Impact of Legal Services Act: Risk management and strategy the new watchwords for law firms
With the end of the year approaching and with alternative business structures now a reality, many managing partners will be taking stock and thinking about what the future holds.
Some law firms have already taken proactive action by launching new services to take advantage of deregulation under the Legal Services Act, others have taken a more defensive approach.
Wherever your firm is in this process, the need for sound risk management and long-term strategic planning has never been more evident.
To demonstrate just how many issues firms are juggling with at the moment, here’s a selection of some of the questions posed to me recently by the senior partners that I have consulted with across the region:
– How can I protect ‘at risk’ service lines?
– Should I be downsizing my conveyancing team?
– How can I track where our work is coming from?
– What are the costs of operating our personal injury department?
– How can I generate more work for my family law team?
– Which parts of the firm are most profitable?
– How can I train my staff to deliver new products and services?
– How do I target new streams of work?
– How can I help people to see the benefit of real lawyers?
– How can we demonstrate the value of our wills and probate team?
– How can I adhere to outcomes focused regulation?
– Where do we need to be in five years and how do we get there?
– Do I need to reassess staffing levels?
The key point is that law firms need to be aware of what the risks to their business are and how they can mitigate against those risks.
We have been working with some firms to help them become Lexcel accredited, a process that assists greatly in risk management. In many cases we have helped train staff members to be able to perform that risk manager role themselves, allowing them to implement their own risk register and assign risk factors to different parts of the business.
One example is a firm that realised, thanks to the process we went through, that one of its service lines was overstaffed and unprofitable, so staff were retrained and redeployed to a busy service line, which has enabled growth for the firm, together with a motivated workforce.
But risk management should not be viewed as a one off assignment. It should be a constantly evolving process, led by a senior person within the business, which perpetually informs your long-term strategy. Make it one of your priorities.
Karen Hain is a partner and head of professional practices at Moore and Smalley.