Challenging Times

Even before the economic climate took a nosedive, with many saying there’s worse to come, the squeeze on margins, increased regulatory & compliance issues all combine to make life increasingly demanding for many law firms. Further, with the advent of Clementi and so called “Tesco Law”, firms will require access to increased levels of finance to remain competitive with their rivals who will have access to more finance and resources to capture business which was previously only available to Solicitors. This all adds to the uncertainty of a drastically changing legal landscape for many whose market position has in the past been fairly secure. As a service industry the two main challenges law firms face are how to control its people and finance. A competent lawyer may not have the skills to be an effective manager, as many firms have found to their cost. Therefore the need for effective management and processes is increasingly necessary in the climate of high up front referral fees and acquisition costs. All of this is happening against the backdrop of further reductions to existing predictive fees, and the proposed implementation to expand predictive and fixed fees to other none RTA work

Flying Blind

Despite often significant investments in Case Management and IT, it is not uncommon for firms to question their returns in terms of MI and case progress control. All too often case management systems concentrate on workflows and rely on “task lists” to flag up case movement bottlenecks. Very few case management systems “feel the pulse” and therefore fail to provide financial MI in the key area of WIP where vast amounts of cash can be locked up unnecessarily due to poor case progression.

Frequently the symptoms of flying blind are:

• “We often seem to be fire-fighting. We need to be more in control so we can identify issues before they become problems.”
• “We need to get everyone doing the right things more often.”
• “We are not getting the reward we deserve for the excellent reputation, products and people.”
• “We need to be more in control of our cash flow.”
• “Why does one fee earner earn more than another one with a similar caseload?”

Time Is Money

In the PI Market where predictive costs are not realized until the end of the case, coupled with the absence of interim billing, for most firms the biggest figure on the balance sheet is WIP. This is often exacerbated by delays in costs recovery. Controlling settlement periods is crucial. Case movement bottlenecks are often masked or buried in individual fee earner task lists which are an in adequate tool for the effective management of cash flow.

Cash Is King!

In a time when case procurement costs are rising and profits are under threat, this causes many firms funding difficulties and we all know the Banking sector is nervous at present. Never has there been a more important time to realise the full potential of cash and profits at the same time as retaining an ability to deliver a quality professional service to individual andcorporate clients.

This comes at a time when the SRA have failed to commit to a ban on referral fees and case procurement costs are rising so profits are under threat. With only two sources of cash, banks and partners, there’s never been a more important time to squeeze every ounce of profit and cash from within the firm.

C2JF Solutions LLP

Offers a unique advisory service to Claimant PI firms aimed at helping firms release cash lock-up by optimising performance using the LawPulse System ™ to diagnose and quantify improvements. We then work with our clients to realise them, however long it takes.

The Diagnostic

Using LawPulse™ we have a tried and tested approach to determine the extent of potential improvement in the 3 lines of defence:

• Profits – productivity, litigation & abandonment
• Cash – case lifecycle, enforcement & caseloads
• Process – people, risk control, IT systems & MI (Management information)

A Diagnostic Health Check of these key issues provides substance to the improvement potential and, following Partner approval, the scope and focus of our ongoing involvement.

The Outcome

Using data extracted from the case management and financial systems LawPulse™ produces a comprehensive evaluation of the firm’s activities which, when compared to benchmark standards, reveals the nature and extent of improvment potential. Most importantly, using the Management Information on case lifecycles, abandonment rates etc. created by LawPulse ™, and liaising with Partners with regard to future case intake, we deilver a fully auditable three year cashflow forecast determining the firm’s funding requirments. The diagnostic culminates in a report covering the key components of Profit, Cash and Process presented to the Partners / Management Team.