Collaborative Legal Practices Manchester Forum

www.inpractice.co.uk

Collaborative Legal PracticesManchester Forum

Facilitated by

Allan Carton

17 & 19 August 2010


Agenda

Introductions

The initiative

Opportunities to improve businessLevel 1

Level 2

Issues, options and solutions

Next steps


Allan Carton

Director of Inpractice UK and MSC10 years – solicitor2 years – national network (LawGroup UK – CharterGroup UK)18 years - consultancyMBA (Manchester Business School ‘95)

Specialist AreasChanging mindsetsBusiness and IT strategiesMarket research for law firms and legal sector Fee earner technology strategies and technology led legal servicesBusiness process developmentMarketing databases and CRM

Articles & Publications

Law Soc Gazette, Soc of Computers & Law, Independent Lawyer, Leeds & Yorkshire Lawyer, Venables Online, Lexis Nexis.


10 Consultants



Introductions – 17th August

Cecilia O’Donoghue – www.harryboodhoo.co.uk - [email protected]

Dominic Hester - www.dlhsolicitors.co.uk - [email protected]

Jonathan Barham - www.latimerlee.com - [email protected]

Peter Carey - www.sedgwick-phelan.co.uk - [email protected]

Tony Carter - www.harrisontownend.co.uk - [email protected]

Andrew McHale – www.mchaleandco.co.uk - [email protected]

Mark Gough - www.jonesgough.com - [email protected]

Michelle Garlick – www.weightmans.com - [email protected]

Could Not Attend, but have confirmed that they want to be involved:

Heidi Maguire - www.heidimaguire.com - [email protected]

Ron Pundick - Rothwell & Evans - [email protected]

Stephen Durham - www.cuttles.co.uk - [email protected]

http://www.harryboodhoo.co.uk/

http://www.dlhsolicitors.co.uk/

http://www.latimerlee.com/

http://www.sedgwick-phelan.co.uk/

http://www.harrisontownend.co.uk/

http://www.mchaleandco.co.uk/

http://www.jonesgough.com/

http://www.weightmans.com/

http://www.heidimaguire.com/

http://www.cuttles.co.uk/


Introductions – 19th August

Richard Williams - Licensing Legal (Licensing) - [email protected]

Rudi Kidd - Gray & Co (Media) - [email protected]

Sunil Mohindra - Mohindra Maini (Commercial) - [email protected]

Hilary Kenway – Motoring Lawyers - [email protected]

Andrew Sherwin - www.quill.co.uk - [email protected]

Could Not Attend, but have confirmed that they want to be involved:

Lynda Spiby-Parry - Thomas Mansfield (Employment) - [email protected]

Gary McIndoe - Latitude Law (Immigration) - [email protected]

http://www.licensinglegal.co.uk/

http://www.grayand.co.uk/

http://www.mmsolicitors.co.uk/

http://www.motoringlawyers.com/

http://www.quill.co.uk/


Overall Picture – England & Wales, 2007

No of Partners % of Firms No. of Firms % of

SolicitorsNo of

Solicitors1 44.0% 4,450 8.0% 6,6052-4 41.9% 4,238 22.7% 18,7405-10 9.1% 920 15.2% 12,63111-25 3.2% 324 13.8% 11,39326 plus 1.9% 192 40.2% 33,188Totals: 10,114 82,557>4 14.2% 1,436 69% 55,597


Project Objectives ... Help to ...

Manage the inevitable transition in the structure of the legal profession - assist the sector to re-shape itself.

Create a system whereby firms can go into a transitional phase which will follow the market trend (as opposed to seeking to distort it).

A feasibility study

To research and develop the potential opportunities from changes in the market place that are affecting the Legal sector now and which will continue to affect it in the future.

Support to pull together the next stage of thinking based on actual meetings with the sector.

Develop further thinking documents (with an action plan), presentation and business proposal.

To create a model (or actual?) structure for the grouping of law firms.

Road test the model

Get potential firms lined up


Geography a limitation for now


Business Drivers – per Stephen Mayson

The Legal Services Act reforms provide new opportunities for doing things differently, and better – in clients’ interests, in the public interest, but also in your own interests.

The prime directive for organisations is to do more with less — more functionality, more computing power, better security, higher availability and business continuity, better global accessibility, and more storage capacity. And at the same time, there are demands to cut IT expenses and reduce overall total cost of ownership.

The Co-operative Group’s 2009 business review reported that sales from the legal arm grew 45%, from £14 million to £20 million, with operating profits before significant items up £2.1 million, from £1.7 million to £3.8m.

Lawyers are in business, and have to be more business-like. They haven’t been sufficiently responsive to that call to be more cost-effective, to do things in different ways that either bring the cost down or provide better value for money. They haven’t been sufficiently innovative, and the world is catching up and overtaking them.


The Market Place

The RecessionWork Volumes downFinancial Squeeze from banks, shrinkage, marginsDramatic reductions in firms allowed to handle legal aid

Legal Services ActNew competition – specialists, Co-op, HalifaxShift in power from lawyer to consumerRestructure opportunities – LDP, ABSMore options, need for flexibility

Compliance and RiskLaw Society, MLO, Commercial,

Resilience and DRCompliance, clients

New Purchasing MethodologyY Generation and www.

Clients more demandingMore knowledge, price competition, value for money

Traditional Competition ChangingMore aggressive, bespoke to commodity,


Group Insurance Scheme -

40 to 60 well-managed firms falling within the target categories you outlined during our conversation, could present an attractive proposition for a commercial insurer wishing to underwrite a managed insurance scheme for solicitors. The attraction to an insurer would be that only firms meeting specified quality benchmarks would be insured and that claims would be handled to a very high standard. The attraction to firms would be that by pooling their claims experience in a scheme targeted at similar quality firms, over time they would be able to achieve fairer premiums and/or better terms of cover.

They would also benefit from high service standards from the insurance scheme. A good model for such an insurance scheme to which you may wish to refer is our scheme for occupational pension fund trustees and administrators, OPDU (www.opdu.co.uk). In OPDU the members use their combined purchasing strength to secure favourable terms from underwriters without mutually carrying the insurance risk. The members ensure the delivery of strong service standards from the managers through an Advisory Council elected by the members.


Initiatives

Minute Boxhttp://www.vimeo.com/14236362 (iloveminutebox)

Aquarium - eCatcher

Quality Solicitors

Connect2Law

Legally Better

Wigster.com


Business Trends – different responses

Restructuring of firms to operate better businesses. Mergers and growth in size of practices to achieve critical mass and to integrate operations with non-legal businesses.

Increasing introduction of performance measures, more pro-active management, more professional managers.

More rigid and demanding service standards and compliance requirements. Pressure to control costs, streamline operations and increase flexibility of operations. Get lean, get focused on the business.

Demand for more flexibility and agility in catering for new relationships. Increasingly complex financial arrangements

Increasing demand for E-communications and electronic data transfer. Introduction of XML and .net initiatives to achieve integration of data and business more easily.

More mobile and flexible working with 24/7 availability

Increasing number of distribution channels for legal services. E.g. “Get” the telephone and online – and do it right


The Legal Environment

Lawyers struggle with vision and with innovation. Find it difficult to imagine different and better ways of working. Need to be helped to see it and feel it.

Lawyers (particularly in smaller firms) do not collaborate easily; otherwise they would probably be working in a larger practice already. Although at a high level, partners will say how open they are willing to be with other lawyers, competition inhibits them when it gets to detail.

Any new type of organisation has to be focused on delivering whatever it is that clients value as cost effectively as possible. Lawyers often pay lip service to this, not realising how far off the mark they can be.

Where lawyers now generally understand what practice and case management systems do (even if they are not fully utilised), there is a huge gap in understanding how hosted IT systems work in practice.

Lack of time to commit to any project is a killer. Other urgent, but (probably) less important matters that are easier to handle are the easiest escape route to avoid difficult issues.


What can we do better than the Co-Op

Client Relationship

Local connections

Personal connection

Specialist knowledge

....

Building Client Relationships - Roles

Relationship Timeline

Suspect - could the Client fit the target market profile?

Prospect - Client fits the profile and is being approached for the first time

First-time Client - Client makes first purchase

Acquisition Role: Finding and winning the right Clients. Marketing & Sales Activity

Majority Client - Client selects your company as supplier of choice

Repeat Client - Client makes additional purchases

Retention Role: Keeping the right Clients. Client Service/Service Delivery

Loyal Client - Client is resistant to switching suppliers; strong positive attitude to your company

Advocate - Client generates additional referral dollars

Development Role: Growing the value of the right Clients. Up-selling, Cross-selling & Down-selling


Managing Relationships and Referrals

Microsoft Dynamics CRM

CRM4Legal

http://crm.simmans.com:5555/loader.aspx crmlawa

crmlawb

crmlawx


Advantages of Niche

Perception as an expert in the field.

Focus will build genuine specialist knowledge and experience

Charge higher fees

Dominate the local market by focusing the message - not diluted.

Promotion is easier as you will understand your target matter better.

Focus on a targeted audience - easier to know publications, events, what they really value, so you can adapt accordingly.

Networking easier and more effective. Meeting the right contacts relevant to your sector, who will be interested in what you do. Know your niche clients inside and out will also help you understand their needs.

A clear message about what you do, who you do it for and how they benefit, you will be remembered.

Referrers of work will find it easier to recommend your services

The niche area doesn’t have to be the only area of work you handle?


Geographic Exclusivity, business in common

The benefits almost exclusively about sharing one way or another to improve “operations” – where a geographic spread of similar practices can bring operational benefits where they operate in geographically exclusive areas and there is no need to go out find new business as it is queuing at the door. Here we envisage solutions for:

High street specialist criminal practices with the right geographic spread enabling them to band together to bid for contracts and perhaps associate with barristers and to cover courts efficiently. These may operate within their own “exclusive” geographic territory

Legal aid / publicly funded practices servicing the needs of less well off people with a small high street practices each handling a range of similar legal issues. These may be more broadly based practices operating within their own “exclusive” geographic territory.


Worktype Exclusivity, clients in common

Groups of niche firms, complementary services

Add shared marketing and business development capability to the operational improvements, where one firm can introduce their clients (subject to compliance) to other practices who handle areas of the clients needs (perhaps not just legal) that they do not cater for.

Niche firms targetingHigher value individuals

SME’s – small and medium sized enterprises.


Outsourcing

Reception

Cashiering

IT – hosted?

Compliance

Promotion

Transcription

Law Costs

Legal Work (peaks and troughs?)


Collaboration

Compliance – forward looking

Training

Improve business development

Lexcel

Document Storage

Greater Manchester Chamber bulk buying – 17% savings

Legal aid contracts

Banking arrangements

Conveyancing

Other online services


Joint Ventures

Barristers on criminal contracts

Financial Services

Lead Generation


Services focused on client needs


SME’s - perceptions

Positive perceptions and experiences of solicitors

knowledgeable, experts in their field able to get the job done quickly and efficiently provide definitive advice / reassurance and

peace of mind relieves pressure so able to get on with the

day job

Negative perceptions and experiences of solicitors:

perceived high cost / inability to judge VFM not knowing who / where to go to lack of control over time spent / cost of advice delays in getting advice / resolution associated with very negative incidents /

issues


SME Issues

Drivers of Satisfactions Drivers of Dissatisfaction

Quick resolution Lengthy process / unnecessary delays

Definitive advice / resolution Generic, non-specific advice

Reassurance and peace of mind that issue is understood and being resolved

Advance warning of likely cost / feesNo advance warning of likely costs and fees

Value for money Poor value for money / escalating fees

Treated with respect / as priorityNot treated with respect / as low priority

Kept informed throughout processNot being kept informed or updated on progress

No nasty surprises

Tailored, relevant advice Sub-standard representation


SME’s – Need Lawyers?


SME’s – where they go (multiple options)


SME’s – Informal Advice


Online Services


CollabCo Questions & Issues

How collaborative – how integrated?

Who leads – is there a dominant player

Growth – start small, few, local – expand?

Agree to share client data (need evidence of client consent)

Limitations on “Creep” into other areas

Consistent compliance and standards (Supervisory?)

Finances - revenue, costs, savings

Ownership – relative voting rights

Company limited by guarantee (internally focused), Recognised body(externally focused)


Questions

Allan Carton

www.inpractice.co.ukblog.inpractice.co.uk

[email protected]

Tel: +44 (0) 161 929 8355


Why Do Law Firms Want Hosted?

ComplianceNeed to demonstrate business continuity and DR

High availability needs because of system dependence

Capital cost v Revenue spendHigh demands on limited budgets

SaaS culture

Latest versions

Start ups

Extended working hours and mobilityEnhance networks and support hours

Expertise requirement v employment challenges

Moving on from managed service – still a demand (cost perception)

Work prioritisationAdded value for profitability and clients v Keeping system going


Reserved Legal Services

The exercise of rights of audience - appearing as an advocate before a court;

The conduct of litigation - managing a case through its court processes;

Reserved instrument activities - dealing with the transfer of land or property under specific legal provisions;

Probate activities - handling probate matters for clients;

Notarial activities - work governed by the Public Notaries Act 1801

The administration of oaths - taking oaths, swearing affidavits etc.


Solicitors in practice, 2007

15,694 separate organisations employing solicitors

10,114 solicitors’ firms in England and Wales (1.1% increase, 2006)

85.9% of solicitors’ firms have four or fewer partners.

42.6% of private practice firms located in London and SE.

27.6% located in London in 2007.

London firms employed 42.5% of all private practitioners.

The 1.9% of firms with 26 or more partners employed 29.8% of all principals and 40.2% of all solicitors in private practice.

Sole practices account for 44.0% of firms, but employed only 8.0% of all private practitioners.

The largest firms, with 81 or more partners, had 2.1 assistant solicitors per partner compared with between 0.4 and 1.6 in the smaller and medium-sized firms.


CollabCo – Legal Documents

Memorandum and articles of association of management company;

Management agreement between management company and participants;

Agreement between participants for referral fees (insofar as not dealt with in (ii));

Agreements for hosted IT services.