in 2020, the market (and particularly Conveyancers) experienced its busiest months ever in March and June 2021. During that month of March alone, Cashroom successfully processed over £1.3billion pounds of client money payments through our portal. In June we surpassed this with over £1.6billion pounds of clients money processed through our portal. With over 230 law firms as clients, March and June were the busiest months we have ever experienced at Cashroom. Our cashiers were under the same pressures the industry was under. However, they had the tools available to them to protect their clients. Our expert cashiers processed payments using secure open banking technology integrated in our Cashroom portal.
With integrations into the leading banking platforms, Cashroom can significantly reduce the risk of human error and save time when initiating payments and checking for incoming funds. We have combined the expert knowledge of our legal cashiers and accountants with the master capabilities of our technical team. Last year could be viewed as our biggest test yet on our people and technology. We are delighted that our clients benefited from our sophisticated technology and expert cashiering services. Combined with our expert service, our technology enables us to provide the best support possible to the industry that cannot be replicated elsewhere.
Our standard processes also protect our clients against the rising threat of fraudulent payments through the authorisation workflows we have developed, and the segregation of duties our service provides. Using our service ensures that the law firm has a payment process that protects not only against external fraud, but also internal collusion and single point fraud, where a hacker only requires to obtain one set of login details.
We can deliver this industry ‘best practice’ service to a huge range of firms, who have the ability to scale their requirements up and down as required. We work with firms of all sizes. From sole practitioners to large, full-service top 200 firms. Geographically, our client base extends to all corners of the country. Our team continues to develop new products and services to extend the support. W have plans to add integrations between our Cashroom portal and more practice management systems throughout the next few years.
Taking care of our employees
We work hard to provide an industry leading level of service. This includes regular training and development of staff across all areas of the business. This year we have also focused on the well being of our staff – encouraging daily miles, regular emotional check ins using a helter-skelter scale, value awards and other initiatives ran by a dedicated culture group – we place importance of our staff who in turn value our clients and provide the best support to the industry possible.
We have continued to grow as a business to support the industry. At the start of the pandemic Cashroom had 80 employees and now we have over 110. We have been a completely remote non-office-based business throughout the pandemic and have a new ‘work where you want policy’. This offers staff the flexibility of an office or remote working.
Cashroom team performance since the start of the pandemic has been exceptional. This has been proven by the levels of client money transferred in March and June 2021. Through innovation, expertise, and professionalism Cashroom have supported the industry through a turbulent time.
What some of our lovely clients have to say about Cashroom
“The Cashroom offer an invaluable service for any solicitor’s firm. Their approach is efficient, professional, and responsive. They have allowed us to deal with rapid growth by taking on all accounts functionality.
The staff at The Cashroom are highly skilled and can deal with all aspects of SAR. They are competitively priced relative to an in-house solution and have been a pleasure to deal with from the start.”
Alexis Brassey, Managing Partner and Notary Public, Cavendish Legal Group
“We set up Cheval Legal from scratch as a specialist litigation firm, specialising in financial mis-selling claims.
From the outset we knew we would process a high volumes of claims. We had to design our systems with efficiency and compliance at their core. Cashroom needed a finance function that was flexible, resilient, and scalable. We did not think that traditional in-house function would work, so we approached Cashroom.
From the outset they demonstrated their knowledge and expertise in designing law firm financial systems. They listened to what we wanted. They designed the system to fit our needs, and integrated it with their own internal processes. Throughout they were responsive, innovative, and willing to listen and adapt. This collaborative approach was key in designing exactly what we wanted.
As a result, we can now grow our business at a faster pace, with the knowledge that our finance function is in safe hands.”
Phil Ryan, Director, Cheval Legal
Change is inevitable, and in business, it’s an essential part of the process. Whether you like it or not!
At Tricres we have a model known as The Change House. It outlines the various feelings, emotions, and thoughts that as a business owner you experience at various stages in your business timeline. We break down the House into four rooms that you cycle through as you process change.
And this cycle doesn’t have a set starting or endpoint. Indeed you may experience the cycle numerous times over the course of your business’s existence. What is interesting is that the amount of time you spend in each segment of this cycle will vary from person to person and from each organisation to organisation. No two cases are identical.
If you’re in a great place, savour it! If it isn’t a great place to be stuck into you need to take action to move on from sitting there. The reality is taking a clear and honest stock of where you are in the cycle in order to get to a phase that is happier and more productive.
Change is inevitable and it happens. Resisting change is usually not an advisable tack, as those who avoid it so often get left behind.
So what is this cycle of change we speak of? And where are you in this model? All an excellent exercise in understanding where your leadership has brought your business to at this very stage of its existence.
THE CYCLE OF CHANGE
First, let us note that you can only move within this model in one direction. Be prepared, we will start in the darkest place in The Change House!
THE ROOM OF DENIAL
Let’s face it, change is usually scary!
Many companies go here when change is suddenly imminent. You may not have realised just how dire your situation is or acknowledged the reality of your business status. And that may be exactly why changes are needed in the first place.
If you stay in this room too long you may drop down to the Cellar of Despair where everything seems impossible or too big to manage.
The Cellar of Despair is no place to be for long, although there is only one way to go, which is back up to the Room of Denial. Make sure you get back up there in order to move to the next room…
THE ROOM OF CONFUSION
As we truly believe at Tricres, after confusion comes clarity. This room is filled with uncertainty and chaos. But once your move into this phase you can rest assured that clarity is on the horizon.
There is no point in avoiding this phase, it’s a necessary step to reaching the decision making that will take you in the right direction. Sometimes business leaders try to avoid this phase and walk out the ‘Wrong Door’, which isn’t going to solve your issues with the changes needed.
We suggest avoiding making decisions when you’re hungry, tired, or angry as you will likely make the wrong choice. Better to observe your situation like a distant bystander casually taking notes and then seeing what needs to be done with a calm and collected demeanour.
THE ROOM OF RENEWAL
This is a great place to be as once confusion has passed it gives your business that warm and fuzzy feeling. When your company colleagues can embrace and welcome the changes happening your business should feel refreshed, revitalised, and ready to make these changes happen.
As a business leader, establishing a healthy culture that welcomes change is certainly positive and assists in avoiding any wasted time in those less functional rooms of the change cycle. Acceptance of change when required that can cycle quickly through this Change House model will help your business move forward with ease.
THE ROOM OF CONTENTMENT
No changes on the horizon? Content with the status quo? While this room is a great place to be it can be hazardous if you head out onto the Sun Deck and hang out resting on your laurels!
Many industries have seen epic shifts in the last few years and those businesses that failed to make relevant changes got left behind in spectacular fashion.
Embracing change and making essential changes are key to staying relevant in whatever industry you’re in.
Assessing where you are in this model can help highlight if you are possibly a little too comfortable with the way things are. Are you in denial that change is needed? It could be time to move into that uncomfortable space to bring your business up to speed with what you need to be doing now, not after all of your competition has done the legwork.
Tricres have a host of tools and techniques that can help coach and consult your ambitious SME business to achieve scalable success. We have an array of partners with expertise in every sector waiting for you to get in touch.
Find our partners here at: https://tricres.com/our-partners/
January marked Open Banking’s fourth birthday, but it is still a foreign concept for many, including the legal sector. Questions as to what Open Banking even is, and how it can be applied, remain unanswered.
To help shed some light on this, Open Banking experts, Cashroom and Armalytix, tackled some key questions around the applications of Open Banking for the legal sector in the following Q&A.
What is Open Banking and what are its current application?
“At a top level, Open Banking provides a standard and secure method to connect businesses with banks to enable sharing of data and access to banks services such as setting up payments, with the overall aim of providing greater financial transparency and making the lives of businesses and their customers much simpler. Created during the implementation of PSD2 in 2018, its mission is three-fold: to make consumers better informed and engaged in financial services, to enable numerous payment choices for customers, and to create an enhanced client experiences through increased competition and product innovation. It is this final point on creating an innovative ecosystem with new products where open banking is having its main impact on the legal sector. For us this has meant being able to develop the capability to set up lawyers payments using a straight through process.”
“For us, Open Banking has meant that conveyancing firms can improve their analysis of source of funds, making buying a house faster and more secure. Firms can automate their data collection and gain the information that they need via Open Banking which analyses data from different sources, including personal and business bank accounts.”
What are some core challenges the legal sector faces?
“Tedious manual processes, lengthy forms and paper chains that underpin the legal sector have made the sector a playground for fraudsters. Add in tired and overworked employees, who have to fill in forms by hand – the opportunities for fraudsters and challenges for the legal sector are numerous. The successful value of successful frauds of property sales more than tripled – from £7m in 2013 to £25m in 2017, and this number has only continued to rise. According to the Law Society of England and Wales, 2021 proved to be one of the worst years for fraud in property sales, especially APP fraud (Authorised Push Payments) – as the removal of Stamp Duty put people under additional time pressure to execute on their house sales, opening the door for criminals to impersonate clients’ lawyers and convincing them to send their hard owned money to the wrong account.”
“Another core challenge that we are seeing from within the legal sector is the increased digitisation of both businesses and society. People live their lives through their electronic devices, and this has resulted in a higher expectation from both clients on their law firm and employees within the law firm to deliver a digital offering, similar to online banking. This has only increased the pressure placed on legal firms to modernise their reliance on paper and outdated technology by replacing some of their existing processes with ones which are more efficient and digital first.
How can Open Banking address these challenges and make the legal sector more efficient?
“Open Banking is providing lots of opportunities for suppliers to the legal sector to help build automated end to end processes, making it easier and more secure for the required data to flow from the clients through to the many complicated back-office processes that happen within the legal sector. Additionally using the same principles as Open Banking is promoting within other areas of the legal technology is going to continue to drive the efficiencies that many firms are looking for to help provide the best service they can for their clients.”
“For our Source of Funds analysis, the time saved from using Open Banking cannot be understated. In terms of the benefits for clients, using Open Banking could save companies 50% of the time spent analysing manual source of funds checks.
“The anti-fraud benefit that open banking brings is critical and is a key reason as to why we have implemented it. It creates a digital register and audit trail, uploaded, and maintained without the input of employees. This helps to prevent fraudsters and criminals, who like to target weak processes, with a heavy human input, as this allows them to slip between the cracks without being noticed, which is the case for the current state of the property market. Historic cases indicate that criminals won’t engage with robust technology, as they realise that the value isn’t there for them.”
How do you (Armalytix / Cashroom) use or apply open banking?
“Open Banking helps us access up-to-date and accurate numbers. We can then analyse the data and clearly present it to help the conveyancer assess the client’s Source of Funds more efficiently. By being able to confirm that the payees are who they say they are, we can help to prevent fraud and money laundering. Open Banking provides a very simple, digital journey for both the law firm and their clients, enabling them to provide and access the data in only a few clicks, and provide a clear picture for conveyancing firms to make their decisions.”
“We use Open Banking to initiate payments required by a law firm to provide straight through processing of payments removing the need to rekey bank account details and making it easy for the lawyers to authorise the payments that need to be made.”
What are your predictions for open banking in 3-5 years?
“The recent ruling from the FCA states that users no longer need to re-authenticate their connected accounts every 90 days. In our opinion, this is a step in the right direction for Open Banking to become mainstream in the legal sector and shows that the government is committed to innovation and improving outdated products. Open Banking will continue to develop worldwide, and 2022 is shaping up to be a bumper year globally, with the UK and the EU set to follow Brazil’s lead in the move to Open Finance. People are beginning to see the massive benefits of Open Banking, and how it makes the lives of everyone easier and more secure through creating a better client experience. Across the next couple of years, we expect Open Banking to become a key tool in many businesses’ armouries, opening up a path for a form free future.”
“This demand internationally for Open Finance initiatives will continue to expand, and the requirements for regulation, fraud and financial crime checks will rise sharply with it. Whilst everyone will become more comfortable using Open Banking and enabling the required flow of financial data to make their interactions with sectors like the legal sector easier. They will also be more aware of what data they have and be aware of the risks associated with sharing this data so will expect a secure digital journey to be provided to enable this sharing of data. Open Finance will continue to open up more capabilities within suppliers to the sector, such as banks and other financial institutions, which will provide greater opportunities to make processes more efficient, by removing the need for most manual inputting of data and securely sharing of data across the processes, all leading to a better and safer world.”
Find out more about Armalytix at https://armalytix.com/
It’s hard to believe, but I joined Cashroom full time just over 10 years ago. I was a non-exec director before then, but my first day sitting at a desk with a job of work to do, was in January 2012.
I was employee 13, we had 22 clients, and turned over £330k in the previous year. My mother (!) was horrified I had given up my career as a solicitor (“but David, what will I tell people you do now?”), and we were still crawling out of the great financial crisis.
This week we had an “all hands” meeting and more than 100 people logged into the Teams call, we act for over 220 clients across the UK, and last year we turned over almost £3.5m.
And my mother still has no idea what I do!
People often ask me if I miss being a solicitor. Often the question is asked by other solicitors.
Some are genuinely curious, but others I feel want (need?) me to say I don’t miss being a solicitor. I confess my answer is occasionally tailored to suit the questioner.
I believe passionately that the legal profession is a crucial part of any society. Without a legal system, and an independent and fearless professional, prepared to fight for their clients (whether against government, or against their fellow citizens), western democracy as we know it could not function.
However, it is easy to lose sight of this while fighting in the trenches. The great privileged I have at Cashroom is seeing over 220 firms and hundreds of solicitors fight that fight every day. So rather than focusing on my muddy boots, and the rats and the damp, and worry about the snipers (!)I get to see the best of the profession. I get to see all of you build your business and fight for your clients – and I get to play a small part in helping you do it.
So, while I do, on occasion miss being a solicitor, I don’t regret the decision I made for a second.
Looking forward to the next 10 years.
The nominees are in. The tension builds. The red carpet gets hoovered, and evening dress is dry cleaned. But who will be the winners at the star studded event in March 2022?
I’m not talking about the Oscars, by the way. I’m referring to the British Conveyancing Awards which take place in London on 15th March. Once again I was delighted to be asked to be a judge for these awards. It’s always a bit of a double edged sword. It’s very time consuming and quite intense, but it is also incredibly inspiring.
For anyone who has done this kind of judging, you’ll know what I mean when I say time consuming. Today’s Media who run these awards have worked really hard to optimise the tech we use for reading the submissions and marking each response to a specific question. However it still takes ten or fifteen minutes to properly review a submission. With over twenty to review across three categories, it effectively needs a full working day to do it justice.
As always, though, the effort is worthwhile.
It’s not often you are effectively forced to sit at your desk and look at how great some law firms are. And they are… truly great in so many ways.
It was wonderful to read about firms who care for each other and for their communities. It was fantastic to hear about innovation in the conveyancing sector. A sector which over the last three years has probably faced more challenges than any other.
There were some themes which came across loud and clear. One of the main ones was that these firms understand the need for excellent client service, and they also understand that to achieve it involves a sophisticated union of process, people and technology. If any one of those elements is operating sub-optimally then the excellence for which these firms strive would be forever out of reach. They would fall short of the required standards, and it was inspirational to read about firms who simply would not accept that.
I’d add in my usual cautionary tale here for firms looking to make submissions for awards.
ALWAYS ANSWER THE QUESTION!
There were a few submissions which in many respects were impressive, but simply didn’t address the specific category questions in enough detail. I know from speaking to other judges that this is something the crops up every year.
So – a big thank you to the wonderful David Opie and Allie Jones of Today’s Media for giving me the chance to immerse myself in the conveyancing sector for a day, and for making the process as slick as possible. I’ll be donning my dinner suit for the 15th and waiting as eagerly as everyone else to hear the winners be announced. Maybe the winners should start being allowed to make Oscars-style acceptance speeches? Then again… maybe not!
Alex Holt, Director of Business Development.
Have a chat with Alex today here about how Cashroom can help you manage your finances.
At the beginning of this month, I began my new journey as Digital Marketing Manager at Cashroom. The Team here is fantastic and I am very much looking forward to my future here.
I began my marketing career straight from college, completing an apprenticeship in Digital and Broadcast media. Since then, I have worked in Government procurement and most recently the legal sector for a legal technology firm.
The legal industry has faced many challenges over the past two years owing to multiple lockdowns, working from home, stamp duty and much more. The resilience the industry has shown is what makes me enjoy working in the legal industry so much.
Can we call it fate?
Unfortunately, in January this year I was given the news that my position was being made redundant. The business I was working for had recently been acquired by a large company and unfortunately redundancies were made. Unfortunately, this is not as uncommon as I first thought in the legal sector, especially during the past two years. Law firms being acquired, or merging can cause a lot of uncertainty for employees.
My experience was fortunately positive, I was overwhelmed by the support from colleagues and connections throughout the industry. The legal sector really is a sector that pulls together and that is what I love about it.
When I first spoke with Emma O’Day (Head of Marketing Communications) it was clear to me that Cashroom was a place I wanted to be. The company has grown exceptionally in recent years, and I am excited to be on board and to help spread the word of how Cashroom can support law firms and make their day to day lives much easier, allowing them to focus on what they do best and looking after their clients.
I have always worked in intimate businesses and that is just one thing I love about Cashroom. There is a real team spirit and great culture. I am so excited to be taking on this new challenge, working with a fantastic team of industry experts in such an ambitious company.
To discuss how your business can work with Cashroom on joint events, publications and much more, or to simply find out more about our services, please get in touch.
I recently read a rather interesting article from CLIO which discussed the legal trends of 2021 and how law firms have evolved during the pandemic.
If anyone has some spare time, I’d recommend reading it too.
Whilst it focuses on the USA/ North America market predominantly, I have noticed the same trends here in the UK and it provided a couple of rather interesting points, where I believe outsourcing is the solution (and not just the accounts element)!
The first item I picked up on was ‘’Assessing change, identifying opportunities and reviewing firm resources.’’
This can be quite a broad subject so I won’t go into too much detail, but if there is one thing that the last few years has taught me, it is that no matter how much time we spend on a certain task, there’s always something that can be improved. ‘’Work smarter not harder’’. I guess that’s where the Cashroom can help – we have a lot of great experience on multiple practice management systems used throughout the UK – we know how to make things work and we can help put processes into place to allow you to get the best out of the system (saving time and allowing you to make more money!)
The other point to note was, of those firms surveyed ‘’23-35% of their finances are spent on office space.’’
Whilst I appreciate that office space is always needed to some capacity, having outsourced functions can reduce the cost, and provide more space for fee earners and other members of staff. Not only will outsourcing reduce the cost on office space, but also on things such as IT equipment and other regular expenses that are needed. It prevents the need for supervision, the worry of sickness and holiday cover, and also simple things such as lunch breaks! In all honesty, the list goes on.
From the conversations that I have had with law firms in the past, they have always been concerned about outsourcing such a fundamental element of their business.
However, since the pandemic, this has been the norm with staff working from home on the daily, and everyone has had to change and deliver new methods and ways of working very quickly. This proves the concept works and we were fortunate enough to be ahead of the game, having worked in this way for many years prior, therefore business as usual for us.
If outsourcing your finance function is something of interest to you, or if you would just like to know more about what we offer, please get in touch.
It’s early in 2022. Does it feel different to 2021? Well yes, there’s an air of optimism around. Consumers seem to be looking forward, positively, to life moving on to a new phase where we can all enjoy having our freedoms back that we took for granted pre-March 2020.
The business community has a renewed sense of optimism. Law firms dealing with conveyancing in 2021 have already been through a period of hyper-activity with the relaxation of stamp duty. Other departments are seeing growth in activity and should continue to see the impact on the top and bottom line in their businesses.
Taking away the positives from the pandemic and lockdowns is the imperative: retain the good, dispense with the bad, accept and embrace this new-normal.
Digital transformation as a term and activity has been in vogue for some time. The last two years have accelerated many programs and focused on client centricity.
With an ever-increasing demand for remote document signing and customer onboarding processes that can speed up completions and reduce the risk of identity fraud, the use of Electronic Signatures has become the norm for many law firms.
However, the frequent updates to legal guidelines coupled with the availability of an extensive range of products on the market, have created confusion about where, how and when the various types of eSignature can be used.
VirtualSignature.com has compiled a simple table (see below) highlighting typical applications of the three main eSignature standards, which can be used as a guide to prospective buyers looking for the most suitable product.
There may be a requirement within a law firm to use different standards for different areas of its business eg. QES for executing property deeds registered with HMLR, and Simple for the signing of basic contracts. The VirtualSignature platform provides the whole range of eSignature options, which can be introduced into document workflows and tailor made for each department within a firm, offering significant cost savings.
It is also worth noting that VirtualSignature’s tools can be integrated easily into existing document management, case management and CRM systems, such as Visualfiles, iManage, Proclaim, Tikit P4W and MS Dynamics.
If you would like to know more about how VirtualSignature can help, not just with eSignatures, but workflow automation and ID verification, please get in touch with the team on 0333 335 5176. They also provide a free trial evaluation and can be followed on Twitter and Linkedin for company news and updates.
Peter Gill, Director at VirtualSignature
So here goes, not only is this the first blog that I have written for Cashroom, but it is the first time I have attempted one in general. Last week, I started my new journey as Sales and Business Development Manager working alongside experts in the industry who will no doubt provide me with the knowledge, tools, and resources that I need to make this a success.
Since leaving college, my background has always been working in the Legal sector to some capacity. I have worked in both Legal Cashiering and Customer Relationship facing roles with a large legal sector PMS. Each of those had their own individual challenges that I won’t dwell on today, but each have developed me as a person and allowed me to get to this position.
I initially spent 3 and a half years at Cashroom from 2016 to 2019, working in the operational side of things. My responsibilities varied and my tasks were quite different as I progressed. One minute I was helping a client onboard our services, the next I was completing day to day cashiering services for multiple law firms across the country. My subsequent role was with a large PMS provider. I spent time visiting law firms to provide training on case management systems and reviewed processes to find out what they could do to improve efficiency. As you can imagine, every day was different, and I learned some valuable lessons and met some wonderful people.
When I was offered the position of Sales and Business Development Manager at Cashroom, for me, it was a no brainer.
The perfect opportunity for me to take the skills that I have learnt over the past 6 years and put them into practice, spreading the word so that we can help law firms manage what can be a very difficult aspect of their business, allowing fee earners to record more billable time. A win-win for both parties if you ask me.
I can’t lie, it is quite surreal being back where I first started.
Seeing the changes that have been implemented, and for the better. When I first started at Cashroom, the England office was fairly small with around 15 staff members. Fast forward to today and we have over 100 staff members, all working remotely with the best equipment in place. We service over 250 clients across England, Wales and Scotland. The Cashroom is a great company with ambition, which I love and am very happy to be a part of it again.
It would be great to discuss how we can help moving your business forward this year. If you want to find out more about how Cashroom operates and if it would be something that you would like to explore, give me a call or drop me a message! email@example.com
Christmas is over and I trust you had a wonderful time. The New Year is now upon us, so what better time than the present to review how you are going to ensure that your firm not only survives but thrives in 2022 and beyond?
The challenge that most law firms have is a lack of confidence in those who negotiate fees because they fear losing the work or the client.
This is a powerful, yet negative motivator as it means that they are not in charge of those fee discussions, right from the start.
Hundreds or even thousands can be won or lost in a phone call, depending on the competence and confidence in having the right conversations with prospects and clients, at the right time.
Lawyers are undoubtedly highly intelligent, skilled individuals who know their stuff and care about what they do, often working long hours to satisfy their clients’ needs.
Like other professionals, they are not immune to the challenges which the business aspect of their work may pose and with the ever-changing legal landscape, this may be even more complicated for lawyers than other professionals.
Ever-increasing competition, much of which is a race to the bottom on price, the perceived threat of AI and the changes in the SRA’s regulations around price transparency may have been enough to unsettle even the most commercially-minded lawyer.
For those who are heart-led working with clients going through particularly tough times, it’s doubly difficult. Having those money conversations and managing clients’ expectations can be immensely challenging.
So even though their charge-out rates may well be set at the correct level, they may not apply them properly and automatically discount and over-service clients because they just don’t have the heart to, as they see it, add insult to injury by billing the full fee.
So what is the impact of this?
Clearly there’s a financial impact on the firm’s bottom line, resulting in a significant loss of revenue year on year. There is also an equally important factor which cannot be overlooked and that is the well-being of lawyers themselves, since not charging and managing clients effectively often leads to them working excessively and quite understandably being very stressed, tired and even overwhelmed.
Consequently, it may well be a contributing factor to the increase in mental health issues in the legal profession.
Lawyers are trained as lawyers, they are not trained in the art of conducting business, so how can they be expected to be experts at it?
It is therefore reasonable to expect that many of them simply have a lack of knowledge of how to talk to clients about the business side of the work.
Secondly, like any other human being, they have patterns of behaviour which are driven by their unconscious beliefs and their emotions, which, depending on their nature, may well lead to discounting and over-servicing of clients.
Academic ability, knowledge and even professional experience are one thing (well three actually); being competent and confident in business is of course a completely different skill-set.
Since most lawyers probably haven’t studied business, it’s hardly surprising or even fair to expect them to be good at it without adequate training; yet it’s vital to the firm’s success and the lawyers’ well-being.
It is important to emphasise that if you haven’t already got the message, that this problem cannot be solved by process and pricing training alone. From discussions with Managing Partners, CEOs and Practice Managers, it is very clear that they are tearing their hair out, frustrated with the amount of revenue which is being unnecessarily lost, as they don’t know how to solve this conundrum.
Yet there is a solution, once the dilemma is genuinely understood.
Since the problem is two-fold, it goes without saying that the solution must equally be two-fold.
1) Address the lack of knowledge.
2) Address the lack of confidence
Remember that a lack of confidence is emotional rather than rational. Human beings (and lawyers are human too of course) are complex, irrational and emotional.
This lack of confidence is usually what causes the all-too-frequent, unnecessary and often automatic discounting and over-servicing of clients.
Just one example is extreme people-pleasing behaviour, even at partner level which is not uncommon. It usually comes down to long-term unconscious limiting beliefs which drive them to consistently do work which is badly paid and work all hours of the day and night.
If not addressed, this may well be the slippery slope to overwhelm and a nervous breakdown.
Another less extreme example and also quite common is that of one of my past clients, a very experienced employment lawyer and part-time judge. During coaching, he said:
“I used to be constantly hunting on the prairie looking for the next kill, regardless of its quality. I never really considered my value. I wish I had learnt what Vanessa espouses when I was 25 and at law school.”
A third familiar problem is that employed lawyers often do not feel comfortable with their charge-out rate, look at it from a very personal perspective, comparing it with their salary and think:
“I wouldn’t want to pay that!
And it’s that very thought which causes the damage; they cannot help themselves and will discount their fees, just to make themselves feel better. That is normal human behaviour; to move away from pain.
Do you recognise yourself or some of your fee-earners in any of the above?
If so, what are you going to do about it?
My unique 9-step True Worth methodology, created as a result of my own inability to get paid my true worth many moons ago, will address the problems highlighted in this article.
Vanessa Ugatti is a keynote speaker, transformational trainer/coach and helps lawyers and others to increase revenue ethically, without having to work harder, by sharing her ground-breaking TRUE WORTH step-by-step methodology, leading to a wealthier firm and healthier and happier lawyers. For her 10-point cheat sheet to Get Paid Your True Worth go here: https://www.thetrueworthexpert.com/cheat-sheet-get-paid-your-true-worth
So, you’ve found a prospective purchaser and presented your business to them in its best possible light. Unfortunately, you’ve now only reached the beginning of the most difficult part! Let’s consider in general some of the hurdles you are going to have to deal with.
The price is right?
One extremely important point to remember at this juncture is that deals are done between two people. It is personal, and while “matchmakers” and professional advisers can present things in the best possible light, ultimately it comes down to two parties sitting down together and reaching an agreement that both are happy with. If as a seller you feel unhappy about the price, don’t sell. There is an argument that as a purchaser if you feel that the seller is unhappy about the price, don’t buy: you are unlikely to acquire much goodwill at the end of it all. Listen to what your advisers tell you, but make your own mind up in an informed manner on the terms on which you are prepared to proceed.
Well then, what’s the value of your business? As I indicated previously, the market for legal firms is limited and this tends to depress the price. Accountants can, of course, justify many different types of valuation both for purchaser and seller, and it is unlikely that these will be the same. As a seller, if the decision has been made to sell then it’s about maximising the price, but principally it’s about obtaining some value for the business and, possibly even more importantly, closing off some of the liabilities that we discussed earlier if you were simply to close the door and walk away.
It would be an article in itself to consider the sales process and maximising values! Circumstances will vary from individual to individual and deal to deal. There are a number of things to bear in mind though. Present your proposition in the best way possible. In the ideal world you want to show any prospective purchaser that your income streams are robust, recurring and not dependent on you as an individual. Be realistic in your pricing. Better to encourage a dialogue rather than have possible purchasers refuse to open discussions because the asking price is too high. Lastly, make the proposition as attractive as possible. Consider agreeing to a part of the price being dependent on future fee or business levels. This takes away many of the fears and risks to the purchaser. Remember though that if you are prepared to agree to this, there should also be a corresponding uplift if the business does better than anticipated.
Advisers at arms length
As far as the practical implications are concerned, each sale will be different. Some will be the sale of a business as a whole, some will be one partner selling to the remaining partners, and there will be a wide range of variations in between. It is therefore hard to give much specific advice regarding the practicalities of a sale, but from my own recent experience there are a number of suggestions I would make that might be useful.
At the earliest opportunities, speak to your professional advisers and make sure you understand fully the implications of what you are considering from the outset. You will need to consider items such as price, goodwill, the tax implications and (possibly) tax mitigation, a best completion date, and the best breakdown of the price between goodwill, work in progress, capital etc. Only the very brave would wish to complete any formal agreements themselves, so speaking to a legal firm specialising in these matters will allow you to understand the legal implications and what specific areas you may require to address for your business.
One word of caution though: I personally believe that the actual negotiation should take place directly between purchaser and seller and not, except on technical issues, through agents. As solicitors we do have a tendency to over complicate the technical matters. So far as possible, try to reach heads of agreement with the other party directly and without the need of agents. If possible, work through a draft agreement with the other party and identify and deal with any potential difficulties on a face to face basis. Thereafter, when hopefully the main points of contention have been resolved, pass matters to your professional agents to finalise. This should allow matters to move far more quickly and minimise any additional expenses.
My own experience was that once all of the foregoing points had been dealt with, the actual practicalities of leaving the profession were relatively simple. There were the usual intimations via the Journal and to the Society, indemnity insurers and the bank. Clients and professional connections need to be notified as appropriate, and staff issues require to be dealt with. Final accounts will obviously require to be completed and a final tax position resolved, but these generally are matters of administration and are relatively straightforward to resolve.
A sight of goal
I suppose the two questions that I’m asked most and, in some ways, the summation of this article are, “What would you have done differently?” and “How are you enjoying retirement?”
Hindsight is a wonderful thing, and some of my views I’ve already touched on. I think that you have always to start with the end in mind. If the end is a business which is a valuable, easily realisable asset then there are several things I would have changed. If you are in a partnership I think it is essential that there is a partnership agreement in place that fully identifies the exit route for the partners, both at the agreed retirement age and also should they wish to change careers at an earlier time. Few of us like to discuss what happens when it all goes wrong, but as most agreements are only ever examined at exactly that time, it is extremely important that full and frank discussions take place at the outset and all of the possible outcomes discussed and agreed. The difficulties for partners in larger practices without one may be extremely hard to overcome.
Starting with the end in mind, you also have to consider who your purchaser in the future might be and what they might wish to buy. The “who” can be addressed by putting in place the structures today that will create the purchasers of tomorrow. One way is investment in younger solicitors who will be the future partners, and their retention within the practice. While many firms have structures in place for this and, indeed, this was always the traditional route for legal firms, many smaller and medium sized firms, faced with profitability or other issues, seem keener to invest perhaps in paralegals to process work. Graduates and young solicitors also seem less keen to serve their time in smaller firms for perhaps less attractive salaries or, notionally, doing less interesting work, in return for greater profit shares in the future.
The other method is to build a legal practice with real sales value. This might be by specialising in an area, or acquiring a significant market share or work type in an area or number of areas. Certainly businesses which can show recurring income streams, ideally independent of the principals, will always achieve the highest values.
There is no one answer, but, if the question isn’t asked and measures put in place, the answer that you are faced with at the end may not be one that you wish to hear.
Nothing to do?
As to how will one enjoy retirement, again the effort and planning put in beforehand will affect the answer. Finances will be a factor. I was once told “capital will never replace income”, and that is a lesson I am relearning very quickly. It would be sensible for anyone seeking to change their career to spend some time looking at their finances and to be clear that these will meet their reasonable requirements when they no longer have the same income stream.
Likewise, while the thought of long leisurely days with nothing to do seems irresistible when faced with demanding clients, work pressures and partnership issues, the reality is that most of us will become bored very quickly, faced with no new challenges. Some time spent even at the early stages, considering the structuring of one’s time after retirement and the routines that will be put into place to make it both productive (in the widest sense) and enjoyable, will be very well spent. One may also wish to consider, like a runner, a warm-down period. In the high pressure world in which we all operate, it can be extremely difficult to go from busy and stressed days, to doing little, literally overnight, and many say that this can have adverse health issues. Instead consider “warming down”, taking a period of time to gradually reduce work and stress levels. This could be some form of consultancy, some part time or locum work after retirement, or just a reduction of work in the year or so leading up to retirement.
Lastly, there are issues for those leaving the profession before retirement age that few consider. There may be a loss of status, or at least a loss of definition of who they are in society. They are no longer solicitors, professionals, men of business – what then are they? There can be the loss of a social experience: our work has taken up such a large part of our lives that many will miss the interaction with staff, clients or partners. Some may well experience feelings of loneliness without daily contact with their work environment. Routines may have been the bane of your life, but life without routine also has its issues. Again there are no simple answers to any of these questions, but they should at least be considered by those contemplating change.
While I joke with friends that I am retired at age 46, I suspect that there are many busy and productive days ahead of me. I am however extremely lucky in being able to take a little time to consider what I want to do next. The ability, even for a short period, to wake every morning and do (subject to what my wife has planned) exactly what I want to, is a gift and should be treasured.
Stephen Vallance is a former partner in Vallance Kliner & Associates, Glasgow. He is happy to undertake consultancy work. For any queries arising from this article or any issues surrounding practice management, profitability or marketing, contact him at firstname.lastname@example.org .
Stephen Vallance tells of the issues that arose when he decided to leave the law without having done much forward planning – and his advice with the benefit of hindsight (1 of 2)
I was 46 when I sold my interests in my legal practice. It was a long and much more difficult process than ever I had imagined, and I must admit that my last day “in the office” was not the day of happy relief that I had expected, but rather one tinged with some sadness for the passing of a very significant proportion of my life.
I remember in my teens telling my father that I wasn’t enjoying my law degree. I remember during my traineeship that I thought about leaving the profession and travelling the world. By the time my first job as an assistant came around I was caught up in the routines of life with a wife and then a son, so I tried to make peace with myself by planning that I would be out of law by my 45th birthday.
About a year ago I sat at my desk and realised that my 45th birthday was upon me and that I hadn’t done much about getting out. My partner and I had talked through “exit routes” several times over the preceding years, but had never been able to put in place a strategy to allow either of us to leave the practice at a time and in a manner of our choosing.
The purpose of this article is, in light of my own recent experiences, to consider many of the practical issues surrounding a principal in private practice attempting to realise his interests in the business with, hopefully, a few useful pointers on how to manage the transition. I will also attempt to identify some of the strategies that can be put in place to make the outcome more certain for those considering an exit in the future.
I have always considered myself goal-driven. Throughout my professional life I had a clear idea of how I wished to conduct my business and how to achieve what I believed to be the key objectives. Strange then that no such plan existed for my exit. They say that the only things in life that are certain are death and taxes. Retirement must come a close third. Why does it therefore seem then that so few principals in private practice have clear exit strategies?
Let’s look for a moment at the practicalities, in the absence of any other agreement, for anyone leaving their business – in essence just closing the doors and walking away. They have, amongst other things, the following matters to consider:
The staff, some of whom have possibly been with them for many years, will require due notice of termination and, of course, redundancy payments. While there are things that can be done to minimise this, there is still potentially a large liability.
Professional indemnity insurance – depending on one’s claim record, there may be the costs incurred in paying for run-off cover (which I believe is a capital expense and not a revenue one and therefore cannot be offset against income). In addition, you will need to make provision for the self insured portion of any potential future claims.
Files – they need to be maintained in a safe environment with the associated storage costs for up to 10 years.
Work in progress – this will almost certainly have to be completed, and almost certainly the government will have taxed you on it. If you leave private practice, you have no way of completing it.
Lastly, it is likely that you will still require to deal with clients’ queries and claims that arise from transactions handled by you, and therefore you will have to retain some way of dealing with these matters after you leave.
There are also a host of other possible headaches, including the cost of disposing of premises whether by sale or the renunciation of a lease (with associated worries of dilapidations etc), finalising the clients’ account, and disposal of furnishings, papers and other miscellaneous detritus acquired over a lifetime in the legal profession. For most of us who have been self employed there are of course, those final accounts and the final payment of tax to the Revenue.
End of empire
It suddenly begins to dawn on you that this empire that you have built, this machine that has provided a steady income for you and your family, may not be the asset that you thought but might in fact be a huge liability! You begin to realise that if you don’t have a strategy, you might not be able to afford to leave the profession as it will be too expensive.
The wise amongst us (of which I was not I’m afraid one) at this point might pull out their partnership agreement and sit back in the comfort of knowing that some, although probably not all, of these matters have been covered during the careful drafting of this lengthy tome. I suspect from my own investigations that they will be in the minority. Many practices today still do not have written partnership agreements or, if they do, many of the practical issues of a retiring partner will not have been addressed. Even those who have properly drafted agreements are still dependent on the partnership existing at the time of their retirement in an appropriate form. In these days of dissolutions and mergers and changing market conditions there can be no guarantees as to the future, and while partners in their more senior years may be less concerned, the more junior partners will have to hope that they are not the ones left to turn off the lights when they in turn wish to exit.
So, faced with a desire to leave, and not wishing to just close the door and meet all the potential liabilities, what can you do? For the purpose of this article I will not address the issues of those with valid and correctly considered partnership agreements. I will simply wish them the best and hope that all parties are able to honour their commitments.
Selling in a small market
What then? Well, the obvious next step is to find a purchaser for your interest in the business. This might be your other partners, or a younger solicitor within the firm, or perhaps another firm or solicitor entirely who might wish to acquire it. Sounds simple, but this has many more complications than you may have realised.
One of the first issues is that the market for legal businesses is extremely limited. At the moment, in essence only other solicitors can buy one. Therefore while your business may be extremely profitable or desirable, the pool of prospective purchasers is small. This in itself tends to restrict the price that can be achieved. Legal work also has a high degree of personal involvement, whether perceived or actual (i.e. clients believe you do all the work for them whether you actually do so or simply delegate it). Often clients relate to an individual solicitor and not to the practice as a whole. Some may even argue that when that solicitor retires there is little value in his or her client following, as they will not automatically stay with the firm.
For those in partnership the position is much more difficult than that of a sole trader. Unless all partners agree to the business being sold as a whole and all their respective needs accommodated, or unless the remaining partners wish to acquire the outgoing partner’s share, there are some very serious practical difficulties in realising any value for their share in the business. Where there is no agreement to the contrary, the outgoing partner would be faced with the equally unattractive options of attempting to sell their personal, and largely unidentifiable, interest to a third party firm; a dissolution of the partnership followed by a voluntary sale of the one half interest; or at worst a forced sale by a judicial factor.
The first option has a number of potential difficulties, including identifying one’s own clients and interest in any business name, intellectual property, capital assets etc. The second option is at the very best unwieldy and unattractive, and potentially unworkable. Least attractive of all would be a forced sale due to warring partners, perhaps involving a judicial factor, where seldom if ever is there a satisfactory outcome. The one thing that is certain is that none of these options would maximise any value in the asset being sold.
Assuming that the foregoing matters are all resolved and that you are able to proceed with a sale of your interest, there are other practical matters to be considered. Not least you need to find a purchaser for your business, then persuade them that you have something of value and that they would wish to acquire it.
Let’s consider these points in general terms for both sole traders and partners.
Do you have something of value?
Well, it’s for you as seller to present what you have in the best possible way. As the old adage goes, you never have a second chance to make a good first impression. It’s worthwhile therefore spending some time considering how to present your business to any prospective purchasers.
Accounts and trading history will be important, and so you should collate information such as trends in turnover and profitability (both gross and net), and relevant ratios of staff to fee earner etc. If there are weaknesses in your accounts, such as that you cannot show year on year improvements in profit, then address the reasons for these as part of your presentation of the figures (for example, “profits went down that year as I took on additional staff to gear up for new workflows”, and demonstrate the evidence in the following years’ figures).
Look at work types that you undertake, and the sources of that business, and try to categorise them. Can you show what percentage of turnover comes from which part of the work you undertake, how much of your business is from existing clients, and how much introduced from external sources? Are the clients that you act for all personally introduced or do you rely heavily on introductory sources such as banks, brokers or insurance companies? Do you hold a large number of wills or title deeds (although neither is perhaps as important as once they were)? Can you easily identify your clients, their current addresses and the work you have carried out for them? Are there specific areas that you are known for and that your clients require? This might be very important when looking for a prospective purchaser, as this might either add to or compliment their existing business profile. Most importantly, can you show you have work types that are recurring, and better still are not dependent on you as an individual?
Consider how your staff and, if applicable, offices might be viewed by a purchaser. Do you have key members of staff that your business couldn’t do without? Do you have members of staff who could operate your business without you? If so, do you have proper contracts of employment in force? Are your premises important to the business? Do you require a presence in a particular geographic area? Do you have a fantastic site which guarantees high levels of passing trade, or could your business operate from any location?
Just like selling your car, you need to get your business into shape for selling. You need to have a good look at it, not from your tired eyes but from the eyes of a prospective purchaser and, just like the car, you need to give it a good polish and service so that it looks in the best possible condition for selling.
Finding a purchaser for your business
To the best of my knowledge there is no dedicated estate agency for legal practices. There are a few firms offering either consultancy or employment services who will dabble in this market, but few if any have a proven track history. The one major benefit they do offer however is a degree of anonymity, a way to explore interest without making your identity public in the first place.
Alternatively, there are publications such as this Journal where adverts can be placed, but generally advertising a business for sale can have many potential drawbacks. The responses to anonymous adverts inviting prospective purchasers to reply to a box number are few, as solicitors as a group are all a little suspicious of writing to anyone who won’t identify themselves. On the other hand advertising who you are has some major worries in itself. It puts your thoughts into the public domain. Staff may become aware of your intentions much earlier than you would have wished, and you may lose key members through uncertainty while you try to plan your own exit. Clients may become aware of your intentions, thus making client retention and a smooth transition more difficult.
There is good old word of mouth. Many solicitors will have retained close contact with others within the profession, perhaps old university friends or other individuals within their faculty who might be able to act as a matchmaker. Potentially this is the best source of introduction, as people in these situations tend to have less of an axe to grind; they are assisting a friend or colleague and are probably familiar with the foibles of the parties and their businesses, and therefore have at least an idea that the match might work. They are also unlikely to be motivated by a financial commission.
There is perhaps one other approach to be considered, which is to speak to people outwith the profession but who regularly deal with it. IT consultants, suppliers, accountants etc are all dealing with a wide group of legal firms on a daily basis and might have useful information of firms on the acquisition trail.
The success of one or all of these approaches will depend on the individual’s thoughts and preferences, and the timescale to which they are working. Generally a more measured approach will bring the best results, but the timescales may be considerably longer.
Part 2 of this article will cover negotiations for the sale, what happens after retirement and some reflections on the whole process with the benefit of hindsight.
I think this is my 3rd post rambling on about the conversations I’ve had with clients over the last few months.
I try to speak with as many clients as I can, simply to get a feel for how they’re holding up, and what they see happening in the market.
Residential Conveyancing Slows Down
Last time (https://www.thecashroom.co.uk/an-anecdotal-review-of-the-market/) I reported on the conveyancing boom. But over the last few months clients I’ve spoken with have reported that things are starting to calm down. Nobody has seen the dramatic fall some feared, nor any marked increase in mortgage defaults or insolvency (“yet” perhaps!), but there are fewer instructions and fewer completions.
One client opined – “the residential guys are fooling themselves if they think this will continue – we’re keeping our costs low and our heads down”.
Personal injury clients have been hit by a “treble whammy”. First, fewer people were injured during lockdown, second, legislative changes have made it harder (although not impossible) to recover anything like reasonable costs, and thirdly, lockdown induced court delays mean insurers are much slower to settle, making it very difficult to convert WIP into cash.
One client reported they were convinced insurers were delaying payment simply to try and “starve out” smaller firms.
Some clients are moving on from road traffic claims to the “next big thing”. I spoke with one who had some very interesting ideas … thankfully none of them involved GDPR claims!!
Corporate/Commercial is “Steady”
I’ve heard mixed reports on corporate and commercial work. Some clients are incredibly busy, but there’s a worry it’s simply deals delayed from last year coming through.
Commercial Property is quiet, and there’s still a lot of worry about the future.
Private Client work is “where it’s at”
Every client I speak with who does private client work (broadly wills, trust, probate/executries, power of attorney) has had a good year. Nothing like a global pandemic to make one face one’s mortality! In fact, private client work has been an extremely good “hedge” against down turns in other areas – like a good solid bond holding in an equity portfolio!
But what I’ve found very interesting is the success of some clients in this sector, specialising in a couple of very narrow areas, and doing some really innovate things with technology to “leverage” their skills.
And finally, family law continues to outperform. Turns out being locked down with somebody you don’t like makes you want to leave them!
It’s also an area keeping a few litigation practices alive! Indeed, 2 clients I spoke with plan to open a family law practice with lateral hires (if they can find them!), again because of the “hedge” it provides against down turns in other areas.
And that’s it, a quick round up of what my sample’s saying in the last quarter of 2021.
And one more thing.
Take some time over Christmas and New Year. Another, worrying theme of many of my calls is “burn out”. We have gone through a stressful and bruising couple of years. Take time to spend with friends and family over the holidays and remember why you do what you do.
Have a great Christmas and New Year
We want to celebrate you this Christmas and show our appreciation by giving you 12 days full of amazing offers from the best law firm suppliers there are.
We won’t annoy you with daily emails (how annoying was Black Friday!) but keep your eyes open on Social Media for our daily offers.
If you just can’t wait then you can take a sneak peek at them all right now (it’s like being able to eat your advent calendar all in one!) These offers will run until the end of December.
Enter any of our partners offers for a chance to win a festive treat from Cashroom!
I won’t go on and on about the idyllic time I spent on honeymoon (it was amazing!)…I certainly didn’t spend much time thinking about work…
…but some things just make a real impression on you, don’t they?
We stayed at two different hotels. One was a tiny, boutique place with only about 30 guests at any time and a small close knit staff. One was a bigger, lovely hotel with loads of staff run in teams depending on the section of the hotel they were covering.
The thing that stood out was the service quality from every single member of staff at both hotels. And while the hotels weren’t in any way connected they shared the exact same mantra- when we thanked them for a lovely meal or for a great cocktail the constant refrain from both sets of staff was “If you are happy, we are happy”.
We made friends with some great people who worked at the hotels and had some really good conversations with them. Mostly about football, I must admit. I asked one of them about the “If you are happy, we are happy” mantra. He said it was simple. If customers are happy then things are easier for all the staff. An unhappy customer experience takes up time and causes stress for both parties. The unhappy person is unlikely to recommend the hotel subsequently and may in fact give bad feedback on review sites.
Sometimes we can forget that service quality and a happy customer is such a valuable thing, not just from a retention and revenue perspective.
It makes for a more harmonious working relationship with the customers, and also sets up the potential for the client to recommend our services to others. It’s not just about things being “ok”. It’s about making the customers truly happy. Going that extra mile brings reward, but it’s fair to say that while making your customers happy is just the right thing to do, it certainly benefits your own staff in more ways than simply client retention.
Empowering your staff to provide excellent service also enables them to create a happier working day for themselves, with fewer issues and complaints. It really is a win/win.
At Cashroom we survey our clients every month to create an NPS rating that we can track. From this we can look to learn. We won’t always get things right. However, we want our clients to tell us what we could do better. We can then seek to make them happy.
Providing good service is not a new or startling concept, but thinking ‘why’ you should do it can in fact lead to a happier workforce, as well as a happy client.
I’m told by my daughters that I am “the most impatient person in the world”. Now, allowing for some teenage hyperbole, I would admit to there being some truth in that!
I get frustrated easily when things don’t work.
As I get older, I find myself shouting at inanimate objects when they don’t cooperate. I have always hated inefficiency. If I’m busy, and there is a process that slows me down, it drives me nuts.
Now of course, all business need processes. There needs to be a way to manage and control complex tasks, making sure they are done safely and correctly.
However, there needs to be a balance. Between making sure complex task are completed accurately, while at the same time allowing those people running the process (or interacting with it), to get on with the job.
What I’ve found in business, and particularly in law firms is that processes, specifically accounting processes, are poorly designed and lead to confusion and frustration.
The problem is that process design is a skill. It takes time and experience. A deep understanding of the rules around which the process is built. You need a knowledge of “best practice” from which one draws inspiration. Very often processes are built in an ad hoc way, bodging them together with duct tape and string.
And it’s easy to understand why. Most business process are built over time, with small incremental changes implemented to “solve” today’s pressing problem, without a full review of the bigger picture, or an understanding of the impact that small change might have. Over time, the process become so complex, with so many exceptions and “work arounds” that it leads to inefficiency and frustration.
Processes are often created for the benefit of only one part of the business. A process designed around the accounts team which makes the fee earners like harder – or (more commonly I’m afraid), a process designed around the fee earners, which makes the cashiers life hell!
The ideal is that business processes are designed (or redesigned) from scratch, with a clear focus on what’s necessary, a full understanding of how the firm works, a desire to balance efficiently (not the same as equitably!) the admin burden on everybody who interacts with that process, and the will to drive the change program necessary to implement the new process.
It takes time, it’s difficult, and often infuriating. However, if it smooths out the process, leads to more efficient workflow and reduces delay and frustration – it’s worth it.
But best of all, it stops old blokes like me shouting at their computers!