The pandemic has changed the working landscape and the way that we do business. It is no surprise that after the push to remote working, Zoom meetings, embracing Cloud solutions and working virtually, more Solicitors than ever are considering leaving firms to start their own. Pre-COVID, a 2019 report by Lexis Nexis found that fewer than 20% of respondents wanted to work in a big firm. The pandemic has accelerated that journey for Solicitors looking to leave big firms and start their own.
There is plenty of support available to those researching how to start their own law firm.
The book “How to start a law firm” available in the Law Society Bookshop provides practical guidance and support, advice on technology and marketing.
Conferences and exhibitions such as Legalex or The Solicitors Group provide an opportunity to network with others who have started the journey or meet suppliers who can assist with different areas of practice management.
Software suppliers such as LEAP Legal, Clio or Insight Legal provide webinars and events, breaking down the barriers to practically starting up.
Ascentant offer a range of a range of consultancy services including Startup consultancy, Outsourced Legal Cashiering, Company formation, PAYE/VAT setup and Annual Accounts. We work with a number of partners who provide end to end support such as Compliance, Marketing, IT and Secretarial or Typing.
The Law Society and SRA also have a range of resources. The SRA have recently updated their Sole Practitioner and Small Firms Regulatory starter pack which contains help, support and resources to those looking to set up their own firm.
Key risk areas in the pack include Resources, managing your finances and misuse of client money which are key risk areas for startups to consider when providing effective legal services.
Resources
Law firms of all sizes need access to effective resources if they are able to function effectively.
The SRA asks start-ups to consider if outsourcing is the answer. If the necessary resources can’t be accessed what are your alternatives and how can the most critical functions be prioritised and resourced cost effectively?
Typically startup firms do not need a full time or even a part time Legal Cashier. They may need a few hours flexibly, depending on the level of work. Further, firms may struggle to hire a Legal Cashier in a competitive market, where few are available to hire.
Ascentant provide outsourced Legal Cashiering services to start-ups to meet this need. Typically, having left a large firm with an inhouse Accounts department, sole practitioners have little knowledge on how to record client account transactions, posting to matters, running compliance checks or how to read financial information. They need certainty that they are complying with the SRA Accounts Rules, but don’t have the knowledge or time to dedicate to prioritising this while in the early days of their new firm and also trying to bring in new clients, get to grips with their Practice Management System, typing up documents themselves or networking and marketing.
Ascentant provide a cost effective solution to startup law firms to hit the ground running, set up workflows, finance policies and procedures and monthly COFA report packs, taking away the worry of complying with the SRA Accounts Rules. We work flexibly where our time can be bought as and when needed or our pricing can be linked to the level of transactions that need to be processed.
If using LEAP Legal, Ascentant are an approved Bookkeeping partner and can save you money on license fees, as Ascentant are provided with a free license to maintain your records.
Managing your finances
Startups need to understand how to make money and always have sufficient cashflow to meet business needs.
Do you have a budget? Do you know how to read a P&L or set KPI’s? Do you have sufficient capital or reliant on overdraft or loan facilities?
The SRA have seen an increase in the number of firms in financial difficulty in recent years and it is key to ensure that startups are commercially minded and can interpret financial data.
Ascentant can provide management accounts and forecasting, prepare budgets, KPI analysis and cashflow forecasting to assist in managing your finances. We also review aged debtors regularly and chase outstanding invoices.
For startups, we prepare business plans, cashflow forecasts and management accounts forecasting, planning out recurring costs and assist with financial planning.
Planning ahead ensures visibility of potential issues before they happen and putting controls in place where necessary to prevent issues reoccurring.
Misuse of Client Money
The obligation to protect client money and assets goes to the heart of the SRA Standards and Regulations.
The role of the Legal Cashier is just this – To ensure compliance with the Solicitors Accounts Rules and that client money is protected. Ensuring that good policies, procedures and workflows are set up and followed is key to protecting client money.
Ascentant are able to set up policies such as a client account withdrawal policy and Accounts manual to ensure that all processes are documented and followed. Our Legal Cashiers check that cleared funds are on the ledger before making client account payments, that payments are not made against uncleared funds, that the client account is not overdrawn and that the client account is not used as a banking facility. We put checks in place to ensure that client money is not misused.
scentant Accountancy are a Derby based Accountant who provide Outsourced Legal Cashiering and Accountant services to Legal Practices across the Country.
If you are considering setting up your own Law Firm, get in touch to see how Ascentant can help on 01332 981920 or Info@ascentant.co.uk.
