External examination fosters higher quality standards and better practice – and it will soon become the norm, says Russell Conway as he prepares for his next audit
The Lexcel auditor said he was coming in at 11 o’clock. It was going to be a two-day audit. Before the
audit he sent me a plan for the two days setting out the names of the members of staff he was going to interview, details of the files he wanted to look at, both open and closed, and other evidence of compliance that would be required. It all sounds a bit scary but, as a veteran since 1993 of regular Legal Services Commission audits, in many respects this was just another audit – or was it?
Lexcel is an idea which until rather recently has not exactly excited me. I had been secure in my specialist quality mark with the Legal Services Commission, but we live in changing times and with the onset of outcomes-focused regulation it became obvious to me that the firm needed a quality standard not only for its non-contentious work but also for its contentious work. I also felt that with the changes imposed by outcomes-focused regulation there was a real need to shake the firm up a bit, change the way we did certain things and tighten up many of our procedures.
Managing change is never easy. Introducing change on your own can sometimes be impossible, and for that reason I chose a firm of consultants – Enderley Consulting – to help us in our quest for the holy grail of Lexcel. While it is by no means essential to have a consultant, and Lexcel can be achieved on your own if you do not have the catalyst of a third-party probing, pointing you in the right direction, instigating the changes that are sometimes unwelcome and generally directing the project, I doubt whether we would have been able to manage the project for ourselves.
Only one in ten firms is Lexcel accredited. It is not an easy accreditation to obtain and I started the process in the summer of 2011 and my audit was in June 2012.
Our auditor put it very well; he explained that Lexcel was a collaborative process that was designed to ensure staff ‘buy in’, and, unless the staff were interested in the project, prepared to make it work and aware of its benefits, it was never going to happen. Fortunately, my staff have been through the vigours (in some case miseries) of many Legal Services Commission audits. They know that such external examination of the firm is essential and there is no point in fighting against the process; it is much more fun to buy into it, embrace its virtues and fight hard to make it work.
On the day of the audit itself the staff were a bit nervous. Nobody wanted to let us down, and, while those chosen to be interviewed thought they would be asked long and detailed questions about the staff manual, they discovered that in fact they were not being examined but simply chatted to about the firm, how it operated and how they were involved in its work. Yes, the auditor did want to check that we were doing the things that we said we were doing. He did want to see that we were recording complaints, undertakings and
keeping a file of monthly file reviews. He was keen to see our appraisal and human resources processes; likewise he was keen to see our money laundering plans, business plan, anti-bribery plan and departmental
meeting minutes. So much of this was in existence already. It was not a matter of change but repeating what we had been doing for years.
It was, however, on the subject of risk where Lexcel does tighten up on existing procedures. I was rather excited by the fact that risk is now something that all the staff are far more aware of and I am sure that my indemnity insurers will be thrilled to bits and hopefully they will give me a vastly reduced premium!
The audit has just finished. The auditor has made a recommendation that I am aware of but which will have to be ratified by the Law Society so I cannot give you the result. Suffice it to say that Cosmo is sitting in front of me with a smile on his face as I feed him one or two extra treats!
I suspect that in a few years time Lexcel will be a far more universal quality mark. It will not be just one in ten firms that are accredited but it will probably become the norm. Gone are the days when law firms carry on in their own way without regard to risk, quality standards and practice. I believe the dusty, disorganised firms will wither away along with their rather haphazard way of practising