In recent years, the legal profession has had to face many challenges and make constant changes to keep ahead of the game.
1.Winning work at the right price
Depending on your work types you will usually quote an hourly rate or a fixed fee. You may also have a fee structure which includes a success fee. Whichever way you price up the work you are calculating the time that is likely to be spent on the matter, the challenges involved in delivering the work and the risk to your business. Knowing your market is crucial as is delivering the work efficiently. The LASPO, the referral fee ban and the cuts in legal aid have meant that many firms have had to change the way that they work and look at taking on other work types.
2. Ensuring that the work is processed efficiently & profitably
Once you have won the work your team need to deliver the service in an efficient and profitable way. Utilising a case management system along with other available technologies is often the key here. Keeping on top of your housekeeping and monitoring the work capacity of each fee earner is also an essential part of the supervisory procedures.
Billing and collecting in the fees in a timely fashion is the lifeblood of the firm. Monitoring WIP as part of the supervisory procedures, and incentivising fee earners to take money on account and keep a check on their clients’ payment record, should form part of the regular activities in the firm. Residual client balances can build up and this needs to be managed carefully to avoid breaching SRA Accounts Rules
4. Profession Indemnity Insurance premiums
Keeping your PII premium down is a challenge and a source of stress every year. Robust risk management, dealing with any complaints quickly so that they don’t turn into claims, and achieving a quality standard such as Lexcel are all positives. Develop a good relationship with your broker/insurer so that they understand your business and can help you as much as possible.
5. Compliance, regulation & changes in legislation
If there is a change in legislation or regulation it can have a huge impact on your business if you are not prepared and cannot make changes quickly enough. You need to review your Business Plan & risk assessment every 6 months to keep on top of what is happening in the profession and how to deal with it.
You need to be compliant so that you meet your regulatory obligations. The key to compliance is good organisation, the right policies and procedures and regular monitoring. If you build these into your business processes you will develop a robust and realistic way of working and stave off damaging behavioural challenges and a poor risk profile.
Denise Butler is Director at Peacock Risk Management