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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assessments, only 3% of practices have dropped out of the scheme – a handful because their accreditation has been withdrawn; a few because of budgetary pressures; and some have merged with other Lexcel practices.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.’
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.’
Grania Langdon-Down is a freelance journalist