Simple thinking

Having been working since I was 17 (which I can't believe is true sometimes), I have come to a few conclusions about working life and about the way that people operate at work. Chief amongst those is that we all over-complicate things. Sometimes this over complication is deliberate.

Two things have prompted this blog. The first is the shocked statements coming from the government and the House of Commons about the tax avoidance "tricks" of some international companies. It is apparently appalling that such companies should use the law to, completely legally, pay as little tax as possible. It's a little like, completely legally, using an expenses system to get as much money as possible...

The very people making most noise - politicians of every party it would seem - are surely in the best place to do one of two things. Either change the law to ensure that companies pay more tax (possible with in Europe - Germany seem to do it), or simply be public and honest about the fact that there is nothing the government can do (if international tax laws are really so complicated - which I'm not sure I believe). Don't, however, come over all outraged and expect companies to "pay the git amount of tax" (as I heard this morning on the radio). I'm not sure how much tax I would pay if I was asked that question, and I'm a socialist... Surely the simplest thing to do is to update the tax rules

The second area in which I feel there is over complication is with the implementation of the Leveson recommendations. To my possibly ill-educated eyes, there seems to be a very silly argument in which  everyone appears to be saying "of course we need strong and independent regulation of the press" - the silliness comes with the refusal to legislate. Why not? I do understand the concern about the freedoms of  the press (and the accompanying responsibilities) - but so many other professions are regulated by a body established by statute. Is there a problem with those bodies? Are they saying in their independent regulatory role? If they are, is it because of the. Statutory underpinning?

I may be wrong, but the legal profession is regulated under statute, isn't it? There doesn't seem to be a problem with independence there (competence, perhaps, but not independence...).  The current argument against Ofcom being the oversight body (appointed by the government and so not independent) would seem to suggest that there must be an urgent review of the regulation of broadcast media.

Lets try to do the simple things. Change the tax laws rather than telling commercial organisations to voluntarily pay more tax, and use the oversight regulatory that already exists.

I suspect that's have an over-simplistic view of life...

Starting on the wrong foot...

Over the weekend, some kind person hit my car while it was parked, causing quite a lot of damage. I mention this for two reasons. Firstly there is always a (I admit very slight) chance that the fine person who hit me (I was parked on a Sunday on a quiet street in EC4, City of London) simply forgot to leave their name and contact details and so will take this opportunity to get in touch.

Secondly, it means that I have been in contact with my insurer. To be honest, it wasn't something that I was looking forward to because in the past (and with other insurance companies, I should add) communication has been difficult.

I'm insured with Sheila's Wheels (mostly for my wife's amusement - she likes the idea of me having to tell people that). I called the claims line and got a recorded message asking me to confirm that I could answer "yes" to four questions - all to do with making fraudulent claims. Having done that I spoke with a very pleasant chap who dealt with everything efficiently, politely and quickly. 

It was, however, an unfortunate start to a relationship or a communication. Like most insured people, I have no intention of making a fraudulent claim and feel a little aggrieved that this is the first thing that is mentioned. I understand that it is perhaps something that they need to get out of the way - but there must be a better way of starting a phone call - particularly when it is a claims line which means that anyone calling is likely to be a little upset already.

The same happens (or should happen...) in barristers' chambers. the Bar Standards Board require sets to write to the lay client - in every case, and at the beginning of the case - to explain the complaints procedure should they wish to make a claim. Again - I understand that the BSB are trying to make it easy for ordinary people to be able to complain about a professional. It is, however, a very unfortunate star: "Hello, sir. I'm your barrister, Mr. Blair. If you want to complain about me, this is how to do it".

In this day and age of technology, there must be a better way. Surely every case could be centrally logged (automatically from the firm or chambers case management system) with a single reference number (on a card with a QR or bar code perhaps), from which the client can access information about every person (solicitor, barrister, case worker, etc) who has dealt with their case. Quick, simple, and it avoids starting off on the wrong foot.

The Virtual Director

Staffing in a barristers' chambers is always a contentious issue. Sets are under pressure as never before (particularly those involved with publicly-funded law) and members of chambers are very keen (understandably) to make sure that their staff are good value for money - no matter who they are, what they do and what they cost.

The current fashion in many sets is to move to a Chief Executive model. It sounds good - have someone to come in and run the business of chambers. In smaller sets - and nowadays fewer than 60 barristers is a small set - it is, however, difficult to justify the expense of a professional general manager. Often what chambers mean when they say they want a Chief Executive (or Chambers Director or whatever name is decided on), they actually want someone who has a primary focus on sales - not even marketing. This probably requires the prospective CEO to have a marketing background and to enjoy the sales role - and to be able to sell to solicitors, insurers, corporate clients and public agencies (a difficult task as we all know).

Having sales at the centre of a small business like a set of chambers is entirely correct. Unless chambers is large enough to support a marketing/sales function (that a good general manager can then direct), the senior administrator will be responsible for sales (it is likely that it will be referred to as marketing, but generally it is sales).

So - how does a set of chambers get access to the strategic thinking, the strategic administration, that a good, experienced, general manager can provide.

This is where the 'Virtual Director' comes in. Chambers can find an individual or an organisation who has the administrative skills required  - but who does not join the payroll. Chambers then has access to an individual who can offer advice about:

• strategic thinking
• regulatory compliance
• purchasing and procurement
• supplier contracts
• supplier liaison
• staffing issues
• leadership coaching
• soft skills training
• etc

These are all issues that arise in chambers. It can be quite a challenge for a Marketing Director or a Senior Clerk or a Director of Clerking to (a) know about these sorts of things and (b) have the time required to address them properly.

This is where the Virtual Director comes in. With an up to date understanding of the regulatory framework (as it applies to the business of chambers) and expertise in running business, the Virtual Director can offer expert advice to chambers as well as its members and staff. There is generally no on-going commitment (although chambers can choose to pay a retainer which will ensure that the Virtual Director does not work with any chambers engaged in the same area of law) and payments can be decided in advance for project work. On-going advice is simply charged as done - rounded to the nearest minute.

Smaller sets of chambers now have access to the sort of expert advice only normally available to the very largest (richest) sets.

The Sales Bit...

I would be delighted to discuss your requirements and to discuss how the Virtual Director might work in your set of chambers. Email Peter Blair for more information.

Equality & Diversity - are you ready?

It's back to work with a bump. The new Equality & Diversity Rules from the Bar Standards Board are now in force. You can ready the announcement from the BSB here, but in essence there are a number of changes and you and your chambers will need to have a new Equality Policy that conforms, and Action Plan, and processes and procedures to made sure that the new rules are being followed.

That all sounds rather simple. It is, however, imperative that every set of chambers has to ensure that their documentation is in order - and, possibly more importantly, that members and staff know about the changes. Members also need to know about their new responsibilities.

Under the old rules, it was the responsibility of the Head of Chambers to ensure that chambers was compliant. It is not the responsibility of every member of chambers. Yes - you heard that correctly. Every member of chambers, from the most junior to the most senior has a personal responsibility to make sure that their chambers understands the new rules and takes them to heart.

Not only do your documents need to be changed and added to - you have to make sure that every member of chambers and staff understand the rules and is able to speak knowledgeably about them. The BSB is likely to audit chambers' compliance by simply asking some question.

Finally - chambers will have to collect and publish statistics about its membership by the end of this year (and every three years thereafter). These statistics must conform to a standard set by the BSB and must be published to chambers' websites.

Now is about the latest point at which chambers should be addressing the changes.


The sales plug:
Mar-aon can help with the development of the documents you now need, with the planning of training, with the design of the questionnaires you need, and with the publication of the data. Just get in touch.

Practising Certificate & the Law Society

Legal Week's headline today is about the "20% increase in the Practising Certificate". Actually it is an increase of 18.6% - but I suppose that we have to allow for journalistic licence.

So - will the new certificate represent value? Well firstly that may not matter since, as you will all know, the Solicitors Act of 1974 requires practising solicitors to have the certificate. The fee covers the work of the Law Society and the SRA - so both the "trade union" and the regulatory body.

Legal Week quotes the certificate rising to £1,180.00 from £995.00. In fact there is a range in subsidised prices available - including £665 if you work for the CPS and £500 if you qualify for "low income fee reduction". Of the full fee, the SRA are to get £492 (49% or 42% - it's not clear whether £492 is for this year or next).

It is a brave organisation that increases its fees by nearly 20% in the face of a reduction in its members (of about 5%) and in light of some of the most difficult economic circumstances in a generation. A brave organisation or a monopoly, that is.

So - value for money. Well that's difficult to tell as an outsider. As a solicitor, I hope that you are given copies of the annual report and accounts - as well as using any opportunity to question the Society on any aspect of its governance. As a non-solicitor, I rely on the published accounts for 2008 (I should note that I didn't have the easiest time finding the accounts and had to use the site's search facility. The accounts are on the "Governance" page. I suppose this makes sense, but it shouldn't be hard to have a menu item of "accounts" should it?).

There are some items of interest in the 2008 accounts:

• Of the total income of nearly £130 million, practising certificates, and other fees (exams, admission etc) accounted for over 83%
• There was a surplus for the year of nearly £18 million from continuing operations and another £5.8 million from discontinued operations (the surplus includes investment income, and surplus from insurance operations of about £10.7 million)
• Over £115 million was spent on "Administration" including nearly £67 million on its 1,324 staff; nearly £6.9 million on legal fees and £12.2 million on other professional fees.
• The balance sheet reserves are £50.3 million
• There is an actuarial deficit of £59.1 million in the defined benefit pension scheme

Let's just focus on the surplus for the moment. £17.7 million in 2008, £9.9 million in 2007 and, looking further on £11.1 million in 2006 and £22.6 million in 2005. This seems to suggest that the requirement for an extra £16 million or so in income from practising certificates may not be so desperate. I hope that, as a practising solicitor you are content with the use made of the surplus

I'm sure that the Society is working efficiently - but then I don't pay a practising certificate. If I did, I should want to be sure that the Society was acting as efficiently as possible and that, as one of the people funding the organisation (and remembering that the Law Society is suppose to be representing me as a solicitor), I should want to have lots of detail about the way the money was spent and the use being made of the surplus. I admit to reading the accounts quickly, but I didn't see a statement of use for the surplus - I'd be happy to be corrected.

The issue of the pension scheme is, I'm sure, also under debate. With a deficit of nearly £60 million, this may be a "benefit too far".

Returning to the cost of the practising certificate, I'm not sure that £1,180 a year is that expensive. It's 1.2% of a £100,000 income; it's about £3.23 a day; and, in larger firms at least, it's often paid by the firm. Yes, a 20% increase in anything at the moment is difficult, but I'm not sure that many solicitors could argue that £1,180 is so large they can't afford it. The issue for the Law Society is to justify the fee on the grounds of efficiency and service to its members.

Over to the solicitors, then, to comment.

Lessons for Business

The expenses saga continues with our politicians, and seems to get worse at every step. Are there lessons for businesses in this sorry tale? Yes, I believe there are - but they are quite simple, straight forward lessons which I would hope that everyone knows. Sadly, the MPs' story seems to suggest that, once again, the bleeding obvious does need to be stated.

Lesson 1: Ethical standards rather than complex rules.

If you do not believe that the people who work with and for you have high ethical standards, there is no point in setting up complex rules to try to control them. Standards and principles work,in my opinion, although it may not be obvious why. There is often a delight in writing new rules to cover new situations. The difficulty with specific rules is that, if there are many of them, the lesson for staff can be "if there is no rule against it, then you can do it". By having a simple principle such as "Behave responsibly" or "Act in the best interest of the client" there is enough vagueness to persuade staff to err on the side of caution. 

I worked with one organisation which moved from a set of reasonably well understood financial principles to a 60 page set of financial regulations. Financial efficiency went downhill - partly through the complexity of the rules and partly because of the "work to the rules and only the rules" way of working.

Lesson 2: If you have done wrong - admit it and go immediately

We can all make mistakes. If a member of staff - no matter how senior - has "made a mistake with their expenses" for example, they should admit the error and then resign. This may sound as if the punishment is more serious than the "crime", however the alternative is to say "it's ok to fake some of your expenses so long as you are an important employee and we don't think it's too serious". To me this sounds rather like tempting staff to take a chance. Zero tolerance has the advantage of being easy to understand.

I worked in a hotel company which had a published zero tolerance for drinking on duty. Every member of staff knew about the rule but we didn't think it was that serious. One Saturday evening the General Manager was acting as Duty Manager, and late one night was standing at the bar drinking a small glass of beer. The Area Manager happened to visit, saw the GM drinking and fired him on the spot. We had no problem convincing staff that the rule was serious after that.

Lesson 3: Transparency is easier

The more things are kept private and secret, the more people are convinced that the reason for the secrecy is because they are being disadvantaged.

Staff expenses should be available throughout a firm (and to the shareholders or partners depending on the structure) - this leads to better behaviour from everyone since they will not only need to justify their expenses to their line manager, but to the firm as a whole. Why should anyone be ashamed of legitimate expenses? The same can be applied to most expenditure. Even salaries can be published by way of salary bands - it works in the UK Civil Service, so why not everywhere.

By considering lessons for our own workplaces, perhaps some good can come out of the mess that our MPs have made of theirs.

Regulation and Trust

I normally try to avoid blogging on the same subject more than once, but will do so now on the subject of MPs and expenses. 

The revelations continue (see the BBC's list today) and my faith in MPs as a whole is possibly damaged beyond repair - certainly for the current class of MPs - and I'm not sur

e I had that much regard for them in any case. There are three main problems for me:

1. The "I was following the rules" excuse. I have a real problem with any individual suggesting that they have no moral compass themselves and instead are simply looking at the letter of a rule or procedure and following that. Not only that - some MPs seem to suggest that if no rule exists to stop a form of behaviour, then they are free to do it. This excuse suggest not only a lack of ethics on the part of those hiding behind the excuse, but an ignorance of how non MPs might react to the use of this excuse.
2. The "It was the Speaker's fault for not regulating the system properly" excuse. It may well be true that Speaker Martin was incompetent, but let's take this excuse to an extreme. I've never been charged with murder, and never seen a murder investigation in action. Some cases would suggest that there can be problems in murder investigations and, undoubtedly, some murderers are never caught. Does that suggest that, were I to commit a murder and get caught, that the system is to blame because it did not stop me sufficiently? No - of course not.
3. The "It was the broken system at fault" excuse. Yes it was. Sadly for the current batch of MPs, it's their system. How many MPs complained last year about lax regulation and a dodgy expenses system. Not enough. I seem to remember a close vote about the release of the expenses information and a plan to release it in July when MPs would be away from the prying eyes of the media.

There is something desperately wrong with an individual - whether an MP or a banker or anyone else - who's excuse for at best immoral behaviour is that there were rules covering this behaviour.

I didn't think I could be shocked by MPs any more, but they have managed it. The defence of the system last year is incredible (see here) and certainly helped to engender a culture of, if not expense fiddling, certainly one of screwing the system for all it's worth. That elected MPs should be have in this manner is appalling. I am equally shocked by the reaction of some MPs to being "caught out". Stepping down at the next election is no good. They will continue to claim a full salary and presumably full allowances until a date up to a year in the future. They should go now and, if there has been wrong-doing rather than "just" immoral behaviour, they should be prosecuted immediately.

Heads should roll - and many of them.

Update:

And another justification for immoral behaviour...

Update 2 - 28/05/2009:

More going - but, again, not until the next election. Good - but not good enough. They should go immediately.

Doing the Right Thing

Well really. I go away for a week's holiday with no access to the internet, email or much in the way of news, and on my return, I find that the wheels have come off British politics and the impression is that the whole system of politician's allowances and expenses is corrupt.

I've spent this morning catching up, reading through all the sources I can find to see what the real story is. So far as I can see the main explanation/excuse being offered is "I was following the rules".  This seems to me to be missing the point. The point is not what you can claim for - but what you should claim for. Let me give you an example.

As a line manager, I decide that the team are a little down and that a night out would be the very thing. I take them to the local pub for a couple of hours followed by a meal out. What should be claimed for? Well, let's look at this one thing at a time. The drinks - is there a budget? Has the expenditure been cleared by my line manager? Most importantly, however, is - who is taking who for a drink? Is this me taking the team out or the firm taking the team out? In my opinion, in most circumstances, it is and should be me taking the team out. No question. The gift of an evening out has more value if it comes as a personal gift rather than a corporate gift. 

So then - the meal. A number of those out for drinks are able to come along for a meal too - but no everyone. Again, then. What should be claimed? Again - it is a personal gift and a personal expense. 

Many politicians do not seem to have the same opinion. A good number of them seem to be of the opinion that they should claim for every penny that they can. Look at some of the items on the list: a home cinema, cleaning a moat, furniture, interest for a mortgage that has been paid off. Those that have made these sort of claims - no matter that the "rules" appear to allow them - have become confused about what they need for the purpose of their work and what they might want for personal satisfaction or gratification. In my opinion, this is a dreadful lapse in ethical behaviour. 

I don't believe that any person who is of the opinion that the allowance and expenses system is there to provide as much money as possible will make a good MP. I am certain that I would prefer to  be represented by someone with a better understanding of ethics.

This debacle can have a lesson for business. The simplest way to regulate MP's expenses, in my opinion, would be to have some simple principles (expenses must be for the least possible amount, for the sole purpose of MP's business and supported by receipts) and then publish everything. Not just expense - all earnings. The same should apply in business. I can't think of any reason that expenses should be private. Salary, yes, but not expenses. If it is really a business expense then the firm should know about it.

The simplest systems are usually the best. The most open and transparent are usually the most fair.