Karen Babington, Consultant – Legal Eye Ltd
It is budget time again and most of us have our noses in next years’ financial plans.
This time last year we at Legal eye were planning for 2013 and beyond which was reflected in our budgeting process. We recognised that to meet our future plans and targets we needed to invest time and money in the company in a number of key areas. One of our priorities was recruitment and training to expand the compliance team and therefore the geographical area we can cover. This has resulted in taking us across the border into Scotland for example.
As a company where our law firm clients are at the core of everything we do we also recognised that keeping in touch with our expanding client base was also a priority. The introduction of the Legal Eye app to provide a complimentary communication tool to update clients on ever-changing regulation contributed to achieving this aim. We also implemented customer satisfaction surveys using an independent company to survey 100% of our clients. In addition we researched areas where solicitors are lacking in choice of CPD seminars and hosted much welcomed seminars in rural areas.
So what are you budgeting for next year? The same areas as previous years or are you investing for the future? We are working in an ever changing landscape in the legal industry and the pace is starting to quicken thanks to factors such as the introduction of ABSs, increase in fraud and financial instability leading to consolidation within the market.
A recent article by my colleague Loschinee Naidoo identified emerging risks to law firms. These included lack of adequate succession planning with a number of firms unable to continue to trade or with no viable exit route placing them at risk of financial difficulty. Poor standards of service were also identified particularly in relation to vulnerable clients. Top of the list is inadequate systems and controls over the transfer of money.
When did you last review your compliance requirements? Compliance needs of firms change with ever changing risk and regulation so if you are formulating your plans for next year and beyond then it is worth reviewing your compliance needs at this time in the planning process.
In addition it is advisable to review the efficiency of your current compliance processes. In areas such as conveyancing with legal resource scarce could your fee-earning resource be used more effectively than carrying out file checks?
We recently had a law firm in the Midlands who tracked the hours Legal Eye did for a month compared to their internal resource. They found that the partner responsible for compliance was losing £6,195 per month in fee income because of the time taken in managing the compliance needs of the firm. Not surprisingly Legal Eye now takes care of the firms’ compliance and in addition the whole firm gets the benefit of CPD points from our internal training sessions.
This is an example where compliance, whilst necessary, can provide an unwanted distraction to the needs of your business. So as part of your budgeting process question whether compliance diverts your time, resource and energy from developing and managing your business. If the answer is yes then it may be worth looking outside your firm and speaking to a compliance consultancy such as Legal Eye.