A Survival Guide for Legal Practice Managers

A Survival Guide for Legal Practice Managers

The 2020’s: time for law firms to take strategy more seriously

Monday, September 24, 2018

By Mitch Kowalski, Strategic Advisor on Legal Innovation

I remember meeting the Managing Partner of a large Canadian law firm and asking about his strategy for the firm. He was quick to respond, “Our strategy is to be the best in every area of law that we cover.” He seemed to be very pleased with himself. And perhaps rightly so; after all, lawyers hadn’t much use for sophisticated business strategies.

Traditionally our monopoly meant that we only competed among ourselves - and we predominantly differentiated ourselves based on quality of legal work, not on different customer experiences. And on a personal level, many lawyers define their own sense of self-worth on labels such as being the best or working with the best. And so, his pronouncement made perfect sense to himself and to his partners.

I, on the other hand, having had training and experience on boards of large companies where strategy was taken very seriously and where the key to success is competing on difference (not different shades of sameness), was stunned. In my mind, I started to pick away at his triumphant pronouncement.

There was the obvious problem of defining what the best means when it comes to lawyers - how does one objectively and accurately determine the best real estate lawyer or best corporate lawyer? Are they the smartest? The most efficient? The one who gives the most value for money? The one who gives the best customer service? And what exactly does it mean to be the best law firm?

Had I been cheeky enough to ask these questions, he might have realised that being the best is not a strategy at all. Most would scoff at a cricket or rugby team saying that its strategy this year is to be the best, or its strategy is to win more. Winning, or being the best, is the outcome of following a successful strategy – it’s not a strategy itself.

To paraphrase strategy guru, Roger Martin, strategy is the framework that holds together a set of integrated choices (where to play; what capabilities are needed; what management systems; what technology), that when taken together, not only give the law firm superior financial returns, but most importantly, give the law firm sustainable advantage over all competitors. Sustainable advantage means an advantage that’s not fleeting because it’s not easily duplicated by competitors.

As we know from sports teams and even law firms, quality is easy to duplicate - it can be bought, or it can be trained. Moreover, quality doesn’t differentiate firms in a market where there are numerous competitors all with the same quality.

Both Canada and Australia are awash in good quality lawyers, so the Canadian Managing Partner’s so-called strategy has little chance of setting his firm apart in such a market; particularly when his own lawyers are easily poached by some firm willing to give them a higher draw.

Having great lawyers is now merely table stakes, in a market place that now boasts law companies, legal process outsourcers, lawyers on demand, massive in-house legal departments, business technology applications that are revolutionising office environments, a new generation of workers that are proving less enamoured with traditional law firm careers, and well-funded legal tech cool kids building applications that can already provide different forms of legal services.

With these changes and opportunities comes the ability for law firms to take a much more sophisticated approach to strategy so as to create real sustainable competitive advantage that not only brings value to clients, but also entices and retains talent.

A successful law firm strategy must be based on something more than just having a bunch of great lawyers who do good work for a bunch of great clients. These ideas will form the basis of future blogs.

About our Guest Blogger

Mitchell Kowalski is the Gowling WLG Visiting Professor in Legal Innovation at the University of Calgary Law School and a strategic advisor to in-house legal departments and law firms on the redesign of legal service delivery.

He is a Fastcase 50 Global Legal Innovator and the author of the critically-acclaimed books, The Great Legal Reformation: Notes from the Field, and Avoiding Extinction: Reimagining Legal Services for the 21st Century.

Twitter:  @mekowalski     |     Email:  mekowalski@kowalski.ca

Firm-Book; a snapshot of the risks of using Facebook in the modern practice

Monday, September 17, 2018

By Dugald Hamilton, Principal & Founder,  23LEGAL

Social media has become a part of our lives, whether we like it or not. Facebook posts of new babies, insta-blasts of the latest delectable cuisine you have just whipped up in your kitchen or a boomerang story of you and your friends enjoying a Friday night cocktail after a long week.

But what does this mean for your firm? Regardless of whether you use Facebook as part of your firm’s marketing strategy, this global phenomenon impacts your business. 

Facebook Terms and Conditions

You may be hard pressed to find someone who has read, and understood, the terms and conditions of Facebook (T&C’s). Yet we use these platforms daily (perhaps hourly in some cases) and blindly accept that these companies have our best interests at heart. 

The recent US elections and the large-scale data scraping undertaken by Cambridge Analytica [1] to attempt to manipulate the election should have sent alarm bells off across the Social Media world.  Yet we all still seem to use these platforms and probably haven’t given it another thought. [2]

These recent events should be seen as a chance to consider (or reconsider) whether it is worth the risk of using Facebook; both as a marketing tool but also simply accessing it on devices that also hosts your firm’s data and information.

We seem generally aware that when we are sharing data with Facebook, we give them the ability to access and use that data. Facebook call this “Provid[ing] a personalised experience for you”.  But is it really this simple?

Intellectual Property Licence

One key term which generally gets glossed over is what Facebook can do with your Intellectual Property. The T&C’s state:

you grant us [Facebook] a non-exclusive, transferable, sub-licensable, royalty-free and worldwide licence to host, use, distribute, modify, run, copy, publicly perform or display, translate and create derivative works of your content (consistent with your privacy and application settings).”

Notably you allow them to translate and create derivate works from your content. You need to consider whether any derivative content will be consistent with your branding? Will it comply with your legal and ethical requirements when it comes to advertising legal services?  What if it doesn’t?

Generally, Facebook will only respond to orders issued out of a Californian Court [3]. So, there is a risk that you could be subjected to obligations or orders here in Australia (e.g. injunctions or other court orders) which ultimately you may need to seek the assistance of a foreign court to allow you to comply with such order.

Now you can end the licence with Facebook by deleting the Content or your Account, but if you have shared it with others (or if Facebook has) the content will subsist until those people also delete it.

Access to Data

As a user of Facebook, also grant them access to a wide (and possibly exorbitant) range of data.  This can stem from simply the data you upload or submit knowingly to Facebook (e.g. a photo or blog post) but also encompasses many other forms of data including, for example, meta data [4], location settings, device settings, signals and unique identifiers. 

One major area of concern which needs active consideration is that that you grant Facebook access to your cameras, microphones and even where you move your mouse on your computer screen [5].  There are reasons why founder Mark Zuckerberg covers his own webcam and microphone on his laptop with tape. [6]

The risk for firms is that if Facebook (or any other hacker) is recording, storing and using this data, you potentially put yourself at risk of breaching privilege, court orders and causing irreparable harm to your clients and your firm.  The reputational damage of a breach alone can cause significant irreparable harm to your brand, and this is before you consider the on flow of that risk to you having to notify your clients and respond to any claims as a result of that breach.

If you turn your mind to how many staff members use Facebook on their work computer, work phone or on their personal devices in their office, around clients or on firm business, the risk is ever present.

Commercial Terms and Conditions

In addition to the T&C’s, when you access Facebook for business purposes you are also subject to Facebook’s Commercial Terms and Conditions (CT&C’s).

Relevantly, these CT&C’s include terms such as:

  • Warranties that:

    • you can bind your firm when you use it for business;

    • your access of Facebook complies with all applicable laws, rules and regulations – this may arguably include the laws of other jurisdictions;

  • an indemnity in favour of Facebook for any damages (including legal fees) related to any claim brought as a result of your use; and

  • Depending on the service you use, you also agree to a wide range of additional terms and conditions which themselves can have a significant impact on your firm. [7] 

Five Tips for what should you do to minimise risk

Facebook, when used well, can be an essential tool in your Firm’s marketing arsenal.  When things go wrong however you need to fully understand what you have signed up for, the risks that flow from that.

So, here’s five tips on what can you do today to start to address this risk:

  1. Read the T&C’s and CT&C’s (and all other terms and conditions) in full so that you fully understand what you are agreeing to by allowing Facebook to be used on your systems;

  2. Begin the discussion about what risk your firm is willing to accept and whether using Facebook is right for your business;

  3. Develop, implement and enforce an appropriate policy for use of Facebook (and all social media for that matter) within your firm, your office and amongst your staff;

  4. Consider whether you can outsource any of this risk; say for example taking out cyber insurance;

  5. Stay up to date and continually review these ongoing risks.

All risk management strategies are designed to ensure that you are prepared to respond meaningfully and quickly to any issues which arise in and around your business.  The best time to prepare for that is today.

Meet the author, Dugald Hamilton at the ALPMA Summit in September

Rise of the Machines – The Essential Guide to Future Law Firms (Panel Member)

You are the Biggest Risk … Goodbye … but it doesn’t have to end this way

Dugald Hamilton, Principal, 23LEGAL

[1] (87 Million users (~300,000 Australian users) had their data accessed)

[2] (If you are concerned that you may have been caught up in the Cambridge Analytica data breach you can check via this link https://www.facebook.com/help/1873665312923476?ref=shareable )

[3] Consumer law breaches can be resolved in Australia; however, you are unlikely to be a consumer if you are using or publishing on behalf of your firm

[4] Meta data is a set of data attaching to files which describes and gives information about the data.

[8] See for example, Facebook Platform Policy, Self-Serve Ad Terms, Advertising Policies, Facebook Business Tools Terms, Pages, Groups and Events Policy, Facebook Commerce Product Merchant Agreement, Developer Payment Terms, Custom Audiences Terms as an example.

About our Guest Blogger

Dugald founded 23LEGAL to deliver traditional dispute resolution, restructuring, insolvency and commercial legal services but with a modern-world approach.  Prior to founding 23LEGAL, he spent 10 years working in high-end boutique law firms across Brisbane, specialising in litigation, dispute resolution, restructuring and insolvency.

This extensive experience provided him with a strong foundation to be able to assist you with the most complex of problems and to work with you to resolve it in the best way possible.

As a self-professed tech geek, he is passionate about the intersection of technology and law which can provide new and novel solutions to age-old complex problems.  He recently co-hosted the Sydney leg of the inaugural Global Legal Hackathon in February 2018 and is excited about the current legal tech landscape and the advantages is can bring to modern practice.

LinkedIn (23LEGAL):  https://www.linkedin.com/company/23legal/                   

LinkedIn (personal): https://www.linkedin.com/in/dugald-hamilton-8595b640/

Facebook (23LEGAL): https://www.facebook.com/23legal/

Twitter: https://twitter.com/_23Legal

Five things you can do right now to future proof your legal practice

Monday, September 10, 2018

By Fiona McLay, Special Counsel,  Rankin Business Lawyers

If you feel like there is a lot of talk about innovation and disruption in the legal services, but very little actual change in the way lawyers and law firms are operating day-to-day on the coalface, you might be right.

What is changing?

There has been a 484% increase in the number of legal service technology patents globally in the last five years.  In 2017 investment in UK lawtech start-ups was reported to have reached £16m, with 87% of lawtech start-ups aimed at providing legal services to business.

Dramatic changes in processing power and connectivity are making new ways of working possible. New alternative legal service providers, improvements in AI options and increasingly accessible automation tools are bringing irreversible change to the legal market.  

Is it “phoney” change?

A 2018 online survey conducted by ALMPA and Centre for Legal Innovation in Australia found that only half of all respondents identified technology, innovation or disruption as directly impacting changes to their role in the last three years.  Aside from 10% who were not sure, 40% said their role had not changed.

Why are law firms and legal departments not adapting?  Surveyed attendees at the Legal Innovation & Tech Fest in Sydney in June 2018 revealed that the top three roadblocks to innovation were:

  1. Not enough time

  2. Too many ideas, no prioritisation

  3. Not enough money

Getting started – innovation with training wheels

If those roadblocks sound familiar, the good news is that there are often opportunities to implement effective, low-cost innovations in a short time frame. 

1.   Working smarter

Asking “What is the dumbest thing you do?” will turn up bottlenecks caused by manual or inefficient processes.  Look for small ways to eliminate an unnecessarily time-consuming process or double handling. 

Start with the capacity of your existing software.  Are there better ways to use it to avoid common time-suckers like:

  • manage collaboration on documents;

  • manage email;

  • auto-respond to routine requests;

  • use shared calendars to manage resources and avoid scheduling conflicts.

There is no need to reinvent the wheel and pour money into developing a customised, bespoke IT solution. Employ products already designed to solve problems commonly faced by law firms and legal departments which can be used “off the shelf”.

It may also be worth revisiting something that didn’t work very well a few years ago.  For instance, speech recognition products which enable dictation straight to screen have improved greatly.

2.   Legal project management

The Thought Leader Experiment underway in the US suggests that 46% of general counsel surveyed highly value legal project management by law firms.  Using legal project management facilitates more accurate scoping, pricing and resourcing of work. 

Comprehensive process improvement is expensive, but most law firms have detailed records of exactly how many billable units go into the work they do.  It does not require upfront financial investment to use historical billing data to better scope, price and resource repetitive work.

3.   Alternative legal service delivery

McKinsey estimates AI will automate 24% of what lawyers do.  Even if you don’t have the budget to use AI tools, you should get familiar with the capabilities. 

There are a number of reasonably-priced products specifically designed to help Australian lawyers and in-house counsel automate routine document production.  They include products that will:

  • produce comprehensive legal documents from information entered into a responsive series of questions;

  • allow you to automate your own documents using drag and drop elements (no coding required);

  • do an initial review of agreements by comparing them to similar agreements you have used in the past;

  • proof read to detect unused definitions, capitalisation and cross-referencing errors in documents;

  • update authorities cited in support of legal arguments.

4.   Talent management

A global survey by Peerpoint in May 2018 indicated that 81% of current lawyers believe that many young lawyers entering the profession will feel that undertaking the path to partnership is not worth it.  Consulting offers an alternative way for experienced lawyers to continue doing challenging work but with more flexibility and variety than the traditional law firm model. 

Employee engagement initiatives are essential in a disrupted industry.  It costs nothing to thank people for effort, publicly recognise employee contributions and involve employees in interesting projects.

There are lots of opportunities for law firms to use new technology to deliver better and targeted training.  Low cost products allow easy creation and sharing of videos and screen recordings. 

Reviewing data can also reveal a hidden need for training or improvement.  For instance, you can check if documents which are not approved precedents are being continually copied and used as a template.

Although it is expensive to develop useful workflows, checklists and templates for particular work types, this is another area where the quality of the available products has improved significantly.  The investment enables junior staff to progress matters more effectively and capitalises on the expertise of senior team members.

5.   Having an authentic and credible digital presence

If you want to be able to engage with clients online you need to adapt to the continuing trend toward mobile devices and video content.  You can establish an active digital presence by regularly engaging with social media platforms like LinkedIn, Twitter and Facebook without having to revamp the firm’s entire website.  There is no budget required to regularly share useful information with your network. 

You will need to be able to present complex information visually if you want to compete in an increasingly busy online space.  

“Ready.  Fire.  Aim”

Don’t let hype about Lawtech blind you to the impact of new tools and new ways of working on the future of the legal profession. 

Look for ways to begin a digital transformation requiring little or no capital outlay that will improve client satisfaction, the way your law firm or law department works, and the bottom line. 

Meet the author, Fiona McLay at the ALPMA Summit in September

 Rise of the Machines – The Essential Guide to Future Law Firms – Panel Discussion

Fiona McLay, Special Counsel, Rankin Business Lawyers

Snapshot of the 5 Lawtech Trends You Should Know About: A Guide for Non Geeks

About our Guest Blogger

Fiona McLay is an experienced litigator who acts for individuals and small to medium sized companies in a wide range of commercial litigation matters. 

At Rankin & Co Business Lawyers she helps people resolve disputes, both in their business and personal lives, in a way that minimises the expense and disruption that those disputes can cause.   

She has implemented practice management tools which improved functionality like customisable automation and paper-lite processes.  She is excited about the way technology is helping us to work more efficiently and focus on delivering great service. 

Fiona regularly shares useful info on LinkedIn, @BreakupBusiness on Twitter or @FionaMcLayLawyer on Facebook.

Your super should not be “set and forget” – it’s time to make a statement

Monday, September 03, 2018

By Andrew Proebstl, Chief Executive, legalsuper

With superannuation fund members across Australia receiving their FY2018 annual member statement, now is the perfect time to reflect, review your fund’s performance and make decisions about what you can do to improve your future super outcomes.

Your super account investment balance and working out how much you’ll need for retirement

Understandably, the first thing most people look at when they receive their annual super statement is how much money they have in their account.

This amount will be shown on your statement. Ideally, your statement will not only show your balance at the end of 2017-18 but also your balance at the end of previous financial years. That way, you can see, at-a-glance, the changes in your balance over time.

To help you forecast what your balance total could be upon retirement, your super fund should provide an online retirement planner calculator.  If they don’t, ASIC’s MONEYSMART website provides such a calculator.

Once you have determined your forecast balance using a calculator, the next step is to compare it to the Association of Superannuation Funds of Australia (ASFA) Retirement Standard.

The ASFA Retirement Standard benchmarks, on a quarterly basis, the annual budget needed by Australians to fund either a “comfortable” or “modest” standard of living in the post-work years.

The latest standard, issued in March 2018, states that, in retirement, a single person aged 65 will need $27,368 per annum to lead a “modest” lifestyle and $42,764 to lead a “comfortable” lifestyle. Couples will need $39,353 and $60,264 respectively. (These figures assume the retiree/s own their home outright and are relatively healthy).

Should you be topping up your super?

If your analysis shows that you could fall short of your desired retirement balance target, you can consider making additional voluntary contributions to your super.

Your super balance includes both compulsory contributions paid by your employer (currently 9.5 per cent of your salary pursuant to the Superannuation Guarantee) and any additional voluntary contributions you have chosen to make.

If your Super Guarantee contributions are less than $25,000 per financial year, then you can choose to make additional voluntary contributions to super up to the $25,000 limit. These additional contributions (known as concessional contributions) are taxed at a concession tax rate of 15 per cent compared to your marginal tax rate, which in most cases will be higher.

If you decide to pay voluntary concessional contributions it is important to first check with your super fund to ensure these additional contributions do not lead to you exceeding the $25,000 contribution limit.  Contributions in excess of this limit can be taxed at a higher rate.

As well as making voluntary concessional contributions up to the $25,000 cap, employees can also make what are called non-concessional (after-tax) contributions. While non-concessional contributions are taxed differently to concessional contributions, these types of contributions also carry attractive taxation advantages. Your super fund can provide further information.

The current after-tax non-concessional contribution cap is $100,000 for each financial year. However, people under the age of 65 on 1 July in a financial year can contribute in excess of the $100,000 cap up to an amount of $300,000 in a single financial year pursuant to the “bring-forward rule”. This can be a valuable and significant way to boost your savings for retirement.

As the Australian Securities and Investment Commission (ASIC) MONEYSMART website says: “If you can spare the money, you can really boost your super savings by making after-tax contributions. You will usually save more by investing through super than by investing in the same assets outside super.”

Investment options through super

One other significant aspect to consider when reviewing your current and future balance is the investment option in which your balance is invested. Your investment option will be shown on your member statement.

Most members are invested in their funds’ ‘default’ investment option. Speak with your fund to determine whether it is time to make a change. Often, younger members choose “aggressive” or “assertive” options (e.g. more highly invested in shares and property) while those nearing or in retirement choose a “balanced” or “conservative” approach (e.g. more highly invested in fixed interest and cash).

Insurance types and levels

Just as there are benefits in reviewing your investment options, it is also worthwhile reviewing each year the types and levels of insurance. Your circumstances will change and the appropriate level of death, disability (TPD) and/or income protection insurance for you and your family will therefore also change too.

Also, as part of looking after your dependents, it is well worth checking to ensure you have nominated a beneficiary for your super in the event that you die, and that you have indicated whether this nomination is “binding” or “non-binding”.

Fees and charges

There has rightfully been a spotlight in the media recently on the fees and charges some super funds charge.

Most super funds will have competitive and fair fees and charges and will readily be able to explain the basis for the levels at which these are set.

To help you evaluate the reasonableness of the fees and charges described in your annual member statement, the ASIC MONEYSMART website provides an excellent introduction to this.

Check your contact details and contributions

Each time you receive your member statement you should always check your contact details to ensure they are up-to-date, complete and correct.

At the same time, make sure that your employer has contributed the full amount required under the Superannuation Guarantee. Sadly, some employers, either through deliberate omission or oversight, fail in this regard. If you are not sure how to review your Superannuation Guarantee contributions (and other contributions such as your salary sacrifice contributions), your super fund will be able to assist.

Your fund’s performance

With superannuation being the bedrock for retirement for almost all Australians, people are entitled to know, and should want to know, how well their fund has performed compared to other super funds.

One independent superannuation ratings agency is SuperRatings , which reports that in 2017-18, the median MySuper investment option returned 8.7 per cent. By comparison, legalsuper returned an impressive 9.4 per cent during this period.

As part of your review of your annual member statement it is well worth checking to see if the statement provides investment performance information for your fund, including how your fund performed compared to other funds.

If your fund does not provide this information, or if they have not met or exceeded the median performance level, ask them why. If you are not satisfied with their response, it may very well be time to think about changing super funds.  Even small differences in return can make a material difference over time.

About our Guest Blogger

Andrew Proebstl is chief executive of legalsuper; Australia’s super fund for the legal community.  Qualifying as a Chartered Accountant while working with Arthur Andersen, Andrew has broad experience across the superannuation industry with fund administrators, investment managers, custodians and other superannuation funds.

Andrew is a member of the Policy Committee and former Director of the Australian Institute of Superannuation Trustees. He is also a former member of the Victorian Executive of the Associations of Superannuation Funds of Australia.  He regularly presents at superannuation industry conferences and writes regular superannuation columns for law societies across Australia.  He can be contacted on ph 03 9602 0101 or via aproebstl@legalsuper.com.au

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