This week I attended the Spring Symphony Legal Conference - Orchestrating your Law Firm’s Future 2016. It was being held at the the plush offices of the RBS building in London. The room was buzzing about mergers, acquisitions and what plans firm have for 2016.
Vanessa Davies, Director of BAR Standards Board (BSB), talked us through what firms can expect from BSB for 2016. Their key areas were simple: regulators should base their regulatory activities on risk. To help BSB establish this, they had a 5 point plan:
- Clarity
- Value
- Better Decision Making
- Consistency
- Evolution
Risk is huge within the legal sector, and so to cover all aspects of risk, Vanessa was keen for more firms to Identify - Asses - Prioritise - Mitigate - Monitor. Without this approach, firms are hopeless in minimising the amount of risk that they are open to.
So what is next for the BSB? Well, their plan over the next 2-3 years is the following:
- Regulating public interest
- Being strong and sustainable
- Meeting consumer demand
- Wants to stay in the niche segment of the market
Keeping with the theme of risk, we then heard from Frank Maher, partner at Legal Risk LLP. Frank was straight talking and to the point on risk, covering 3 key areas of risk:
- Merger and Acquisitions - PII
- Risk to the practice
- Compliance
The areas of risk are as follows:
- Consider the insurance aspects, you are changing the risk of the practice
- Run-off cover - could be 2-3x the previous cover
- Access on the previous firms claims / penalties or outstanding premiums
- Identify the liabilities / bad apples or outstanding problems
- The commercial deal - full merger / spilt the firm? / asset stripping
- Changes to the PII cover
- Run off from 6 years to 2
- Limit to consumer claims only?
- Will you be able to buy what you need? What will happen when your retire?
- 12th August 2016 change to the Insurance Act 2015 (Grouse season)
- Do you have enough cover?
- Terms of business changing
- Protect yourself from cyber risk / bank scams - (Panama law firm Mossack Fonseca were hacked due to out dated software!)
- Train your staff - a crucial aspect of risk seems to be the human element.
- Have a plan if things go wrong, a plan B if you will
- Buy cyber risk cover - yes its a real thing!
- Check your accounts rule compliance - banking facility, professional disbursements, bill or written notification of costs
- AML - Anti Money Laundering - MLD4 (Money Laundering Directive) Risk assessments, pooled client accounts, domestic PEPs
- Client and Matter engagement
- FATF Red Flags Report - http://goo.gl/cVYsKo
- Watch out for rogues - breach of confidentiality, theft of client money, expenses - it happens at all levels regardless the size of the firm.
After lunch and after a lot of talk around Cyber Security we had Andy Miles CEO of ThinkMarble Ltd.
Being a partial techy myself I am always keen to hear about what cyber securities and attacks are happening (must be all the episodes of Homeland!) Never the less, Andy was straight to the point covering areas that caused quite a gasp with the audience.
- Risk is for law firms - why they target you, a lot of firms take cyber security for granted. Even small firms are being attacked because they are vulnerable.
- Cyber risk = financial loss, business disruption, reputation loss - which one do you think is the worse one?
- Threat comes from internal as well as external
- WIFI Hacking in under 6 minutes, is your firms WIFI secure?
- Technology is only a small part of the problem
- You have to achieve 100% security
- Your data how much is it worth to the firm?
- Culture change of security, firms need to address a culture change and buy in from the top
- Forward planning for security - it is always changing, technology never stops!
- Do you have a shared user name & password for your it systems ? Most firms have this, it needs to change.
- Continued governance, advice and training on a regular basis
In a basic security test at a law firm ThinkMarble found:
- 80% of cyber attacks can be avoided
- Getting the basics protects you 80% of the time
- 55% of failed controls could be attributed to IT managed service providers
- Governance - process / policies are out dated
- Awareness - training / visibility / monitoring
- You can potentially save money on your insurance by investing in Cyber Security
After coffee we had Symphony Legals Julian Oldfield on Personal Injury - Change to Survive!
A slightly different change of topic, Julian explained the way how PI is still on the decline it has lost around 40% of its revenue.
- Lord Chief Thomas - rules are not working and we need to start again
- Slater & Gordon implosion - will the SRA step in? only time will tell
- PI small Claims limit up from £1,000 to £5,000
- When will the insurance companies have a say in the changes?
- Majority of firms have lost their mid-tier staff due to change, de-skilling their firm
- Most firms have broken their team up into technical, process and admin teams. To cover all aspects of the case
- Not many firms working and benefiting from fixed cost fees
- Diversification - clinical negligence (but hard to win)
- Firms need to adapt, pay rises and bonuses have gone out the window
- Maximise hourly rate work for high value cases
- Outsourcing cost firms are charging around 10% of the profit of a case goes to the cost firms
- Reputation is key along with an accredited digital agency to support your ongoing digital strategy
- Firms need to adapt to survive..its that simple.
Overall a great Spring seminar, and the first launch of Symphony Legal. Well done to Viv and the team for putting on another enjoyable conference.
Thank you to all the clients who attended, its great to see so many faces in one room.
See you all very soon.
Rich