Taming technology and making an ally of regulation

12 Apr 2019Feature

Hart Brown's CEO Nigel Maud shares his enthusiasm for technology as a tool allowing lawyers to deliver expertise and focus on clients

“It’s been an interesting journey”, Nigel Maud responds modestly to my comment about a career that has seen him start off reading psychology and politics in South Africa before qualifying as a solicitor and becoming chief executive of Surrey-based Hart Brown six years ago.

Maud’s remark refers not so much to crossing continents and ending up at the head of the 100-strong law firm in Guildford, but to what he did in-between.

His first lawyer job was as a prosecutor but he later turned to corporate and commercial work, subsequently joining the business recovery department at PricewaterhouseCoopers (PwC) and eventually Hart Brown, in 2002.

“It’s been an interesting journey because it allows you to see how accountants work, how they view life and how they view business”, he says.

“Also, in my area, it gives you useful insight into how companies are run. So, from that point of view it’s given me a lot of experience for my own benefit.”

Hart Brown will celebrate its one-hundredth birthday this year. It’s still a traditional partnership and all five equity partners, except Maud, were trainees at the firm.

However, behind the scenes a new chapter is unfurling. Maud’s role as CEO, rather than ‘managing partner’ is a clear hint that the firm is keen to portray itself as a modern business.

More significantly, the plan is to swap the partnership for a corporate vehicle – probably an LLP – in the next 12 to 18 months.

Maud says incorporation is about aligning the firm’s structure with its existing approach to management.

For instance, when the firm rebranded a few years ago all staff were involved in the process, not just the partners or senior members.

Their take on business processes and the role of technology is also unusually positive.

Technology forward

“You can become myopic about the way you work if you’re not looking at the ways other businesses work – not just in the legal sector.

Doing things in a particular way just because it’s the way it’s always been done is not always the right answer. For instance, we’ve always been ahead with technology”, he says.

According to Maud, Hart Brown was the first firm in the area to have a PC on everyone’s desk and advanced case management systems. It recently embraced more technology by rolling out a new software package across the entire practice in one go, not one department at a time in the way it’s usually done – a “courageous” approach but one which Maud says made the most sense.

And the firm was also an early adopter of cloud storage. Altogether “it creates a lot of consistency in our performance across our five offices”, Maud explains.

Implementing a new IT system was also essential to unlocking the potential of artificial intelligence (AI), he confides. The firm already uses AI for some of its processes but it’s now looking to harness more of it.

“Technology will take more out of what lawyers do; the result is that what lawyers do will be more advisory, as opposed to, say, producing documents”, he says.

For instance, he suggests lawyers will be able to engage with business clients more effectively, by “advising how clients can best organise their business and then, behind the scenes, have the mechanisms to produce these documents in a very cost-effective way.”

By way of illustration, Maud says clients frequently say they need a particular kind of agreement, when in fact, it emerges in the course of conversation that they probably need something else.

“The advisory part is the most important because the way tech is going will allow professional advisers – not just lawyers – to produce a lot more. For instance, if you receive a contract, technology can compare it with all the contracts you’ve got and come up with suggested inserts.”

While savvy business owners are the perfect clients on whom to test these new tech-driven systems, these are neutral tools that could be extended to all clients.

“How these are deployed is more a question of whatever the client needs, we’ll use technology to speed up the delivery of it”, Maud says.

The firm is already giving clients direct access to parts of its systems but it is now looking at opening that access further, giving clients more choice as to how they want to engage with the firm and have the service delivered.

“Clients’ perception of lawyers is that it’s perhaps a bit of a grudge purchase and expensive and complicated”, Maud remarks, “so we’re looking at how we can embrace technology to make clients’ lives easier.”

Focusing on advice

One of the early manifestations of the rise in legal technology has been in black letter law updates, with lawyers able to subscribe to court reports and precedent services online.

This is a priority at Hart Brown too, where a firm-wide precedents system is updated daily, with technology used to put together draft documents that lawyers then apply their skills to. Unlike at some firms, these advances in technology are not deployed to replace lawyers.

Rather, intelligent automated systems prepare the ground, pre-constructing contracts and other documents up to a certain point, when legal expertise is applied. “The expertise at higher level is what’s going to be required”, Maud explains.

“So our structure involves more experienced solicitors and fee earners doing the work, as opposed to passing on some components of the work to be undertaken by several less qualified people.

“We’re trying to have a model where a lot of the work is being structured by technology, so that document generation is done by technology and people deliver the advice.”

All of which would also, all being well, result in cost saving, although this would be the wrong way of looking at it, says Maud.

“As soon as you think in terms of cost cutting, you lose the emphasis on delivering a better client service. But if I’m a fee earner and tech organises the information and documents for me, then I can come to you more quickly, sooner, that’s a much better service”, he says.

“When clients call, they speak to somebody who has knowledge of their matter and can give them a steer. It doesn’t really work in the same way with a chatbot.”

Departmental structure

This consistency in approach runs across the firm’s five sites. The head office in Guildford is located in a small business park just five minutes from the train station and focuses on commercial work.

But the four other offices are strategically positioned for private client work. “At the retail end of our business – conveyancing, trusts and estates, and family – someone living within the catchment area of our Cranley office would be unlikely to come to the Guildford office.

We’ve done surveys about that, and it’s important to be local”, he says. The model, in short, is to be local for personal services and central for commercial services.

With this set-up, some departments are spread across several sites, and it is technology, once again, which keeps these departments together. Irrespective of where individual lawyers are based or when they are going to another office for a client meeting, IT ensures they are in touch with colleagues and have access to files.

“We run on department, not on offices –obviously we have someone running each office – but the main structure is that of the department”, Maud explains.

From the client’s perspective, services are available at all of the firm’s locations, with lawyers making themselves available at the client’s preferred office if that isn’t the one where they are based.

“There’s no perception of where we are for any particular service. Obviously, we look at how best we can utilise space and people across offices but they don’t have to be based at a certain place.”

Technology also plays a key part in keeping not just processes but also teams together, he continues. “People can just click in at whatever office or from home if necessary.

We’re trying to provide a flexible structure without losing the teams. Where people don’t feel part of teams, it tends to create a deconstruct between them at one office and others in other offices.”

Hot-desking may well work for small businesses, Maud believes, “but with slightly larger organisations, you lose a lot of expertise that way, if you’re not working together, the regular exchange of experience and thought. And people tend to feel isolated.”

Multidisciplinary mindset

The move to a corporate structure would also allow non-lawyers into the firm’s equity, a point which Maud says is essential in today’s legal services environment.

“You can progress your marketing manager, for instance, to be a director. That’s important because it creates a more diverse perception of business rather than just being good at doing law.”

In the background is a more holistic approach to the delivery of professional services, which, for some, takes the shape of a multidisciplinary practice.

Hart Brown is no stranger to the multidisciplinary approach. Until three years ago the firm had a full-service financial services department.

The trouble was that this meant two regulators, the Solicitors Regulation Authority (SRA) for law and the Financial Conduct Authority for financial services.

In the end it was a choice of either growing it – it had worked well for the firm in the previous 25 years and for its large generational client base – or close it.

Changes to financial services regulation meant that, in the end, “we decided we had to concentrate on being lawyers and service these clients from somewhere else”, says Maud – a reference to the sale of the business to Argentis, now part of Gallagher.

Would the firm ever again consider offering financial or perhaps even accountancy services? Many law firms already deliver a layered service, where lawyers are the main hub for the provision of legal and other professional services.

However, this is not truly integrated; what lawyers deliver in the end is still a legal advisory service. Going the full multidisciplinary partnership (MDP) route would only happen if the regulatory framework were significantly overhauled, Maud says, and any duplication was eliminated.

“So if we could, for instance, provide accounting services under the aegis of the SRA, that would be easy”, he says.

Of course, there would be other questions to consider. Being an MDP could be an obstacle to getting referrals from other accountants, which currently brings a healthy source of work for most law firms.

Regulation is good

Complex layers of regulation could, of course, be another area for technology to painlessly sort out.

“In time technology will assist with a lot of that”, Maud believes, but he also points out that regulation in itself is not a bad thing – on the contrary.

“If you look at regulation purely from a compliance exercise, it’s a red-tape nightmare, but if you look at what goes on in schemes such as Lexcel, CQS and ISO accreditation – which we have – it’s a process structure for running a business.”

Maud admits that “a lot of regulation is tedious, in every sector” but he says it has made people reflect on how they ought to run themselves and put management structures in place.

“A lot of law firms weren’t like that, they were cottage industries where you me and three others could be running a law firm”, he says.

“A lot of the processes we have in place are related to ISO or Lexcel, but if you take those off and you look at the processes in place, they’re just good management practices.”

And there is another trend taking shape in the small firms’ sector, which will be a major influence for change: ageing partners.

When the Legal Services Act came out, a lot of the partners weren’t old enough to retire. Now they are, Maud says, which will bring about a lot more consolidation.

“People will be retiring and the costs of running a law firm will become more difficult in a smaller practice – unless you’re in a very niche practice where there are three of you doing, say, IP.

But it will be [challenging] if you’re trying to do a bit of everything.” What’s more, insurers’ perception of risk in legal services has changed.

It’s no longer about signing up as many firms as possible but about securing safer, risk-aware and compliant businesses. And that means being a one-man band on the high street could soon be an obsolete twentieth century concept.

“You’re having to work within the structure insurers are prepared to entertain”, Maud says.

“So, you can’t just do residential property and commercial property, and then decide to do a will one day. You have to specialise, to make sure you’re professionally proficient in it, but also able to be insured for it.”

These are tough times for law firms around the country and the cherished high street partnership could soon be a distant memory.

But practices like Hart Brown are a vivid example of how, with just a bit of momentum, law firms that embrace the opportunities presented by technology, implement sound business management processes, and keep a complete focus on clients, will continue to thrive.