Practice management: a people business
A prosperous law firm depends on efficient and effective practice management at the helm, with its benefits filtering through to its lawyers. Nicola Laver reports
About the authour
Nicole Laver is a freelance legal Journalist
If firms cannot keep pace with the most profitable practice trends, advances in technology and new cyber threats, or increasing client expectations, they risk losing ground and losing their best lawyers. There are key factors that underpin the effective management of lawyers and, crucially, ensure that their practice is effective and profitable in the face of today’s stiff competition. Those factors range from pricing and billable strategies and pay structures to innovation and tech issues, and from ‘people’ issues (for example, understanding today’s clients as well as understanding the skills and needs of the so-called ‘millennial lawyer’ ) to modern working practices fit for the 21st century.
The ‘millennial lawyer’ reflects a major generational change in attitude in the workplace. Millennial lawyers (born between the early 1980s and the early 2000s) are - by their very nature - tech-savvy , have a greater confidence in their inherent worth within the workplace, expect that they will be listened to by partners and have high expectations. Those factors unpin many developments in law firm practices.
Today, lawyering is really just the start. As Tracey Calvert, a lawyer and regulatory specialist, says: It is no longer good enough to simply be good lawyers. Providing legal services is a business, and lawyers need business acumen and to be able to manage their practices so that they are profitable (or financially viable to use the regulatory jargon). That requirement means that compliance and risk management are part of the firm’s core framework.’
She says that there are a lot of considerations and challenges, including keeping up to date with legal and regulatory expectations; keeping clients happy and loyal; and working in an increasingly competitive environment.
Today’s clients are not afraid to expect value for money, or pricing transparency. Applying an hourly rate, and telling a client they will be informed if the case/transaction is going to cost more, simply does not cut it anymore with many clients. A growing number of firms are, therefore, now willing to agree a set fee so that clients know exactly what they will be paying, and for what. Firms are recognising that flexibility over pricing arrangements is a necessary innovation. So, what do those on the ground say?
Alexandra Fordham is a Chartered Legal Executive at Irwin Mitchell Solicitors in Southampton, specialising in noise-induced hearing loss claims. She says: ‘At Irwin Mitchell, we are always looking for innovative ways to ensure the clients can access legal services. Where possible, we have some fixed fee products such as Freedom Legal, and we are always transparent about our pricing so the client knows where they stand.’
The bottom line is satisfied clients pay the bills. Tracey Calvert says: ‘Part of the role of practice management is financial control. The starting point for this and the financial viability of the firm, in general, is having enough clients. This is not a given. Clients in the 21st century tend to be more fickle and less loyal, and have more information and choices at their fingertips when deciding which lawyer or law firm to instruct. ‘It is essential that the firm’s pricing strategy is
pitched appropriately, and that the firm is competitive in an ever-expanding marketplace. Firms should be reviewing their fee structures and packages. Increasingly, and particularly with some more procedural areas of legal services, firms are working with fixed fees. This has a number of advantages over hourly charging structures: the money can be paid straight into the firm’s office account, and the client has the certainty that comes with knowing, in advance, how much a service will cost.’
The business world has long since accepted that traditional working practices are not always fit for purpose. The legal profession – notorious for its cautious approach to modernisation – has been making great strides to introduce innovative working practices that suit today’s lawyer. Lawyering can, after all, be done wherever there is internet access, and many law firms now facilitate working from home for a certain number of days a week.
In a notable leap in the trend for flexible - also known as agile’ - working, privacy firm Schillings has taken the concept to a whole new level. The firm has been widely reported as offering its lawyers the option of working in the office just two days a week, with lawyers able to ‘book’ desks for their office days via a hot-desking technology platform. Though some cynics may view this as a gimmick, it will be interesting to see how - in the coming months - this option works in practice for the firm and its staff.
Alexandra Fordham agrees that flexible working is important within the workplace. She says: ‘With more people travelling further to work, and technology allowing, it is more coste ffective for people to work from home and change working hours to avoid rush-hour traffic . Also, working from home can free up work space in the office . Clients don’t always want to talk to their lawyer nine to five, Monday to Friday, so it is important to be flexible where possible.’
The possibilities abound. David Gilmore, founder and director of DG Legal, says that he has seen ‘a great flexible working model that almost all firms would hate, but they would be wrong to be so dismissive’ . ‘A citizens advice bureau in the South West decided to abolish almost all rules, including those around [human resources (HR)] (for example, the number of holidays, hours worked, recording of sickness, etc). The only rules were that their lawyers had to meet an agreed target and pass any audits carried out by the Legal Aid Agency and Citizens Advice. I visited the bureau to find out what the catch was: I could not find one. The files were in very good order, they had passed all audits and morale was unsurprisingly high.’
Since his visit, the citizens advice bureau has expanded from one office to 11 under the leadership of Steve Davies, who is the manager there. The offices now provide advice and assistance to one-half of the Devon area.
‘Think this can’t work in a larger organisation? Think again’ , says David Gilmore. ‘Semco, a firm with more than 3,000 employees, does not have an HR department. There are no rules about holidays or sickness, and employees pretty much set their own pay.’
‘One of their clever ideas is the four-day working week. They feel it is illogical that people work five days a week when they are youthful and healthy, and then reduce to zero when they retire. They suggest reducing to four days per week for much of the employee’s career, and then later to three days. They’ve found that their employees are more productive when working a four-day week.’
DG Legal puts this into practice: its latest recruit is on a fourday week contract and, says David Gilmore, its aim is to recruit future employees on a four-day-week-only contract. And, as from January, the existing employees will move to a fourday week.
As Tracey Calvert says, the traditional view of legal services and how they are obtained is very different to today’s realities. She explains: ‘Commentators have described this as a quiet revolution, and there are some law firms which have responded to the challenges and opportunities for change and discarded the old-fashioned concept of the nine to five day, and meetings with clients which are by appointment only.
‘Much of this is in response to the increasingly competitive marketplace, but in many ways clients have dictated these changes. Many clients want to use the internet, and expect to be able to receive services beyond the normal five-day working week. What we are seeing is some firms offering e-mail /internet-led services to their clients, clients being able to access information via online portals and similar.’ However, she says that while there are risks attached to such innovation, firms’ compliance systems will need to reflect these risks. What is clear is that this is, nevertheless, a growing trend.
Critically, without the latest technology, innovative working structures cannot be tested and implemented. Technology is the facilitator of agile working; good client/ lawyer communication; effective case management systems; outsourcing; and so on.
As Alexandra Fordham says, case management systems play a large part in everyday practice, especially personal injury: ‘It assists with the day-to-day running of cases, particularly in relation to diarising and ensuring that court dates are complied with. It is useful to have case management systems with larger caseloads.’
As Tracey Calvert says: ‘Harnessing and making use of technology, so that it is a practice management resource, is essential. Technology can be used to provide consistency in the firm, in terms of casework management, in- file review monitoring, in terms of installing systems and processes, and so on.’
However, she warns that the use of technology is not without risk. ‘Over-reliance on it by members of the firm, without a real understanding of issues or ownership of the same, is one risk as is, of course, the threats relating to data security and the possibility of cyber interest in the firm.’
So, what about the expectations of today’s clients, without whom lawyers would have no work? David Gilmore says that one of the major challenges for lawyers today is effectively meeting clients’ expectations. DG Legal recently undertook a project for a firm that wanted to get a competitive advantage over other firms by better meeting clients’ expectations.
He explains: ‘Many clients often feel that they are one of dozens, or sometimes hundreds, of clients that a lawyer is dealing with. We put that thought out of the client’s head by implementing a text message system which provided the client with an update once a week - even if nothing had happened in the previous week. We did this by writing about 30 text message templates. We trained the team of solicitors and paralegals how to send these messages to clients using the internet. The paralegals would send these messages under the supervision of the solicitors. It meant that the solicitor would provide the client with an update before the client had a chance to think about - let alone act on - chasing the solicitor.’
He says that the result was very good: ‘Clients commented on how they had never known solicitors to be so good at caring about them and their case. It also cut down wasted time on responding to chase-up calls.’
Lawyers who are engaged, ie, able to work efficiently , are those who have satisfied clients that will come back to them in future - and recommend them to others. The law is, after all, a people business. An efficient practice management strategy which not only reflects the worth of its lawyers and the value of its clients, but also facilitates the best practice environment for its lawyers will ensure a prosperous firm.