As specialist Outsourced Legal Cashiering providers, Ascentant Accountancy, we are seeing an increase in enquiries for Outsourced support in line with a number of shifts in the Legal Sector.
Increasingly we are engaged to work with Startup firms, Consultancy model firms requiring a service centre function or those looking to focus on fee earning and outsource support functions while remaining agile, competitive and profitable. On the flip side, we work with practices struggling to resource a Legal Cashier and reluctantly consider Outsourcing (which is never a great start to a relationship that they feel forced into) or firms looking to get their ducks in a row prior to merger, acquisition or sole practitioners looking to plan their exit strategy.
Firms have recently faced a wave of cost increases from suppliers for day to day essentials, increased utility costs, increased borrowing and debt servicing costs and the ever increasing cost for Professional Indemnity Insurance. All of these factors in an ever competitive market where firms may struggle to justify fee increases due to the cost of living crisis mean that firms are increasingly looking at cost savings, including outsourcing functions.
Number of Law Firms
According to the SRA, in November 2023 there were 9,369 Law Firms in England & Wales, 1,588 being Sole Practitioners.
Looking back over SRA data, there has been a year on year decrease in firms since 2017 where there were 10,301 Law Firms, 2,198 being Sole Practitioners.
It is clear that there is consolidation in the Legal Sector in terms of regulated firms, but shockingly a 32% decrease in Sole Practitioners between November 2017 and November 2023.
Hazlewoods Accountants research indicated that there were 122 mergers in 2022 – And increase on 99 in 2021.
This could be due to a number of factors such as regulation, increased cost of PII, retirement of Sole Practitioners or mergers and acquisitions in the Legal Sector.
Number of Legal Cashier Vacancies
Looking on a popular recruitment site at the time of writing this article, there were 176 Legal Cashier roles available in England.
This is in contrast to 3,714 Bookkeeper roles and 4,987 Accounts Assistant Roles.
A quick CV search on the same recruitment site showed 609 CV’s with the title Legal Cashier – Of course while the CV database isn’t representative of all Legal Cashiers available or working, splitting 609 Legal Cashiers between the 9,369 Law Firms registered by the SRA gives an indication of how scarce Legal Cashiers are….
With firms merging and consolidating, this is also having an impact on the availability of Legal Cashiers in the sector with some choosing to retire rather than adapt to new processes, systems and technology in addition to those no longer needed moving into general accountancy and finance roles, rather than staying in the Legal Sector.
If looking to recruit inhouse, salaries are ever increasing due to lack of supply and increased demand, further putting pressure on firms bottom line, especially if their Legal Cashier isn’t fully utilised.
Consolidation and change in the Software Market
Working with so many PMS providers, we have seen constant change over the last few years with Dye & Durham recently acquiring Insight Legal, LEAP Legal acquiring FILOS/Cognito, Advanced acquiring Tikit and The Access Group acquiring Eclipse/Proclaim.
We’ve also seen new software emerging such as Matters.Cloud, Hoxro and Smokeball as well as new pushes from Actionstep and Clio.
It can be daunting to know where to turn in an ever changing market and having access to the data and KPI’s needed to efficiently run your firm.
So….. Do I need to Outsource?
No…. Outsourcing isn’t for everyone….
… Taking into account the lack of availability of Legal Cashiers to recruit inhouse, loss of Legal Cashiers due to moving into general roles post mergers, increased salary requirements due to high demand and some finding it difficult to adapt to new technology….
Although you may want to recruit inhouse – You may not be able to find a Legal Cashier – Or justify the cost of employing one inhouse.
This may lead to employing a Legal Cashier with no experience from a general finance background, leading to breaches of the Solicitors Accounts Rules and compliance issues.
If exhausting the search for an inhouse Legal Cashier, outsourcing may be worth exploring…
Why Outsource and what are the benefits?
Our Legal Cashiers work in partnership with our clients to ensure a seamless service from the pre engagement questionnaire that we issue to assign service roles and responsibilities and creation of your Finance Manual to day to day working and month end reporting.
There are a range of benefits that outsourcing to Ascentant Accountancy provide:
- We build a bespoke service for each client – No service provision is “Out of the box”, standardised or forced around our workflows.
- You pay for the time utilised – You aren’t paying for unused time.
- You can scale our service up or down with your Practice needs.
- Our Legal Cashiers undertake regular training via the ILFM and ALCA in addition to having the opportunity to become AAT qualified.
- Our Legal Cashiers undertake regular CPD training.
- We provide Holiday and Sickness cover, ensuring business continuity.
- Working with a range of PMS’s, we are tech savy and able to use any system, providing training and best practice on workflows.
- We are partnered with a range of PMS providers and Certified with LEAP, Clio and Xero among others.
- We utilise the features of your PMS system ensuring that processes aren’t duplicated through external portals.
- You are able to pick the phone up and speak to our Legal Cashiers or email them, without needing to raise queries via a portal or ticketing system.
- Being experts in working with Legal Cashiering transactions and systems, we are able to produce accurate year end Accounts & Tax Returns.
If you are interested in learning more about our services, get in touch on 01332 981920 or email Info@ascentant.co.uk.