David Calder and Angus Storrie from Cochran Dickie discuss the ups and downs of running a law firm over lockdown. Cochran Dickie Solicitors are a valued client of the Cashroom. They specialise in House Sales & Purchases, Guardianships, Powers of Attorney, Executries, Wills and Trusts and more.
A while ago I wrote an article about why I didn’t think that Commercial Property investment (and in turn, legal work in that sector) was a sound long term “bet”.
I concluded by suggesting that the reason for its success in the past was the need for pension funds to generate secure, long term income streams. And I wondered what might replace them.
Well, I was reading something at the weekend that made me think about this again.
The curious thing is that, despite lockdown and the economic turmoil, the S&P 500 is at historic highs, and while the FTSE has a way to go to achieve that goal, it has recovered a lot of ground.
But the really interesting thing is that some of what’s driving that growth in the S&P, is the return of the IPO. Back in the good old days of the dot com boom, IPO’s were all the rage. I remember my partner pitching for a tiny investment round, and being asked if he could handle the company’s IPO ….. from a couple of guys who probably couldn’t afford the bus fare home!
But that changed, particularly in the last 5 years or so, with more companies being happier to stay private for longer, resulting in the growth of the tech “unicorn” i.e. a privately held company worth more than $1bn.
However, in 2020 so far, companies in the US have raised over $60bn through IPOs. In the whole of 2019, the total was just over $40bn. And there are more to come. On August 19th, Airbnb filed for an IPO. Rumour has it that a number of other “unicorns” are lining up – Snowflake Computing, DoorDash, Instacart and Pallantir. Added together that comes to around $80bn.
But what has this got to do with Commercial property?
Well, I’m sure a number of factors push firms towards an IPO. However, I wonder if one of them is pure and simple supply and demand – i.e. there is a demand for investment in stocks and shares, because other traditional investments (e.g. Commercial Property, and Government Debt) are simply not providing the necessary returns.
If I’m right, and there is a demand for “alternative” investments, or more simply, a lot of investors are looking for a home for their money …… are law firms a potential investment?
A while ago I was speaking to an investor, who invests in law firms. His take was that law firms were not a great investment if you were looking for capital growth. However, if you were looking for yield, i.e. a steady return on your investment, law firms were ideal, because generally they’re pretty good at generating cash. Which of course is exactly the sort of return that Commercial Property and Government Debt investors are looking for.
David Calder, Managing Director
The Cashroom Ltd
Good news for Cashroom clients!
Two of the leading PII brokers in the UK have provided ringing endorsements of the quality of our service. In particular they recognise the reduction in risk that our processes, tech and people bring to a law firm.
As a result of the current professional indemnity insurance (PII) conditions many practices may be facing come the 1st October, we are working closely with Lockton at present to soften any possible increases, and the service features and processes used by The Cashroom for our clients mean that this will be viewed positively by many underwriters and Insurers. Whilst the basis of each premium will be judged individually on the merits of each firm, Lockton are able to use this as a tool to make sure your practice starts the renewal journey on the front foot.
Jake Fox of JM Glendinning said that when he is talking to insurers on behalf of a firm, if he is aware that The Cashroom are providing the cashiering service, he always makes a point of explaining how our way of working reduces the risk and creates greater efficiency. He went on to say that if there were two very similar firms and one was using The Cashroom and the other was not, the insurers would always want to underwrite the one using The Cashroom before the other.
Cashroom and Credit Control! Here David Calder and long standing client Billy Smith from Complete Clarity discuss the use of our credit control service.
At the Cashroom we provide full accounting services to the legal profession – from day to day entries, through compliance, management accounts and now credit control!
Cash is one of the most important things in any business. Law firms are no different. From a business perspective, you need to turn all your good work into cash as soon as possible. But getting you fee note out the door is only the first step, your client also needs to pay it, and that’s where a proper, well run credit control process is crucial.
The Cashroom can provide a sophisticated, cost effective and responsive Credit Control function, with the following key benefits:
If you want to learn more about our Credit Control service, or any of the other services we offer then please get in touch today.
If you want to learn a little more about the service, David Calder wrote about it recently on our blog.
As well as legal cashiers we employ several qualified accountants who can prepare:
If you also use our cashiering, payroll and management accounting services, adding in Statutory Accounts and tax returns creates an accounting function that provides everything you need to run your law firm and take care of your annual accounting and tax compliance needs.
No more time consuming and confusing “liaison” between providers, only one, fully integrated provider.
The only thing that’s not included is audit … but we think somebody else should tell you what a good job we’re doing!
If you would like to learn more about our Statutory Accounts and Tax Returns or any of the other accounting services we offer then please get in touch today.
Alex Holt, Director of Business Development
www.thecashroom.co.uk
I’m old. I don’t just mean old in the way that our kids always think of us as old. I mean I’m old in a ‘seen it all before’ type of way. I was a teenager when the first Live Aid happened for heaven’s sake!
I’ve lived through a few recessions, and I’ve worked both as a lawyer within law firms, and as an external supplier to law firms during recession.
One phrase is always repeated. The perceived wisdom in every such crisis. It’s a phrase we are hearing a lot at the moment.
The theory is that the harsh realities of a recession will effectively weed out those firms which were already in a poor state. It’s a fairly brutal view and while it does have some truth to it, I’d suggest that in fact it doesn’t tell the whole story.
There’s no doubt that inefficiency and old fashioned methods can be risky, and those risks are realised when times become truly tough for businesses. If the firm has too many support staff for what it really needs. If the premises are more expensive than necessary. If credit control is a verboten phrase because ‘we don’t want to upset the clients ‘. (Even the ones who aren’t paying?!)
All of these things can and will cause problems during recessionary times. They may indeed in extreme cases bring down firms.
However, every single post recession review features comments like “We will never go back to those inefficient ways”. But weirdly, people don’t seem to truly learn. If they did then the same issues wouldn’t crop up every time. They might be slightly different in their make up, however they will absolutely relate to inefficiency.
Good times breed lazy thinking. It becomes easy to relax into the old ways. Why expend time and money on new fangled systems, or more efficient resourcing models when ‘things are on the up’?
There’s no longer a burning platform, so difficult decisions get put off, the pain of recession recedes into the distance, and things move on. Until the next time. And the next time. And….you get the point.
A definition of insanity is doing the same thing over and over and expecting a different outcome.
I’d say that these bizarre and awful times are the ideal moment to try something different. To change.
If you had to design a law firm from scratch, I suspect many firms would not design the model they in fact operate at the moment. They’d use up to date technology. They’d outsource key operational functions. They may now facilitate home working.
While they do not of course have the luxury of starting from a blank sheet of paper, that thought process can help firms to spot areas where their present model differs fundamentally from what optimal would look like. Maybe there are small shifts which are possible. Maybe a plan for change can be put in place.
One of the most telling changes we have seen as a business is an increased demand for our Process Review team. Firms of all shapes and sizes, and increasingly bigger firms, have approached us to help them design their operating model for their finance function. It may or may not involve outsourcing the function in whole or in part, but it will always result in an improved way of working. Improved efficiency. Cost savings. Better, more accurate data with which to manage the business.
I’d say that more than ever, with on and off lockdowns and restrictions likely for quite some time to come, the ability to change and adapt will become a defining factor in the likelihood of a firm’s survival.
As we all breath sigh of relief, and acknowledge that the world has not in fact spun off its axis, there is an uneasy consensus forming that, while we may have jumped out of the pandemic frying pan, we have landed in the fire of a global recession.
For law firms, one of the more pressing issues arising out of that recission looms in the new year.
For a number of reasons (explored in detail here https://calicolegalgroup.co.uk/way-to-recovery/) many firms are storing up a cash crunch for the first quarter of next year. Largely because most of the government support schemes will have come to an end and/or payments that were deferred (VAT and tax) will have all come home to roost.
To emphasises the point, this survey finds that 68% of firms have deferred their VAT bills until the first quarter of next year, and 31% have sought time to pay their July Tax bills, which will also fall due then (along with the “normal” January payments).
So, the question is – will you generate enough cash in the next 6 months to pay all the bills falling due in the first quarter of next year?
We want to help as much as we can.
First, we can help with forecasting. All firms (and I mean ALL firms) need cashflow forecasts. I was the Managing Partner of a law firm during the last recession and, in my (not an accountant’s) opinion the cashflow forecast is one of the most critical management tool a firm has. While profit and loss accounts are important, and balance sheets are interesting in a somewhat academic way (!) …. your cashflow forecast is the thing that tells you whether you can pay the salary bill at the end of the month.
The problem is, it’s a continually moving target and, to be truly useful, needs to be constantly updated. In the survey referenced above, 54% of firms plan to review their forecasts weekly, and 28% will review them daily!
You can’t ignore your cashflow forecast!However, the forecast only tells you when you’ll run out of cash. It doesn’t generate cash! To do that you need to fee your WIP and collect your fees. But we can help with that too.
We have recently released an update to our web Portal that automates your credit control function.
The most important part of a credit control process is consistency. Every bill needs to be chased at regular intervals, with increasing levels of “severity” until paid. Each one. Every month. No exceptions.
However, it’s a labour intensive, administrative task that often falls off the edge of a busy desks. The Cashroom’s credit control service is designed to automate you credit control process, allowing you to get back to your clients. It’s a simple, add on module to our Web Portal, that we set up to suit you, and your firm. Find out more about it here.
“We’ve been using the Cashroom’s Credit Control module for 4 months now, and it’s wonderful. As we come out of lockdown, cashflow will be critical, and the starting point is credit control. The Cashroom’s module automates the process, which makes keeping on top of chasing payments simple and efficient. It’s allowed our staff to focus on delivering our service as opposed to chasing for payments. Fundamentally, it has automated the process of cash recovery and my company relies on it.”
Billy Smith, Complete Clarity Solicitors
If you want to find out more about the service contact
Managing Director
E: David.Calder@thecashroom.co.uk T: 07876 236578
Director of Business Development (based in England) E: Alex.Holt@thecashroom.co.uk
T: 07817 420 466
In my last post I mentioned we were beginning to see some Green Shoots, particularly in Family Law, and Private Client law. This time I want to be a little more controversial and talk about one sector that I just don’t see coming back strong – Commercial Property.
The lockdown’s impact will affect business unevenly. We all know that hospitality and tourism/travel will be badly affected. Sadly, many businesses will go bust, and others may need to radically rethink their business model. However, if you were to make a long-term bet on those business coming back, your money would probably be pretty safe. People will always want to “socialise with friends” (accordingly to every other CV I read it’s most people’s only interest outside work!). People will still want to go on holiday.
However, if there is one sector, I wouldn’t put money on, it would be Commercial Property. I just don’t see it getting back to any sort of normal, any time soon.
Up until relatively recently investment in commercial property has boomed. Apparently, since 2000 the global stock of investable commercial property has increased to $32trn. It was seen as a nice safe investment, for long terms steady returns – just the thing for pension funds to invest in.
But I wonder if the pandemic, and the resulting lockdown, has changed all that.
From what I’ve read, around half of all shop and business tenants in the UK simply didn’t pay their quarter’s rent at the end of March. And it wasn’t just shops and restaurants – average hotel occupancy has dropped from 70% before the lockdown, to 15% in April. Office rentals have held up, with many tenants being able to continue to work 
remotely (but is that really a good thing for the landlord … more on that in a moment!). Suddenly that nice secure income stream doesn’t look quite so secure!
Secondly, and more critically, the lockdown has accelerated existing trends. Bricks and mortar retail was struggling before the lockdown, with more and more people shopping on line. Judging by the steady stream of packages being delivered to my door during lockdown (!), that trend has continued. This will continue, putting more and more pressure on traditional business models. Debenhams went into administration in April, and Intu, which owns a number of shopping centres in the UK, appointed administrators on June 23rd. Now, it appears Debenhams will continue in some shape, but only by because it “did a deal” with its landlords (although interestingly not Intu!) ….. I suspect that means they were pressured into taking a haircut on their rent! https://www.bbc.co.uk/news/business-52979759
Second, do we really think the office market will come back? There has to be a risk that businesses continue to work remotely, or at the very least more flexibly. Some commentators see a sharp downturn in high density urban office space. (https://www.moodysanalytics.com/videos-on-demand/2020/major-disruptions-ahead-office-sector). Indeed, at the Cashroom we have decided not to renew a lease on around 40% of our office space.
Bluntly, I’ve no idea. However, the problem that drove investment in Commercial Property in the first place has not gone away. Pension funds and insurers need a way to generate long term, secure income streams to meet their liabilities to pensioners. In fact, as we all get older, it will become more and more pressing. Government debt is not the answer. Interest rates at historic lows, with nobody (at least nobody I’ve read) predicting that will change any time soon. And the last attempt at solving the problem (collateralised mortgage debt) didn’t end well…!
So – how are we all going to convert out pension pots into secure income streams if Commercial Property isn’t the answer?
If anybody knows …. whisper it ….. we’ll make a fortune!
David Calder, Managing Director
The Cashroom Ltd
It’s an arduous process, and the last few months’ restrictions have (to my secret delight) put the brakes on our plans. There were always factors I could use to slow things down sneakily- packing up the house would be a nightmare, we’re too busy to go house hunting etc. But my trump card was always Stamp Duty.
“What a waste of money!” I would say.
And it was a pretty unarguable point. Yesterday’s announcement by Rishi Sunak that there will be a Stamp Duty ‘holiday’ for properties purchased up to £500,000 was a hammer blow to my delaying tactics. Scotland followed with an announcement today that the starting point for land and buildings transaction tax (LBTT) is to rise from £145,000 to £250,000.
We were back house hunting with a vengeance. Many of the house details contain virtual tours, and with the added tools of google maps and satellite view. It’s far easier to house hunt from the sofa than it used to be. Dagnabbit!!
This morning we have had responses from a number of the estate agents with details and proposed viewing times. I do get the impression that estate agents are struggling to balance their furloughing of staff with the upturn in interest.
So I may be in my own private hell as a result of Mr Sunak’s ‘generosity’. However it seems clear that the housing market will see a boost from this announcement. Our friends in the legal sector with property sector departments will no doubt be delighted.
From The Cashroom’s point of view, we stand ready with our huge flexible resources to support our existing clients with our cashiering service. We know that our processes are particularly popular for conveyancing firms. We move money quickly and securely, and fit into a slick process of payment authorisation which our clients love. Any firms who aren’t yet clients (why aren’t you?!) we would be delighted to chat with.
What I’m secretly hoping is that we will be inundated with new enquiries and as a result I’ll be able to recycle the “too busy to move house” excuse.
So come on law firms….help a fella out!
Alex Holt, Director of Business Development
In this last part of the series, I’m going to talk a little about the Cashroom. What are we doing to change things up and innovate in the post COVID environment.
First, a quick recap on where we are, and how the lockdown affected us.
We decided to “lockdown” about a week before the official announcement. We initiated our business continuity plan and went from having 85 people fully operational in the office, to having 85 people fully operational at home, in just over a week. I’m not going to pretend it was easy (it wasn’t), nor that it went entirely smoothly (it didn’t), but we did it and I think (hope!) most of our clients didn’t noticed any service disruption as a result of the transition.
When the government announced their financial support, we knew we had to take advantage of it. Volumes were dropping across out client base, and some clients were finding it tough. So, while it broke my heart to do so, we made the difficult decision to furlough 31 members of staff. I spoke to them all personally, explained the situation, assured them we would do our best to make sure they all came back, and spent the rest of the evening drinking heavily!
Also like many of our clients, we (successfully) applied for a COVID Business Interruption Loan, took advantage of the VAT deferral, and negotiated with our creditors.
Long story short, we are emerging from lockdown, blinking in the sunlight, and preparing for the new normal.
So what are we doing?
As of the beginning of July, we’re bringing all staff back from furlough, at least part time.
We’re not doing it because we think work volumes will have returned by then. We’re doing it to free up “idle” capacity in the business to be able to work on all the initiatives and projects we have underway that never seem to get the attention they need.
You all know what I’m talking about, the change initiative that never seems to quite get over the line, because those involved have “day jobs” delivering client services that always take priority. Well, by bring everybody back from furlough before we “need” them, we hope to create the capacity we need to drive through that change.
And talking about change…!
The lease on one of our offices is up at the end of August. We have decided not to renew or replace it. We will lose around 40% of our office space. The enforced home working has shown that we do not need everybody in one place – home working … works!
In the short to medium term, we will need to make changes around booking desks, social distancing, “Hot-desking” and deep cleaning, but in the longer time we plan to have only around 50% of our workforce in the “office” at any one time.
We have recently completed a deal to acquire a small technology business, bringing in house, the expertise we have to date outsourced.
An odd move for an outsourcing business, you might think. However, outsourcing works when you’re outsourcing a non-core function (e.g. your accounts team!). Over the last year or so it’s become clear that technology is in fact a core function at the Cashroom, and crucial to our future growth and development.
And talking about technology…!
Over the next few weeks we’re trialling a new development to our client Portal. It takes advantage of the new Open Banking regulations to automatically set up payments based on instructions received from clients into the Portal. That means there is no need for our cashiers to log onto the client’s bank account, to set up the payment, increasing accuracy and security.
That’s only one example of how future developments of our technology platform will drive efficiency and accuracy.
It seems we’re a “Fintech” business now!
So, we’re being bold, and are trying to innovative and creative. We know not everything we try will succeeded, and that’s OK, because we’ve given ourselves permission to “fail” as long as we do it fast, in a safe environment, and learn.
“Gulp…!”
David Calder, Managing Director at The Cashroom Ltd
At the Cashroom our goal is to revolutionise legal accounting world-wide, and we have recently taken a big step towards achieving that goal.
Kanbaro Limited is the company behind developing and maintaining our Portal. For those that don’t know, the Portal is the IT platform on which we run the majority of our business. It securely and efficiently deals with client communication, task management and increasingly the automation of many of our processes.
The Portal is critical to what we do and was one of the main reasons we were able to quickly and easily, transition to remote working when the lockdown was announced.
However, it is clear that the pace of technological change in our market will accelerate – driven in part by the opportunities presented by Open Banking and the automation of tasks and processes. Over the next few years the Portal will revolutionise the way we work, and we need to increase the scope and pace of our technology development
So, with that in mind, a few months ago we reached agreement with the shareholders of Kanbaro to acquire their business along with all its IP. I’m happy to say that the deal has now completed, and Kanbaro Limited is a wholly owned subsidiary of the Cashroom. One of the Directors, Paul O’Day will join the Cashroom as Head of Product Development.
This is a significant step forward for the Cashroom. Having an in-house development capacity will allow us to move forward more quickly with a number of exciting technology projects, taking full advantage of the opportunities presented by Open Banking, process automation, and creating our own published API allowing the integration of our Portal with other systems.
In turn this will increase efficiency, accuracy and security for all our clients… The Cashroom is about to become even faster, even more accurate and even more secure!
In addition, consolidating all the IP under one ownership will allow us to exploit that technology world-wide.
Our goal is to revolutionise legal accounting world-wide after all!
Exciting times.
David Calder, Managing Director at The Cashroom Ltd
So, to recap – business are facing unprecedented change forced on us by the COVID pandemic, and the lockdown. We’re being forced to make big changes, fast …. and we really don’t like it!
We’re being challenged to break things and make them better.
So what might a law firm think about?
Do you have a sales process that is rigorous, data driven and measurable? Do you know where your clients come from? How do they find you? Do you have a process that takes them (in a systematic and trackable way) from enquiry to closed?
A couple of years ago, we were using Hubspot, an “off the shelf” sales tools, but it wasn’t quite working for us. In response we developed a module for our Portal (the tool we use to communicate with our clients). We created a Sales Pipeline, represented as a Kanban Chart, showing all our current prospects and their progress towards a sale.
It allows us to track progress, hold our sales team to account on that progress, and provide data for analysis and insight.
(For clients wondering, it’s a module available for internal use, and not displayed to clients! Get in touch if you want to know more.)
Is there scope to develop or improve your sales process? How does it need to change, now that face to face interaction is much less common?
Do you know exactly where your business is? Do you know how much you made last month, which department/lawyer made it, and how that compares to the position last year? How much cash will you have in the bank next month, in 3 months, in a year? And can you “flex” these projections, taking into account all the uncertainties we face?
I’m embarrassed to admit that, before I met Catherine (the Cashroom’s founder, our Chariman, and from the outset, my Finance Director in a previous life as managing partner of a law firm), I didn’t know the difference between profit and cash, a balance sheet was a mystery, and I had never looked at a cashflow projection in my life!
But I suspect I wasn’t the only one, and I’m probably still not. If you’re one of these people (or suspect you might be(!)) the most important innovation you can make in the post COVID business world, is to have prepared regular, reliable and helpful management accounts.
Reliable and up to date management accounts and management information makes everything easier. It makes the uncertain, more certain and makes it easier to deliver changes and innovation – because, if you know where you are, working out where you’re going, how to get there, and what you need on the journey, is so much easier.
Is there something in your business that drives you nuts? A process or a procedure that’s grown up over time, driven by “its good enough for now”, with no regard to the bigger picture? Well sort it now!
Even if its “OK” ….. “”if it’s not broken, break it and make its better”!
And, if it’s got anything to do with the flow of money and cash through your business, how you run your accounts team, and how you ensure compliance with the rules … we can help!
David Calder, Managing Director at The Cashroom Ltd
For more information about our services.
In my last blog post I talked about innovation, and how facing the post COVID world has forced “5 years of innovation in 18 months”. And I admitted to being uneasy about facing that challenge.
Well, let me share a webinar that was shared with me (fair warning, not for those who are offended by the odd expletive!)
TLDR – we need to become comfortable with uncertainty. We need to come up with loads of ideas, and accept that most of them are rubbish, and we need to be happy to fail, and get it wrong. Most importantly, we need to let people know it’s OK (even good) to screw up and get things wrong, as long as we learn from it.
Scary stuff …. and easy to dismiss as the ramblings of a “swivel eyed loon”, that just doesn’t understand. But, be honest ….. is your model perfect, is it optimised? It’s maybe OK, but is it truly good…..!
“Gulp…!”
And I think as lawyers, we’re not very good at this. We struggle with the idea of getting something wrong. If goes totally against our training … as a result if people get something wrong, then there’s liability, and blame, and compensation.
Challenging stuff.
In Part 3, some thoughts on what a law firm might look at (fair warning …. bit of a sales plug!)
David Calder, Managing Director at The Cashroom Ltd
This quote has been rattling around in my head for a few weeks. In the article I read, it was attributed to a production line manager in a Chinese manufacturing plant, working out how she would return her plant to full operation, post COVID. She was contemplating robotics, split shifts, worker segregation, and a myriad of other ideas. Now a manufacturing plant is different to a legal firm innovating during COVID but the point however was how the COVID lockdown was forcing innovation at breakneck speed.
We’ve seen it everywhere. Think about the Nightingale Hospitals. Seeing the London Exhibition Centre converted into a hospital in a matter of days, was quite inspiring (and a little scary – happily it was never used to full capacity … yet!).
All over the country the government, the NHS and business have innovated at breakneck speed, to meet the challenges of COVID and the post lockdown world.
Which of course begs the question “Why the !@$%^&* didn’t we do this before?”.
Why has it taken a global pandemic to drive such dynamic innovation and change, when we know (be honest!) it should form part of our “normal” business planning?
The question is largely rhetorical, but the obvious answer is that most people hate change. We like the familiar, and the comfortable. We’re hard wired to prefer an “easy life” where we control most of the variables. We hate uncertainty – it triggers fear, and a “flight or fight” reaction. And dare I say it – lawyers even more so. How many partners meetings have you sat in when your partners come up with 100 reasons why the firm shouldn’t do something? It’s what we’re trained to do – to see the problems and the risks and manage them.
At our last board meeting, we were challenged to be bolder, to be braver, to do now what we’ve been talking about for the last few months (years!). To seize the opportunity to make the changes we should have made, but never quite got around to.
I must admit, it made me a little uneasy!
But innovation is critical for survival and becoming more so. In 1964 the average tenure in the Fortune 500 in the US, was 33 years. In 2016 it was 24, and in 2027 one study predicts it will be 12. (https://www.innosight.com/insight/creative-destruction/) The rate of “creative destruction” is accelerating!
Change, innovate …… or fail.
Are your palms sweating yet!
Mine are!
David Calder, Managing Director at The Cashroom Ltd
Remember the fairy tale of the Emperor’s New Clothes?
A vain emperor is conned into paying a huge sum of money for a suit of new clothes, that don’t actually exist. He parades through the streets in his non-existent clothes, and the sycophantic citizens buy into the myth that he’s wearing a wonderful new set of clothes. They are afraid to call out the truth and are complicit in the lie.
But, so the story goes, a small boy shouts out “but he’s naked”, shattering the “illusion” and the Emperor is ridiculed by the previously complicit citizens.
What’s that got to do with anything?
Well, I’m beginning to think that the COVID lockdown is a bit like the little boy – shouting out to all of us “but he’s naked”. Let me explain…..!
Up until recently many businesses have been toying with remote working, thinking about it, but not really doing much. People were worried that we will miss “something” if we don’t all work from one (expensive, centrally located) office. Along comes the COVID lockdown forcing many of us to work from home, and we suddenly realise that it’s perfectly possible.
The COVID lockdown is the little boy shouting “but everybody working in that office is stupid”.
So what else might the little boy laugh at?
“Wait what … you spend hours traveling to and from work?”
I’m lucky – for the last few years my commute has been about 10mins. But I did spend years traveling in and out of Edinburgh. Nobody enjoys that – and if we no longer need to work from one centrally located office … we can all have a 30sec commute to our “office”.
“But why do you need to work then?”
And if you work remotely, from home – why do we need to work between the hours of 9-5 (or a rough approximation of those hours!)? Are we going to see working hours becoming much more flexible?
“But why does it need to wait until the weekend?”
So if working hours become more flexible, will weekends matter? If you’re working from home, with no commute and no fixed hours … why would you split a week into 5 days on and 2 off (schools I hear you say….but I suspect the little boy will be laughing at them too!)?
“So, why is it we live in this tiny house near all these other people”
Looking further ahead, the only reason cities exist is to bring people to one place allowing them to collaborate and work together. Will the little boy’s ridicule reverse the last 100 years of urbanisation? If I don’t need to work in an office, and have no fixed hours, I can live wherever I have access to a fast broadband connection!
So, you get my (somewhat laboured) point …… the COVID lockdown is forcing us to confront long held assumptions. It’s forcing us to look hard at whether the reason we held them in the first place, remains valid now.
And one last question the little boy might ask (!)
“So, why haven’t you outsourced your cash room yet?
………!
David
But is it?
In 1942, after the battle of El Alamein, Churchill said …..
Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.
I can’t help feeling this is where we are in the COVID Pandemic. We have weathered the initial storm, but there is a long way to go.
If like me, you’re beginning to emerge from lockdown, blinking in the sunlight, with the initial business continuity response behind you, and a business that is beginning to operate “normally” – you’ll be starting to think “well, what’s next?
Bluntly, I have no idea … and very few people (including our politicians) have.
However, we need to start somewhere, and I wanted to talk about a couple of things playing on my mind recently. Firstly, business continuity, and secondly, a return to the “office”.
At the Cashroom we went from having 85 people in a traditional office setting, to 85 people, fully operational and working remotely in just over a week. I won’t pretend it was stress free, but our planning worked, and we did it.
We also continued to provide a fully remote service to our clients with minimal interruption to service, meaning they didn’t need to worry about business continuity planning for their accounts function.
So why is this still an issue?
Well, if I understand the epidemiology (!), the lockdown has flattened the peak, but by preventing the majority of the population catching the virus, as the lockdown is loosened, there’s a risk of a second peak, as we have not yet reached the stage of “herd immunity”. Or in other words – the lockdown stopped people getting the virus so they can still get it now, because they are not immune.
And look to history. The 1918 Spanish flu pandemic hit in three waves, with the second killing more people than the first. The 2009 swine flu pandemic started in spring and, in the northern hemisphere, was followed by a second, larger wave in the autumn.
Chances are, this will not be the only lockdown.
So, let’s not pat ourselves on the back too soon. It’s likely we will dusting off our business continuity plan once again. And as this article argues (https://www.continuitycentral.com/index.php/news/business-continuity-news/5136-looking-ahead-to-a-second-pandemic-wave-why-acting-now-to-strengthen-your-crisis-management-capability-is-the-key-to-building-future-resilience) the second wave will hit already weakened businesses, and may be more devastating than the first.
We’ll be reviewing our business continuity plan, making sure we’ve learned the lessons of the first lock down, and making sure we’re ready for a possible second.
Returning to the Office
In the UK we’re hoping to return to the office sometime in late summer/early autumn. It will be gradual, and cautious, but it will happen …… maybe!
Setting aside all the discussion about whether office life is dead, and whether there is any need for businesses to return to an office at all, the practicalities of making a typical office environment “COVID Safe” are daunting.
Read this article from the CIPD – https://www.cipd.co.uk/knowledge/fundamentals/emp-law/employees/workplace-guide-returning-after-coronavirus, and if you’re brave, look at the detailed guidance from HMG here https://www.gov.uk/guidance/working-safely-during-coronavirus-covid-19/offices-and-contact-centres
Now, some will have no alternative. But if you do, if you can operate your business remotely, using technology and outsourced providers, why would you risk a return to office life …. particularly if there is a risk of a second outbreak, and a second lockdown.
So, lots to think about as we find our way safely to a “new normal”. But it seems to me that agility is the key. The more flexible your workforce, and your systems, the better.
We all need to be prepared for disruption, and a lot less certainty than we’re used to. And we need to design our businesses accordingly.
And if you are thinking about outsourcing your finance function, you know where we are!
David Calder, Managing Director at The Cashroom Ltd
I think it’s now pretty clear we’re facing a severe recession. No surprise really, given the extraordinary measures taken to stem the spread of COVID 19.
Like all of you, I’m trying to work out what that means for our business.
But, we’ve been here before. My business life includes the dot com bust, and the financial crash in 2008. In fact, the Cashroom was founded in 2008, in the depths of the last recession. So, I’ve been reflecting on what we can learn from the past … can we go “Back to the Future”.
One of the first articles I wrote for the Cashroom’s website was how it had never been easier to start your own law firm. I wrote the article in 2012, as we were beginning to recover from the 2008 recession. It focused on how technology had advanced since I set up my own firm in 2005, 7 years earlier. Things like, being able to “rent” practice management software (don’t think I knew the anacronym SASS then!), rather than buy it, and how cloud computing meant you didn’t need to buy and run a server in your office.
It was one of our most read articles of 2012. I followed it up with a short series on starting a law firm from a blank piece of paper, which were also well read (they’re still there https://www.thecashroom.co.uk/law-firm-you-want-to-own/)
Why?
Well, at the time lots of lawyers were thinking hard about what they wanted to do. Many had been made redundant from large firms, and a few had been treated pretty poorly. They were beginning to wonder whether they wanted to “go out on their own”. At the time the Cashroom won considerable new business from new starts.
Last week I signed 2 new clients. Both of them new starts.
I suspect many lawyers are thinking about their future after the “trauma” of lockdown, and many more will do so during the coming recession. And as I did in 2005, many will decide that if they’re going to go to hell in a hand cart, it might as well be their own hand cart.
And guess what – it really has never been easier to start a new firm, even easier than it was in 2012. The price of technology has dropped even further, the scope and diversity of the legal services you can provide has never been wider, and we all know now that you don’t need an office!
So, if you’re thinking about how you go back to work in your old firm, or maybe even whether you go back, remember …. it’s never been easier to set up your own firm!
And of course, if accounting and compliance are something that’s putting you off, we can help!
David
I was fortunate enough to attend the Legal Futures Innovation Conference in London at the end of last year. This is one event that always manages to draw some of the leading lights in the legal sector to talk and share their experiences, news and views on what the future may hold for the profession, and delivery of legal services.
One such talk was by Tony Kay of Lexis Nexis and he conveyed some useful key principles that they live by, when looking at innovation within their business and product offering. In current times, many of us may find that as well as having to make immediate, short term strategic decisions for our businesses, we have more time to focus on what the future may hold, beyond Covid-19.
The great thing is that you can “borrow“ the same principles, and apply them to your own strategic planning of new services, new departments, new offices, new technology, ways of working etc etc.
1. Desirability – does someone want it, and are they willing to pay for it?
2. Feasibility – are you able to do it… cost effectively?
3. Viability –does it make business sense… (specifically) to your business?
One thing that I would add is that this shouldn’t only relate to client facing innovation. It is always worth looking at internal innovation or initiatives on a constant, or at least regular, basis. Sure, there is value in offering new things to your clients to compete against other firms for new business, but you can also use innovative ways of working to become more efficient and profitable at doing the work you already have.
A very basic example – using double computer screens for staff who regularly have to take information/data from one location e.g. an email, and enter it into another, e.g. your practice management system, or online banking platform. The time saving, and increased accuracy of data entry, multiplied by the amount of times the activity is done on a daily/weekly/monthly/yearly basis, is significant. The cost is as little as about £80 for an extra screen!
Using Tony’s criteria above, and considering it as an opportunity to innovate, it certainly meets the three tests. It is:
3. Viable – it makes perfect business sense – for a minimal investment, it creates time and accuracy benefits, thereby making work more profitable.
So, think about innovation in a holistic way. You don’t need to be offering a new flashy/’techy’ product that no other law firm is offering, innovation is also about improving things like the way work is communicated, or the way it is done, so there are many small, easy steps you could take on a regular basis that satisfy the principles of desirability, feasibility and viability, and take your business forward.
Gregor Angus, Senior Business Development Manager.
The Cashroom