PRACTICE MANAGEMENT
Do you want to increase your firm’s profits by 16%?
Is everyone in your firm commercially aware?
Solicitors have always focused on providing clients with the services they want rather than thinking about whether they have maximised their own return from the firm. The most profitable firms are clearly providing clients with the service they want while at the same time having a clear understanding of how they are going to maximise profits.
© Robert Mowbray - Taylor Mowbray LLP
Business Property Relief – Valuing shares in unquoted companies
It is widely known that the value of qualifying businesses can attract business property relief (BPR) at 100% for inheritance tax (IHT), but it is worth reflecting on what value does qualify in practice. A full detailed explanation of the relief as it applies to shares, interests in partnership and sole traders is beyond the scope of this article. Instead it focuses, in broad terms, on some key traps and pitfalls for the unwary shareholder.
© Stephen Barratt - James Cowper LLP
Why don’t solicitors record all of their time with confidence?
Having worked with solicitors for 25 years I am pleased to report that they have a conscience and that they worry about recording time to files where there is a belief that it may not be right for the client to be charged for this time. The impact at the end of the matter is that the time records do not reflect the true cost of delivering the work and both the client and the solicitor are unable to see the true extent of what has been done. This inevitably leads to considerable under charging.
© Robert Mowbray - Taylor Mowbray LLP
The Private Client Business Model in a nutshell
Private client legal issues can be complex and require a high level of skill and knowledge, but the business model that underpins a private client department is basically a simple one.
© Robert Holland - James Cowper LLP
Applying outcomes focused regulation to client engagement processes
With the arrival of ABSs in October we will see the introduction of a new Code of Conduct which requires Outcome Focused Regulation. Solicitors are already thinking about the implications for their firms as there will be less prescription as to how things are done with the focus moving to the achievement of desired outcomes.
© Robert Mowbray - Taylor Mowbray LLP
Benchmarking for Profit
An increasing number of companies have used benchmarking in recent years to improve company profitability. But can solicitors use it as a tool to increase their profitability in these challenging times?
© Mike Farwell - James Cowper LLP
Private Client Practitioners - Are you in good shape for Alternative Business Structures?
Are you in good shape for ABSs
There has been a great deal of hype in the legal press about the likely impact on firms when Alternative Business Structures become permissible in a little under six months time. While this new era will introduce new competitors into the legal market it should also see an increase in the size of the legal market which will provide new opportunities for those firms that are ready.
© Robert Mowbray - Taylor Mowbray LLP
“Everyone wants lower fees. How do I negotiate successfully?”
Several lawyers have said to me “Fees are a real issue. Clients want more for less; cannot understand why they have to pay so much; try to reduce our initial quote; argue about the final bill; and then, to cap it all, delay paying their bill. What can we do about it?”
Considering each of the negotiation problems in turn.
© Pippa Blakemore - The PEP Partnership LLP
How to identify client opportunities and avoid missing deadlines
Practitioners need to ensure that they maximise opportunities for adding value to their clients and make any claims and elections on time. Having a robust system in place will help achieve this.
© Mark Herson - James Cowper LLP
“How can I turn the contacts I make into clients and referrers?”
Many lawyers come up to me and say: “I collect many business cards, talk to hundreds of people and attend numerous events but I can’t seem to convert these contacts into clients or referrers. How can I achieve it?”
In view of the number of questions that I am asked regularly by lawyers about turning contacts into clients, I thought it would be useful to answer these questions, as you yourself may be asking them.
© Pippa Blakemore
Preparing for Alternative Business Structures, 2012 & beyond
Virtually all law firms began 2011 hoping that this year will be easier than the last couple of years and that profits will show some signs of returning to healthier levels. Having said that, in October this year we will see Alternative Business Structures being created which will provide new competition to a profession which is already finding the going difficult and there will be the continued evolution of on line and off shore legal solutions which are designed to undercut the traditional UK providers of legal services.
© Robert Mowbray - Taylor Mowbray LLP
“Where do I find the people that will bring me new work? What networking skills do I need?”
Lawyers say to me “I have exhausted all my friends, what do I do now? Who do I network with, where do I find them and how do I do it?”
You can find people that will bring you new work in 5 categories:
© Pippa Blakemore - The PEP Partnership LLP
Sharing Profits Commercially
The financial pressures of the last couple of years have seen profits falling in many firms. As the cake shrinks, partners start to ask for a larger slice of the cake to maintain the lifestyles to which they have become accustomed.
Most firms will not address the issue. They will continue to see the short term fall in profitability as more pressing than getting the longer term profit sharing and maximising arrangements resolved.
© Robert Mowbray - Taylor Mowbray LLP
Ten Top Tips To Make A Marketing Strategy Succeed
Top Tip 1: Regard everything as an opportunity in marketing
Many marketing initiatives have a very low response rate for law
firms so it is important to try and capitalise on all the effort that
you have put into your marketing events. If you invite people to a
particular event, by email, and they do not reply then take this as
another opportunity to get in contact with them and follow it up.
© Pippa Blakemore - The PEP Partnership LLP
Managing risks and managing PI premiums
All law firms in England & Wales are required to obtain professional indemnity insurance with a common renewal date of 1st October. This requirement creates a scramble every September with about 10,000 firms looking to secure the minimum cover required by the SRA.
© Robert Mowbray - Taylor Mowbray LLP
Seven Secrets of a Successful Marketing Strategy
How do I make sure my marketing strategy works, when I know that only 75% of strategies are ever successfully implemented?
Secret 1: Involve everybody in the implementation of the strategy
Personal participation by each individual in the firm, in the implementation of a marketing strategy will increase the likelihood of its success. Encourage participation, involvement and sense of ownership by every person in the firm, in its future profile raising and successful marketing.
© Pippa Blakemore - The PEP Partnership LLP
What Marketing Processes do I need to understand?
......and what systems and procedures do I need to underpin a successful marketing strategy, with maximum results but minimum bureaucracy?
A successful marketing strategy is based on a comprehensive understanding of the marketing process, is built on streamlined systems and is supported by simple procedures, to produce maximum results.
© Pippa Blakemore - The PEP Partnership LLP
Negotiating Fees with confidence
Twenty years ago a solicitor presented a bill to the client and the client paid it. Those easy days are now long gone and clients want to negotiate discounts at the start, again at the point of billing and often one final time after the bill has been delivered. Sophisticated clients are going on courses where they are trained how to negotiate fees so perhaps it is time for solicitors to think again about some more education in this area.
So what can be done? The following is a quick summary of things to think about before going into a meeting where fees might be discussed:
© Robert Mowbray - Taylor Mowbray LLP
“How do I create and build a marketing strategy? Where do I start?”
The aim of a marketing strategy is to generate additional profitable work. Start with an analysis of where you are now and decide where you would like to be. Set realistic SMART targets - Simple, Measurable, Achievable, Results-driven and Time-bound which incorporate the number of clients, types of clients, fee-income and target dates. The following Six Steps will help you to create and build your marketing strategy.
© Pippa Blakemore - The PEP Partnership LLP
Spring Cleaning the Balance Sheet
Spring is here, leaves may be appearing on the trees but there are still real doubts about the health of the UK economy. As many firms approach their traditional spring year end it is probably right to tidy up the balance sheet to present a more positive picture to partners and to providers of finance.
This tidying up is achieved by converting as much WIP and debt into cash before the year end. It should have been done earlier but if we adopt good practice now perhaps there will be less need for this panic in future years. So what can be done to accelerate cash flow?
© Robert Mowbray - Partner with Taylor Mowbray
Four essential tips on how to increase your business for as little as £1 for each client
The problem Lawyers face is that people in general don’t have to come to them time and time again, as they do to, say, an Accountant. Nor do they wake up in the morning and say to themselves “I have a great bank balance at the moment, I think I will go down to my friendly local Law firm and spend some! In the main, people arrive at the door of a law firm because they have an important (and often unpleasant) life change, or some other external pressure.
© Martin Wyatt - Legal Mentors Ltd
Marketing to Private Clients - Conclusion
My overriding message is that private client practitioners and firms of solicitors can no longer afford to sit back, worry and wait for the threats of the future. They have already arrived!
© Ian Cooper - Ian Cooper Communications Ltd
Putting it all together - how to make it all happen!
Let me ask you a seemingly ridiculous question that has nothing to do with marketing private client services. There are three birds sitting on a fence, two of them decide to fly away; how many are left? The answer is three. Deciding to fly away is not the same as actually doing it! For more than two decades, I have heard many private client practitioners talk enthusiastically about the steps they decided to take. Telling me about their intentions, however, is not the same as actually putting them into practice.
© Ian Cooper - Ian Cooper Communications Ltd
Do your Partners misbehave?
2009 has been a difficult year for most firms and everyone now longs for a return to 15 years of dull and steady economic growth. There are clear signs that the economy is not yet back to full health and 2010 could prove to be another very difficult year. The strongest firms are likely to be the ones where the partners behave properly and are excellent role models for everyone else. Unfortunately, if the partners misbehave, and they are the role models that others follow, then performance in the firm is likely to be poor.
© Robert Mowbray
Beware of a tax enquiry
Under Self Assessment an individual files their tax return, and H M Revenue & Customs (HMRC) process the information. HMRC then have the right to enquire into that tax return within twelve months from the date it is filed. HMRC do not have to give a reason for the enquiry. Such an enquiry can be both time consuming and expensive, in terms of both professional advice required and additional tax payable. There have been certain recent changes to these procedures.
© Mark Herson - James Cowper LLP
Market externally to generate more enquiries (Part 2): Advertising and Marketing
Mention the work ‘marketing’ in legal circles, and many solicitors automatically equate this word with advertising. This, of course, is simply the process of paying for space, either in a publication or somewhere else, to promote your own particular message. All that is required is a quick phone call or email to book the space and the job is done. However, more money is wasted on pure advertising than anything else when it comes to marketing.
© Ian Cooper - Ian Cooper Communications Ltd
The Time Question - How to bill in Private Client Practice
The traditional billing model for professional practice firms has been the allocation of a charging rate to fee earners. They then charge time to each of the matters they work on which is then billed to the relevant client. Charging rates can vary, but are usually broadly designed to be a multiple of the full employment cost of the fee earner. Unfortunately this system has some flaws. For example:
© Robert Holland - James Cowper LLP
Market externally to generate more enquiries (Part 1)
Joint Venture Marketing and Showcasing your Expertise
The following is a summary of certain types of external marketing initiatives that I have seen work well, together with some simple pragmatic tips about their execution.
© Ian Cooper - Ian Cooper Communications Ltd
Is your management information resulting in any real change?
Twenty years ago law firms were very different. Everything was done at a slower pace, clients paid their bills without questioning everything and it was relatively easy to earn a good standard of living. Most firms would get their accountants to produce a set of accounts at the end of the year but there was little need for management information.
© Robert Mowbray - Partner with Taylor Mowbray LLP
New Offshore Disclosure (ODF) Initiative
As anticipated, HM Revenue & Customs (HMRC) have now issued details of its new disclosure initiative. Remember, disclosure can be made by personal representatives of a deceased person.
© Mark Herson - James Cowper
Alternative Business Structures: Threat or Opportunity?
Alternative Business Structures (ABS) will be with us sooner than we imagine!
In just over 15 months, the landscape for legal services will enter its next wave of evolution. The legal profession's approach to its business and how services are delivered has remained largely similar for many decades now, but ABS will bring a whole new regime.
© Ray Gordon - Legal Mentors Ltd
Marketing to Private Clients (6) - Marketing to Existing Clients (Part II)
There are 8 ways to keep in touch with clients . . .
© Ian Cooper - Ian Cooper Communications Ltd
Marketing to Private Clients (5) - Marketing to Existing Clients - Part I
There are four golden rules of marketing to existing clients. These are as follows:
Golden rule 1 – Know your firm’s clients
Golden rule 2 – Keep your clients happy
Golden rule 3 – Keep in touch with clients
Golden rule 4 – Ask clients for more!
© Ian Cooper - Ian Cooper Communications Ltd
Cracking the time recording nut
For a very long time, solicitors have struggled to record their time properly. This failure causes enormous problems at the point of billing a client when inconsistencies between fee earners become apparent and it also means that firms have no real idea of the cost of their services and hence struggle to provide clients with realistic and reliable estimates.
© Robert Mowbray - Partner with Taylor Mowbray LLP
Planning the practice you really want
What is the strategy for your practice?
Surveys and research continue to prove that the most successful businesses have one thing in common – they have committed time and effort to having a clear Plan in writing setting out their goals for what they want to achieve in the short, medium and longer-term. And please don’t think that a law firm is any different. Your law firm is a business just like any other, selling services and products to generate revenue and make a profit.
© Michael Porter - Legal Mentors Ltd
Income or Capital - a game of snakes and ladders?
Until 5 April 2008 both income and capital gains were taxed at the marginal rate, so that the highest rate of tax for each was 40%. However, from 6 April 2008 capital gains tax reduced to 18% and from 6 April 2010 income tax rates go up. Personal allowances will be tapered down to £nil for those with more than £100,000 of income and income above £150,000 will be taxed at 50%, with dividend income being taxed at 42.5%, rather than the current 32.5%.
© Mark Herson - James Cowper
Measuring Profit - looking in the round
An issue that often arises is that private client departments can often focus on one or two profit indicators, but don’t look at all three in the round. It is a sad but true fact of life that if departments try to increase recovery then seemingly inevitably the number of chargeable hours falls. Similarly it is all very well increasing charging rates, but if they become out of kilter with the market then recovery rates tend to fall.
© Robert Holland - James Cowper
Getting the Price Right
Market forces
When solicitors are challenged about why they are not charging more for the services they are offering they often reply that there is a market price for the service being offered which they then have to offer to get the work. In addition, most solicitors will quickly tell you that the market price for the services offered has fallen.
© Robert Mowbray - Partner with Taylor Mowbray LLP
Dealing with the Office Bully
You work in an office where there is a ‘tyrant’. They are not the boss
as such, but they have often been in post for some time and have some
informal authority. This is not gained by rank or experience but by
intimidation. They tend to get their own way and tend to show two faces
– a reasonable [and somewhat twisted version of the truth] to their
bosses and a much more unpleasant bullying tone to their peers and
subordinates.
© Robert Holland - James Cowper
Planning for Profit
Big fees?
Power in law firms has, for many generations of lawyers, been associated with the lawyers who have the largest fee portfolios as it has been seen that these people clearly make the greatest profits. In the same way, management information has tended to focus on the number of hours worked and the billings of individual fee earners rather than on the amount of profit actually made.
© Robert Mowbray - Partner with Taylor Mowbray LLP
Keeping the cost down
In recessionary times all businesses tend to be cost conscious and this recession is no exception. Many firms have a Spring year end and so now is the time to start looking at costs to make sure they fit the current profile of the business.
We have undertaken a number of exercises recently on behalf of clients to re-examine their overhead costs from the bottom up. Although, as with many professional practices, the bulk of costs are human, some real savings can be made.
© Robert Holland - James Cowper
Looking after your private clients in a recession
In a time of recession no client is ‘safe’. Businesses go bust whilst others have problems paying their bills but the private client sector is probably one of the most vulnerable and the most at risk. Buyer behaviour in a recession has changed;
- The buyer decision process is taking longer as people research more e.g. on the internet whilst others are willing to ‘wait and see’
- Thriftiness is on the rise - value for money isn’t enough to keep a client
© Melissa Baxter - James Cowper
Managing the Loss of Staff
In recent months many law firms have been adjusting their headcount to reflect the new trading landscape they find themselves in. Certain departments will have been affected more than others, but all departments with the possible exception of employment and insolvency departments, are likely to have been adversely affected to some extent.
© Robert Holland - James Cowper
Back to basics with billing
With GDP expected to fall by 2.5% and the very real risk of deflation, solicitor’s practices, like many other business are feeling the bite of the recession. People are reining in their expenditure and discretionary expenditure is more likely to be put off.
© Robert Holland - James Cowper
Marketing to Private Clients (1)
Private client and probate work is not, on the face of it, easy to market. After all dying is hardly a sexy topic. Most people really don’t want to think or talk about it, least of all do it!
Finding a sensitive way to get your promotional message across can appear a bit of a challenge but over the next few months I hope my column will help practitioners to be aware of the marketing challenges facing them and provide some practical tips.
© Ian Cooper - Ian Cooper Communications Ltd
Cash is King
Everybody has heard the phrase but professional firms nearly always choose to concentrate on higher profit rather than on good cash flow. Profit is obviously the long term aim of every firm but without good cash flow in the short term this long term goal will not be achieved.
© Robert Mowbray - Partner with Taylor Mowbray LLP
Marketing to Private Clients (2) - Where should you start?
Start by understanding two things:
- the marketing idea is not the only key; but it is the “personal performance marketing skills” of the person or team involved that is the critical factor that makes the difference between success or failure.
- get your priorities right
© Ian Cooper - Ian Cooper Communications Ltd
Marketing to Private Clients (3) - Convert existing opportunities/enquiries into profitable business
This article refers to incoming calls and enquiries relating to wills and is for illustration only as the skills, techniques and thinking that I will mention apply equally to other private client services, too.
© Ian Cooper - Ian Cooper Communications Ltd
Marketing to Private Clients (4) - 5 Steps in Handling Queries
It is absolutely critical that the private client department and all practitioners understand the importance of this first leg of the Marketing Triad and the potential financial implications of it.
© Ian Cooper - Ian Cooper Communications Ltd
