Overheads out

Woolley & Co is one law firm that has committed itself to fully outsourcing business-support functions, including marketing efforts and legal software. While regulatory compliance could be considered a challenge, the removal of expensive overheads means profits have steadily risen for the past five years.

By Andrew Wooley, managing partner, Wooley & Co

Divorce rates might be going down, but at our family specialist solicitors Woolley & Co, cases per month are increasing. While many firms are reining in expansion or even laying people off, we are taking on more fee-earners. And at a time when law firms are carefully examining their costs, working methods and efficiency in the wake of the Legal Services Act, we have already pared down overheads and layers of bureaucracy to a bare minimum. We are bucking not just one trend, but several. In practice, however, we have actually been doing so, rather successfully, for the past 13 years. We have done this using a technology-led ‘virtual’ business model that has now been enthusiastically embraced by some 17 fee-earners.

In 1996 I decided to establish a different kind of law firm, avoiding expensive town centre locations and stripping away unnecessary layers of secretarial and junior staff that come between clients and their lawyers. From an IT perspective I was a very early adopter, back in the 1990s, of what was, at the time, a nascent branch of the IT industry variously known since then as application service provision (ASP), managed service provision, software as a service (SaaS) and cloud computing. Using the latest technology I saw no reason why the high overheads of a ‘bricks and mortar’ operation, with its associated people, IT and running costs, could not be swept away and replaced by direct client to lawyer communications. My mantra was to remove overheads and outsource just about everything – except legal expertise.

I tend to take a fairly simplistic view. I had had enough of seeing the top line on the accounts being huge and the bottom line being small because of all the costs involved in having a high-street presence. Second, I saw that solicitors did not need the armies of secretaries that shielded us from using technology ourselves. Third, I saw that e-mail was a far more streamlined and a cheaper way of communicating. I reckon it takes about the same amount of time to write and check an e-mail as it does to dictate a letter, but it is instant and low cost. Letters are ludicrously expensive.

I then left the ‘tried and tested’ world of the high-street practice and set up on my own, specialising in divorce and family law. Avoiding having an office really seemed like rocket science in 1996. I really was out on my own with my thinking. Until the turn of the century I admit I struggled to persuade others to join. Solicitors didn’t like it but clients loved it. I was incredibly busy. Clients really appreciated I was on the end of the phone, and if they left a voicemail it would be me that responded.

Changing with the times

In the early years a PC, e-mail and internet connection was all that was needed, and accounts were a manual operation. The whole concept began to take off in the early 2000s. As Woolley & Co started to grow more wide-ranging, robust systems were needed. By the time we were a force of nine or ten solicitors, I needed to manage risk, have more systems to do so and demonstrate that those systems were in place. Rather than employ anyone, however, the firm looked at ways of using legal software without bringing the IT function and its associated overheads in-house. Initially Osprey Pracctice mail messenger and case management was chosen, primarily because the software was provided as service over the internet. To be honest we struggled with it for a few years and then decided to take advice and review the legal software market properly.

The Law Society’s software solutions guide and help from the National Business2Business Centre at Warwick University proved useful starting places. A detailed specification of requirements was drawn up, and a fairly exhaustive review of solutions followed. SOS Connect was selected as the most appropriate for our needs. This was a very big decision. Features such as the integration with Outlook, automated handling of e-mail and the ability to personalise case-management processes were particularly attractive and ticked all the boxes. When choosing SOS it was very important that I felt very comfortable and safe with the company.

SOS Connect offers a flexible and highly integrated case, document and practice management solution enabling users to adhere to common business processes and best practices, even in a business as widely dispersed as ours. Contracts were concluded in 2007 and the solution rolled out during early 2008.

After a few months, however, Woolley & Co outgrew the original hosted server provider as the use of SOS Connect increased. After reviewing several more providers. dynamic managed services provider e-know.net, based in Telford, Shropshire, was chosen to host the IT infrastructure. Established for nearly 10 years, e-know.net has a strong proven record in the legal industry. The move gave us more control over e-mail and software generally, as well as the ability to develop our own intranet. e-know.net offers a complete ‘one stop shop’ for IT needs, which means that I can concentrate on running the business. Operating a huge server farm, the business provides us not only with server space but also 24/7/365 technical support for our hosted desktop and applications. And as the service is charged on a per user, per month basis, we always know our IT spend will be in line with the business.

In addition to SOS Connect software, Smartstamp, Laserforms, Microsoft Office Professional 2007, GoldFax, Live Communications Server, Local Anti-Virus, Micrososft Exchange email, SQL and Citrix for 30 users are also hosted. Users access the service through e-know.net’s web portal, and a simple login brings up the hosted Woolley desktop, enabling fee-earners and staff to access SOS Connect and all other applications from anywhere in the world, at anytime from their laptops.

Direct connect

The fully managed service appeals because there is no large capital expenditure and no need to purchase and replace expensive hardware. High service levels of 99.5 per cent are guaranteed, while disaster recovery and business continuity are included.

Another major advantage of the managed-services route is flexibility. It takes one business day to add a new user, which is simply achieved by raising a support call via the e-know.net service desk, albeit as most of our fee-earners work from home there is, in reality, a longer wait for the new phone line and confirmation of the broadband connection number from BT. It’s very reassuring to know that we can expand, and if necessary contract, IT to fit the needs of the business. The service also provides much more reliability than we could ever afford with IT in-house and is always there. I go to Canada for five weeks every year and I can supervise the business remotely, including conducting peer reviews or monitoring business performance by accessing any information held in SOS Connect.

The firm is well placed to withstand the impact that the Legal Services Act (LSA) is predicted to have on many high-street firms and react to new demands. Changes we would need to do to prepare for the LSA have already been implemented, although, of course, that was not the original business driver. Costs have been driven down. They are lower and our personal service aims to be higher than the norm. We offer our clients the major advantage of a direct connection to highly experienced lawyers. I fear to say it but there will be so many firms going to the wall, larger ones too, that I think
there will be more family work around for us. We have grown from having one to having 17 lawyers because of our growing case load, despite the fall in divorce cases generally, so we must be taking the business away from someone.

SOS Connect has provided the opportunity to streamline all the processes associated with opening a new case and conducting the case, including document management and workflow, automated recording of incoming and outgoing e-mails and tying them back to cases, automated time recording and automatic bill production. All information is readily accessible to those authorised to view it. Woolley & Co may be a dispersed operation but supervision is a top priority and something that SOS Connect greatly aids. I have two ways of supervising. One is peer file review, which is fairly standard and which the lawyers can do online. The review is kept on the system, allowing feedback for fellow lawyers and the necessary evidence to be submitted to the regulators that the reviews have taken place. I also review one file per lawyer per month from a quality of advice and customer-service perspective, and again I can do this wherever I am. There tends to be a misconception that supervision will be better when lawyers are surrounded by bricks, but in my experience this is not the case!

The virtual business model could present difficulties for regulation. In the early days I found myself explaining the model as much as demonstrating that I had the necessary procedures in place to comply with the SRA code of conduct. Having substantial systems in place definitely helps with
the compliance.

Web marketing is also of paramount importance. We work hard at quality as that is our differential, but we also work hard at our web presence through two websites – DivorceMyths.co.uk and family-lawfirm.co.uk. You can also find us on Twitter, which has generated business although it is really too early to gauge the effectiveness of that.

True to form, marketing is outsourced too. The quote from Dr Lawrence J Peter (the American educator and writer, 1919-1990) springs to mind: “A man doesn’t know what he knows until he knows what he doesn’t know.”

The ‘outsource everything’ model has proved beneficial, but how is that success measured? The high calibre of staff is one valued yardstick, as is the fact that there have been no negligence claims or serious complaints during the firm’s history. I haven’t needed to use recruiters for over two years either, and I am attracting people at the level of head of department. Also I see a rise in the conversion rate from initial enquiry to client. I find SOS very capable and constructive, and they clearly demonstrate their understanding of our business. In fact, in my capacity as advisor to others wanting to set up the virtual business model, I have been happy to recommend them.

However, the most recognisable measure is the bottom line. Net profits have consistently risen for the past five years, including the last year of recession.

Andrew Wooley is the managing partner of Wooley & Co. He can be contacted at: 0800 3213832