The legal industry is going through a period of intense transformation - make sure your firm is up to date
ARTICLE BY DAVID MARTIN FROM ITQ
Legal Services Act 2007
The legal industry is going through a period of intense transformation, with profit margins under ever-increasing pressure from clients, competitors and legislators. The Legal Services Act is driving the creation of new entrants and services into the market, with big brands such as the AA, the Co-operative Group and BT now able to own and run legal companies for the first time.
The legal system in England and Wales hadn’t changed for 300 years, the Legal Services Act 2007 introduced a new level of competition within the legal services industry that will increase and result in wider access to justice. With new entrants to the market, the changes will also provide wider access to a commercial environment that is more accustomed to developing cost-effective legal services.
The legal profession has specialist workflows, a dependency on paper and unique information processes, which makes its needs very specific. Firms are obliged to keep documents for certain periods of time and are beholden to strict regulations around data protection and storage.
Failure to correctly manage data can lead to heavy fines for non-compliance, reputational loss and legal action from clients. New European data protection laws introduced in March 2015 mean that companies found in breach of users' personal data rights will also risk heavy fines.
However, by allowing new powerful entrants to the market smaller high-street law firms will be exposed to competition that is already well established with greater capabilities and existing retail presence. It seems that outdated and outmoded business practices will be squeezed out by the entry of new providers, and so traditional firms may use the Act as a catalyst for change to the way they operate.
An obvious sign of change will be the disappearance of clerks wheeling in barrow loads of papers; all documents will be available, on computer through the Digital Case System, to all members of the court. The present, numerous, bundles of documents will be replaced by a single electronic bundle that can be displayed on a large screen in court. The government is pushing these changes by investing £700+ million in the digital system and judges are encouraging documents to be presented in digital form.
It therefore follows that both new providers and traditional firms will have to be prepared to present their documentation in the way that will be expected. This will mean having the right systems and equipment to digitise potentially large volumes of documents.
Archiving of documents is already a common office function indexing, archiving and ready access to information is a key requirement but it is not unusual for firms to encounter problems with hard copy document storage & retrieval. Many solicitors will be familiar with a story of a missing paper file, the content of which is key to the matter in hand and the implications of non-accessibility are serious.
Large firms may have the scale, volume of work and profitability to create their own technology-led solution to their file archiving requirements. However, many smaller firms continue to rely on the conventional storage and retrieval services that were created before the technology and digital revolution took place The actual cost of these archives is often not fully appreciated, both in terms of physical office space or the resource spent filing, searching for and retrieving documents. Physical archives are also at greater risk of being destroyed or damaged. To move these smaller firms on may require guidance in order to take advantage of modern technology giving them access to the same functionality, efficiency and cost savings of larger firms.
Whilst a paperless society is unlikely ever to exist the current initiative will boost the uptake and acceptance of digital documents and firms need to be ready; either with systems to incorporate documents produced digitally or from scanned originals to then create ‘digital bundles’ to present in court.
For more general applications within a legal practice, whatever the reason for requiring the data, instant access to the information and knowledge contained within a file would be an ideal requirement for many firms. Not only would this save time and minimise risk but it would also reduce costs, increase profitability and allow a more efficient service to clients. The latter being an important differentiator in competitive times.
The digital age now allows scanning and imaging of files within the firm with the latest equipment and software. Whilst all the options available can seem daunting, with right advice leading to the right solution many tasks can be simplified and automated.
A digital system will mean you need not be subjected to cost of on-site or, worse, off-site storage with the ongoing retrieval costs. You will no longer have to wait for files to be collected and sent back to your offices. Even when the boxes of hard copy data are located and delivered back to the office someone still has to go through the box, searching files and papers to find the required, relevant piece of information. This compared to the touch of a button illustrates the potential for massive time and cost savings and data security.
Many companies that have made the switch to digitisation still believe they are legally bound to archive hard copies when many regulators accept electronic records that are created and stored in-house. These records will also be legally admissible in court if scanned to British Standard BS10008:2008. Firms that keep paper copies 'just in case', need to be aware that keeping records beyond the legal requirement is not compliant with the Data Protection Act and exposes their businesses to legal liability.