Your firm’s finance function sits at the centre of your firm’s risk profile.

There are many different elements of risk, which means that it is an area ripe for improvement if you can identify those problems. Improvements in your risk profile can lead to efficiency savings, cost savings, lower PII premiums and better nights’ sleep.

See how many issues you can recognise in the following fictional account.

A day in the life of a Bloggs & Co’s finance function

Bloggs & Co is an average firm in an average town. They have a mixed client base of private individuals and businesses. They operate across three small offices. Some clients are local, and some are from other parts of the UK. [Risks around AML processes- whose responsibility is it within the firm to make sure there is compliance?]

The firm’s finance function is based in their main office. There is a senior cashier, Maureen, who has no formal qualifications, but has been with the firm ‘forever’. She has done the cashiering for thirty years and was the only one who knew the passwords for the old practice management system. [Many firms have this situation with passwords, and with one person being the only one who can make the finance processes work]

Last year the firm changed system and Maureen has struggled. [System change can prove stressful for the finance team, as the system is often chosen for reasons related to case management and we hear of cashiers receiving little training, or in some cases simply being resistant to change].

She now keeps password details on yellow stickers next to her screen. [Clear security risk, but surprisingly common] The new system is cloud based and many data reports are available, however Maureen tends to provide info to the partners using Excel spreadsheets. It can take several weeks to pull the data into her old spreadsheets but she prefers to do it that way. [Inefficient process and providing the Management Information to the partners so slowly makes the information far less useful]

The changes to the Solicitors’ Accounts Rules recently caused some stress for Maureen and for the COLP but she assured the COLP that since they had been compliant before the regulation changes, they would be compliant now. [Wrong! And from what we have seen of Maureen, are we sure she is right that they were compliant beforehand? It’s not necessarily her fault- she may have little or no knowledgeable support within the firm]

The firm hired a junior cashier six months ago to support Maureen. They advertised in the local press and the managing partner interviewed the candidates. [How did the MP assess competence as a cashier? How did the firm assess integrity?]

The new cashier is called Joe, and Maureen finds it very time consuming to train him, especially when it comes to the accounts system. She has shown him how to access the bank and make payments, as that is one area in which she can get completely swamped. [Having someone new and junior able to make payments puts the firm at huge risk of either mistakes or even internal fraud. Also, Maureen will find it difficult to train on the system as she doesn’t understand it herself.].

The fee earners email the client and office slips to Maureen and Joe, and occasionally partners come into the room with paper slips when they want to jump the queue. On a Friday they often have to field emails, visits and even telephone calls from clients chasing completions and providing information. [Huge inefficiencies here which can affect cost effectiveness and indeed service for the firm’s clients with eg delayed completions. Also, using email to communicate with the accounts department is fraught with cyber risk, especially when the team is swamped and more prone to errors]

This year the firm has of course coped with Covid restrictions. Initially their work dropped off, but there has been a huge surge of conveyancing work since July. When the first lockdown occurred, Maureen was sent to work from home, however the firm’s technology and processes didn’t work for her. Her home wifi kept crashing as she tried to set up payments. The partners who were used to giving her tasks face to face struggled to implement remote working. Supervision and ongoing training of Joe was almost impossible. When things eased the firm decided to move the finance function back into the office, seating Joe and Maureen at either end of their room. [Many firms had the same problem- working securely and efficiently away from the office is not as easy as simply sending people home with a laptop]

Today Maureen feels really tired and her coronation chicken sandwich for lunch was strangely lacking in taste. Joe seems to have an irritating cough too. [The risk of the resource within any function of a law firm becoming unwell is always there, but of course even more so at present- what if the team or key individuals need to isolate rather suddenly?]

Hopefully this article will have raised some interesting topics for discussion. Next month I will run through the ways in which these risks and problems can be mitigated and avoided.

Alex Holt, Director of Business Development

Cashroom Ltd 

Over the last few weeks, I’ve spoken to a number of client firms about their experiences of 2020, and where they see the market going over the next few months. I won’t pretend this is a scientific study, or that it has a huge sample size (about 20 individuals in 20 firms) but I found it interesting, and I hope you do too.

My first take away, was how resilient our client firms are. While a few found the first lock down, challenging, all of them managed, with a mixture of home working, and minimising visits to the office.

The 2 big issues were, access to technology, and access to their “files”. Firms who had invested in cloud computing (most of them) and had digitised their paper files (far fewer) had a huge advantage. Experience ranged from simply going home and “logging on”, to panicked calls to IT support, and loading paper files into their car.

Of course, not worrying about their finance function helped!

Next, most took advantage of the furlough scheme. It was a challenge for some. For a number 80%  of their furloughed employees’ salary was less (in some cases, significantly less) than the maximum grant. Some topped up the government scheme, to pay 100% of the furloughed staff members salary, but most didn’t.

Some firms took out a COVID Business Interruption Loan. Interestingly, most of those who did, found they didn’t need it, and are treating it as “low cost working capital”.

Which brings me to business activity.

This was more varied. Generally speaking, there was a short sharp shock in the second quarter. Revenue fell, in some cases dramatically, but mostly far less than people expected. Broadly the message was “it wasn’t as bad as I thought it would be”.

Different sectors held up more than others. Matrimonial and private client work (excluding conveyancing) held up best. Firms with strong matrimonial practices have remained busy throughout the year (a cynical person might correlate that with lockdown!), but general private client work was also strong. One person commented “there’s nothing like being faced with a global pandemic to make one face one’s own mortality” when reporting an increase in enduring powers of attorney, and estate planning. Sadly, a few have noted a marked increase in executory and probate work.

Commercial work was more mixed. Most deals froze at the start of lockdown. Some never came back, and very few deals were initiated in the 2^nd quarter. However, in the third quarter many of the deferred deals came back, and some of our commercial firms have been very busy through the summer.

Interestingly, some commercial firms report their clients seeing the impact of the lockdown as a buying opportunity. One in particular is extremely busy with Commercial Property clients “recycling their cash” (the client’s words), into other investments. From a few firms the message I received was that there is a lot of money “out there” looking for a home!

Residential Conveyancing has had the greatest roller coaster ride, from “falling off a cliff” in Q2, to “I could be working 24hrs a day 7 days a week if I wanted to” in Q3. However, it’s fair to say that the residential property lawyers I spoke to are the least confident about the next few months.

Other more “random” observations.  Agricultural work is booming – apparently “farmers have buckets of cash” at the moment. Insolvency work is very quiet …… but “watch this space”.

Which brings me to the next few months.

As I mentioned above, residential conveyancing lawyers are nervous. There is normally a dip over the holiday period, but the expectation is that with increasingly sever lockdowns, and the expectation of increased redundancies, that will be exacerbated (one person referred to the Furlough Scheme as the “Redundancy Deferral Scheme”!). A number of people reported mortgage lenders dramatically tightening their lending criteria, making getting a mortgage much harder.

Firms with a broader private client offering (matrimonial, wills and executory/probate) feel they are in a better position to weather the downturn. The few Commercial Property lawyers I spoke with, were “cautiously optimistic”. One pointed to “turmoil” in the letting market creating a lot of work.

Commercial Litigators and Insolvency Lawyers are “biding their time”!

The consensus is still that Q1 of next year will be hard, possibly very hard. I’ve written about his before. The expression I’ve heard more than once is that it’s when the “chickens will come home to roost”.

I’m not going to disagree with that assessment. The economy is in a bad spot, and the public finances are in a worse one …. but …!

There are 2 things beginning to make me think optimistically about Q2/3 next year.

First are the increasingly hysterical reports about a Vaccine. This morning Matt Hancock opined that most folks should be vaccinated “sometime after Easter”. For once the hype might be real. I hear from friends in the NHS that planning for distribution is underway, and my wife (a Doctor, and possibly the most cynical person I know) is surprisingly optimistic! A 95% effectiveness rate is extremely high (vaccines in common use, e.g. Cholera, are far less effective), and with  the “Oxford” vaccine reporting a 70-90% effectiveness, we have one that is much easier to manufacture and store than the others.

Second – as with all down turns, there will be winners and losers. No doubt some sectors, and many businesses will be badly affected. However, a recurring theme in the conversations I’ve been having is that “there is a lot of cash out there”. Which makes absolute sense – look at the hole in the public finances? Very broadly speaking, the government has borrowed billions of pounds and given it (by way of grants and loans) to people. Also (and I’m sorry, but this is a little “dark”), the 50,000+ excess deaths will dramatically accelerate the passing of “inactive” wealth, to a younger generation where that wealth will be much more active.

What connects these 2 things – confidence!

The biggest problem for individuals and business over the last few months has been uncertainty and a collapse in confidence. Everybody has put off significant purchases and investments because of uncertainty, and a lack of confidence. The result – a lot of people are sitting on cash – remember the firms who have their CBILS still sitting in the bank, and all that cash “looking for a home”?

But with an effective vaccine in reach, and “the end in sight”, that confidence will return … and that cash will be looking even harder for a home.

I hesitate to predict a 2021 summer boom – I’m not an economist (!), and public debt is eye watering, but ….. there will be a lot of people, with a lot of cash, looking to “get back to normal”.

Remember the “roaring 20s” (well, at least,  do you remember hearing about them – even I’m not that old!). Well, that boom happened right after the First World War …. and the Spanish Flu pandemic!

David Calder, Managing Director

Cashroom Ltd

I promise I didn’t spend my honeymoon in Cornwall thinking about the legal sector and business generally. That would be tragic, and may well be the sort of thing that would lead to a very brief marriage.

However, when I got back to my desk and the joys of my working life a few things did occur to me.

We can fall into a trap- looking in very insular ways at the sector we serve, at the methods and processes which are specific to our market. I believe that in doing so we are missing out. I think this may be particularly the case for winning and servicing new business.

Think about client service and parallels with the hospitality industry who must surely have had things tougher than most other sectors.

Booking a table – almost every restaurant we wanted to visit had very slick online booking systems. They were easy to use, and provided a very quick and certain confirmation that we had a table. There was no need for ‘human’ interaction and it made me wonder whether customers might value the ability to book an appointment slot online, when googling legal services in an evening.

Surely firms could use a version of this method to engage with existing clients and potential new customers. The firm would specify slots of available time, and the load could be shared across a number of fee earners. I know that when booking a table, we were far more likely to book at our convenience, rather than having to call during specific hours to speak with someone. I suspect there is a large portion of a firm’s potential market who would think similarly when shopping around law firms to acquire services.

Which brings me onto customer reviews. It’s not so long ago that price transparency on websites was the big new thing for lawyers. But surely more than ever, the ideas from online shopping have relevance for the sector. The parallel with a service industry like hospitality is that service and customer experience play a key part in reputation. Every firm can perform its core legal business. They can write a Will. Or sell a house. Or litigate. However the differentiator is often not about price. What makes a firm stand out  is how well they perform those services, what the customer experience is, and what the firm does to capture reviews and publicise them to win work.

When we were looking where to eat we would want to view a clear website, with the detail we needed (menus usually, and lists of cocktails!), and we would always consider some of the recent reviews and star ratings.

Finally, let’s think about that customer experience in more detail.

So we’ve gone online, searched for our restaurant (or lawyer), looked at their website, read their reviews, made a booking. In we go.

The variety of experience from that point on is huge. Someone who has booked a table (or decided to meet a lawyer to discuss a will for example) has only just started their journey. How are they greeted on arrival? The parallel here is the difference between being left standing with a mask on in the foyer for twenty minutes or being shown by a friendly and helpful person straight to your table.

Does your firm have processes to deal with people both remotely and face to face which make the client feel valued, not just on their first encounter, but then onward throughout their dealings? And at the conclusion do they look at the bill and say “the main course was expensive for what we got” or do they wax lyrical online about what incredible service and value for money they experienced?

One thing that law firms don’t need to worry about is the upset caused by eating at loads of these establishments and realising that the major efforts to get fit and lose weight before the wedding were decimated by the wonderful meals and drinks we enjoyed. I guess that’s another story entirely!

Alex Holt, Director of Business Development

Cashroom Ltd

Gareth Jones from Easthams Solicitors discussed his Law Firm Insights with Alex Holt of Cashroom. Easthams are a firm located in Blackpool dealing with Conveyancing, Personal Injury and Road Traffic Accidents. Easthams are a valued client of ours!

Last week we set out the first 5 benefits of Management Accounts. Continuing with that, here are another 5 to round out our Top 10!

6. Allows Monitoring of Working Capital

It is easy to see how much cash you have in the bank from month to month, but much more difficult to monitor how much your clients owe you, how much you owe creditors, and of the monthly movements in those figures. An increase in debtors, without an increase in turnover can be an early warning sign that clients are taking longer to pay, and that you need to invest some time in chasing payment of your outstanding fees, or using an outsourced Credit Control service.

7. Helps Motivate (some) Managers and Staff

It can sometimes be helpful to share management accounts with key members of staff, so that they can easily see the reason why they need to control costs, increase collection of fees etc. Accounts can be a nice visual aid to focus performance, and can also be split into specific areas if you only want to show staff particular areas of the business relevant to them. However, you should note that not everyone will be interested in numbers!

8. Avoids Surprises at Year End

Usually business owners will have a reasonably good idea of turnover, and a grasp of regular costs, however it can be difficult to monitor varying margins, exceptional costs, one-off projects and anything else out of the norm. It can also be difficult to factor in accounting concepts such as accruals and depreciation. This can mean that the year-end results are far from what’s expected. If a business has made an unexpected loss it can come as a nasty shock. If the business has performed much better than expected, it could result in an un-planned corporation tax bill.

9. Helps Identify Seasonal Variances

Traditionally, some types of firm will be busier at certain times of the year, and quieter at others, so need to plan ahead for that. Usually (albeit not in 2020!) conveyancing firms are busier in spring and autumn, and monthly accounts allow you to track and analyse every individual month, so that you can clearly see the impact of this and plan for future years accordingly.

10. Helps to Plan Dividend Payments, Drawings and Other Remuneration

Some business owners will choose to take their earnings in dividends or drawings rather than salary. However, for less established or less profitable companies this will need careful monitoring, to ensure too many dividends or drawings are not taken through the year. For other businesses, it may be that through monthly monitoring, it is perfectly possible to take more drawings each month.

There are of course many different benefits, and these will vary firm to firm, but hopefully this has provided some food for thought in terms of running your business with the benefit of information allowing you to do so with more confidence.

Gregor Angus, Senior Business Development Manager

Cashroom Ltd

Every limited company must file a set of accounts with Companies House following the end of each financial year. That is a statutory requirement, and is seen by some as a necessary evil in exchange for some of the benefits of being a limited company entity. However, far from just being a box ticking exercise, a set of accounts can provide you with valuable information about your business and its performance, allowing you to make better decisions and strategically plan for the future.

The benefits of Accounts can however be limited, if you only see them once a year. Many businesses therefore produce monthly management accounts. For smaller firms looking to control spending, this may seem like adding an unnecessary cost, but we would contend that the benefits nearly always outweigh the expense. Here (in no particular order) are our top ten reasons why:

1. Compare to Budgets and Forecasts

Usually business leaders will have an idea of where they want their business to go, and how it should perform. Often the reality is very different from expectations though, and the difficult part is spotting where those differences stem from. Budgets and forecasts can easily be integrated into management accounts, providing a visual aid to easily see the causes of any variances. Our management accounts packs are specifically designed to be very visual, with graphs and charts to easily see where you are against budgets and forecasts.

2. Help to Control Costs

A monthly set of accounts makes it very easy to compare costs month to month, and to expectations or budgets for the month or year to date. Often savings can be found by analysing costs in more detail, and promptly. It allows you to pick up on small variations against budget, which over the course of a year would add up to a significant difference. It also helps to set out all your various outgoings/costs in a list that is easy to review, rather than trying to do that in your head. This situation has been even more apparent in 2020 where all businesses’ are trying to review their costs, and those with management accounts have a very easy place to start.

3. Can be Used to Obtain Finance / Extent Credit

If you are looking to raise finance from a bank or investor, continue or increase an overdraft, usually a good business plan, backed up by forecasts and accounts, can dramatically improve your chances of success. However, this can be difficult to do if you are using a set of accounts that were produced 6 months or more ago. This is especially true if the business performance has changed significantly since the last financial year end, or in the present situation, where the whole world has changed significantly since the previous year!

4. ‘What Gets Measured, Gets Done’

It’s a bit of a cliché, but it is true! Relying on annual accounts or data is not very useful in measuring realtime, or within a useful timeframe, what is going on in your business. You can use management accounts to help set measures or targets that would be beneficial to your particular business, and then use the monthly reports to measure where you are against those. That way, you are using the data to refine what you are doing, change tact completely, choose what you should be doing more of, less of, or even not doing at all!

5. Helps with Cash planning

Remember cash is not the same as profit. For example, some firms may collect a payment to account from their clients up front, but obtain credit from suppliers, or have chosen to defer payment of VAT. In the gap between receiving cash up front from clients, and paying suppliers or deferred VAT, the company may have other costs to pay out, such as wages and monthly bills. Cash in the bank can sometimes give a false sense of security, whereas monthly accounts will make it easy to identify problems or gaps in funding quickly, so that you can look for external funding or reduce costs before the problem becomes critical

Next week 6-10!

Gregor Angus, Senior Business Development Manager

Cashroom Ltd

So we are now well into lockdown 2 in England but hopefully it is not quite as drastic on working life as the first time – thankfully there is less home schooling, banana bread making and Joe Wicks too!  Wales has come out of their ‘circuit break’ and the central belt of Scotland is working under Tier 3 restrictions. Back in March, EVERYTHING stopped so what about this time?

It appears that for the legal sector there is a lot of good news.

Robert Jenrick, Secretary of State for Housing, Communities and Local Government took to social media to reveal that the housing market would still be able to operate.

In a tweet Mr Jenrick wrote:

Housing market update ahead of Thursday’s measures:
 – Renters & homeowners will be able to move
 – Removal firms and estate agents can operate
– Construction sites can and should continue
– Tradespeople will be able to enter homes
– But all must follow the Covid safety guidance

The market is still facing an unprecedented busy time with buyers desperately trying to beat the Stamp Duty Land Tax SDLT holiday deadline so the ability to keep operating will be welcomed.

More good news for the profession is if it is necessary then solicitors can meet clients. The Law Society said it has met with officials from various government departments this week and secured agreement on interpretation of the rules that law firm offices are able to remain open during this period.

Solicitors and law firm staff should work from home if possible but if this is not possible, they can leave home to work in the office. Solicitors must try to see clients remotely and deliver services virtually, but again if this is not possible then face-to-face meetings are permitted.

People are allowed to leave their home to fulfil a legal obligation, including attending court, or to participate in legal proceedings. They can also access public services such as asylum or immigration advice or services provided by charities and voluntary organisations.

So to summarise the stress of everything absolutely shutting shop is not there this time.

However how are firms and business owners coping?

You may have seen Philip Armstrong a conveyancer solicitor in Northern Ireland blow off some steam on LinkedIn last week. My friend at Todays Conveyancer told me to give it a watch and it really struck a cord with me how lawyers are struggling and how they seem to bearing the brunt of a lot of stresses that everyone is having at the moment.

While business is continuing it is at a much slower rate than usual and clients seem to really be taking this out on their lawyers. Some clients…and I stress SOME…are raging! They are fed up with restrictions/worrying about family members/lacking social contact/may have financial worries/work stresses and at the moment that is being taken out with anyone who listens to them – their lawyer! Areas such as conveyancing which can be emotive at the best of times really seem to be taking a kick from clients at the moment!

Give Philip a watch and a follow, he has published another video since then and if the video gives you nothing else other than realising you are not alone then I hope that gives some comfort this year. It is also quite nice to see and hear from other people – even if it is on a video!

Now I am off to do a Joe Wicks (I lied, I’m not fed up of him yet!)

Emma O’Day, Head of Marketing and Communications

Cashroom Ltd

With apologies to Steven Spielberg – “just when you thought it was safe to go back to the office”, we’re all back to lockdown.

With our office in Lancashire in Tier 3 lockdown, and our office in Livingston under the Scottish equivalent, we’re all still working remotely.

We had planned to reopen in October, but have recently told our staff not to expect to be back working “in person” until April next year. Pessimistic? Perhaps, but one thing that makes lockdown harder is uncertainty. How do you plan your life, if you don’t know from one month to the next whether you will be at home of in the office? By ruling out a return to the office for 6 months, it lets people plan a little bit further ahead.

So, like many people I’m going into my 8^th month of working from my “study” at home. And when I say “study”, I really mean the kids old “playroom”, complete with pictures on the wall and Winnie the Pooh lamp shade!

But is it really the same as last time?

Of course not! We’ve done it before. We know it works, and we’ve learned the lessons. We’re better prepared for remote working, and it’s not nearly as scary as it was in March.

Speaking with solicitors across the country, I find more of us ready to embrace remote working, and alternative working arrangements. We’ve noticed a big increase in firms looking to outsource their accounts function. As usual, there are a number of reasons, but increasingly there seems to be 5 main drivers

• First, convenience – With The Cashroom you don’t need to worry about whether your account’s team will function if you’re working remotely – it already does! You can go in and out of lockdown as many times as you need to, without worrying about your accounts team.
• Second, security – you don’t need to worry about the security of email communication or whether somebody hacked your cashiers home computer. All our staff operate over a secure VPN, using our Portal, which undergoes regular penetration testing.
• Third, quality of information – if things are tight, it’s critical to know exactly where you are financially, and where you’re going. Previously smaller firms “skimmed” on management information. Not anymore. Our accounts team are extremely busy, producing management accounts, and most importantly, forward looking projections. We can provide quality financial information to firms who can’t afford to employ a Finance Director.
• Fourth, restructuring. Lockdown has forced many firms to look very carefully at how they work, and how they’re structured. We work with around 200 firms across the UK, and have unrivalled expertise and experience in how to structure a law firms accounts function for maximum performance and efficiency. Our projects team is helping many firms redesign their systems from the ground up.
• Finally – retirement. A lot of people have reassessed their work/life priorities during lockdown. A number of firms have come to us because their cashier has decided to retire.

Whatever the reason, there has never been a better time to outsource your accounts function to The Cashroom!

David Calder, Managing Director

Cashroom Ltd

It goes without saying that 2020 has been a challenging year for us all (to say the least!).

But for those businesses that have been able to adapt their strategy, operational model, or pivot their business successfully, and those who have been fortunate to be in sectors that have largely continued with ‘business as usual’, now might be the perfect time to kick off some Corporate Social Responsibility (CSR) initiatives. Often seen as a ‘nice thing to do’ but only ‘when we can find the time’, I would encourage you to challenge that mindset.

CSR activities, at any time, really can be a win:win:win!

Let me explain, using our business as an example. We select a Charity Partner of the Year, and in 2020 it is Thrombosis UK. This is a cause very close to our hearts here at The Cashroom – a member of our team, Emma Collins, very sadly passed away in 2019 from the condition. Emma was a Cashier in our Skelmersdale office, and an extremely popular team member. In honour of Emma, choosing Thrombosis UK as our charity partner for 2020 was a unanimous decision amongst the Culture group.

During October, we are aiming to walk, cycle, run, golf(!) or use any mode of active travel the 201 miles between our two offices. Our staff are undertaking the challenge either in their teams, or individually, to try and raise lots of money for this cause. We will also be doing a raffle draw, and a ‘Fancy Dress Friday’ on 30 October. So, first and foremost, undertaking the fundraising challenge will benefit Thrombosis UK, and assist them in funding the fabulous work that they do. A Win for them.

Secondly, our people have really enjoyed getting involved in the charity initiatives, and that’s even before Fancy Dress Friday! It has brought people together, positively impacting staff engagement, raised awareness of the important health messages from the charity. Also encouraged our staff to stay (or get more) active as the weather turns a bit worse, which has many positive outcomes on physical and mental wellbeing. A Win for our people.

Finally, it is worth mentioning for those who think CSR is all about giving time and money away, it has also been a Win for us as a business. The various activities have raised our profile, and led to increased engagement with clients, suppliers, strategic partners and other stakeholders. People generally like to support good causes, and those trying to help raise funds for those good causes.

So, I would encourage you not to write off CSR just now, but to embrace the opportunities it brings.

Charities have been hit particularly hard this year, and for those able to do so, I would encourage you to support them, even in a very small way if you can. On that note, if anyone would like to donate to our challenge, the link to our JustGiving page can be found here. Even donating the equivalent cost of a take away coffee would be very much appreciated, as every little bit really does help. And I’d be more than happy to return the favour in the future!

Gregor Angus, Senior Business Development Manager

The Cashroom Ltd

Cashroom is not only a legal cashiering company. In this video you will find out more on our technology capability. Chris details where our Portal came from, where it is now, open banking integrations and the introduction of Kanbaro Directors to Cashroom.

Asking a lawyer whether they know what they are doing might seem a little odd. Not an approach likely to endear me to lawyers in general! However, having been a lawyer some years ago, and a partner at a couple of large law firms, I do know that it’s a valid question.

One of my old firms was a leading light in the personal injury sector. I therefore had a ringside seat as the Chief Executive had numerous ding dongs with the claimant department over his ideas for new ways of running claims. This was the early 2000s and his ideas were, at that time, somewhat radical. The firm was one of the first to create an approach based very much around technology, case management and PROCESS.

The mantra which irked many of the solicitors in the claimant department was “What you do is a process. It’s not complicated.”

Many of the lawyers were horrified. The very thought!

But in the end, it was true. The firm took the time to understand the elements of their process, supported it with the right technology, and ended up with a model which is now familiar for volume businesses especially – teams of more junior people operating cases on sophisticated case management systems, with a senior person overseeing each team. Twenty years ago, this was revolutionary thinking.

Fast forward to the present day and many firms (but not all) adopt a variation of that approach. They completely get the concept of ‘right person right task’. Often that is driven by more detailed billing information which means that a client would see if a partner’s hourly rate was being charged for something which could have been done by a junior.

However, a far smaller proportion of firms consider other operational areas of their business in the same terms of process and efficiency. The finance function of a firm in particular is the most often neglected in this respect.

It lies at the core of the firm. It carries the highest risk elements in terms of internal and external fraud. In terms of potential negligence, efficiency and therefore client service. Also, in terms of the data accuracy and interpretation required in order to effectively run the legal business.

It is frequently an area of the firm which the lawyers do not understand. Cashiering is a dark art which requires significant expertise, and even more so as it now interacts with the technology utilised by the firm. The practice management system, so often seen by the lawyers as simply a case management tool, carries the accounts element which, both for compliance and risk avoidance, must be operated efficiently and accurately.

This is more relevant than ever in the present Covid driven circumstances. Is the firm’s remote or disrupted operational model now handling client money optimally? Safely? Efficiently?

We have seen a trend developing. It used to be the case most often that forward thinking firms approached us when their incumbent cashier was leaving or retiring, seeking a different way to resource that function. What we are now seeing is an increasing number of firms, some of them very large, approaching us to carry out a review and redesign of their finance function. It forms part of a general move towards reimagining the delivery of legal services generally. It isn’t just traditional law firms either. Some very big ABSs are looking at it from a ‘blank sheet of paper’ perspective. They want to get everything right from the start.

In all cases, these forward thinking people are looking for an assessment of what they do and how they do it, and whether they could be doing it better. And so, back to my opening gambit…I think it’s actually a fair question. Because many lawyers and legal businesses are now in fact asking themselves that very question…”Do we know what we are doing?”

Alex Holt, Director of Business Development

The Cashroom Ltd

So, maybe I was wrong?

I’ve written a few blog posts on how the COVID Lockdown is affecting Commercial Property in general and bricks, and mortar retailers in particular. It’s fair to say, I’ve been a bit down on the sector.

However, a week or so ago the Issa brothers, backed by TDR Capital, bought Asda from Wal Mart for £6.8b. What’s more, they have pledged to invest £1b in Asda over the next 3 years. The Issa brothers made their billions through EG Group, which owns almost 6000 petrol stations across 10 countries.

That must bring a smile to the face of commercial landlords. If somebody is prepared to make that sort of investment into the retail sector, and into a business that has such a massive retail “footprint”, maybe it’s not all “doom and gloom”.

So, “shrug” what do I know….! Looks like some far cleverer businessmen than me see money in traditional retail, which should, in turn mean rents will continue to flow, and values hold up.

But, here’s a thought …. what if their plan isn’t traditional retail?

Apparently the £1b investment is earmarked for “convenience and online operations”. Asda’s online presence has doubled since the start of lockdown. So that bit makes sense, but the interesting bit is the “convenience operations”. I suspect this means that, very shortly, Asda will be opening small footprint convenience stores on petrol station forecourts. And I can think of 6000 potential sites!

But what about the huge Asda mega stores. There’s one not far from where I live, and it’s cavernous. But again, a move away from “traditional retail” may be on the cards.

First, there is a lot of space that could be used for fulfilment of online orders, and “click and collect” fulfilment of e.g. clothes.

In addition, recently Asda’s chief strategy officer, Preyash Thakrar said

“Our partnerships strategy is focused on making our busy customers’ lives easier. That means offering convenience when they visit our stores by bringing in complementary brands to help them complete more shopping missions in one location, and convenience that makes our great value products more accessible in local communities.”

So, rather than filling out their mega stores with Asda products, there will be a selection of alternative retailers, working in a partnership with Asda, essentially subletting space in their stores. This will benefit from EG Groups experience of setting up franchises in their petrol forecourts.

David Calder, Managing Director

The Cashroom Ltd

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We have just completed our 6^th month of working remotely. In terms of the service we deliver to our clients, this has been brilliant and our business model has proven we can function 100% without an office. We have such an amazing team, everyone has really pushed through during this strange time. The biggest problem arising from remote working can be the lack of communication and the impact on company culture. We are keen to not let these become a negative for our staff at The Cashroom.

So what about your company culture?

In an office it is easy with everyone in one place to talk about values and have them on posters all over the walls but how do you motivate staff who are not only all working remotely but who are also living through a pandemic?!?

Before you think “pah! I have enough to worry about right now without adding my business culture to the list”, please remember company culture is vital. According to a Glassdoor survey, 56% of employees find a good workplace culture to be more important than salary.

Values

Having a clear set of values can really help direct the culture in your business. Think about what is important, what are the principles you want to drive your business – teamwork, trust, fun and innovation are popular themes in company values. We already have company values but we are taking this time to look at them again – does everyone understand them? How do we communicate them more effectively? How do we integrate our values into part of our everyday work?

Peer to peer recognition is important. We have value awards where staff nominate those they feel have demonstrated our values through their work. We celebrate this quarterly as a whole company. It feels good being recognised, and we make all nominations public so even those who don’t win see that someone has nominated them. These are a great morale boost and are a time to all come together.

Communication and Values

You need to document your culture and publish it. If you are bringing in new team members during this time (some businesses are actually growing at the moment!) then it is really hard for a new employee to understand a company’s culture. The document should be clear about expectations, how performance is measured, how you assess employees for cultural fit, and the like. No detail is too small. Look up any successful business and you will see their values visible in everything they do, Netflix, Air B n B and I can’t leave out Google. Check out Mills & Reeve who came top for culture with a score of 94% in RollOnFriday Firm of the Year survey.

Take your culture public. You can put a culture deck together and publish it on your website. Have your values on email footers and social media. This is a perfect way to attract the right candidates to your business.

Staff interaction

Always encourage open communication, make everyone comfortable with video calling. The more open and transparent you are then the more your team will be with you too. You want to encourage an environment where everybody is contributing, not just the loud extroverts amongst your team.

Take time to learn about everyone. In an office you get a sense of who people are, without even trying. This is hard remotely as you aren’t sitting chatting in the kitchen or at the printer. Something we are doing is sending short virtual surveys out to staff with a few short questions, favourite tv programme, do they do sports, role in the company and we’re publishing these. We hope these generate some conversation which will really help grow a positive company culture.

A tool such as Slack or Teams is useful too. It can act like your office coffee station, where the random chats happen, there can be some banter, jokes and chat about the news – people love adding GIF’s and memes here too.

I’m going to say it again – KEEP COMMUNICATING!

It all boils down to this, culture will fail or thrive purely on communication. We set aside time every week to dedicate purely to a culture group. 30 minutes will suffice and include as many team members as possible.

Measure it. Send an employee survey every month or quarter to see how you are doing and gauge how staff are feeling.

Keep going!

Company culture should be constantly reassessed as you grow or change as well. Don’t just spend copious time on it, and then shelve it somewhere inaccessible to everyone. In order to grow a positive company culture with a remote team, you need to continue to monitor your culture and values, and never stop.

Go create something positive from 2020 and have fun with it!

Emma O’Day, Head of Marketing and Communications 

The Cashroom Ltd

Today I dropped my daughter off at the local train station. We live in a smallish town within commuting distance of Edinburgh. “Normally” the station carparks are chaos, with all spaces full, and people resorting to leaving their cars on the grass verge. This morning (at about 0830), it was empty … well not empty, but there were far, far fewer cars.

It really brought it home to me how things have changed. It’s been noted elsewhere, but the world of office work has changed fundamentally.

A recent survey by Morgan Stanley, reported that, in August this year, only around 50% of people in five large European countries spend 5 days a week in the office. In the UK the number was only around 30%, with over 40% spending 5 days a week at home.

The jury is still out on how that will impact productivity, creativity and company culture (for example, Jack Dorsey, the boss at Twitter has said his employees can work at home “forever”, while Reed Hastings at Netflix thinks working from home is a “pure negative”. Most people tell you they are more productive at home, but that creative output, or “collaboration” is more difficult, and benefits from face to face meetings.  There is some evidence of increased efficiency, but interestingly, less evidence that centrally positioned, densely populated spaces (i.e. offices) help with the generation of ideas.

But the rights and wrongs of it are somewhat academic (!) – the fact is, it’s happening.

Three things stopped it happening before, first was that until it was forced on us, nobody was quite sure it would work … well, it does! Second, we were worried about what our clients and our employees would think. Well, because it was compulsory, nobody cares about that anymore! Finally, there was some investment involved (e.g. laptops), but because of lockdown, we were simply forced to make it.

But will it last? Will people continue to want to work from home, even when we don’t need to?

At the Cashroom, the biggest downside is our staff miss the social interaction of the office. They miss the chat, and they miss their friends. The biggest challenge for us (and I would suggest all firms contemplating long term working from home, or a blend of home and office), is how do we address that?

I would love to hear your thoughts on this in the comments.

But, looking longer term, IF working from home is a long-term trend, it will change the face of the country. Arguably the whole point of cities was to bring people together so they can work more closely, both in the sense of working more collaboratively, and within physical proximity. It all started with the development of the steam engine, consolidating people into factories, and grew into the need to have people close to the paper that, until relatively recently, was the life blood of bureaucracy.

Without that driver, will people still want to live in cities, or commute into them for work? I doubt it, or at the very least, far fewer will.

Apparently around 900,000 people commute into London every day. That’s 900,000 fewer who might buy a sandwich at lunch time, a beer after work, or nip out to the shops in their lunch hour. I suspect city centres will change dramatically.

But those people aren’t dead! The still need lunch, a beer, and will still shop. They just won’t do it in cities. Perhaps we’ll see the rise of smaller towns, “commuter towns” that until now only “thrived” at the weekend.  Will entrepreneurs create new business to service the needs of the home worker, now freed from their commute and prepared to spend more time (and money) where they live? Will we see the resurgences of local culture and “society”, fuelled by home worker with more time and energy to participate more fully in their local communities? Will the search for the lost office social interaction, actually encourage people to speak to their neighbours….!

I have no idea! But what I do know is that when large scale change happens quickly, and when people and business need to adapt, there is opportunity.

If people are moving out of the city, there are houses to buy and sell, if business are setting up in commuter towns, there are leases to negotiate, and if people are spending more time with their neighbours …… there will be neighbourhood disputes to mediate…!

People will always need lawyers.

David Calder, Managing Director

The Cashroom Ltd

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