The legal sector is evolving like never before. The need to maximise revenue per professional is now the number one aim for most law firms, as the sector adapts to an ever-changing economic and regulatory landscape, writes Salim Hashamy, UK Account Manager, Casewise.
The rationalisation of the sector has brought with it a wave of mergers and acquisitions as law firms move to consolidate their existing customer base, and expand their offering to new customers. This process brings with it the need to acquiesce and combine two – often different – sets of working cultures and processes in the most transparent way possible.
On top of this, new challenges are beginning to make themselves known in the areas of compliance and risk. From 1 January this year, and on the back of the Legal Services Act, law firms had to modernise and, like the rest of industry, initiate a risk strategy into their businesses by appointing compliance officers.
New solutions for a new era
This brave new world of Outcome Focused Regulation (OFR) will see the detailed rulebook governing solicitors’ practices replaced with principles and outcomes to protect consumers of legal services. There is now greater flexibility for firms in how they achieve the required standards, but with that comes an obligation to appoint a compliance officer for legal practice (COLP) and compliance officer of finance and administration (COFA).There are big decisions to be made around better reporting, referral fees, international trade, and the need to think on a truly global scale. After the upheaval in the legal sector with the jostling for position by mid-tier firms through mergers and acquisitions, and recent high-profile struggles by the likes of Cobbetts, the new OFR rules present a weighty challenge.
The drive for transparency
COLPs clearly have big decisions to make in the coming months and years. But to make the best decisions for their businesses, they have to have access to the right information – and have greater awareness where processes are failing. COLPs and COFAs will need to delve deeper into these processes, and bring together all the data and outcomes within a business to make them more transparent.
Identifying risk within any business isn’t a manual process. The implementation of smart software can act as an early-warning system that will identify systems, data and transactions that are falling outside of your risk boundaries. The processes within a legal business need to be brought to the surface, and the checks on them made easier and more transparent. It’s in this way that risk will become so much simpler to manage.
EBA: building an advantage
How can the legal sector use management techniques and technology to build and sustain a competitive advantage? Winning legal organisations are turning to the discipline of Enterprise Business Architecture (EBA) to help take their business to the next level.
Until recently, Enterprise ArchitectureEBA tended to take a bottom-up approach – led by technical constraints and isolated operational IT solutions. Organisations were working for their IT system, not the other way around. As a result, achieving business goals was way down on the agenda and Enterprise Architecture initiatives failed to deliver anything meaningful.
Learning from this, leading software company Casewise takes a more business focused top-down approach. Creating a robust Enterprise Business Architecture (EBA)-based solution that ensures that EBA initiatives work to solve problems the organisation is facing, contributing to the business strategy and offering a secure platform for the future.
EBA allows a business to adapt quicker, improve faster and work smarter. With IT extending to – and having a huge influence over – all areas of operations, and with the COLPs and COFAs now tasked with ensuring risk compliance through the entire law firm, this is more important than ever. EBA can mean an IT structure that reduces costs, maximises efficiency and contributes towards exorcising risk.
The big issue for the COLPs and COFAs is using EBA to proactively alert them to any risk issues, and how they make this the norm for the workforce. EBA can help with that as it handles the information derived from a business’s processes and understands the relationships between different items of information. In this way, EBA is proactively seeking out conflict which could lead to a breach of compliance.
What EBA can do for the COLPs and COFAs:
- Defines the link between the enterprise business strategy and the results predicted from supporting strategic initiatives.
- Provides a single source and comprehensive repository of knowledge from which compliance initiatives will evolve and link.
- Transforms the information into a fully integrated enterprise model of the business throughout the business.
- Engineers solutions that directly link to the compliance strategy.
- Ensures that risk and compliance projects are not ad hoc, but properly designed and tested, ensuring continuity for the future.
- Give a holistic view of the business and allow them to transform performance through accelerated growth, reduced risk and newfound efficiencies.
EBA also has knock-on benefits. Better reporting will mean the Solicitors Regulatory Authority are likely to view the business favourably, and let it get on with the day-to-day efforts of increasing fee income. Furthermore, with EBA making the business more transparent, the workforce will be encouraged to take the lead in optimising their processes and decision-making.
And perhaps just as importantly, the more information you have transparently available throughout the law practice, the better decisions you can make. EBA is all about optimising both physical and mental processes; the more confidence the workforce has in them, the more confidence a business’s clients will have in the workforce, and the quicker a law firm can continue to grow, and escape the fate of those which didn’t wise up in time.