Industry analysis from Intelligent Office UK: Change for the better
This article was also featured as an industry analysis in the March 2016 issue of Briefing. To read the issue in full, download Briefing.
The way law firms deliver their services has never been under more scrutiny – all in the name of increasing revenue, growing market share and improving profitability. From reengineering process to pricing strategies, from captives to outsourcing, the one constant is change.
Firms clearly see the need to change the way they support their fee earners and clients. The reasons are many and varied – but one imperative is to free up fee earners to focus on generating income or winning new business.
A lawyer spending time on non-chargeable ‘admin’ is a double cost to the business. Not only is the firm paying a high price for completing an administrative task, it's also losing out on time the lawyer could be recording.
Let’s do the maths: 200 fee earners at an average charge-out rate of £200 an hour. Converting just one hour a week per fee earner from admin to chargeable time would add at least £2m of additional revenue.
The same’s true of secretarial time – where salaries are on average 25% higher than general administrative resource. The secretarial timerecording data we’ve collected and analysed from a number of UK 200 firms consistently shows that around two-thirds of all secretarial time is spent on document production, file management and general administration. These activities could be delivered at the same quality, or even better, often more flexibly – and at lower cost.
Put the right support structure in place, and fee earners are free to focus on what they do best, knowing that administrative and secretarial tasks will be performed by the right people, at the right time and in the right way. The service the fee earner receives will be better. The end result for clients is improved. And the firm can focus on growing revenue and profitability.
The introduction of a new structure for legal support services can also serve as a Trojan horse for other process changes, often in areas the firm may have wanted to address before, but failed to get sufficient traction. Reducing paper is one example. It’s a goal for most firms – although, as yet, one few have managed successfully.
The benefits of ‘paper-lite’ working are compelling. Cost is an obvious one. Less paper means less storage on- and offsite, which in turn frees up valuable office space. There are also significant hidden costs associated with a paperdependant way of working. The ability to work flexibly is also driving firms to develop agile working strategies. They rely not on bundles of paper but on systems and processes. And finally, there’s a risk and compliance benefit to moving away from paper. A single electronic file is easier to find. It's an improvement on its paper equivalent.
Law firms have a cultural attachment to paper. In order to move lawyers from paper to electronic files, we help address the reasons not to change and make it easier for them to change.
Hard-copy filing was still very much the norm when Intelligent Office started working with Capsticks, for example. Average storage space per fee earner stood at 14 metres. The firm had already outsourced document production, reprographics, general administration and mail services (to Intelligent Office). Its challenge was now to make the e-file the audit file.
The first task was to identify the barriers to change and the potential early adopters in a practice team. With a pilot group of fee earners in place, the IT team helped to identify the technology requirements.
Process improvements were mapped out to help bring about change, scanning post as it arrives each day – and filing it straight into the case management system. Our local administrative floor support team then notifies the fee earner that newly scanned mail is in the system.
The pilot provided proof of concept and enabled roll out of these processes to all fee earners in the department. Then began a pilot with the next practice team, and so it went on.
The audit file was the e-file within two years. The firm no longer opens any new client or matter files in hard copy. Files are easy to access – and onsite storage space has been cut to just two metres per fee earner.
Since then the firm has also implemented a clear-desk policy. The onsite floor support team monitors desks every night to ensure the policy is being followed – something that would have been impossible to enforce before the firm’s support services were outsourced.
Since Intelligent Office started working with Capsticks, the firm has grown to around 280 fee earners and annual revenue of almost £40m. The firm has also seen financial benefits, such as a 60% reduction in the cost of our service per fee earner. Reducing the amount of paper the firm needs to use is just one operational improvement the partnership has achieved.
Change is hard to bring about, but when firms grasp the nettle and pursue operational improvements and efficiencies, they may put themselves one step ahead of the competition.