denotes premium content | Feb 6 2012 FD Legal archive
Volume 2 Issue 1
Editor's Letter
In this month’s profile feature, Claire Hafner, finance director at Eversheds, raises two particularly pertinent issues for finance professionals in law firms today. The first is that the firm’s IT department reports into Hafner because “so much of what finance does is IT related”. With the emergence of the practice-management system, the link between IT and finance has become more firmly entrenched. But it is still only a few years ago that I first remember the divisions being formally tied in Rosemary Kind’s combined role of IT and finance manager at Shoosmiths. I remember at the time thinking it was an unusual decision by the firm to have one manager responsible for the two seemingly different functions, but as the years have rapidly passed, it seems more and more typical.
The second point Hafner raises is on the emergence of e-billing in the UK. Although still a new phenomenon among UK firms, it seems inevitable that this will be a growing discipline in the future, as clients increasingly demand and expect their law-firm clients to comply with their newly purchased billing systems. For IT and finance teams in the legal profession, e-billing will be a joint challenge: IT professionals will have to set up the systems to cope with the new requirements; finance professionals will have to bring those into line with existing billing mechanisms as well as get the fee earners on side to new e-billing processes. This latter task may prove to be the biggest obstacle of all – we all know how difficult partners can be when it comes to incorporating change into their working lives. And, with e-billing, it’s seems far from a welcome change right now. This month’s cover story touches on a variety of views on electronic invoice management – while it appears that some form of e-billing is here to stay, few are enthused about the practicalities, at least not for the present.
The really big financial news story of this month, though, has to be the troubles of Northern Rock. The latest development (as we go to press on 18 September), is that shares in the bank have recovered some ground. This follows Chancellor Alistair Darling's pledge that the Bank of England would guarantee all existing deposits. But this follows a week of plunging share prices, with queues of customers waiting at branches to withdraw their savings. There was even one report of a couple blocking the exit of a branch manager, because he said the bank would be unable to hand over their £1m of savings that day. What the story perhaps demonstrates more than anything, is that financial profitability and sustained success has as much to do with perception and reputation as it does the underlying financials. After all, Northern Rock might not have been having the best year, but its business model has been fundamentally solid since its launch as Northern Rock in 1965. In one week, the bank was reduced to seemingly desperate pleas for public calm from the chancellor; it just goes to show how easily trust and reputation can be irreparably damaged.
Banks may not be law firms but any firm that thinks its profitability is secure, no matter what (perhaps partly because it has been in business for so long), should look at an established bank like Northern Rock and take note.
Caroline Poynton
Editor
Features
Reaping the benefits
In 2007, PIFC Consulting conducted a 'Legal Sector HR and Employee Benefits Survey'. In the first of two articles, these survey results are examined to establish how firms can maximise their considerable investment in employee benefits.
Q&A: Money Laundering Regulations 2007
Simon Moore, partner at Field Fisher Waterhouse LLP tells Caroline Poynton why and how the forthcoming Money Laundering Regulations 2007 will impact your firm's client-vetting rules.
Financial performance: Are your partners measuring up?
Performnace measurement is often considered an HR discipline, but the financials are the key to most clearly establishing whether a partner or practice group is really up to scratch.
Financial analysis: Measuring the true profitability of legal work
Practical considerations for finance professionals in the legal profession.
Financial Management: Getting close to the figures
The legal landscape has changed rapidly over the past decade, but further overhaul is likely with the impending Legal Services Bill. Gaining competetive advantage in an evolving landscape will mean getting closer to the finances at the heart of the firm.
Taking the plunge...
On the other side of the pond, many US firms have already taken the plunge, but for UK firms, e-billing is still a new and daunting propostion. One thing is for sure, though, firms need to act now if they are going to be ready for the growth of e-billing in the months and years to come.
Profile - Claire Hafner
Claire Hafner took up the position of finance director at Eversheds in 2005. She has been instrumental in increasing profitability at the firm and driving Eversheds towards becoming a more commercialised operation. Hafner talks to FD Legal about her role.
Regulars
The Last Word: Client due diligence
As the previous Q&A has shown, the Money Laundering Regulations 2007 will require a far more thorough approach to working with clients. After all, while your firm's clients are your business bread and butter, they also represent your firm's greatest exposure to the risk of damaging claims.
Thought Leader
OWNERSHIP OF the risk-management issue is critical. There has to be someone in your firm who is in charge of managing risk. Appointment of a full-time risk manager has, until recently, been the preserve of a handful of the largest law firms, mainly in the top ten, but there has been a notable increase in recruitment of full-time risk managers in smaller firms in recent times, not even confined to the top 100.
