Getting technical

As we all know, the Legal Services Act is changing the way many lawyers do business. The Act will enable new forms of legal practice to develop '“ both legal disciplinary practices (LDPs) and alternative business structures (ABSs) '“ which will permit external ownership of legal businesses. There will be a rise in multidisciplinary practices (MDPs) providing legal and other services for businesses utilising strong corporate identities and brand names, and an upsurge in alliances for smaller legal practices and chambers who wish to benefit from the revolution in a more regional way.

Consumer first

The introduction of the Legal Services Act and its subsequent organisation structures will obviously have important implications for barristers. Currently, there are restrictions on the type of business structures in which barristers can operate and the legal services that can be provided. For example, the Code of Conduct forbids barristers from supplying legal services to the public through any organisation such as a partnership '“ except in the case of barristers employed by solicitors, who may provide legal services to the firm's clients. Will we see this change? The answer is most likely yes, given that the whole ethos surrounding the Legal Services Act is to put the consumer at the heart of the operation. Consumers respond to brands and brands have the ability to transcend structures, organisations and nations.

The Act also facilitates the ability to attract capital for these businesses in a carefully regulated environment. However, the regulatory framework of the legal services will need to be reviewed and it will probably need to change dramatically if it is to be successful. Quite how the regulations will work and be implemented remains to be seen. There are many discussions taking place which we will see the outcome of over time. However, one thing we can be sure of is that no matter what the eventual business structures resemble or what regulatory framework is in place, technology will be needed to implement them.

Challenges

So, what challenges will the new order face? Brutally put, you will be asked to deliver more for less. It is envisaged that Legal

Services Commission (LSC) schemes will continue to drive the market towards value-based pricing. There will therefore be a commercial need to use technology to automate as much of the legal process as possible to preserve margins. Larger corporations will look to increase their own in-house legal departments where possible, recruiting both solicitors and barristers as they see fit. However, these teams will not be exempt from the pervasive requirement to show productivity levels and value contribution and so will require automation too.

The introduction of ABSs and MDPs will increase competition across the board. Larger organisations which have strong corporate brand identities will leverage these to best effect when competing nationally and globally. Other alliances, partnerships and legal network communities will combine their resources to allow them to compete at regional and local levels or within niche markets. New market entrants such as retailers or insurers which are masters in automation and customer service will seek out market share.

The ABSs and MDPs will need to decide if they want to be partners or competition to these new kids on the block.

There is also another new kind of entrant to the market, one that we are already seeing the emergence of: the internet/virtual firm or chambers which will meet the demands of the online community.

Other challenges will centre around the growing requirements for compliance and risk management. Anti-money laundering compliance, the need to support e-disclosure, the ever-increasing governance from the LSC and the associated reporting, and the need to have full audit trails of all information, history and transactions will become an increasingly important part of everyday life, and therefore chambers need to consider their impact on both them and their clients.

The legal services market is becoming increasingly client-centric, in part due to the all pervasive nature of the internet and our penchant for 24/7 access to services. The implementation of Direct Access may facilitate this further but, as yet, it is still in the early stages of development.

Be noticed

However, that's not to say that chambers should not be considering the bigger picture now. In a mass market customers will find someone else if they can't find you. Therefore your chambers needs a presence, be it your own website, via alliances and networks or through the efforts of technology suppliers. You will need to be noticed and to promote your talents to the wider world. Self service, at least to some degree, will be an essential strategy to win business and manage cost.

Marketing will be most effective when targeted at communities; chambers will need to identify the communities they wish to pursue and then move to understand them and their requirements. As a direct result we will see more communities being built. Job sharing and collaboration will become the norm, knowledge will be shared and client care and service level agreements will become increasingly important.

The role of technology

Regardless of the final structure of chambers, it is certain that technology will be the key to delivering the nirvana.

Both law firms and chambers will need to become network enabled. They will need the ability to interface their businesses quickly to each other and anyone else in the value chain. Clients will require, and to a certain extent demand, a complete end-to-end service. This will be particularly prevalent if chambers choose to partner with players such as insurers, banks and other retail brands.

For this to happen effectively we need to consider multi-channel delivery models. While disparate by nature they must retain a high degree of consistency of service and brand. For example, a client may wish to begin the transaction on the web via a self service channel. They may then encounter an issue and need to complete their part of the process by talking to someone on an information helpline. In collaboration, firms and chambers will need to cater for these requirements.

Reducing client costs while retaining high levels of client care will mean that chambers and law firms will have to work collaboratively. They will need to draw on the client themselves to complete some of the tasks required to optimise the value of their services and possibly look to include value-added content services where appropriate to enrich the client experience.

They will also need to track and monitor the client's behaviour in order to build a profile of client behaviour and needs. Harnessing those profiles will then give them the ability to market other services that might be appropriate to that client. Proactive marketing will become essential in identifying additional revenue streams and in retaining loyal clients.

Online communities

Technology also has a role to play when looking at community building. The creation of online communities and networks along with the innovations of Wikis will provide an environment that firms and chambers can flourish. The creation of communities (chambers and firms) together with the automation of processes between them such as appointment generation, time recording, billing and knowledge sharing will serve to increase client care, reduce costs and foster strong working relationships.

Finally, for chambers the advent of new business structures brings a focus onto operating as a business, monitoring the success or otherwise of that business and reporting back to all interested parties.

There will be a requirement for business analytics and real-time balanced scorecard KPI reporting. This will be necessary for the value chain as a whole as well as the individual businesses that comprise that chain.

Emanating from the need for business analytics will be the requirement for predictive analytics based on reporting. Predictive analytics allows for the review of the value chain and subsequent analysis and remodelling. Ultimately, it will enable improvements to the existing chain or new chains to be created. Business analytics reporting will also allow for risk metrics to be set and monitored, for example, clients without satisfactory ID evidence, unallocated credits in office/suspense accounts, and matters that are flagged as high risk. Finally, the reporting mechanism can be aligned to the LSC rules to enable faster payment '“ something everyone in the supply chain will want!