The Lexcel standard has been updated and is going global
The Law Society has launched a drive to push the number of practices with Lexcel accreditation up from 850 to 1,000 and to take the quality mark international. At the same time, Chancery Lane has updated Lexcel to encourage firms to set their standards ‘above and beyond’ the requirements of the Solicitors Code of Conduct. By taking out specific references to the code, this means law firms and in-house legal departments all over the world can now seek accreditation.
The marketing drive is also being used to promote Lexcel to legal services buyers, with the strapline ‘Look for Lexcel, the Mark of Excellence’.
The push to encourage more practices to seek accreditation comes as the profession faces huge changes. The new outcomes-focused regulation regime (OFR), specifically principle 8, will require firms to run their businesses in accordance with proper governance and sound financial and risk management principles.
Charles Plant, chair of the Solicitors Regulation Authority, made it clear earlier this summer that he believed firms which achieve Lexcel’s practice management standard ‘are likely to find compliance with principle 8 much less challenging than others’.
Lexcel has also become a ‘must’ for firms tendering for work, says Mike Jackson, Lexcel specialist with legal consultancy Inpractice. It recommends that firms introduce the procedures to satisfy Lexcel, even if they do not go for formal accreditation.
‘For us, it’s the application of the good guidance in the standard that matters, not the badge at the end of it – for now,’ he says. ‘The public doesn’t generally recognise the value of Lexcel, so client perception isn’t a driver yet. But that is changing. However, if firms are tendering for work, we would see it as essential now.’
Lexcel, the only legal-specific quality mark, was launched in 1998. Twelve years on, 9% of practices, from sole practitioners to 50-plus partner firms, have achieved accreditation. About 20% of those accredited are in-house legal teams, mostly in the public sector.
Despite the pressures and cost of annual assessments, only 3% of practices have dropped out of the scheme – a handful because their accreditation has been withdrawn; a few because of budgetary pressures; and some have merged with other Lexcel practices.
The standard is reviewed every three years and the latest, version 4.1, updates the 2007 version 4. Firms already accredited will only have to make minimal changes to remain compliant, says Lexcel manager Clare Jarratt. The standard will be reviewed again later this year to take account of regulatory changes such as outcomes-focused regulation and alternative business structures.
Jarratt says the quality mark is increasingly being demanded by the public sector. ‘I am aware of one authority where one of the first ten questions on the tender document is – do you have a Lexcel or relevant quality mark?’
This is likely to become more common as in-house teams gain accreditation to prove their value and so are keen to demand similar quality standards from their external lawyers.
Start-ups can apply after three months to give them time for their systems to become bedded in.
TPP Law, set up in 2001, achieved accreditation within six months. Practice manager Jayne Hughes says the benefits are ‘increased profitability by avoiding costly mistakes and effectively managing risk; improved financial management; winning more work as public sector clients increasingly expect law firms to demonstrate evidence of quality during tenders; improved communication; increased self-confidence; and continuous improvement’.
Jarratt says the key to Lexcel is that it provides a framework which allows practices of any size to adapt it to their needs. ‘It has to be flexible – we have a sole practitioner who works on his own from home and another who has 150 fee-earners. It is not about us dictating what they do and saying “go forth and implement this” even if it isn’t suitable.’
For larger firms, the latest version provides a welcome opportunity to have their overseas offices accredited. So far, only two firms outside England and Wales are accredited – McClure Naismith in Scotland, the first practice to secure UK-wide accreditation, and TGC in Poland.
For Sternberg Reed, a 16-partner general practice, achieving Lexcel accreditation this year is the icing on the cake after obtaining the Investor in People accreditation in 1999 and the Quality Management BS EN ISO 9001 in 1995.
Practice manager Gareth Britten says the three quality standards complement each other. ‘Adding Lexcel has strengthened our client care and risk management. It is also recognised by the Legal Services Commission, and helps us when we tender for public sector work, and with our PI cover.’
Significant investment
Achieving Lexcel accreditation requires a significant investment in time and money. The challenge then is to retain it. There are nine licensed assessment bodies which employ about 80 Lexcel assessors. The application fee payable to the Society ranged from £60 for sole practitioners to £865 for 50-plus partner firms. The assessment fees are set by the bodies to promote competitive pricing.
Legal Risk partner Frank Maher, who advises on risk management, argues that the assessors should be legally qualified. ‘You can’t expect a personal injury lawyer to know some obscure provision of the Taxes Act, but the aim is to manage risk, not eliminate it, and a good lawyer will know a good file when they see one.
‘We audit files when we are advising firms on their risk management, and we find significant compliance and risk management issues which have been missed by the assessors.’
Jarratt says some assessors have practice experience. ‘But we are looking for knowledge of processes and procedures and identifying compliance – legal insight is helpful but the assessments are very much systems-based,’ she says.
With firms’ attention currently focused on the annual professional indemnity insurance merry-go-round, Lexcel accreditation is seen positively by insurers and brokers. ‘Lexcel doesn’t equal a certain percentage reduction,’ says Jarratt, ‘because insurers have to take so many factors into account. But feedback from firms is that it has helped to maintain or reduce a quote.’
If anything, says Inpractice’s Jackson, ‘insurance brokers and underwriters are more likely to “load” premiums for those firms who do not have Lexcel, rather than reduce premiums for those firms which do.
‘All the feedback I am getting from brokers and underwriters suggests it won’t make any difference to premiums today because of the shambles in the insurance market – claims histories override everything.’
Providing independently validated evidence of your systems can give insurers some comfort, says Maher. ‘But managing risk is a culture not an event. Lexcel is only a framework on which you can build a system which may or may not be good.’
Alongside the quality mark, the Lexcel team is developing a range of practical toolkits, including kits on business continuity and financial management. While these are an added commercial bonus for the Society, Lexcel is not intended to be a ‘money spinner’, says Jarratt. ‘It is about supporting our members. While we want to drive up numbers, the self-assessment checklist is still useful even if you don’t take the further step of applying for accreditation.’
For Trowers & Hamlins, which has offices across the UK and the Middle East, being able formally to accredit their international offices is seen as ‘vitally important’.
Partner Scott Dorling is responsible for Lexcel across the firm. ‘We have required our international offices to work to Lexcel for a number of years and they have been subject to informal external review by the same organisation that manages our Lexcel inspection of the UK offices. Formal accreditation will reinforce our “one firm” ethos.’
He does not believe Lexcel is widely recognised internationally yet. ‘But that is not our main driver. The key for us is to ensure that the processes used in the UK offices are, where appropriate and practical, the same processes used worldwide.’
The firm achieved its accreditation in the UK in 2003. The initial drivers were to ‘give us an edge’ in tendered work and to systematise processes for file management and client care, he explains.
‘Given that most of the Lexcel requirements are [reflected in] the Solicitors Code of Conduct as well there was not a great deal of new invention,’ he says. The most time-consuming elements were documenting processes, which were not always written down, into a formal office manual, and implementing a systematic, firm-wide, regular, independent, monitored file review process.
He believes Lexcel earns its keep. ‘Lexcel is a key risk management tool. Quality processes are now embedded in day-to-day management of files. It is only anecdotal but we do think that Lexcel accreditation results in a reduction in our insurance premium.
‘Public sector bodies also routinely enquire about quality standards when putting work out to tender or when making panel appointments. Many local authority legal departments are themselves accredited, so expect external lawyers to have externally validated quality systems as well.’
Juliette Kinsey, who set up as a sole practitioner in 2007, believes Lexcel is vital even for ‘minute’ practices. She specialises in private matrimonial and family law with the help of a full-time secretary. ‘Being a sole practitioner is a lonely business. Lexcel offers a safety net and valuable guidance – the business continuity issue, for example, is more important to a sole practitioner than anyone, yet how many give any thought to what happens if that dreaded bus crosses your path!’
Kinsey, who sits on the Law Society’s Lexcel Panel, achieved accreditation less than a year after launching Kinsey & Co, using the experience she had gained taking her previous firm through the process. ‘Solicitors as a profession are notoriously bad managers. Lexcel provided me with clear aims and objectives. It made me think about my business and what I wanted to achieve from it. It also ensured that compliance requirements became second nature rather than a big stick.’
She chose Lexcel because it is tailor-made for the legal profession. ‘I did not want to spend time jumping through hoops that were unrelated to my type of business.’
She says achieving and maintaining accreditation is daunting but it brings many benefits. ‘It gives you confidence that all bases are covered. Of course mistakes and omissions can happen, but working with Lexcel means they can be dealt with before they become skeletons.
‘It eases PII renewal pressures because insurers give you credit for reducing their exposure. It also increases job satisfaction. I don’t dread the post, and I view compliance and regulations not as threats but as opportunities to improve my business capability.’
So, does Lexcel earn its keep? ‘If you are purely undertaking the Lexcel process to see a pound-for-pound reimbursement then you may be disappointed. But it is about more than that. The mark is about taking pride in your work, your profession and making a proper commitment to professional standards and proper business management. For me, peace of mind is worth its weight in gold.’
Staffordshire County Council’s legal services unit has 75 staff, including 63 fee-earners. It successfully applied for Lexcel in 2001 after two years' preparation. Practice manager Leslee Griffiths says: ‘The team saw it as a way of benchmarking the internal processes that support service delivery so they could show the value the unit added to county council functions.’ Initially there was a lot of work examining operating systems, standards and procedures, she says. ‘Putting together an office manual – still in place today – was daunting, however the Lexcel templates helped us structure and manage our information.
‘Culture change was the most difficult part. Staff could understand the need to assess and monitor risk but were less happy about us wanting them to audit files regularly or taking their files from them for audit.’
She says the unit was already doing the majority of work required to meet the standard – what Lexcel did was ensure they systematically recorded and ordered their processes in a more consistent manner.
Griffiths believes Lexcel can be a ‘powerful tool’ for local authority practices: ‘We found that implementing Lexcel saved us time, and consequently money, because less time was spent searching for files or information. It also greatly enhanced our risk management.’ She adds: ‘The culture change also meant we could take staff from a purely fee-earning role into assuming accountability for their systems and processes. Staff who contribute to the way their work is done are happier and more fulfilled.’
So does Lexcel earn its keep? ‘The cost savings can remain subtle,’ says Griffiths, ‘only noticeable when the framework provided by the standard disappears. But, in these tough budgetary times, I would say Lexcel is essential to ensure organisations remain committed to process improvement, driving out waste and putting the customer first.’
Having seen its benefits, how important is it that external law firms tendering for work are accredited? ‘It is something we look for when going out to tender. We know how effective the standard has been, and continues to be, in ensuring quality in the service we provide, and it gives us assurance that any firms we use will share our commitment to quality.’
Grania Langdon-Down is a freelance journalist
