The CoreLegal Seminar, the first in a series of forthcoming events that CoreLegal is planning over the coming months, is entitled ‘Outcomes Focused Regulation – What It Is And How To Achieve It’ and will take place on 28^th November at the Hotel Russell on London’s Russell Square.

Expert presenters Paul Bennett and Michaela Hardwick, calling upon a wealth of practical experience together with the highest level of expertise in the fields of consulting, training and performance coaching, will be giving key presentations on the day.

With the introduction of OFR, which has come to be viewed as a ‘thorn in the side’ for many solicitors, the old detailed and prescriptive rulebook has been replaced with a targeted, risk-based approach that shines the spotlight very markedly on client service standards.

The Seminar will seek to explore this brave new world, explain the new SRA regulations and offer practical advice on how law firms and solicitors can deal with these changes.

The CoreLegal Seminar is open to all law firms and solicitors and will offer guidance on how to comply with OFR, help on how to negotiate change from being reactive to being pro-active and give advice on specific OFR issues.

The event also provides an excellent opportunity to network following the presentations.

CoreLegal CPD Seminar

• Monday 28^th November 2011
• Hotel Russell, 1-8 Russell Square London WC1B 5BE
• 2-5pm (networking and complimentary drinks 5-6pm)
• Cost £40 – early bird rate (pre 8^th November) £35

For more details and to book a place please visit:

http://www.outcomesfocusedregulations.eventbrite.com

Related posts:

1. Delays for Alternative Business Structures (ABSs) but Outcome Focused Regulations (OFR) are just around the corner
2. CoreLegal White Paper Part 2 – ‘Practical Tips for Effective Outsourcing’

But they are often done badly, with little thought for the needs or interests of the recipient and ignoring best practice. Jon Hepburn from the Fedora Consultancy looks at some of the key preparation areas to consider when planning a campaign.

Targeted, measurable and able to drive traffic to your website, an e-mail newsletter can underpin and support company goals and objectives, enabling the sender to share a professional opinion, impart knowledge or rapidly broadcast sales messages in whatever priority they see fit. As long as it avoids being relegated to junk via the DELETE button.

1) Do it properly or don’t do it at all?

Whilst e-mail newsletters are cost-effective (cutting out print and postage costs) and easy to implement due to the development of technology, they are in essence a permission-based marketing activity governed by best practice principles that companies ignore at their peril.

Poorly timed, overly sales-oriented, over-designed material that is randomly or relentlessly fired off to unsuspecting recipients is not only ineffective, it has the potential to seriously undermine a company’s reputation and act as a ‘turn-off’ – especially if the recipient can’t even find a link to ‘unsubscribe’. The e-landscape is evolving quickly and so there is a need to keep abreast of what is best practice in order to compete effectively for a reader’s attention.

2) Creating a dialogue

As with any communications or marketing activity, some groundwork is key to the successful delivery of an e-mail newsletter campaign. At the heart of it all is a focus on creating a dialogue with people who have (or potentially have) an interest in who you are, what you say, what you stand for, what you sell etc.

This means that an e-mail newsletter should only be sent to people who might wish to receive it, not to a random list of email addresses from business cards scooped up at networking events or collected on a piecemeal basis over a number of years.

3) Data Quality

The effectiveness of your campaign will depend heavily on the quality of your data i.e. how ‘clean’ your mailing list is so it is vital that you take a good look at your intended recipients list and see how up to date it is. In addition, and this is becoming increasingly more important as e-mail services tighten up their spam criteria, ensure that you have permission to send.

Even then the perception of ‘spam’ is not just limited to items being received from unknown email addresses or ones that the recipient hasn’t consented to.

4) Fresh, not too frequently and with their permission

According to a study by Q Interactive conducted in conjunction with marketing research firm MarketingSherpa:

• 56 per cent of consumers consider marketing messages from known senders to be spam if the message is “just not interesting to me”
• 50 per cent consider “too frequent e-mails from companies I know” to be spam
• 31 per cent of respondents said that they consider“e-mails that were once useful, but aren’t relevant anymore,” to be spam
• Five per cent click-through is the typical level now – ten years ago it was over 20 per cent. Without consent, recipients vote with the “move to spam” button.

Source: http://atriumgroup.com/news/respect-isnt-option

5)  Consent – but not forever

If you’re considering renting a list of email addresses, think hard whether the list vendor genuinely sought consent to sell it to you, a third party. If they haven’t, it’s highly likely you will be damaging your brand. Buying lists of people who apparently have agreed to ‘Yes, please send me anything’ could be a recipe for disaster.

Remember too that the consent to remain in contact is not forever. If your emails remain unopened after 10 messages, would it not be better to ask the recipient if they are happy for you to stay in touch?

The objective should be to build a database that increases client loyalty, response levels and traffic to your website.

To find out more please contact Jon  Hepburn at The Fedora Consultancy on 01743 366288 or visit http://www.fedoraconsultancy.co.uk/

Related posts:

1. Advertising for law firms – 9 tips for an effective campaign
2. Is your brand stereotyped?
3. What is actually meant by a business development campaign?

Much of the publicity about non-legal outsourcing in the legal sector has focused on the larger firms. For example, in May 2010, City law firm CMS Cameron McKenna announced that it was outsourcing its non-legal office functions (e.g. accounting and finance, HR, training, IT, marketing & communications, library and information etc) to Integreon in a multi-million pound deal. See link 1 below.

In December 2009, Beachcroft and TLT Solicitors joined a third law firm Osborne Clarke in outsourcing their entire library services in another agreement with Integreon to create the first shared information centre in the UK legal sector. See link 2 below.

However, a 2010 survey by Core Legal member IRN Research analysed responses from 36 law firms with 10 partners or less and found that almost half of these were outsourcing something:

• Just under half of smaller law firms are outsourcing some non-legal activities but these are concentrated on areas such as recruitment, accountancy, typing and secretarial support, and IT and software support.
• Outsourcing of other activities, such as marketing, market research, and PR, is much less common so far but more are likely to consider in the future.
• Most of the law firms that have successfully outsourced specific tasks and have seen the benefits are willing to consider other areas for outsourcing but there are few smaller law firms that have so far outsourced all their non- legal tasks.
• For those firms reluctant to outsource, tasks such as marketing, PR, and even IT support are taken on by either fee- earners or support staff in specific law firms.

One smaller law firm that has outsourced virtually all of its non-legal activities is Woolley & Co and Andrew Woolley notes that it is about improving efficiency as much as cost savings:

“ It is a truism that lawyers are good at law but nothing else! Certainly we tend to be very poor at admin, IT, HR, web, marketing etc. So it seems a clear case to outsource even if only to get it done right – any cost saving is a bonus. My firm is extreme in that our whole ethos has always been to outsource everything we can. After all, clients outsource their legal issues to us! What can be more critical than that?”

Andrew adds “The law firms that survive will be the ones who get all their lawyers billing 4 chargeable hours per day minimum at the top rate concentrating on what they do best and leaving the rest to the experts”.

As well as individual law firms taking the outsourcing route there are also “shared outsourcing” schemes starting to appear.

One pilot scheme involving 10 small law firms is already underway in Greater Manchester (see link 3 below) with these firms setting up a single management company to manage their shared support services. The scheme has been initiated by Manchester Law Society.

Outsourcing is also particularly popular with virtual law firms, like Woolley above, and more of these are emerging. The need to cut overheads during the recession, demands for more flexible working and a better home-life balance, improvements in IT solutions and systems, and a more competitive environment are factors driving the significant increase in virtual law firms in recent months.

These are firms which have largely dispensed with physical premises – they may still have a small central administrative office somewhere – and allow their partners to work from home or a satellite office.

Outsourcing – Quick Tips

Here are some quick tips to bear in mind when considering an outsourcing option:

• Spend some time evaluating variousoutsourcing options before you select the one for you.
• Do not base any outsourcing decision on price alone – the lowest price option is not always the best.
• Consider the qualifications and experience of potential outsourcers and, in particular, clarify exactly who will be doing the work.
• Be clear about the precise service levels required and being offered, think about a Service Level Agreement (SLA) if appropriate.
• Support of relevant internal staff is important so keep staff informed and engaged from an early stage and try and take them with you on the outsourcing journey.
• Look at the legal, security, and compliance issues surrounding any outsourcing deal. You are responsible for the actions of your internal staff and liable for these actions. Clarify the position when a task is outsourced.
• Check out some existing clients of the outsourcer, ask for references.
• Make sure any potential external supplier used understands legal practice.

In Part 3 we look at a strong growth forecast for busines process outsourcing and present a number of outsourcing success stories.

1 http://www.lawgazette.co.uk/news/cameron-mckenna-signs-deal-outsource-middle-office-functions

2 http://www.legalweek.com/legal-week/news/1565496/beachcroft-tlt-sign-share-outsourced-library-services-oc

3 http://www.lawgazette.co.uk/news/smaller-firms-collaborate-north-west

Related posts:

1. Outsourcing of non-legal services – smaller law firms are beginning to see real benefits and savings
2. Outsourcing for Smaller Law Firms: Core Legal White Paper – Part 1 of 4

1. Introduction

In practice, there are still many law firms that are reluctant to consider outsourcing perhaps because of fear of losing control of business operations, concerns over poor quality service, security and compliance issues, or higher than expected costs. However, a growing number of law practices, and more and more smaller firms, are embracing outsourcing.

This White Paper aims to describe some of the outsourcing success stories from some UK law firms in future postings. These include:

• Legal insurance
• Client surveys
• Marketing
• Bookkeeping
• Law firm sale
• Public relations
• Copy-writing
• Cloud computing

It also outline the types of activities being outsourced and explain some of the basic principles to think about when considering outsourcing.

All the outsourcing examples are from projects undertaken by Core Legal members in the UK. Core Legal is a one-stop shop for legal support services in the UK and its members include legal cashiers, a legal copywriter, insurance specialist, experts in marketing, market research and PR, a software expert and a specialist in law firm mergers and acquisitions amongst others.

2. Outsourcing – Overview

Our focus is on the outsourcing of those non-legal activities and tasks that take place in a legal practice. These can range from day-to-day areas like bookkeeping, HR and recruitment, insurance, IT, secretarial work through to more strategic issues such as marketing, market research, PR, and merger and acquisition advice.

These activities are often referred to collectively as Business Process Outsourcing (BPO) and should not be confused with LPO, or Legal Process Outsourcing, which refers to the outsourcing by law firms of legal tasks such as the drafting of standard legal documents, legal document review, legal research etc.

Cost savings are often the motivation for outsourcing and, in the present financial climate, most businesses are looking to reduce costs and overheads. But outsourcing should be viewed as much more than a cost saving exercise. It is also about:

• Driving improvements in business efficiency and productivity. It allows an external supplier to take on the responsibility for specific tasks and processes allowing you and your staff to focus on the business’s core areas.
• Gaining access to specialist expertise which otherwise would not be available within the business, and increase resources. An effective outsourcer should also be there to come up with innovative ideas and processes to help the business move forward.
• Business flexibility: while many outsourcing deals are relatively long-term and the supplier can build up a relationship with the client, there are also opportunities to use outsourcing for one-off projects or occasional tasks that arise and which cannot be dealt with by an internal resource.
• Cost restructuring with outsourcing often changing the ratio between fixed and variable costs. With outsourcers often charging on a fee for service basis these variable costs become more predictable and more manageable.
• Capacity improvements can be achieved without major investment in capital and resources with the risk in providing the excess capacity borne by the supplier.

As we slowly move out of the economic downturn and some law firms look to grow again then outsourcing becomes one avenue to boost growth. Conversely, for those businesses trying to overcome a period of instability then outsourcing can provide resources and flexibility.

In part 2 there will be ‘Law Firm Outsourcing – The Story so Far’ and ‘Practical Tips for Effective Outsourcing’.

To find out more about outsourcing for smaller law firms please contact:

David Mort -Director, IRN Research on 0121 635 5210
Email: david.mort@irn-research.com
Web: www.irn-research.com

Related posts:

1. Outsourcing of non-legal services – smaller law firms are beginning to see real benefits and savings
2. CoreLegal White Paper Part 2 – ‘Practical Tips for Effective Outsourcing’

In October 2011, Core Legal is planning a half-day CPD-accredited workshop in London offering practical advice and guidance to law firms and solicitors on how to achieve Outcome Focused Regulation (OFR) and deal with Compliance.

If you would like advance details of this event please contact dmort@irn-research.com.

In the meantime, Core Legal member David Mort of IRN Research provides a quick update on the anticipated changes coming soon covering both OFR and ABSs:

Outcome Focused Regulation
OFR launched in October 2011, focuses on the high-level principles and outcomes that should drive the provision of legal services for consumers. The existing detailed and prescriptive rulebook will be replaced with a targeted, risk-based approach concentrating on the standards of service to consumers. There will be greater flexibility for firms in how they achieve outcomes (standards of service) for clients.

The detailed strictures of the old rules have been replaced by an outline of the 10 mandatory ‘principles’, professional standards expected of the solicitor and firm at all times. The arrival of OFR gives the Solicitors Regulation Authority (SRA) various powers, including the ability to visit law firms at random or carry out risk-based assessments and receive an annual compliance report. Law firms will also have to nominate a dedicated compliance officer for legal practice by March 2012.

Background details regarding OFR can be found at:

http://www.sra.org.uk/solicitors/freedom-in-practice/outcomes-focused-regulation.page,

Alternative Business Structures (ABSs)

ABSs, also due in October 2011, have been delayed and the first ones are not expected to be up and running until 2012. It seems that almost every week the legal press mentions a business or brand ready to become an ABS, from the Co-op and DAS Insurance to online legal services on their way from the USA and established law firms like Irwin Mitchell, but they will have to wait as the parliamentary process needed to enact the legislation behind ABSs has been delayed.

Formal applications to become ABSs can only be submitted once the SRA is designated as a licensing authority and this is not likely until the end of 2011 at the earliest. Then the SRA can take up to six months to make a decision on a specific ABS application.

So, more competition in legal services is coming but high street law firms and solicitors have a little more time to consider their responses to this new competition.

For more information, the Solicitors Regulation Authority (SRA) published a guide to ABSs (www.sra.org.uk/abs) in August 2011 and a forthcoming Core Legal White Paper in October 2011 will explore their likely impact in more detail.

Related posts:

1. CPD Training course ‘Where are you in the race towards ABSs?’ (Alternative Business Structures)
2. The proposed new SRA regulations – ‘fudged’ not ‘focused’?
3. Uncertain Future For The Legal Market But Still Opportunities For Innovative Firms

In part 1 of a two-part article, Jon Hepburn from the Shropshire-based Fedora Consultancy point out how to make your campaign a success and avoid the pitfalls.

Advertising has an important role to play in bringing your product or services to the attention of potential clients. It performs a number of functions including profile-raising, communicating particular messages and positioning your firm in the marketplace.

1) The basics – when to use advertising

• To raise the firm’s profile within a particular target market.
• To communicate specific branding or positioning messages.
• To raise awareness of something new (a new service, case won, event etc ).
• To generate leads and new opportunities.

2) Planning – the key to advertising success

To maximise its effectiveness, your advertising campaigns should be part of a strategic communications plan. Consider the following:

• What is your firm trying to achieve?
• Make your campaign relevant to each product/service you offer and identify the best way of reaching the identified target audience.
• 2+2=5. Co-ordinating advertising with a creative and original PR campaign will have greater momentum and impact.This is essential as the average person is exposed to thousands of promotional message daily.

3) Getting maximum value and impact for your campaign

• Create and build awareness quickly by investing in more adverts at the start of the campaign, then reducing the frequency.
• Spending a large amount on advertising for short periods, then doing none for a long period is counter-productive.
• If budget is available, a more continuous approach to advertising throughout the year works better for existing services.

4) Putting it into practice –  client case study

• Opposite  are recent adverts from long-running campaign in ‘Etc’, a monthly regional lifestyle magazine for a law firm client.
• The advert is seasonal (it changes quarterly) and the message focuses on private client services.
• The campaign has helped GWCA Solicitors maintain their position as one of the leading law firms in West Sussex.

In part two next month, lots more including ‘finding your partner’; ‘testing, testing…’; ‘QR codes and getting traffic to your website’

To find out more please contact Jon  Hepburn at The Fedora Consultancy on 01743 366288 or visit http://www.fedoraconsultancy.co.uk/

Related posts:

1. What is actually meant by a business development campaign?
2. CoreLegal White Paper Part 2 – ‘Practical Tips for Effective Outsourcing’
3. E-newsletters: ‘Raise the bar and ditch the junk’

What’s actually done often depending on the culture of their firm. Jon Hepburn from The Fedora Consultancy and Managing Director of Legallybetter takes a closer look…

In the past there has been a ‘no one knows our clients better than we do’ attitude of some law firms in choosing to ignore the need for getting client feedback.

• Aside from non-compliance in the future, paying lip service to client satisfaction creates a false impression and does not measure progress.
• Whatever client feedback system or procedure is utilised there will always be a limited number of responses from clients as they are under no obligation to provide the information, but I recently met with a law firm recently that achieves a 70% response to questionnaires they send out.
• Those that do respond are more likely to be those that have stronger feelings (either positively or negatively) about the service they received.

Remember, “A happy client will probably tell a few people, but an unhappy client will tell a lot more.”

It’s better to find out and act on feedback than ignoring it and hope it goes away. In this age of mass communication and social media – that’s unlikely to happen.

• The increasing use of social media (LinkedIn, Facebook etc) to communicate is driving this change but it also helping the increasing number of ‘social media savvy’ sole practitioners and virtual law firms setting up in practice
• I believe that we will see an increasing awareness among solicitors of the need to manage their individual reputations, not just that of the law firm they work for.

So why do this?

There is little point for most law firms trying to compete on price unless they prepared to restructure their processes and fee systems – a big task. Leveraging your reputation as a source of competitive advantage much more sense.

• Perceptions of value are not just about price, especially where judgments by the client as to the quality of the service provided are very hard to make.
• Business development – client feedback surveys are not just something that should be done to comply but, in the new legal environment, should be seen as part of the business development process, e.g. client recommendations bring in new clients and new revenue, client suggestions can improve services etc.
• As a final thought, the value of existing clients is often forgotten in the search for new business.

To find out how Legallybetter can help your law firm call Jon Hepburn on 01743 366288 or email jon.hepburn@legallybetter.com for an online demonstration.

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1. Measuring client satisfaction – will your law firm comply with new SRA regs?
2. Legallybetter’s new Client Feedback Service launched
3. Advertising for law firms – 9 tips for an effective campaign

Jon Hepburn, founder of The Fedora Consultancy and Managing Director of Legallybetter Ltd takes a brief look at the relevant legislation, the implications for law firms and the benefits of the new service from Legallybetter.

Law firms will need to have systems in place to demonstrate how they comply with the new outcomes- focused regulation.

• Under mandatory Principle 5 the onus is on the law firm to be able to prove, if required by the SRA, that they provide a proper standard of service to their clients and one that is in their best interests.
• This can only be substantiated by asking the client about their experience of the service and legal advice received.

The solution? The new service from Legallybetter.com

“Reviews, Recommendations, Client Care and Compliance”

This is an easy to use, post-based feedback system, with good reviews automatically added to three websites, and to your choice of social media. All helping to maximise the value of positive client feedback.

It has been developed through consultation with a number of authoritative parties including a compliance company, specialist solicitors, consultants and law firms that have prioritised client satisfaction as a source of competitive advantage

Legallybetter have teamed up with web marketing experts IRUN Ltd and the UK’s fastest growing feedback and national business directory The Disc to offer law firms a unique combination of services that will help you achieve the following:

• More client reviews and the opportunity to ask for recommendations
• Management feedback/reports to measure service quality and progress
• Feedback from clients – protect and enhance your reputation online
• Help with client care compliance issues with new SRA Regulations
• Increased website effectiveness and web presence for participating firms
• A presence (or increased presence) on social media sites – Twitter, LinkedIn, Facebook etc

The service  will give you an enhanced web presence with a listing and good client reviews on three websites, including automatic updates and quarterly summary reports. To see the new service in action visit www.catherinesousasolicitors.co.uk and scroll down to bottom of the home page.

Catherine Sousa, Partner, Catherine Sousa Solicitors says about the feedback service:

“Gathering client feedback and referrals through an impartial source has become an essential element in our business development. Our testimonials are now used to good effect as this system automatically uploads them to our website and social media such as Twitter, Facebook and LinkedIn. The fact that it is all managed for us makes it far more valuable than just a feedback service.”

Legallybetter’s client survey procedures are acknowledged by the Law Society as complying with section 7.5 of the Lexcel Accreditation process.

THE POWER OF RECOMMENDATIONS

Research was conducted recently among people that had actually used a solicitor in the last 18 months.They were asked how they had chosen their solicitor. In a sample of 719 people, 53% said they had used recommendations from friends, relatives or work colleagues. Source: YouGov SixthSense legal services survey, Nov 2010

To find out more please contact Jon Hepburn on 01743 366288 or email jon.hepburn@legallybetter.com Alternatively call David Mort on 02476 421821 or email david.mort@legallybetter.com

Related posts:

1. Client feedback for law firms – why do it?
2. Legallybetter’s new Client Feedback Service launched
3. Increasing use of the internet and recommendations when looking for solicitor

For example, accountants seem to think that there’s a standard formula.  I’ve heard it said that the value is 2¼ x net profit.  I’ve also heard it said by other accountants that it’s 1½ x gross fee income.  Oddly enough, when Solicitors are looking to buy a Practice, they tell me that law firms don’t have a value.  Why do I not find that strange?  Stranger still, is that when those same Solicitors come to sell their firm, it does a value!!

Some years ago I was selling a small law firm in Handsworth in Birmingham.  I had an enquiry from a solicitor in a small Gloucestershire village.  He wanted to know what the firm in Handsworth was selling for. I asked him why he was interested in buying a practice in Birmingham.  He told me he wasn’t really interested in buying the firm, but assumed that since his practice had the same turnover as the Birmingham practice, the two firms would be worth the same.

When I explained to him that a firm in Handsworth with over 40,000 residents in a highly multi cultural and multi ethnic environment, about 4 miles from a major city centre might be worth a different amount to a firm in a genteel Gloucestershire village, he finally got the point.

However, net profit and gross fee income do have a part to play.  Having said that, take the example of a number of absolutely identical law firms, they are in the same town, they do the same work, etc.

• Practice 1 has a dozen P I negligence claims.
• Practice 2 has an excellent web site and is generating lots of work off the web.
• Practice 3 is in the centre of a major shopping centre and has considerable passing trade.
• Practice 4 has a database of 25,000 local residents and mailshots them regularly.
• Practice 5 has a lease on a really old building and has a huge exposure to dilapidations when the lease expires.
• Practice 6 has a 25 year lease without a break clause.
• Practice 7 occupies offices owned by the Principal but the law firm doesn’t charge any rent so the profits are over-inflated.
• Practice 8 also occupies offices “owned” by the Principal but this time the offices are actually owned through an offshore registered company so a higher than market rent is being charged to reduce UK income tax and take the rental income offshore to a tax fee environment.
• Practice 9 occupies offices space without security of tenure and the lease is about to expire.
• Practice 10 occupies offices space that does have security of tenure and the lease is about to expire.  This means that a potential buyer could take over the practice and move it to another location without any significant property related costs.
• Practice 11 is owned by a Principal who is seriously ill and needs to sell in the next few months.
• Practice 12 “employs” the Principal’s wife and children purely for tax purposes.
• Practice 13 wants the firm valued because they want to incorporate.
• Practice 14 wants the firm valued because the Principal is getting a divorce.

So here we have 14 absolutely identical law firms but they are all valued differently.  So, in simple terms, there’s really no fixed multiple as to the value of firms.  The only way to get a true valuation is to work with someone who sells law firms week after week, month after month and has done so for over 16 years.

Remember if you use your accountant to give you a valuation, the likelihood is that they have never valued a law firm before and have no more than a conceptual or theoretical idea as to how to value the firm.

Also bear in mind that if you have a valuation for incorporation purposes, HMRC are increasingly challenging accountants’ goodwill valuations as accountants have no real platform on which to base the valuation of a Solicitors’ Practice.

Ray Fox

7/7/11

Related posts:

1. A law firm that can’t be sold?
2. So who’s going to buy your Firm?
3. So what is your firm actually worth?

1/ Research and invest in legal accounts package

2/ Put the records on a spreadsheet

What are the implications of this choice…?

You have decided to go for spreadsheets. You know how they work, you’re fairly comfortable with Excel, and so you have also decided to keep the records yourself. (Are you with me so far?) You wouldn’t be on your own in this situation. In fact, a lot of small firms of solicitors go for this option. They create ledgers on spreadsheets and then add the receipts, payments and bills. This means that they have to keep a manual bills book. They do the bank reconciliations for the receipts and payments. And if they are vat registered, they’ll keep accurate records of payments made with vat and the bills book. Then they’ll use this information to work out their vat liability.

It all is fairly manual, arduous and heavy going work. Nothing is automatic and at the click of a button. Miss an entry, (or one side of it), and you’ll have to back track and retrace your steps to try and locate where it went wrong. Using a spreadsheet, you are able to record the expenses, but unable to produce a profit and loss, trial balance and balance sheet with ease. And doing the bank reconciliations isn’t easy – especially as you get busier and the transactions increase. Using spreadsheets in the beginning may seem like a good option, but invariably, they are very time consuming, easy to make mistakes and can end up costing you more money in accountants fees and fee earning time.

The alternative is to invest in a legal accounts package. There are MANY on the market which can cover al your needs. Right from the very basic ones costing a few hundred pounds right up to bigger ones costing several thousand pounds. In addition, you don’t necessarily have to buy software for one machine – some legal accounts packages can give you online access for as little as a monthly fee of £40 which then gives you the option of doing some yourself, as well as allowing your bookkeeper or accountant to have remote access so that they can either do some data entry inputting for you, or provide you with some financial analysis and management reporting on what the figures mean.

Do take note though – don’t go for just ‘any’ accounts software. There are popular packages out there – but they were not designed for the legal industry. The software needs to be a legal accounts package and has to comply with the SARs. You set up your clients on the system and post your receipts and payments and bills to the client’s ledger. The system will automatically produce a bills book and allocate the receipts and payments to the bank reconciliation area.

From here the bank reconciliation can be done. From the expenses and income posted, the system will produce the profit and loss, trial balance and balance sheet. And to get the VAT figures you go to the vat report and at the touch of a button you have the figures. At the end of the month you go to the reports and print off reports needed for SARs and it shows you how the business is doing.

But most importantly, using a basic cheap accounts package can cut your time by at least half. Your bookkeeper (if you decide to give the whole job over to someone like Boogles) can get on with it in your office (or remotely if you have internet access), and you’ll be far more productive and organised. Take our word for it – spreadsheets are just not cost effective or, for that matter – effective. They’ll ‘do’ for your first few months, but in your law firm, you don’t want to ‘make do’ – you want to start out on the right foot and stay on top.

Boogles Ltd

Related posts:

1. Why should solicitors use Accounts Specific software?
3. FINDING A LEGAL BOOKKEEPER