Allan Carton of Inpractice UK argues that achieving Lexcel and CQS are essential but can only take you so far. Adopting the Investors in People philosophy will add genuine competitive advantage
Accreditation – a useful tool for serious business improvement, just a distinguishing feature in a market where it’s difficult to tell one firm from another offering the same service… or a costly and time-consuming commitment that isn’t worth the costs involved?
Like it or not, we have had accreditation against quality standards of some kind in the legal industry for about 20 years now and in that time, firms large and small have faced up to this conundrum. Now it’s a no-brainer – you have got to do it, even though I have very serious reservations about how firms set about the process; particularly when forced into it.
Lexcel and CQS – the minimum standard
With new entrants from commerce outside the legal sector, where compliance with quality standards are routine, beginning to provide legal services, the Law Society’s practice management standard Lexcel will increasingly be viewed by the expanded legal industry more as a minimum standard that sets the bar for procedural compliance low.
It will not continue to identify firms that offer added value and differentiation in customer experience – the qualities that really drive a firm’s brand.
The same applies to the Law Society’s Conveyancing Quality Scheme (CQS), which gives lenders another opportunity to put pressure on conveyancers to demonstrate adherence to yet another set of rules.
Of course, if a firm has achieved Lexcel, they will be exempted from 25+ requirements of this scheme when the application form is filled in, and Lexcel will always go a long way to helping a firm get better organised to meet regulatory compliance – which is again a minimum standard.
Lexcel and CQS are about introducing what should be regarded as a good framework for operating the business – no more than that.
Developing a genuine competitive advantage
To achieve real improvements in your business, we still maintain that the standard to meet is Investors in People (IIP), which is not legal specific. Because it reinforces a management framework that requires people working in the business to understand and contribute to the unique ethos of the business, you are beginning to talk about standards that help to develop genuine competitive advantage – if it is introduced and maintained property.
This is where the value-added will come from; effective development of people as an integral part of the business, where they can help you drive improvements in the use of technology, more efficient operations, better relationships with clients and new services that fit the changing needs of clients – and doing it better than your competitors.
Yet most firms have given voluntary accreditation schemes a wide berth because the standards are viewed as too demanding. Overcoming partner resistance and firm-wide apathy proves too high a mountain to climb, especially when firms are already struggling to make the established ways of working profitable under increasing pressure on margins.
Things have to change and accreditation to a standard is not seen as a priority to address this. They can be part of the solution though.
Focus on good employee and business management
Lexcel is now just a stepping stone. When we work with firms on Lexcel or IIP, we move the focus to introduce good employee and business management rather than simply aiming for the standard.
These cultural changes often contribute more to developing a firm’s unique brand and so become worth more than the accreditation standard itself. Other firms we work with comply – using the guidelines set out in schemes to improve their business – but don’t actually undertake the formal process. It works well for them and getting the certification is just a formality to seal the deal.
A potential reduction in professional indemnity insurance drives many a firm in search of accreditation, but the only way to truly reduce insurance costs is to actually reduce the risk, which requires buy-in from firm members in addition to good systems.
The accreditation itself means very little in reality – insurers are more interested in whether actions taken action really have reduced non-compliance, in which case huge reductions in premiums have been achieved. Examples include creation of “IT-automated” matter inception and management processes that identify (and make highly visible to everyone in the practice – so there is a focus on them) where there have been non-compliances in the matter-management process.
What interests insurers here is not that they have a system, but the demonstrable results actually produced by using it. The firms involved who have achieved huge savings on insurance can demonstrate a significant reduction of meaningful non-compliance, maintained very visibly at an acceptable level.
Standing out from the crowd
The emphasis here is likely to change as a result of the ‘Big Bang’ hitting the legal industry in October. The Legal Services Act will highlight the need for members of the public to compare services, so the more boxes a firm can tick, the better chance it stands of winning work against high street names.
The changing market is putting pressure on firms – especially those with a client base consisting of members of the public rather than corporates – to stand out from the crowd and for now, accreditation serves as a differentiator.
So achieving Lexcel and CQS are now essential – but they can only take you so far.
Adopting Investors in People philosophy (with or without formal accreditation, which creates a focus) will add genuine competitive advantage, provided that you are genuinely prepared to invest time and effort in your biggest resource.
The next step for some firms aiming to develop competitive advantage in the future will be EFQM.
Commercial firms don’t face the same pressure since their well-informed client base is likely to see through the accreditation process, but nonetheless they will still count the boxes ticked when it comes to a tender. They have to manage their risks too. Accreditation will continue to act as a differentiator, particularly in public sector tenders, where it is stipulated that legal suppliers have either Lexcel or ISO9001.
New entrants to the legal market won’t be put off by the need to get these accreditations; they will do it as a routine part of the business.
From October, firms will need to demonstrate a degree of business agility to compete with non-legal entrants to the market. The accreditation schemes geared towards unlocking opportunities by focusing on people and culture such as IIP, or improved procedures like Lexcel and ISO 9001, will provide guidelines to achieve this.
Look out also for another standard beginning to make its mark the legal sector – ISO27001 – which enables firms to improve operations on data security, where it is recognised by commercial clients in particular that most law firms are lax and need to improve. This is one area where (for now) compliance with a relevant standard will differentiate firms within and outside legal for some time to come.
Wider benefits on offer
When debating the pros and cons of accreditation schemes in the run up to October, firms should consider the wider benefits on offer: improved client satisfaction, improved risk management, better data security and so fewer complaints, a framework to improve business management and crucially, improved profitability and the generation of a competitive advantage.
These outcomes are more valuable than any piece of paper and will be a huge boost to any firm – even if they are achieved by following the guidelines without entering the formal accreditation process.