We spend a lot of time talking to our current clients, new prospects, and strategic partners to ensure that we keep an ‘ear to the ground’ with what is happening in the sector. One theme that we are hearing a lot at the moment, is that mergers are very much back on the radar again. One solicitor we spoke to described it as a time when the stronger players will ‘eat up the weak’! A bit extreme, perhaps! However with continued uncertainty, fundamental changes to the way people work, more changes to PI work in England and Wales, inevitable tax increases in the near future, and a whole host of other reasons, it is understandable that consolidation may well appeal to some firms.

Benefits

By merging with the right firm, you can gain expertise in other areas of practice. Perhaps a geographical reach you don’t currently have, put a succession plan in place for those nearing retirement, and share costs of suppliers, premises, PI Insurance etc etc. So, what are the things you need to consider when choosing a potential merger partner, or when responding to an approach made to you?

The first thing you will need to consider is whether you get a good ‘feel’ for the other firm. A bit vague, I know, but it really is important that there is a good ‘gut instinct’ that the two firms could come together well, that there is a logical reason for it, and that the cultures align.

If you can tick that box, you can move on to some due diligence and valuation work. This is where the Accountants come in, and there will be extensive number crunching to try and ascertain the ‘worth’ of the entities. Regardless of which side you are on, you need to agree amongst the Partners/Directors what your ‘yes, lets do the deal’ or ‘no, thanks ’ numbers are. When it comes to negotiation with the other firm, it doesn’t have to be, and indeed shouldn’t be, an acrimonious process. There needs to be a collective will of both firms to make it work if it is going to be a success.  You will obviously also need to consider how you are going to fund the acquisition if you are doing the acquiring, but that’s a whole different article!

Once a deal is reached, that’s when the hard work begins!

There is a huge piece of work in making the merger a success, and ensuring that the two firms don’t just continue to work in silos, albeit under the same firm name. You shouldn’t underestimate the time and work involved in this. The time and work should be factored into any merger budgeting, if the two firms collectively are going to be better than the sum of their parts.

Work hard at the post-merger integrations of people. Involve specialist business coaches or consultants where possible,. Facilitate specific sessions for the people from both firms to get to know (and trust) each other. For the firm to operate as one business going forward, I can’t emphasise how important it is that the people feel that they are on the same team. It might also be a good opportunity to re-structure the decision-making process, depending on the size of the new merged firm. For example, you might look to move away from collective committee decision making of ‘the partnership’ towards a Managing Partner, or Executive Board, that are empowered to make decisions more quickly.

Systems Technology and Process

When it comes to systems, technology, and processes, again bring in experts if possible. Review what each firm has or does, and how to either knit those together seamlessly, or possibly even bring a new way of working for the new expanded firm as a whole. This ensures that the merged entity does in fact bring the efficiencies and cost savings planned.  Without a specific and well-defined plan on this, both firms will simply default to their old ways of working, and some of the benefits of the merger disappear quickly.

Manage the messaging around brand and culture for the new firm, internally and externally, carefully and constantly. Again, invest in the right experts to help you with this. This means who and what you now are is known by everyone in the firm, and as many people as possible outside the firm. The merger is fundamentally about being a ‘better’ firm going forward, so let everyone know that.

So, there is a lot to think about, and even more to do, if you are going to successfully merge two firms together. However, with significant efficiencies and cost savings to be made, and the possibility of creating a more robust and future-fit firm, it may just make sense for you.

Gregor Angus, Head of Business Development at Cashroom

Common outsourcing worries and how at Cashroom we address them

No longer is outsourcing an alien concept like it was when Cashroom began over ten years ago. However, we are still met with concerns over outsourcing such a pivotal part of your business – your finance function. So, once you’ve decided to outsource, how do you choose from the wealth of providers?

When your client is looking for a lawyer, they want the best service and when you are considering outsourcing you should come to the most experienced and best provider – that’s Cashroom!

We asked some of our clients what worries they had pre-Cashroom.

I don’t like change

Ah that old chestnut! Change can be difficult for everyone, but the benefits gained will outweigh this small period of feeling uncomfortable.

Managing expectations and clear communication are the most important things here. You will receive a direct contact at Cashroom (in-fact we have a dedicated transition team) who can hold your hand during the Transition process.

Keeping everyone in your firm informed along the way really helps with their reservations and fears.

We have onboarded over 200 clients at Cashroom and have a wealth of experience in ensuring the process goes smoothly and is pain free!

Is it better for employees to all be under one roof?

One thing the pandemic has shown us is that we don’t all need to be in an office for a business to succeed and you do not need to employ everyone that makes your business thrive.

By adding a supportive remote component to your current all-star team, it creates a better quality of working life for the stars you hired to do the work you hired them for.

Cashroom help you make the most out of the skilled talent you already have, by providing them with expert support.

Will I still need an accountant? I don’t like the idea of having to liaise with lots of external providers.

Absolutely not, Cashroom can provide as little or as much of your finance function as you need!

We have our own chartered and management accountants to prepare monthly management accounts and Cashroom can seamlessly provide the year end accounts and tax returns too.

Also don’t forget we also do credit control and payroll – in-fact when you think about it doesn’t it make sense to just have on expert provider doing all of this?

I just have greater trust with an in-house team

Cashroom are committed to hiring and training talent that invest in your business and are as enthusiastic as any in-house team. With less plates to spin you have better control of your business.

Trust is one of our most important values. We have monthly awards to nominate staff who display these values beyond the expected level.

We are not a large call centre where you get passed off to any available person. You have a dedicated team that you get to know well. You’ll develop a working relationship with them, just like your in-house team along the corridor.

I will have faster reaction times inhouse

Unlike most in-house teams or some smaller outsourced providers we are a flexible resource. During a sudden spike of activity your cashier may normally get swamped and reactions times may decrease. At Cashroom we can flex our team and provide the extra support needed to ensure everything always runs smoothly.

Think of us as a business partner allowing you to focus on the core competencies of your firm.

At Cashroom communication is seamless, accessible, regular and secure. We use a dedicated Web-Portal, that provides secure communication and a clear audit trail of all communications and transactions so you can see exactly what’s happening and when.

Using Cashroom might just be better than your existing team!

You won’t know our system like an in-house team would

Cashroom has a dedicated team of over 90 experts in accounting, technology and the legal sector and support over 200 UK law firms using the full range of practice management systems. Our teams bring a specific skill set that comes from significant professional experience, which is always developing. We are constantly refining our systems and process knowledge and work closely with many system providers to ensure the best possible software. We can also help recommend the best system for you if you are thinking of changing or are in the process of setting up a firm.

Now what?

Yes, we are biased but you truly are getting the best outsourced legal provider when you choose Cashroom. And if you don’t want to take my word for it then please get in touch and we can let you chat to one of our clients about their experience. Alternatively we have some testimonials on our website. 

There are lots of bolt on cashiering options out there, but don’t you want the best for your firm? 

With over 200 firms of all sizes and doing all types of legal work, we are prepared and ready now to take on your firm’s legal accounting.

Emma O’Day

2020 was a hard year for everyone whatever way you spin it but there is always a lesson to be learned if you look closely enough.

Your worth is intrinsic

One thing that I came to understand during the various quarantines, is that I am not my title or my productivity. I have spent so much time during my career basing my personal value on what I contributed to my various roles, how I was perceived by my peers and the professional hats that I got to wear. When you are forced to revolutionise your standard day from one filled with meetings, events, and projects to long lies, Netflix binges and reading; it can have the potential to trick you into feeling like you are worthless. Once you take the time to reprogramme your mind, you realise that you are worthy of all that you want by merely existing.

This has the power to shift how you view yourself and work going forward resulting in a healthier relationship and improved work life balance.

Change can be good

We all have our routines, and for some of you, the thought of doing something a little different or during your working day might sound like an absolute nightmare. We’ve already experienced so much upheaval, but would you do it on purpose? Each new adventure has the potential to challenge you a little further. It could be as simple as speaking to a colleague you haven’t spoken to in a while, walking down a route you’ve never explored before or trying out a new recipe for dinner. Or you can use this opportunity, like I did, to go for the Nuclear option and push yourself out of your comfort zone. As I write this from my sun soaked terrace, I can attest that it’s little things and the little wins that really keep your happiness topped up.

Try something new and see how you feel. It has worked wonders for me.

Take some time off

Have you taken any time off during the pandemic? Chances are it will be the standard holidays over Christmas and New Year and not much else. You might feel that using your annual leave to stay in your house is a waste and you want to keep it until you can rebook that holiday to Bali. I totally understand that, but our current circumstances are far from ideal and they’re far more draining than we may realise. In turn, it is worth it to take some time where possible to allow you to truly take a break from the grim reality we currently face without the additional pressures of work demands. It is essential to recharge your batteries to serve your clients and everyone else in your life to the best of your ability. My time off allowed me to focus on the positives in my life and appreciate them.

Comparison is the thief of joy

In the first blush of lockdown, I recall the LinkedIn boasts from those who completed courses and training every week. It can really make you question whether you’re spending your time wisely. I feel it’s important not to judge your life journey by comparing it to the destination of others. We’re all on our own separate adventures, we are all experiencing different blows, struggles and impacts from the current quarantine. Each day we survive during this is an absolute blessing and should be celebrated as such.

I’ll be taking these lessons with me into 2021 and beyond. What did you learn in 2020?

Katie McKenna, Marketing and Engagement Director at Casedo

It’s fair to say that we have all learned a lot during the past surreal 12 months. We have learned how to cut our own hair. How to walk in single file when passing other families. How to ration our viewing of streamed box sets.

In business we have learned how to operate remotely from our colleagues. We have used new approaches to technology and developed processes to manage, supervise and support via Teams and Zoom.

For me, one thing that has stood out increasingly has been the importance of relationships.

My job is Business Development, and so creating links and alliances has always been something I have worked towards. It’s true (my FD was keen to point it out!) that the last twelve months we have been more successful than ever at winning new work, and that has been without any of my old style swanning around the country speaking at events and continuing to develop a worrying level of caffeine dependency.

However, I’m more and more convinced that what I did prior to the pandemic has played a major part in the ability to continue to operate and develop business opportunities.

We carried out analysis of the best sources of new work for our business and we found that by a long way, the two best sources of new enquiries were referrals from existing clients and referrals from strategic partners.

We are a service business so the first source is pleasing because it suggests our service teams are doing the great job that I tell everyone about. The strategic partner referrals are slightly different.

We have worked hard to create a network of legal sector specialist suppliers who know what we do and how we do it, so that if they come across a firm needing our type of services, they kindly refer them for a chat. The same works both ways, in that I know what they do, and given the opportunity can similarly point people in their direction.

We very much operate a ‘karma marketing’ approach- do enough good deeds for others and the good stuff will flow back around. It’s not commission based, it is good will based. And that’s where I get to the main point of this article (At last, I hear you cry!).

The strength of the business relationships developed over the years, and in many cases out and out friendships, meant that Teams and Zoom calls worked so much better. There was no awkwardness, and in many ways the fact that we were all desk bound meant we were able to meet far more frequently without the whole “When are you next in London?” type of scheduling nightmare.

We’ve also seen the power of groups of allies. We are involved with more than a dozen different groups, ranging from marketing and publication groups such as Calico Legal Group and Law Firm Ambition, to business networking groups like Northern Legal Alliance and Consortium of Professional Advisors. Joining these groups enables us to share ideas, to be introduced warmly to new friends, and to introduce others. This is old school networking, but enabled and strengthened by the joining of modern remote meeting capabilities with existing strong relationships. If the relationships weren’t there before we moved onto remote meetings, the interaction would not have been as strong and productive.

Law firms themselves benefit from some wonderful group memberships such as Lawshare, Fusion Law, Law South and Bold Legal Group, and we try to support those groups wherever possible. It’s all part of relationship development, and has enabled us to reach a broader potential market via webinars and publications.

One thing we have all come to appreciate is that whilst it is perfectly possible to thrive when working remotely and individually, there’s no need to work in isolation. There’s a real power in collaboration and relationship development, and long may that be the case.

Alex Holt, Cashroom

This is a guest post by Jonathon Bray (www.jonathonbray.com) – risk and compliance advisers to law firms.

1. COVID and financial stability

At the risk of stating the obvious, COVID has presented significant challenges to all law firms. Home working, remote hearings, not seeing clients, executing documents, banking money, declining turnover (in some cases, but not others), and so on.

Although 2020 saw a hopefully once in a generation change to the way we work, in 2021 firms should now have the systems and controls in place to deal with these challenges. When the pandemic first hit, the SRA was quick to say that they were taking a flexible approach to regulation. That wasn’t an invitation to ignore the rules, but it was an indication that they were not insensitive to the unique position that firms were in.

But it’s been almost a year, and we can already see the SRA gradually getting back to regulation-as-usual. They are not going to be particularly forgiving if firms have failed to deal with obvious high risk areas, such as how to supervise remote teams.

We should all be aware of the areas of our practice that have changed, and make sure that we have addressed associated risks. For example, conveyancers are meeting far fewer clients in person. This has significant implications for AML risk assessments and client due diligence. Have policies been reviewed, forms amended, and training given?

The pandemic has resulted in financial struggles for many firms. Town centre practices that rely on regular footfall are particularly vulnerable.

Regulated firms have to actively monitor their firm’s financial stability and to notify the SRA if there are any indicators of serious financial difficulty. Short of actual insolvency, struggling to make payroll and rent every month are obvious examples of ‘indicators’.

Telling the SRA that your firm is struggling is one of the hardest things to do. It’s only human nature to think of reasons for not reporting. We’re going to trade out of it within a couple of months. There’s a big case likely to settle imminently. We can stretch our suppliers.

That is a dangerous temptation.

One way to avoid this trap is to use an objective tool such as this one we formulated last year. This involves planning in advance with a clear head what your triggers for reporting look like. You can then file your plan away, in the hope that you will never have to use it.

2. AML supervision

The last couple of years have seen a step change in the SRA’s approach to AML supervision. It’s fair to say that they were a little slow out of the blocks after the implementation of the 2017 Money Laundering Regulations. Since the new AML unit has been set up, they have become increasingly proactive.

First, we had all those spot checks of firm-wide risk assessments. The profession failed that test pretty miserably. So they are now increasing their targeted approach to supervision.

If you are a firm that is caught by the Money Laundering Regulations, you can expect to receive a letter from the regulator asking to see various documents to demonstrate that you are complying. It’s been over three years since the new Regulations were introduced, so excuses are decreasingly likely to be tolerated.

Whereas the first set of SRA reviews were limited to firm wide risk assessments, we are likely to see increasing regulatory interest in:

• Client and Matter level risk assessments
• AML policies
• Client Due Diligence processes
• AML training records
• Regulation 21 audits

If you haven’t come across ‘Regulation 21 audits’ before, you’re not alone. They are the independent audits that firms have to put in place to make sure their AML systems are up to scratch. The SRA says ‘most firms’ should be doing them. These audits can be done in house by someone who isn’t marking their own homework, or can be outsourced (hello!).

And let’s not forget the vexed question of ‘tax advisers’. There has been a significant broadening of the definition of what constitutes ‘tax advice’ recently. Broadly speaking, anything more than signposting a client where there is a tax implication has the potential to be caught by the Regulations.

The implication is that additional areas of law can easily fall into the scope of the Money Laundering Regulations (and all the compliance requirements). Think will-writing, settlement agreements, pensions scheme advice. All have the potential to stray into the new definition, even if you specifically exclude legal tax advice.

That doesn’t mean you can’t do that work any more, but it does mean:

• Some areas of law will be in scope of the Regulations that were previously not
• Therefore the entire range of AML compliance will apply to those areas (e.g. Client Due Diligence)
• Certain sections of the firm will need additional training on AML systems
• You may have to charge more to make some services viable
• Some firms may have to register with the SRA for AML authorisation for the first time

3. Transparency Rules enforcement

It amazes me that this one still catches firms out. Like them or loathe them, the Transparency Rules have been with us for over two years. They are not difficult to understand or implement. It is easy for the SRA to spot non-compliance (they literally have people visiting firms’ websites to check).

And yet the amount of non-compliance I regularly see is quite concerning. You will have seen reports that the SRA is stepping up its offensive.

It’s important to appreciate why they are so hung up on this. They are being pressured by the Competition and Markets Authority (CMA) and the Legal Services Board (LSB), which both have more clout than the SRA.

The thinking goes that the legal services market does not operate correctly, partly because people find it difficult to compare the price and service levels. (Although most conveyancers will tell you that clients have no problems shopping around).

They say that by improving price and service ‘transparency’, this should make legal services more accessible.

The upshot is that we can expect to see more CMA scrutiny, translating into tighter SRA supervision and ultimately more regulatory fines and rebukes.

Be warned: our regulators also have an unhealthy obsession with price comparison sites. They seem to think that these are the ultimate way to improve market access, and are prepared to give away all sorts of regulatory data to facilitate.

Let’s just be aware that these sites are not run for the benefit of transparency (they are lead generation machines), and over-reliance on them will mean that individual firms will effectively be in competition with the huge marketing budgets of price comparison sites. There will be a huge downward pressure on consumer legal services with implications for service levels and professionalism.

4. SRA reporting

The ‘new’ SRA Standards and Regulations rulebook has had a year to bed in and we are seeing more and more firms having to grapple with the broadened reporting duties in the Codes of Conduct.

In short, not only do you have to report ‘serious’ breaches of the SRA rules (as before), but also “…any facts or matters that you reasonably believe should be brought to [the SRA’s] attention…”.

This would include potential breaches that have not yet been fully investigated, as well as allegations of misconduct or other serious issues with other solicitors where you might not have the full picture.

As a result, we are increasingly seeing:

• COLPs having to make SRA reports at much earlier stages than before, often with intense internal opposition
• Solicitors and firms feeling compelled to report others when allegations are made
• Others using the threat of reporting as a weapon against opposing firms (not very sensible)

5. Brexit, practising rights and data flows

The UK’s exit from the EU has had some interesting implications for solicitors. The legal profession was not at the heart of the withdrawal negotiations, but The Law Society did some excellent work in working with the government to highlight the problematic issues.

For the majority of solicitors, any post-Brexit changes to practising rights will pass by without any drama.

For those affected, however, the fall out has been pretty profound. There was lots of scrabbling around at the tail end of 2020 to get European lawyers practising in the UK cross-qualified as solicitors, so that they could continue to trade. Others had to close their doors completely.

If you are a solicitor wishing to practise in another EU country, which was frictionless before 2021, you will now have to check the rules in your destination country. ‘Fly in, fly out’ rights may be affected too.

The other issue which is still to be bottomed out is whether the EU deems the UK to have data protection ‘adequacy’. If it does not, then obtaining data from the EU could become more difficult to facilitate. The UK will be treated like any other third country.

There is also the question of what to do about data between the UK and non-EU countries such as the USA, now that the EU-level mechanisms have fallen away. It gets quite technical at this point, but we have a webinar recording on the topic if you would like access.

If you haven’t revisited your data map (or data processing flows) since Brexit, that is probably a good place to start. This should help you identify whether international data flows are something you need to worry about.

6. Professional indemnity insurance

And finally, it can’t have escaped your attention that the PII market is having something of a wobble. There is lots of anecdotal evidence of premium rises across the professions (not just solicitors) and a general lack of appetite by insurers to take on risk.

This is an existential problem for some firms, particularly those with a poor claims record or operating in out-of-favour practice areas. They simply may not be able to obtain cover or justify the increased cost. Those affected will be forced to close or merge.

New firms are also finding it hard to obtain insurance due to the market squeeze.

There are a few practical suggestions:

• Make yourself attractive to insurers. Take risk and compliance seriously, invest in it, and be prepared to do the hard work to bring about change. Outsource what you can, but make sure accountability sits with the COLP.
• Get a good insurance broker. If you have been with the same broker for years and they have gotten a little ‘comfortable’ placing your business, is it time for a change. It’s not until you get a good one that you realise they are more than just insurance sales people. (I’m not saying chop and change insurers, which can be counterproductive).
• Think about succession before you need to. If you plan to retire in the next 5-10 years, you should be thinking about succession planning already. Is your business going to be an attractive acquisition – if not, what can you do to change that? Is there ‘new blood’ coming through the business? How should you attract, develop and incentivise future partners? Have you thought about employee ownership as an alternative?

Always happy to connect and discuss on LinkedIn or email.

Jonathon Bray, Director

What’s your path out of Lockdown?

After the first lockdown I referenced a Churchill quote. In 1942, after the battle of El Alamein  – he said “This is not the end, it is not even the beginning of the end, but perhaps it is the end of the beginning”.

Well – have we finally reached “the beginning of the end”? Are we finally hauling ourselves out of the pandemic and getting back to “normal” – if anybody can remember what “normal” was or is?

Mr Johnson seems to think so. He’s set out the country’s path out of lockdown – but it begs the question – what’s your path out of lockdown?

If I was (still) the Managing Partner of a law firm I would be wondering about a few things.

The first, and most important would be – what are my clients’ paths out of lockdown? How have they been affected by the pandemic, and how will they need to change? That will to a greater or lesser extent determine your path.

For example, I was speaking with a client recently who has a large commercial conveyancing practice. They act for a number of Landlords with portfolios focused on retail and hospitality. They had seen a huge move towards warehousing as a replacement asset class, driven by the huge increase in online retail. So, their client’s path out of lockdown is to swap shops for warehouses. Consequently, their path our of lockdown is to support that move.

Inevitably, an opportunity for your clients is an opportunity for you.

Also, the constant theme I hear when speaking with clients is that “there is a lot of cash looking for a home”. I saw a report yesterday that the country has saved over £200 billion over the last year. Somebody who works out where that money’s going, will have a very busy path out of lockdown!

Once you work that out, I would be wondering how I tell clients that I’ve worked it out!

Or putting it another way – how do I market to clients as we all come out of lockdown? When I was a junior lawyer, I remember my Senior Partner telling me that my practice would not be determined by what I knew but rather who I knew and who I had lunch with. He wasn’t wrong (and I had the waistline to prove it!). But things have changed.

To be fair, they were changing before lockdown, but that change has accelerated. Time will tell, but I wonder if clients and contacts will want to go back to traditional face to face business development activities. They’re incredibly inefficient and time consuming – far more efficient to reach out remotely (!)? I might even lose a few kilos!

Next I would be asking how I‘ll change my business.

Speaking to our clients, there is a clear focus on how they will redesign their business as a result of the lessons learned. A few themes

1. Paper files are dead (if they weren’t already). We all need to transition to case management systems that allow you to store everything electronically unless paper is absolutely essential. I’ve heard horror stories of loading files into car boots and bringing young children into the office to do filing so a law accountant can fee a file!
2. Almost everybody I speak to has embraced remote working, and doubts whether their firm will ever return to having everybody in an office.
3. People are looking hard at business resilience – and I don’t mean disaster recovery plans (although they’re looking at that too). Rather I mean structuring their business so it can withstand sharp drops in income. Their focus is on premises and staffing. Nobody wants long lease commitment or an expensive back office when income is so volatile. I see fewer “traditional” partnership arrangements where partners share profit, and more “consultancy” arrangements where people in business together “share” income (and by that, I mean pay the entity running the business side of things a fee).

Which perhaps brings me to more fundamental re-imaging of the law firm’s business model.

A while ago I heard somebody say that the legal profession needed a Tesla! It needs a new disruptive entrant into the market which isn’t a law firm, and is not “steeped” in the traditional way of running a law firm. Much like Tesla did for the motor industry, that new entrant would approach the legal market with an entirely different mind-set– the mind set (perhaps) of a technology company.

I know it’s been tried before, with mixed success. But timing is everything – and I can’t help wondering whether the huge acceleration of digital adoption brought on by the pandemic and it’s associated lockdowns, makes this the right time!

So, what’s your path out of lockdown?

David Calder

Discussing the positives and negatives from lockdown and managing a firm through the pandemic with valued client Campbell Read, partner at Stewart Balfour and Sutherland.

Living in these uncertain times and with the big shift towards working from home. Either full time or even blended working, 2 days in the office and 3 days at home sounds appealing but presents mental barriers and frustrations.

When you are used to the morning commute to work, getting yourself some morning me time, before walking straight into the working day routine. Next, a face to face team meeting with management and work colleagues to receive your fix of inclusion, recognition and work chatter. Then getting on with your working day as normal, something that you have done for years. Going to the same places for lunch or eating the lunch you’ve brought from home. Abiding by the same rules, time restrictions and seeing familiar faces. Finishing off your day at the usual time, with the normal commute home, listening to music, podcasts or reading your kindle or book, before back home to jump on the treadmill of your evening schedule and family life.

We are creatures of habit and routine, but we only see and feel the realisation of this when we are pulled out of our work environment due to a significant change in our lives, for everyone this has been due to Covid. Our times are changing and we need to adapt.

The arising problems from working from home

By working from home, problems arise.  Many are using the time it would take them to commute to start work earlier and finish later.  As work and home life merge, it becomes harder to switch off. Normal routines have gone.  Checking emails in an evening, or going back to your desk to do more work in the evening, means that other areas of life that are valuable to you get neglected.  You may not be present with the kids or family, you may have stopped doing regular exercise. Work can become exhausting and takes over your life.

Working from home can be distracting.  The home comforts and family can pull our attention and make it harder to focus on work.

Online meetings can be more draining than attending meetings face to face.  Speaking up during an online meeting can also be anxiety provoking.  As the camera turns onto you or your name is highlighted when you speak, the mind can be filled with what if thoughts about what your colleagues are thinking.  The lack of facial cues and body language from colleagues to indicate that they are interested and listening are gone.  Some people end up staying quiet and contributing less, heir confidence lowering as they are critical of themselves for holding back their opinion.

Some people struggle with the lack of simple social interactions about daily life.  The chats with colleagues in the kitchen or while at your desk have stopped.  Some struggle with not getting as much regular feedback from colleagues or their boss about the quality of their work. This can trigger self-doubt and self-criticism.

Let’s start by creating a mindful remote working sanctuary

Working from a home office presents two major challenges: Effectively separating business and home life, and the lack of stimulating social interaction that you would normally have working in an office with colleagues. At the same time, working from home brings numerous benefits to one’s lifestyle, and feng shui can help you make the best of it. Learn how to apply the philosophy of feng shui to make your space an inspiring and conducive environment for work.

Location

An important office feng shui guideline is to have your home office as far from your bedroom as possible. If the layout of your house allows, having a separate entrance to your home office is ideal. If this is not feasible, be sure to create as much division as possible between your home office area and your bedroom; this is the basis of good home office energy.

Inspiring Decor

Plan your home office with your success, well-being, and productivity in mind. Think of specific images, inspirational colours, meaningful career memorabilia, and appropriate decor items that make you feel successful, appreciated, and happy. Since you are working from home, feel free to fully express your creativity in decorating your office. Depending on your chosen field, you need to make sure your home office reflects the energy you want to project in the world.

Air and Light

Be mindful of the quality of air and the quality of light (both natural and artificial) in your home office, as these are two of the good must-haves. If your brain is starving for oxygen and your body does not get enough natural light, you will not enjoy being in your home office no matter how much you love your job. Consider investing in full-spectrum lights and bring at least a couple of air-purifying plants into your home office. The energy of plants will refresh not only the energy of your space but also your own energy.

Be Mindful of Position

Position your desk in the so-called feng shui commanding position to attract stronger and more successful energies to your work area. A feng shui commanding position means you do not have your back to the door; your desk is positioned further from the door and not in line with it. Be also mindful of not facing a wall while working at your desk.

What we Need is Routine, Routine, Routine

Having structure to our days is important.  Getting up at the normal time you would have got up to start your commute to work, allows you time to then add pleasure and fun into your life.  If you know you’ll be doing Zoom meetings for 8 hours getting daily fresh air and exercise is important.  You could go for a mindful walk, do exercise, make a healthy breakfast, even prep for your lunch or evening meal.  Research shows that if we schedule things into a planner, we are more likely to do it.  For good mental health we need a balance of activities that bring us a sense of achievement and pleasure.  Activities can be active, relaxing or soothing, on your own or with other people.  Connecting with other people is good for our mental health, humans are social creatures. Choose video chatting with friends and working out over binge-watching TV shows.

Living life in accordance with all our values makes for a meaningful life.  Switching off from work helps us to do this.  Take short breaks during the working day.  You could meditate, read, go for a walk, get fresh air or chat to a friend.  Once your working day is done, note what you need to do the next working day on a list, clear your head. Prioritise your workload into smaller manageable time slots to prevent procrastination.  Think about what has been good about the day, what you are grateful for, and note what has been challenging.  Tidy your desk, get changed and turn off your work email notifications.  Switch off from work and be present in your personal life.  Do 3 x 20-minute recovery blocks before work, at lunchtime and especially straight after you log off from work.  Focus on calming activities.

Stephen Robinson and Anna Ashworth from It’s Mental

Was getting your tax return complete more stressful than it needed to be? It is never too early to start thinking about next year. Let Cashroom experts remove your tax return stress…starting now!

We launched an additional service last year. Preparation of Statutory or Annual Accounts (depending on whether the client is a Ltd company, LLP, Partnership or Sole Trader) and the Corporation and Self-Assessment tax returns flowing from these. These services are offered to our clients that use us for their day to day cashiering, who ultimately need this work done by somebody to remain compliant. We already had chartered accountants in-house. We also have access to our clients’ books and records (that we also knew to be in good order!) It just seemed like an obvious step to offer additional ‘compliance’ services to our clients.

The service has proved extremely popular since launch, with both existing firms and new start firms alike. To them, it just makes sense to have their financial compliance taken care of in the most efficient way. So, instead of us doing the day to day and month to month record keeping, and then somebody coming along once a year to turn that information into a set of accounts, we can do it ‘under one roof’. It saves the client dealing with multiple suppliers, saves them being asked for information by external Accountants which we already have, and saves us time dealing with a third party who are coming at it from a standing start, given that they may only interact with their client once a year.

The service is also provided entirely by a Chartered Accountant.

There may come a time when we have others working in this team, but for the time being, the work from start to finish is done at the most senior and experienced level. This reduces risk. With full understanding of the specifics of the solicitors’ accounts rules, and the complexities of client accounting that ‘normal’ businesses do not have to deal with, we reduce the risk of mistakes or omissions. We will also, generally, turn a set of Accounts around more promptly. As with most things in life, the quicker you deal with something, the fresher it is in your mind, and the less likely you are to forget some of the details.

Importantly, we are also very clear on where our service offering starts and finishes. If the client requires more specialist advice on something such as Tax or Pensions, we are very happy and proactive in referring them on to a specialist in that area through our network of strategic partners. Again, sticking to what you know is fundamental to reducing risk.

If this service sounds like it might benefit your firm, I’d be delighted to have an informal chat about how we can help.

Gregor Angus, Cashroom

The problem with history is that it takes a long time.

Often it takes a long time to happen, but more importantly, it takes a long time to work out what happened, how important it was, and what caused it. And more importantly – it takes even longer (if at all) to learn the lesson it teaches.

And there was an awful lot of “history” last year!

COVID 19, and the resulting lockdowns blighted last year, and continue to blight 2021. According to the John Hopkins COVID Resource Centre as of mid-January 2021 97m people have had COVID worldwide and 2.1m people have died (https://coronavirus.jhu.edu/map.html). World economic output has dropped by 7%, the biggest drop since World War 2.

No doubt, the immediate impact of COVID is significant, but what of the long-term trends. And what of the “unintended” consequences?

In his extraordinary 1998 book, “Guns Germs and Steel”, Jared Diamond explained the impact on civilisation of transgenic diseases jumping from farmed animals to humans. Specifically, the part smallpox played in decimating the native populations of North and South America, making the European conquest of these continents so much easier.

So, in 10 or 20 years, what will we have learned from COVID-19, what might be the “unintended” consequences ?

It appears that COVID 19 was also a transgenic disease, jumping species somewhere in China. That deadly “chance” highlights the appalling damage (not to mention suffering) caused by rearing and slaughtering 80 billion animals a year, so we can eat meat. Might COVID-19 encourage a move to Veganism?

COVID 19 shows how a long term, high impact, yet relatively unlikely, risk can devastate … if it happens. It illustrates how ignoring those risks, to deal with more likely, but less impactful issues, comes back to haunt you. Might it provided us with a terrible “wake up call”, (hopefully) forcing us to deal with climate change?

COVID 19 has highlighted inequality. Inequality between those children who can keep up with their remote lessons because they have a laptop, and those who don’t, and can’t. Inequality between higher skilled workers who can mostly work from home, and those who can’t. Inequality between races, where the pandemic seems to hit the BAME community harder than the white community. And finally, inequality between the rich world, racing to vaccinate their population, and the rest of the world …. where vaccines are too expensive, too difficult to manufacture or too difficult to distribute. Will COVID-19 force democratic governments to do more to address growing inequality?

And finally, in those western democracies the state has stepped into citizen’s lives in ways that would have been unimaginable even 2 years ago – and mostly for the good (or at least with good intentions – let’s not talk about the outcomes!). One lesson history teaches is that, when sates take more control of their citizen’s lives, they give it up reluctantly.

Will COVID-19 lead to more authoritarian states, with greater control over their citizens?

To return to my first paragraph, history will take time to work out where all this ends. Dramatic events can have huge, unintended consequences. That’s particularly true of diseases.

You can draw a line between smallpox and the colonization of the Americas, between the Black Death and the end of serfdom in England, between African’s relative immunity to malarial mosquitoes and the Atlantic slave trade, and between the Spanish Flu, the great depression, the rise of Fascism and World War 2.

History has a funny way of things working out!

David Calder, Cashroom

Is the sales process important to a law firm?

2,000,000,000,000!!  There were over 2 trillion Google searches per day in 2020.  If we’re not looking for it online we’re not looking for it at all.

Once upon a time it was claimed that people buy from people; and whilst this to a small extent remains the case, the truth is that we now buy convenience.  If we do not get it fast these days then we move on, and quickly.

You’ll be a lawyer who gets this; your ‘shopfront’ these days is your website.  You will have appointed a fantastic Digital Marketing agency to design your website in such a way that it makes your phone ring or your email ping!  You’ll have designed a sales process which makes sure that any enquiry is dealt with very quickly!  You’ll not lose any ‘shopper’ to any one of the many hundreds of other lawyers who are just waiting online for your system/process to slip up.

As a lawyer I know that you are rare!  For the majority, sales systems and processes are for shiny sales people selling Double Glazing and Second Hand Cars, right??

Wrong!!

My firm relies on the web to supply 80% of its new clients every day, month and year.  I know that answering enquiries and quickly is critical.  I’ve learned the hard way though.  I had a receptionist who became my ‘Sales Prevention Officer’.

Onwards Answering is my answer to my law firm, I know it’s the answer to yours!  I know that getting that email/phone/message answered and quickly just needs to happen, or I lose.  I know that telling a ‘shopper’ that we can help them before anyone else does is key.  My law firm’s progress is founded on this.

Onwards Answering supplies law firms with a telephone reception and diary management service which will simply improve your firm’s turnover, guaranteed!  A bold statement I know, but it’s true!  Allow them to become your front-line sales team.  They’ll answer all your calls but most of Onwards Answering is designed and is primed to listen for your next new business opportunity.  Our call handlers act fast in dealing with getting your shoppers talking to you, and on your terms. But even that’s just not enough. We’ll become an integral part of your business sales process and we’ll work with you – and even teach you – how to convert leads into new business and increase your turnover, all guaranteed!

85% of all missed calls do not call back!  Let us begin to help you today.

Billy Smith, Director of Onwards Answering

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

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