Experts in Business Advisory for the Legal Sector...

Living the Eye Life – August 2021

Does anybody know any good legal cashiers? Fortunately for me, I do as I get to work with many of them on a daily basis across the country. And if you are reading this article, the chances are you are one of the good ones too, as you probably wouldn’t be reading this if you didn’t take compliance seriously. But trying to find these gems is proving really difficult for many firms. And from my own personal experience, this is because the best ones tend to be fiercely loyal to their employers. And this is despite them being overworked and in many cases underpaid. The stamp duty holiday placed many of them under extreme pressure with a workload never experienced previously. They have been absolute superstars.

When I mention this to owners and practice managers, some of them look at me like I have gone mad. Why would they want to invest in their finance department they say? Well from what I see there is a direct correlation between successful, profitable firms and those firms with tight control over their finances. Too many firms believe the legal cashiers they hire are there for one reason only. To stay on top of the banking and to post monies on to ledgers in accordance with the Accounts Rules. This will then hopefully result in a clean AR1 and no report to the SRA for one more year. This is so short-sighted and not what your PII insurers would expect to see.

If you ask the same owners if their accounts department produce budgets, monthly management accounts and cash flow forecasts their eyes glaze over. If you ask the finance team why this is the case, they will more often than not say they don’t have the time or the knowledge to do so. This is a quite ridiculous state of affairs. No other profession would operate in such a fashion – it’s a bit like flying an aeroplane whilst blindfolded. It only works when the cash is rolling in. It comes to a spectacular end when the cash starts drying up and in many cases, it’s too late to do anything about it.

So what can firms do to meet the challenges that all firms are now facing as we continue to battle the pandemic?  Well, there is no magic wand here and it will require owners to have a hard look at the way they have previously operated. But there are a couple of things they can do immediately.

Invest in their people

The first thing is to begin investing in their finance people. Many cashiers I talk to want to improve their skills and knowledge but are provided with limited opportunities to do so. For example, many of them take a day’s leave to attend a training course and some even pay for the course themselves. What an absurd situation. The finance team is as important as everybody else in the firm. They also need help and support on an ongoing basis. Given the opportunity and a little guidance, they could be producing all the financial reports a business needs to operate efficiently and profitably. They may need some additional resources to give them the time they need to learn these new skills. But what a great investment that will be in the long run.

Revisit your technology

The pandemic has certainly opened the eyes of many firms to the benefits of remote working. There are a number of risks attached to this but in many ways, it can make firms more efficient. But to do it efficiently firms need to make sure they have the right technology in place. The case management and accounts packages that are available today way surpass anything that used to exist only 5 years ago. What’s even better is they are cheaper to operate, much more secure and relatively easy to transfer to. There is really not much point in constantly trying to upgrade old and antiquated systems. One day they will stop working or you will be unable to find anybody to support them. It will also be hard to employ people to use them because they will only be familiar with the new technology. Hybrid working is not just something you hear on the news. It is a real thing and will be with us forever. The sooner firms realise this the better. They can then put the right technology and the appropriate systems and controls in place to help them survive and prosper. We have no idea as to how many times we may get locked down again in the future – hopefully never but it is better to be prepared for the worst-case scenario.

I appreciate that these are difficult conversations for legal cashiers to have with their superiors. I find myself having to raise these issues on their behalf as part of our compliance review programs. Because ultimately a well-run firm is much less likely to make mistakes and get into trouble with the regulator. Being able to demonstrate that you are serious about compliance by empowering the finance team will assist firms in ensuring that fee earners take it seriously too. Everyone understands that the fee earners job is to bring in revenue. But only the little gems in the finance team can ensure that the money is safely accounted for and used wisely. That is why they are so valuable and should not be taken for granted. And that explains why the good ones are so difficult to find. They are like gold dust!