Cashroom got emotional.

We have quarterly training sessions with Rebecca at Tricres and I can honestly say she is great. In a pandemic when training might not be at the top of your priority list I highly recommend firms take the time to go through an exercise like this. Beforehand I always think I could really be doing without this today, I need to be getting on with X, Y and Z, but I ALWAYS come away up beat and feeling better about work and also about homelife – it’s basically one and the same now isn’t it!?!

We had our quarterly session last week and Rebecca sprung emotions on us. Believe me when I say we are not a touchy feely bunch at all. This did not come naturally to any one of us but we completely let it all out and you know what…it felt amazing! In-fact most of the company has had it now but I will only speak about the session I attended. You might think that sounds horrific and is not for you and your firm and I would have agreed in your position but after doing it I am a convert.

We want to be able to talk to our teams and listen to how they are feeling during this time.

It is important we help people feel better and we all do a better job when we aren’t under stress. While we will be encouraging team members at all levels to tell us how they feel we felt it was important to go through the exercise ourselves.

Rebecca introduced the session and that we were going to be talking about emotions; I recoiled and potentially muttered something rude to myself. As a Scot it’s not naturally in me to talk about such things never mind with my colleagues (I even quite like that people can’t hug me anymore).

Now I won’t give away her secrets, but Rebecca had some tools and ways to get 12 remote individuals opening up to each other from within their own homes through a video call.

Oh how cathartic it was.

Not only did I feel so much better divulging how the stresses of home school, having a toddler at home and doing a good job at work were getting to me but I immediately felt closer to my team again, not an easy feat with remote working. I felt empathy towards everyone’s struggles and I also didn’t feel as alone in mine. Now when I type it here it doesn’t look a lot, but I really went into how these things are making me feel. I don’t suggest we do this as a team every week but ongoing being more mindful of your colleagues’ emotions can only be positive for the business.

We are a diverse management team. We have people living alone, those home-schooling young kids, older kids, those who have spouses working in hospitals or the care sector, one is based in America and those who have full houses again with children that had left for university. It is easy at the moment to get caught up in just how awful your own situation is and to hear how your colleagues personal life is really actually going at the moment, nobody was allowed to use the word fine, was such a beneficial insight for everyone.

Obviously, we threw in the odd joke when it got too serious or awkward, we are human after all, but we all came away and agreed one thing – we will openly talk about our emotions in our business more.

If you and your staff are listened to and don’t feel alone, that can only be a good thing both for the individuals and your business.

I now understand the importance of this for my children too. I am currently home schooling a 5 and a 6-year-old and each morning when they log-in they each have their own way to let the teacher know how they feel. My five-year-old has a display of coloured monsters. Green monster is jealous, red monster angry, yellow happy – you get the idea. My five year old is getting used to telling us how he feels at the start of the day and in turn his teacher knows what language to use to help him learn better, what tools to give him to improve how he feels, perhaps when to challenge him more because he is in the right mood – how amazing is that as a child and yet as adults when we are told to talk about emotions we physically recoil!

Emotional wellbeing is more important in running our businesses than we give it credit for.

We might not be spilling our hearts out everyday and although post-pandemic the emotional challenges might not be as tough; we will continue to talk about how we feel at Cashroom.

Emma O’Day, Head of Marketing at Cashroom

I almost called this post “Mama Mia” – as in the Abba song “Mama Mia – here we go again” … but thought better of it!

With infection rates soaring, and the death toll mounting at an alarming rate, we’re all back in Lockdown, pretty much where we were in April last year. At the Cashroom we have re-initiated our business continuity plan and are back to regular business continuity meetings every other day.

Our biggest worry is complacency – the thinking that “we’ve been there, done that” and it will be fine. But it’s different this time.

It’s different because, last April the legal sector slowed down dramatically. That allowed us all to furlough staff that had child care commitments and found working from home challenging. This time, like many of our clients, we’re busier than we were in February last year, and furloughing staff is not an option.

It’s different this time because while no more deadly, the new strain of COVID is far more infectious. So, we can all expect more of our staff to be incapacitated by illness.

It’s different because we’re all tired, run down, and sick fed up with lockdown. The mental health of our employees is more “challenged” than ever.

So we are taking nothing for granted, preparing for the worst, while hoping for the best.

And you should too!

If there is anything we can do to help, please get in touch.

• Is your legal finance team struggling with going in and out of lockdown (perhaps child care is an issue), we can help. With the Cashroom, your team is already working remotely, to you don’t need to worry about change.
• If you are worried about security (and you should be, fraud increased dramatically last year), all our staff work over a secure VPN, using our Portal, which is regularly penetration tested.
• If you are worried about how it might all “work out”, our accounts team can help with forecasts and projections.
• Do you think you might need to “do things differently”, then our projects team can redesign your finance system from the ground up, using our experience of working with over 200 firms across the UK.
• And, finally, if your cashier has simply “had enough”, and has decided to retire, we can take the whole thing off your hands!

We’re here to help the profession through lockdown and beyond. If we can help you or your legal finance team, please get in touch.

And there is light at the end of the tunnel…..my wife (who’s a Doctor) will receive 3,000 doses of the Asta Zeneca vaccine next week for her older patients … we’re getting there!

David Calder, Managing Director at Cashroom

To stimulate immediate momentum in the property market and to support the jobs of people whose employment relied on custom from the property industry, the government decided to introduce a temporary Stamp Duty Land Tax (SDLT) holiday as relief. This relief increased the starting threshold of residential SDLT from £125,000 to £500,000 from the 8 July 2020 until 31 March 2021. A similar holiday is in place in Scotland although with a £250,000 threshold set until 31 March too.

A petition calling for the government to extend the SDLT holiday until September 2021 has now attracted more than 86,000 signatures, up from just over 54,000 earlier this week. At 100,000 signatures, the petition to extend the stamp duty holiday will be considered for debate in Parliament.

Delays are holding up homebuyers as the current lockdown places extra pressure on conveyancing solicitors, mortgage lenders and surveyors, struggling to push through purchases.

Todays Conveyancer published an article this week detailing law firm Dutton Gregorys promise to clients. They have unveiled their latest campaign promising if they don’t complete a client’s property purchase before the deadline, client’s won’t have to pay their conveyancing fees.

In a press release on their website, it says:

“Dutton Gregory want to do everything in their power to ensure all their clients affected by the Stamp Duty Holiday complete before the deadline – alleviating stresses where possible and saving thousands of pounds in the process.”

Would you follow Dutton Gregory in a similar campaign your own firm?

Is extending the SDLT holiday scheme for those already committed to the process the right thing to do or is it going to reach a chaotic end? We have seen a dramatic change to the furlough policy and could we see the same again here?

The latest lock down is only further adding to the pressure on current property transactions, with many working from home, many having children with home schooling obligations and many unfortunately falling ill. Many firms are beginning to fear the potential for negligence claims rising if they don’t get deals completed before the deadline.

While the transaction of buying and selling a property differs quite substantially between Scotland and England with most notably the completion date being agreed at different stages of the process, will the UK be united in its approach? Could the Scottish Government make a marked distinction between Scotland and the rest of the UK by extending the LBTT holiday beyond the current March 31st deadline? The Treasury has already said that it has no plans to extend the deadline so Nicola Sturgeon could make a competitive difference for Scotland by extending the tax holiday north of the Border.

The amount of legal cashiering work approaching this deadline may be impractical for many firms to meet. During this time it is more important than ever to be accurate, efficient and compliant. We help over 200 law firms in the UK so they can concentrate on their legal work. This is the ideal time to outsource your legal accounting to our experts. Contact us today. 

Emma O’Day, Head of Marketing and Communications at Cashroom

We regularly get enquiries about our services from start-up law firms. They are generally solicitors who have realised that they want to work for themselves, that they don’t really like the management style of their boss or Partners, or that they want flexibility that their current role doesn’t allow them. They are sometimes niche practitioners who know with some confidence that clients will follow them, but are just as often practising in areas such as conveyancing, family law, or personal injury.

Lately we can add to that list people who have been made redundant by their firm due to Covid-19 related uncertainty, and those who have realised by working remotely for the best part of a year that they don’t actually gain very much from all the back-office infrastructure and cost their current firm has, and could very easily and seamlessly set up on their own. For example, one recent new enquiry told me that she has realised they don’t really need a receptionist to answer the phone – calls can be easily diverted to the relevant Partner, and they definitely don’t need multiple typists – it turns out that typing emails, or short letters, themselves isn’t that difficult or time consuming.

Just as importantly, and often above everything else, the people starting these firms realise that working for themselves can mean earning more – they receive all the fees they earn, minus a few overheads (that they are in control of) – rather than a far lesser sum, often as little as the traditional professional services business model (roughly 33.3% to the Fee Earner by way of salary, 33.3% to the Equity Partner, and 33.3% towards overheads/costs).

So, if you have started the new year with a resolution to set up your own firm, please do get in touch for an informal chat about it. We have been through this many, many times before with all different types and sizes of firms. We are very well placed to recommend some things you may want to think about, some networks you may want to join, some systems or processes you may want to put in place, some people you may want to consult with on, for example, which bank may be best suited for your needs, and of course we can chat through our service offering to ensure accounts rules compliance, payroll and accounting are taken care of, all without the burden of employing somebody.

We have a vast amount of legal industry knowledge and experience, and a wide network of contacts. We would be very pleased to share these with you, if it helps you along your journey.

Gregor Angus. Senior Business Development Manager 

Cashroom Ltd

Most lawyers have been asked that questions multiple times. We all have our own answers, and if you’re like me, the answer may change to fit the circumstances of the question.

However, last night, watching the (ultimately) failed coup taking place in Washington DC, I was reminded of why I became a lawyer.

The legal system creates a set of rules and norms that regulates all of us. At its core, it stops society falling into chaos, where the strong prey on the weak, and anarchy rules. Ironically, the reason for the attempted coup last night, was because the system worked and judges across the US threw out every attempt by the Trump administration to prove voter fraud and the legislature were doing their job – the only avenue left for those “protesters” was the chaos and violence that was on display last night.

But it did not work.

American democracy, and the American legal system was strong enough to defeat those who wanted to subvert it. It was messy, and noisy, and took longer than it should have (and tragically took 4 lives), but it worked.

I was incredibly proud to be a lawyer last night. To be a (very small) part of a system that has defeated tyranny and anarchy across the world and did so again in the US yesterday.

And I know it might not seem like that when you’re 14 hours into a mediation and nobody wants to settle, or it’s midnight on completion day and you still haven’t agreed the draft, but we are all part of that system, and we should ALL be proud.

David Calder, Managing Director at Cashroom

The last article I wrote for the blog sounded an upbeat note for 2021, comparing the 2020s to the “roaring” 1920s. Since then we’ve a new strain of the virus, chaos at Dover, and the continuing Brexit drama, with no deal in sight.

All looking a bit bleak again.

However, some more thoughts to try and keep us smiling over the festive period.

Part of the reason for my optimism was clients reporting that there was a “lot of cash looking for a home”. Well, I’ve been looking at that a little bit more.

According to Refinitiv, 2020 has been a bumper year for raising finance. Initially, much of the money raised was “defensive” in nature (in April Carnival Cruise Lines raised $6.25b in debt, and Boeing sold $25b in bonds around the same time), however by the summer more business were raising finance presumably because they saw opportunity. The cash now held by non-financial firms is around $7.6t, up from $5.7t last year.

That’s an awful lot of “cash looking for a home”! Where will it find that home?

Bluntly, I have no idea, but there is one thing that’s clear – the pandemic, and the various lockdowns have driven innovation. Business have been forced to change dramatically, and people are beginning to realise that the things they thought would be “too hard” or would take too long are actually a lot easier than they thought. Change and innovation isn’t as difficult as we all thought.

So, we have a situation where businesses have lots of cash and are less fearful of new ideas and change….! I suspect some of that cash may “find a home” in technology and innovation investments!

And there’s something else.

Productivity is the engine of growth and prosperity. Doing more with less drives increases in income and living standards. However, since the financial crisis productivity in the western world has remained pretty static.

Economists debate why that is. However, one theory is that it takes time to work out how best to deploy new technologies effectively. Think about the “dot com boom” – everybody knew that the internet would revolutionise the world … but it took a while to work out how that would happen – hence the dot com bust. It takes time for businesses to work out how best to use technology and make the organisational changes that let them do it.

Well, the pandemic has forced our hand. There has been more organisational change, and technological innovation in the last year than many people expected in the next 5 years.

Now combine that, with all the “cash looking for a home’ and it makes you wonder if we are looking at a productivity boom in the 2020’s…..!

The more I think about it, the more I can see reason to be optimistic … and the more I want to learn the Charleston!

David Calder, Managing Director 

Cashroom Ltd 

As we look to welcome in a new year, the UK economy waits with anticipation over the prospect of an effective COVID-19 vaccination and the delivery of a BREXIT deal that will support UK businesses.

The challenge for many law firms, outwith the concerns over future fee income levels, will be the reality of increased costs caused by the ending of the furlough scheme, the start of CBILS loan repayments and the settlement of any deferred tax/VAT. Adding to this, the increases to Professional Indemnity Insurance (PII) premiums leads all firms to consider how best to recoup cash and build sustainable financial reserves.

Lexcel encourages law firms to adopts strict controls (Lexcel 2.2 ) which should help to maintain a watchful eye on business finances, and the SRA has also mandated that firms must be able evidence their approach to financial stability (SRA Code of Conduct for Firms 2.4).

“The mind is everything. What you think you become.” – Buddha

SRA recently published their Risk Outlook 2020/2021 which offers further insight on several future developments and it is clear that firms must proceed with renewed energy in order to encourage an effective flow of cash within the business.

In the spirit of Christmas, these ‘three wise kings of finance’ may not offer gold, frankincense or myrrh but they will provide an immediate positive result for your firm heading into 2021.

1. Review client money interest rates

The threat of negative interest rates has been widely discussed over the last couple of months and the big 4 high street banks offer a historic low rate of 0.01% on client monies. Do not despair – it is still perfectly possible to achieve higher rates on ‘top slice’ client monies. You just need to know where to look. That is an extra £4,900 per £1m deposited.

2. Complete financial benchmarking

The Law Management Section offers an opportunity for firms to benchmark their financial performance. Participants receive a bespoke report which they can use to effect positive change in the approach to cash management. For example: A £5m turnover practice that can reduce lockup (Debtors and WIP) by 10 days can expect to reduce their cashflow by £136k. This reduces the reliance on an overdraft and provides headroom for future periods of cash shortages. This practice should be an essential annual event for Lexcel firms and offer a great exercise for the COFA to really understand the financial position of the firm.

3. Remove billing/cash collection from fee earners

Many firms now realise that allowing fee earners to earn fees whilst the finance team owns billing/cash collection, creates a perfect balance. Evidence is of course anecdotal and success levels will vary amongst firms but It is encouraging to learn that firms that have made this step report a positive impact on cashflow and more importantly, the positive development of their teams understanding of the importance of effective cash control.

There are many ways to improve the financial performance of a legal practice, and what is important is to first have a clear understanding a firm’s cultural approach to financial management. Only then can an improvement plan be mapped out.

The Financial Stability Scorecard is a free resource available to firms associated with The Cashroom. The scorecard takes less than 5 minutes to complete and does not require any financial information. With 100% of respondents confirming the scorecard helps to evidence their approach to financial management, you can be sure this resource offers added value.

Paul McCuskey is Managing Director of Gemstone Legal which helps law firms to maximise income whilst reducing risk. Former UK Head of Professional Practices at Bank of Scotland and Lloyds Bank, Paul has worked with law firms of various sizes and complexity across the UK and Northern Ireland. Having seen banks shift away legal sector specialism, Paul set up Gemstone Legal to offer firms a trusted, independent approach to finance and risk management. Paul is a Lexcel assessor and speaks and writes regularly on financial factors impacting the UK legal sector.

Your firm’s finance function sits at the centre of your firm’s risk profile.

There are many different elements of risk, which means that it is an area ripe for improvement if you can identify those problems. Improvements in your risk profile can lead to efficiency savings, cost savings, lower PII premiums and better nights’ sleep.

See how many issues you can recognise in the following fictional account.

A day in the life of a Bloggs & Co’s finance function

Bloggs & Co is an average firm in an average town. They have a mixed client base of private individuals and businesses. They operate across three small offices. Some clients are local, and some are from other parts of the UK. [Risks around AML processes- whose responsibility is it within the firm to make sure there is compliance?]

The firm’s finance function is based in their main office. There is a senior cashier, Maureen, who has no formal qualifications, but has been with the firm ‘forever’. She has done the cashiering for thirty years and was the only one who knew the passwords for the old practice management system. [Many firms have this situation with passwords, and with one person being the only one who can make the finance processes work]

Last year the firm changed system and Maureen has struggled. [System change can prove stressful for the finance team, as the system is often chosen for reasons related to case management and we hear of cashiers receiving little training, or in some cases simply being resistant to change].

She now keeps password details on yellow stickers next to her screen. [Clear security risk, but surprisingly common] The new system is cloud based and many data reports are available, however Maureen tends to provide info to the partners using Excel spreadsheets. It can take several weeks to pull the data into her old spreadsheets but she prefers to do it that way. [Inefficient process and providing the Management Information to the partners so slowly makes the information far less useful]

The changes to the Solicitors’ Accounts Rules recently caused some stress for Maureen and for the COLP but she assured the COLP that since they had been compliant before the regulation changes, they would be compliant now. [Wrong! And from what we have seen of Maureen, are we sure she is right that they were compliant beforehand? It’s not necessarily her fault- she may have little or no knowledgeable support within the firm]

The firm hired a junior cashier six months ago to support Maureen. They advertised in the local press and the managing partner interviewed the candidates. [How did the MP assess competence as a cashier? How did the firm assess integrity?]

The new cashier is called Joe, and Maureen finds it very time consuming to train him, especially when it comes to the accounts system. She has shown him how to access the bank and make payments, as that is one area in which she can get completely swamped. [Having someone new and junior able to make payments puts the firm at huge risk of either mistakes or even internal fraud. Also, Maureen will find it difficult to train on the system as she doesn’t understand it herself.].

The fee earners email the client and office slips to Maureen and Joe, and occasionally partners come into the room with paper slips when they want to jump the queue. On a Friday they often have to field emails, visits and even telephone calls from clients chasing completions and providing information. [Huge inefficiencies here which can affect cost effectiveness and indeed service for the firm’s clients with eg delayed completions. Also, using email to communicate with the accounts department is fraught with cyber risk, especially when the team is swamped and more prone to errors]

This year the firm has of course coped with Covid restrictions. Initially their work dropped off, but there has been a huge surge of conveyancing work since July. When the first lockdown occurred, Maureen was sent to work from home, however the firm’s technology and processes didn’t work for her. Her home wifi kept crashing as she tried to set up payments. The partners who were used to giving her tasks face to face struggled to implement remote working. Supervision and ongoing training of Joe was almost impossible. When things eased the firm decided to move the finance function back into the office, seating Joe and Maureen at either end of their room. [Many firms had the same problem- working securely and efficiently away from the office is not as easy as simply sending people home with a laptop]

Today Maureen feels really tired and her coronation chicken sandwich for lunch was strangely lacking in taste. Joe seems to have an irritating cough too. [The risk of the resource within any function of a law firm becoming unwell is always there, but of course even more so at present- what if the team or key individuals need to isolate rather suddenly?]

Hopefully this article will have raised some interesting topics for discussion. Next month I will run through the ways in which these risks and problems can be mitigated and avoided.

Alex Holt, Director of Business Development

Cashroom Ltd 

Over the last few weeks, I’ve spoken to a number of client firms about their experiences of 2020, and where they see the market going over the next few months. I won’t pretend this is a scientific study, or that it has a huge sample size (about 20 individuals in 20 firms) but I found it interesting, and I hope you do too.

My first take away, was how resilient our client firms are. While a few found the first lock down, challenging, all of them managed, with a mixture of home working, and minimising visits to the office.

The 2 big issues were, access to technology, and access to their “files”. Firms who had invested in cloud computing (most of them) and had digitised their paper files (far fewer) had a huge advantage. Experience ranged from simply going home and “logging on”, to panicked calls to IT support, and loading paper files into their car.

Of course, not worrying about their finance function helped!

Next, most took advantage of the furlough scheme. It was a challenge for some. For a number 80%  of their furloughed employees’ salary was less (in some cases, significantly less) than the maximum grant. Some topped up the government scheme, to pay 100% of the furloughed staff members salary, but most didn’t.

Some firms took out a COVID Business Interruption Loan. Interestingly, most of those who did, found they didn’t need it, and are treating it as “low cost working capital”.

Which brings me to business activity.

This was more varied. Generally speaking, there was a short sharp shock in the second quarter. Revenue fell, in some cases dramatically, but mostly far less than people expected. Broadly the message was “it wasn’t as bad as I thought it would be”.

Different sectors held up more than others. Matrimonial and private client work (excluding conveyancing) held up best. Firms with strong matrimonial practices have remained busy throughout the year (a cynical person might correlate that with lockdown!), but general private client work was also strong. One person commented “there’s nothing like being faced with a global pandemic to make one face one’s own mortality” when reporting an increase in enduring powers of attorney, and estate planning. Sadly, a few have noted a marked increase in executory and probate work.

Commercial work was more mixed. Most deals froze at the start of lockdown. Some never came back, and very few deals were initiated in the 2^nd quarter. However, in the third quarter many of the deferred deals came back, and some of our commercial firms have been very busy through the summer.

Interestingly, some commercial firms report their clients seeing the impact of the lockdown as a buying opportunity. One in particular is extremely busy with Commercial Property clients “recycling their cash” (the client’s words), into other investments. From a few firms the message I received was that there is a lot of money “out there” looking for a home!

Residential Conveyancing has had the greatest roller coaster ride, from “falling off a cliff” in Q2, to “I could be working 24hrs a day 7 days a week if I wanted to” in Q3. However, it’s fair to say that the residential property lawyers I spoke to are the least confident about the next few months.

Other more “random” observations.  Agricultural work is booming – apparently “farmers have buckets of cash” at the moment. Insolvency work is very quiet …… but “watch this space”.

Which brings me to the next few months.

As I mentioned above, residential conveyancing lawyers are nervous. There is normally a dip over the holiday period, but the expectation is that with increasingly sever lockdowns, and the expectation of increased redundancies, that will be exacerbated (one person referred to the Furlough Scheme as the “Redundancy Deferral Scheme”!). A number of people reported mortgage lenders dramatically tightening their lending criteria, making getting a mortgage much harder.

Firms with a broader private client offering (matrimonial, wills and executory/probate) feel they are in a better position to weather the downturn. The few Commercial Property lawyers I spoke with, were “cautiously optimistic”. One pointed to “turmoil” in the letting market creating a lot of work.

Commercial Litigators and Insolvency Lawyers are “biding their time”!

The consensus is still that Q1 of next year will be hard, possibly very hard. I’ve written about his before. The expression I’ve heard more than once is that it’s when the “chickens will come home to roost”.

I’m not going to disagree with that assessment. The economy is in a bad spot, and the public finances are in a worse one …. but …!

There are 2 things beginning to make me think optimistically about Q2/3 next year.

First are the increasingly hysterical reports about a Vaccine. This morning Matt Hancock opined that most folks should be vaccinated “sometime after Easter”. For once the hype might be real. I hear from friends in the NHS that planning for distribution is underway, and my wife (a Doctor, and possibly the most cynical person I know) is surprisingly optimistic! A 95% effectiveness rate is extremely high (vaccines in common use, e.g. Cholera, are far less effective), and with  the “Oxford” vaccine reporting a 70-90% effectiveness, we have one that is much easier to manufacture and store than the others.

Second – as with all down turns, there will be winners and losers. No doubt some sectors, and many businesses will be badly affected. However, a recurring theme in the conversations I’ve been having is that “there is a lot of cash out there”. Which makes absolute sense – look at the hole in the public finances? Very broadly speaking, the government has borrowed billions of pounds and given it (by way of grants and loans) to people. Also (and I’m sorry, but this is a little “dark”), the 50,000+ excess deaths will dramatically accelerate the passing of “inactive” wealth, to a younger generation where that wealth will be much more active.

What connects these 2 things – confidence!

The biggest problem for individuals and business over the last few months has been uncertainty and a collapse in confidence. Everybody has put off significant purchases and investments because of uncertainty, and a lack of confidence. The result – a lot of people are sitting on cash – remember the firms who have their CBILS still sitting in the bank, and all that cash “looking for a home”?

But with an effective vaccine in reach, and “the end in sight”, that confidence will return … and that cash will be looking even harder for a home.

I hesitate to predict a 2021 summer boom – I’m not an economist (!), and public debt is eye watering, but ….. there will be a lot of people, with a lot of cash, looking to “get back to normal”.

Remember the “roaring 20s” (well, at least,  do you remember hearing about them – even I’m not that old!). Well, that boom happened right after the First World War …. and the Spanish Flu pandemic!

David Calder, Managing Director

Cashroom Ltd

I promise I didn’t spend my honeymoon in Cornwall thinking about the legal sector and business generally. That would be tragic, and may well be the sort of thing that would lead to a very brief marriage.

However, when I got back to my desk and the joys of my working life a few things did occur to me.

We can fall into a trap- looking in very insular ways at the sector we serve, at the methods and processes which are specific to our market. I believe that in doing so we are missing out. I think this may be particularly the case for winning and servicing new business.

Think about client service and parallels with the hospitality industry who must surely have had things tougher than most other sectors.

Booking a table – almost every restaurant we wanted to visit had very slick online booking systems. They were easy to use, and provided a very quick and certain confirmation that we had a table. There was no need for ‘human’ interaction and it made me wonder whether customers might value the ability to book an appointment slot online, when googling legal services in an evening.

Surely firms could use a version of this method to engage with existing clients and potential new customers. The firm would specify slots of available time, and the load could be shared across a number of fee earners. I know that when booking a table, we were far more likely to book at our convenience, rather than having to call during specific hours to speak with someone. I suspect there is a large portion of a firm’s potential market who would think similarly when shopping around law firms to acquire services.

Which brings me onto customer reviews. It’s not so long ago that price transparency on websites was the big new thing for lawyers. But surely more than ever, the ideas from online shopping have relevance for the sector. The parallel with a service industry like hospitality is that service and customer experience play a key part in reputation. Every firm can perform its core legal business. They can write a Will. Or sell a house. Or litigate. However the differentiator is often not about price. What makes a firm stand out  is how well they perform those services, what the customer experience is, and what the firm does to capture reviews and publicise them to win work.

When we were looking where to eat we would want to view a clear website, with the detail we needed (menus usually, and lists of cocktails!), and we would always consider some of the recent reviews and star ratings.

Finally, let’s think about that customer experience in more detail.

So we’ve gone online, searched for our restaurant (or lawyer), looked at their website, read their reviews, made a booking. In we go.

The variety of experience from that point on is huge. Someone who has booked a table (or decided to meet a lawyer to discuss a will for example) has only just started their journey. How are they greeted on arrival? The parallel here is the difference between being left standing with a mask on in the foyer for twenty minutes or being shown by a friendly and helpful person straight to your table.

Does your firm have processes to deal with people both remotely and face to face which make the client feel valued, not just on their first encounter, but then onward throughout their dealings? And at the conclusion do they look at the bill and say “the main course was expensive for what we got” or do they wax lyrical online about what incredible service and value for money they experienced?

One thing that law firms don’t need to worry about is the upset caused by eating at loads of these establishments and realising that the major efforts to get fit and lose weight before the wedding were decimated by the wonderful meals and drinks we enjoyed. I guess that’s another story entirely!

Alex Holt, Director of Business Development

Cashroom Ltd

Alex Holt has been chatting with Karen Bexley of Bexley Beaumont gaining important insights into how Bexley Beaumont have dealt with this year. Bexley Beaumont are one of our valued clients who only started trading in January 2020. They are a boutique law firm who specialise in many areas of law from Commercial, to Family and even Employment law.

Gareth Jones from Easthams Solicitors discussed his Law Firm Insights with Alex Holt of Cashroom. Easthams are a firm located in Blackpool dealing with Conveyancing, Personal Injury and Road Traffic Accidents. Easthams are a valued client of ours!

Last week we set out the first 5 benefits of Management Accounts. Continuing with that, here are another 5 to round out our Top 10!

6. Allows Monitoring of Working Capital

It is easy to see how much cash you have in the bank from month to month, but much more difficult to monitor how much your clients owe you, how much you owe creditors, and of the monthly movements in those figures. An increase in debtors, without an increase in turnover can be an early warning sign that clients are taking longer to pay, and that you need to invest some time in chasing payment of your outstanding fees, or using an outsourced Credit Control service.

7. Helps Motivate (some) Managers and Staff

It can sometimes be helpful to share management accounts with key members of staff, so that they can easily see the reason why they need to control costs, increase collection of fees etc. Accounts can be a nice visual aid to focus performance, and can also be split into specific areas if you only want to show staff particular areas of the business relevant to them. However, you should note that not everyone will be interested in numbers!

8. Avoids Surprises at Year End

Usually business owners will have a reasonably good idea of turnover, and a grasp of regular costs, however it can be difficult to monitor varying margins, exceptional costs, one-off projects and anything else out of the norm. It can also be difficult to factor in accounting concepts such as accruals and depreciation. This can mean that the year-end results are far from what’s expected. If a business has made an unexpected loss it can come as a nasty shock. If the business has performed much better than expected, it could result in an un-planned corporation tax bill.

9. Helps Identify Seasonal Variances

Traditionally, some types of firm will be busier at certain times of the year, and quieter at others, so need to plan ahead for that. Usually (albeit not in 2020!) conveyancing firms are busier in spring and autumn, and monthly accounts allow you to track and analyse every individual month, so that you can clearly see the impact of this and plan for future years accordingly.

10. Helps to Plan Dividend Payments, Drawings and Other Remuneration

Some business owners will choose to take their earnings in dividends or drawings rather than salary. However, for less established or less profitable companies this will need careful monitoring, to ensure too many dividends or drawings are not taken through the year. For other businesses, it may be that through monthly monitoring, it is perfectly possible to take more drawings each month.

There are of course many different benefits, and these will vary firm to firm, but hopefully this has provided some food for thought in terms of running your business with the benefit of information allowing you to do so with more confidence.

Gregor Angus, Senior Business Development Manager

Cashroom Ltd

Every limited company must file a set of accounts with Companies House following the end of each financial year. That is a statutory requirement, and is seen by some as a necessary evil in exchange for some of the benefits of being a limited company entity. However, far from just being a box ticking exercise, a set of accounts can provide you with valuable information about your business and its performance, allowing you to make better decisions and strategically plan for the future.

The benefits of Accounts can however be limited, if you only see them once a year. Many businesses therefore produce monthly management accounts. For smaller firms looking to control spending, this may seem like adding an unnecessary cost, but we would contend that the benefits nearly always outweigh the expense. Here (in no particular order) are our top ten reasons why:

1. Compare to Budgets and Forecasts

Usually business leaders will have an idea of where they want their business to go, and how it should perform. Often the reality is very different from expectations though, and the difficult part is spotting where those differences stem from. Budgets and forecasts can easily be integrated into management accounts, providing a visual aid to easily see the causes of any variances. Our management accounts packs are specifically designed to be very visual, with graphs and charts to easily see where you are against budgets and forecasts.

2. Help to Control Costs

A monthly set of accounts makes it very easy to compare costs month to month, and to expectations or budgets for the month or year to date. Often savings can be found by analysing costs in more detail, and promptly. It allows you to pick up on small variations against budget, which over the course of a year would add up to a significant difference. It also helps to set out all your various outgoings/costs in a list that is easy to review, rather than trying to do that in your head. This situation has been even more apparent in 2020 where all businesses’ are trying to review their costs, and those with management accounts have a very easy place to start.

3. Can be Used to Obtain Finance / Extent Credit

If you are looking to raise finance from a bank or investor, continue or increase an overdraft, usually a good business plan, backed up by forecasts and accounts, can dramatically improve your chances of success. However, this can be difficult to do if you are using a set of accounts that were produced 6 months or more ago. This is especially true if the business performance has changed significantly since the last financial year end, or in the present situation, where the whole world has changed significantly since the previous year!

4. ‘What Gets Measured, Gets Done’

It’s a bit of a cliché, but it is true! Relying on annual accounts or data is not very useful in measuring realtime, or within a useful timeframe, what is going on in your business. You can use management accounts to help set measures or targets that would be beneficial to your particular business, and then use the monthly reports to measure where you are against those. That way, you are using the data to refine what you are doing, change tact completely, choose what you should be doing more of, less of, or even not doing at all!

5. Helps with Cash planning

Remember cash is not the same as profit. For example, some firms may collect a payment to account from their clients up front, but obtain credit from suppliers, or have chosen to defer payment of VAT. In the gap between receiving cash up front from clients, and paying suppliers or deferred VAT, the company may have other costs to pay out, such as wages and monthly bills. Cash in the bank can sometimes give a false sense of security, whereas monthly accounts will make it easy to identify problems or gaps in funding quickly, so that you can look for external funding or reduce costs before the problem becomes critical

Next week 6-10!

Gregor Angus, Senior Business Development Manager

Cashroom Ltd

So we are now well into lockdown 2 in England but hopefully it is not quite as drastic on working life as the first time – thankfully there is less home schooling, banana bread making and Joe Wicks too!  Wales has come out of their ‘circuit break’ and the central belt of Scotland is working under Tier 3 restrictions. Back in March, EVERYTHING stopped so what about this time?

It appears that for the legal sector there is a lot of good news.

Robert Jenrick, Secretary of State for Housing, Communities and Local Government took to social media to reveal that the housing market would still be able to operate.

In a tweet Mr Jenrick wrote:

Housing market update ahead of Thursday’s measures:
 – Renters & homeowners will be able to move
 – Removal firms and estate agents can operate
– Construction sites can and should continue
– Tradespeople will be able to enter homes
– But all must follow the Covid safety guidance

The market is still facing an unprecedented busy time with buyers desperately trying to beat the Stamp Duty Land Tax SDLT holiday deadline so the ability to keep operating will be welcomed.

More good news for the profession is if it is necessary then solicitors can meet clients. The Law Society said it has met with officials from various government departments this week and secured agreement on interpretation of the rules that law firm offices are able to remain open during this period.

Solicitors and law firm staff should work from home if possible but if this is not possible, they can leave home to work in the office. Solicitors must try to see clients remotely and deliver services virtually, but again if this is not possible then face-to-face meetings are permitted.

People are allowed to leave their home to fulfil a legal obligation, including attending court, or to participate in legal proceedings. They can also access public services such as asylum or immigration advice or services provided by charities and voluntary organisations.

So to summarise the stress of everything absolutely shutting shop is not there this time.

However how are firms and business owners coping?

You may have seen Philip Armstrong a conveyancer solicitor in Northern Ireland blow off some steam on LinkedIn last week. My friend at Todays Conveyancer told me to give it a watch and it really struck a cord with me how lawyers are struggling and how they seem to bearing the brunt of a lot of stresses that everyone is having at the moment.

While business is continuing it is at a much slower rate than usual and clients seem to really be taking this out on their lawyers. Some clients…and I stress SOME…are raging! They are fed up with restrictions/worrying about family members/lacking social contact/may have financial worries/work stresses and at the moment that is being taken out with anyone who listens to them – their lawyer! Areas such as conveyancing which can be emotive at the best of times really seem to be taking a kick from clients at the moment!

Give Philip a watch and a follow, he has published another video since then and if the video gives you nothing else other than realising you are not alone then I hope that gives some comfort this year. It is also quite nice to see and hear from other people – even if it is on a video!

Now I am off to do a Joe Wicks (I lied, I’m not fed up of him yet!)

Emma O’Day, Head of Marketing and Communications

Cashroom Ltd

With apologies to Steven Spielberg – “just when you thought it was safe to go back to the office”, we’re all back to lockdown.

With our office in Lancashire in Tier 3 lockdown, and our office in Livingston under the Scottish equivalent, we’re all still working remotely.

We had planned to reopen in October, but have recently told our staff not to expect to be back working “in person” until April next year. Pessimistic? Perhaps, but one thing that makes lockdown harder is uncertainty. How do you plan your life, if you don’t know from one month to the next whether you will be at home of in the office? By ruling out a return to the office for 6 months, it lets people plan a little bit further ahead.

So, like many people I’m going into my 8^th month of working from my “study” at home. And when I say “study”, I really mean the kids old “playroom”, complete with pictures on the wall and Winnie the Pooh lamp shade!

But is it really the same as last time?

Of course not! We’ve done it before. We know it works, and we’ve learned the lessons. We’re better prepared for remote working, and it’s not nearly as scary as it was in March.

Speaking with solicitors across the country, I find more of us ready to embrace remote working, and alternative working arrangements. We’ve noticed a big increase in firms looking to outsource their accounts function. As usual, there are a number of reasons, but increasingly there seems to be 5 main drivers

• First, convenience – With The Cashroom you don’t need to worry about whether your account’s team will function if you’re working remotely – it already does! You can go in and out of lockdown as many times as you need to, without worrying about your accounts team.
• Second, security – you don’t need to worry about the security of email communication or whether somebody hacked your cashiers home computer. All our staff operate over a secure VPN, using our Portal, which undergoes regular penetration testing.
• Third, quality of information – if things are tight, it’s critical to know exactly where you are financially, and where you’re going. Previously smaller firms “skimmed” on management information. Not anymore. Our accounts team are extremely busy, producing management accounts, and most importantly, forward looking projections. We can provide quality financial information to firms who can’t afford to employ a Finance Director.
• Fourth, restructuring. Lockdown has forced many firms to look very carefully at how they work, and how they’re structured. We work with around 200 firms across the UK, and have unrivalled expertise and experience in how to structure a law firms accounts function for maximum performance and efficiency. Our projects team is helping many firms redesign their systems from the ground up.
• Finally – retirement. A lot of people have reassessed their work/life priorities during lockdown. A number of firms have come to us because their cashier has decided to retire.

Whatever the reason, there has never been a better time to outsource your accounts function to The Cashroom!

David Calder, Managing Director

Cashroom Ltd

It goes without saying that 2020 has been a challenging year for us all (to say the least!).

But for those businesses that have been able to adapt their strategy, operational model, or pivot their business successfully, and those who have been fortunate to be in sectors that have largely continued with ‘business as usual’, now might be the perfect time to kick off some Corporate Social Responsibility (CSR) initiatives. Often seen as a ‘nice thing to do’ but only ‘when we can find the time’, I would encourage you to challenge that mindset.

CSR activities, at any time, really can be a win:win:win!

Let me explain, using our business as an example. We select a Charity Partner of the Year, and in 2020 it is Thrombosis UK. This is a cause very close to our hearts here at The Cashroom – a member of our team, Emma Collins, very sadly passed away in 2019 from the condition. Emma was a Cashier in our Skelmersdale office, and an extremely popular team member. In honour of Emma, choosing Thrombosis UK as our charity partner for 2020 was a unanimous decision amongst the Culture group.

During October, we are aiming to walk, cycle, run, golf(!) or use any mode of active travel the 201 miles between our two offices. Our staff are undertaking the challenge either in their teams, or individually, to try and raise lots of money for this cause. We will also be doing a raffle draw, and a ‘Fancy Dress Friday’ on 30 October. So, first and foremost, undertaking the fundraising challenge will benefit Thrombosis UK, and assist them in funding the fabulous work that they do. A Win for them.

Secondly, our people have really enjoyed getting involved in the charity initiatives, and that’s even before Fancy Dress Friday! It has brought people together, positively impacting staff engagement, raised awareness of the important health messages from the charity. Also encouraged our staff to stay (or get more) active as the weather turns a bit worse, which has many positive outcomes on physical and mental wellbeing. A Win for our people.

Finally, it is worth mentioning for those who think CSR is all about giving time and money away, it has also been a Win for us as a business. The various activities have raised our profile, and led to increased engagement with clients, suppliers, strategic partners and other stakeholders. People generally like to support good causes, and those trying to help raise funds for those good causes.

So, I would encourage you not to write off CSR just now, but to embrace the opportunities it brings.

Charities have been hit particularly hard this year, and for those able to do so, I would encourage you to support them, even in a very small way if you can. On that note, if anyone would like to donate to our challenge, the link to our JustGiving page can be found here. Even donating the equivalent cost of a take away coffee would be very much appreciated, as every little bit really does help. And I’d be more than happy to return the favour in the future!

Gregor Angus, Senior Business Development Manager

The Cashroom Ltd

Cashroom is not only a legal cashiering company. In this video you will find out more on our technology capability. Chris details where our Portal came from, where it is now, open banking integrations and the introduction of Kanbaro Directors to Cashroom.

Asking a lawyer whether they know what they are doing might seem a little odd. Not an approach likely to endear me to lawyers in general! However, having been a lawyer some years ago, and a partner at a couple of large law firms, I do know that it’s a valid question.

One of my old firms was a leading light in the personal injury sector. I therefore had a ringside seat as the Chief Executive had numerous ding dongs with the claimant department over his ideas for new ways of running claims. This was the early 2000s and his ideas were, at that time, somewhat radical. The firm was one of the first to create an approach based very much around technology, case management and PROCESS.

The mantra which irked many of the solicitors in the claimant department was “What you do is a process. It’s not complicated.”

Many of the lawyers were horrified. The very thought!

But in the end, it was true. The firm took the time to understand the elements of their process, supported it with the right technology, and ended up with a model which is now familiar for volume businesses especially – teams of more junior people operating cases on sophisticated case management systems, with a senior person overseeing each team. Twenty years ago, this was revolutionary thinking.

Fast forward to the present day and many firms (but not all) adopt a variation of that approach. They completely get the concept of ‘right person right task’. Often that is driven by more detailed billing information which means that a client would see if a partner’s hourly rate was being charged for something which could have been done by a junior.

However, a far smaller proportion of firms consider other operational areas of their business in the same terms of process and efficiency. The finance function of a firm in particular is the most often neglected in this respect.

It lies at the core of the firm. It carries the highest risk elements in terms of internal and external fraud. In terms of potential negligence, efficiency and therefore client service. Also, in terms of the data accuracy and interpretation required in order to effectively run the legal business.

It is frequently an area of the firm which the lawyers do not understand. Cashiering is a dark art which requires significant expertise, and even more so as it now interacts with the technology utilised by the firm. The practice management system, so often seen by the lawyers as simply a case management tool, carries the accounts element which, both for compliance and risk avoidance, must be operated efficiently and accurately.

This is more relevant than ever in the present Covid driven circumstances. Is the firm’s remote or disrupted operational model now handling client money optimally? Safely? Efficiently?

We have seen a trend developing. It used to be the case most often that forward thinking firms approached us when their incumbent cashier was leaving or retiring, seeking a different way to resource that function. What we are now seeing is an increasing number of firms, some of them very large, approaching us to carry out a review and redesign of their finance function. It forms part of a general move towards reimagining the delivery of legal services generally. It isn’t just traditional law firms either. Some very big ABSs are looking at it from a ‘blank sheet of paper’ perspective. They want to get everything right from the start.

In all cases, these forward thinking people are looking for an assessment of what they do and how they do it, and whether they could be doing it better. And so, back to my opening gambit…I think it’s actually a fair question. Because many lawyers and legal businesses are now in fact asking themselves that very question…”Do we know what we are doing?”

Alex Holt, Director of Business Development

The Cashroom Ltd