Change before you have to…..   Leave a comment

The legal sector is waking up to the realisation that 2012 will be a year of change. Both law firms and barristers’ chambers are bracing themselves for a fundamental shake-up in the way clients access their services.

Threats and opportunities

Recent government reforms are opening up new options for legal clients, while providing opportunities for new entrants to the legal market. High Street retailers, such as W H Smith and the Co-op, as well as some city libraries, are providing ground breaking access to legal services via newly created channels.
As a result, traditional solicitors and barristers practices are finding their traditional operating models restrictive and out-moded. They are being challenged on a number of fronts, especially price with high volume legal work streams including debt recovery, already feeling the pinch.
It is estimated that the UK legal services market is worth in excess of £26billion, and ‘Tesco Law’ as it has become known, is seeking to win a large market share by using tried and tested business techniques that traditional law practitioners cannot afford to match. One example is Quality Solicitors £15million television advertising campaign, designed to attract clients using methods that others can only dream of. The effects are already being felt.

Even large firms’ profits are being squeezed, with a top-ten law firm recently reporting a £16million increase in debt in its latest accounts. There has never been a better time for Legal practices to embrace the value of professional credit management techniques to help prevent cash-flow from drying up.

According to a report produced by IRN Research, small and mid-sized practices will face the greatest threat. Many are already experiencing reduced margins and are struggling to grow revenues

Legal sector response

The annual Law Firm Survey conducted by Price Waterhouse Cooper shows that the legal sector is already responding. “Unfortunately, whilst they have taken cost out of their business, what they haven’t done is actually change the way they do business,” said David Snell, author of PWC’s Law Firm Survey.

Quality standard

Clients are becoming more demanding and practices supplying services for volume debt recovery may have another reason to consider professionalising their approach.

It is becoming common for clients to demand badges of industry-standard performance by which they can judge and value the services supplied. Lexcel and BARMARK are examples of awards recognising organisations meeting the required standard in practice management, in law firms and barristers chambers respectively.

There is evidence of performance benchmarks becoming more common in the selection process used by clients when selecting legal practices for panel positions. HSBC’s Conveyancing Scheme Panel is a good example of this. All providers of services must have attained the Conveyancing Quality Scheme Award before being accepted as a service provider. This badge of quality enables HSBC to have confidence that their own values and performance standards will be delivered by other businesses working on their behalf.

As clients become more demanding, increased professionalism in their pool of providers is sure to follow. Legal practices which fail to meet the standards will risk losing credibility along with clients. So now’s the time to invest in skills development and work towards attaining the credit industry’s quality standard, Qicm, if you don’t want to be excluded when the next volume debt recovery panel tender comes in.

Invest in people

It is readily acknowledged that the most valuable asset a business possesses is its people. Continual professional development brings benefits that far out-weigh the costs. Investment in legal sector credit management skills has been made easier as a result of the introduction of a new industry specific solution, by ICM.

Legal sector specific training

Credit Management Law) Ltd, specialist consultants to the legal sector, in association with the ICM, have created a modular training programme to provide students with the technical skills, relationship management and communication techniques necessary to counter the current challenges and assist clients to benefit fully from the opportunities.

The five modules, devised specifically for law firms and barristers chambers, can either be studied as stand-alone workshops, or as a five part course. Learners can either elect to have their post-workshop assignment assessed, to obtain QCF credits, or they can simply improve their skills, without completing the assignment. The QCF credits resulting from a successful assessment, can lead to a certificate or when supplemented by the core Level 3 ICM subjects, a diploma in Credit Management.

The course has been carefully structured as a result of extensive research into the needs of this market, most particularly regarding barristers chambers. Chief executive officers, senior clerks and practice managers in a variety of chambers contributed to the research and the resulting course meets all the needs expressed. Some had previously tried to obtain relevant training for fees clerks and credit controllers, but without success.

“We spent as much time teaching the trainer about the specific practices which govern how we work,” said a CEO in a top 30 Chambers, “That we sometimes wondered if it was worth it. I wish there had been a specific course available two years ago, when we started our improvement programme.”

Quadrant Chambers took part in the final stages of pre-launch testing. Credit Manager, Clare Peters had already gained experience in a large law firm before joining Quadrant, so understood the specific nature of credit management in the legal sector. She was able to bring tried and tested skills in communication and relationship management to the role, essential when trying to persuade barristers to allow direct contact with their clients on the delicate subject of non-payment of fees.

Conclusion

Times of change bring out the full range of emotions in us; excitement about new opportunities, fear concerning how the threats might impact on the business and our own particular role. One thing is clear, that those organisations with well communicated credit management strategies, which engage their workforce in delivering to the best of their ability and empower all personnel with the right skills for their role, are most likely to be looking forward excitedly to how their organisation will emerge from 2012 stronger and more successful than ever.

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