Six things to consider before outsourcing your legal cashiering
When running a law firm, it can be tempting to want to oversee every piece of day-to-day admin that comes through your doors, especially when it relates to your legal accounts.
Knowing exactly how much money is coming and going from your office and client accounts is essential for business stability, growth and, of course, compliance – which is why so many law firms rely on bringing dedicated cashiers to their team.
But is performing your cashiering in-house the smartest way to do it?
Here at Quill, we often talk about how managing your law firm’s cashiering in a ‘smart’ way is essential if you want to succeed in an increasingly competitive legal marketplace. There are many ways to do this, including investing in new technologies or going completely paperless.
But there’s one tactic in particular which more and more law firms are employing: outsourcing.
Why outsource your legal cashiering?
There are a huge variety of reasons why a law firm might want to outsource their cashiering functions. But, to us, there’s one factor that stands out: compliance.
In the legal sector, accounts are governed by heavy-duty rules. That means ongoing compliance poses a huge challenge, especially for busy practices processing large transaction volumes, where the risk of making mistakes increases.
By relinquishing your cashiering duties to an outsourcing expert, it becomes their responsibility to help you ensure your accounts meet tough regulatory rules. You’ve got peace of mind that your accounts are up to date with no compromise on compliance.
But that’s not the only reason. Some of the other major benefits which law firms look for include:
- improved business continuity, with no gaps in services, even during peak holiday periods or sickness absence
- cost savings without the extra salary, training, office space and other overheads associated with employing an in-house cashier
- a strong personal relationship with outsourced cashiers that act as an extension to your team, even if they’re located miles away
- tailored support that you can flex to your workload volumes and your individual processes and procedures
Things to consider before outsourcing
As with any transition between different ways of working, there are many factors you need to consider carefully and seriously, before you make any major commitments.
When it comes to outsourcing, there are six important considerations that will help you ensure a successful changeover.
1. Come with a new mindset
‘Outsourcing’ can elicit images of a nameless, faceless person doing subpar work from far away with little knowledge of your business.
But experienced outsourced legal cashiers couldn’t be further from this stereotype.
The key to a successful relationship is to change your mindset of how you see an outsourced partner. The best approach is to view an outsourced cashier as a part-time employee, who happens to work remotely.
By treating them as an extension of your staff, you entrust the legal cashier to act in your best interests and with the right level of autonomy to deliver efficiencies to your business.
More than that, if the pandemic has taught us anything, it’s that we need to consider how a business would cope without a skilled employee. With an outsourced cashier, you have the business continuity in place to pick up exactly where your accounts were left off with no interruption whatsoever, including any back-posting.
2. Clear communications
Communication in all its guises is a fundamental concern for both you and your outsourcing partner. It’s likely you’ll be assigned a named cashier who you can contact however you prefer and as often you need to.
These lines of communication open up from the moment you start engaging with potential partners, continuing through the onboarding stage right up until you eventually team up with your chosen cashier. Proper communications guarantee that your outsourcing company delivers exactly what you want.
3. Cost and scalability
Every business has their eye on the bottom line, and cost is a critical element of any professional decision. That means you need to understand where you’re spending your money and where cost savings can be made.
Outsourcing providers tend to charge fees according to your transaction volumes, so they scale up (or down) depending upon how busy (or quiet) you are. This is extremely helpful in terms of budgeting and financial planning.
4. Regulatory compliance
Solicitors Regulation Authority (SRA) compliance is at the crux of your bookkeeping. Or, at least, it should be. Not only is it important for complying with regulators, but it also enables your compliance officers to perform their roles satisfactorily.
One of your outsourced cashier’s tasks is to generate weekly compliance reports which go a long way to keeping your finances, compliance officers for legal practice, and compliance officers for finance and administration on the right side of industry regulators.
If there’s anything to sway your decision in favour of outsourcing, it’s probably the assurance of compliance.
5. Established processes
It is crucial to establish processes for the smooth maintenance of your accounts, and effortless flow of information between your law firm and your outsourcing partner. These are simple but vital efficiencies which simplify who does what, and when.
Some flexibility and trust may be required here; for example, conveyancing specialists might give their outsourced cashier access to their HM Land Registry portal to post transactions directly from Land Registry statements as a further time-saving measure.
Read-only access to bank statements or your online payments portal are examples of streamlining as it assists greatly with bank reconciliation.
6. Adapting to change
Let’s be honest, we all become set in our ways. But that doesn’t mean the usual way is the correct way. It’s easy to get accustomed to having a cashier in an adjacent office, whom you can just throw pieces of paper at throughout the course of the day.
With outsourcing, that all changes, and it can sometimes be difficult to adapt to this more structured working pattern. However, the time spent familiarising yourself with a new, more streamlined process is worth it in the long run.
Your outsourcing partner will collaborate to devise best methodologies which strip out inefficiencies. It’s a big change but, if you get buy-in from all concerned, the switchover to outsourced service support will be that much easier.
When’s the optimum time to choose outsourcing?
While the majority of law firms tend to choose outsourcing when first setting up their new enterprise, in reality outsourcing can be activated at any time. Aside from start-ups looking to reduce their admin workload, the typical triggers include cashiers retiring or resigning (requiring permanent support), or staffing shortfalls due to holidays or unexpected absences (requiring temporary support).
As with most disruptive business decisions, there’s no perfect time to start outsourcing your cashiering. But there is always a right time.
And trust us. When the right time comes, you’ll know it.
The Law Society has partnered with Quill to offer legal cashiering services for our members.
This article is adapted from Quill's ‘Guide to legal cashiering: how outsourcing works’ webinar in conjunction with guest speaker Chas Arya from Ratio Law. Learn more