Goldwag: Demand and supply challenges

Lawyers are getting better at handling complaints, meaning that those reaching the Legal Ombudsman (LeO) are becoming more complex and costly, the organisation said last week in part justification for an increase in its budget for the second year running.

The budget for complaints against lawyers has increased from £11.85m in 2017-18 to £12.5m in 2018-19, according to the business plan published last week.

Last year’s plan had anticipated a budget reduction for 2018-19 to £10.7m based on 7,000 new cases.

It now forecasts that that it will accept between 7,500 and 7,900 new cases in the coming year, and close 8,000-8,425 cases as it clear a backlog from the past year.

Among the strategic issues facing LeO, the plan said, was “the sector is improving its first-tier complaint handling. This, and changing customer expectations, means case mix is becoming more complex”.

Despite this, LeO projected that its cost per complaint would fall 6%, from £1,685 to no more than £1,563.

It admitted that last year’s performance targets had been missed: “We have faced significant challenges during 2017-18 from increased demand – both higher volumes than budgeted and the proportion of high complexity cases being higher than forecast.

“These factors have added to the number of cases awaiting allocation.

“Our 2017-18 business plan highlighted the risks that increased demand would increase cases awaiting allocation and prevent us achieving key performance indicators (KPIs), both of which have crystallised. High workloads have impacted staff morale and staff turnover.

“This year, we will start to realise the benefits of the improved process and systems implemented as part of Modernising LeO, enhanced by further innovation in our delivery of the scheme. These changes, informed by more robust operational forecasting and modelling, will help us achieve our new KPIs.”

The plan said the impact of increasing demand and case complexity has two elements: “one-off, time-limited resources to close cases awaiting allocation at the point of transition to our new business process in April 2018; and we are forecasting similar levels of demand in 2018-19, which means that our original budget and staffing model is insufficient, and there will need to be an increase in staffing costs to meet anticipated caseloads”.

The budget for complaints against claims management companies – which is paid for by those businesses – has reduced from £3m to £2m “as a result of falling demand and reduced bad debt costs”.

LeO said the budget also reflected one-off costs of modernisation, particularly in IT.

“We will be running two case management systems during 2018-19, have inflation in licensing costs, and need to make a number of one-off investments to modernise our IT infrastructure, data and records management.”

Wanda Goldwag, who chairs LeO’s oversight board, the Office for Legal Complaints, said: “LeO has made progress with its modernisation programme during 2017-18. The foundations for sustainable future performance are now in place but it has been difficult to maintain performance against our KPIs at the same time as delivering such wholesale change.

“In 2017-18, the organisation faced simultaneous demand and supply challenges while delivering major organisational transformation: demand and case complexity have increased, while at the same time we have seen high levels of staff turnover in a highly competitive recruitment market.

“To meet increased demand, mitigate the impact of staff shortages, and tackle the build-up of cases awaiting allocation, we have increased our resource allocation for 2018-19.

“We need to use the additional resources to create sustainable improvements in productivity, performance and quality. The OLC is under no illusion about the scale of the task.”

Ms Goldwag said there was “no quick fix to our current challenges, particularly if case numbers and complexity continue to increase”.

She added: “We will prioritise improvement of business-as-usual performance in 2018-19. We will also ensure that we invest in digitising our service and continue to develop our approach to feeding back learning from the scheme to the professions.

“In particular, we will continue to develop robust data systems and tools to mine our business intelligence for the benefit of consumers, service providers, regulators and policy makers.”


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