Going equipped

Whilst there is no quick fix or easy answer to combat the effects of the economic downturn, now is the time to have a look at the business side of your practice. Below are a few simple things that firms should be looking at.

The basics

• Have regular partnership meetings, report on and discuss about financial planning.
• In terms of the firm’s strategic planning you should be looking three months, six months, 12 months and 18 months ahead.
• Make sure that you carry out a monthly cash flow analysis and projection:
• • outgoings – allocate costs for next few months;
  • make sure you know how your cash flow looks at the end of January 2009 when the half year’s income tax is payable;
  • fee incomes – diary when fees will be coming in;
  • make realistic short term/long term projections (if you anticipate periods when the cash flow is weak, it should be measured against your cash reserves).
• Pursue outstanding accounts and debit balances.

Managing the business

• Identify where savings can be made such as premises, staff, energy, telephones, post, insurance and vehicles.
• Compare your current turnover, costs and profit levels of your firm with the equivalent figures for this time last year.
• Identify profitable and non-profitable areas of the business and consider refocusing the practice. Determine the resources and skills required to take advantage of any opportunity.
• Review your business investment strategy – re-examine any plans for refurbishing premises or upgrading IT, whilst looking for ways to streamline processes, staff training and marketing.
• In some cases a more radical option may be to consider sale and leaseback of premises or merging with another practice. Details on where to access specialist advisers are available from the Society’s Professional Practice Department.

Financial management

• Review your terms of engagement to ensure optimisation of arrangements for client fee payment.
• Review your internal financial management systems, for example credit control and invoicing.
• Discuss financial planning strategies/tax management strategies with your accountants.
• Discuss financial planning strategies with your bankers: deferred payment/interest only on fixed loans; additional facilities to assist cash flow; better terms.

Developing the client base

• Maintain customer service levels and complaint handling procedures.
• Look at cross-selling opportunities and marketing activities.
• If looking at new areas of work, make sure that your staff have the appropriate skills to deal with it.

Support from the Society

Professional Practice team

The Society’s Professional Practice team has a wealth of knowledge and experience and is available to assist members with both practical and ethical questions. The team is closely monitoring the current situation and is regularly updating its advice.

For advice, please contact:

Bruce Ritchie: 0131 476 8124

Fiona Robb: 0131 226 8883

Stella McCraw: 0131 476 8176

Education and training

The Society’s Education and Training Department is also providing assistance and support to trainees and their employers.

For advice, please contact: the department on 0131 476 8105 and ask for Katie Meanley.

New team: Regulation Liaison

On 1 October, the Society established a new Regulation Liaison team to provide information to members about how the new Scottish Legal Complaints Commission will handle complaints.

For advice please contact:

Mary McGowan or Laura Malcolm in the Regulation Liaison team on 0131 476 8168.

Employment

The Society continues to monitor contraction, redundancies and re-employment levels in the profession. The Society launched its new recruitment website on 7 October. The new site aims to provide the profession with up-to-date information on legal job opportunities. It can be found at www.lawscotjobs.co.uk, and accessed through the Society’s website as well as the Journal Online website.

LawCare

All Society members and their staff also have free access to the professional and confidential counselling/advice services of LawCare on 0800 279 6869 or www.lawcare.org.uk .