A number of positives are revealed in a recent survey conducted by the SRA. Most notably, a year after the implementation of OFR and perhaps understandably, firms’ attitudes towards OFR might be shifting towards greater levels of favourability as they increase their experience of working with the new regime of regulation.
Measuring the impact of OFR on firms released last week found that 50% of respondents felt ‘favourable’ about OFR, a welcome increase on the previous year’s 36%. However, that still leaves the other 50% to be convinced!!
Presumably that also includes the 40% who saw nominating a COLP & COFA as the only change required and therefore business as usual, despite a UK Economy that continues to struggle to regain momentum. Yet 85% agreed that what they do to comply is directly related to the good management of their business and the need to look after their clients’ interests.
The telephone based survey representing 10%, or 1,000 firms in England and Wales focused on the typical characteristics of firms in England and Wales covering a diverse range of areas of the law. So just over 80% of respondents had no more than four partners and 50% had a turnover of less than £500,000. Firms that are perhaps at greatest risk to the increased competitive pressures that many senior commentators have been warning about in recent years.
Findings in the report are mirrored in the compliance engagements that Legal Eye have with firms. Many firms are initially confused and clearly unsure of what to do with OFR to see the benefits.
Initial scepticism and concerns are generally voiced around the increased time and cost that compliance is going to take. Perhaps rightly so, when the regulator has the power of censure, yet has removed the previous route to achievement, virtually at the same time the UK Economy plunged into recession and Fee Earning determines survival.
However, from our practical experience of working with a large number of firms, the initial investment of time and money into establishing effective compliance mechanisms is rewarded with a greater understanding and awareness of the performance improvements and flexibility that OFR might bring to their business. A key ingredient, as in anything in life, is in the attitude of the people reflected in commitment and support for effective change.
This is best demonstrated when change is embraced. Responsibilities shared equally amongst the team. From the on-going revision of internal policies, procedures and plans, to a greater willingness to share information, guide and support everyone in the business enabling them to seize opportunities and achieve business objectives.
OFR has served as a timely reminder for many that there are a variety of ways to service client needs and that a client may also have a life-time value, if they are properly engaged. That has caused many to reassess their strategic plans and objectives, not least because the lenders have also not been so easily prepared to provide the historic financial cushion to the sector.
The future UK Economic scene remains a challenging one with growth across most sectors remaining elusive. Coupled with a number of new challenges, not least the emergence of new ABS players, the report underlines the fact that the legal sector needs help in recognising the flexibility that OFR might bring to their business.
With reasons ranging from OFR doesn’t offer any real flexibility, or that the outcomes are too vague or unclear to do so with confidence, there are some clear competitive advantages for the 50% of respondents that get help to utilise the benefits that OFR brings.
Legal Eye Ltd