Management Archives - The Cashroom

Category: Management

Does your firm have a plan for its future?

At The Cashroom, we have recently started extensive training programmes for our ‘Rising Stars’ and ‘Future Leaders’. The initiative is aimed at identifying key people for the future success of the business, and to start developing them to ensure they are able to perform and thrive when the time comes to step up the ladder. It made me think about my time in practice as a Solicitor, and the fact that I never came across any such deliberate and plan for future detailed plan for the future. Sure, there were appraisals and performance reviews which set goals, and identified areas for improvement, but they were concerned more with performing better in your current role, rather than planning and preparing for future roles, and areas of interest. Have a think for moment – does your firm have a plan for developing its key people for the future?

I deliberately say key ‘people’ because although you must plan for the future ownership of the business via the next batch of Partners, it is just as crucial that you plan for key staff, and older Partners too. The partnership agreement may provide a set retirement age, but retaining people as Consultants or Ambassadors for the firm beyond that may be crucial for retaining certain longstanding clients who have worked with that person for many years. Equally, Paralegals or Support Staff may have the deepest understanding of certain clients, or may be the ones who are in regular contact with them on an ongoing basis.

When developing these key people for the future, it is also crucial to find out what they want and aim for in their working lives. When was the last time you asked your staff what their career aspirations were? There are many reasons to do so – for starters, if you can’t offer what they are aiming for, they will leave at some point, and you need to know that. Secondly, the future wellbeing of your firm will need people to take care of the different areas of the business – not just the practice of law – so you need to find out if you have people who have an interest in being, for example, ‘Business Development Partner/Manager/Director’, ‘Client Relations/Complaints Partner’, ‘Cashroom Manager / COLP / COFA’, or ‘Managing Partner’. It is important to find and develop these people over a period of time, and also to think about these role specifications clearly so you are not setting people up for a fall. All too often, particularly the role of Managing Partner, is given to somebody without enough regard for whether they are the best person for the role, what the firm expects of them by way of splitting their time between fee earning and management commitments and, crucially, any sort of plan as to how they would return to a full time fee earning Partner role thereafter.

plan for future So, perhaps there is some food for thought here for discussion at your next Partners meeting. Do you have the same people in mind to take over the reins, and how are you going to equip them with the skills to do so? I would suggest putting a realistic plan together, with clear and achievable objectives, put it in to practice as soon as possible, and keep in regular dialogue with the people involved. They will likely be motivated by the opportunity, bringing better engagement immediately, and more seamless business continuity and succession into the future.

Gregor Angus, Senior Business Development Manager

The Cashroom Ltd

England and Wales new SRA Accounting Rules

As we suspect you are aware, new SRA Accounting Rules will be effective from 25th November 2019. These come with some significant changes to the current rules and with the added responsibility of understanding what the rules mean to you as a firm.

We have prepared guidance notes and pro forma policy documents which can be used or tweaked for your own firm. We believe these will be extremely useful for all of our current clients and indeed non clients as they will enable compliance with these new regulations, and provide advice on the impact they may have on your current procedures.

These documents are available at a one-off charge of £200 plus VAT for all existing clients of The Cashroom, and £300 plus VAT for all non Cashroom clients. For more information please contact chloe.mcginn@thecashroom.co.uk.

What are the benefits of pensions for business owners?

Pensions are not always popular with business owners. Only about a third have a pension at all, with many business owners choosing instead to rely on their businesses to fund their lives in retirement. But shunning pensions does mean missing out on some significant tax benefits that could make a big difference to the amount of money they have in the future.

Are you missing out on pension tax breaks?

Because the Government wants people to save for their retirement, pensions come with significant tax breaks. Pension contributions up to the annual allowance receive up to 46% tax relief, and there are other big tax benefits for business owners:

If you have a limited company, pension contributions can be treated as an allowable business expense, helping offset your company’s corporation tax bill
Pension contributions can be a tax-efficient way to take money from your business
If you’re planning to sell your business to fund your retirement, making the most of pension allowances is wise because it can help reduce Capital Gains Tax when the company is sold

Do you have all your eggs in one basket?

Business owners are often much more comfortable investing in their own business than trusting others to invest on their behalf. They know their company and industry inside out so on the face of it, this makes sense. But as with any investment, it is rarely sensible to put all your eggs in one basket.

You never really know what is going to happen to your business in the future. The market could go against you, or you could become ill and need to give up work earlier than expected. You may also need to sell your business for less than expected. With a pension or other forms of retirement saving, you would be less vulnerable.

Getting the best from a pension

We speak to many business owners who have been put off pensions by a bad experience – they’ve paid high charges and ended up with mediocre returns. That’s where financial advice can more than pay for itself. A good financial planner with experience of working with business owners can work with you to construct a pension that helps you make the most of the tax benefits and investment opportunities while also taking into account your individual attitude to investment risk.

A good financial planner can also work with you on your exit plan, helping you understand when you can realistically retire. We use cashflow modelling to create a visual illustration of what your future finances could look like, and we can help transfer business wealth into personal wealth, making sure your assets are structured in the most tax-efficient way.

Would you benefit from our specialist financial advice for business owners?

The easiest way to find out how we can help is to book an initial, no-obligation consultation by contacting Alison Fitzsimons on 0333 014 5429 or alison.fitzsimons@tilney.co.uk.

The value of your investment can go down as well as up and you can get back less than you originally invested.

Mike Wardlaw, Chartered Financial Planner

Tilney Group

Stick to what you know, delegate what you don’t!

You probably hear the phrase all the time – “stick to what you know” – but how good are you at doing that? I think it’s fair to say that most solicitors know this is the best way to approach things. Why would you want to spend time researching an area of law you don’t know much about? Even worse, why take the risk of providing advice which, at best, may not be very beneficial to your client (because you don’t have sufficient previous experience on which to draw) or, at worst, may be professionally negligent.

Perhaps some sound advice would be to pause for breath the next time a client asks your professional view on something outside your area of expertise. Is there a colleague who may be better placed to advise? Is there another friendly firm who would look after your client for this particular matter, but not poach them for future work? Perhaps you are part of a network such as the Commercial Law Network, HM Connect, CPIN, Lawshare or Fusion Legal. By delegating the work to somebody in the know, you can rest assured the client is getting the correct advice, that you are more likely to have a happy client who will come back to you in future for other matters, that the firm you refer to are more likely to send things your way when they have a conflict/area they don’t feel comfortable advising on, and you may still be entitled to a share of the fees for the work you have referred. A win, win, win, win!

However, it’s not just legal work that this applies to. Think of everything else that goes into running a successful legal business: IT infrastructure and support, sound HR policies and procedures, compliance with a plethora of regulation (e.g. GDPR), and not least your finance/accounts function. Again, if you are minded to “dabble” in any of these areas without sufficient and up-to-date stick to what you know knowledge, it could potentially be dangerous for a number of reasons. For example, are you up to speed with the latest cyber fraud tactics? Are you fully aware of what your employees’ rights and responsibilities are from an HR perspective? Or is trying to do your own cashiering going to land you in hot water at a compliance inspection/audit. With all of these examples, you may ‘think’ you know what you are doing, or that you can get by, but do you “know’ what you are doing? If not, the additional time you’re spending on them, not to mention the stress, probably more than justifies delegating to somebody better placed to deal with them, or outsourcing those responsibilities to experienced experts or third-party providers. That way, you can sleep at night knowing things are being done properly, that you are covered from an insurance point of you, and just as importantly, that you can focus on what you do best, whether that be generating new business for your firm, or doing fee earning work for clients. I hope there is some food for thought here, and some take away points to discuss at your next Partners meeting.

Gregor Angus,

Senior Business Development Manager, The Cashroom

Invest (at least your time) in wellbeing initiatives – it’s a win,win!

It’s well proven that a happier, healthier and more engaged workforce is good not just for those employees wellbeing, but for your business too – a true win,win scenario. You will lose far less days to sick leave, and spend much less on recruitment, training and the management of a constantly changing workforce. In addition, your employees will become your best brand ambassadors, thereby improving the top line, as well as the bottom.

There are various reports and surveys which attempt to quantify the return on investment in workplace wellbeing but, even without investing heavily in financial terms, there are many simple and practical steps you can take within your business to implement some initiatives that will make a difference over time. This is a topic I could write a whole book on (maybe one day!), but here are just a few ideas to think about…

wellbeing investment 1. Starting a new job can be very stressful, so have a look at how you bring new staff into the business at the outset. Only 12% of employees think that their employers do a good job of onboarding them (Gallup State of the Workplace Study 2017). Could you invite new starts to a social get together in the weeks leading up to their start date? Even a chat over lunch will make them less anxious about starting with you. Could you provide them with some sort of ‘welcome pack’ to make them feel part of the team as quickly as possible? Could you ask someone to be their ‘buddy’, that they can ask for simple help and assistance when they start, e.g how on earth does that coffee machine work?!

2. A survey in the US (State of the American Workplace) found that close work friendships boosted employee satisfaction by 50% and people that have a ‘best friend’ at work are seven times more likely to be fully engaged in their jobs. That sounds good on all fronts, doesn’t it? Think about whether you could offer more by way of social interactions for your employees, from lunches, drinks after work, barbecues, teambuilding days, to Corporate Social Responsibility volunteering opportunities, encouraging friendship amongst your employees.

wellbeing investment 3. Some employers are fortunate to have deep pockets, or access to investment cash for wellbeing, allowing them to invest in a gym in the office, subsidise gym memberships, or have personal trainers or dieticians come in to the office regularly. However, you really don’t need to go to that extent to encourage your employees to spend a bit more time moving and exercising regularly during their working day, thereby improving their wellness. How about encouraging walking meetings: a brisk 10 – 15 minutes round the block to chat through something you would normally do while sitting slumped in a meeting room to do. You will likely arrive back in the office refreshed, or at least a little more awake, and ready for the next task. Top tip – an initiative like this requires a top-down adoption, i.e. the leaders and managers of the business need to embrace it and start doing it regularly, to help instil into more junior staff that it is acceptable, and in fact is to be encouraged!

4. Could you invest a small sum in having a specialist come in to talk to staff about mental health wellbeing, such as how to spot when things ‘aren’t quite right’, where to turn for support or advice, and some practical hints and tips or coping strategies. You could go one step further and train a mental health first aider within your organisation, which will help to make this an ongoing initiative, benefitting all within your organisation, and helping to reduce time lost to sick leave.

5. Finally, make seasonal events (e.g Easter, Halloween, Christmas) fun! Think about giving out Advent Calendars or Easter Eggs to all staff – not a huge investment, but definitely a morale booster – or having a dress down/up(!) day for Halloween. This can encourage interaction amongst employees, lift spirits in the office, and at the same time be used to generate some money for a charity of your choice.

I hope there are some ideas here that you might be able to implement in your organisation, even with minimal investment. I think you will see an improvement in morale, health and wellbeing in the longer term, and a reduction in sick leave and staff turnover. With proper commitment to employee wellbeing, and a strategic approach to it, you will also see financial improvement to the top and bottom lines too. As I say, a win,win.

Gregor Angus, Senior Business Development Manager

The Cashroom Ltd

The Ultimate Guide to Cyber Risk, Security & Compliance in the Conveyancing Sector

Data breaches and cyberattacks are big news. And, the threat from hacks and fraud have become a stark reality for law firms around the world.

Given the level of trust between solicitors and their clients, it is not surprising that criminals target these relationships for financial benefit. However, offenders are not just looking for financial gain. They are also after the confidential data at the heart of solicitor-client relationships.

Today, law firms are at greater risk than ever before, with around 1,400 criminal organisations actively targeting the legal sector at this very moment[1]. Moreover, conveyancers are a specific focus due to the vast sums of money involved in property transactions.

There has been a 112% rise in legal sector data breaches in just two years.[2]

Despite the risk, conveyancers are ill-prepared for dealing with and preventing cyberattacks. As such, a security-first approach is now urgently required.

Common security threats facing conveyancers

There are catastrophic implications of not defending against data breaches and cybercrime. But, before you can put stringent security processes in place, you have to understand the risks.

Push Payment Fraud

Authorised push payment fraud (APP) fraud occurs when cybercriminals deceive individuals into sending them money. Because the victim believes the fraudulent transaction to be genuine, the client authorises the handover of cash. This is then quickly transferred to different accounts, often abroad, which makes getting it back almost impossible.

£11 million of client money has been stolen due to cybercrime over one year[3]

APP fraud is on the rise. And conveyancers may find themselves liable if they don’t do enough to protect their clients from scammers and are found to be negligent.

Phishing and Spoofing

Phishing sees criminals use emails, texts, websites, phone calls, etc., to pose as a legitimate person or institution. They aim to lure the people in your firm into handing over sensitive data.

90% of data intrusions start with a phishing email[4].

80% of law firms report at least one attack in the past 12 months[5]

With spoofing (or email hijacking) hackers attempt to obtain financial or other confidential information by impersonating your firm. For example, by sending emails or hosting a fake website.

The conveyancing (and wider legal) sector, is at huge risk of financial and reputational losses because of phishing and spoofing. So much so that the SRA is issuing new threat warnings most days.

With fraudulent emails and websites spoofed to a high standard, firms must improve their cyber defences. For example, email security systems can provide robust first-line protection for most attacks.

Property hijackings

security Property hijackings (where criminals pose as owners) are escalating. In many cases, criminals will rent a property and steal the landlord’s post. They then use this to pose as the real owner and sell the house to cash buyers.

In one particularly high-profile case, property development company Dreamvar purchased a London property for £1.1 million from a seemingly legitimate seller. It was only after the firm began refurbishment work that the scam came to light.

Initially, despite the buyer’s solicitor acting honestly and innocently, it was still found 100% liable for compensation. However, following a long-awaited appeal[6], the court ruled that both sets of solicitors must ensure that a property transaction is genuine or face the consequences. This decision should put conveyancers on both sides of property transactions on high alert.

Money laundering

The National Crime Agency (NCA) believes that the extent of money laundering impacting the UK could be costing hundreds of billions of pounds each year. Moreover, conveyancing firms are a significant target for money launderers. And, when you consider the amount of money that can change hands in just one transaction, it’s easy to see why.

According to NCA figures, residential property transactions made up 32% of all suspected money-laundering activity in the last three years. What’s more, the SRA revealed that there was a 43% increase in money laundering reports in the opening nine months of 2018[7].

Solicitors can incur hefty fines and even go to prison if they don’t report suspicious activity. So, conveyancing firms must do more to protect against this threat.

Malware & ransomware

security Malware attacks – where malicious software is installed on a user’s machine – can be extremely damaging; to your day-to-day operations, your reputation, and your bottom line. Ransomware attacks – an aggressive form of malware which prevents access to systems unless a payment is made – can be even worse.

More than 55% of British law firms suffered at least one cyber-attack in the past 12 months[8]

For conveyancers, being locked out of your IT systems, even for a short time, could make it impossible to meet essential client deadlines. For example, completing a property transaction. And the implications of this could be catastrophic.

Password spraying

Password spraying happens when hackers use common passwords to try to access a large number of accounts (e.g. password123). If one password doesn’t work, they wait long enough so that the account is not locked down before trying a different one.

Once a hacker has gained access to one email account, they use their skills to work through the rest of a firm’s systems. So, having one person using a weak password could put your entire firm at risk.

75% of organisations have accounts with passwords that feature in the top 1,000 passwords, and 87% have accounts with passwords that feature in the top 10,000[9].

Denial of Service (DDoS) attacks

Distributed Denial of Service (DDoS) attack happen when an email or website server becomes overwhelmed. Once besieged, hackers can exploit the weakness of the system to access other content on that server. Cybercriminals might carry out a DDoS attack by sending millions of emails to a single email address in an attempt to collapse a server.

DDoS attacks have been around for years. In 2014, ACSe:Law was forced offline by hacker group 4chan. While the firm’s website was restored, an error led to an archive of internal emails and financial information to be published on the home page. As you can imagine, this caused the firm serious reputational damage.

DDoS attacks have increased considerably over the years. And, as more and more connected devices come online, the risk becomes even greater.

It is estimated that 33% of all downtime is related to DDoS attacks[10].

Human threats

Insider threats happen when malicious users (e.g. disgruntled employees), get their hands on confidential and commercially sensitive data. But, when it comes to human risk factors, it is simple mistakes that are the biggest threat to your conveyancing firm. This is because conveyancers often fail to undertake adequate checks, or don’t know, or don’t follow, the necessary security processes.

Common security issues caused by human error include:

Not undertaking the necessary client checks
Not following established processes (e.g. how to take payments from clients)
Losing mobile devices or leaving them open when working remotely
Sending emails or post containing sensitive data to the wrong person
Not using the BCC function when sending emails to a mailing list
Installing unauthorised software onto work devices
Clicking on dangerous links, downloading viruses or falling victim to phishing scams.

Law firms are still not taking cybersecurity seriously

If your firm is the victim of a cyberattack or data breach, and your security processes are found lacking, you could be liable for a hefty fine.

In July 2019, The Information Commissioner’s Office (ICO) announced plans to fine Marriott International £99.2 million following a data hack. It also plans to fine British Airways £183 million for security failures exploited by cyber-attackers. These fines don’t include any victim compensation payments.

Payment from the compensation fund relation to conveyancing fraud is up from £700k in 2015/2016 to a staggering £3.7m in 2017/2018.[11]

While professional indemnity insurance might cover any losses you incur as a result of a cyber-attack, it is unlikely to include regulatory fines due to negligent security processes. It is also unlikely to cover the potentially significant reputational damage.

How to combat data breaches and cybercrime

Put robust processes in place

Only 55% of law firms have documented policies and procedures for cybersecurity[12]

When it comes to protection from cyber risk, preparation should always be your first line of defence. While not a full and final list, this should include:

Establishing compliant policies and processes

Create (and regularly review) your data protection and financial security policies and processes to ensure compliance with the latest regulations and industry guidance.

You should also have a cyber incident response plan ready. Also, print out a hard copy of this, including necessary reference numbers and phone numbers. If you get shut out of your systems, you may not be able to access this.

Putting the basics in place

Put stringent security controls in place (and make sure that you document these). For example:

Preventing staff from sharing passwords and ensuring suitably complex passwords
Making sure passwords are changed if a firm suspects a system has been compromised
Making sure devices are encrypted and require a password when switched on
Establishing steps to remove outdated info
Using encryption and two-factor authentication.

All your printers, copiers, even iKettles linked to your network need the same rigour of security and password regimes as the rest of your tech equipment. Without this, they could provide a route into your system.

Regular testing and monitoring

Set up regular penetration testing (ethical hacking) to test your systems and proactively identify any vulnerabilities that an attacker could exploit. Penetration testing can be performed manually or done automatically via security software. Also, increase monitoring across websites and apps to defend against attacks.

Keeping everything updated

In addition to ongoing maintenance, make sure that updates and patches are carried out. This should cover things like browsers, servers, operating systems, antivirus software, malware protection and firewalls.

Managing third-party relationships

Cyber-attacks are often possible due to third-party weaknesses. As such, security controls must be a crucial part of any vendor agreement. Also, analyse any data integrations for vulnerabilities.

What’s more, if you’re merging with another firm, check their cyber risk levels. If they have malware on their system, it will infect your firm when you consolidate.

Investing in security accreditation

Information security certification (e.g. ISO 27001 or Cyber Essentials) helps to protect client and employee data. This won’t just keep sensitive data secure, it will also demonstrate to clients (and the ICO) that you take your responsibilities seriously.

Meeting the requirements of the GDPR

Establish a lawful basis for data processing Personably Identifiable Information (and document this). Also, develop GDPR-friendly policies and templates such as Terms & Conditions and Privacy Notices.

Should a data security incident occur, under the GDPR, you must report this to the ICO without undue delay. So, establish compliant processes for responding to data breaches and other security threats.

Protect against human error

All too often, mistakes happen because people do not understand their data protection responsibilities.

“Challenges such as keeping information safe, cybercrime and compliance with anti-money-laundering regulations need constant attention. The threats of criminals using IT to steal client’s funds is an increasing problem. It is important that law firms develop a culture where cyber security is treated as a serious priority, and take sensible steps to warn their clients about the risks”.

SRA Chief Executive, Paul Philip

Security awareness training

Law firms are failing to train staff on data security, leaving the door open to avoidable data breaches and cybercrime. To combat this, conveyancing firms must establish an acceptable use policy (AUP) that spells out the rules of using digital technology.

In addition, training is vital to ensure everyone understands the policy, the risks, and the potential consequences of breaching data protection laws.

Client and financial checks

Law firms have more stringent security requirements than most other professions. As such, safety measures and checks are vital.

Law Society’s Conveyancing Quality Scheme (CQS)

Changes to the Law Society’s Conveyancing Quality Scheme (CQS) came into effect on 1st May 2019. These changes included a strengthening of requirements to mitigate the risk of property and mortgage fraud, money laundering and terrorist financing. Crucially, the new Core Practice Management Standards (CPMS) reinforced solicitor obligations towards client identity checks and checks against the conveyancer acting for the other party.

Find out more about these changes here.

Dreamvar v Mishcon de Reya

Following Dreamvar v Mishcon de Reya, both sets of solicitors are now obligated to ensure that a property transaction is genuine or face the consequences. According to the Law Society[13], the steps that must be followed are:

Reviewing your policy for risk assessing transactions, identifying the facts that make a matter high risk and making efforts to ensure that you have procedures in place to deal with those risks
Reviewing or establishing policies about when you might ask seller’s solicitors or conveyancers questions, for example, about whether they have carried out their AML investigations. Considering raising questions where there are indicators of potential fraud of the type highlighted in the HM Land Registry/Law Society joint note on Property and Title Fraud (if you raise questions but fail to pursue the responses properly, you may be exposed to additional risk)
Reviewing or establishing policies in relation to how you will answer questions from the buyer’s solicitors when acting for a seller
Reviewing or developing policies to establish when you should decline to act if you are not confident that the ‘seller’ is the registered proprietor.

Conveyancers must also be aware of, and put into practice, the following information:

Law Commission Proposals

Conveyancers could be held liable for fraud under new proposals from the Law Commission to reform the Land Registration Act. These proposals would place a new statutory duty to check the identity of clients. Where conveyancers fail to take reasonable care, they could be forced to make indemnity payments to the Land Registry.

Find out about the red-flag indicators that mean a transaction may be suspicious here.

Use technology to combat cybercrime

Training staff to recognise common scams and risks is vital. However, as cybercriminals become increasingly savvy, education alone isn’t enough.

“No training package (of any type) can teach users to spot every phish. Spotting phishing emails is hard. Spotting spear phishing emails is even harder. Even our experts struggle. The advice given in many training packages is based on spotting standard signs like checking for poor spelling and grammar, and while these can be a good place to start, they can’t be used to spot all phishing emails. Bad guys can spell (and some nice genuine people can’t).”

Sociotechnical Security Researcher, NCSC

It’s essential that you bolster your defences. Not least because, when it comes to digital threats, it’s better if these are stopped in their tracks as soon as possible, without relying on human involvement.

In addition to things like encryption, antivirus software and two-factor authentication (which all firms should use as standard), there are some ingenious ways technology can help conveyancing firms improve their security.

Online portals

As phishing attacks and technological vulnerabilities are costing law firms millions each year, emails are coming under intense scrutiny.

Could online portals like The Cashroom’s provide the answer?

In a word, yes. With a portal, all exchanges are safeguarded, with access restricted to authorised members of the firm carrying the relevant security information.

Indeed, firms not using a secure portal service could pose severe security and GDPR risks. For example, financial and personal information sent through word processing documents and email could be intercepted and used by unscrupulous cybercriminals.

OnDMARC

Many conveyancing firms have invested in standard IT security solutions. But these won’t protect them against phishing and spoofing attacks.

DMARC technology combats email fraud by actively blocking phishing attacks and preventing rogue third parties from impersonating an email domain. For example, Lawyer Checker – which provides technology and products to help protect lawyers and consumers – has service designed specifically for the legal profession. By using OnDMARC, conveyancing firms currently vulnerable to email fraud can protect themselves from reputational or financial damage.

Blockchain technology

Blockchain is a digital ledger of every transaction ever made using cryptocurrency. These transactions are recorded forever, and duplicated thousands of times across a network of computers (so they can’t be tampered with).

Crucially, blockchain technology can be used to monitor more than just financial transactions. And, because it is impossible to corrupt, it could play a key role when it comes to preventing fraud and embezzlement.

Outsourcing reduces the security and compliance risk

Outsourced cashiering and management accounts

Your firm is professionally obliged to keep an accurate set of books, and a failure to dedicate the time necessary to accounts-related work increases the chance of human error. Especially when you don’t have access to certified experts. But, should an error occur, the impact on your bottom line and your reputation could be devastating.

The good news is that, when you use outsourced services, the risk disappears.

An outsourced legal cashier will keep your accounts in order. And prepare tax and VAT returns to ensure you meet all regulatory requirement deadlines. They will also enable compliance with the Solicitors Accounts Rules and Money Laundering Regulations. Crucially, an outsourced cashier will also ensure that there’s a clear audit trail as required by your accountant or inspector.

Also, if you have one cashier looking after payments, a fraudster need only get their hands on one set of bank login details. Even if you have multiple cashiers, they will all likely to be on the same network, so it’s easy for hackers to get all the information and access rights they need.

But an outsourced partner will have invested heavily in security measures (e.g. encryption, anti-intrusion systems, back-up procedures, etc.) It is almost impossible for conveyancing firms to ensure the same level of protection.

An outsourced legal cashier and management accounts partner should also offer:

Robust confidentiality processes to ensure that confidential client information will be protected as per the SRA code
A secure online portal to protect those all-important communications
Cyber Essentials Plus certification
A robust GDPR policy
Regular staff training on cyber risk.

At The Cashroom, we provide all this and more. Ultimately, when you outsource to us, you get the peace of mind that comes with knowing the processes and people looking after your firm operate securely.

Outsourced risk and compliance

The burden of risk and compliance has become increasingly complex. Today, a proactive approach is essential to mitigate the risk of a regulatory issue or destructive reputational incident.

But rather than lying awake at night, many conveyancing firms are opting to outsource this aspect of their business. And, in doing so, are gaining access to appropriate experts with all the skills and expertise they need.

Often, outsourcing means taking someone on to help with more specialist work, while in-house compliance teams get on with day-to-day work. For smaller firms that don’t have the budget to employ full-time in-house risk and compliance professionals, the ability to pass everything over to a trusted partner is especially valuable.

Outsourced security technology

The progression of technology has enabled criminals to become even savvier. So, fighting fire with fire is essential when it comes to reducing the cyber-risk in today’s digital age.

This includes using:

Technology that filters out viruses before they hit your inboxes
Business-class antivirus/malware that offers active protection against attacks
Regular and automatic back-ups
Online database checks to highlight any red flags
A digital bank account checker that validates the source or destination of funds
DMARC technology that actively blocks phishing attacks and prevents third parties impersonating your email domain to any recipient such as clients, suppliers or employees.

Conclusion

Digital information and client funds must be safeguarded to protect firms, conveyancers, and clients. And this requires a combination of education, technology and robust processes. What’s more, cyber risk, security and compliance are not one-time activities. The challenges are evolving and require constant vigilance.

Where a failure in security occurs, solicitors could be liable for losing client funds, be forced to pay the money back to lenders, be subjected to raised insurance premiums, and face severe and long-lasting brand damage.

Outsourcing not only reduces the pressure upon conveyancers – who already have to be vigilant when undertaking daily tasks – it also frees up fee earner time. And, just as important, it leaves due diligence to specialists who can keep up with the rapidly evolving issues of a digital world.

[1] HM Government

[2] Xyone Cybersecurity roundtable

[3] Xyone Cybersecurity roundtable

[4] Xyone Cybersecurity roundtable

[5] Hiscox Cyber Readiness’ Report

[6] Dreamvar v Mishcon de Reya

[7] Upholding Professional Standards 2017/18 report

[8] ‘Hiscox Cyber Readiness’ Report

[9] The National Cyber Security Centre (NCSC)

[10] Verisign/Merril

[11] https://www.sra.org.uk/sra/how-we-work/reports/annual-review/annual-review-2017-18.page

[12] https://www.logicforce.com/2018/11/02/cyber-security-scorecard-q4-2018/

[13] https://www.lawsociety.org.uk/support-services/advice/articles/dreamvar-informative-and-case-summary/

The Ultimate Guide To Outsourced Legal Cashiering

An increasingly strict regulatory regime has changed the legal sector forever. At the same time, the financial pressure on many firms has grown substantially as challenger firms and online providers have made their presence known.

What’s more, with many law firms registering as Alternative Business Structures (ABSs), there has been a rise in non-lawyer experts taking on management roles. And these non-lawyers are applying tried and tested business techniques to improve standards, deliver consistency and reduce costs. In response, more and more traditional firms are having to adopt a similar business-like management approach to keep up.

But it’s not just about surviving. By modernising the way they operate, law firms can also thrive in today’s challenging legal landscape.

One way that savvy firms are choosing to innovate and respond to change is by outsourcing essential business tasks. In particular, legal cashiering is one back-office function that has become increasingly popular to offload.

“Outsourcing to The Cashroom has been painless. So easy to deal with accommodating everything that we need to do, when we need to do it, whilst keeping us on the right side of the vast array of regulations.

We have complete trust in them to ensure our compliance, and have a Law Society Inspection Report which proves what a great job they are doing for us.

We will never have a cashier in our office again.”

Kate Anderson, Director at Masson Cairns

Why outsource your law firm’s cashiering?

Rather than wasting time on routine, non-legal tasks, many law firms have chosen to contract things out, while they focus on the more lucrative aspects of winning new business and keeping clients happy. And, with lawyers increasingly expected to do more with less, the appeal of outsourcing is only getting stronger.

Here are just some of the ways that outsourcing your legal cashiering can help your law firm.

Reduce the cost and burden of managing employees

Legal accounting is a complex administrative task, so it’s vital that your firm has access to experienced staff. This is especially important in such a highly regulated industry. But, with a shortage of quality legal cashiers, finding qualified bookkeepers can be tricky. And, interviewing and assessing candidates’ integrity and skills is not straightforward for a law firm.

At the same time, the total cost of employing in-house cashiering personnel is expensive. Because, in addition to wages, you also have to take the costs of recruitment, induction, training, mentoring, sick pay, maternity cover, holiday cover, pension contributions, and National Insurance into consideration.

Also, law firms face the challenge of having to fund sufficient senior cashiering resource to deal with complex, high risk elements, while using that same resource to carry out the more mundane, junior tasks. And that’s not cost-effective.

Employing a full-time legal cashier may not even be financially viable for smaller firms. And, if you are one of the 523 new law firms planning to open in the next year^[1], you will need affordable, quality cashiering support to challenge the larger players.

Using an experienced outsourcing supplier lets your law firm tap into recognised, certified expertise, without the burden and cost of employing and managing your own staff; making it a much more affordable option. In addition, a resourcing approach provides you with 9-5 support and real time cashiering, but at a cost based on the actual activity and skill level your firm requires.

Respond quickly to a changing marketplace

Today’s legal market is in a state of flux. Because outsourced services are scalable, your firm can adapt quickly to rising or slowing demand for services, without the worry about hiring or laying off staff. And you only ever pay for what you use.

So, by partnering with a trusted outsourcing expert, smaller law firms benefit from a more agile approach. As such, embracing an outsourcing ethos could help you to adapt and thrive. And secure your long-term survival.

“The Cashroom offer an invaluable service for any solicitor’s firm. Their approach is efficient, professional and responsive. They have allowed us to deal with rapid growth by taking on all accounts functionality.”

Alexis Brassey, Managing Partner and Notary Public at Cavendish Legal Group

Save valuable office space and costs

We have already looked at how outsourced legal cashiering can help your law firm to cut down on employment costs. But the savings don’t stop there.

With outsourced cashiering, you will also save on infrastructure and associated office costs (e.g. energy, floor space, hardware, software, etc.). Indeed, when you consider the total cost, you can save thousands of pounds year-on-year by outsourcing.

Reduce the compliance burden

Compliance is now a pressing concern for most businesses. Not least because the rules and regulations are continually changing. But for law firms, the need for demonstrable security and integrity is vital.

For example, when it comes to legal cashiering, your firm is professionally obliged to keep an accurate set of books. But for lawyers, preparing accounts can be stressful and worrying, especially when they don’t have access to certified experts. However, not taking the time to dedicate the focus necessary to accounts-related work is not an option. Because unintentional accounting errors can prove costly, and, if a mistake happens, the risk to your reputation and your bottom line could be devastating.

However, if you employ an outsourced legal cashier, they won’t just keep your accounts in order. They will also enable compliance with the Solicitors Accounts Rules and Money Laundering Regulations. And, crucially, an outsourced cashier will also ensure that there’s a clear audit trail as required by your accountant or inspector.

With the Solicitors Regulation Authority (SRA) accounts rules set to undergo their first major overhaul in years this November, with significant changes that all firms will need to prepare for, firms should look to get their cashiering processes in order now to stay ahead of the game.

“The Cashroom has definitely been a good business move, not only because of efficiency but also in relation to compliance which can be daunting at times.”

Susan Ayre, Partner at Simon A Holt & Co

Plan for business as usual

Law firms that don’t want to suffer any downtime due to unexpected events have to be prepared. For example, how would you cope if unforeseen and long-term absenteeism hit your business?

By offering support that never stops or takes a break, with outsourced legal cashiering you are free from the burden of sick days, jury duty and family emergencies. So, as well as saving you money, it can also boost your productivity.

Also, as alarmist as it might sound, extreme weather conditions are on the rise. And, with global warming set to lead to more and more changing weather patterns, you have to think about how you can continue to operate if you can’t access the office. Outsourcing business services such as legal cashiering can help to support your disaster recovery planning. With remote support available when you need it.

Free your solicitors up, to get on with what they do best

Law firms depend upon a steady cash flow to survive, so keeping on top of your bookkeeping is essential.

But, for many practices, this can be both challenging and time-consuming. Correcting errors is a costly waste of your valuable time; especially where many other responsibilities need looking after. For example, if you don’t nurture and grow your client base, your business will suffer, you’ll spend less time earning fees, and the less profitable you’ll be.

With time one thing none of us has in excess, it pays to acknowledge that you can’t be an expert in all areas of your business. Instead, you should focus on your strengths.

Removing the hassle from your shoulders, expert outsourced legal cashiering will take care of everything for you. Leaving you free to spend more time with clients and other tasks that make your firm money.

By outsourcing your legal cashiering you’ll also have peace of mind that you are working with people who have experience in dealing with day-to-day bookkeeping, as well as the escalation of matters where necessary.

“We operate a business which requires efficiency and certainty of service. The Cashroom has augmented our own internal accounts team, taking control of key elements and working closely to provide a seamless service to us.

We have found them to be extremely professional and helpful, at a cost which has achieved significant savings as against an in-house approach.”

Andrew Kwan, Solicitor-Advocate at Clear Law Solicitors

Help your law firm to grow

An outsourced cashier will ensure an up-to-date log of case-related fees and expenses for regular claim back purposes – resulting in a healthier cash flow. And that’s crucial to business growth. But more than this, with the right support, you will also get access to better forecasting data. So, using an outsourced cashier can provide valuable business insights that can be used to identify trends and inform your overall business strategy.

For example, forecasting data can be used to assess the profitability of certain matters, to intelligently determine opportunities for growth, and to identify legal service areas that are becoming problematic.

What type of firm needs outsourced legal cashiering?

We help many types of law firms with their outsourced legal cashiering needs. Including:

Sole practitioners up to mid-sized firms.
Firms where the cashier has retired (as it can be difficult to recruit cashiers)
Firms where the cashier is going on maternity leave
Firms that are restructuring and dealing with TUPE options
Firms that need help to improve following a Law Society Inspection
Firms where the lawyers have been trying to do it themselves and have no real knowledge of compliance
Forward thinking firms with a desire to do things differently.

The challenges of outsourced legal cashiering (and how to overcome these)

When it comes to introducing outsourced legal cashiering into your law firm, the benefits are clear. But what are the challenges you will face?

Data security

Law firms are a particular target for cyber criminals, not least because of the huge sums of money transacted each day. But criminals are not just looking for financial gains; they are also after the confidential data which is at the crux of the solicitor-client relationship.

When it comes to protecting client money, it’s only natural that you’d be worried about putting your valuable data and finances in the hands of a third-party. But, in most cases, an outsourced partner will have invested heavily in security measures such as encryption, firewalls, password protection, physical data centre anti-intrusion systems, software updates and back-up procedures. They should also have a robust confidentiality process in place to ensure confidential client information is protected as per the SRA code. It can be hard for smaller law firms to provide the same level of protection.

Let’s face it, if you have one single cashier who sets up and authorises payments, a fraudster need only obtain a single set of bank login details. Even if you have multiple cashiers to check payment details, they are all likely to be on one single network, so it’s easy for a hacker to get all the information and access rights they need.

Modern law firms are like mini banks, but without the resources required to protect the money they hold securely. That is precisely where the added value of outsourced provider comes in to play.

The burden of managing a third-party supplier

Some law firms are concerned that managing a third-party could be just as complicated as looking after in-house staff. But this shouldn’t be the case.

Yes, it’s true that, if your requirements are complicated, you may rely on multiple outsourcing partners. And this can become tricky, not least because, in an age of interconnected systems, getting a supplier to take responsibility if something goes wrong can be a challenge. But the right outsourced legal cashier will be used to a multi-party model and will do everything possible to streamline and simplify things for you.

Of course, there are also benefits of simplifying supplier management. For example, using one partner for multiple tasks such as cashiering and management accounts.

Fear of change

Change is both risky and exciting. But it can also foster self-doubt. Will all your effort be worth it?

As we established earlier in this guide, the law is not just a profession; it is also a business. So it’s vital to keep moving forward. And, with a wealth of benefits to be had, not taking the leap could mean that your competitors get ahead while you stagnate.

Cost

When investing in outsourcing, price is always going to be a concern. So, when making your business case, it’s crucial to understand the total cost of ownership (TCO).

What’s more, price doesn’t always mean value. In many cases, spending money and saving yourself time is more cost-effective.

Being stuck with the provider

When looking to outsource, one of the biggest concerns faced by law firms is that they will be stuck with the service provider in some unholy death grip.

Many outsourcers combat this fear with exit clauses in their contracts. However, even with an agreement which allows for termination, you could face difficulties replacing the service, either by taking it back in-house or by finding another, better outsourcer.

There is also a concern about ‘professional behaviour’ on separation. With numerous horror stories where the outsourcer makes life extremely difficult – either by ‘working to rule’ or by being generally obstructive as the service is taken off them.

To ensure this doesn’t happen to you, due diligence is needed before signing any agreement. This should include obtaining a reference from a firm which no longer uses the service and putting a plan in place for end of contract.

Integration with other processes

The last thing you want to do when appointing an outsourced legal cashier is to have to switch all your existing systems. But modern partners should be able to work with your current setup.

To make this work they will look at things such as:

How your systems are hosted and how they access them (e.g. server-based or cloud)
How the system works (e.g. how are documents stored and how will financial information requests be forwarded)
Who will manage the process your end (e.g. will there be a specific contact, or will they liaise directly with fee-earners).

The Cashroom has a totally system agnostic approach. This means that firms need not change their systems before benefiting from the service.

Things to consider before you appoint an outsourced legal cashier

Outsourcing your legal cashiering will have many rewards. But as with any investment, there are some things to consider before making the leap.

What questions should you ask your preferred provider?

Who will manage your account?

For example, will it be a dedicated individual, and, if so, who will cover for sickness or absences?

You should also make sure that you will be supported by specialist legal cashiers. It is vital that any partner you appoint doesn’t just have a firm grasp of accounts, but also possesses an ILFM qualification and has an in-depth understanding of the SRA Handbook, SRA Accounts Rules, and other relevant guidelines.

Can you get a reference from other customers?

A few positive words from a happy customer can put your mind at rest and give you confidence in your decision. As such, ask the outsourced legal cashier for references.

What are the terms of your agreement?

It’s vital that you understand the terms of any contract and Service Level Agreement (SLA) you are entering. Things to look out for include:

Data protection processes and guarantees
If they have an established business continuity and disaster recovery plan
How they would handle a security incident and rectify any data or financial losses
Whether they hold professional indemnity insurance
Who owns your data
What happens if you want to end the contract
If they will support you during a compliance visit.

Do they offer an online portal?

In an age of intense regulatory compliance, demanding client needs and increasing levels of cyber crime, it is imperative that any online portal is able to protect client information, improve the customer journey and provide increased efficiency.

Remain Cyber Secure and GDPR Compliant

Traditional forms of online communication, like emails, are coming under intense scrutiny as phishing attacks and technological vulnerabilities are costing law firms millions each year.

An effective portal can minimise this risk as both internal and external stakeholders are able to communicate and share information through the secure portal. All communication exchanges are secure with access restricted to authorised members of the firm carrying the relevant security information.

Using an outsourced legal cashier without such a secure portal service poses serious security and GDPR risks. Financial and personal information sent to the legal cashier through word processing documents and email could be intercepted and used by unscrupulous cyber criminals causing financial and reputational damage to your firm.

Improving Efficiency

Working outside of a portal creates a myriad of opportunities for communication to be lost or seriously delayed. It is extremely easy to mislay or overlook an email. Busy practitioners working on legal services are bombarded with email requests meaning the legal cashiers could be delayed. Similarly, sending a request to the outsourced cashier means that your firm’s request is buried within the work of their other clients. This could delay important transactions and reduce efficiency.

A portal can solve this. Each request that is made both internally and externally is unique to the business. Here at The Cashroom, all tasks also have an automated workflow, ensuring that deadlines are adhered to and communication is clear for all concerned.

Portal functions also enable the legal cashier to eliminate internal and external email. All requests are clearly tracked and progress is monitored via the technology. This means that each task has a clear and easily accessed audit trail; something that becomes extremely time consuming when using emails alone.

How quickly can you get up and running?

As with any investment, it’s essential to get up and running quickly. Ask your outsourcer how long this will take, whether there will be any downtime or disruption, and if there is a migration plan to ensure a smooth transition.

Do they offer any other outsourced services?

As previously discussed, it’s not unusual for law firms to be put off by the idea of managing multiple third-party suppliers. To keep things streamlined, find out if they offer any other outsourced services to help you consolidate your supplier management. Could they be a ‘one-stop-shop’.

Why work with The Cashroom?

Pioneers in the evolving legal landscape, at The Cashroom, we supply you with high calibre, qualified and experienced legal cashiers – at a fraction of the cost of employing your own staff. We also help you to unlock a huge range of additional outsourcing benefits.

For example, when you work with us, we will:

Save you money
Offer a fixed monthly fee, so you stay in control of your cash flow
Work with your existing practice management system (or provide recommendations where wanted)
Remove the burden while making sure you stay in control
Help to keep you compliant with industry rules and wider regulations
Facilitate and support your business growth
And more!

More than outsourced cashiering, we also offer management accounts and payroll support to law firms across the UK.

With trained lawyers on our team, and board members who were previously managing partners of their own firms (along with a chartered accountant), we also understand what it takes to run a successful legal business. And we share all this knowledge and expertise with you.

But we don’t expect you to take our word for it. As well as having won multiple industry awards, we are also happy to supply references of current and former customers to give you all the peace of mind you need.

“We have been using The Cashroom’s services for three years now. We brought them in to provide a secure, efficient, compliant cashiering function to support our growing business with their flexible resource model.

They have delivered exceptional service with a real personal touch, saving us money but delivering a quality finance function which suits our forward thinking approach to the provision of legal services to our clients. Their processes work especially well for our very busy conveyancing team.”

Gareth Jones, Practice Manager at Easthams Solicitors Limited

What type of tasks can we help you with?

The Cashroom provides all the legal cashier services typically provided to a firm of solicitors; the difference is we employ “your” cashiers, and they work remotely from our offices. Among many other things, we:

Maintain up-to-date books and records
Process all day to day transactions
Make bank payments
Reconcile firm and client bank accounts daily
Pay suppliers
Perform day and month end routines
Prepare and submit VAT returns
Assist with VAT inspections
Prepare Law Society Certificates and assist with inspections (Scotland only)
Provide information for Accountants’ Reports
Ensure full compliance with Law Society Accounting Rules /SRA.

In conclusion

Today, outsourced legal cashiering is not only helping law firms to make significant cost and time savings, but it is also leading to improvements in productivity and growth. Crucially, outsourced legal cashiering is helping to relieve the massive compliance worry. But when it comes down to it, the most significant benefit of outsourced legal cashiering is that it frees up lawyers to focus on client work.

To find out more about how outsourced legal cashiering can help your firm to flourish, contact Alex Holt alex.holt@thecashroom.co.uk or take a look at our services page on our website.

^[1] Hazlewoods, Chartered Accountants and Business Advisers

5 Common Questions about Outsourced Cashiering

When we are out meeting solicitors, explaining what it is that we do, and how we do it, they are often surprised at just how simple it really is to outsource your cashiering. We thought it would be worthwhile explaining some of our standard responses!

Do we need new ‘IT’, or learn how to use a new ‘system’?
We do not have a ‘system’ or software that we use, we simply access the accounts part of your existing Practice Management System remotely. So, all you need is a legal practice management system of some sort, and a means of us accessing it remotely. We also have a secure client portal which all of our clients are on, creating a secure environment for both The Cashroom and client to communicate without the cyber risks of email. This also avoids having to protect sensitive data via email. Training can also be given to ensure you are comfortable when using the portal.
Will we get a different person each time we contact you?
We allocate each client to a cashiering team, headed up by a very experienced senior cashier, essentially your ‘Head Cashier’. They will have a small team of people who will work with your firm, in order that holidays, sickness cover etc, are not a problem for you. You will get to know the two or three people working with your firm very quickly, and build a relationship with them. You can pick up the phone or send a query via our secure client portal to these selected people at any point and be ensured that someone will always be about to help.
Is it impossible to bring the service back in-house in the future?
We do not require you to use any new software/system, we are accessing your existing system remotely. Therefore, if at any point you wanted to bring the service back in-house, it would be as simple as recruiting a cashier, changing the username/password for our login to your system and online banking, and then our access would be terminated.
Is there a loss of control involved?
Some feel that by having ‘their cashiers’ offsite, they will somehow lose some of the control over what is going on. Clients tell us time and time again that they actually have a better understanding of what is going on by dealing with our cashiers. Before outsourcing, the cashier at their firm often controlled things, choosing what they wanted to disclose to the Partners. By outsourcing, it puts control back in the hands of the Partners of the firm, rather than the cashier, allowing the Partners to make the decisions and be more involved in what is going on in the firm!
Does it really save us money?
We can offer a saving of around 20-30% on the salary costs of inhouse cashiering staff. This will vary from firm to firm, depending to a large extent on how well they pay their staff, but in some cases the saving can be as much as 50%. There are additional savings, such as National Insurance and Pension contributions, the cost of additional office space which can be used by fee earning staff instead, the savings on recruitment / training of new staff, the management time of a Partner in dealing with appraisals, performance issues etc, as well as the cover for holidays/sickness.

If you are thinking about outsourcing your cashiering / accounts department, but have any questions, please feel free to get in touch.

Scotland – gregor.angus@thecashroom.co.uk / 07875 598 593

England & Wales – alex.holt@thecashroom.co.uk / 07817 420 466

How outsourcing your Legal Cashiering can save time and money

The Legal Institute of Forward Thinking says; “Law firms don’t fail for lack of profits; they fail for sufficient cash to operate.” Change is inevitable in the business world, but how you adapt to this change makes the difference between whether you sink or swim. One way that savvy firms are choosing to adapt is by outsourcing essential business tasks, like legal cashiering.

An outsourced legal cashier provides a variety of functions, including but not limited to: processing the day to day transactions, set up bank payments, assist with VAT inspections as well as preparing and submitting VAT returns. The list is endless.

Having the right person delivering your legal cashiering service is vitally important. If you were looking at having an in-house cashier, you’d have to take time recruiting, vetting, training, providing cover for any absences. Add in the costs for computers, software, pensions and wages, the cost of having an in-house cashier continues to increase. Combine that with the time put into recruiting and managing the cashier, it goes to show that someone’s time will be heavily constrained, preventing them from conducting their daily business.

By outsourcing the legal cashiering service, you are introduced to a talent and knowledge pool of people who can provide cashiering support every day, their training and management needs are taken away from you. They also ensure that you remain compliant with the SRA, CLC and the Law Society of Scotland.

What is the cost benefit of outsourcing?

Maximise your resource: Benefit from a cost based on the actual activity and skill level your firm requires, rather than having to fund sufficient senior cashiering resource to deal with complex, high-risk elements, while using that same resource to carry out the more mundane, junior tasks.
Access expertise and insights: Get access to better forecasting data which provides valuable business insights that can be used to identify trends and inform your overall business strategy.
Improve your cashflow: Ensure an up-to-date log of case-related fees and expenses for regular claim back purposes – resulting in a healthier cash flow.
Reduce your exposure to risk: An outsourced partner will have invested heavily in security measures and will assume compliance responsibility.
Improve efficiency and productivity: Free your employees to get on with what they do best and benefit from more streamlined processes.
Become more agile: Scale resource up and down as you need it, without the hassle of hiring and firing employees.

Outsourcing this part of the business, frees up lawyers to do what they do best, win business and earn fees. This enables your business to grow.

About The Cashroom

When the property market is causing enough headaches for legal service professionals, The Cashroom is ready to help ease the pressure on your law firm by ensuring compliance with the solicitor’s accounts rules, saving firms money and providing accurate and timely management accounts and management information.

Let The Cashroom worry about your firm’s legal cashier and payroll services so that your firm can focus its resources and time on providing expert legal advice to the consumer. Additionally, our management accounts and management information on budgets, cash flow projections and monthly management allow you to reflect on the work that has been completed and accurately predict where your firm is going in the future.

The health and well-being of people working in the legal services sector

Mental illness is the leading cause of sickness and absence from work and like many other sectors, the health and well-being of people working in the legal sector is something that needs addressing. According to research 66% of solicitors feel high levels of stress in their jobs, and each year in the UK, 70 million workdays are lost to mental illness.

According to the recent ‘Stress in the Legal Profession: Problematic or Inevitable’ report by LexisNexis, legal professionals feel as though a level of stress comes with the territory. 75% of respondents were concerned that stress and mental well-being is a major issue that needs addressing in the legal sector. Over a quarter of respondents feel that more needs to be done to help and support colleagues struggling to cope with the rigours of the job. These startling statistics show that people feel more confident talking about well-being in the legal sector but feel more needs to be done to address the issue.

The health and well-being of legal service professionals has started deteriorating in recent years. Lawcare, a charity promoting and supporting good mental health for all in the legal community witnessed a surge of calls being made to their helpline in 2018.

The helpline received 932 calls in 2018. Of these calls, the majority were concerned about their mental health. 26% felt stressed by their jobs and 19% were starting to feel depressed. 11% of callers were anxious about their jobs and the service they are providing.

Almost half of all the calls received (48%) were made by legal professionals with less than five years’ qualified experience. The Junior Lawyers Division’s resilience and well-being survey also found a huge number of younger legal professionals struggling with work related mental health issues. This research clearly shows that the well-being of people in the legal sector spans all knowledge ranges and doesn’t discriminate between the newly qualified and the more experienced lawyer.

93% of respondents reported feeling stressed in their role the month before they completed the survey. Over a quarter of qualified members surveyed felt severely or extremely stressed.

The survey classed stress as being under too much emotional or mental pressure. When almost all of young legal professionals feel this way, it is clear that more should be done to improve the working conditions in the sector.

77% of respondents believe that their firm could do more to support those with stress at work with 87% looking for their employer to provide more guidance and support when it comes to mental ill health.

Whilst the call from those within the profession is looking to employers to do more, the reports also found that the majority of legal service providers are happy in their jobs, finding stress to be an unavoidable consequence of carrying out such an important service.

About The Cashroom

Brexit’s Impact on the Property Market

Since the referendum of 2016, there has been uncertainty about how the property market would fare. Prices have continued to grow in most areas in the UK, but they have been slowing with buyers and sellers reluctant to make a move. Which leads us to the question what will Brexit’s impact on the property market be?

The headline figure that everyone is throwing around is the inactivity of buyers and sellers entering the market. In February, the RICS UK residential survey found that respondents recorded a 40% reduction in new buyer enquiries. Although the net balance figures for March, April and May were slightly more buoyant with only a -26% net balance of new buyer enquiries. It’s clear that buyers are reluctant to declare an interest in property until October 31st when they know what the country is doing next.

Alongside that, the number of registered house hunters per branch fell from 296 in March to 265 in April; it also marks a reduction of 21% in the past year when there were 337 registered house buyers per branch.

The average of 237 house hunters per branch was the lowest recorded number since the financial crisis of 2008. This reluctance from buyers is one of the effects of Brexit’s impact on the property market.

It’s not just buyers and sellers who have been put off by Brexit. The number of properties available on the market has decreased. The NAEA Propertymark’s Housing Report states that the number of properties available per branch fell from 37 in March to 35 in April.

Construction output in May saw its most severe decline since the unseasonably poor weather of March 2018. Thanks to the political uncertainty construction companies haven’t wanted to commit, resulting in their employment levels plummeting to their lowest levels in 6 years. With all of this in mind, less houses, less market activity, less new builds happening resulting in fewer construction jobs, Brexit’s impact on the property market looks to be catastrophic.

There is light at the end of the Brexit tunnel, and we’re not talking about deal or no deal. Reports have suggested that transactions are slowly starting to pick up. The number of approved sales per branch were eight in April, an increase on the seven per branch the previous month.

Research conducted by Reallymoving.com shows that house prices could be set to bounce out of the Brexit blip and could potentially increase beyond the dizzying heights of summer 2018.

The data found that UK house prices are set to soar by 9% between May and August, with the North East of England set to increase by 20.2%.

The Financial Conduct Authority’s ‘Mortgage lending statistics – June 2019’ data also reveals that mortgage lending in 2019 is healthier than in previous years.

The start to 2019, saw the negative impact Brexit had on the property market, but as the year progresses there seems to be a more positive outlook for those looking to take part in the property market in the summer.

About The Cashroom

New SRA Accounting Rules 2019

The Solicitors Regulation Authority has recently confirmed, that the changes of the SRA Accounting Rules will be effective from 25^th November 2019. These new reforms were approved by the Legal Services Board (LSB) last year and are part of the Looking to the Future programme, allowing solicitors greater flexibility in how they work.

The new SRA Accounting Rules are designed to be far more outcome-focused, and are shorter and more targeted than the existing rules. They continue to focus on the protection of client money but with the freedom for solicitors to use professional judgement in considering how the standards are met, by applying simpler accounting rules that focus on the principles of safeguarding client money, rather than lots of specific technical rules.

November will also see the SRA Digital badge becoming a mandatory requirement for all regulated firms who run a website. Further information is available on the Solicitors Regulation Authority website.

Under the current rules, period controls are specifically described, for example the transferring of costs within 14 days and the banking of client monies by next working day. However, under the new rules, these period controls have been replaced with the word “promptly”, leaving it open for you as a firm to decide what “promptly” means to you.

This also means that you could make the decision to continue using the old rules period controls for handling client money, as long as all areas of the new rules have been considered and changes made where necessary.

The SRA has promised some form of guidance in addition to the new rules. However, we have not yet received any confirmation when this will be nor what form, this will take.

Significant Changes to the SRA Accounting Rules

Under the current rules, firms can transfer money from client account to reimburse the firm for incurred or paid disbursements. However, under the new rules (4.3) firms must provide a bill of costs or other notification of costs incurred to the client or paying party first, before the transfer of funds can be completed. The definition of costs includes disbursements.
The current rules include a section on the dealing of residual client balances. However, these are now silent under the new rules with only rule 2.5 referring to the prompt return of client money as soon as there is no longer any proper reason to hold those funds.

Other Key Changes to the Rules

The number of rules has been reduced to 13, compared to the current 52.
Changes in what is classed as client money under certain circumstances means some firms may not be required to hold client bank accounts. This includes money received in advance for fees and disbursements (where they are the only client monies held and clients are informed in advance) and money received from the Legal Aid Agency.
Professional disbursements are currently considered separately to disbursements. However, it appears all disbursements will be treated in the same way under the new rules.
Agreed fees are no longer considered as separate to costs. Under the new rules, agreed fees are classed as client money until the bill is raised (unless the firm follows the changes in point 2).
The new rules now formally require the COFA or manager of the firm to review and sign off the client account reconciliations. Any differences on the reconciliation should be investigated and resolved promptly.
Firms running client’s own accounts will now be subject to reconciliations every five weeks. Considerations will need to be made on how this is completed as it is unusual for these accounts to be recorded on the client ledgers.
New rule 11 specifically refers to the use of TPMA’s (Third Party Managed Accounts). You are permitted to enter an arrangement with your clients to the use of a TPMA. You however must still ensure to obtain regular statements from the TPMA provider and ensure these accurately reflect all transactions on the account.

Considerations in Advance of the Rules

We recommend that all firms review the new rules which are available on the Solicitors Regulation Authority’s web page, to ensure you are comfortable with the changes due to commence from the 25^th November 2019. Below are some considerations to be made for the more common process changes required under the current rules:

Firms that current rely on the transferring of incurred and paid disbursements for cashflow purposes or as part of their usual cashiering procedures, need to consider the new rule 4.3 on billing or notifying clients in advance of transferring these costs. Changes to the current process will be need to be considered to either;
1. first supply disbursement only bills, or
2. only transfer costs on the creation of a final bill
Under the new rules the concept of unpaid or incurred disbursements has been removed, meaning disbursements are only to be considered as disbursements when paid.
Defining the meaning of “promptly” for your firm. Under the new rules, “promptly” is referred to on the banking of client monies received, and on the transferring of office monies from client account for costs (this includes disbursements). As a firm you will need to consider if you are required to adopt changes to adhere to this rule. It is recommended that documented systems and controls are in place to ensure the definition of “promptly” is familiar to all.

The Cashroom Clients

The Cashroom offers recommendations for adherence to these new rules and provide advice on the creation of a suitable policy to ensure compliance for our clients. If you are interested in what The Cashroom can offer, please get in touch…

Katie Wilson,

Head of Cashiering England and Wales

The Law Society of Scotland launches mental health survey!

Mental health issues are being recognised more, especially in the workplace however there is always more we can do. The Law Society have now implemented a survey for Scotland’s legal sector urging solicitors, accredited paralegals, paralegals, legal technicians, and all support staff working at law firms and in-house legal teams to get involved and complete the survey. For us working in the legal sector, we are often helping others and finding ways for them to solve and deal with their problems, sometimes forgetting about our-self in order to help someone else. Along with our extremely busy and sometime stressful work we all have commitments and strains to deal with in our personal life too. It is vital for all of us to take a step back when needed and deal with our own health. And even if we do not have any existing mental health problems, ensure that we are all looking after our mental health as we do our physical health.

Alison Atack, the president of the Law Society of Scotland has said: “At the Law Society, we want to understand more about mental health issues within the whole of the legal sector, which supports around 20,000 jobs in Scotland, and examine what we may need to do to tackle any stigma that exists around mental health in the workplace and ensure people can access support when they need it most. I’m proud that we are the first professional body in Scotland to initiate a sector-wide survey of this kind.”

At The Cashroom Ltd we think this is a fantastic initiative from the Law Society and would like to encourage everyone to participate in this survey – CLICK HERE TO PARTICIPATE.

Mental health is becoming extremely common within the workplace now and is now one of the main causes of sickness in staff members. A massive 70 million working days are lost every year in the UK due to mental health issues which is costings businesses around £2.4 billion per year.

It is common for people not to talk about their feelings especially in the work place due to the fear of being discriminated, feeling ashamed and embarrassed or the not knowing how people will react. We should now be creating workplace environments for people to feel safe enough to be themselves and speak out about how they are feeling.

At The Cashroom we have a confidential phone line available to staff which goes to trained mental health professionals that they can call 24 hours a day (you wouldn’t let yourself or even a colleague treat your cancer would you?).The Mindful Employer creates a safe place for staff to call and also has a lot of useful information on its website for staff. We also encourage all staff to look after their mental wellbeing by allowing time during the working day for staff to complete a daily mile outside in the fresh air and we have fresh fruit delivered weekly. We also have our mental health charter displayed in the office for staff to see.

It is also Mental Health Awareness week so what better time to complete this survey and take some time to think about you and others mental health.

TOP TIP: Ask yourself, would you know if you or someone else was being affected by mental health, could you recognise it? There can be a lot of different signs and symptoms related to mental health but no one should be afraid to get help if they are having difficult feelings. Things to look out for in work are, feeling more tired than usual, finding it extremely difficult to motivate yourself, short tempered, isolating yourself and avoiding colleagues.

Chloe McGinn

Marketing Assistant

Top applications to help you run your business

The world has gone technology crazy. Technology means we can all work more flexibly and more efficiently than ever before but with so many top applications and gadgets to choose from how do you know what really would benefit you and running your business? This week we ask a Managing Director, a Business Developing Director, a Business Development and a Marketing Manager what their top applications are and how could they help others in running a law firm.

David Calder, Managing Director, The Cashroom Ltd

Top Applications – OmniFocus

I’ve always thought of myself as a pretty productive person, but I’ve always hated “ToDo” applications or reminders. They’ve never really worked for me. For years I kept a very simple clip board on my desk, with a pad of paper, wrote down my tasks for the day and scored them out as I completed them. It worked reasonably well for the 20 years I was a practicing lawyer.

And then I discovered OmniFocus.

applications OmniFocus is a Task Manager for OSX and IOS, which implements the “GTD” (Get Things Done) productivity methodology espoused in the book of the same name by David Allen. I had never come across this until I read about OmniFocus, but it’s a pretty comprehensive process for time management and (surprise surprise) getting things done.

In essence OmniFocus is a big data base where you log everything you need to do. You can store personal and business tasks, and organise them into mini projects. You can then aggregate the tasks together to create a daily ToDo list. However, the clever thing is that, not only are your tasks organised by project, they are also organised by “context”. A context is a brief description of the circumstances that must exist before you can complete a task. They can be pretty much anything, but a typical example is time – so you categorise tasks according to how long they’ll take.

The beauty of this is that, if you have an hour to spare, you can set up OmniFocus to only tell you about tasks you can fit into that hour, and ignore anything that’s longer. In this way, you know exactly what you can do in the time you have available. So your custom To Do list, only contains those task you can complete in the time you have. That’s only an example – contexts can be pretty much anything.

It’s this ability to create custom to do lists, for specific circumstances, drawing tasks from all your projects, that makes OmniFocus so powerful, and has persuaded me to give up my trusty clip board!

Emma O’Day, Marketing Manager, The Cashroom Ltd

Top Applications: Hubspot

Before you skip passed the marketing part and think this doesn’t affect you, please stop and skim your eyes over what I have to say. Marketing is effectively just a name for promoting your business to allow it to grow and be a success– now doesn’t everyone want a successful business? I myself started working in marketing whilst I was completing my diploma in legal practice so believe me when I say lawyers can be marketing gurus too – yes that is what I am now calling myself!

Hubspot is my app of choice, David and Alex can testify to me bleeting on like a sheep for months about getting it and oh how I love my hubspot! One application contains every single one of our contacts and their full history – how we know them, what emails they have ever been sent, have they read those emails, have they attended events, what business they have referred our way etc. I can send emails from it or add a task for one of my colleagues to send an email to someone. We can automate emails so if someone does open a specific campaign then they get sent a follow up campaign without me actually doing anything – very cool! applications

You can spend half an hour scheduling all your social media posts for the week/months/year ahead and then never have to go on social media again if you don’t want to! This is brilliant to ensure you have constant content going up, although I would advise you take a look on social media at least a couple of times a week to see what is current and what your followers are talking about too.

You can create a blog post on it which then automatically goes onto your website, and automatically is then pinged out on your social media accounts. You can also create a mass email campaign to go out to hundreds or thousands of contacts if you have them with the click of one button.

applications The Business Development Managers also log onto hubspot and all our new business comes in through it. David can log in and see on a dashboard very quickly how many new enquiries we have, where they came from and at what stage they are in our sales process, for example he can quickly see if Alex has sent out a contract and can then click into that if he wants to see more details.

Hubspot also has a fantastic reports feature to see how successful your email campaigns have been, how many new leads you have converted that month and you can set a monthly target so it can report on how close or far away you are to reaching your target. Perhaps you want your fee earners out generating some of their own business every month, you would be able to track this here.

Having your full sales process in one place from marketing right through to your client becoming a client is brilliant and I can’t recommend using a CRM like hubspot enough! Go on, become a marketing guru too!

Alex Holt, Business Development Director, The Cashroom Ltd

Top Applications: Good Notes

The life of a BD person is hard. No…really…stop laughing.

We develop a caffeine addiction. Our cars take a pummelling. We are forced to eat nice lunches with people and attend drinks events.

It’s hell, I tells ya.

But on a more serious note, our remote, wandering lifestyle is a wonderful testing ground for apps which enable easier and more efficient working methods.

applications One of the biggest issues for anyone who deals with numerous client meetings whether on the road or in the office is the whole issue of fitting in the time to type up the notes and perform the activities you’ve agreed, before the next meeting starts.

Good Notes is an iPad app which, when using the rather clever stylus, allows you to write out your notes straight into the ipad. Because it effectively replicates a pad of paper, you are able to make notes just as quickly and ‘haphazardly’ as you would do normally within a meeting. You can even doodle! Once the meeting has finished, you can export that note and then save it within your CRM (I’m guessing Emma will have sung the praises of Hubspot in that regard!), and flag it up to relevant people within your team. It is a searchable app, so once you’ve made your notes you can name the note and then it becomes searchable subsequently within GoodNotes either by name of note or by date- a definite improvement on the physical day book, especially after you’ve moved onto a fresh one.

We toyed initially with using an app which converts handwriting to text, however we found that for meetings, it distracts you a little to be keeping an eye on the ‘translation’ of your handwritten gems into text. With GoodNotes, it is of course sensible to try to write so that others can read it, but that’s really the only limitation. And did I mention you can doodle!?

Gregor Angus, Business Development Manager, The Cashroom Ltd

Top Applications: RD Client

For me, since moving forward to working exclusively from an iPad, the best App has been RD Client. This App allows you to have a remote desktop connection to your workplace computer, using just the IP address. Once you open the App, it is exactly the same as sitting in from of a PC or laptop if you were in the office. I find this an absolute lifesaver, and my ‘go-to’ App every day (along with our CRM). It means I can still send my emails from Outlook, access documents from our Cloud, check my calendar, access anything on my desktop, use Word etc, with exactly the same look and function as if I was on a PC. The other ‘plus’ is that it’s all in the same place, which saves going in and out of various Apps. It is certainly a long way from when I first got an iPad, and you couldn’t use Microsoft programmes at all, or at least it certainly wasn’t easy to do so! I can’t imagine ever going back to a laptop now, let alone a PC!!

So those are out Top Picks, could they help you? Please let us know if you use any applications that is instrumental in your day to day working and could benefit others.

Top 5 Tech Products For a Successful and Efficient Law Firm

I work in marketing and so part of my day involves checking social media and reading up on tech legal news. Today I was really struck by how Tech focussed the profession is becoming – gone is the image of the lawyer surrounded by paper and difficult to get in touch with.

Now everything is electronically stored and you can even read an email on your watch. It is really beneficial for lawyers to be aware of potential opportunities through the use of technology and at the minute there is more of it available than ever to help your firm function better and more efficiently.

In our everyday life we are surrounded by advancing technology, smart TVs, apps to control your central heating and our cars aren’t far away from driving themselves! We need to embrace technology (many already are!) in the workplace too. As well as technology, the workforce is focusing more on work-life balance and flexible working than ever before. I believe the two go hand in hand.

Below are 5 techie products that I believe would make running your law firm easier and help you get more out of your working hours.

My top 5 tech finds

The Link App

Nobody understands working in a law firm better than a lawyer and this product is designed by a Lawyer for lawyers. This app puts client communication at the core of your business. At the touch of a button you can keep clients up to date with their case. Client cases can be accessed at any time of day, at your desktop or on the go. A happy client comes back again and again; and are your best referrers!

Amiqus ID

Anti-money laundering, identity and compliance checks online. Ok, so I know that not many people get excited about this process, but the checks are there to protect the profession and Amiqus ID is a fantastic product which makes the process and checks much quicker and is cost effective too. When you just want to focus on managing incoming client care, Amiqus can securely handle the money laundering checks and on boarding.

Breathe HR

As a growing business, we have discovered that HR is really important. But you don’t need to pay for someone in-house. We took our own advice and outsourced but in the form of an App called Breathe HR. There are a lot of these products out there but this one works great for us. Staff holidays and sickness can be logged easily and teams can view when other members have holidays booked. Staff contracts and documentation can all be stored in one secure place and it is easy to claim expenses and have them go direct to your accounts department. A great all around company tool.

The Cashroom Portal

Of course our Cashroom portal! We are an outsourced accounts department for legal firms and we also provide management accounts and payroll services.

We have been developing our very own portal, it is a secure method for clients to send their instructions to us and both organisations benefit from a full audit trail, it is extremely user friendly.

You will always have your own dedicated cashier however with the ability to add attachments and comments to the portal the need for phone calls and emails is minimal. An efficient and compliant accounts department should be a top priority for every law firm. Download our client portal presentation here.

E-CPD

CLT Scotland are now offering e-learning CPD -you can now gain the necessary CPD hours by fitting it into your own schedule, you could even do it from home wearing your pyjamas (if you wished!) Topics include the Criminal Justice (Scotland) Act 2016, powers of attorney and social media law. I really think that CPD without having to leave your desk is a great idea.

If you know of any other products then please let me know, we are always looking for tools that can benefit our clients.

Emma O’Day

Marketing and Communications Manager

6 barriers for professional services getting into LinkedIn (and why it’s important to overcome them)

In professional services, there is historic reticence regarding technology, yet technology is here to stay and evolving at a rapid pace. Broadly speaking, six barriers exist that prevent professionals from creating their LinkedIn presence and getting results.

Fear of change

First, there is the issue of change. Change is risky and exciting, but it can also foster self-doubt: is this effort worth it? But LinkedIn is now no longer optional for professionals. It is the digital business card, but offers a whole lot more in terms of creating new business, strengthening existing relationships and moving yourself and your practice up the Google search rankings. LinkedIn is the first place that other professionals look when they have problems to solve, so not having a presence—lacking even a foot in the door—could mean that your competitor gets the brief, not you.

Desire to leave it to someone else

“I don’t have the people skills” or “I didn’t train to be in business development” you may say. However, you must upskill because direct relationships are what people now want, not through a middleman. You must not only excel at your profession but grow your business, tapping into nascent skills or developing new ones. Once you and your business understand this basic reality, you are ahead of the game.

Misconceptions linkedin

On the face of it, LinkedIn can appear like a glorified Facebook. The reality is, like Facebook, many people use it — 22 million in the UK alone. It is tailor-made for professionals and the services you provide and is the number one B2B database in the world. For the most part it is free and represents an efficient way to foster new professional relationships.

Lack of time

Time. You don’t have enough of it, and creating an effective LinkedIn profile demands some of your most precious resource. But there are shortcuts available and content can be repurposed. Just small bursts of time each day—think of it like going to the gym—help keep your profile lean and focused, so your activities are effective and pay dividends.

Fear of going public

Another barrier is the fear of putting yourself out there in public, to many millions of people. You have full control over what people see, but this control requires skill and it is not simply a case of plug and play with LinkedIn. You need to bring online what you do offline.

Lack of skills

Finally, you don’t need digital skills to make your profile accurately mirror your professional life. This can be done with baby steps to build confidence and—most likely—outside help from other professionals that can help you get that boost that a LinkedIn profile provides.

Many professionals fear using LinkedIn or do not think it is worth their time. But it cannot be ignored anymore because building your LinkedIn presence effectively can put you and your business out in front.

Miles Duncan is CEO and Founder of LinkedIn Success Systems

LinkedIn Success Systems is a specialist training company that provides LinkedIn training for Corporates and SME’s.

miles@linkedinsuccesssystems.co.uk

LinkedIn Success Systems is in no way associated with LinkedIn Corp. We are a third-party organisation helping companies and individuals to improve their performance of using LinkedIn

New work types & mitigating the risk involved

The legal profession has had so many challenges in the last few years that many firms haven’t survived, and many have only survived because they have made effective changes.

We are seeing a trend of firms wanting to review the types of legal work that the firm undertakes. If you are looking to take on new work types, there are some key areas where good planning, due diligence and robust risk assessment will pay dividends and avoid catastrophe.

The work type
What are the factors that are driving the decision to expand your range of legal services? The usual driving force is to look at which areas are currently busy and lucrative A trend is emerging where personal injury firms are looking to start up or acquire a conveyancing department.
Whilst PI and conveyancing are both process driven work types the challenges and the risks involved are very different

Dealing with client money
A conveyancing department will usually mean that your accounts department becomes very busy and you need to ensure that you have the right support in place to cope with the number of transactions taking place. Complying with the SRA Accounts Rules and ensuring that you handle client money correctly is imperative.

Once a matter has completed residual client balances must be dealt with. Fee earners must take responsibility to keep on top of this to ensure that you do not hold client money longer than is necessary.

The Team
When recruiting prepare role profiles that you can use when advertising the job and carrying out interviews. You will need to set out your expectations to new people, and if you are recruiting a Head of Department they will need to be able to support you by supervising the legal work and be an effective manager.

Support staff – do you need more secretarial support or will your fee earners be able to be self-sufficient?

Alternative options – consider being able to outsource the cashiering or typing or buying in interim practice management.

Templates, documents and workflow

Prepare & develop a compliant suite of templates that are approved and ready to use for your new and unfamiliar work type.
Incorporate them into your case management system
Provide training for the team so that they are familiar with them and can process them efficiently.
Technology
Ensure your accounts package, document/case management system is appropriate for your new work type. There are additional modules or packages for specific work types.
Buy enough licences in time for your team to function properly.
Ensure that the broadband will cope with your planned systems.
Quality Standards, Lender Panels & Portals
Applying for a quality standard such as CQS membership, apply to be on lender panels, or set up the firm on a portal for a specific work type – allow at least 6 months.
Your cash flow may be affected if there is a gap in being able to take on new work.

Denise Butler is Director at Peacock Risk Management
www.peacockriskmanagement.com

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Would you like a risk-free 2017?

I’ve never been a very keen gambler. The occasional office sweepstake for the Grand National is the limit of my daring. I just hate losing money on things outside my control.

Gambling with someone else’s money (see what I did there) would be even more scary I think. I spoke at a conference the other day hosted by Armstrong Watson Accountants, alongside Xyone cyber security specialists. It was pointed out that law firms are like mini banks, but without the security. It’s one of the reasons that more than ever law firms are under attack from these new-fangled cyber criminals. You’re probably yawning right now- “Not another hacking blog?” but no!! Grab yourself a coffee because I think we need to talk in a more broad sense about ‘Risk’.

After the strange global occurrences of 2016…Brexit…Trump…Leicester winning the title…Ed Balls on Strictly…it seems that we live in very uncertain times. It’s never easy to predict what is going to happen with 100% certainty, however putting the right measures in place can provide a solid yet agile basis to withstand risks while enabling your business to still remain highly functional.

This is all inspired (as many things are) by a business lunch- this time with Jake Fox (an independent Insurance broker of some note!). I mentioned the ‘mini-bank’ anecdote to Jake and we agreed that more than ever, a firm must pay close attention to its risk profile. As Jake pointed out, it’s crucial to look at it from the perspective of Professional Indemnity insurers. The insurer is quoting you a premium based on how risky they think your practice is and that relates to much more than just cyber threat. They will consider your previous track record of claims for negligence, the strength of the sector you operate in, the accuracy of your accounts procedures, your history of compliance with the SRA, the robustness of your IT systems for resilience as well as security, and the general quality of your people- both those within your organisation and those providing services externally.

Over the next couple of months we will explore ways to combat risk, and you’ll be relieved to hear that I’ll be roping in some far more qualified friends to provide guest articles around the subject. We will have Business Continuity specialists, cyber geeks, Compliance gurus, all augmenting some hopefully informative content from us around best/safe practice cashiering, and how better quality management account information supports decisions on business strategy.

So as we look ahead to what may be a turbulent 2017 I’d like to wish everyone a very Merry Christmas and a Happy and Risk-free New Year.

Alex Holt
Director of Business Development at The Cashroom Ltd

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The Top 5 Challenges Facing the Legal Profession

In recent years, the legal profession has had to face many challenges and make constant changes to keep ahead of the game.

1.Winning work at the right price

Depending on your work types you will usually quote an hourly rate or a fixed fee. You may also have a fee structure which includes a success fee. Whichever way you price up the work you are calculating the time that is likely to be spent on the matter, the challenges involved in delivering the work and the risk to your business. Knowing your market is crucial as is delivering the work efficiently. The LASPO, the referral fee ban and the cuts in legal aid have meant that many firms have had to change the way that they work and look at taking on other work types.

2. Ensuring that the work is processed efficiently & profitably

Once you have won the work your team need to deliver the service in an efficient and profitable way. Utilising a case management system along with other available technologies is often the key here. Keeping on top of your housekeeping and monitoring the work capacity of each fee earner is also an essential part of the supervisory procedures.

3.Cashflow

Billing and collecting in the fees in a timely fashion is the lifeblood of the firm. Monitoring WIP as part of the supervisory procedures, and incentivising fee earners to take money on account and keep a check on their clients’ payment record, should form part of the regular activities in the firm. Residual client balances can build up and this needs to be managed carefully to avoid breaching SRA Accounts Rules

4. Profession Indemnity Insurance premiums

Keeping your PII premium down is a challenge and a source of stress every year. Robust risk management, dealing with any complaints quickly so that they don’t turn into claims, and achieving a quality standard such as Lexcel are all positives. Develop a good relationship with your broker/insurer so that they understand your business and can help you as much as possible.

5. Compliance, regulation & changes in legislation

If there is a change in legislation or regulation it can have a huge impact on your business if you are not prepared and cannot make changes quickly enough. You need to review your Business Plan & risk assessment every 6 months to keep on top of what is happening in the profession and how to deal with it.

You need to be compliant so that you meet your regulatory obligations. The key to compliance is good organisation, the right policies and procedures and regular monitoring. If you build these into your business processes you will develop a robust and realistic way of working and stave off damaging behavioural challenges and a poor risk profile.

Denise Butler is Director at Peacock Risk Management
dbutler@peacockriskmanagement.com
www.peacockriskmanagement.com

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Top Tips for Pension Automatic Enrolment – Avoid the Penalty!

There are some things we would all quite happily miss: cleaning the bathroom, bad traffic, or time recording. However when it comes to Pension Automatic Enrolment that’s not something any employer wants to miss.

The Pensions Act 2008 changed the law on work placed pensions. All employers in the UK are now required to have a pension scheme in place for certain staff and contribute towards it. This is known by most people as “Automatic Enrolment” to some as “AE” and to those very lucky people, like myself, who have an incredibly witty line manager you may even be dubbed the office “AE Geek” -whether you like it or not!

Penalties for Non-Compliance

Now for the scary part! Employers who fail to comply with their Pension Automatic Enrolment duties may face large fines or even imprisonment. Don’t just take my word for it- a quick online search will provide adequate evidence of companies fined by The Pensions Regulator for non-compliance.

One English Football club was fined over £20,000 for repeated non-compliance. Unusually, I imagine, this was a penalty the club would have preferred not to have been awarded!

Eligibility- A Quick Summary

All employers in the UK are responsible for assessing the eligibility of their own work force. All employers in the UK must enrol their staff into a work place pension and make contributions if their staff are:

Working in the UK
Aged between 22 and state pension age
Earn at least £10,000

Full details on eligibility can be found under the “Work Place Pensions” section of the Government’s website. (Link below)

Link: https://www.gov.uk/workplace-pensions/joining-a-workplace-pension

Where to start-Your Staging Date

First comes the Automatic Enrolment “Staging date” less theatrical and exciting than it sounds but none the less an important date for the diary. The Staging Date is the date in which your Automatic Enrolment duties come into force. You should receive confirmation from The Pensions Regulator of your Staging Date but if not you should contact The Pensions Regulator for clarity or you can check by using the Staging Date Calculator. (Link below)

Staging Date Calculator: https://www.thepensionsregulator.gov.uk/employers/staging-date.aspx

The next steps

Once you are clear on your Staging Date there are further issues to consider:

You may wish to postpone your Staging Date for up to 3 months.
Link: https://www.thepensionsregulator.gov.uk/postponement.aspx
You will require to select a Pension Provider and Pension Scheme. We advise independent financial advice is sought in relation to Pension Provider selection.
You will require to set your Pension Scheme up and start providing monthly data to your Pension Provider. We regularly assist clients with this part of the process.
Once your Pension scheme is up and running you will require to continue to ensure your employer’s duties are being fulfilled. Full details on employer’s duties can be found on The Pensions Regulator website. We strongly advise familiarising yourself with the required duties. Link: https://www.thepensionsregulator.gov.uk/en/employers

Setting up your Pension Scheme and the provision of monthly data to your Pension Provider

At The Cashroom we regularly assist clients with the set-up of their work place pensions and with the provision of monthly data to their selected Pension Providers. We ask all clients to seek independent financial advice in relation to Pension Provider selection. Once a client has selected a Pension Provider we can assist by working closely with the Pension Provider and any other third party involved to ensure a smooth set up and effective monthly data transfer thereafter. (We also require to carry out the Payroll work for any client wishing to instruct our Pension Automatic Enrolment Service).

We have teamed up with Armstrong Watson who can give you independent advice in relation to a Pension Provider and who have compiled a FAQ document to give you more detail. Please email emma.oday@thecashroom.co.uk and you will be sent your own copy of this FAQ document.

For more information on how we can help please do not hesitate to email Gregor.Angus@TheCashroom.co.uk.

Useful Links:

An essential guide to Automatic Enrolment Link: https://www.thepensionsregulator.gov.uk/docs/the-essential-guide-for-automatic-enrolment.pdf

Detailed Guidance note for Employers Link: https://www.thepensionsregulator.gov.uk/docs/detailed-guidance-2.pdf

Full details on Automatic Re-enrolment, employer’s duties and timescales can be accessed on the Pensions Regulator’s website. Link: https://www.thepensionsregulator.gov.uk/re-enrolment.aspx

Full details on Compliance and Enforcement policy Link: https://www.thepensionsregulator.gov.uk/docs/pensions-reform-compliance-and-enforcement-policy.pdf

Don’t forget to email emma.oday@thecashroom.co.uk for a copy of the FAQ document!

Hayley Gibson
Senior Business Development Associate at The Cashroom Ltd

For more information on how The Cashroom can help you and your business please do not hesitate to email, if you are SRA regulated contact Alex.Holt@TheCashroom.co.uk or Law Society of Scotland regulated then Gregor.Angus@TheCashroom.co.uk.

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Common security threats facing conveyancers

Push Payment Fraud

Phishing and Spoofing

Property hijackings

Money laundering

Malware & ransomware

Password spraying

Denial of Service (DDoS) attacks

Human threats

Law firms are still not taking cybersecurity seriously

How to combat data breaches and cybercrime

Establishing compliant policies and processes

Putting the basics in place

Regular testing and monitoring

Keeping everything updated

Managing third-party relationships

Investing in security accreditation

Meeting the requirements of the GDPR

Protect against human error

Security awareness training

Client and financial checks

Law Commission Proposals

Online portals

OnDMARC

Blockchain technology

Outsourcing reduces the security and compliance risk

Outsourced cashiering and management accounts

Outsourced risk and compliance

Outsourced security technology

Conclusion

Why outsource your law firm’s cashiering?

Here are just some of the ways that outsourcing your legal cashiering can help your law firm.

Reduce the cost and burden of managing employees

Respond quickly to a changing marketplace

Save valuable office space and costs

Reduce the compliance burden

Plan for business as usual

Free your solicitors up, to get on with what they do best

Help your law firm to grow

What type of firm needs outsourced legal cashiering?

The challenges of outsourced legal cashiering (and how to overcome these)

Data security

The burden of managing a third-party supplier

Fear of change

Cost

Being stuck with the provider

Integration with other processes

Things to consider before you appoint an outsourced legal cashier

Who will manage your account?

Can you get a reference from other customers?

What are the terms of your agreement?

Do they offer an online portal?

Remain Cyber Secure and GDPR Compliant

Improving Efficiency

How quickly can you get up and running?

Do they offer any other outsourced services?

Why work with The Cashroom?

What type of tasks can we help you with?

In conclusion

About The Cashroom

About The Cashroom

Significant Changes to the SRA Accounting Rules

Other Key Changes to the Rules

Considerations in Advance of the Rules

The Cashroom Clients

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