Changing ways of working is always hard. Inertia is the strongest force in nature. ‘We’ve always done it this way’. People fear change and so put it off.
I am naturally a shy person (my wife laughs at that comment, but it is true). However, I’ve learned in life to face my fears. They are normally less bad than I feared. Self-analysing, I can see the tendency to avoid change. So, I have taught myself to embrace change by looking at the opportunity. Weighing up the pros & cons and then getting on with it.
You can put the move to change into 3 categories:
Remote working: the technology is there but the thinking can lag behind.
| Cons | Pros |
|
Loss of cohesiveness Will my staff skive off They need to access the server to work All the computers are in the office How will they print How will we manage the staff How will we have staff meetings Who will man the phones? |
More resilient Treats staff with trust Cuts overheads More profitable More flexible Higher productivity – in my experience More efficient Healthier |
You will note that a lot of the Cons are actually barriers to ‘How to do it’ rather than objections in principle.
In a ‘Distress Purchase’ situation, you need to work through these issues quickly with a plan. I encouraged remote working when I took over running my department of 60 litigators. It aligned them better with the hours our clients wanted to contact them. It allowed my staff the ability to save commute time. It produced higher productivity. We weren’t on the cloud but used citrix as a virtual platform. I could always manage them by the reports and phone calls. I would now have better technology available to manage them.
How to do it?
Some Practical suggestions
Feel free to contact us to help you work through these and other issues.
Looking forward
I was recently visiting a village near where I live. Increasingly villages where there is good internet are finding buildings are being turned into small office units. It struck me that a revolution is quietly going on: small office-based businesses are moving back into the rural villages as people are freed from the need to set up in a town or city. Why not have a nice environment where you work and less of a commute? Then that encourages other businesses that support them – the café in the village etc. It’s certainly something I will be raising when advising someone thinking of setting up a new law firm.
If you are struggling with the move to remote working for your business, or just want to talk through the strategy then feel free to contact us.
These rules came into effect as mandatory on 6th December 2018. They affect you if you are regulated by the SRA and carry out work in the following practice areas:
Services for the public:
Services for Business:
We have a Support Package to help you: https://hunningsconsultancy.co.uk/?page_id=3249
Here is a link to the rules and guidance on the SRA website: https://www.sra.org.uk/solicitors/guidance/ethics-guidance/transparency-in-price-and-service/
I was working with a law firm a little while ago, helping it through some changes in it’s practice. The managing partner said to me “You know, were really just a collection of sole practitioners”. That summed up beautifully one of the business models have I come across many times when working with firms. I explore 2 business models below.
Collection of Sole Practitioners
So, what did my client mean by this phrase? I think it was as much attitude as size. The attitude would be one where the clients belong to the solicitor (partner). The connection is personal. They either do the work or they direct and delegate to their team – which might be a secretary, team of secretaries, paralegals or suchlike. Each partner operates independently of the others and brings to the partnership the fruits of their labour. In this model the business is the sum of the parts that each brings.
Pros:
Cons:
The Integrated Business
In this model the interests of the business are placed above those of the individual owners. All effort should be aimed at driving value into the organisation. This takes more effort and is not natural to many people working in the professional services sector. The risk is that everything can become less personal – which is not good when the business is focused on providing a personalised service to clients. However, that can be avoided with good management. If the business has invested in its processes, it can better withstand the departure of one of the owners or staff. The business can be more than the sum of the parts. This model is seen more commonly in other areas of our economy but can also work in the professional services sector.
Pros:
Cons:
These are just a few thoughts. What will be appropriate will depend on the circumstances in each case. A typical consultant’s comment! There are other business models and ways of doing things. I’ve only looked at 2. Seeing the variety is part of what I enjoy.
We’d be very interested to learn people’s views and hear of other pros and cons and people’s experience.
From 6th April 2020 capital gains tax on the disposal of residential land is payable within 30 days of completion. Here’s a link to HMRC advice: https://www.gov.uk/government/news/get-ready-for-changes-to-capital-gains-tax-payment-for-uk-property-sales
Delighted to share that we have been informed that HCL has been awarded: "Best Law Firm Business Consultancy – Midlands" in the SME News Legal Awards 2020.
Please note – we are not tax accountants – BUT this is something that businesses, including larger law firms, need to be aware of. Get appropriate tax advice.
IR35 – a bear trap for companies hiring external help. Basically, the Inland Revenue wants to ensure that the state is not being done out of taxes through the use of a service company instead of the staff being regular employees, paying PAYE etc. So for some years now, if external help has been hired by an arm of the state (including local government, the NHS etc), the hiring party (or end client as HMRC calls them, eg, NHS) has to make a determination as to whether the hired help is an employee. If so, the end client needs to pay employers NI etc. If they say that they are not an employee and HMRC decide they got it wrong the end client will need to pay the missing tax to HMRC.
On 6th April 2020 this regime is extended to larger private companies hiring external help. By larger they mean companies meeting 2 of the following criteria:
a) you have an annual turnover of more than £10.2 million
b) you have a balance sheet total of more than £5.1 million
c) you have more than 50 employees
Several factors influence whether HMRC will regard the external help as an employee; such things as
HMRC has created an easy to use tool to check if an arrangement is likely to fall foul of IR35. Crucially, it is anonymised, so one may check out a scenario before entering into a contract. Here is a link to it: https://www.tax.service.gov.uk/check-employment-status-for-tax/disclaimer
A lot of organisations will need to consider how they work very carefully. This will even affect mid-sized Accountancy & Law firms, given the criteria above. Many law firms hire ‘Consultant’ Lawyers. It’s a way of getting experienced talent in to cover a need within the business. Typically, the consultant solicitor will have their own company through which he/she trades. If they are there long term, as they are most likely to just be working for that firm, there is a strong likelihood that they will be caught by IR35 after 6th April 2020. This is a shame, as the arrangement allows flexibility within the workplace that suits both sides. Feel free to contact us to talk this through, as we might have a solution.
Here are some useful links to the rules:
Understanding off-payroll working (IR35)
https://www.gov.uk/guidance/understanding-off-payroll-working-ir35
Who the changes apply to:
https://www.gov.uk/guidance/april-2020-changes-to-off-payroll-working-for-clients
What the April 2020 changes are:
I expect most of you have experienced poor management in your career. It can leave you feeling bewildered, undervalued & demotivated. I have and I’ve seen others close to me undergoing it as well. I’ve had the privilege of coaching some people through it until they come out to the other side. So why does it happen, why does it matter and how can you as an organisation try to minimise the likelihood of poor staff management occurring? I have found that size of the organisation does not necessarily make any difference to how well they manage their staff. Huge blue-chip companies can do it very poorly, whereas micro-businesses do it very well (& vice versa). Here are a few thoughts and suggestions.
Why does it matter – how can it affect your bottom line?
Setting the character of the team: this issue goes to leadership, which I have written about before. It is difficult to overstate the importance of leadership in setting the character of an organisation. That is replicated in management at all levels. We are social animals and how we behave in an environment will be influenced by the leader. If the behaviours of the leadership reflect and support the achievement of the goals and strategies decided for the organisation, then it is likely that it will work more smoothly to achieve them. If the management, at any level, is operating at odds with them, then their staff are also likely not to be fully aligned to achieve them and the organisation will underperform.
Staff retention/talent acquisition: if you have poor management it is likely to affect morale. Whilst a certain amount of churn in staff is inevitable, if it is too high then it will drag back the organisation. In my department we worked out at one time that there was a £60,000 dip in fee production over a year each time a member of staff left and a new one started. Conversely, if morale is good staff will often go the extra mile, stay even though the pay might not be the best in the local market and word will spread into the market place that yours is a good organisation or team to work for. That will help with bringing in new people.
Productivity: You will want your most expensive resource (people) to be as productive as possible to maximise the return on your investment and as quickly as possible. Low morale, as mentioned above, will affect productivity. So will lack of clear instruction, support and guidance for junior staff to enable and facilitate them to meet the needs of the organisation. Poor management may indeed mean that it is unaware of the effect of decisions, as no targets or the wrong targets are set and/or data measured.
Goodwill: the goodwill of your staff will not alone save a business but it will certainly help it. You are unlikely to have much goodwill with poor management. The goodwill is likely to lead to a nicer working environment, stronger bonds within the team, more cooperation and mutual support.
Additional Benefits: Your workforce is a potent source for innovation and unexpected benefits. They may have connections of which you are unaware that might open up opportunities for new work or partnering. They are often the people with the greatest knowledge of how to do their job and then, if encouraged to share, how to do it better.
Why Does it Happen?
Ego: There is no doubt that in some businesses the manager is on an ego trip. The manager feels that everything reflects on them and their image. Why is a whole exploration in itself, which a business coach might investigate or I might explore when I am mentoring someone. However, it might arise from inherent insecurities, from a management style learned beforehand or handed down through the culture of the organisation. It can result in every interaction being personalised, every analysis, turning it into an assessment of how it affects and reflects on them. It can end up as a corrosive
Pressure from managers above: people have said that being in middle management can be the most pressurised position – pressure from above and from below, but often without the power to make decisions that relieve the pressure. Decisions of top management will need to be implemented by middle management. As will fear for their own career development or how their actions and the performance of their team are perceived by their superiors.
Inexperienced managers: if your manager is new to managing, they may be out of their comfort zone. They were trained to do a particular job but now have to take on managing people, perhaps because that is what is perceived as what comes with the territory as they become more senior. Just because they were good at one particular job doesn’t mean that they will be good at running a team.
Lack of discipline: sometimes it comes down to poor self-discipline – they are just poor at managing their time, keeping to commitments, making time and head space to manage. So, appointments with their junior staff are missed, they forget to do things they promised, they seem to lurch from one crisis to another.
Lack of time: this could be a feature of lack of disciple, as set out above, but it could also be that their superiors have not given them time to manage, just expecting them to fit it in around and on top of the rest of their work. It could be that there is just too much work coming in – which is great but should only be a temporary issue as this will be processed if short term, or if long term then other resource should be added. It could be a failure to delegate, which could have a number of reasons, for example: it could be part of their nature, lack of trust in their junior staff, lack of infrastructure to facilitate this.
How to improve staff management
Training for Managers: I have always believed that it unfair to someone to put them in a position but not give them the training to do it. It’s a poor investment and can look as though you are setting them up to fail. At the very least give them clear instruction on what you want them to do and how you want them to manage their staff. This should not just be a one off. The best organisations will have a structure of mentoring or coaching (either informally or formally) right down the management structure, which would then be replicated through the team members as well. Remember that the manager will influence the whole team they are managing. They have the potential to do a lot of harm or a lot of good.
Good measurements/Data: be scientific – measure the appropriate data and then make informed decisions on it. Then keep measuring the data and adjust when necessary. That can help to keep things less personal and steer away from prejudice, favouritism and nepotism. The best people delivering the best results is likely to maximise performance.
Communication & Regular Reviews: you almost can’t communicate enough! I’ve found in management that you think you’ve told everyone time and time over and yet there are people who say they didn’t know. Sometimes it is their fault. Sometimes it is the method of communication. You may be saying something in one way but that doesn’t get through. They prefer another method. For example, sending out email which everyone ignores. There’s a whole article, maybe a book to write on this! I’ve also put in here regular reviews. These I have found to be so, so important to managing staff. It is a subliminal message to them that they matter. It gives them a space to ask longer term questions about their progress, your expectations of them and their career. It should build trust and allow for a light touch on the tiller to guide them rather than a drastic shove.
Honesty, Humility & Curiosity: I’ve recently finished reading Eddie Jones autobiography. These are aspects that he wants to see in his players. This resonated with me, as they are traits I admire and believe help people succeed. Honesty – because you look at the data and your own performance as it is without excuses or rose-tinted spectacles. Humility – because if you don’t have that you are not open to analysing, reflecting on and learning from your own mistakes. Curiosity – because open to outside influences and ideas, learning from others, always facing outwards to innovation. Then you have managers who are interested in improving themselves, their performance, that of their staff and of the whole organisation.
These are just a few thoughts from my experience from working in a law firm for 24 years at all levels from Office Junior to Equity Partner, Board Member and Head of Department and subsequently through my consultancy with over 300 SME’s. I have found that size of the organisation does not necessarily make any difference to how well they manage their staff. Huge blue-chip companies can do it very poorly, whereas micro-businesses do it very well (& vice versa). I would welcome other people’s input as comments to this article. No-one has all the answers but some do it a lot better than others and reap the rewards. If you like to talk more about implementing some of these thoughts into your organisation then please contact me.
Today the 5th AML Directive comes into force. If you are a law firm we can help you update your AML policies & procedures.
Here is a link to the guidance from the Law Society with a summary of the changes as well.
https://www.lawsociety.org.uk/policy-campaigns/articles/anti-money-laundering-guidance/
Top Line minus Middle Line equals Bottom Line. In simplistic terms this is the equation for Profit. Top Line is the exciting stuff: new sales. Everyone loves a new sale. The risk arises when people focus on new sales alone. Of course, if you don’t get sales there is no business. Driving up turnover is essential for a healthy expanding business. But it’s not by any means the whole picture. Your business can survive by just increasing sales if that is turning you a profit but it misses an important element of the business.
In this article I’m going to write about the Middle. When times are good this is often neglected. When sales flat-line or fall then businesses may take the time to look at this. That is fine, but there are a couple of problems with only looking in this then. One is that the business will have missed out on extra profit during the good times. Another to bear in mind is that making changes to squeeze the middle may actually involve up-front investment – always harder to do when sales are down.
So, what do I mean by the Middle? In short – the Cost of Production – what it costs for you to get the sale and then do the work so you may invoice, indeed also the cost of recovering the cash. It all drives towards cash in the bank.
Service firms often overlook the investment in getting the sale. If it’s a referral fee or an overt marketing spend then that is usually captured as an overhead. However, the networking, lunches, golf afternoons/days, drinks, social media are all part of the cost of acquisition and should not be overlooked. Some of this is difficult to quantify. It might just be time – but time can be given a value and measured. It is important to do so, to facilitate accurate comparisons.
That brings me on to another point – data. In order to be able to make informed decisions accurate data must be gathered. This is often the hard bit. Getting staff to accurately record their financial outlay is a bit of a struggle, but, if they are claiming that as expenses, easier than getting them to accurately record their time spent. They can see the benefit in recording their expenses, as if they claim them they will be paid back to them. Recording time is a different matter. Most businesses I’ve worked with struggle with this. Some do not even recognise the issue. Some do, but collection of the data is patchy. I would argue that this is of great importance to a business. After all, when a business hires someone what does it do but buy a number of hours of that person’s time and expertise? So, in order to measure Return on Investment, it needs to know what that time is spent on and how effectively that time has been used. No-one would argue against that approach with regard to the investment of hard cash. With good data one can start to measure what is working and what is not working. Then one may start to experiment with approaches that might deliver better results.
I would argue that the best approach is to be scientific: setting out the objective and then measuring results in an impartial manner against the objective. Squeezing the middle will often result in reflecting performance back to people and asking them to make changes. It is very easy for staff to take things personally, or indeed management to mishandle the situation with negative impact on the performance of the business. This is why the whole issue of Change Management is a topic of it’s own. In general, people do not like change – but that is the messy business of improving performance that distinguishes the best businesses. Ducking the issue because it is difficult and might/will result in difficult conversations does not help the business. Certainly, approaching the situation with good, clear, impartial data will help taking out some of the emotion.
Without initially realising it, I have been involved in change management for a large part of my career. When managing and then running a department of 60 in a mid-sized regional law firm, I took them through restructuring, both of the organisation of the teams, the staff and the methods of working. We held regular departmental meetings to keep everyone aware of the objectives so that everyone knew what was happening. We had regular team meetings and a system of monthly 121 meetings – so there was a clear understanding and feedback to guide through the changes.
Since setting up my consultancy, HCL, we have helped around 300 law firms through change. It is fascinating seeing the different business models and approaches that people have. However, the fundamentals I have written about above apply to all.
Below are a few examples of changes that have made a difference to our clients:
Each circumstance will vary and the ideas will need to be adapted to the way each firm works and the challenges it faces. There is so much more to explore on this topic but that will be for future articles.
They said they would do this. Now they have. This week they have written to all firms caprtured by the 2017 Money Laundering Regulations requiring the COLP to sign a declaration confirming that your practice has a firm-wide money laundering risk assessment in place. The deadline for responding is 31 January 2020. Firms outside the scope of the regulations will not be written to.
The SRA website is a great resource to check on this. https://www.sra.org.uk/
