Practice and Procedure

How To: create a shared back-office

PUBLISHED January 10, 2013

Tuckers is a criminal law firm - one of the UK's largest. We cover practice areas where margins have been severely challenged by changes in public policy and public funding. In February 2012, we announced our intention to make our billing, diary management and other back-office operations available to rival firms in an innovative partnering initiative that aimed to cut operating costs and save lawyers? jobs.

So the essential driver for this initiative was to reduce costs from the administration of criminal defence practices ? both our own and that of other firms. There are 1,700 criminal defence firms, all of which have essentially the same work-flow framework and the same compliance obligations. It is, we thought, hard to sensibly conclude that there are not some costs savings to be made through the consolidation of some of these functions.

One can then factor in the fact that much of the actual work of criminal defence solicitors is done out of the office. At police stations and courts, there is actually quite a lot of day-to-day work that can be done out of the office using remote electronic working. Furthermore, when dealing with the administrative aspects of criminal law, it does not make much difference whether the telephone call to the court chasing legal aid is made from London, Manchester, Birmingham or wherever else.

First steps

Our first step, given we already have 10 offices, was to create the infrastructure to ensure that we could centralise our own back-office functions. From there, it is a natural step to use the scaleability of the infrastructure you have created to provide those services more widely. We are working on some exciting applications that genuinely reduce cost, and simply rely on the ability to use our case management system designed for the purpose. For example, we have now developed the application so that our police station booklet is completed on the desktop of a portable device. At the moment we are using laptops, but we are already testing on tablets and, with the full Windows 8 tablets coming out early next year, envisage a deployment of tablets in the first quarter of 2013.

The form is completed on the device and, as and when an internet connection is available, by Wi-Fi, at home or in the office. The booklet can be uploaded to the system through our intranet. This will then automatically open our police station file, post time recording and expenses information, generate compliance documentation, perform any conflict checking and, if the matter has finished at that first attendance, generate the information for the police station bill to be bulk uploaded to the Legal Services Commission.

This also has significant efficiency benefits when dealing with a client who has been arrested and charged late at night to be represented by someone else at court early the next morning. All the relevant information is passed through the system electronically. We are very keen to take this further and will be approaching the LSC to see if it would be prepared to pilot other initiatives with us. For example, in the process described above, we have already created a mirror of the CDS14 & 15 forms (the application forms for most criminal legal aid).

We could, therefore, not just submit the application for legal aid by email with an attachment, but actually in a form of code so that the LSC could develop its own system to reduce the amount of data entry it has to do when considering an application for legal aid. We are working on a similar process for managing the process of recording the outcomes from court hearings, as well as police stations.

?Shared back office? is a fairly opaque way of describing one of two things. A merger, or some kind of franchise arrangement. The easiest to achieve is through merger. We are pro-actively looking for merger partners all around the country to use the technology that we are developing. This does create difficulties in terms of managing expectations regarding the ownership of the business. However, it is certainly possible, by having different profit/cost centres within the branch office structure, to create financial incentivisation for people who relinquish ownership (and, of course, risk), but who want to be rewarded for the performance of ?their? business in any particular geographical location.

The alternative concept is franchising of some sort. This has many more obstacles in terms of the costs of the software you need ? particularly to create the necessary chinese walls to ensure confidentiality and conflicts are managed ? and generally in terms of the Solicitors Regulation Authority with regards to compliance issues. We are a criminal legal aid firm and every firm in our sector is squeezed both in terms of the working capital available to the business, because of declining revenues for like-for-like work, the reduction in work through saturation of the market, and the inability to raise any capital for investment because of total uncertainty of the criminal contracting horizon beyond 2015. In other words, you have to work with what you have got. We are lucky in that we have a case management system which is a ?toolkit? rather than a boxed product and we have a couple of developers who can work on that toolkit to develop it to our specific needs.

Baker & McKenzie ? the global shared office

The international law firm created a global back-office for the whole firm, improving systems and saving money.

As a global law firm, with over 4,000 lawyers in 72 offices, Baker & McKenzie could set out to achieve the benefits claimed for legal business process outsourcing and ?offshoring? without requiring functions to leave the firm.

In 2000, the firm started the process of locating many of these functions in the Philippines. It was building on over 30 years in the capital Manila ? an English-speaking country in south-east Asia which has a large legal community and strong ties to the rest of Asia and the US.

Global Services Manila (GSM) is a shared services centre wholly owned by the firm covering mainly (though not exclusively) business services, with some legal process services. At 550 employees, it is the largest captive offshoring operation in the legal industry, with a 24/7 capability that is available to all offices.

The document Support Centre logs over 90,000 hours each year, and the billing and financial support centre logs over 100,000 hours a year, producing significant savings.

Finance support handles bill preparation, the accounts payable function, including staff expenses, and some ad hoc financial reporting and aspects of the new matter opening process.

A number of HR functions have also been moved. These include the management and administration of all CPD records, HR databases, training courses, reference requests and some recruitment; graduate recruitment application screening; and ad hoc research projects.

Some knowledge management and secretarial functions have also moved to GSM.

GSM is not just about savings though ? it is also producing the improved efficiencies in service and turnaround that clients tell us they want. GSM also frees up staff to work on high-value matter without the distraction of providing and managing other services.

From the perspective of the London office, the following principles were applied when it came to moving work to Manila:

  • Transfer tasks rather than roles
  • Transfer administration and lower level work
  • Transfer those responsibilities where there is no/limited interaction with the business
  • Transfer routine and documented processes, and
  • Encourage use of Manila through redistribution of roles and natural attrition, not redundancy.

Baker & McKenzie now has a wider strategy for developing LPO. This will include:

  • Some legal process being handled in GSM
  • Use of third-party LPOs
  • IP portfolio management
  • Managing IP portfolios for a number of multinationals,
  • Providing client with direct access to a dedicated 24-hour team.

Project management

We do not have the luxury of bringing in project consultants and having resources, human and otherwise, dedicated to delivering a project plan. We have a goal, we have some software and we have some people. From there we just have to carve out enough time from the day-to-day initiatives, to put enough effort into the strategic initiatives. Like any firm undertaking a project of this kind, the client?s needs had to be high in our list of considerations.

The ?client? in this sense for us really is the LSC, and to a degree the SRA. Our true clients do not really care that much whether we fill in information by hand or on a laptop. If we are honest, they are not particularly concerned, when at the police station under arrest, about the raft of compliance obligations and reporting obligations that we have. So a client care letter for our clients, more than most, has very little to do with client care ? but we take seriously the need to achieve compliance, just at the lowest possible cost. That is the main driver, but if we could go further and achieve a genuine partnership with the LSC that would benefit both parties by streamlining the flow of information, then I think that there would be considerable benefits for both parties. These benefits would come at no cost at all in terms of the most important relationship between the lawyers and the clients.

Measuring progress

It is too early to tell if our project has been a success. We are going through a lot of pain, partly because of our inability to invest large scale capital expenditure on these projects. Given that we could theoretically lose our criminal contract in 2015, we cannot justify large-scale investments in some of the things that would make the project much easier to implement.

However, if we secure an expanded contract in 2015, then the benefits of the work we are doing now will be significant, in my opinion. For us, this is an iterative process rather than a project. We learn new things and make changes every day.

Adam Makepeace is practice director at Tuckers Solicitors